And ticket prices ahead. And we look at alphabet, on deck to report. Our guest says now is the time to buy hell make his case and well start with dom chu with more you can see we are just about at session highs right now, with the s p 500 up about 18 points again, session highs 4573, just a notch below the 52week highs we got over the past week. The dow up one quarter of 1 . And the nasdaq composite up. Mostly green behind me, but its some of the economic sectors leading the way higher with regard to one of the trades playing out today, the housing sector, real estate markets are red hot. If you look at some of these Home Building stocks, check this out, one of the better performers in the s p 500, up 5. 5 afterprofits and revenues came in better than expected, because people are still demanding new Housing Construction and theyre raising prices, expanding profit margins. So ndr, horton, some of the Big Companies there. And itb is up 1. 5 , as well. One of the bigger downside moves that we are seeing today, outside of the s p 500, comes from streaming audio and podcast giant spotify. Those shares down 14. 25 right now, after its revenue comes in lighter than expectations, as does the fullyear revenue forecast they did add some subscribers and premium subscribers, as well so theres a little push pull. For a stock up over 130 and dropping about 23 from that high, you can see there, spotify, really a big mover on the day. Back over to you investors turning down the volume on the share price. Thanks weve got just 24 hours until the feds decision on Interest Rates forecasters are feeling a bit more optimistic about the economy. Steve liesman has the details on that steve . Hey, good afternoon this is a consistent pattern where the most recent quarter, which is supposed to be terrible, is revised up and somewhat less than terrible. And its finally being projected forward where odds of a recession are being reduced. Take a look at the gdp forecast for 2023 in january they thought it was be 0. 4 . Now theyre up to 1. 23 . They have taken that out of this, where they expected to have something of a bounceback from a really low rate now, its more along the line of 1. 3 , which is below potential, but far from a recession you can see that yield at the quarterly numbers. They were all pretty much revised up a big number there Second Quarter, the one we just finished it had biteen 0. 5 in may. I have seen numbers as high as 2. 5, and same with all the other numbers. Theyre all anemic, but theyre also not negative and above where they were. Its not a recession built in. Another reason respondents have a hard time forecasting recession is what they think will happen to the Unemployment Rate they see only a modest increase. 3. 6 goes up to 4. 4 so not quite a percentage point, leading to what we are talking about here, the decline in recession probabilities. For the first time in a year, now below 50 . The low point had been 19 in december 2021. They went all the way to 63 and fears of recession now its back down, still elevated but at 48 , the lowest since may 2022 and look at the fed outlook here, 5. 13, thinking that it goes up by a quarter some people are baking in that, but the overall opinion is that its one more hike and done and stays there through december we talked about the cuts built in for next year risk levels are still high, just not as high as they were and the chance of the fed doing too much, as you know, john, remains one of the risks theyre talking about. Things are just working out ill mention all the major indices, near session highs. Things are economically working out. Stick with us, steve the next guest says a disinflationary soft landing is what the fed is doing. Joining me now is the former chief economist at pinco, and a professor at mcdunnas schoolo business paul, this hasnt shaped up like you thought it would say threeish months ago, because yeah, theyre looking at possibly two hikes theyre not done and yet things sort of seem to be working out so whats powell going to potentially say one side or the other that will affect the markets after tomorrow yeah. I think the markets have been in line with the more positive outlook, a soft landing outlook. So the markets have been there but the fed does not want to declare victory that is the bottom line they paused at the last meeting but put two more hikes into the projections for end of year. So the bottom line is the economy is doing better. Disinflation is happening. Soft landing is coming into vision all of that is good news, but the feds not going to declare victory until it sees the whites of the eyes of a weaker labor market it hasnt seen that yet. So i think that they will tighten obviously tomorrow, and i think chair powell will reiterate that projections have another hike before the end of the year, and that he thinks its still likely, unless the data come in on a positive surprise, both on inflation and softer labor so were almost there, but were not there, and he aint going to declare victory early. Paul, hang tight. Were going to bring in Rick Santelli here. Fiveyear notes up for option. Lets see how they did rick yes, john, it was a very interesting auction. 43 billion fiveyear notes, 4. 17 . The market was around 4. 16 and 5. So lower yield, higher price thats where the biggest demerits come in with respect to the gray, which is a b minus but a b minus for a bad pricing is a great grade so whats up ill tell ya, if you look at one of the metrics, the direct bidders, pension funds, insurerers at 22. 1 , that was the most aggressive bidding by that group since july of 2014 nine years, nine years and that really put it over the top, because all the other metrics were pretty darn good, priced a little sloppy but trying to catch that falling price, buying on the curve is definitely a bit of a channel. John, back to you. B minus, rick, thanks steve liesman, getting back to the conversation that we were just having about what is the fed to do, and paul was mentioning not declaring victory, they cant, because inflation has been relatively, you know, core inflation, stubborn yeah. I think i heard a sound of a large exhale around noon, and it came from the federal reserve, john, when ups signed that contract with the teamsters. I think theyre very happy about that im also really interesting in what rick was reporting. I want to engage mr. Mcconey on this, which what you dont want to be is an institutional bond investor and look back on the possibility that the fed is at or near the end of its hiking cycle, and you missed a big juicy 4. 17 possibility on the yield on that fiveyear. At some point here, those longend yields will start to look good if there is a sense that the fed is done here with the question whether or not somehow that curve reinverts, but perhaps it pivots along the long end and comes down. What im really asking about is this the time to think about locking in some rates because perhaps the long end is done yeah. And just to add a little to that before paul jumps in, everybody is feeling good about what theyre getting on savings right now, but that will fluctuate when rates come down so if you lock in, you dont have to worry about that, paul i think theres a lot of merit in moving into the belly of the curve, which would be the three, five, seven area of the curve. Not so much the longer end of the curve. But yes, i think now is the time that if i were still managing portfolios for other peoples money, i would want to be at least neutral operation versus the benchmark. And i would want to be in the belly of the curve in anticipation that the fed is going to stop, and then looking out into 24, that as the economy soft lands and jobs slow down and so forth, then we actually will get an easing and a resloping of the curve in fact, i think thats the most exciting and interesting thing to talk about, looking out to 24 is the fed itself is forecasting easing, not this year, but next year. Right now, theyre in the endgame for the tightening process. But soon, perhaps this fall, perhaps at jackson hole, the fed will have to Start Talking about the easing process for 24 let me ask another one for the folks at home. What about some of these bond funds out there, where the yields are pretty good, you know, theres not an inordinate amount of risk in some of these, but people are feeling spooked based on what happened in 2022, you know, the prices came way down the flipside is the yields are now up, but theres been such a bias towards equities for years, that they might be staying away. Similar situation when thats away for the folks at home to perhaps play this, and kind of rebalance their portfolios for folks at home, the equity versus fixed income, but as you get older, youre more focused towards fixed income obviously, a lot of people got surprised last year that actually bond prices go down when Interest Rates go up. So they get to see that red ink on their statements. But from this perspective, you know, in the four to five range for the belly of the curve, then i think its a Good Opportunity to lock in those yields, and if you can, try to have, you know, the memory of what happened last year with respect to the prices of your funds be in the Rearview Mirror but i know its hard its probably the biggest question i get asked when im out and about here, Interest Rates went up bottom line. You need to buy some bonds you heard it here paul, steve, thank you meantime, alaska air having its worst day in 16 months after forecasting annual revenue below estimates. The Company Sees Sales growing 8 to 10 versus expectations of 11 . For more, im joined by the ceo of alaska air. Phil, you can kick it off. Thank you, john ben, thank you for joining us. You have seen the reaction of your stock today doesnt matter if you beat the street in the Second Quarter and you had a very nice quarter, your guidance has people spooked. Whats changed good morning, phil, good morning, john, from seattle. Well, phil, let me unpack it a little for you q2 was a fantastic quarter for us you know, were probably going to lead the industry in pretax margin i want to thank our employees just for a fantastic quarter, not only on the financial side, but we led the industry in operational performance. Heading into q3 and you have interviewed other airline ceos, you are seeing a massive surge in International Travel. I think thats a good thing for the industry to have International Come back the way it is, because we serve a lot of our Global Partners internationally. But thats having a little bit of a modest impact on domestic fares. So were still going to have a strong qu3. But we are seeing some deceleration in our revenues heading into q3. Thats why you have guidance in terms of revenue per seat mile, below what is expected for the third quarter. How much Pricing Power are you losing, and are you basically saying the Domestic Travel boom is cooling off you know, quite the opposite, phil demand domestically is still strong so thats one thing we just have to remember. So low factors are high, demand is strong. The International Surge is impa impacting domestic fares, but that is still higher than they were prepandemic 2019. We feel good about where the industry is and where alaskas position now to the end of the year so were not hitting the panic button if we have to make adjustments, we will. We think were in a solid position indulge me a second why are we seeing the loss of Pricing Power if demand is still strong you know, phil, thats a great question in terms of context, you know, theres a few points of load factor moving through international and just for context, we put our loyalty members are filling up the equivalent of 18 787s every day. So these were customers and thats 50 higher than last year so these are customers last year flying domestically that are now flying internationally thats why you are seeing a little bit of that drop in domestic fares but demand is till strong, fares are still strong i think what we see is, you know, this International Surge is going to last between maybe june through september, october. But when kids are back in school, you know, the balance between domestic and international will normalize, and you will see this get back to a more steady state ben, youre focussed in the western u. S. , so you have been able to avoid alot of the storms that have made schedules a mess primarily on the east coast. But you have a strong heatwave that continues to really hammer the southwest where you have a number of operations, and its a big area for you in terms of where your flights are to. Is that impacting your operations at all . Phil, what i will say about extreme temperatures, whether its too hot or too cold, it does impact operations because its hard on machines, and its hard on people. So you have to put safety first. So we are impacted by those extremes but what i will say is that in the areas we dont have extreme temperatures, were operating extremely well and kudos to our people that are running the best operation in the country but those are extremes, phil, that are tough to operate in, no question how much of a head wind is it its few points, for sure in the new york area, weve got over 30 flights a day in the new york area. That impacted us significantly we didnt have many cancels. Those are flights delayed significantly or even diverted before they can get in it does have a huge impact on us ben, thank you very much for explaining the guidance, which obviously is hitting your stock today. We appreciate you joining us from the Alaska Airlines headquarters in seattle. John, i will send it back to you. Phil, thank you important details there in the balance between domestic and international. It happens after september the extreme weather. Thank you both coming up, alphabet up about 40 to start the year, but still underperforming its mega cap peers. Thats next. Plus, rising rates have real estate firms racing to cut costs. As we head to break, lets get a quick check on the markets the dow is higher by nearly 80 points, the s p up and nasdaq the best performer of all, up about 0. 85 . The exchange is back after this you got this. Lets go. Gobble gobble. Ive seen bigger legs on a turkey rude. Who are you . Im an investor in a fund that helps advance innovative sports tech like this Smart Fitness mirror. Im also mr. Leg day. 1989 anyone can become an agent of innovation with invesco qqq, a fund that gives you access to nasdaq100 innovations. I go through a lot of pants. 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For the year, alphabet is up about 38 , still underperforming mega cap peers overall, not just today. Thats one of the reasons why my next guest says the time to buy is now while the stock is trading at a discount. Ai concerns he says are overblown. Hes got an outperform on the stock, 145 price target, which implies a 20 move from here jason, you know, im looking at the chart. Im no chartist, but the question is, does it go back close to 150 where it was in late 2021 or closer to 100 where it was in march and april . Whats the key number or two from the report later today that will determine which way it goes does it have to do with youtube or google cloud . I mean, i would say that the core advertising number is probably the most important. It drives most of the earnings of the company, looking for 4 growth the general view is that add verytizing, you know, did not get worse in the quarter and should get better in the next quarter. You also had cost cutting going on at the company. They dont give a lot of forward commentary so we do think you should start to see margins flow through, while there is concern about ais impact on margins, thats not going to happen yet. Is the core business performing to expectation enough to take it up to the 150 area, or do they have to have one of those growth areas or one of those areas that have been shakier, sort of outperform perform well to show people oh, its not just microsoft that can do well in this game and have a portfolio that performs in Uncertain Times . Yeah, i mean, youre not going to see ai in the numbers yet. We dont think ai is doing anything right now traffic was down in june so that should make people feel better about the impact on google you know, howdy luted you know, the buys that have theres just no theres a lot of confusion on where margins will be in the back half of the year and concerns that the margins go down next year why is aidilutive to margin just because you have to pay nvidia to do it . Gen ai searches are more expensive to run right now, we dont know what percent of google searches will be gen ai in the future. I think people have found for most things they want to do, a traditional search has better results. That being said, ai will be integrated in all parts of the business, in gsuite, and everybody will have to deal with that i do think the cost to do this will get a lot less. Does that have to do with custom chips because amazons talking about that microsoft certainly doing it, so is google. If their chips can reach a performance level where they dont have to buy as much from say nvidia, because stock price