there, a number of asks that they have. but at this point there's not one thing that jordan can do. it's just a lot of distrust at this point, a lot of concerns about how the process has unfolded. it's not clear what he can do to win their support in the next hour. >> thank you very much. emily wilkins following the story in washington for us. thanks for watching "power lunch." >> as the markets move to session lows, "closing bell" starts right now. welcome to "closing bell." i'm mike santoli. this make-or-break hour begins with a post-powell puzzle, the stock market wavering since his comments saying policy is restrictive, but expressed uncertainty about how it might perform under higher bond yields. the ten-year treasury has been hesitating all day, keeping indexes off balance. just about 499 right now. the so-called steepening of the yield curve getting some

investors a bit unnerved in the last our or so. the index supported by netflix and tesla's post earnings drop is weighing heavily on the s&p 500. talk of the tape, should investors take heart in powell's wait-and-see approach and the encouraging earnings outlook, or is there a flashing light for risk? let's ask chief investment officer at i capital. plenty going on. as we just kind of ran through, the bond market is still fixated on, perhaps, the supply of treasurys at the long end, perhaps the lack of buyers that have shown up so far and it's gotten people skittish. is that really what's driving things right here? can we get some clearance from the bond market to refocus on earnings any time soon? >> unfortunately, not yet, or at least not today. and if you think about what's driving these yields, it's at least three or four different factors. first of all, you've got growth

that remains resilient and that pushes up the long end of the curve. you've got inflation, oil that's a little more resilient and that feeds into policy. inflation break-even is staying sticky. policy today, it was sort of we're going to move carefully, but at the same time we're not yet done. you put all of those together and that's pushing up the yields. that doesn't explain the whole move we've had in the last two months, and there's a big residual. i think that has squarely to do with this very different environment today, which is quantitative tightening at the time where we're issuing a record amount of treasurys and refinancing about 40% of our debt maturities this year and next. that is what is really pushing on the yield curve and pushing those higher. >> does that mean that you just have to sit back and see where yields ultimately settle out, or are things becoming interesting and cheap along the way? yeah, the s&p 500, you look at it and say it's been pretty resilient, it's been in this

tight range, still up 12 or so percent on a year-to-date basis. we all know the sanaverage stoc has done nothing this year and only a third of s&p stocks are up. how do you navigate it? >> the market has been incredibly resilient and i would say discerning amidst the higher rates. this month we've got 36 basis points or more of backup in yields, and at the same time the s&p was sort of in positive territory and the nasdaq has been outperforming. software was up 5% before the sell-off we had. that's a lot of resiliency. and if you rewind back to the last month, we've got 115 basis point backup in rates. you would think the market would be down 10% or more. big tech is down about 6%. that's kind of remarkable resiliency. i think what the market is doing is being discerning. if you think about big tech, it's one of the sectors that is most immune fundamentally from

higher rates. yes, higher rates hurt valuations, but at the same time, tech doesn't have a whole lot of debt on the balance sheet. what i worry about are the sectors in the economy that do have a lot of debt, that are vulnerable, and consumer discretionary, for example, case in point, those are taking it on the chin, and rightfully so. >> it is true, but those exactly are the areas that you would say yields have registered, the idea of a slowdown, that might be coming, is already making its way into those valuations. you have this bifurcated market and you're left with saying the market has got it right and we should follow the trend, or we want to be somewhat counter and try to look at stuff. >> i love to be a contrarian in most cases. i think in this case the market is right, and the reason is i can't say with certainty that we have reached a peak on a ten-year treasury. the reason i say that, when we look at the different kind of debt piles around there, we know

there's so much treasury debt that is coming, again, 40% of maturities are due this year and next. they have to be refinanced at materially higher rates. and, by the way, this is happening at the time where the fed used to sit on about a 25% treasury outstanding, that was out of the market. that's not the case today. that percentage down to 19%. the fed is not an incremental buyer. the central banks globally are not. the banks are not buyers, either, so that really leaves us with a supply and demand mismatch. so that means, most likely, we can't call a cap and yield just yet and that makes unprofitable tech a challenging place to buy the dip, as well as consumer discretionary. >> i love to turn the charts upside down, or at least let's talk about treasurys in price terms. >> sure. >> you would say if we were talking about stocks right here, you would be saying, yeah, there's value being built in, this pullback is deep.

but ultimately you want to be a buyer of the dip. does it apply to bonds right now? >> i would decouple the next three-month view versus the next six months to a year . what i mean, in the next three months, i see the yields pause and maybe retrace lower. the reason i say that is because growth is likely to taper off in the fourth quarter and we've priced in the fed hawkishness, so i think longer term those deficits weigh on treasurys. >> it does seem so. do we have greg branch? i want to bring him into the conversation as well. it's good to see you. you've been thinking that the market had downside, that earnings weren't going to come through. the earnings piece seems like it's okay, at least so far, in terms of results versus expectations, but how does the whole macro picture feed into what you're expecting? >> so i agree with anastasia on that, we haven't seen the peak in yields yet. i agree for a couple of reasons.

the first is whether you believe it's fed action or you believe that the fed will let the market do its tightening, this we know, if we're going to see higher yields, then that could cause the equities, as you already pointed out. to a degree that we haven't seen consensus estimates with the harshening environment. i think the estimates for 2024 are significantly too high. that makes me cautious on all equities, not just the ones that anastasia pointed out that are most susceptible to higher yields, but across the board, despite this quarter coming in much more lenient than expected with 40 basis points of growth, as opposed to the projection. so if i am somewhat skeptical on equities and somewhat skeptical

on bonds, at least long-term bonds, because at the end of the day i do see yields rising, we're going to get greater compensation on those issues than the issues of today. so i'm still focused on the short end of the curve because i feel like we're staying liquid enough to take advantage of other opportunities when they present themselves. as you said, some things are looking quite cheap right now. it's just my macro view that keeps me from advocating for them right now. >> if you prefer the short end of the curve and you would rather harvest the 5% you're going to get in those maturities, you must think the economy is going to be okay, that the fed is not going to be forced to be cutting any time soon, because that would raise the risk of the reinvestment and all the rest of it. in a world where the economy is going to hold up, how are we talking about radical downside to earnings? >> i think that's absolutely right. let's define the term radical.

i'm not 225 for this year, if i put the multiple, that puts me at 3800. so i'm not advocating for anything draconian, but i think the consensus has it wrong. i'm certainly not advocating for 8% growth in the third quarter and 12% growth in 2024. so let me make that clear. i do believe that we won't see rate cuts next year because, as you pointed out, i don't think the economy is going to slow that much. i do believe, however, it's going to slow much more significantly than consensus. so typically downward revisions affect equities and even things that i think are cheap right now, i feel like consensus is underestimating how high yields will go and overestimating the strength of the consumer balance sheet. >> anastasia, it is still on the early end of this earnings season, but the pattern going into today has been big upside

in aggregate to the growth rate, but stocks not trading well, on average down 1%, i think, of the companies reporting, and even if you're beating and raising, the stock is not getting rewarded. this has been the pattern for the past couple of quarters as well, and ultimately the markets, or the index found its way to stay supported. do you think that that simply reflects that we're in this mode where investors are saying, sure, it's fine now, but it's about to erode? we're in late cycle no matter how you slice it, and i'm not going to be dissuaded otherwise, and what changes that dynamic, if anything? >> i think there's a couple of things at play. maybe near-term focus versus thinking about 2024. first of all, we can't get away from the rates discussion, and as good as the earnings may be -- by the way, we're having a pretty substantial beat on earnings and we're flipped into positive territory on year-over-year earnings, but if we're talking about rates, we can't focus on that. the other thing that i think is at play is the bar going into

this earnings season was not set particularly low. for example, you typically have earnings and downward revisions going into the quarter, but we didn't have that much. i think most analysts were relatively bullish, so to speak, on the economy in the third quarter, and i think that's why the reaction you're seeing is sort of muted as a result. but i also have to talk about market technicals. i think what's not at play right now is corporate buybacks are not being executed right now as the corporates are in a blackout window due to earnings, they're not the big buyer in the market they typically are. hedge funds have pulled back as well. i think that does start to come through as the earnings season goes through. huge week of earnings next week, so i'm optimistic. >> that is true. i wonder, greg, if that's the thing that maybe is keeping investors from getting even more negative or reacting in a more rash way to what's happening with yields right now. because it does seem as if there's at least the

potential -- look, netflix is flying today on its own earnings. it's not that big in the index, it's not a bellwether for anything. does that happens to an alphabet, do you want to stand in the way of it? >> i think the quarter is coming in better than expected, as have the last two quarters. we start thd quarter with the expectation of contraction, but that doesn't necessarily predict what's going to happen. one of the things that powell pointed out today, and is reminding the market, is that we haven't felt the whole impact of the 25 basis points of fed tightening, he's just waiting to see what the markets will do in and of their own accord. the other thing i think we have to focus on, is not only is this quarter better than expected, but the signs for future

quarters being worse and the sign for those earnings being off is littered in some of these earnings reports. i think it's the reason for one of the lack of buyback activity that anastasia referenced. the companies are not all that optimistic, whether it's jpmorgan, which is in position to capitalize on all the trends we've experienced, be it interest margins improving, you see wells fargo provisioning and you see the retailers talking about failures in credit cards and purchasers shifting from large ticket items. i think they're seeing the warning signs and i think powell took a shot today at his primary enemy, which has been the politicians in this fight for inflation. he has warned them that this stimulative path cannot continue forever. he's seen an extraordinary amount of stimulus poured into

the economy over the last three quarters and that has postponed the inevitable to some degree. we can't get down to 2% inflation. >> i think to be fair, what powell said and what all fed chairs have tended to say is the long-term fiscal situation is out of whack and something has to change about the trajectory, and hard to argue that point. i just wonder, anastasia, right now we are very focused on this supply and demand issue for debt, for the government's securities. on the other hand, debt to gdp and deficit to gdp are off their highs. we're not actually making new peaks because we obviously are growing nominal gdp every day. the credit markets are undisturbed by anything going on right now. whether that's right or wrong, they're not. and however you slice it, the fed is kind of in wait-and-see mode, and they're almost done. all of those things to me build toward, you know, maybe there's a little bit of a longer leash

on this situation. >> well, i'm going to give you one scary stat, but then i think there's a positive stat there as well. the scary stat, if you look at the debt service, the u.s. government debt service relative to revenues, it used to be around 6%. if you look at the trajectory of that debt service, if nothing changes with interest rates, we're on path to be about 21% debt service to revenues. that's why i think the markets are starting to worry. if the fed is not done, if we don't resolve our budget deficit issues, we're on path to that 21%. that's scary and i think that's why i'm not in a rush to be piling in treasurys. having said that, if i look at the corporate balance sheets, first of all, only 10% of s&p 500 companies have floating rate debt. if you look at the wall of maturities in investment grade and high yield corporates, they're not financing 20% or 40% in the next several years. that gives me a reason, if there's a place to step into the

bond markets, to step into investment grade corporates, for example, or look at municipalities, because they're actually in far better shape than they were post the financial crisis. they have a lot of rainy day reserves. if you're compelled to buy duration, i would do it in munis. >> greg, outside of, let's say, short-term bonds and cash-like stuff, is there anything that seems to make sense right now? a lot of folks from either side of it seem to be able to come around to energy as being something that's exempt from a lot of the issues we're dealing with. is that appeal? >> it does have appeal. you're familiar with equity exposure and we're going to look to where there's secular tailwinds and some degree of margin protection, if not expansion, and we believe those things will give us relative earnings growth. so energy is one where you can certainly argue for the structural advantage long term, and owning energy, the supplements are not growing as

much as demand right now. but there are other areas. financials look interesting, if i didn't believe we were at the very beginning of the provisioning cycle. the environment should be improving, particularly if the curve is going to flatten to some degree. once we get into the middle of that cycle, there are some bellwether names that are trading right now, cybersecurity, certainly a strong secular tailwind, as well as cloud and ai. i think you can be opportunistic. i think the opportunity will present itself within the next six months. >> greg, anastasia, thank you so much. appreciate the time today. let's get to our question of the day. what is most important to the market right now? is it the fed, earnings, or geopolitics? we will share the results later

in the hour. let's get a check on top stocks to watch. kristina partsinevelos is here with those. >> shares of the largest contractor in the world, tsmc higher, about 4% higher after posting better than feared earnings early this morning, and this comes even with the 25% drop in profit. on the earnings call, they said the chip making market is very close to a bottom and that they're seeing stabilization in pcs, personal computers, as well as smartphone demand. the company is seeing robust demand for chips like the ones used in the iphone 15 pros. you're seeing the stock up 4%. union pacific's third quarter profit dropped about 19% as the railroad hauled fewer shipments and costs remain high, but the company still posted an earnings beat. why? the company kept raising prices amid higher inflation. you're seeing shares almost 3% higher. competitor csx transportation will have earnings after the

bell today in 40 minutes. >> thank you very much. we're just getting started. up next, morgan stanley's ellen zentner joins us with her reaction to fed chair powell's speech today. how she's sizing up the recent ramp in treasury yields and talking about the u.s. economy heading into next year. you're watching "closing bell" on cnbc. this is american infrastructure. megawatts of power, rails and open road, and essential services of every kind. all running on countless invisible networks, making it a prime target for cyberattacks. but the same ai-powered security that protects all of google also defends the systems running america's infrastructure. for these services. for the 336 million of us living here. ♪

stocks moving lower as the yield on the ten-year treasury inches toward a high not seen

since july of 2007, after fed chair powell signalled further tightening may be necessary. ellen zentner here, thanks for being with us. >> you bet. >> i don't know what your takeaway was. it seems like there may be more to do, inflation is not close to the target. on the other hand, there are lag effects, the bond market is doing its thing as well. where does that leave you? >> i think it definitely was a softer tone, a dovish tone, even though he said there could be more work to do. look, he joins a long line of fed speakers that we've had over the past couple of weeks where we've seen an aboutface tied to these tightening financial conditions in terms of do we need to hike rates further, probably not. so we heard from vice-chair jefferson and governor wall and powell is with them.

what was so interesting it comes to the back of really strong data, a blowout jobs report, high inflation report, surprising retail sales report. but you can look through that, because they've done a lot and he's pretty sure there's still a lot of impacts to come through to the economy. so this is a fed that's moved into the patient zone. >> for sure. i guess you say we can look through the recent state of very strong economic growth data, but does that give you confidence we're going to slow apprec appreciatably soon? >> there's less interest rate sensitivity in the economy, but that explains why the fed has been able to hike rates 500 basis points without killing the economy. does that mean they can hike another few hundred? no. or another hike or two, no. what it does mean is they do need to keep pressure on the economy, and when chair powell

talks about raising rates further or rates becoming more restrictive over time, that's because inflation is falling. the fed intends to allow it to rise further, which should continue to put downward pressure on the economy. so i do think we're slowing here, i think the fourth quarter is going to start a lot of that slowing. but we've been wrong before. so let's see. >> yeah, it seems like -- we got the move lower in weekly jobless claims today, if you take that on face value, it seems as if something structural might be happening with the labor market, but it's been very resilient. is there any way to handicap how this move in longer-term yield, which has been sudden and steep, is going to play through into next year? it seems as if the markets in general are very unsure as to whether the overall economy can handle it. >> the uncertainty is shared by the fed as well. when you've got such a sharp rise in longer run yields and a volatile rise, it creates a lot of uncertainty.

you've seen delinquency rates racing for credit cards, auto loans. it's still concentrated toward the lower income areas and i look for that to spread out to more consumer products and march up the income chain. we haven't seen that, but you will probably start to see it more and more as we move into next year. >> i was struck by something that fed president barkin mentioned as one of the reasons he believes the economy has done better than anticipated, which was relatively wealthy americans, higher income folks, strong net worth growth, houses are up, financial markets are up in the past few years and now they're getting 5% on whatever cash they have. is that something that you can identify as a genuine offset to what's been going on in terms of tightening a policy? >> so far it has been an offset. look, the top income is 15% of spending in the u.s. and we saw weakness in the lower spenders.

aggregate spending has looked fine. the wealthy drew down much more of that excess savings than we had expected them to and really pursuing those really high dollar experiences, super luxury travel. this was a global luxury consumer story. and it's only just now started to slow. it all comes down to the wealthy when it comes to consumer spending. what gets them to stop? loss of real estate wealth, which i don't expect. the housing strategist don't expect because nobody is moving. that's going to prop up home valuations. the other thing is white collar layoffs. we had tech round, we've had a round in finance, but we've not seen broad-based white collar layoffs. that can get the wealthy to stop spending and that's what we have to be watchful for. initial jobs claims are still very low. >> in terms of inflation itself, we all talk about the inputs to it, how it should be trending based on how restrictive policy might be.

do you expect the actual measured inflation to come down in a way that's going to persuade the fed and the markets they're on the right track for now? presumably powell is never going to say definitively we're done, mission accomplished, until we're at 2%. are we on the way there? >> i do think we're on the way there. it's a matter of do we get there with a steady deceleration or do we have periods where we might look like we've lost the deceleration and then pick it up again. that's where the fed has to really -- its patience will be tested at those times, i think especially late this year into the first quarter of next year. look, nothing has changed in terms of the way inflation develops over the business cycle, and we're seeing it play out right now. households are substituting down. they are, for instance, substituting away for cheaper goods. it turns out we don't have unlimited tolerance for higher prices. it's something businesses have been saying. they've reached that limit of being able to pass on price increases. when we substitute from higher priced goods to lower priced

goods and services, it changes these inflation indices and that's a constant reflection. that's why as we get later in the cycle when financial expectations are not as high, you start to get the downward pressure. i think that happens as we move further into next year. >> ellen, we can certainly hope. appreciate the time today. ellen zentner from morgan stanley. don't miss noted fed watcher jim grant in "overtime" today at 4:00 p.m. eastern. he will break down chair powell's speech and give his outlook for where rates are headed. straight ahead, bracing for big tech. with microsoft, amazon and alphabet all reporting earnings next week, we have a shareholder that owns all three and he's waving the caution flag ahead of those results. he'll make his case next.

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s&p 500 down three-quarters of a percent. tesla sliding 10% today, a big part of that after the company missed analysts expectations on earnings. could the rest of the magnificent seven stocks be headed for a similar fate? let's bring in malcolm etheridge to weigh in. good to see you. now, tesla is kind of its own beast in terms of its business and the things it feeds off of. but i wonder how you think it fits into the outlook for some of the other secular growers that have been carrying this market. >> i think now is when tesla gets called an automotive company, an auto manufacturer and no longer a tech company. all of a sudden it became a tech company. i think it goes back. i think it's a big difference between tesla, the manufacturer, as a hard good, versus the rest of the mega cap tech companies. the margins don't take much, the project is not working, the team

goes with it, all of a sudden your margins improve. not as easy to do that with an automaker. tesla is an outlier and we're seeing that versus the rest. >> that's certainly a little comforting. you can put that behind a bit of a firewall. the terms of the other stocks, the traditional ones, microsoft, amazon, alphabet, that is where the earnings estimates have been going up. it's kind of been a reason for some of the stock strength. what's your take on how they're positioned now? >> i think they better bring it. i think we're going to get earnings from the majority of those names next week, and the market has been looking for a reason to bring those names back down to gravity. you've got a ford pe on the s&p at 18, roughly 32 on average on those names, and so they better bring it to support that kind of pe again and again and again, quarter after quarter, and i'm not so sure, just based on what we've been seeing so far, sentiment-wise, that the market is going to reward them if they

do have the goods and earnings reports are favorable. >> netflix is obviously smaller, it's different as well. it's doing something, its subscription based, it's direct-to-consumer. but the market was seemingly a little nervous ahead of that and did reward that stock. so the capacity is there, i guess, if they do have the numbers. >> netflix to me is more of a story of the writer strike for six months on the network, the entire six months we're talking about how they're the only option when you talk about fresh content. this is more of us just getting confirmation that they were the only good thing happening when it came to content, and we also are seeing 2 million or so, 2.5 million additional subscribers they got they didn't suspect. is that really sustainable for a company like netflix going forward? i just don't think that the double-digit run-up in their share price is warranted when you consider the unlikeliness the number repeats. >> among those names we

mentioned that you did own, something like alphabet, more like 20 times earnings, not 32, like you mentioned before. does that seem to be in a reasonable zone? how would you approach it? >> alphabet i'm more concerned for a different reason, and it's more to do with their legal battles. i think that alphabet is actually the one that they can land a glove on, if any of the mega cap techs there's actually a shot. the distraction that we know goes along with fighting off a court battle with the government makes me concerned that google, alphabet is going to be a little distracted and not on the right path for a while. i definitely do think of them, microsoft is probably the one i'm most positive on, i'm most excited about. i think they will continue some growth trajectory going through this rough patch we're talking about solely because in the ai battle, save for maybe nvidia, they're the only one likely to do really well and see profit

from the ai wave near term. so just based on their ownership stake in openai and what's happening there, i think microsoft is the one that can tell a compelling story regardless of the environment. >> a fair bit of fuss this week that amazon was going to be getting licenses for microsoft 365. it's a billion dollars over a few years. it's not a lot of money, but it would suggest that microsoft has a franchise, has something going for it. >> for amazon to -- for amazon to concede to microsoft, their competitor in the cloud space, we can't necessarily do this without you, also amazon brought itself out as sort of the everything store for ai development. we want developers to come build on our chassis, and regardless of what you're building, we've got access to all the large language models. for them to concede that and have to go to microsoft for help in that regard, that's a big deal, i think. >> yeah.

these stocks have also, at times, had the character of just, i want to buy a great balance sheet. it's not really about the business or where earnings estimates are going. we may be in that mode or get there, but does 5% of the treasury yield change the story in one direction or the other? >> maybe not in apple, maybe not microsoft, fortress balance sheets, tens of billions of dollars on their balance sheets in cash, which obviously is going to help their earnings just on a net positive basis. but, also, those have been the safe haven trade all throughout this year, and i think the history is just going to repeat itself, where the trade has always been you get into a little bit of a stumble, not sure where to go in the market, the safe haven is microsoft, apple, and i think that's what traders will cling to until we inevitably rotate out of that mega cap tech trade. i don't think we're there just yet. >> as a group, they haven't

recovered the old highs. there may be plenty more to go at some point down the road. >> the least dirty sock in the hamper. >> malcolm etheridge, thank you. up next, we're tracking the biggest movers. >> what bed bugs? pest control demand is down. and one company is encroaching on duo lingo's turf. we've got it all next.

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bell. s&p 500 sliding, down 0.9%. >> let's start with genuine parts company, on pace for its worst day since march 2020 after they missed expectations on revenue, but the company did increase earnings guidance. the shares hitting their lowest level in over a year, down about 12.5%. >> and the bug extermination giant is having its worst day in two years, after rental kill warned of pest services in north america. london had their worst session since 2008, while shares of rollins are off by roughly 9%. i guess theyweren't in paris with the bed bugs.

i have to continue. i have one more stock. i just got really excited with that story. >> you bring the punch line tomorrow. >> shares of duolingo, actually dropping right now. dropping sharply late in the session as google announces a new feature to help users practice speaking and improving other languages, starting with english for the initial rollout. the newfound competition has shares off 8%. you see that drop just after 2:00 p.m. eastern. >> interesting. >> now i'm done. >> excellent. we'll see you again soon. thank you. last chance to weigh in on our question of the day. we asked, what is most important to the market right now? the fed, earnings or geopolitics? head to cnbc closing bell on x. we'll bring you the results after this break. ♪ ) ( ♪ ♪ ) ♪ (when the day that) ♪ ♪ (lies ahead of me) ♪

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s&p 500 pretty much at session lows. we did get about a 1% pullback, the dow down 260. this happened as bond yields did continue to climb after jay powell's midday speech. let's get the results of our question of the day. what's most important to the question right now? look at that. 37% say geopolitics. that edged out the fed at 36% earnings, people are comfortable thinking that's the biggest factor. up next, at&t shares having one of their best days of the year after third-quarter results. plus, a reality check for the t gionals as more bank earnings hithe tape. that and much more when we take you inside the market zone.

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we are now in the "closing bell" market zone. the s&p trying to pull up the lows. julia boorstin is here to break down the big move in at&t shares, plus contessa brewer on casino stocks. julia, at&t, a big mover to the upside for a change today. >> yeah, that's right. at&t shares surging, up 6.5% heading into the close, after beating expectations on the top and bottom lines. the company added 468,000 prepaid wireless phone companies, marking the company's first quarter of growth after four straight quarters of decline when it comes to that

metric. the company raised guidance for free cash flow to $16.5 billion, and at&t raised guidance for adjusted earnings. this stock has been on a roller coaster over the past year, but with today's gains over the last 12 months, the stock is down less than 1%, and worth pointing out, if you just look at the analysts here, a third of analysts have it, 56% at a hold. >> certainly there's plenty of skepticism around that name. management had some pretty encouraging things to say about their view of consumers and their ability to keep spending. but i wonder if there's the makings here of another round of competitiveness breaking out in this industry. that's always the concern, that it's going to start to get very tough again on pricing. >> yeah, the concern is always that there's going to be sort of a price war between all of these

different players, and that's going to weigh down on margins. there did seem to be a sense when it comes to paying for your cell phone or broadband, those are things consumers are not going to want to give up. they really understand the value there. so a lot of optimism from their ceo, john stankey, and he certainly left the call indicating to analysts that things were going to continue on this path. >> thanks. and contessa, speaking of consumers, casinos, what's happening? >> las vegas sands, there's been speculation about the chinese consumer, and they came out with earnings today, and what we saw was that shares were popping throughout the day on the basis of the strength of the chinese consumer, fueling the travel and tourism spending. singapore on fire, macau, an impressive ramp-up. they have seen more customers spending, 96% occupancy.

visitation is still down 15% or so from pre-pandemic levels. las vegas sands ceo rob goldstein says the company is sitting on $5.6 billion in cash. they made it clear they're going to use that to invest back into the properties, phase two in macau, phase two in marina bay, sands and singapore, and the company announced a $2 billion shareholder purchase, and they're going to rely on that in the future going forward rather than dividends. we saw shares similarly pop up on mgm today. that stock has been in the tank lately. so it's a nice lift for them. we saw some real steam, at least where the gambling destination of the world is concerned. >> is this mostly for the industry a macau story? united was saying some things about corporate and group travel coming back. >> in fact, it has replaced whatever softness you've started seeing in the leisure segment, being picked up by the business

segment. a very crowded convention and conference calendar in las vegas, and then, of course, right around the corner, f1 is three weeks away. november is usually the slowest month for las vegas. they're expecting it to be a blockbuster, the first-ever event to make more than a billion dollar impact on the city. >> formula 1 and the sphere. >> the sphere is crazy, yeah, impressive in person. >> got to get out there and check it out. contessa, thank you so much. leslie, let's talk about regional banks. what are we looking for here? >> huge difference between the big ones and the regionals. investors are separating the weak from the chaff as regional banks continue to report this week. you can see zion down about 9.5% today, after missing bottom line estimates and showing higher interest rates, squeezed the bank's profitability from loan

making. net interest margins slipping 31 basis points from a year ago as the cost of deposits skyrocketed, and the amount of non performing assets jumped 45%, primarily due to two office real estate loans. not all banks are disappointing. webster financial and fifth third, they're in the green today. webster financial managed to expand, yes, expand that interest margin sequentially, up 14 basis points. fifth third did see some contraction in 3 q, but analysts believe it could find a bottom in the next quarter or two. the reports keep coming. tomorrow morning we'll hear from regions financial, first bank corp. and huntington. >> you know, i find it interesting, in jay powell's speech and his q&a today, he was asked about bank regulation, about regional banks in particular, and he said, you

know, our largest banks are the biggest and most profitable in the world, the community banks have a really important role to play, they're knitted in with the local economies, and regional banks, we hope they're not under too much pressure. there's attention on the fact that the regionals are caught in between. u.s. bank corp., the stock popped when there was regulatory relief. how big of a part of the tstory is that? >> it's a huge part of the story, because of the end game proposals that are currently floating around, that includes any bank with assets over $100 billion. so it spans $100 billion to $700 billion that weren't previously subjected to as stringent of rules. so what that does, even now, even before the proposal goes in permanent ink, things are starting to pull back on lending just in advance, to make sure they have adequate capital if it does come to pass and if it does

become permanent. those sort of activities happen pretty much right away, so that's the key talking point, that's what the regional bank ceos will tell you about, adding regulation causes an immediate reaction of pulling back on financing capabilities. >> it does feel like we've been in that mode for months on end, waiting for another shoe to drop. we'll see how these numbers fit into that, leslie. end game, not a marvel sequel. >> maybe it will be. >> thanks very much. as we head into the close, the s&p 500 down about three-quarters of one percent. it's below 4300. we're trading at levels we got to around ten days ago, so we've lost this last little rally above 4300. the volatility index popping, above 20. we have not closed above 20 in quite a long stretch of time, a matter of months. a lot of folks were looking for that as an indication that some anxiety is building, whether that's viable or not, we'll have

to see. the nasdaq down 1%, certainly pressure by tesla along the way. the dow is off just about 250 points, s&p is going to go out around 4273. that's going to do it for "closing bell." we'll send it into "overtime" with morgan and jon. closing near the lows in what's been a choppy session for stocks as the ten-year treasury yields came very close to 5%. that is the scorecard, but the action is just getting started. i'm morgan brennan with jon fortt. >> we've got more earnings coming your way this hour, including key earnings on the transports from csx and knight-swift, and intuitive surgical, which warned in july about the impact of weight loss drugs on medical procedures. plus, we'll talk exclusively with fed watcher jim grant