[ heavy breathing ] [ lights buzzing ] [ music builds ] [ screaming ] good wednesday morning i'm carl quintanilla with sara eisen. cme ceo terry duffy is with us this hour. a breakdown of earnings, trading activity and the impact of high rates across the markets >> speaking of higher rates, dismal comments from housing ceos on the calls today. why they're calling this property market the worst in decades. >> later on, what can the fed do about the deficit? absolutely nothing, according to the journal's greg ip. he'll join us this hour. let's kick it off with the market there are some pockets of green that have emerged in the last few minutes, in defensive groups like staples and utilities everyone else is red communication services at the bottom of the market today

that group is down 4.8%, because of google and alphabet, a sharp negative reaction to earnings there. a big week obviously, on the nasdaq as well, which is down 1.4%, alphabet will be the bottom performer, but you've also got weakness today in amazon, in apple, offsetting some of the strength in microsoft earnings and tesla. when it comes to finding opportunities in the market right now, our next guest says steer clear of utilities and large-cap value, bullish instead on midcaps with a eye on rolling recessions hitting a variety of different industries next year joining us, city global wealth chief investment strategist, steven whiting it's an interesting idea to not just worry about overall recessions, but rolling recessions in industries, because what you hear and what i've tried to capture in certain companies and industries is very different, whether you're in housing or in travel >> absolutely. and look, two years below-trend growth feels awful but it's going to accomplish what a shallow six-month

recession will i think that the labor market, has chz outperformed, outgrown the economy the most last year, is heading to a slowing next year i think profits, which fell over the last 12 months, are going to grain some ground. it's probably going to take two years rather than one year to get that big 12% it's going to be longer and rolling recessions, you talked about real estate for a moment multi-family housing, it's about to deliver a million now housing units. all of this was planned three to four years ago at zero rates that's a piece of the housing market and real estate that's going to weaken the economy next year but trade, manufacturing, single-family housing, these are all deep in what looks like a very recessionary contraction. >> so play the stocks, according to how industries are impacted by rising rates? >> when i think about like today, this is a bad market. we're getting tightening financial conditions, what the fed does is it raises yields, it

lowers stock prices, pushes up the dollar, all of that. but it will give us a good entry point. and when i think about that, the fact that growth stocks outside of the very largest ones have been left behind, we're talking about for mid-cap profitable growth companies, not the ones with the highly leveraged balance sheets in banks and reits, but those growth companies that don't have a lot of debt are trading about 15 times trailing ing earnings that is very rare to find an asset that's trading cheap to its own history. and around the world, when you have bond yields in japan and europe that are not about to join the 5 percent club, we can use some of our asset allocation over in u.s. assets, even if the environment isn't wonderful. >> russell is closing in on a 20% drawdown are you interested in small caps, as well? >> we are interested in small caps, but being specific that russell 2000 works, when we've had that v-shaped collapse in the economy. some of the firms just managed to survive, and then they

bounced back we were overweight russell 2000 in 2021. that's not where we're going to go yet we're going to go on a lower risk, growthier, higher quality version of small cap and again, you can do this with s&p 400 and 600 industries, and if you shift away from benison financials, which could have their day, i think you can find there are a lot of areas cybersecurity companies again, as an industry that are not, you know, trillion-dollar behemoths, that are really growing, and really outperforming what could be a 5% yield. >> what about health care? where does that fit in there typically, defensive, non-performing is too high >> this is the thing pharmaceuticals were already over overweight they could perform a bit in a down market. but it's still a relatively crowded trade for us

when we think about taking risk for the next two years, medical equipment looks like something that's been beating down and these are not only again unprofitable companies >> oil is down 10% from even in the midst of what's going on in the middle east. how do you think geopolitics buffets the markets in '24 >> really fascinating, because in more than 90% of cases since world war ii, these regional conflicts and shocks have not changed the direction of the world economy. and you've got to be prepared in the event that it does but it's a tail risk we're looking at western energy companies and saying, opec has cut production more than american producers have raised production, right? so they're giving a benefit again to western energy companies, by doing that it's going to mean that some of the alts, some of the things that we depend on like electrification through copper, these things will be strong.

we talk about recessions, the oil price has averaged $24 a barrel after the last four recessions not this time, i don't think >> it doesn't feel like that's the direction. steven, thank you for joining us sharing your advice you give to clients. by the way, carl, things are improving. the dow has gone net positive. and within the s&p, groups like information technology and financials joining in the green camp >> we lost boeing there for a moment that threw the dow into a spin meantime, the latest in washington the vote for house speaker is expected in less than an hour. our emily wilkins is in d.c. mike johnson is the fourth nominee in three weeks >> reporter: they're hoping that he is the last, carl last night, mike johnson got the votes to become the nominee. and then republicans did something a little bit different. they actually opened the doors to the room that they were in, mike johnson and a lot of republicans behind him, and they said, look, we're united and ready to get to work we had asked who said said that they would vote against johnson tonight floor, and the response

that lawmakers gave was no one that everyone was onpboard. there were 20 absences and three members who voted present, including thomas massy, but massey came out this morning and said, look, they spoke with johnson this morning, they had a good conversation, and he's now committed with voting with him on the house floor and a lot of absences last night were from members that had other places to be they were also onboard with mike johnson. johnson will be a little bit different than kevin mccarthy. he's a lot more conservative than mccarthy is heapsed to providing aid back in ukraine. back in may, he voted against that $40 million package that most of his republican colleagues actually supported. he also voted not to certify the 2020 election, and he also voted against the most recent stopgap, although several folks tell me that johnson has said that he does want to see the bigger long-term appropriation bills done, but he is open to another stopgap to keep the government fully funded

and back in june, he did vote for that final debt limit agreement that kept us from going over the fiscal cliff. and even though johnson is a little bit more conservative, he's really considered to be well liked by his colleagues, they just see him as a nice guy they can get along with. and we have seen a number of more moderate republicans, republicans will have to win in districts that biden won in, come out this morning and say that they support him. things are really looking good for a potential speaker mike johnson. we expect the vote to start by around 1:00, maybe have the results by 2:00 and have a speaker at that point as well. sarah? >> you mentioned his support of ukraine or lack thereof, and i wonder if there's any discussion about the next step if he does get the full support, because they'll have to tackle this $100 billion defense package for israel, ukraine, and the border. >> reporter: and certainly there are al of republicans who said, look, we need to separate out the funding for israel, that needs to move separately for

ukraine. but the house has lost some ground here. the white house came out with their request. the senate has started to begin working on it. and if the senate winds up sending a package to the house, that could put pressure on members to vote for ukraine and israel funding at the same time and there is a lot of support for ukraine funding still, even among republicans. and if johnson becomes speaker, he's going to have to grap to grapple with that. >> and defense spending as a part of gdp. >> just mention ds part of the urgency to select a house speaker has to do with the aid package for israel nbc news correspondent jay gray in tel aviv as the u.n. warns that the situation in gaza is growing more dire by the day, by the hour jay, what can you tell us? >> yeah, sarah, you're absolutely right it appears that a lot of the humanitarian effort inside of gaza is beginning to crumble at this point the u.n. agency, unrwa which

provides assistance and help inside of gaza and has for decades saying they're going to be forced to stop helping there, only because they're out of resources. and primarily out of fuel. 600,000 people displaced in gaza, families, who are staying in 150 of their facilities, are not going to get some of the assistance they've been getting, some of the food, some of the electricity and warmth it's going to end, because they don't have any fuel, and there's no sign that any fuel is on the way. we know that more aid trucks rolled into gaza today across the egyptian border. but israeli teams continue to inspect those trucks and they have been adamant that as this war continues, there will be absolutely no fuel moving into gaza for fears that hamas will take that fuel and use it to fire rockets and use it in the war against israel and to that point, today, the

idf revealed some photos online that they say shows fuel tanks within hamas compounds there, and said, as a part of their post, here is some fuel, get it from hamas so they're saying that there is fuel inside gaza that hamas has control of it and they're not sharing it, they're not helping the hospitals that so desperate need this i talked to a doctor who is in contact with some of those inside gaza and he says that the situation is growing much more dire by the hour not only because of the fuel, but because there's just no room left that they don't have anymore space in any of the hospitals. that they are treating people in the hallways, on the floors, and so that's something that continues to push a growing chorus for a brief pause if the air strikes from israel.

a humanitarian pause the u.n. pushed a resolution on that yesterday it did not pass, obviously, and the strikes have continued over the last 24 hours. we know there are more than 200 hostages still in gaza officials in qatar say they've actually intense fiified over te last couple of days and have some hope that they'll be able to break through and broker a deal that will allow a number of host hos hostages for a ground assault before a substantial number of the hostages have been released. israel continues to say that they're going to do that on their terms and on their time, sarah. >> jay, any sense of what happens to the aid there's a lot made of how many trucks going in and how fast we can get them and everyone wants the aid trucks going in.

>> reporter: we've seen video of the red crescent delivering some of that. but remember this. what's going in right now is about 4% of what during the normal day with no war normally flows into gaza every day. so we're seeing, at the most, 20 trucks go in they say that 400 to 500 semitrucks move through gaza every day with supplies. it's getting to people who need it, there are just a lot more people who need that aid >> israel has agreed to delay any ground invasion until the u.s. can get some missile defenses in place later this week we'll find out more later. jay gray in tel aviv after the break, snap returning to growth. what went wrong at alphabet. and a look ahead to meta tonight with the s&p communications sector down 4% near a one-month low. >> and cme group's terry duffy joins us, his outlook on rates and commodities as cme delivers

its ninth consecutive quarter of double-digit earnings growth stay with us but you can invest in them. at t. rowe price our strategic investing approach can help you build the future you imagine. t. rowe price, invest with confidence. ( ♪ ♪ ) ( ♪ ♪ ) ♪ (when the day that) ♪ ♪ (lies ahead of me) ♪ ♪ ( seems impossible to face) ♪ ♪ (a lovely day) ♪ ♪ (lovely day) ♪ ♪ (lovely day) ♪ ♪ (lovely day) ♪ a bank that knows your business grows your business. bmo. ah, these bills are crazy. she has no idea she's sitting on a goldmine. well she doesn't know that if she owns a life insurance policy of $100,000 or more she can sell all or part of it to coventry for cash. even a term policy. even

a term policy? even a term policy! find out if you're sitting on a goldmine. call coventry direct today at the number on your screen, or visit coventrydirect.com.

pretty bearish sentiment from a pair of housing ceos this morning. there's taylor morrison ceo warning that the rapid acceleration in interest rates in september has once again injected some hesitation into the housing market, while the ceo of co-star parent, apartments.com and homes.com said, quote, the current environment is one of the worst housing markets in decades all of that said, we did get decent news on new home sales data in the last hour. that's surprising, given the 8% mortgage rate. >> indeed! >> meantime, the sun has stopped shining on shares of alphabet as cloud severely disappoints stocks down double digits, worst earnings prints since 2020 revenue growth not helped by the results across the street of microsoft, which did have significant growth in its cloud

business, azure. joining us, guggenheim's senior managing director, michael morris, and cnbc media and tech correspondent, julia boorstin. let me turn to you and ask whether or not b of a is right >> they missed on cloud, but beat on advertising. if you want to contextualize google as this business or alphabet that has so many different pieces to it, the cloud business did underperform expectations, but the advertising business outperformed if you look ahead to meta, it bodes well for what we could see for meta they saw accelerating growth at youtube and in search and that bodes well for meta. i think the fact that cloud disappointed was a real surprise, especially given that it's going in a different direction than microsoft >> a lot of people had been hiding out in alphabet after the print. >> i think that's correct, and i agree with a couple of things that julia just pointed out. the core business at alphabet

continues to be healthy. that is the advertising business, the search business, the youtube business but there are a couple of concerns on a name that came up following the report last night. one, on cloud, where the company underperformed also an ai, where it feels like it's a very, very competitive environment with the other large tech players and every time someone gets closer to a new practical application, the other players in the space seem to take some heat there's a little bit of concern about expense growth at the company. the company has been pretty clear that they think that they can fuel their growthy ambitions by managing parts in other parts of the business, but margins were a little softer in the quarter, they talked about some capex in the fourth quarter, and i think that that concerned investors as well. >> does it deserve to be punished 9% down today and you stick with the 150 price target? >> it doesn't deserve to be punished 9% down the market is humbling and we respect it, but i think this will ultimately prove to be a buying opportunity i think we're in the top of the first inning for what ai ultimately is for this industry. and the leaders, when they're

able to lead into the businesses, when they are at their strongest, in google's case, it's advertising, it's search i think that their tools will be powerful they will be money making. ai is going to be a multi-trillion-dollar opportunity for the industry at large and google will be there alphabet will be there we want to be long this stock, but we respect a move today and see it ultimately as a buying opportunity. >> meantime, almost classic volatility in snap last night, right? >> that stock shot higher on the fact that there was a surprise not only beat on the top and bottom line, but instead reporting a loss in earnings per share. there was actually a gain in earnings per share and the fact that revenue accelerated snap's revenue grew 2%, instead of declining 5%, which is what analysts expected. that means that the changes they made to their ad platform is working, but they're also seeing strength in direct response pch this is something that meta is really focused on, and direct response is expected to be able to be a little bit more resilient, if there is a

pullback in advertising. the interesting thing here is that snap did indicate, as did youtube and search, that the ad market is stronger than many had feared the question is whether there's going to be volatility ahead and snap ceo evan spiegel warned that they did see a pullback once the war started between hamas and israel and their concern if this war continues, as many people say it will, it will have a big impact on brand advertising in the all-important fourth quarter that is where the uncertainty lies and that really did put pressure on the stock >> how do you process all of that >> julia hit a lot of the key points here. i think when you see the move in the stock, especially the surprise pop last night, it's a matter of a stronger performance against low expectations snap has clearly been out of favor with investors for quite some time. and seeing a surprise topline beat is always going to drive the stock higher in the short-term i think it is good for the

company. that growth is still modest, it's on easier comparisons the company is not gauging impressions on its monetizable surface anywhere close to the rate of it peers so it's still a very modest step compared to peers. >> so if you add up snap and alp alphabet, we're looking forward to meta reporting after the bet. the stock is up 150% year-to-date, but weaker today on the back of alphabet sell-off what does it mean, michael >> there's a couple of considerations it does tend to flow through, especially when they have been in favor to your point about the appreciation in the shares, as much as they have. there also was the news yesterday about a lawsuit being brought by multiple state ags.

that does bring up questions about some of the challenges that the business could have in the future now, we think that the company is strong enough that they're going to overcome these challenges when we think about reading through performance that we learned about last night, compared to what we see about meta, we think meta is absolutely a stronger player our advertising checks indicate that spend on meta accelerated in the quarter, so we feel very good about what they should be able to support. there's always risk that people take a little bit off going into the print and that's what you're seeing right now >> upcomings are high going into these earnings the stock has been up so much in the past few months. and the real question on the heels of yesterday's news about these attorney generals suing meta, could that potentially impact the business? could they curtail the way that we are targeting teens' ads, or is this something tlairl working on top of. i hope mark zuckerberg addresses that in the call today >> or just some civil fines?

>> but will the fines be meaningful we'll see. >> great discussion on "squawk" this morning what a good week to have you in house, julia julia boorstin and michael, thanks so much up noext, porsche's warning about the luxury consumer. >> and boeing providing no relief to the dow now, maintaining free cash flow estimates, but they did cut the max delivery forecast, something we talked to dave calhoun about earlier this morning >> we know the work that has to get done and i think it will be a little better than surmised and back to our full rate for the end of the year , may make all the difference. at humana, we know that's especially true when you're looking for a medicare supplement insurance plan. that's why we're offering "seven things every medicare supplement should have". it's yours free, just for calling the number on your screen. and when you call,

a knowledgeable, licensed agent-producer can answer any questions you have and help you choose the plan that's right for you. the call is free, and there's no obligation. you see, medicare covers only about 80% of your part b medical expenses. the rest is up to you. that's why so many people purchase medicare supplement insurance plans like those offered by humana. they're designed to help you save money, and pay some of the costs medicare doesn't. depending on the medicare supplement plan you select, you could have no deductibles or copayments for doctor visits, hospital stays, emergency care, and more. you can keep the doctors you have now, ones you know and trust, with no referrals needed. plus, you can get medical care anywhere in the country, even when you're traveling! with humana, you get a competitive monthly premium, and personalized service, from a healthcare partner working to make healthcare simpler and easier for you. you can choose from a wide range of standardized plans. each one is designed to work seamlessly with medicare and help save you

money! so how do you find the plan that's right for you? one that fits your needs and your budget? call humana now at the number on your screen for this free guide. it's just one of the ways that humana is making healthcare simpler. and when you call, a knowledgeable, licensed agent-producer can answer any questions you have and help you choose the plan that's right for you. the call is free, and there's no obligation. you know medicare won't cover all your medical costs. so, call now and see why a medicare supplement plan from a company like humana just might be the answer.

shares of lifetime getting hit hard this morning. our brandon gomez has a market flash on the fitness group's downturn today >> lifetime shares down double digits after a brief pop this morning. the executive team bullish on their strategy to execute on expansion with new locations relying on premiere member experiences for their more affluent consumer base but the street clearly down on the stock. revenue and epps falling short this quarter the company saying revenue was a miss, in part due to a delayed club opening and sale of some nonprofitable assets, issuing weaker than expected revenue

guidance lifetime putting a pause on sale leaseback transactions, as it continues to monitor rates, which we obviously follow here at cnbc. all of that weighing on shares, down 30% over the last three months carl, back to you. >> our brandon gomez, thanks for that >> israel has reportedly agreed to delay its invasion of gaza so that the pentagon can get its air defenses in place to protect u.s. troops in the region. that's according to the "wall street journal," which reports the defense department is scrambling to deploy the assets because of the likelihood u.s. troops would be targeted around the region when israel moves in. the house of representatives will convene in just minutes and could hold a vote on the new republican nominee for speaker representative mike johnson of louisiana is the fourth congressman to be nominated for the job, which has been vacant for three weeks now since the ousting of kevin mccarthy. johnson has received backing from former president donald trump and mccarthy and hurricane otis made

landfall as a major category 5 hurricane as acapulco, mexico, last night and knocked out all communications in the region it's the strongest hurricane to ever hit the country and the eastern pacific. the storm rapidly strengthened in a matter of hours, catching some forecasters by surprise back over to you, sarah. >> leslie, thank you european markets turning higher as we turn into the close. mining and tech are the outperformers right now, bhil retail and leisure are lagging among retail names moving, gucci and bvalencia hitting new level. and after beating third quarter expectations, despite ongoing struggles with its investing arm. right now, all eyes are on the european central bank. ecb expected to hold rates steady when it meets this week after we saw a 90 basis point decline after we saw a rate hike

in september, i should say president christine lagarde set to speak this afternoon, carl, and the feeling is that the economy has turned south in europe and the ecb, like the fed, has done a lot of hiking rates. they've seen prg on inflation, it's not pack to target, so there is some mystery and drama surrounding what she says about the need to potentially raise more and keep them how high for how long >> yeah, at least german ec. fo went higher a little bit and bank of canada held. >> as expected, but there have been some surprises lately central banks are in pause mode. >> meantime, porsche, one of the big laggards out of europe today downed after the ceo warned about the future of the luxury consumer that piqued the interest of our robert frank today hi, robert >> well, porsche's cfo this morning adding to fears that the luxury consumer may be breaking down a bit he said, we are suffering and the entire economy is hitting the luxury industry.

those shares down about 12% today. and lvmh earlier this month reporting sales growth of 9% it doesn't sound bad, but that was half the level of earlier quarter. down 24% from its highs. the company's cfo saying after three roaring years, growth is converging more in line with historical average and the owner of gucci and saint laurent saw north american sales down 21% and asia x japan was also down. st at its lowest level sinceherk down 12% analysts say the most discretionary items from aspirational brand are most at risk right now guys, the surest sign that the roaring 20s may be aiming for luxury, even champagne sales are down for the first time in three

years. s sara >> does this mean at least that there'll some relief on pricing? with these luxury hand bags skmus, it was like there was no ceiling. >> you look t this channel flat bag that's now $10,000 or more that's twice what it was pre-pandemic and it's that those price increases that were so dramatic that may have just hit the ceiling, but most of the buyers of luxury good are not wealthy they're upper middle class people that like to splurge and when they're not having all that extra catch, that's going to hurt those discretionary purchases most >> waiting for the price to come down, i guess, then. shares of cme group making a comeback after the company did report an earnings beat. chair terry duffy joins us next for more on the quarter and his outlook for all this volatility in the rates market. we'll be right back.

let newage products transform your garage into an area of your home you can be proud of. modular steel cabinets let you pick and choose the storage solutions to keep your garage organized, with overhead racks and shelving, slat wall, workstations and flooring

that let you create a showroom garage to call your own. designed for diy installation. all you need is one weekend to take your garage from unusable to unbelievable. visit us at newageproducts.com. ♪ (upbeat music) ♪ ( ♪♪ ) with the push of a button, constant contact's ai tools help you know what to say, even when you don't. hi! constant contact. helping the small stand tall. you founded your kayak company because you love the ocean- not spreadsheets. you need to hire. i need indeed. indeed you do. indeed instant match instantly delivers quality candidates matching your job description. visit indeed.com/hire

welcome back turning now to the cme group and earnings mover today, seeing its ninth consecutive quarter of double-digit earnings growth, as investors continue to turn to the derivatives business to mitigate risk amid all of the volatility joining us now in an exclusive interview is cme group chairman and ceo, terry duffy welcome back, terry. good to have you >> thanks, sara, appreciate it >> clearly, it's been volatile in the rates market, more so than even stocks how is that affecting you? >> obviously, to a very positive effect for us. there's so much stuff going on in the rates market today, sara,

as you all know, you discussed it constantly. if you can take this back a few months and see where a lot of this stuff started, especially with duration risk i think there's been so much of the opinion, i heard carl talking before the break, central banks are potentially pausing, but the rates market continues to move soe duration risk is a concern, no matter how small or big you are, and people need to mitigate and manage tha risk and that's exactly what they should be doing also with the issuance, sara, a large issuance continuing to come out and the traditional buyer of that has been the fed and the fed is not buying, as we know if the fed's not buying, fed doesn't hedge, other people are buying, and they do need to hedge. so if you're buying government treasuries today and you're not going to hedge them and you're not the federal reserve, that could be a very risky proposal >> do you chalk this moua and rates up to the concerns about supply and demand of treasury

instance >> i think it's important to talk about the supply and demand of treasuries. you're starting to see other asset classes catch a bid. you see bitcoin right now just below 35,000 i'm not saying that people are leaving treasuries and going to crypto, but it appears to be more than just an etf announcement you have gold just under $2,000 an ounce you had oil come up, but it sold off. people are diversifying away from some treasuries, and that's art of the equation. >> i know there's been some on the street that are calling for you to find ways to generate revenue. if and when rate volatility backs off, do you see that day coming >> and if it does, what then >> i'm not going to speculate on that right now, when you look at our business, 80% of our revenue is devrived from transactions. we've been sitting here for the last several years talking about

rate markets we have the most uncertain world we've ever seen on the planet. we're here to mitigate and manage risk. we are in a strong sweet spot. as far as looking at other recurring revenues, i think what you're referring to is a recent article if we would do something from an m&a perspective to get reoccurring revenue. we have reoccurring revenue, it's called trading. and right now that doesn't seem to be going away for the foreseeable future i think we're in a really sweet spot and when you have operating margins of 70% associated with that transactional revenue, that's a pretty good business that a lot of people like to be in >> so you don't have to go by the cboe, which is really what the article is about from reuters? >> that's what it's about. but as the article suggests, and the headlines are deceiving. and unfortunately, people only read headlines in the world that we live in today but if you read the body of the article, i said what i've been saying for years, that we are in the strongest position of any institution that looks like us to do m&a deals, and there will be a lot of people shopping

those deals towards us i will never do anything that does not benefit the users of my marketplace or shareholders. i was only referencing that our ebitda is less than one times where our ore comther exerts, t all it was >> how about the imagining and commodities business a little wild lately i wonder how long you think that could last >> it's hard to predict, but right now i wouldn't want to put a timeline on it we've all kind of forgotten about what's going on in ukraine and russia, which has a huge impact on the oil prices, because our focus is on israel right now and rightfully so. there's so much uncertainty around the world the energy source, we're already looking to quort oil from places that we never thought that we would go back to ever again. hopefully we can get more drilling going on, but also have

a long-term plan about how we are going to keep the planet safe and i don't see that backing off. >> when silicon valley bank failed, you came on and were railing against the management for not appropriately hedging their interest rate risk has that improved? this is still sort of a lingering issue for regional banks in particular. >> as i said at the beginning, sara, i don't think it's just the regionals. everybody's got some kind of duration risk on their books no matter how big or small you are, you need to manage that, because you never know what's going to happen. just because the fed has paused and other central banks have paused, it doesn't mean they're not going to have to accelerate again for whatever reason it may be we still need to pay the bills and the way we pay bills is to issue debt if there's not a demand for that, you have to be careful where rates are going, so people

need to manage that duration risk no matter what the size of your kpaecompanies are. >> one final one from me, are treasuries safe havens nimpl you mentioned the move we've seen in gold and bitcoin, dollar kind of mixed. what do you tell people when they ask about the volatile world and the geopolitical landscape and wonder if they should be buying those risk-free bonds. >> this thereby a terry duffy opinion, not a cme opinion, of course i still own them i think they're a very safe haven. you look around the world, what else are you going to buy? where else will you put your mup money in today's world the united states of america is the best place to keep money it's been that way for years and years. my only earlier point was diversification is not a bad thing and we might be starting to see that. it's happened in the past, whether it's with stocks, when we had a zero-interest rate environment or now we're seeing

it with rates going up i don't see people going away from the largest market in the world which is the u.s. treasury market we might have back and forth, but it's not going away. >> that's what we wanted, the terry duffy opinion. thank you very much. always appreciate you joining us >> coming up after the break, california suspending cruz's autonomous driving permit. what a halt of its robot taxi service might mean for gm and google's waymo stay with us help. because the right information, at the right time, may make all the difference. at humana, we know that's especially true when you're looking for a medicare supplement insurance plan. that's why we're offering "seven things every medicare supplement should have". it's yours free, just for calling the number on your screen. and when you call, a knowledgeable, licensed agent-producer can answer any questions you have and help you choose the plan that's right for you. the call is free, and there's no obligation. you see, medicare covers only about 80% of your part b medical

expenses. the rest is up to you. that's why so many people purchase medicare supplement insurance plans like those offered by humana. they're designed to help you save money, and pay some of the costs medicare doesn't. depending on the medicare supplement plan you select, you could have no deductibles or copayments for doctor visits, hospital stays, emergency care, and more. you can keep the doctors you have now, ones you know and trust, with no referrals needed. plus, you can get medical care anywhere in the country, even when you're traveling! with humana, you get a competitive monthly premium, and personalized service, from a healthcare partner working to make healthcare simpler and easier for you. you can choose from a wide range of standardized plans. each one is designed to work seamlessly with medicare and help save you money! so how do you find the plan that's right for you? one that fits your needs and your budget? call humana now at the number on your screen for this free guide. it's just

one of the ways that humana is making healthcare simpler. and when you call, a knowledgeable, licensed agent-producer can answer any questions you have and help you choose the plan that's right for you. the call is free, and there's no obligation. you know medicare won't cover all your medical costs. so, call now and see why a medicare supplement plan from a company like humana just might be the answer.

general motors taxi service c cruise now no longer allowed to operate in california after the state suspended their licenses >> and more details are emerging the question being asked today by the dmv and public officials is this. was there a cover-up the incident under investigation involves a driverless cruise vehicle that initially came to a

hard stop running over a pedestrian the dmv alleges that cruise only showed footage up to that stop and left out subsequent footage of the vehicle pulling over a distance of about 20 feet while dragging the pedestrian under the car the entire time. we'll show you an image of the fire department physically lifting the kaur off aft woman cruise disputes this and says it shared the whole video, but the investigation has much broader implications for the entire autonomous industry. it involves the biggest names in tech cruise is backed by general motor. its name robo taxi exert is waymo. others include amazon, which bought zooks for $1.2 billion in 2020 apple's rumored project, titan, and tesla's own very early plans for a full robo taxi fleet robo and cruise have been taking

paid rides since august. waymo has the edge cruise's suspension now likely to widen that gap further. for all of them, the costs are higher, the regulatory hurdles are many gm has said that krooud could generate up to $50 billion in revenue each year. last point i want to make here, the backlash, you're hearing it now, but it hn building well ahead of this latest cruise incident and it could bolster the argument that would hit not just the end players who we showed you, but companies that are supplying the chips, the lighter sensors and other technology to them a few of those names up on your screen now like nvidia, mobile, and qualcomm up next, what can the fed do about the deficit? why the answer differs from the past stay with us

i'm going to sell my life insurance cuz i don't need it anymore. my kids are grown, my wife is great, let's settle up the score. it's time to travel to paree, spend retirement happy. call 877-sell-easy. 877-sell-easy. 877-sell-easy, and sell your policy. you can sell all or part, live your life and play it smart. 877-sell-easy, and sell your policy. if you've had a change in health, or you're over 65, and paying for $100,000 or more in a life insurance policy you don't need, get paid for

it instead. then take the money that you get, go to live it up, you bet. call 877-sell-easy. 877-sell-easy. 877-sell-easy, and sell your policy.

c'mon, we're right there. c'mon baby. it's the only we need. go, go, go, go! ah! touchdown baby! -touchdown! are your neighbors watching the same game? yeah, my 5g home internet delays the game a bit. but you get used to it. try these. they're noise cancelling earmuffs. i stole them from an airport. it's always something with you, man. great! solid! -greek salad? exactly! don't delay the game with verizon or t-mobile 5g home internet. catch it on the xfinity 10g network.

welcome back the u.s. budget deficit showing no signs of slowing down growing from 1.4 trillion in 2022. intense borrowing doesn't help the fed chair's mission to stem inflation but our next guest doesn't think there is much he can do to stop it and writes this morning despite powell chiming in on fiscal policy during the pandemic commentary now may make unwanted enemies. joining us this morning "the wall street journal's" chief economics commentator. and a great snapshot, greg at how his stance and rhetoric surrounding this changed over

time >> yeah. it is kind of an asymmetry there right? in 2020 we had the pandemic and the economy was in a very dire strait powell was quite vocal saying yeah we need more stimulus and to help people out i get where it is coming from. the economy was in bad shape and the fed had done all it could do and lowered the risk to zero fiscal policy was sort of the only game in town. you could have argued wouldn't symmetry require it is becoming a threat in the other direction that you say something and apparently the answer is no. when powell is asked about it he says we don't comment on fiscal policy and is that the right thing? i know there are people like the former speaker paul ryan who would like him to speak out but he has apparently concluded there is probably no upside to him doing that. >> what is the down side >> i think he has tried since he became chairman his words are essentially stay in our lane and not comment on things that have nothing to do with monetary policy as you know we are in a very

polarized time the risk if you take a position on controversial subjects it comes back to bite you you give cheer to those who agree with you but make enemies of those who disagree. the truth is like back in the early 1990s george h.w. bush, bill clinton, these were presidents ready to listen to advice and make hard decisions congress wasn't as polarized as now. those aren't the times we live in now i like to say congress uses the fed chairman the way a drunk uses a lamp post -- support rather than illumination >> the other risk is, first of all, it is politicized right? there are certain members for instance of the republican party that have taken a harder line against deficit spending for democrats. he doesn't want to get embroiled or lumped in with one of those sides. the other is it is not clear whether it is having an effect on the economy back when he spoke out about the need for fiscal spending it was more to juice the economy. in this case it might be having an impact on bond market and

eventually slow growth but right now it is not clear that's what's happening >> absolutely. it is not like the deficit is a clear and present danger where the explanation and solution are both fairly obvious. it is in greece, right, where we are about to face total bankruptcy and economy cataclysm and, you know, it is necessary for people like a central banker to speak out there are a variety of theories about why bond yields are going up i happen to think the deficit is one reason a lot of people disagree then there is sort of the counter intuitive reality that as far as the fed is concerned because most of this rise in bond yields is in the form of the term premium as opposed to investors thinking the feds will tighten more the higher term premium slows economic growth and makes the fed less likely to raise interest rates you don't exactly want to go to washington and say oh, that deficit i am worried about means we're less likely to raise interest rates that is not a message you want

to be telling congress right now. >> it also helps him that is what he is trying to do is slow the economy enough to get inflation back to target which has not yet fully happened. >> but on the other hand, you know what would really help them now would be a little contractionary fiscal policy it is the mirror image of the period we had after the global financial crisis and during the pandemic when monetary policy was doing all it could do. interest rates were at zero. the fed was buying bonds and it wasn't enough to help the economy. that was when there was a role for fiscal policy. we are not in that world any longer the fed is doing all they can to get inflation down which is too high and a little help from the fiscal authorities, higher taxes, lower spending would give the fed a valuable assist here and perhaps make higher interest rates less necessary. >> one thing he said in the last few days is that the good news we've gotten on disinflation lately is just the beginning of what will be eventually necessary. are you hearing that the three-month annualized data

we've gotten lately is durable >> you know, we'll get an important number out this week, the pc inflation number. i think people are looking for that number to be constructive i think it is going to have a slightly firmer reading than the cpi inflation number a few weeks ago. if you sort of canvas the expert opinion there is a view we probably brought underlying inflation down to the 3% area but there is a lot, we still had the last mile problem ahead of us my own gut instinct is we're going to have the fed on pause at their next meeting but they will keep the door open to having to do more because they, themselves are not certain that they've solved that last mile problem. >> the last mile problem, same thing in e-commerce as monetary policy, greg. >> that's right. >> great piece as always great to check in with you thanks. >> thanks for having me. >> greg ip of "the wall street journal. we've kind of been all over the map but for the most part holding 4200 s&p is the

important key today. >> we've also got strength in a spot other than defenses consumer staples and utilities are up but financials are also rising today and that has been a question mark as far as the source of strength for the market after better earnings we'll get more coming after the bell as far as barometers. meta, ibm will be reporting. u.p.s., honeywell, comcast all out tomorrow so busiest week of earnings continues. and the pressure on the market continues and the ten-year yield above 49 again not 5 but it is rising we'll be watching. >> we started the morning around 486, 487 new home sales getting strong. and upside pressure. that's done the kind of damage -- tonight as well on some of the hallmark names santoli has been pointing out. very sensitive direction. >> and gdp tomorrow which is going to be key. everyone is expecting a strong number how strong is it and does it set up for stronger growth in the fourth quarter and into next

year >> goldman which started at one five and slowly worked up to four six just increased one more tenth to 4.7 >> everybody has been revising straight up joining the atlanta fed gdp at 5.4%. >> let's get to the judge in philly today for "the half." thank you very much. welcome to "the halftime report" i'm scott wapner from the schwab impact conference here in philadelphia thousands of registered inve investment advisers are here including our very own jason snipe. he'll make his way over to our platform when he is off. the rest of the investment committee debating the markets today as well. microsoft and alphabet as they trade in opposite directions today and the stage now set for meta this afternoon with lots to discuss for all of you with me for the hour tod