good thursday morning. i'm carl quintanilla live from the new york stock exchange. is the boom or bust cycle for stocks here to stay? fidelity's head of macro is with us this morning. a warning on the three bears that could break the market. sa satori funds dan niles is with us. wells fargo's head of fixed income weighs in on higher rates and why a harder landing may be inevitable. we start the hour with the activity in the bond market, which continues to dominate sentiment for stocks, which are selling off and the momentum is fading fast here. s&p down 0.75%.

senior markets commentator mike santoli taking a look at that question. doesn't feel very settled. >> no, and not persuasively so. we did get a bit of pressure taken off that surge in bond yields yesterday. this morning it seems a bittentive ahead of the jobs number tomorrow. it's unclear to me you're going to get a lot of decisive moves. the scene is set for potentially some near-term reversals in both fixed income and in equities. of course, as you've been saying for days, it always gets this way when you're kind of a couple of months or several weeks into a correction in the stock market. things are getting pretty washed out, the breadth call, the put/call ratios. at the same time, bonds, very negative sentiment and really a steep climb in yields. what does all that mean? if we're still in the old trends, they should back up quickly and we should get a little bit of relief from an

oversold stock market. things to look for today. s&p 500 yesterday made a slightly higher low than the day before. i mean, we're talking about slicing it pretty fine here in terms of looking for any sign out there that the sellers are getting fatigued. >> i thought of you yesterday when sam stovall put out the note and his points is the s&p has never made a lower low after retracing as much loss as it has this last round off '22. when do we start to worry about a stat like that? >> i have to say, pretty much now you start to worry about it. what i want to keep in mind, it's been an unusual cycle in both directions. i'm absolutely cognizant of that. i feel as if the people who are complaining the spring into the summer the market was too narrow, only seven stocks, they

were wrong for that period of time. maybe they were wrong enough for long enough that they're no longer on the wrong side of this one. you have to keep watch, see if the market responds to these oversold conditions, see if the seasonal strength starts to kick in. that will kind of tell us whether, in fact, we are still in that longer term uptrend or not. i don't think we have a tremendous cushion in terms of keeping the benefit of the doubt with the bulls. for now, though, i think it still sits there. >> what's happening with earnings expectations, could that rescue the stock market from this bond malaise? >> if we go down the list, sara, that's one thing more reassuring or less so at this point. it's top-heavy increase in earnings estimates because it is some larger stocks. at this point you've taken two pe points off the s&p 500 in a couple of months. you've gone from almost 20 to 17.7 or something like that. if you believe the earnings, that means you've taken some risk out of there. cyclical sectors, cheap and even

more. it's a funny spot here because we want some evidence of economic slack if that's what it's going to take to have the bond yields calm down. but we don't want too much slack because that's going to bring the earnings increase story into question. you want slower, but not slow. and it's a fine needle to thread. >> mike, thanks for that. mike santoli at the stock exchange. sticking with the markets, our next guest says the fed's done or at least mostly done hiking, predicting we could get rate cuts next year if inflation gets below 3 and the economy slows down further. joining us, yuri. it's good to see you're stuff coming out of burning man. i wonder as we get, for example, goldman upping their q3 tracker at 3.7, if we're in an environment where reacceleration is going to confirm this action behind bonds.

>> yeah, it's a great question and certainly the gdp estimates in terms of the overall consensus has been rising all year and even for next year it has stabilized. so, this has been the elusive recession that the yield curve was screaming about. and i think generally the market was, you know, coming into this year with that sense that that other shoe still had to drop. obviously, it hasn't dropped. i think the main reason is that so much of the economy has turned out their debt at low rates. so, we're talking about higher for longer for the fed. but for the private economy, consumers via home mortgages and corporates, it has been lower for longer. that's a very big disconnect between fed policy and what the economy is actually doing. so, whether we have a recession next year or not, i mean, this is anyone's guess, certainly rates are rising, the term premium is now positive, which probably makes a lot more sense than having a negative term premium. and, obviously, rates are biting

in terms of their impact on the stock market, just like they did last year in 2022. so, remember, last year was all about the rising cost of capital, that lowers the present value of future cash flows both for bonds and for stocks. the ten-year treasury, if you flip the yield around, and express it as a pe, had a pe of 200 back in 2020. it's now at a pe of 20 or 22. much better levels. this is the reset. and earnings expectations are presumably baked in the cake. the consensus is for plus 12 next year, plus 12 for the year after that. earnings have, apparently, bottomed for the cycle but whether we're going to get back-to-back 12s in a late cycle economy, you know, maybe that's a stretch. so, the market becomes overly sensitive to rates. that's why we're seeing this pullback. the good news the s&p is at

4200. that is support. that is the 50% retracement of the recent rally. it's also the 200-day moving average. only 9% of stocks are trading above their 50-day moving average. the market is legit oversold now. >> interesting. does that necessarily mean that you're willing to put targets on it, say, on a 12-month basis? >> i think 12 months -- i don't like targets. they tend to be a losing proposition for anyone making them. but i think in 12 months, i think the market will be higher. you know, the question is, does this cycle end with a whimper or a bang, as you mentioned in your opening remarks? inflation is improving. the core is at 3.9. cpi is at 3.6. it's sticky because the base effects are gone. at the same time next year we're seeing 3% inflation, even if we don't have a recession, i could see the fed pulling kind of a page from the greenspan playbook

back in '94 when greenspan gave back some of the rate hikes in '95 because it was essentially mission accomplished. they didn't say that at the time. but that is the window into a glass half full ending. of course, the glass half empty is we do get that recession, get another washout and microcap stocks, which is the bottom half of the russell 2000, are making new cycle lows as we speak. so, that's not a good sign and it shows how bifurcated the market is here. >> i was going to ask, if you're a believer in the market, where do you think leadership is going to come from at this point? >> we know who the leaders are, tech and energy, which are kind of a strange pair, if you will. at the bottom are the defensive bond proxies, utilities and real estate. if you kind of express the s&p, if it was just tech and energy, we would be at over 5,000 right now. if we just expressed it as utilities and real estate, we

would be at a 2500. it just shows you how dispersed the leadership has been. of the winners, i think energy is still looking pretty good. on the tech side, we talk about the magnificent seven or the nifty seven, their valuation premium over the rest of the market is not even half of what it was back in the late '90s during the tech bubble as well as the original nifty 50 period in the early '70s. so, maybe there's more room to run. obviously the a.i. story is part of that. i think one of the big questions or the hopes, if you will, for the market is that a.i. boom feeds down into the rest of the market just like the internet age in 1996 did, eventually for all companies on the planet. if we get that, we get a capex boom. that capex boom then leads to a

productivity boom. a productivity boom is severely needed when demographics are so sluggish, right, because if you think about the noninflationary run rate for the economy, potential gdp, it's labor force growth plus productivity growth. we know where labor force growth is going. the great hope is productivity will get a lift from this a.i. boom that right now is only benefiting -- benefiting the mega cap growers. >> certainly a big part of the long-term bull thesis. i can't imagine that many would explain about a 95 repeat in terms of the cycle. we'll talk more soon. thanks for that. still to come this morning, goldman laying out its best ideas in energy, plus making the case for $100 crude this spring. brent is down double digits in the past week, as you know. and then dan niles on the three bears investors need to fight in this market. and the three tech stocks he's buying as a result. his fund higher last month

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home of the xfinity 10g network. small rebound for disney shares this morning after the stock closed at its lowest level in nearly a decade. declining park attendance and hotel occupancy part of that pes nichl as disney announces it will discount children's tickets at its domestic parks next year to combat the drop-off. disney universal, six flags, seaworld have reported decline in attendance. a one-day ticket to disneyland for a 10-year-old is $104. carl, i welcome the disinflation in this part of the economy as my kids are dying to go to the new star wars world in disney world. >> that sounds like there haven't been bargains like that in a while. a note from goldman's desk grabbing our attention. they see this double digit dip

in brent, they see brent pushing to $100 a barrel by next spring. joining us is goldman sachs managing director, head of research, don. it doesn't sound like you were necessarily moved by this demand data yesterday. >> thank you for having me. we believe the crude selloff reflects temporary factors. in particular, unguided fears about gasoline demands, overdone fears about rate-driven recession and some technical factors. we think this bearish factors will ultimately prove to be transitory. robust demand will push brent to $100 a barrel by next spring. dod data shows drop drop. a sharp selloff in gasoline

markets, gasoline refinery margins, which is bleeding into the crude market. we think that these date significantly show underlying demand for gasoline and tightness in global inventory for gas. >> right. and u.s. production and non-opec production not enough to come to the rescue? >> so, we think that u.s. production is going to slow down significantly from rapid growth this year because of ongoing capital discipline. opec we think because it has such elevated pricing power and because the region needs a lot of money to fund its ambitious expansion projects will be very patient in bringing barrels back to the market. the group level cut that was announced in the spring of last year will extend through 2024. >> what's going on with the

strategic petroleum reserve in the u.s.? last week when prices were still spiking -- i know they've come down a lot since then -- that was all the talk of whether the administration would step in again ahead of the holidays. what is the situation with how much they've got left and how much wiggle room they have to do more? >> so, the significant releases of the spr were a major contributor to the selloff in crude markets in the second half of last year and the first half of this year. however, moving forward, we don't think spr will be a main driver of crude prices. the main reason because you're down almost 300 million barrels over the last two years. the level of the spr is low. the bar, we think, to start releasing barrels, again, is pretty elevated. base case you get only very modest case of refilling, less than 2 million barrels per month. but i think you need very significant price moves to get

up from where the spr is not a game-changer for crude prices. >> finally, putin is on the tape today talking about ukraine. obviously, funding, very much in doubt in washington. can you just talk about where russian supply, that geopolitical element might fit into the demand or supply picture? >> so, i think one key reason why, you know, crude prices rallied earlier this summer, until a month ago, is really that russia has started to comply with the cuts with the saudis. and when we look at our high frequency russian productions data, that continues to be the case. and so we believe that the russians will continue to comply, cooperate with the saudis, and that will contribute to low supply and a deficit throughout next year. >> don, it's a good take,

especially in light of sort of the action we've seen so far this week. we'll see how this settles out in the coming weeks. please come back. goldman's head of oil research. thanks. wells fargo institute says there's no reason to think we're near a top for treasury yields. their head of fixed income is with uson the move in the bond market and why they think at least one more hike is ahead from the fed. watching rivian as well. we've talked about it, down 20% on news it's planning this $1.5 billion convert. stocks obviously getting hurt today. back below 19. stay with us. the citi custom cash® card automatically adjusts to earn you more cash back in your top eligible spend category. hi. you don't have to keep tabs on rotating categories... this is the only rotating i care about. ...or activate anything to earn. your cash back automatically adjusts for you. can i get a cucumber water? earn 5% cash back that automatically adjusts to your top eligible spend category, up to $500 spent each billing cycle with the citi custom cash® card. i love it.

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mixed bag of groceries for instacart today, the words of bernstein, as they initiated market prepare. they say growth and increased competition remain the chief concerns, although the firm is bullish on the advertising business. target there, sara, is $30. they do say gdp growth already sho slowing. it's going to create some challenges. >> it's been a weak debut performance. european markets losing gains after treasury yields climbed higher in the u.s. following jobless claims numbers, which were strong. the german dax under a little pressure still. the economic indicators over there, not particularly rosy. german imports and exports both fell short of expectations. eurozone construction pmi did tick up slightly month over month, but people are focused especially on the exports when it comes to germany, carl, which is the engine of the german

economy and weaker numbers don't bode well for the economy. overall lately, the data on europe has been coming in worse. worse than the u.s. and worse than expected. >> yeah, bespoke had a great list of countries where retail sales are negative year on year. france, germany, italy, norway, sweden, switzerland, uk. speaking of stories abroad, a money laundering scandal in one of the world's most regulated markets has caught wall street's attention. robert frank has more on that. >> good morning. singapore authorities freezing assets worth more than $2 billion in a money laundering probe that is quickly expanding. so far they've seized 150 properties in singapore, 62 cars, lots of gold bars, jewelry and thousands of bottles of wine. ten people have been charged with laundering proceeds from illegal gambling. the suspects are all from china or have links to china. this scandal has exposed a dark

side to the massive wave of wealth that's been flowing out of china and into singapore. in total, more than $1.5 trillion has poured into singapore just last year. the chinese wealthy and private companies all moving money, trying to get it out of the reach of governments and crackdowns and potential tensions over taiwan. singapore depends on its reputation for that clean and well-policed financial system. authorities there now working with the big banks to try to figure out where the gaps might have been. officials also looking at the potential role of family offices. the private investment firms of wealthy families. the number of family offices registered in singapore more than tripling since the pandemic to over 1,000. family offices have minimum disclosure requirements. until recently they paid no taxes so singapore put an attractive place to put family offices. a lot of chinese wealth moved there. now the question is, was that regulation too light? >> what is china's reaction here and their position on the money

leaving? >> as our currency expert, you know the capital controls in china are very tight. they are especially tight right now. they need foreign capital and capital to stay in china. son-in-law asking singapore, in fact, whether this investigation was at the behest of china. singapore saying, no, we did it on our own. china has a strong interest in keeping that wealth in china right now at a time when many wealthy want to get it offshore as quickly as possible. >> the investment has been a big problem for them. thank you very much. time for a news update. silvana henao has that for us. >> ukrainian officials say nearly 50 people were killed on a russian strike on a grocery store and hotel. it would be among the worst attacks on civilians since the start of the kremlin's invasion last year. donald trump's lawyers asked a judge to postpone his federal documents trial until after next year's election. it's currently scheduled to take place next may in florida.

the defense argues a postponement is necessary because of scheduling conflicts with trump's other cases, including his ongoing civil fraud trial in new york and the accused prosecutors of not providing basic evidence in the case. the special counsel last week said trump's team was seeking unreasonable delays. and the new high-tech virtual golf league led by tiger woods and rory mcilroy has a broadcast home. espn announced it inked a multiyear deal to air the matches. it debuts on january 9th with preview on december 30th. dan niles is next on the three tech stocks he's picking up in this down market. his fund in the black over the last two months against an obviously tough macro. "squawk on the street" is back in a couplofinese mut. day, buss everywhere are asking: is it possible? with comcast business... it is.

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take a look at shares of

clorox. the company warning quarterly sales and profit took a big hit due to the cyberattack that hit operations. raymond james says that sales will suffer in the interim with more challenging comps ahead and increasing input cost risks, sara. we had a call from da davidson earlier in the week trying to make a bet that the update would actually be positive for the name. that did not pay off. >> no, because the magnitude of the hit here, i think, is a lot larger than wall street expected. and was, perhaps, discounted in the stock. first quarter organic revenue now seen to be down 21% to 26%. the street prior estimate was up 5%, a plus number on terms of growth. the earnings per share, negative 20 cents. the street was at 1.37 profit assumption. the good news is they did say things were tracking better than normal leading into the

cyberattack and it's largely behind them. i think the magnitude of miss on numbers is spooking investors, on top of the weakness in the stock year to date. a couple of hours into trading, we tried to put in an early morning low here south of where we are. let's get post to post with bob pisani. >> down 32. just about the lows for the day. no real bounce. dramatically oversold in conditions like reits. no bounce. not heavy volume. no price move up. there's no buying interest. it's a buyer's strike going on. and it's about the yields. if you don't think it's not about the yields, let me show you here. home depot was 328 september 15th, in the middle of the month. i want to show you a chart. thank you for putting this up. a one-month chart of home depot. red means it's down on a daily basis. yields started going up, september 15th. straight down every day. red means down on a daily basis. this is a japanese candlestick

chart. that's what they use down here. that's all about yields. boeing's been a major problem for the dow. down almost every single day. it's amazing to watch this. it was 225 a month ago. now it's 186. there's been very significant downward revisions in the earnings estimates. this quarter is going to be a down quarter. it's going to be down about $3. so, that's been the major problem there. that's been a real drag on the dow. elsewhere conagra is a problem for the consumer names here. so, the story on conagra, they have the earnings report out here. very simple. the story was prices were up 6% but the volumes were down 6%. there was a bit of a consumption slowdown. they're switching the budget choices. that's influencing a lot of the consumer names today. come over here. switch over here. coca-cola here. all of the names, the consumer names, are basically to the downside. you want to take a look right there. so, coke's been weak recently.

kraft heinz has been weak, mondelez will be weak, molson weak. the big story next week, other than jpmorgan, is pepsi. they report on tuesday. that's the first september-ending quarter company reporting. all the other ones we've been talking about with august-ending quarters. that's significant. that's when the yields started moving up, in the middle of september. that's what we want to hear about, how that's impacting the consumers. back to you. >> it's going to be key for inflation, too, because they had seen double digit price increases, a company like pepsi, on snacks and beverages. thank you, bob. staying on the market, the nasdaq struggling to pick up momentum after closing out its worst month of the year. could the recent volatility be a buying opportunity? joining us is satori fund founder dan niles. it's good to talk to you. i'm glad you're very transparent on twitter about what you're doing because it sounds like you were buying yesterday, ight, going net long? >> yeah. well, the day before yesterday we went ahead and covered most

of our shorts. and our feeling was, if you go back through our posts, we thought oil was probably peaking out. we thought that would drive yields lower. that environment where you've gotten such oversold conditions in different sectors, not all of them, we thought that was a good opportunity. one of the sectors we bought a lot of was the russell 2000 type stocks. those were down 22% last year, down another 22% year-to-date this year. they don't have the same dollar exposure that the s&p 500 has or the magnificent seven. so, that's kind of what we're investing and going into earnings season. we're short-term bullish but make no mistake, we're long-term bearish because of the three bears we see on the horizon. that's how we're viewing things. >> just first on the short-term call, since you are willing to put it out there, you were right on the oil call, seeing a steep

drop there, but not so much on stocks and bonds, which are not rallying. >> stocks and bonds, you have to remember, they're chopping around right now. for us the big thing, and we've talked about this before, i wake up in the morning, first thing i look at is oil. that seeps into all sorts of different things. the food you get, your grocery store, that has to be shipped there. materials, a lot of that is created with energy or oil and plastics, efforts. it seems into a lot of different things. oil has now gone from mid-90s, and we put out a post on this, and now it's down to the mid-80s. that's going to take a lot of pressure off. the bigger -- the bigger concern we have is the dollar. that's gone up 7% since mid-july, which is when most of these companies guided. if you look at that, you've got 20% of the russell is outside the u.s. in terms of revenues. but that goes to about 30% of the s&p 500. if you look at the magnificent

seven stocks up about 90% year to date, that number is 53% of their revenues are outside the u.s. so, that's what we're paying a lot of attention to going into earnings season. we're short two of the magnificent seven. we like two of them. i'm sure we'll get into. the rest of them we have some concerns about in terms of the forward outlook based on what the dollar is doing and what oil is doing. >> dive into that, dan, because we have talked about shorts on apple before, haven't we? >> yeah. so, to be transparent, that's one of the two names we look to short on. i look at apple. between the overheating issues with the iphone, between the fact they've got 57% of their revenues outside the u.s. and they got a deal with the dollar up 7% since they guided last, roughly, this is going to be an issue. you know, i've been talking a long time about the fact that you had three down y

year-over-year quarters in a row for revenue, they guided to a fourth. that will be the first time since 2001 they've had four quarters in a row of down year over year revenue. the bulls can talk about service and whatever they want, but that's included in those numbers, and they're done. you're paying a 30 multiple for it. you're taking a lot of risk going into this. you talked earlier about clorox, low expectation, stock still getting hit. conagra, low expectations. constellation brands is even more interesting because they beat revenue and eps and the stock is down today. this stuff matters. the multiple you pay, you know, puts an envelope around the risk you're taking, especially when the s&p is trading at 20 times. >> what are the two names you like in the tech space, if not apple? >> so, the two i like are google -- i think they -- they have a lot of revenues outside the u.s. at 52%. i think the numbers are actually low enough in q3 and q4 where

you can get a beat and raise quarter out of them. nvidia is trading at 50 times this year. if you look out 12 months, it's at 30 times and trading 25% below its trailing five-year average for pe or seven-year average for pe. believe it or not, the stock is actually cheap if you look out a period of time. remember, we're a hedge fund. i can hedge it by shorting things like apple and other names that i feel like there's more downside risk to numbers. so, that's how, as you brought up earlier, that's how we were in the black in both august and made money in september as well. it was that balance between longs and shorts. >> dan, i know i always come back to disney with you, but it's only because during the pandemic you really had pretty resolute view of where things were going and it ended up being a good trade. is it still a big part of the book? what do you make of it south of 80? >> i'll be honest, carl, i've been short disney off and on. we're not short right now. we covered it.

i mean, i just -- i look at the valuation for disney and i look at it relative to other media companies. the multiple's just too high for me. you combine that with the fact the numbers continue to go down on streaming. and the fact they're going to spend $60 billion in capex. i love disney. i love going to the parks with my kids. they're now 20, but anyway, but, you know, it's a great experience. but, you know, again, it goes back to do i want to pay 2x the valuation for other media-related names when i've got this big capex coming? there's other things i like better. that's the good news. you have 5,000 stocks or so on the russell -- in the stock market to choose from. so, i don't have to care what disney does in the short term, but, you know, with numbers going down, i'm just not interested in it. >> dan, a lot of your thesis, it sounds like on what you like and don't like, has to do with

overseas exposure and the rise in the u.s. dollar. i get in the moment these stocks get caught up in, but usually companies i followed have been given a pass on misses for currency exposure, especially when they telegraph them. i know they can't hedge it. to me bigger fundamental worries about the economy, i feel, are more problematic than currency and oil swings. >> well, but, remember, oil plays into the economy. every time you've had oil go up a ton in the past, and we've talked about this before, if you had oil double relative to the prior two-year average, recession has followed, i think, every single time. oil is an input cost into things. and, you know, it also dries inflation. so, if you look at cpi, that went to 3% in june. it went up in july and august. now it's sitting at 3.7 in terms of the headline. i know people love to focus on

core, but we all eat and we all put gasoline in our cars and heat our homes. i look at the headline number, because that's what the consumer has to pay. so, if you look at that, that's going to pressure earnings going forward. at the end of the day, the stock market's really simple. it's earnings times valuation. so, you know, it's amazing how people are willing to give companies credit when they beat earnings with the dollar helping them. but when it's trying to go -- when it's working the other way, people want to say, oh, well, just ignore that. you can't have it both ways. so, right now you're going to have to deal with that going forward. companies aren't getting a pass, sara, is what i would say. look at what's going on. you talked in an earlier segment about clorox, conagra, you know, constellation brands, which i -- they're not getting passes. that's all i would say to that. >> yeah, it's true. even jpmorgan this morning said, we expect people to look through the clorox issues because they're short-term and they're over, but clearly not happening

at the moment. dan, thank you. dan niles, good to check in with you after a big selloff like we've been seeing. carl? coming up after the break, sara, walmart quantifying the impact of these weight log drugs like ozempic on the grocery business. we'll get some details when "squawk on the street" comes back after this. i probably embrace my hispanic heritage because my heritage is deeply rooted in family values and at the same time, hispanics boost economies through the millions of small businesses they own. innovative science and tech holding patents in space technology are winning prizes in chemistry and play critical roles in public service from congress to the u.s. supreme court to many other areas. hispanic americans are and will continue to be a driving force for progress.

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this time the chatbot maker anthropic eyeing $300 million valuation. >> if you thought there was a bubble building in artificial intelligence, take another look. it continues to swell. it's now reaching stratospheric heights. latest exhibit is anthropic with a focus on safety. it's reportedly in talks to raise $2 billion, just days after securing up to $4 billion from amazon. that would mean $6 billion secured in the space of about one week. honestly, i cannot remember seeing anything like this since wework got an $8 billion life line from softbank in 2019. that was the peak of that bubble. many people in the bay area would tell you wework was not a tech company but anthropic are the real deal. the valuation that the

information reports that anthropic is eyeing, $20 to $30 billion, requires a major leap of faith assumptions. the low end, the $20 billion, it would quintuple since march and forward looking two to three times higher than openai which whoa broke down. reports surfaced it was raising potential of $90 billion valuation. for those keeping score, look at this graphic. microsoft sales multiple is ten times. nvidia's is 17. openai would be at about 90. anthropic, if it secures this valuation, 200 times sales. this has less buzz, less consumer brand and yet at the top of the funnel on your screen. yesterday i was at tech investor conference in dallas. no surprise, lots of conversation around artificial intelligence. some founders of vcs told me

these are less investments into the applications, chatgpt and cloud, and more bet on talent and technology that underpins them. that also means we don't know what the ultimate applications are and these are extremely steep multiples, putting startups ahead of some of our biggest tech giants on certain multiples. >> is there any sense that these rounds are being buffeted at all about the macro back drop we talk about all day? >> zero. how could they? they exist in a different space. obviously, it's a different audience. you have private investors, vcs, and also having the big companies, too. this is kind of setting mega cap tech against each other. microsoft has an exclusive partnership with openai. that means openai has to use microsoft. it goes through microsoft for everything it does. whereas anthropic has taken revenue from amazon and google. the question is how they will split that allegiance.

they both are in this company and so close together as well. it will be interesting to see how it plays out. >> yeah. i mean, rising yields haven't made it into this, i guess, into this a.i. valuation yet. thank you, deirdre. deirdre bosa. up next, will rate hikes continue intoyear? head of global fixed income says that may be the case. he'll join us next to lay out his thesis. don't go anywhere as we keep a close eye on the ten-year yield coming off the hhsig, 4.7%. still pretty elevated. in the u.s. we see millions of cyber threats each year. that rate is increasing as more and more businesses move to the cloud. - so, the question is... - cyber attack!

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we close out the hour with the story of the moment, which is the rise in bond yields.

our next guest says there's no reason to think we've hit the top yet. reallocating his portfolio from equities to short-term fixed income. joining us is the head of global fixed income strategy at wells fargo investment institute. it's good to talk to you. so you don't think buyers will come in for treasuries here? >> we could see a brief relief rally, but i don't see any reason why the current trend of higher rates is ready to end. until the data changes, until there's evidence that the fed is going to have to turn to a more friendly institution to investors, i see no reason why the most recent trends can't continue. >> so where do you think we're headed into 2024? when do you think the fed changes? >> well, i mean, it all comes down to me to the economy. the consumer continues to spend.

employers continue to employ. if we see those trends change, then the fed can once again become our friend, but absent those changes, i think the fed is going to have more work to do into next year. now the market is clearly susceptible to something breaking. something could break at any time, but predicting that break i think is a fool's game. again, i think in the short term there's upside in yields. now for an investor, a longer term investor, i actually think dollar cost averaging in here to long-term bonds and locking in some of these yields for the long term makes a lot of sense because i do believe strongly that the fed will win the war on inflation, and you're looking at locking in some really attractive real yields at current levels. >> i guess, brian -- i guess what's somewhat reassuring, you still think there's a line between inflation and economic activity and the bond market as opposed to some who argue it's sort of been more closely tied

now to external affairs, international dynamics. you wouldn't want to see something as sinister as a weak economy and continued elevated yields. >> that would be worrisome. i am a bit concerned about the fiscal situation and the dysfunction in washington, no doubt that has an impact on investors, especially in global investors, but i still believe when something breaks, when we have that big risk off moment likely around some type of a recession, investors will gravitate back to what they always have in the past and that is high quality fixed income instruments. you see the best price movement on obviously those long-term bonds in such a situation. >> are you beginning to wonder whether or not -- there's a bar barclay's note that hinted at this -- it would take a hard sell-off to bring bond stabilization? >> i think so, yeah.

just this kind of slow, steady sell-off. i don't think that drives the investors into those long-term fixed income treasury securities. i think you need something to break. you need some strong indication that the economy is really turning over. and i think we'll get that at some point. now does that come, you know, in the next month or two? does it come after the elections next year? that's much more uncertain, and really just have to, i think, play in those short-term moves as the data comes in, as those developments unfold, predicting the break and what breaks is, like i said, a fool's game, i think. >> what about just a weaker than expected jobs report? i know tomorrow we had someone on saying upside risk but we are expecting the labor market to weaken, aren't we? >> i think that would put some stability. i don't think it changes the trend, though. if it's substantially weaker, yes.

i think that could begin to see or begin to paint that picture that the economy is really rolling over a little bit harder, but, again, i don't expect that if it's just mildly weaker, we continue this trend of shallow weakness. i think, yes, you could see a rally for a day or two. i don't think it fundamentally changes the trajectory we've seen here for the last month or so. >> all right. pretty bearish on bonds. thank you very much, brian. >> thanks for having me. >> good to talk to you. meantime, ozempic not just tightening the belts of consumers but now walmart as well as the world's largest retailer warns that people are, in fact, buying less food thanks to the popular weight loss drug, although walmart is getting a revenue boost from selling the drug at its pharmacies. the ceo talked to us about this on monday, the make esh of cheez-its and pringles, the negative effect on snacking, and that's not to mention what it's done to some health care names and medicaldevice makers since

the summertime, let's say. >> how about the restaurants? look at the restaurant stocks year to date versus the s&p 500, and they're underperforming. yes, there are questions about consumer and savings going away, but for sure if you read the analyst notes in this sector, they're wondering about the overall impact on people's ability to eat out at restaurants as much. in fact, jefferies analysts did a recent survey of consumers on these drugs. 71% say the medication makes them feel more full quickly, they eat from restaurants less often. it remained the same for 39% and increased d for 15%. it did not influence any change in coffee consumption. as far as eating out at pizza and fast casual had an impact. >> yeah, the mcdonald's chart is not pretty right now. we didn't mention the dividend hike mcdonald's gave us, but it's having incredible effects given the limited data set that

we have on the drug so far. sara, you mentioned the jobs number tomorrow. i hope you'll be back in for that. >> i will. wouldn't miss it. >> talk about a tenfold print for the week. >> weaker adp, stronger j.o.l.t.s., stronger jobless claims today, 170,000 is the estimate. also the market wants to see less upside pressure on wages. >> we'll see you tomorrow. let's get to the judge. carl, thanks so much. welcome to "the halftime report." i'm scott wapner. front and center this hour, breaking for big market events in the days ahead. tomorrow the jobs report. next week earnings. the investment committee here to get ahead of all of that. joining me for the hour, everyone at post 9, josh brown, kari firestone, jim lebenthal. take you 12:00, noon, in the east. red across the board. red, too, from yields, which we continue to watch closely. 4.72 is the note on the ten year. you, josh, are real dialed in on tomorrow and the jobs report and what might