No, it isnt. To keep it simple, dont overthink it approach, maybe further chop to the downside. The s p 500 has really followed the seasonal script pretty well in direction if not magnitude this year, which would suggest a couple more weeks of difficulty. I think pretty much everyone is alert to the idea you probably get a strong finish or at least the odds would say, to the year. The longer we go churning sideways this way, though, i think people are looking for cracks or just finding them. There has been a loss of momentum. Market breadth has faltered if you look at the equal weighted s p. Its been left behind. Even some of the cyclical bellwether area like industrials and Consumer Discretionary, theyve given back some outperformances. Its not as if theyre setting off loud alarms but they lost a little bit of their leadership year to date relative to the s p 500. All that, though, is working against the idea that all the known headwinds were talking about, the strikes, the student loan repay, maybe government shutdown, maybe global weakness and higher gasoline prices are interacting with an economy that just a few weeks ago we thought was running too hot in july. Were using up the momentum and benefit of the doubt. Late cycle psychology is going to be hard to escape from, i think. Were at this point in the cycle where its people feel like its when not if things fall apart. It reminds me of 2019 in a lot of ways. Who knows how long we would have gone without a recession if not for the pandemic. It could have been a long time. The journal piece this morning, looking at 95 and the period where they managed to do it. In the words of blinder who said, nothing bad happened. Thats right. Got lucky along the way. I would quibble a little bit first of all, 95 is the pristine, perfect soft landing scenario. I would quibble slightly saying its the only one. The mid80s you also had the end of a tightening cycle and you didnt have a recession for quite a long period of time. So its doable. Youre just looking to prolong the good things, full employment type setup. Nothing will trump the Inflation Numbers on that front. I think on wednesday well talk a lot about what the fed has to say in its outlook. If theyre still saying were not going to get to 2 inflation target until 2025, meaning theyll wait to see if the numbers help them out, i think it allows more to be patient. I think theres less kind of collective macro panic happening, at least right now. I love goldmans granular pencilling in one more hike to give them the out, in case. I think thats what these institutions always want to do, preserve their flexibility as things change. I think the market could live with that for now. Mike, well talk in a little bit. The treasury secretary talking with sara earlier this morning giving an op mystic outlook for the economy. There are lags in Monetary Policy on the economy. We would expect to see some impacts. I think weve certainly seen it in the housing market. Look, we still have a good, healthy labor market, Consumer Spending remains quite robust. Weve seen Strong Industrial production. I dont see any signs that the economy is at risk of a downturn. This is the best of all worlds, to see continued strength in the economy, a good, strong labor market and inflation moving down. That is what were seeing. Sara is back on set. What did you think of the interview . You know, i threw a lot at her in terms of potential risk for the economy there. I mentioned the student loan payment he payment resumption, mentioned a possible government shutdown, the uaw strike, the lag impact of Monetary Policy. She sticks with the optimistic view. Now, obviously, shes a treasury secretary, but it so far has been the case. She kept pointing to the resilient labor market. Even mentioned i even talked to her about the fact that, hey, all this fiscal stimulus and the spending, thats whats keeping us from recession and could keep inflation sticky, couldnt it . She said not really a ton of evidence thats happening. A lot of it is paid for. Push back against some negativity. On oil prices, theyre clearly watching that very carefully because a lot of the progress theyve made there is being reversed. She said, were not near the highs. Were still lower than we were last year. But they are watching it. I thought it was the responses were watching closely, gas prices monitoring. Monitoring. On the shutdown she did Say Something we do not need as a risk factor at this point. Less than two weeks to go. They better make a deal. Its not clear whether that could happen. I asked if there was an Economic Impact if there is a shutdown. She said, probably not. Not such an Economic Impact. The biggest question is how long the uaw strike will last and what the resumption of the student loan payments would look like. That is a little hard to tell still. Two big stories as we work our way through september. Our next guest thinks a soft landing could be possible if that strong labor market holds on and unemployment doesnt spike but also said the feds focus on wage growth could end up pushing us into a recession. Joining us is brent shuti. Neutral equities, underweight xhotties. It sounds like your macro view may not be the most constructive out there. No, we certainly think theres going to be a recession. The economy is late in the cycle. Yes, weve had a disinflation impulse we thought would happen so were overweight equities. Now were rekting to a normal economy where the u. S. Economy looks late in the cycle. You mentioned wages, the uaw, theyre still too hot. To me the fed isnt going to ease the liquidity tourniquet they put on the economy until they see wages push substantially lower which i dont think happens nunless theres a rise in the Unemployment Rate, which we call recession. Thats where we think there is likely to be a recession in the future which is why were overweight fixed income. Where do you think the terminal rate goes . Look, i think more important is, whats the endgame . To me the endgame is there has to be a rise in the Unemployment Rate. Wages are at 4. 3 on a yearoveryear basis. The last press conference fed chair powell said, wages are not consistent with 2 inflation. Thats where i think so this has to push back into the 3. 2 , 3. 5 range. That is unlikely to happen unless you get a large increase in labor force participation, so mike mentioned 1995. Thats where you saw a large influx of people in the labor market. You saw a huge productivity boom. Those are two things that could happen but are probably highly unlikely. In that case, i think thats where you have to have a rising Unemployment Rate which will cause that recession to occur. One of the more interesting things i heard this morning from the treasury secretary, and she said this pretty definitively, that she doesnt see any signs theres concerns in the bond market about issuance and the deficits and the debt. Since youre long fixed income it sounds like youre not expecting that either. Some are worried thats going to keep rates persistently higher. Potentially. I dont think were going back to where we were in 2014 and 2020 where we looked up every day and thought about disinflation and low Interest Rates all together. I do think youll have a period of time where the fed will be cutting rates next year because there will be a recession, which will be a ballast to the fixed income market. Ill take that in the next 6 to 12 months when i think theres a lot of economic uncertainty. Longer term i think there potential problems. Perhaps 4 to 5 is the new normal for fixed income. I think between now and then you get a period of time where the fed does cut and you actually see strong returns in the fixed income markets. Appreciate it. Always good to check in with you. Interesting times, especially now. Brent shutte, thanks. Treasury secretary yellen commenting on the uaw strikes saying too early to tell what the Economic Impact will be. Goldman sachs analyst saying the work stoppage equals 40 million per week and assuming margins deteriorate about 40 . The ebitda impact to gm and ford could be about 40 million per week each. As for stellantis, the average weekly production at its toledo plant is higher than ford and gm and toledo is where we find phil lebeau with the latest on the negotiations. What do we know now . Reporter not a whole lot of movement. We know as we speak, representatives from stellantis and the uaw are getting together. You were talking about that Economic Impact. Keep in mind, the plants that are being hit by the uaw right now, theyre not the most profitable plants by the big three in the united states. Theyre important but not the most profitable. Heres the strike impact. Remember, the plants that have been hit so far in the strikes, youre talking about midsize suvs, popular ones, as well as midsize pickup trucks, but not the most profitable. About 15 of the big three u. S. Production. The fullsize plants continue to operate. There are some key issues. I know were talking a lot about 40 versus 20 and 21 . Beyond hourly pay and where the raise ends up over 4 1 2 years, the other thing to keep in mind are wage tiers, cost of living adjustments and restoring pensions, all of which the uaw wants. Speaking of the uaw, president shawn fain talking earlier on cnbc about his frustration that this does not seem to be moving very quickly. Its a shame, again, the companies waited until the last week to start getting serious about talking about this. They wasted a lot of time. We told them up front, dont do that. We told them up front, we expect to deal with these things early and often. They chose not to do that. So, they chose to be in this position and thats why we find ourselves where we are right now. One last thing as you take a look at shares of ford. Ford negotiators will be sitting down with uaw representatives today as they continue their negotiations. Ford also faces the prospect of a strike at its facilities north of the border up in canada. Contract with ford expires at midnight. Doesnt mean there will be a strike. They could extend the contract. They may continue negotiations. Theres a lot on the plate for ford. By the way, also for gm and stellantis. Ford is the one going first up in canada. Back to you. Phil, it doesnt sound like the union is necessarily counting on the white house to make any kind of difference here. Reporter no, not at all. If you listen to that interview that shawn fain did on morning joe, theres no reason to be optimistic this is going to be resolved any time soon. Seriously. There was nothing in there where, yeah, we see a little movement, things are improving. All they said over the weekend was, there was reasonable reasonably productive talks with ford. Thats not a ringing endorsement of we are moving towards an agreement. They are continuing to talk, but theres no indication they are making dramatic progress. Let us know what you hear, phil. Thank you very much. Phil lebeau. Up next, is luxury the outlier as the consumer gets more cautious . Saks ceo with us. Later on, a debate on the disney dip. Dont go anywhe. Er ht hey corporate types. Would you stop calling each other rock stars . Youre a rock star. You are a rock star. Rock stars. Please do you know what it takes to be a rock star . Ive trashed hotel rooms in 43 countries. I was on the road since i was 16. Ive done my share of bad things. Also your share of bad things. We know that using workday for finance and hr makes you great at your job. But that dont make you a rock star. Ted ted ted oh ted in finance. Youre a rock star hey liz in hr . Can you do this . Unless you work with an actual rock star. You are a rock star thank you whos the new guy . Hi, im ozwald. Hello ozwald. Give it up for pam. Pam, you are a rock [silence] i wasnt going to say it. A majority of u. S. Adults feel the current economic environment is having a negative impact on their finances, according to a new exclusive cnbc Morning Consult survey. Middle income households are feeling the negative effects the most. Sentiment that has held steady since our first survey in june. Higher income households say they are feeling the impacts less. 30 say they are having a positive impact on their finances, up 20 since june. 92 told us they have cut back on spending over the last six months. Clothing, restaurants, bars, and entertainment remain the most common categories for cuts. Looking ahead, more than threequarters of consumers say they will cut spending on nonessentials sometimes or more often over the next six months. We will continue to watch this closely as we get into the allimportant Holiday Shopping season. Interesting the way were getting splinterization on income brackets. And i thought it was interesting that restaurants were included. It doesnt surprise me on goods, but services is what has stayed hot and sticky. So, deceleration there is notable, i think, for the feds inflation fight and the economy. Lets stay with the consumer because when it comes to the Luxury Consumer, our next guest is seeing early signs of a spending rebound. The latest saks luxury poll survey shows 58 of Luxury Consumers plan to spend the same or more in the next three months. That marks the first increase in luxury Spending Plans since the survey began tracking the metric in may 22. The luxury Stock Performance tells a different story. Lvmh down double digits in the last few months. Joining us is saks ceo marc metrick. Good morning. Thank you for having me. Tell us more about what youre seeing in this data. Is it surprising to see a tick up in luxury spending . Weve always said when it comes to the Luxury Consumer, they are last in and first out of these moments. Thats what were seeing. You put it into the lead. Its the first increase in this type of response weve seen since way back in may of 22. Its encouraging. Any sense of whats driving it . I think when you look back it was an interesting phenomenon weve been watching. The Luxury Consumer, 70 of them, even last time and this time indicated they felt comfortable about their own financial situation but were more concerned about the overall economy. Since this is more of a sentimentbased consumer, the Luxury Consumer basis on that, we are starting to see them feel things are going to be, less worse. Im not saying theyre not still concerned but less concerned than theyve been. I think youll see that move into their psyche as well. I wonder how much can be chalked up to the fact that the market was tough last year and its up 16 this year. Nasdaq is up more than 30 this year. How correlated to that is the luc Luxury Consumer . Its the broader space. Obviously, the market is a piece of it but its what they look and feel. They see the ipo markets are opening up. We saw one today, one last week. Its everything as far as the Capital Markets go. Again, its overall sentiment. People want to feel good about spending and they cant if other folks are under pressure. Carl just showed it. Its across different income strata but its there. Sara mentioned the difference between spending on goods and services. What do we expect to hold up better over the long term, luxury travel, for example, or luxury apparel, lets say . You know, there are actually pretty tightly correlated. We consider ourselves a goat, go out and travel business. When you travel, you know, you want to wear luxury or use luxury to travel. Our respondents indicated as such. Over 70 of them have a trip planned. About 70 of those people said, hell, im going to buy something new in luxury to either wear or travel with. Whats happening on pricing, has inflation in apparel and accessory sector come down at all . Youre not seeing pricing moving. Weve chatted about this. Look, inflation isnt necessarily something in luxury that moves around. This is a supply and demand game. You know, youre going to see the prices, you know, kind of stay where they are. And were going to just figure out how to create scarcity and demand for it. We have seen the consumers indicated, the 42 of folks who said they were going to spend less said its going to take a sale and im willing to wait. About 75 said, ill wait it out, which has been what people have done in the past as well. Right. Finally, mike, we did get an upgrade at one firm this morning of ralph lauren. They point to cotton down by a third in the last year and a half, pretty good inventories, margin upside. I just wonder if youre seeing that kind of story spun out across your universe right now . Even exconcerns about china, for example. Look, i think the brands are doing a good job of managing their own supply chain and businesses. Theyre so globally diversified, its a bigger story than just one element of it, but im very happy to hear ralph is having the success theyre having. Im sure a lot of other folks are balancing the same way. Is it still the going out clothes, jackets, coats, wearing to work, is that still whats working . Yeah. Whats working is im not saying sneakers are dead, but sneakers are being pushed aside for more of a shoe. Its what we talked about last time, comfort. Shes getting into the ballet flat, embellished or clean, doesnt matter, and hes getting into the loafer. Its evening, going out, and jewelry. Dont forget about that. Theyre stacking and they used to be stacking on the wrist and now theyre stacking around the neck with a layered pendant. If youre wearing it, its going to be red. Thats the color the team keeps talking about. I love that. Red, i can get down with that. Not ballet flats for a short girl. Marc, thank you. Thank you for having me. And hes wearing loafers. Yes. A bunch of us are, trust me. Still to come this morning, deutsche is bullish on one chip name this morning ahead of earnings. That call straight ahead. Plus, watching arm. Bernstein turning sour on the stock despite a red hot debut. Its down 6. 3 . Well look at what it means for inactprpes iseestars osctth wk, next. Gold isnt merely a commodity. Its an investment in people and communities. At osisko, we strive to build modern, safe, and sustainable mines that benefit all. Think big. Shape tomorrow. Osisko. Every day, businesses everywhere are asking think big. Is it possible . With comcast business. It is. Is it possible to use predictive monitoring to address operations issues . We can help with that. Can we provide health care virtually any