number one, margins held up remarkably well even during the very difficult portion of this recession. companies were being very careful in terms of cost containment. we're seeing margin improvement really benefitting the underlying growth and the bottom line in the second quarter, and we think it will be shown in spades in the second half of this year. >> later in this program, regular contributor stefan abrams will talk about a potentially explosive profits rise that will spur new bull market stocks and economic recovery. first up, the key story, the stock market is waiting for this. we'll talk to your friend, joe, of deutch bank who has the most bullish estimate for tomorrow's all important market moving jobs report. the consensus is predicting 325,000 dropped in non-farm payrolls. goldman sachs lowered its

estimates to 250,000 decline but our friend, joe, has lowered it to 150,000 drop which is a dramatic call, if correct, will undoubtedly spark a dramatic stock market rally tomorrow. first, we bring in joe, who is chief u.s. economist at deutch bank. give me the bare outlines of your dramatic call, only 150,000 long. >> thank you. the call is at economic reflection points. the trend in payrolls tends to be significantly larger than we see in jobless claims which historically is a good leading indicator of the economy. i would argue the amount of job loss we have had has been so extreme, companies set up in a labor market with outlook that c will not come to pass and we will see a much lower area of deterioration. >> the key point, as i understand it, in splekz point, these things come on really fast, you're starting to sniff one out. let me just bring up here today, we got a very dramatic initial

jobless claim decline. this is surprising, a lot of people thought because of seasonal things, automobiles, what not, initial jobless claims, the classic leading indica indicator would actually go up. now, going all the way back to match, this thing continues to slow down. you can see the slope get even steeper right in here. how does this in form your view? i think you said the monly july claims was substantially below. >> the monthly change was 58,000. historically, collection points the change is 50,000. we have a pretty big change. the net swing in payrolls is over 300,000. if we are at an inflection point we can see dramatic improvement in the rate of job loss, maybe see something flat sometime soon, maybe in the next couple months. >> to emphasize week 660,000 in

march, the four week average people use for smoothing and all the way down to 550,000 currently. let me go to the next chart. this is the longer turn run of non-farm payrolls. it's interesting. this is pre-lehman going back right here. we had what i would describe as a fairly mild recession. here's the lehman problem right in here is where it starts. >> larry, you know what the average was pre-lehman? 150 a month. >> 150 a month. you can see how this starts to crater and gets to 700,000 and stays there painfully during the fall and winter. but lately, it has been slowing down, although last month threw is a curveball. how do you read this? you have a basic trendline growth. how many months before we see a positive jobs number. >> if we're right tomorrow, we could see a positive by the fourth quarter. absolutely. >> october, december in there.

>> absolutely. >> you are looking for slight rise in unemployment. >> 9.6. you have to wonder if the job market is stabilizing it may not go much over 10% and if we stabilize next month, it may go down. >> just put this up on the floor, i lost a bit of sound. while we're talking about that and bringing in the great rick santelli. a couple quickies, some people are saying automobile improvement will put 50,000 new jobs on in the number reporting tomorrow. is that possible? >> absolutely. we estimate motor vehicles could add 1 gdp in the third quarter and half a point in the fourth quarter. you could get significant hiring. >> i can't help but ask this, anything to do with cash for clunkers, the only federal program i ever favored in my life. >> we can't agreerh grow. i said a few months ago i

thought it would go to 700,000, i was completely wrong, you wer correct. but with cash for clunkers going to work, i don't know. >> the consumer spirit, let's not go there because i know santelli hates that, too. last one, construction jobs, housing has leveled off quite a bit. will we see relief in construction job numbers. >> i would think so. i would think you would see fewer rate of layoffs because we finally saw in three years, a raise in housing starts. we see a slower pace of hirings. i think companies overcut in the second quarter. if they slow down, we may not  have to see any gain, just less firin firing. >> to summarize, i have to have sound on the floor because i will not hear santelli. to summarize mr. santelli, what you hear from mr. lavorgna, jobs loss of non-farm payroll.

mr. lavorgna is down to 150,000 loss. from what i gather, rick santelli, you have something of a disagreement. >> first, the unemployment rate agree with, 9.6 or 9.7. trying to pick these number points isn't easy. i'd bin the 350 camp of job loss, we had straight months in a row. most importantly, we had an important piece of data, jobs and spending and income hooked at the hip. we saw 1.3% drop in personal income for june. i think that is a very important dynamic and job loss, moving to the zero line and moving to addition of jobs is a process i disagree with, joe, i think it's going to take longer and think things like cash for clunker, it diverted capital that could have gone into consumer choice areas, instead of course it had to go into the auto. >> you know america has a love

affair with the automobile, you know that. they love going into the showroom. if they're not buying new cars, they're buying old cars. they love the smell of the new cars, joe, this is america. >> some people might like the smell of a new washing machine, some people might like to buy clothes, no, the hand-out is put forth in a way you're dictated and penciled in where you spend it. payroll tax holiday would have put the money in the pocket quick, given the consumer a better choice. >> i'm in favor of a payroll tax holiday, i'd like a 17% flat tax rate but the politics won't allow that. rick makes a good point a good one, income has been lagging, wages and salary lagging, i wan to ask you that and i tomorrow' report, will we get any leaf from hours worked because in addition to job loss. >> it's key, key. >> hours worked have been slumping and that brings down income to spend on all the washing machines rick santelli wants to buy. >> larry, we'll see some

improvement in temp hiring, go to more adjusted flexible adjusted work force. overall hours is weak, as long as the factory work force is rising, that means we will have an inventory cycle and get some growth. >> ah-ha! ah-ha. >> if we have growth in the third quarter, larry, give written productivity is running you have to get improvement in labor. >> two points. inventory cycle is probably what's going on, whether the inventory gets built and finds buyers is the key, the second point you hit, this was brought up by one of the bank of england, mr. bing in the uk, i like what he said, how can you reconcile the fact initial claims are falling down, if you look at things like wages and salaries, that wonderful piece today by charles on the website -- >> charles beaderman. >> the underemployed are making lessskewing the data to

look like claims are slowing but won't have the money to spend. >> 90% of the work force is working. >> no. how many were working a year ago? >> rick, you were talking earlier, i think you got this from beaderman but the labor of statistics agree, there won't be a benchmark. >> absolutely not. >> it won't happen until autumn and doesn't kick in for a year. that's a lagging indicator, my friend. >> of course, it's lagging indicator? this is a leading indicator. a leading indicator. >> all the charts you have up there, i agree with. the numerology, in my opinion doesn't fit the feel that's out in middle america. the reality is you can show all the charts you want. if we don't get people in jobs at least close to the income they were making if they were laid off or fired and we don't create jobs the fact that less bad is only going to take the stock so far and your great

strategist today we have great respect for, i'd give $25 if anybody can show me a clip of a sell or bearish comment he ever made. >> in defense of abbey joseph cohn -- >> i love her but it's always going to be -- >> listen to me, i have known her a long time, i have been around a long time as you have. she called the crash of 1987. that was a major call from a major firm. >> if you recall, i just said 20 years. >> rick, you know what, she's very imminent -- >> what i'm saying is, a sense of buy and hold forever. >> one of the key points abbey joseph cohn made today, we will hear this later in the program from stefan abrams, profit, very positive that the excessive cost cutting and modest rise in revenues from a rising economy could lead to tremendous profits

and show that rick santelli is bearish out there in the american heartland. >> larry, rick makes very good points. we declined three-quarters in a row nominal gdp declined. that has never happened in post war history. there will be nominal gdp growth and immediate ly feed corporate bottom line. growth becomes self sustaining and self perpetuating when it kicks in. >> if mr. lavorgne is right -- >> mr. blender wrote a terrific editorial on it, i have it in my office. >> glad you're framing alan blinder but so far from you politically, it's very amusing. we all pick and choose the people we want to pick and choose from. i want to ask you in the marketplace, if mr. lavornge is correct, if jobs only are at -- what will happen in the

stock market. >> it will be a rocketship. >> you acknowledge the potential exists. >> and it goes into hyper drive. >> 375? >> 375, supply next week, probably get a great chance to sell the treasury at a much higher price -- excuse me, you will not get a chance to sell them at a much higher price if we get that data because yields will start to move up. >> if joe is right you will work towards 4% on the bottom a. downward price. >> absolutely. >> we will come back to this later. maybe we can put back on the screen the broken dollar, george washington is sort of crying or something on this broken dollar. if mr. lavorgne is right, is that george washington on the one dollar. >> the dollar gets tagged tomorrow. >> if the jobs come in stronger, if the jobs loss is only 150, you think the dollar gets tagged. >> it gets tagged. >> i disagree.

the fed will not renew their treasury purchase, money supply has been flat. >> it won't like the supply and not like -- >> and people will have interest hikes. >> i think rick is initially right, larry, people will go fo high risky trades emerging market but i think longer term -- >> buying dollars. i know rick santelli knows more about the subject than i ever will. both of you will stay with us. we had this little discussion here. i think we had virtually no agreement, no common ground, what i love about it. the great rick santelli in chicago, and the great here at headquarters. and tomorrow, jobs report. all about jobs jobs jobs. we have a top notch bull-bear debate later. corporate profits ready to soar beyond the estimates of walt. i agree with that and so did

abbey cohn this morning. and before the night is over, we will fix the broken dollar. it's the chevy open house. and now, with the cash for clunkers program, a great deal gets even better. let us recycle your older vehicle, and you could qualify for an additional $3500 or $4500 cash back... on top of all other offers.. on a new, more fuel efficient chevy. your chevy dealer has more eligible models to choose from - more than ford, toyota, or honda. so save gas... and money... now during the chevy open house. go to chevy.com for details.

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lavorgne. welcome back. the new bull market had a healthy mild pullback today, the second day in a row. all eyes are on tomorrow's important jobs report which could be a market making game changers. let's go to cnbc rebecca jarvis with the full report from earnings central. >> we have the job report for tomorrow and aig's report for tomorrow that saw massively outsized volume the last two trading sessions. take a look here, 100 million shares of the stock traded today, more than 10 times the vow volume. this was a $13 stock two days ago, what snaepd barkleys puts out a note even unsecured seniors are unlikely to be made whole. the last two days we see short-covering. you have heightened expectations for tomorrow's report. but the second theory a lot of traders are sticking to, stock

lending is making it more difficult to borrow, government banning naked short translating to a more conservative report on trading, you see it reflected in the stock in that short squeeze and morgan stanley will buy back warrants from the government for $950 million and brinker, the parent company of restaurant chain, chili's provides 2010 earnings guidance well below consensus. you have cisco, big tech story, posting a $46 drop in quarterly profits, rather, $46 billion drop in quarterly profits. some folks, i meant to say percent. some folks say the street wanted a more positive outlook that ceo john chambers delivered. where things sounded more upbeat, sequential order of trends are returning to their normal pattern. the same story, stable day, people like to hear it and sounds like what we're hearing out of cisco, positive read and

retailers big story we'll get to you later. >> i want to thank you for hanging out with us, i know you've been going non-stop 12 hours all day. >> my eyes are burning. >> thank you. you are the best of the best. retail, up 1.1%. >> today. >> you described earlier, mediocre chain sales stores report. what you do make of that, still hot retail index. >> there's still a potential of gains in the future and will come out of cost cutting inventories and also upside potential for potential growth for some if say the jobs picture gets better and people say, i'm sick of saving at zero percent interest, i will spend a little money. >> one last one, i don't know if you got this, i don't have this, off the cluster stock website. cit is up 116% in five days? >> the story, some people are looking at it reading it the way

the aig story is read, there's a major short squeeze going on, with lending issues and naked short issues off the table, perhaps we're seeing the risk appetite people are having to cover those shorts and recognize they could get hurt. >> banks took a little bit of breather today. i still say, find a bank you hate and invest in it. we'll talk about that later. coming up, our speed traitder segment tells you how to make money. i want to thank rebecca jarvis for doing all day and all night duty. coming up on the corner of broad and wall. why is house speaker nancy pelosi buying jets for herself with taxpayer money? i thought she didn't like those ceos who traveled in jets, oh, my gosh, we'll have nancy pelosi and others on "the kudlow report." we will still fix the dollar before the end of the show. oof!

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let's dive right into the speed segment. we have jack from futur futuresgroup.com and mike kuo director of derivatives trading at fitzgerald and the two who agree on nothing are still with us. as i live and breath, my great

friend, jack. we have a number of things, the new bull market, economic recovery and we have a very small jobs loss according to joe lavorgne, only 150,000. where are you on those issues? i haven't spoken to you. >> a couple things. we have to keep into account july and january are notorious bad months for unemployment. especially government jobs and teachers that get laid off. they are reflected in that july number. i think it will be a surprise, a little higher than people expect. even 250,000, think about it, we will end up celebrating two 50,000 people are out of work. >> you're okay with that, the thrust of the lavorgne story things are turning in the right direction? i thought you were more pessimistic on the market. >> i think we're on levels we are now voting, the market is now voting what is happening in washington. we are now at levels we were at

election day. now, it's not a question where the market was a few months ago, where it will be in another few months. will the policies out of washington be obstacles? are we seeing prosperity killers, tax hikes. >> protectionism? are we seeing the things dr. lafferty told us were protection killers and these are the head winds we will face over the next couple of months. >> the issue remain, my call for the new bull market and i was humbled abbey joseph cohen agreed with this. cyclicly we have seen a free market capitalist adjustment cost cutting by business, very important producing profits. first, the estimates look better and top line drives revenues sky high. it may not give me 8 or 7% economic rebound like in the reagan years in the 1980s but gives me 3 to 4% i think gets me to 1100 or 1150 on the s&p maybe

1200 pre-lehman. today, the s&p closed down slig slightly, to 1,000, what's your take on those issues. >> first, i agree, we will end the market higher than we are now, probably a good 10%. 1100 was my magic number, i will probably stick with that. you can't drive a car by looking in the rear view mirror. the market's telling us something. when we're looking at economic numbers, we're looking what's happening in the past. things are turning more quickly than you might think. i have a feeling economic numbers we might start seeing including tomorrow's jobs numbers will bear that out. >> the index of leading indicators. hold on one second, joe, back me up on this, the leading index of indicators, last month, a powerful index, the jobless claims you referred earlier, also the business cycle research index is showing the same

things, leading indicators are important. are they consistent with your view? >> it's fairly broad bachltds housing permits are up, vendor performance up, fairly broad-based. >> orders? >> orders, exactly. not just an equity yield curve story, you're seeing broadening out on forward indicators, suggests the economy is turning. >> look at the home building, what we're looking at. we're looking at lower end homes. this is exactly the consumer everybody thinks has been left for dead. this is evidence those guys are stepping in saying, now's my chance to participate and buying the lower end new homes. >> when you break it down, a lot of these are foreclosed a lot of excess inventory soaked up. we're not creating jobs. that's really what it's about. >> new homes? foreclosures? >> i'm talking about new homes. >> think about it a second. the inventory getting scooped

up, is it really creating jobs? what we need to do is set policy. >> you're talking about cash for clunkers deal, every free market capitalist i know when we heard you support that had their jaw dropped. >> i departed because it is fiscal stimulus in the deal, i wouldn't have done this. i said earlier to rick, i'm for 17% tax rate i would have had a tax holiday. it's out and about and will do gusty wind the short run. i'll take it any way i can get it. >> you're picking and choosele. >> i am. i am! >> we're looking in the rear view mirror. anybody know what that number. >> is joe lavorgne, does that ring a bell. >> the ism services number. give me credit. i actually knew that. you guys give me a little credit. >> it's roughly 80% the economy of the service sector. when manufacturing wasn't doing well all my friends picked and

chose, they chose the service sector number now with the clunkers and pent up demand in autos they wear out, you go to manufacturer. what i'm telling you is there is plenty of data, you just can't keep switching the ball. >> what's mr. santelli's attack to the ism services. vitriolic, very difficult punch to the jaw. >> i was going to say association i kept it to myself. >> just say it, joe. don't be bashful. >> no, rick, i won't do it. i don't want to say. >> it i like you, too, but i don't agree with you. >> these indicators are sensitive indicators and sensitive points by definition will turn. i think what's going to happen, larry, we're going to see -- that number was around in the high 40s prior to lehman, below 50, minus 150 where is you were pre-lehman. that is still a very bad level but people have to think of the economy in terms of a pro-self-assessments this is a process of healing.

. >> indexes, manufacturing and service have been trending higher the last five, six months. the trend is your friend. jack, unfinished business. i agree with you there, are no supply-side incentive oriented pro-growth policies coming out of washington. you know, jack, i guess we both have to accept the fact president obama this is president and for the moment he has a democratic congress. what i'm really asking you is, looking inside the economy, internally, in dodge unanimously and looking inside the stock market, why can't we have a cyclical rebound in both profits and stocks and business and ultimately, as joe is suggesting, jobs? i'm not getting you back to 1500 on the s&p, the prior peak, all i'm saying from 60 wherever the bottom was, you're up 50%, i think i can get you towards 1200. >> larry a wise man, i think it

was you, said an occasional liberal in the white house cannot destroy america. >> that is my view. >> i agree with that. >> i don't want to go into political critique, more interested in internal critique, you can have cyclical rebounds. it may only get us halfway to the prior peak. >> one of the problems -- one of the problems, though, larry -- >> the salient point, larry, what we're looking at, the market is not at its all time high. >> right. >> let's keep everything in perspective. we're looking at an economy turning around, we're n not -- it's not like we're buying the highest high. but the market is making a lot of assumptions. >> right now, you're trading last year's learning erngs and we're getting very loft y -- >> abbey joseph later on and ste stefan abrams will tell us, i don't think earnings direction is so important. >> i was going to say, look, as

you know, i've been saying credit spreads are a key variable, they're all back to pre-lehman levels. i don't understand wieck quity prices cannot get back to pre-lehman levels and we'll debate it from there. >> can we go around on that. these corporate credit spreads, libor against treasury spreads in the money market are way down and swap spreads way down. rick santelli, these are financial signs of credit and healing i think are being narrowed in the stock market. >> everything you said is true. if there's not the type of demand to borrow from a system more healed and functioning than it was seven or eight months ago, that continues to be the definitive feature. all the revenues and earnings and growth everybody is talking about at some point has to come to roost in a simple explanation. consumerism, we're not like japan in the '90, if we're going to turn this ship around, we're not an export economy, it has to coming through consumption, you

need bullets for consumers to consume, income and jobs and the rest off it is a lot of pretty charts. >> if mr. lavorgne is correct and the decline of jobs is only 150,000, on a rate of change basis would be tremendous victory for economic recovery, how would you play the market? if that number or something closer to it flashes on the screen. goldman sachs came out with 250,000 job loss estimate, way below. let me go -- no, i'm asking mark, how are you going to play this? how would you play this if you get a low end jobs loss number tomorrow, mark? >> the first thing i would say, when that number comes out, the options market aren't going to be open yet so i won't get an opportunity to play there. we will see something pretty profound, volatility coming out, the level of complacency or concern about the market is coming in. this is a big number coming out tomorrow and i would expect a number like that to see the

market take off and expect down-side options to buy upside. >> would you buy them where in commodity stocks? where? >> i like energy and think the demand will rise there and demand will rise in favor and think we will see commodity prices rise. >> jeff, let me come back fo, you if the number is closer to rick santelli, i guess we lost rick on the hook-up, if it's not as good, 350 or 450,000, jack, how would you play. >> it i think it's a sell sell scenario. if it's a good number, wait and sell it because the market will rally back to the level it was pre-election day. if it's bad, you won't get that opportunity. either way, we will see 5 to 10% in this market quickly. >> jack, how can i talk you into a sicyclical bull market? what piece of evidence or data point should i try to find in the top drawer, some place on

the web. >> a pendulum swing taking place from the left to the center. health care starts to lose momentum see what happens, the market starts to take off. amazing what happened. >> cap and trade is dead. cap and trade tax is absolutely dead. i also think, jack, if i may try to reassure you on a thursday night, the government insurance idea is dead and the taxes that go along with it. i think there will be some kind of health care package. that ain't all bad. thank you. joe lavorgne, terrific stuff. can i tell you, buddy? i am rooting for you tomorrow morning, down 150,000. we lost our great friend, rick santelli, i thanked him posthumously. coming up, the senate is getting close to a vote on cash for clunkers. we'll let you know what happens as soon as we can find out. so far, the senate has not gotten the vote, debating the final strokes and a vote pending

and we will bring you the breaking news as soon as it handshapes. no e cash for clunkers won't solve all our problems but i believe it will help around the edges, for once a stimulus plan will actually create something. and the fcc's new approach to policing oil markets, i call it government gone wild. more to come, bull market stuff. stay with us, "kudlow report," we'll try to fix the broken dollar and raise the stock market even higher. undefeated professional boxer floyd "money" mayweather has the fastest hands boxing has ever seen. so i've come to this ring to see who's faster... on the internet. i'll be using the 3g at&t laptopconnect card. he won't. so i can browse the web faster,

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k today. we open up a new segmen segment.news headlines from the corner of broad and wall. get ready for $1 gift oil possibly, the warning from goldman sachs. they're warning when the global kicks into gear again, problematic supply short annuag will cause a spike in oil prices that will resemble 2008. i hope they're wrong. call it government gone wild. the ftc plans to police oil prices to prohibit manipulatos s

from manipulating the market with fines up to 1 million dollars a day. how will they know? almost all thee suits brought before the ftc has been thrown out in the past. personal planes for house speaker nancy pell lo sni huh? an airplane. the house approved nearly $200 million last month for the air force to buy three elite gulf stream jets. their purpose, sure, to fly top government officials and members of congress including the leadership. now, who's pointing the fingers at those corporate ceos who flew into town? remember the bankers? i guess the congressman will be just like the bankers with their own planes. bailout nations. is the u.s. post office next? they reported a net loss of more

than $2 billion in the third quarter. they're running to congress for emergency money. let me get this right. the u.s. government is asking for t.a.r.p. money for itself? and twitter is trying to regroup tonight after a hack attack disrupted service. the so-called denial of service web attack overwhelmed the social network iing site for several hours this morning, facebook, youtube, other networking sites all reported similar problems. gee, ahead to put my own tweets on hold. coming up next, the new bull market. our market experts are ready to help you power up your portfolio. the new bull market. soaring profits. before we get there, let's check in with my great pal, dennis kneale. >> we have new insights, the new agenda of russian strong man vladimir putin and why he's parking his subs off our coast and a look at those job numbers tomorrow, might the market roar up on end, i will take a special

defense of goldman sachs, larry, it's time. >> somebody has to do it. we did a little last night, you will clench the deal. everybody watch dennis at 8:00 p.m., we will still fix the dollar before the night is over. in a long line of amazing performance machines. this is the new e-coupe. this is mercedes-benz. this is humiliating. stand still so we can get an accurate reading. okay...um...eighteen pounds and a smidge.

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a profits explosion for the new bull market. let's take another look at what abbey told us this morning. >> are companies lean and mean enough with all the business cost cutting to give us a lot more torque in profits and would that really blast the stock market higher? >> larry, you're right on target here. two things to be looking at. number one, margins held up remarkably well even during a very difficult portion of this recession. companies were being very careful in terms of cost tainment and seeing margin improvement benefitting the underlying growth and bottom line in the second quarter and we think it will be shown in spades in the second half of this year. >> the only reason i was right on target and francis ask added good follow-up, our next guest,

stefan abrams gave me his great talking point. i gave him a shout-out the other evening. i am in the new bull market. humbled a distinguished person like abbey joseph is in the same camp. it has to be driven by honest-to-goodness profits, not just near misses. fill me in on your optimism on profits. >> larry, the economy is recovering. look at the manufacturing of automobiles, look at the bott bottoming out of residential construction. watch for the next few quarters as you begin to see a renewed inventory cycle and maybe more important than anything else, remembering that we buy companies, we don't buy economy, look at the demand coming from overseas, as those economies, particularly in the emerging world, are all picking up quite rapidly.

so we're going to have a revenue expansion in the third and fourth quarters, probably all the way through 2010. >> that will go right to the bottom line is what you're saying? >> the incremental profit margins, that is to say the profitability of the incremental sales will be huge. >> so that's good. root canal first. root canal first, and then the profits come later. what's your response to stefan. you're not as bullish as he. >> is no. 70% of the economy is from the consumer, where will he get the buying power for? no one will lend to him, and in hock up to his eyeballs? hock up to her eyeballs. >> you look at the demand for cars and cash for clunkers, government welfare for gm. >> stefan, what is your response to the consumer demand side response? you will come back, give me a

quick one. >> 70% of our economy, but not the source of 70% of the profits of multinational industrials. >> all right. i would just say to neil weinberg and others, it's businesses that create jobs, jobs create income and that's the source of consumer spending, i always look at it from the supply side. both stay where you are, you're both coming back, i want to walk through profits some more and get your stock market estimates and ask when will the fed start raising interest rates to rescue the dollar? mr. evans? this is janice from onstar. i have received an automatic signal you've been in a front-end crash. do you need help? yeah. i'll contact emergency services and stay with you. you okay? yeah.

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we are back with optimist stefan abrams and less optimist, neil weinberg of "forbes" magazine. we've been talking a lot about the jobs that could be a big game changer tomorrow. do you think we will get a low number. our friend, joe lavorgne was down to 150,000. the consensus is about 3, 350,000. what's your take? how would you invest if you get a better than expected number, stefan? >> i have no idea what the number will be. i heard all the experts. if we get a low number the market will take off again and go to new highs for this cycle. if we get a poor number, it's just part of the process of bottoming out and it will give

investors who haven't committed funds one great buying opportunity. >> buy on the pullback is what you're suggesting? the healthy part of this new bull market, is that right? >> exactly. >> stefan, your favorite sector or two? >> well, i still love the industrials, the energy, the materials and the industrial transportation sectors. that's where the profit leverage is. >> neil weinberg, you don't agree with this and think we're topping out. how would you invest from the more pessimistic side. >> if you have asset allocation long term, stick to it. as you mentioned earlier, spread with corporate bonds and junk bonds have come way down, still on historic basis, they're pretty good. you have risk of inflation, if you decide you want to go into bonds probably own tips as well as. >> treasury inflation and securities issuing in greater volume. >> exactly. if you compare this to the stock market, talk about estimated reported earnings for this year,

we're at about 30 times, which is a lot. very high. >> i think the bond rally really means the stock rally has more leg legs. >> i want to go to the last subject, put the broken dollar on the board, george washington in pain and anguish. if you get a good jobs report tomorrow and pieces fall in place nor market recovery, we will speculate the fed will start raising short term interest rate for the next six months, will that stop the dollar from falling. >> first, i don't like the dollar in freefall. i rather like where it is helping restore america and industries come pettiveness. >> chronic weak dollar, wouldn't that prop up the wheels. >> we won't be in global inflation in excess capacity and i don't see the fed moving on interest rates for at least two years. and when the economy starts up,

larry, when this economy gains some momentum, the dollar will rise all by itself. >> that's our thing, neil, if the economy does rise, people will start pricing in a snuggier fit, not a tight fit but snuggier fit, combination of better profits, doesn't that say buy the dollar. >> it does only if the fed says buy strong dollar. >> they have to take action to convince us because we hear mumlings all the time. >> it wouldn't hurt to get our fiscal house in order, right. >> fiscal house in order. stefan, neil, great stuff. me, i still say it's the new bull market. we are going to roar. the jobs number tomorrow is important. we're still going to roar. catch me tomorrow, we'll cover this report on the call with melissa and trish as usual at 11:00. fithe same tools the pros use,

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i'm convinced the action we've taken in the first six months have helped stop our economic freefall. we're losing jobs at half the rate we were at the beginning of this year. our financial system is no

longer on the verge of collapse thecht market is up, housing prices are up for the first time in nearly three years. so we may just be seeing the very beginnings of the end of this recession. >> all right. we may be seeing the beginnings of the ends of recession. i don't know what he had in mind there. i'm glad he's optimistic, i love an optimistic president. i will tell you, he knows tomorrow's jobs number when i worked as deputy at the of fis of management and budget under president reagan we would get that number about 4:30, quarter to 5:00 before the friday morning report. the president gets it with a litt litt little mem an dumb attached from the o & b. mr. obama may have been referring to a better than expected number or maybe not however, i am still strongly devoted to the strong bull market recovery i see. let me turn it over to my great friend, dennis kneale.

have a great program. >> thanks a lot, larry. >> "cnbc reports" starts right no now. tonight on "cnbc reports," does the eve of mid-summer's jobs reports economy from coast-to-coast were all atwitter. if you listen closely to the analysts, tomorrow's news could give you a shiver or quiver or could be a provider of a new market run. no sugarplums dancing on this cable cast, just dollars, cents, bulls and bears. at the same time, the toy soldiers are on call trying to protect your money from a fall. the white house standing tall, bringing in new rules to rattle capitalists near and far. as investors big and small watch the numbers, the u.s. navy is watching at least two russian submarines, they're on the move. the kremlin may be thinking cold war. as back to school season gets started, we're already looking to the big one, the capitalism op