decision and then chairman powell's comments talking about what he sees in the economy as a result and maybe where they're headed. ten-year is at 3.76%. the two-year is at 3.64%. as rick pointed out, very firmly out of inversion territory. >> yep. tomorrow's friday. >> it is friday. one more wake-up. that does it for us today. make sure you join us tomorrow. we'll see you later. "squawk on the street" begins right now. ♪ good thursday morning, welcome to "squawk on the street," i'm carl quintanilla with david faber at post nine of the new york stock exchange. cramer's at one market in san francisco continuing his big week out west. futures come alive on what looks to be the biggest gap higher after a fed day in more than a decade. s&p should hit some all-time highs at the open, above 5,700. jobless claims, meantime, a four-month low. our road map begins, though, with that big fed rate cut, sending stocks soaring in the premarket, one fed governor

voting against the decision, the first official to do so since '05. plus iphone sales slowdown overblown, one major wireless carrier saying the first week of sales came in better than last year's. and darden restaurants, it missed earnings expectation, but the stock is rallying big-time. best name on the s&p out of the market open. >> let's get to global markets today, rallying after the rate cut yesterday. during his news conference, the fed chair stressed the word recalibration. take a listen. >> with an appropriate recalibration of our policy stance, strength in the labor market can be maintained. this recalibration is a process of recalibrating to recalibrate. we're recalibrating policy. recalibration of our policy. we're recalibrating our policy over time to a stance that will be more neutral. >> jim, i think the jpmorgan

notice titled "recalibration nation". >> that makes sense. the first move after rate hike often has -- rate cut has to be faded, and i'll tell you why. people suddenly say, uh-oh, 50, and then other people say, 50's not enough, and then there are people who say, this takes away from further cuts down the year. all these people are wrong. what history says is that you buy the first cut. it doesn't say you buy the first cut 25 or 25, 50, you just buy it. and i think people are still too bearish. when i see that action, david, when you have something so monumental as a 50 basis point and people yawn, you don't yawn, and you don't just watch the people yawn. you do something. >> all right. meaning what, jim? >> well, when rates come down, stocks are cheaper, particularly when you have 50 basis points, because finally, you might get some money from the sidelines because it's not as attractive, and we saw the home builder stocks being lifted again today, because mortgage rates going

down would help affordability. housing got too expensive and the only thing that's going to make it give -- if they lower mortgage rates, we get more str transactions. >> did you say to fade the first move or no? >> the first move, yesterday, was to say, you know, this didn't do anything at all. nothing changed. >> you're talking about that. okay. not about this rally we're seeing this morning. >> no. no, this is a real rally. this makes sense. this is -- >> oh, this makes sense. money on the sidelines, really? we're going to go with that already? money on the sidelines? we're going with that one? oh, it's coming. >> yeah. yeah. it is. look, you're going to anticipate just having your money in some money fund and have it go -- who would ever sit there and take a beating in their money fund? it's not right. the money's going elsewhere. it can go to stocks and have good dividends. darden >> we're going to get to darden in a bit. great line out of the jpm desk

today, jim. over the past 40 years, the fed has cut rates 12 times where the s&p's been within 1% of all-time highs and all 12 times, you're higher a year later, average return 15%. >> look, we obviously weren't targeting employment. we were targeting almost entirely inflation and this 2%, and they are -- the fed is just determined to get at that level. so, i think that we have to sit back and say, you know what? the fed is working for us. the fed isn't trying to work for us, but the fed is working for us. >> do you agree with this line that small caps tend to outperform in the first six months after a cut? >> they do. but i find the small cap way that hedge funds get involved, which is by an index, it is foolish. got to pick some small caps that are actually good. and those are hard to find, carl. so, yes, these are supposed to be working. what they'll do is buy a basket of them, big institutions, because you can't pick and choose the small cap. they're just too tiny.

they would overwhelm every small cap. they would own every small cap. >> meantime, you got b of a today, subramanian comes out talking about old-school economies, utilities, industrials. she points to the biggest boom in u.s. manufacturing in over a decade, the two million jobs that alone brought in. >> we know this is true. i still think the strongest part of the economy is construction. some of that is the doubling of the datacenters. we think that datacenter is going to go from 4% for the grid to 8%, which is going to cause the grid to be rebuilt, and david, you know what i heard yesterday was, apartment prices coming down. we know housing is coming down. these are all the things we need to see in order to be able to have -- i'm going to use the term, i'm sure you're not used to it, soft landing. >> all true. obviously, the 50 was more or less consensus, though i know at the desk here, we kind of

anticipated perhaps a 25 was a more likely outcome and wasn't as though it was weighted that heavily towards 50. but i did, you know, have an opportunity to talk to at least one person, that being mark roan, who runs apollo, who, you know, is in that camp, guys, that says, all right, i get it, but at the same time, there's an awful lot of deficit spending going on. there's a lot of spending yet to still come from all of the government programs that were signed on to, whether it's infrastructure, chips, i.r.a. and you go from there, that really hasn't fully hit the economy. take a listen to what he had to say. >> it does not feel to me like we are having a traditional recession, and yet, we are using the tools of a traditional recession. we are -- we're going to run a $2 trillion deficit this year. i think we're in uncharted territory and that's why i say, it's an insurance policy.

>> what's it an insurance policy against? you seem to be indicating in some way, given your view or the house view, that, in fact, there could be a lot of risk from lowering rates to this extent. >> and i think there can, and that's why i says it's a risky insurance policy. the insurance policy is to get ahead of a potential slowdown based on incoming data, and the risk is that all of this fiscal stimulus, which is very long-term, which has not yet come online against the backdrop of noisy data and a noisy model forces the government and the fed into a retreat. >> possibility, jim, unlikely, perhaps, by the way, long interview with rowan about so many of the different larger trends that his business is the center of, namely public to private, whether it be credit or even equity as well. not private equity, but equity that is private. >> i mean not going to go against marc rowan or apollo.

i would point out larry fink came on our show and said the only way out of this deficit is to grow our way out of the deficit, and you know what? maybe that's the beginning of the grow without inflation that we really want. i'm just more bullish than a lot of other people. 50 basis point plus trying to grow out of things, carl, it doesn't just play for time. it's actually pretty positive. >> yeah. i don't know if you saw the piece in the "journal" today, jim, that the fed has improved the odds of a soft landing significantly, in the words of ipp. he says, low inflation, low unemployment, solid economic growth, greg writes, "this is what an economy is supposed to look like." >> wow. yeah, i read the piece. i don't know greg personally. the way i thought of it was what's happening out here. we have an economy that is growing like mad out here. it is truly trying to keep us in growth mode, but these companies that i'm dealing with, they're all trying to keep prices down for the consumer.

t-mobile yesterday, okay, price down for the consumer. waymo, everywhere in this city, price down for the consumer. salesforce, trying to make it so that its agents, price down for the consumer. so, tech is doing everything it can and obviously amazon doing everything it can to keep prices down. at the same time, they're growing like mad. they are the definition of what approxim powell wants. >> but i mean, one of the lead stories in the "wall street journal" today is tech jobs have dried up and aren't coming back soon. so, i think you need to delineate exactly what you're talking about when you talk about growth. certainly, you're talking to a lot of people who are very excited about generative a.i. and the opportunities that that is bringing to the fore, but there's a lot of traditional tech jobs that are actually not needed anymore already, jim, so when it comes to growth and back to the fed, and employment, it's not clear to me that that's growth. >> okay, look, you're absolutely right to define things. it's what -- they need engineers.

you don't have to -- they don't need computer sicientists anymoe because of the way that a.i. is set up, but they don't have enough engineers and that's something that we have a national shortage in. that has to do with the way our education system is set up. but that is where we need people desperately, and carl, david's right, and it isn't like we need anybody else desperately, because we're still trying to figure out whether a.i. and the agent will take people and put them in new kinds of jobs. >> the piece that david mentions is pretty fascinating because it's software engineers who are both in demand, if you know a.i., and if you don't -- >> you're done. not done. >> you're not getting callbacks at all. >> you're having a difficult time finding a job. >> lisa su wanted the engineers. she added a thousand engineers. a couple years ago, you couldn't give away the engineers, and you know who started the hiring of the engineers, who did more hiring of engineers than any company? >> nvidia? >> you still got it.

you still got it, partner. you still have it. >> yes! >> the daily double. >> just never lost a step. >> glad i got that right. understood. but you know, there is this dichotomy, as "the journal" points out, as carl mentioned, wean the a.i. world, which i know you're getting a very heavy dose of out there for the last four days and sort of the rest of tech, so to speak, jim. >> i met pink last night. she u.s. just wanted to talk nv and she wanted to talk about a.i. that's not true. pink was unbelievable, and as soon as my wife saw her, my wife burst into tears and had to be comforted by pink. david, when i -- true. odd. when we talk about a.i., it's almost -- here's a term i hate. table stakes. even though i wanted to talk to mike sievert, ceo of t-mobile, about the fact that he said that the apple iphone 16 is much better, didn't understand where all these stories came out at

the beginning of the week. those stories seem like now that they are fatuous. >> we're going to hear from him in the next segment. we want to get to that. jim, well, music's already playing but i certainly want more takeaways from the conversations you have been hearing, because it's so valuable in terms of all of the different things, you know, all the different people you're getting in front of over these last four days. >> i'm so ready for you, david. i mean, it's beyond belief. i'm going to raise a glass for you, david. >> you are? oh. i know that. got it. i got it. i got one of those. >> you are so cool. >> oh, i'm so cool. yeah. >> who wrote "pink pony club"? never mind. next. >> jim, we're going to hear, as you said, from t-mobile's chief with that bullish message to jim about the apple iphone 16, some of their cost and revenue targets, their work in a.i. we will get to darden as david said. there's news on apple, paypal, tesla, workday, as we hit

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t-mobile's chief, mike sievert, expressing some optimism about the iphone 16 last night on "mad money." he told jim his company is seeing stronger demand for apple's new lineup than last year's series. take a listen. >> the first week was better than last year. >> better than last year? >> not only good but better than last year. people are buying pros and maxes. they're buying up the food c chain, and they're buying at a greater rate than last year. we may see this is better than last year to a slightly greater extent, because i have a feeling this cycle will be lengthened a little. you know why? the a.i. features don't come out for a little while yet, so the word of mouth of seeing apple intelligence on your phone and telling other people about it, that's still in front of us and will take a few weeks or longer. they didn't tell us. this cycle could actually last a while. >> jim, take that. >> t-mobile, one of the biggest

sellers. sometimes they can outsell verizon. they open a lot of accounts. i think mike was just kind of trying to figure out what almost sounded like lies. you had somebody that told you that the 16 was not doing well last weekend, i forget their name, i don't know, it was a big college day and then a big pro football day, so they may have been completely irrelevant in my mind, but thank heavens they were, because sievert stands for what the numbers really are. david, can you believe the clowns on wall street who bit on some study of someone that no one had ever heard of until the day they gave you the numbers. >> well, i don't know if that's fair. carl just said his name, i think. >> yeah. >> he's been fairly widely followed, jim. >> what was the name? >> on this whole preorder thing. that said, you made the point many times -- i don't know -- that you get so many different data points and it feels as though, until we get the real numbers, none of them ever can

be relied on, whether it's out of china, and what we're seeing and then this and then the channel checks. who knows? >> but no. no. no. that's too negative. >> that's the thing you can rely on the most is hearing mike sievert. he does tend to be promotional sometimes. >> he has the numbers. david, he has the data. the other guy, who you claim is mr. apple, i don't know. i mean, what does he know? >> i don't know him at all. i never heard of him, but my colleagues seem to know him very well, so what do i know? >> gala. maybe he's a gala apple. >> there's a lot of different apple breed. there are. >> if you go apple picking right now, you might get that guy. some of them have worms, david. >> meanwhile, jim, there is this piece on the tape today about the eu, and the pressure that apple apparently will be under to open ios to rivals or face significant fines in the story's words. >> yeah, obviously, suboptimal for apple. apple has an unbelievable

operating system, and the idea that you -- the better you make it, the more you have to give it away seems wrong to me. the european -- we've got, like, u.s. 1, europe, like, 27 in these different -- these things are basically kangaroo courts. they're show trials. they're saying, listen, america, you come here, we're going to take our -- we're going to take our pound of flesh, david. our pound of flesh. >> they do take privacy very seriously there. i think that's fair to say. apple shares were up yesterday even prior to your interview. that was notable. and before the fed even. >> you're like the print organizations who refuse to acknowledge the scoop that i had. you know what? we're silly people on tv. tv are silly people. >> no one will embrace your scoops more than i have. i've been dealing with the silly people on tv thing for 31 years. my own organization -- you know how many times i've dealt with that? >> how about how many t-mobile

suddenly out of nowhere, they can do 12 million fixed wireless. you told me we'd be safe in fixed wireless. >> they, by the way, they keep increasing the capacity on fixed wireless. i'm curious to hear what -- i assume you spoke to sievert about it because there was a time that you well know where -- and it still is the case -- you would rather sell a subscription than -- a wireless subscription, so eventually you do get capacity con tstrained, but fix wireless is a real competitor to broadband. verizon has been pursuing it, t-mobile was earlier. and yet you've got a lot of carriers deciding they also want to move into fiber. obviously, at&t has been the leader, but verizon with the frontier acquisition, and t-mobile has made a number of small acquisitions as well. >> when i ask mike sievert, we work for cnbc, where did he -- where are these 8 many to 12 million fixed wireless customers going to come from? he had one word for me, david. he said, cable.

>> yeah. >> is that us? >> yes, that would be cabletown. i'm not sure if they're familiar with that company. >> it was one of those moments where i just said, okay. all right. i didn't think you could get to 12, but you know what, i have a contract. >> meanwhile, starlink is just revving up. i keep wondering -- when he puts that starship up there and starts all the, release the hundreds of satellites at one time, it's going to change the game too. >> so that i can climb everest and get a clean signal? i'll take t-mobile and a great apple 16. >> not get a signal in the suburbs where they really do compete against cable. >> or an airplane. >> he's signing up airplane. >> i want apologies from the people this weekend who tried to take apple down so they could cover their short. >> takes it so personally. so personally. >> take it personally?

of course i take it personally. what am i, not going to take it personally? isn't it about me? isn't this whole show about me? >> it's not personal. >> we'll get cramer's "mad dash," countdown to the opening bell as we look for these all-time highs at the opening bell in about nine minutes. stay with us. i can't believe you corporate types are still at it. just stop calling each other rock stars. and using workday to put finance and h.r. on one platform. tim, you are a rock star. using responsible ai doesn't make you a rock star. it kinda does. you are not rock stars.

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take a look at futures as the premarket is soaring here. great note out of mark dow today between the first hike by the fed in 2022 and the first cut, the s&p was up 35%. >> wow. >> which kind of throws into some confusion this notion of, don't fight the fed. it would have been smart to fight them this time. don't forget, you can catch us any time anywhere, juslient st to and follow the "squawk on the street: opening bell" podcast.

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>> announcer: the opening bell is brought to you by nuveen, a leader in income, alternative, and responsible investing. time now for a cross-country "mad dash." again, we've got an opening bell very quick, but you just can't stay away from nike. i don't know what it is with you and that name. >> it's not me. it's the analysts. this morning, bernstein comes out, lowers from $112 to $109 but that's not the point. i'm going to read this. "what's happened is that boeing" -- sorry, is that nike is namely a too complex design

process, feedback loops that were taken away and get this one. maybe this doesn't matter if you make sneakers, but leadership not focusing on product. they see a turn in 2026. the way time flies, that could be tomorrow. >> it could. time goes very fast, especially when you get to a certain age. so, 2026, there's the turn. just wait for it, jim. wait for it. >> maybe someone else can -- look, you know what? i've always felt don was a nice guy so i have nothing more to say. nice. >> you've been right on the stock because you've been negative for some time. you don't tell people to short stocks, but you kind of do. do you cover here, jim? >> i want to see -- when mary dillon from foot locker says that hoka is the number one or that new balance is the number one, then i'm worried that -- then i'll say that nike has a shot. but right now, it is just

downhill. but the people -- the people out at nike land, they seem oblivious. >> jim, let's get to this opening bell here. at the big board, it's aa mission acquisition corp., celebrating its recent listing at the nasdaq. financial institution holding company as we see quite a bit of green, looking for some opening numbers here. the implied move yesterday was a percent or more. we only got 30 basis points, so we are making up for some lost time yesterday. >> yesterday was really weird because you had stocks -- you had mag seven fly instantly. then you had the fellow traveler, particularly semiconductors, fly and soar and everything -- every point was given up, and then they started dripping down, and then at the bell, it accelerated. david, who were those people who were trying so desperately to get out of stocks now that

they're up? what was their game plan? i want to get into their heads. their silly heads. >> yeah, i can't explain that to you, jim. i don't understand those kinds of moves, especially in that short period there. people are still listening to the presser and trying to understand the future direction of rates, which has got to be the key here as well. it's not just the 50 now. it's what's next? what are we going to get next year? where is the newutral rate? >> hold on just a second. i got one. chairman powell, were they people who dissented chairman powell and why? that was asked four times. i was waiting for "the tallahassee democrat," where i worked to say, excuse me, mr. chair, was there any dissent? >> i know you don't like the press conference. our steve liesman had the first question, and of course it was the question that many were

asking. did something change? did we miss something between, you know, jackson hole and here or even a little before that? >> well, inflation has come down pretty consistently. we're stoarting to get companie to take their prices down, and then not just sold at costco and walmart anymore. i think the interaction today, we got a mastercard survey, which i thought was masterful, frankly, and it says that season spending, we're going to have 3.2% year over year. 7.1% bump. online sales. and what are people buying? this was incredible to me. they're buying electronics, which they're supposed to grow 6 to 7% over last year. the -- you know, when you say they're going to -- electronics, that has been a horrendous category. so, mastercard survey, very, very bullish. >> yeah. i was just looking at b of a's credit card data for the last couple of weeks, jim, and the

other line that stands out is the decline in spend on gasoline. you're talking 11, 12%, day after day, down versus a year ago. >> well, it's -- i'm so glad you mentioned that, because one of the stocks that's been going up since the, let's just say, the price collapse, is the stock of disney. now, i had thought that that was inconceivable, that the stock could go up. it just didn't seem possible to me. david, you know i thought it was epoxy to '89, '90. and then "agath all along." oh, no, people didn't like that. i think this is the stock to buy when gasoline has peaked. >> disney? >> more than six flags, you know? >> well, there are a lot of stocks that are being right now, the s&p up, the nasdaq doing better than that, up some 2.3%. it's across the board.

nvidia shares are up. what's the latest you've been picking up from your many conversations both on air and off air with people who attended dreamforce this week and who you've seen in the san francisco area? >> well, i think that we can listen to what list su has to say from amd. what she told me was, nvidia's unassailable lead but there's room for two because there is so much business. the demand, i just keep getting, is more and more and more, and the big joke out here is that some people really do have blackwell, and it's going to be elon musk or mark zuckerberg, because remember, last week, je je jensen huang said it's become very emotional who gets his chips. i've not seen anything like this, david. it's like they're scalping him, you know what i mean? >> yeah. >> that's bad. he's had to deal with scalping before. y but yeah, most people just say, yeah, jensen is a.i., we're waiting for others to join his

orb, but nobody has. that stock collapsed last night. it collapsed. went from 15 to 13 as if it was some sort of small cap, knife through margarine. >> now it's higher. we've got an s&p -- carl, that's a new record, right? >> on the s&p? yeah. this is an all-time high and i think for the dow as well, above 42,000. >> david? why don't you say -- >> what would you like me to say? we're approaching a 20% gain on the year. i think after the performance of last year, few would have expected as we came into this year that you would have a potential far tor a two in fron your performance this year. zip it. sorry. >> i think we have had so many people who are negative come on. i'd like to hear from them, the people who screamed that we need giant rate cuts or the people who felt that it wouldn't matter. those people would be really fun to listen to. i would ask them about airbnb,

cadence, lam research, kla. i would ask about applied materials. fortunately, a lot of the cfos will be having dinner with me. i can't wait to stay up even later than i did last night. >> i think it was the bank of america desk that took note of the semis, in particular, leading the price action this morning and questioning whether or not it's really just sheer momentum. maybe there is, now that we have this cut cycle under way, some kind of macro bedrock to the trade. >> i have to tell you what macro bedrock these days has been the semiconductor caps. in fairness, i think the numbers are too high for those customers, because we have micron with static d-ram. we obviously have intel with not a lot of buying. how nice. pat gelsinger doesn't want to sell mobileye at the bottom. how about that? i was in a waymo with five people yesterday, and waymo was telling us what to do. i respected waymo. always polite, the whole time. >> yeah, you took another unassisted ride, so to speak?

>> i loved it. you can climb in the trunk, but they have -- you know what? they have cameras in the trunk, so you got to be careful. >> i'm glad you mentioned autonomous, jim. ubs today takes a crack at the tesla robo taxi day. their argument is that it's ironic they're holding it on the warner lot and not in the real world, because they're not working with california dmv. it's actually waymo, they argue, who could do a demo in real-life l.a. if they wanted. >> this jaguar waymo is all over the place. my wife tried to hail one, not realizing that's not the process. it's on your phone. it's very easy. i found it much better late at night than any driver. i recommend waymo to my friends. >> good segue, guys, into darden, why? because they actually also announced a partnership with uber, both earnings as well. the earnings, jim, did not look on the face of them to be particularly strong. >> no. >> darden stock price is,

although it's come off a little bit from where it was before the market began. you can see we had a slowdown in july. they do announce, as i've just mentioned, this partnership with uber. it will begin with pilot at select locations. drivers will pick up orders curbside, same everyday value menu price for dine-in and pickup delivery. darden will keep the data, apparently. >> and then by may, i think, all 900 u.s. locations will have it. >> look, the yield's 3.3%. that's terrific. david, it's a reverse head and shoulders because i know you care about the technicals. the stock is only up two for the year. a lot of the restaurant chains are doing much better. as the months went on, things got better and there's also a survey today, carl, i thought was very interesting, where it turns out that one of the ingrained habits of covid is the very expensive -- have food come to your house, and somehow, people got -- that became integral to their lifestyle, even though it's very expensive. and you and i both know, when

you order a cup of coffee and a danish, it costs a fortune. >> yeah, those fees. >> they add up. >> almost like ticketmaster. but not quite. >> well -- >> by the way, livenation rebutted the government's case. it was interesting. they put their memorandum out on that. but man, those fees. >> ten to one up day at the open here is the kind of market i think you would be suspicious of. >> yeah, well, actually, you shouldn't have had that -- that's just like, you know, ten to one down and you got to buy. ten to one high, you got to do some selling. jeff marks and i have been huddling this morning about doing some selling and that's exactly what we're doing. >> the only sector lower is utilities. wells cuts to neutral there as we watch the xlu. what happened to the offensive element of the utilities playbook? the whole datacenter energy creation thing? >> well, look, i think that if you want to do that, today, we

always get one every day. today is wolf's day with qantas services. that's going to build a lot of these. vertiv is very important. the travel trust owns a lot in this sector. well, okay, so, i'm kind of trying to figure out how not to give these away. but eton is an amazing stock for this. by the way, this is very much of a midwest powerhouse move. you get companies like dover that people have forgotten about, and they're all involved with the heating and cooling, because these things just -- oh, they burn so hot, carl, and jensen huang has said over and over to me that they have been able to reduce the heat while increasing the speed. but it is one of the major challenges is how to make these things not hot, and right now, it's thought to be water cooling is the best. >> yeah. there has been some criticism of the sector at large benefitting

from low natural gas prices, jim, and subsidies and yet increasing their rates year after year. and we can see how that gets reflected in the market value. >> it's really just vernova. almost everyone got out of the building new nat gas plans because people felt nat gas was going to be closed down, fade away, democrats wouldn't go for it, but democrats put a pause on exporting it, but right now, there's so much more natural gas. that's why i propose to tom jordan, the ceo of cotera, whether he would actually sell a company, david, to a natural gas company that basically supplies datacenters. now, you pooh-poohed it at the time. i kept trying to push it. it was almost like me new mexico obsession with building a theme park, but i'm not backing away that it sure would be smart for one of these tech titans to buy

a company like coterra. >> that's a little far down the line. i un why, and in fact, we are already seeing deals where they're taking all the capacity from a particular electric generation facility, or even considering building their own to power certain datacenters. but you're going down the line to the actual fuel that's provided to run the turbines. i mean, really? natural gas business? i don't buy it still. sorry. >> natural gas is the lorwest since this whole era of reshoring has occurred. you lock in very, very good prices if you do it. now, here's why they won't do it. they're way out of the -- they're watching and they're just saying, we're not getting in that business. that business is going to go away. so, what i think they should do is talk to ge vernova and realize that it's not going away any time soon. we can't replace -- you can't just make solar be the power. sometimes it's not sunny out. that's why you need a backup

engine, perhaps from caterpillar. >> and sometimes it's not windy as well. but you know, nuclear still does take a long time to build, even the smaller reactors. it's not like they happen overnight. >> no. and a lot of people are just talking about reopening, recertifying old nuclear power plants, which i'm sure you'd be willing to live next to. >> jim, is there a particular sector that you and/or you think investors should be focused on, given the declining rate environment we now find ourselves in? >> well, look, i mean, you're not supposed to outthink it. you're supposed to buy first, buy toll brothers, buy lennar if they're going to report, buy dr h horton, and then go to the appliances. we own stanley black & decker. you can go by lumber. these are all the musts, the must-buys, and if you wanted something a little further afield, if we're going to develop a lot of new housing

projects, you buy volka materials, martin marietta materials, and you can buy waste management. they always do well at this point in the cycle. >> carrier, fresh 2024 high, jim, up better than 2%. >> david goodwin reinvented it, and by the way, dave with trane technologies, that's another place where we don't have enough people is hvac. i think that that's because people think hvac is not very sexy, but if you go into hfr hfr hvac as a younger person, you're trying to cut down greenhouse gas. >> paypal, going back to the spring of '23, this new partnership where they're going to integrate paypal into buy on prime. >> the stock has started to come alive. alex chris, still a relatively new ceo with the turnaround plan there and it certainly seems to be working a bit of late. >> seems?

you had him on at 60 bucks. why don't you take a bow? >> congratulations, david. >> thank you, jim, for remembering that. of course, he would be the only person who did remember that. that's true. he was talking about a transformation. >> what about us? you want another good one that can't be stopped? affirm. max levchin has really delivered here with buy now, pay later. buy now, and people are paying later. he has done unbelievable artificial intelligence work to figure out who can -- who is a good person to lend to and it tends to a lot of people who couldn't get bank loans normally. max levchin has done a remarkable job. >> mizuho says the fed cuts could bring 30% upside to some of these consensus volumes. >> and some of these stocks are so heavily shorted because the hedge funds kind of believed it would be 25 and there would be this big selloff, like you had yesterday, actually, between 3:00 and 4:00. that selloff seems to have just

vanished and i know the ten to one is worrisome but we have a lot of stocks that are up nicely and could give up some of that gain. i don't think they can give up all that gain, because this thing is too powerful. the one to watch is nvidia. that was up 3.5%. now it's up 5%. there was nothing wrong with nvidia except for the fact the long knives have been out for it because people think jensen can't possibly maintain this strength. i go back to apple and t-mobile. i know the traditional media doesn't like to cover what we do but the mike sievert conversation was seminal and said all those little surveys you heard, no. i'm going with sievert. sievert, 1. little ninnies, zero. >> apple shares are up almost 3%. that is outpacing some of mega cap tech. nvidia shares are up or even more than that. at&t shares are quite weak, as is verizon, jim, this morning. t-mobile is up a bit. they did put out some other numbers yesterday, as well, at

t-mobile. did they not? they sort of talked about 25 guidance, up 5% year over year, i think. the consensus was about 6.7%, so the stock -- i don't know if it sold off a bit yesterday. i believe it did. >> i think mike was being conservative. i think he spent most of the time talking about remuneration, if you're a shareholder, more buyback, a little bit of a dividend increase, but he wasn't cocky. he knew that verizon and at&t are better. he's focused on taking share from another group of people. he's -- it rhymes with mabel. >> got it. thank you. one story that we haven't touch on is what happened to yields today. we do have the ten-year getting back to 3.75%. that's going to be the highest since about september 9th, as we get a little more data today. we got claims, of course, at

219. philly fed back to expansion and coming up in about ten minutes or so, existing homes and lei, so stay with us. boom! at&t internet that's why i'm chief technology officer but all you did was plug it in, you didn't do anything neither did you exactly exactly exactly exactly impressed? honestly, a little

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we opened about 5700 s&p, still a 73-point gain. dow is off the opening high. up 380. for year-to-date, s&p is closing in on a 20% gain, after last year's 24% gain. we'll get stop trading with jim in a minute. ♪ ♪ ♪ ♪

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introducing a revolution in pain relief. absorbine junior pro, the strongest numbing pain relief available. it's the only solution with two max strength anesthetics for fast penetrating relief absorbine junior pro. nothing numbs pain more. it's time for jim and stop trading. >> i didn't think i would ever see this. nadella did a teams basically call-in at a very big program for crowdstrike. these were supposed to be moral enemies. we know there had been a lot of derision by george kurtz with how microsoft is doing in general with cyber. i say it was at the bottom at 235. i'm going to reiterate that. i think all the hangover from the outage is over. 95% of the customers.

i'll have george kurtz on tonight to talk about this remarkable, remarkable detant. that's remarkable to me. >> delta -- >> george kurtz tried to talk to the ceo and they didn't talk. i think that cuts badly for delta and well for crowdstrike. >> how about tonight? >> i had to get george kurtz on. i think a lot of people have crowdstrike. he'll come in from vegas. and a company called data bridge. they're private but the company everyone is most worried about because they can help you keep your data. keep your data is everything. t-mobile and numbers from apple and what you'll see with salesforce with agentforce, it's not going to end. it's just beginning. these are very important stocks. >> lennar -- >> absolutely.

>> i love pictures of you and lisa at the concert. >> i have one of my executive producer stepping out of the waymo trunk because waymo discovered she was in the trunk. we didn't have enough seats. >> dedicated, whatever it takes. ride in the trunk. >> when you see her get out of the waymo trunk you'll realize it's regina. >> jim, amazing work continuing all week long. >> we're just getting started. >> "mad money" 6:30 eastern time. dow up following this day after the fed cut. you're a rock star. we're all rock stars. oooo look look at my data driven insights, i'm a rock star. great job putting finance and hr on one platform with workday. thank you! guys, can you keep it down. i'm working. you people are (guitar noises).

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the new york stock exchange. stocks this morning, higher across the board. this is the day after the fed cuts interest rates 50 basis points kicking off the easing cycle. the s&p is up a nice 1.5% right now. if you look at what's doing the best, it's technology. information technology, up almost 3% as a group. nvidia is helping. it's up 4%. so are all the chip names and big tech names. financials and health care, they're all higher. what's not, utilities, real estate, and staples. those are the more defensive groups that had been rallying month-to-date. that's why the nasdaq is up more than 2% right now. you have this big tech rally coming out of the fed. treasuries right now and you'll also see the picture. we're getting higher yields. we got some better economic data today. 3.7 is the ten-year. two-year up 3.6%. we're 30 minutes into the trading session.

here are three big movers we're watching. keeping an eye on the banks. regionals on pace for their fifth positive week in six as financials alongside energy lead the charge for the week overall. home builders are also on the move. lennar hitting all-time highs going back to when it was trading in 1971. darden restaurants a top gainer on the s&p, despite a top and bottom line miss. the company behind olive garden and longhorn steakhouse noting there was a significant stepdown in traffic in july, but following the softness in july, sales continued to improve. we'll talk about that a little more in just a bit. busy day for macro prints. let's get to rick santoli with existing homes. >> leading nick indicators 30 consecutive months in a row we haven't had a positive number. last positive number was february of 2022. we had zero in feb of this year and that is the comp.

the new number is minus 0.2 of a percent. which equals june. we were zero in february this year. the real comp would be, you guessed it, feb of '22 when we were up 0.3%. the interest rate, the curve is stiffening to two to tens haven't closed around this area 13.5 basis points of positive slope in 27 months, since june of '22. we also have august read on existing home sales, as carl point out. for that we head east to diana olick. diana? >> 2.5% month to month to annualized rate of 3.86 million units. that's a miss. the street was looking for 3.9 million sales, down 4.2% from august of last year. this count is based on closings. contracts that were likely signed in late june and during july when mortgage rates started coming down but were not as low as they are today.

inventory is improving slightly. 1.35 million units for sale at the end of august. that's up 0.7% from july and up 22.7% year over year. still, though, just a 4.2-month supply. six months is considered balanced between buyer and is seller. tight supply is keeping the price on pressure. the median price of a home sold in august was $416,000, up 3.1% year over year. sales are up significantly for homes priced above $507,000. down for anything priced below $500,000. it is the highest median price for august ever. first-time buyers made up 26% of august sales matching the all-time low of november '21. all cash is down slightly from a year ago but still historically high. sara, we're just waiting to see what these lower mortgage rates

will have on the effect of home sales going forward. >> and home prices. what did you say, august prices on the median at a high, and now the fed cutting interest rates and spurring activity in the housing market, what will happen to prices? >> when you lower mortgage rates and rates come down, then buyers have more purchasing power. they can buy a bigger home because their monthly payment. people buy based on the monthly payment, not on the price. if they have more purchasing power because of lower rates, it is a question of how much demand goes into lower priced homes. if things still aren't selling and things are historically low, you still have prices under pressure. while it might become more affordable to buy homes t won't bring prices down remarkably. >> thank you, diana. we're all digesting the fed announcement yesterday. 50 basis points. the three of us were surprised. the street was surprised.

even though the fed funds future were pricing in odds they would go 50. most economistst were not. this is how the fed chair explained the decision to go big. >> you'll see it's a process of recalibrating our policy stance away from where we had it a year ago, when inflation high and unemployment low, to a place that's more appropriate given where we are now. that process will take place over time. >> as you guys noted earlier, he said recalibrate about nine times. he was careful not to send the message is seeing something you're not and we're worried about it. he sounded upbeat and optimistic. i think he sounded rather hawkish in his news conference and so was the dot plot a little bit, only showing 75 basis points of cuts this year. and yet, why did he go 50?

that's something everyone is trying to figure out. they clearly felt they were in overtightening mode and wanted to show they were serious getting it back in alignment. >> isn't the most universal answer to that question making up for july, they would have cut had they had that jobs number in hand? >> sure, you could interpret it that way. he wasn't explicitly saying that. he didn't say the fed is behind the curve. he just said, we're ready to get going. i turn to the experts this morning to hear what the economists are saying about what they expect next and how they interpret this move. goldman had 25, so he was a bit surprised. now they revised their fed forecast to accelerate cuts next year. now expect a longer string of 25 cuts from june '24 to june '25 when they would reach the terminal rate of 3.25 to 3.5.

not easy to figure out what it's going to be given the reactions function we're trying to figure out from the fed. if you look at the last few unemployment reports, there are -- there's evidence the hiring has slowed down but also evidence things are strong. look at today's jobless claims number. lowest level since may. continuing claims. those who continue to collect jobless claims, that was also at a three-month low. so the fed has to be happy with that. he was serious when he said in jackson hole he doesn't want to tolerate any more weakness in the labor market. >> yesterday i had the opportunity to sit down with mark rowen from apollo global, and their house view has been much less toward significant need for rate cuts. >> he's been saying they're going to reignite inflation. >> as you might expect, rowen when i asked him whether the fed got it right, didn't seem quite sure.

take a listen. >> i don't think we'll know for a long time. my view is what they did is they took out an insurance policy. insurance against things going poorly. the insurance policy is not without risk. certainly our house view is much more conservative than the market view as to both the level -- the number of cuts and the final level of interest rates. but i come at this slightly differently. we've been through an extraordinary period of time. we've been through covid, we've been through recovery, we've had unprecedented fiscal stimulus. how do we know we're calibrated correctly. >> there's that word again, calibration. >> we just don't know what the calibration is. i'm excited for your leader special with him tonight. >> thank you. yeah, he's always worth a listen to. we'll have more from it in terms of the changing nature of the investing markets. it was good to be able to sit down very soon after the news itself hit to get his reaction. >> it was uncharacteristic of

fed chair powell, i thought, to do a double without explaining why they're doing a double or to reference really that they did a double and what that debate looked like. barclay says we expect the fed will cut rates at 25 in september and december and three times in '25, in march, june, and september. jpmorgan, who got it right, said our expectation for 50 cut at the next meeting is contingent on further softening in the two jobs reports between now and then. >> he called for 50 this time and a dovish presser, now calling for 50 again. he did admit that given dohmann's dissent probably not support for another 50 at this moment. >> first dissent we've had from a governor since 2005. i do think it's notable. >> you pointed it out as a possibility yesterday. >> if you follow any of my chel bowman's takes, she's been more hawkish and more worried about

inflation. for those still worried about inflation, by the way we're still at 2.5%, not at 2%. he said he doesn't want to declare victory on inflation, so why did he go 50? the market now is guessing. we don't know what the next move is going to be. i'll say we'll continue to read the tea leaves from the consumer to find out what's happening there as we try to figure out what's happening from the overall economy. cis sysco, q1 quarter is softer than the prior quarter. it softened a bit. not a major shift but has softened a bit. we're seeing it across all sectors. one reason why they could have gone 50 is the beige book was bearish, anecdotally data, earnings, what we're hearing from ceos, and it does speak to a broadening softening. things from consumer companies like it's not just low income. things we're hearing from the

beige book, hiring is harder to come by. that's meaningful the fed weighs that. >> that was the thing from ts lombard at inflection points the fed relies more on anecdotally data. they argued it was the beige book that tipped the scale. >> you can make that point. >> let's take a look at financials. the broader market still up quite strongly. financials performing quite well after that rate cut. a number hitting new 52-week highs. leslie picker is tracking that action. what's it mean for them, leslie? >> you can see the 52-week highs are largely in the asset management space. banks higher on the news as well even though rate cuts are a net negative for them. the first few cuts tend to do little to alleviate asset risk. will there be some relief for

commercial real estate loan refinancing, according to moody's. in the long run as deposit costs to decline and capital markets volumes rebound, the environment should be more supportive barring any recession. historically investors have been willing to enjoy a look through the short term noise. according to wells fargo research, rate cuts in no recession have had bank stocks rallying in the one to two weeks after those cuts. guys? >> leslie, thank you. leslie picker. on the regional banks, which are rallying big time. here's our road map for the rest of the hour. the fed cutting rates for the first time in four years. where to put your money to work from here. we'll take a closer look at the state of the private markets and the public markets with apollo global ceo marc rowan. america's energy woom, is it tapped out or more room to run?

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gina's got the look. that never gets old. talk about easier investing. s&p up 1.6%. we are zooming today. this is the day after the fed cuts rates by 50 basis points. got a double. surprised a lot of people on wall street even though the rates market was tilted that way. and fed chair powell's news

conference. the nasdaq leading, up 2.4%. you have all the usual suspects in there higher, meta, microsoft, nvidia, amd. technology is leading the entire market. recalibrate is the word of the day at fed chair powell's press conference. have a listen to how many times he said it. >>. >> with an appropriate recalibration of our policy stance, strength in the labor market can be maintained. this recalibration of our policy stance, it's a process of recalibrating. to recalibrate, recalibrating policy. recalibration of our policy. recalibrating it. we're recalibrating our policy over time to a stance that will be more neutral. >> he's recalibrating, steve liesman. more on what this means for the road ahead, which is a little less clear. >> it was a new word for us in monetary policy.

we haven't heard that too much. wonder if they use the word normal normalization? what it means for future policy. beginning with the obvious. fed policy needs to be recalibrated because it wasn't in the right place. here's a bunch of things that recalibrating policy could mean. from inflation concerns to worry about employment, going from one to the other. from a restrictive policy to neutral policy. to a policy that may be less data dependent. that last point could be the one that's most important. the fed recalibrated to neutral so may not be guided by nuances in the data. ainge tick up in inflation or tick down in employment. it's got to get to a new place. a new calibration. and it doesn't guarantee but doesn't preclude another 50 basis point cut. here's powell talking yesterday. >> part of bringing down inflation, though, is cooling off the economy and a little cooling off the labor market.

you now have a cooler labor market in part because of our activity. what that tells you is, it's time to change our stance. we did that. the sense of the change of the stance is rear recalibrating our policy over time to a stance that will be more neutral. >> here's where the average fed official is projecting rates. 2024, 4.4%. 100 basis points down by year end. for 2025, 3.4%. that's another 100 next year. and then settling down by 2026 into that long run or higher run of 2.9% for 2026 and beyond. two fed officials see no more cuts this year. seven see only one more or 50 basis points. 9 of the 19 forecast just 25 additional or less, that is. nine see two more cuts and another 50 basis points cuts down and one forecast three more cuts.

question is whether powell and the fed can control market enthusiasm for additional cuts or if they even want to. it's already priced more aggressively than the average fed forecast and future markets have built in a 50 for december. but as one former fed official said to me this morning, if you're recalibrating, why not do another 50, sara? >> i think it raises the question, what are you recalibrating to? what is neutral? how fast do they want to get there and how urgently? i think the urgency of the 50 may have surprised people given the labor market dynamics, which are softening, but not weak. >> i think it did. it had the danger to spook people. sara, i assume you listened to the entire press conference, he took pains to emphasize what he saw as strengths in the economy. he kept trying to say this.

that's another explanation for using the word recalibrate. we're doing this because we're recalibrating. we're not doing this because we're spooked by the economy or the forecast. >> steve, thanks. what a day. stocks are rallying on the back of the fed cuts. head of research and cnbc contributor tom lee joins us on the phone sticking with his tar get of 5200. you agree the cycle has started and there's a fed put in place but it doesn't sound like you're willing to add a lot more risk. >> good morning, carl. thanks for having me. carl, i've got, i think, two time frames. i think what steve said about the recalibration is really important because i think investors also need to recalibrate. there are too many that were in the camp of a hard landing coming or the fed would be too

late. and the fed cut cycle is setting the stage for markets to be really strong over the next one month or three months. but what the stocks do between now and the election day is still a lot of unsecertainty that's why i'm hesitant for investors to dive in. if i was going to advised where to be positioned, carl, it's exactly what you said. it's cyclicals which is industrials, financials and small caps. >> which a preference for that over your traditional mag 7 tech a.i. buildout trade? >> i think tech and mag 7 still keeps up with the market. that's why someone who owns it, i wouldn't sell it. for all these folks that have been sitting on defensive positions or thinking the fed cut was going to be too late and the market was going to -- equity markets were going to

fall, i think those folks have to allocate into cyclical stocks. they're going to benefit to the cyclical boost to the economy. mortgages drop, auto loans, credit cards, potential m&a, all of these are big tailwinds for small caps. >> the risk to this, tom, is inflation comes back, right? if you're talking about this big cyclical recovery because of what the fed's doing. >> that's true. i think one thing investors have to distinguish is real growth, gdp growth, doesn't mean inflation pressures because inflation is a mismatch of supply and demand. i think there is a lot of excess supply potentially coming, for instance, housing could have a supply response. if you look at the two biggest drivers for inflation for the past -- almost for the past eight quarters it's been

shelter, rent rolls and auto insurance. auto insurance, i think these insurers have reached dwis deficiencies. unless the rest of the basket accelerates, inflation is falling pretty sharply. >> tom, on the labor market, we'll get two prints before the november meeting. some of these doves are arguing that labor is going to force a faster pace of cut because they argue the change in monetary policy doesn't get felt in the labor market for four quarters and the peak impact is not for eight quarters. i wonder if you agree? >> i don't think there's anything wrong with people looking at the history of labor markets, especially as labor markets slow, it has a cycle of its own. the one thing we have to keep in the back of our mind is ceos have been cautious because the fed telegraphed a tightening

cycle to fight inflation. i think the fact that rates and now we're in an easing cycle means companies will start doing expansion. i think the labor market and the fed is mentally knocking down these monthly numbers. i think tailwinds for labor markets to strengthen. >> all claims would back you up today at 219, even though some argue about seasonal distortions. look forward to talking in person. tom lee this morning. >> thank you. >> let's get more color on the fed's newly recalibrated policy from a former official. former minneapolis fed official, now professor of economics at university of rochester, and joins us now. i don't know, were you surprised by this? i find it surprising and hard to figure out what comes next as a result. what about you? >> yeah, sara, thanks for having me on. i was surprised. and the reason i was surprised is historically the fed has not

moved downward by 50 basis points unless they see a big risk to the economy. and that is something that chair powell went to great lengths yesterday to take off the table. there isn't that kind of risk. that raises the question, what's going to come next, exactly as you asked? it seems to put 50 basis points into play at every meeting now. if you're willing to move 50 in september, why aren't you willing to move 50 again in november -- >> that's not what the dots showed. >> but i think the dots are mistaken in the following sense. i think the fed has underestimated to what extent they communicated they're using what i would call a new language. the old language was, when we want to move rates down during normal times, we're going to move by 25. we might wait a meeting. now the new language is, 25, 50, they both are in play. maybe, hey, why not 75?

>> but they also say they're data dependent. and i wonder where you think the data is pointing because that's also up for interpretation. we made a ton of progress on inflation. you could argue that's why the need for recalibration. we softened on jobs, but there are questions as to how much and the consumer seems to be holding up okay. >> i think the situation is one where it's very easy to see why the fed thought this was the right time to cut rates. for what it's worth, i agree with that completely. what's harder to understand, what in the data calls out for a 50-basis-point cut? i don't see that in the labor market data and i don't see it in the inflation data. i think there's enough stickiness with inflation to say, let's go slowly. i think there's enough -- as the chairman emphasized yesterday, boy, labor markets are still very strong by historiical

standards. i think it's difficult to understand the 50 basis points call to 25. >> now that they've done it, you think they will do it, they will continue to do 50. >> i think they're going to be forced to do 50. i think they're sitting there right now, we're going to do 50 over the next two meetings. i think they'll find that very hard. i think that markets are going to be forcing them to move faster through their expectations, they're going to worry before disappointing markets, and i think observers of the fed will be calling on them to move -- >> what's the risk? what's the risk of them, if history shows this is too aggressive or they were a little too excited here? >> i think the risk here is on the inflation front that maybe the battle isn't won yet. but really right now, sara, i think the challenge here is that the fed has introduced a lot of

volatility into people's expectations of monetary policy. people like myself, who have followed the fed for a long time, are now left wondering, what's going to come next in terms of how are they going to attack the problems before them? and i think that uncertainty is not -- you know, upward movement when we see markets go up, that seems good. overall volatility is a bad thing. >> really great to have you here today. valuable to analyze what we got from the fed. former minneapolis fed president. big gains not just for stock but bitcoin and crypto, along this rally as powell and the fed recalibrate. a closer look at what the fed policy could look like from here. s&p up 1.7% right now.

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news update. sean diddy combs will remain behind bars until trial after a federal judge late wednesday denied his appeal to get bail. combs is charged with sex trafficking, racketeering, conspiracy and prostitution transportation. general motors is offering adapters to help owners of electric vehicles to use tesla's super charger network. it sells for $200 through gm's mobile apps. ford announced a similar program earlier this year. and lego is teaming up with formula 1 for a multi-year partnership that starts next year to commemorate the sport's 75 anniversary. it will include fan zone activities at grand prix races around the world, along with digital content and new product launches featuring teams and drivers. lego already has a long partnership with mclaren. clearly, david, building on

that, you know, adult fans of lego, they are big business these days. >> indeed, they are. bertha, thank you. >> they need to build kid lego because they're increasing a a huge number of kid fans of f1. that's my two cents. >> your two cents would matter given your own enthusiasm for formula 1. >> there's a lack of toys and costumes and paraphernalia for kids. >> see the things you learn. >> she takes that seriously. >> quite, quite. we're moving on to other subjects. yesterday i had the opportunity to sit down with marc rowan, the ceo of apollo global. we had a wide-ranging conversation, and rowan has very distinctive views on the changing nature of markets, in particular his belief that we're in the earliest stages of a significant change in the way not just institutions but

individual investors will choose to invest when it comes to making a decision between the public markets, both debt and equity, and the private markets. take a listen. >> i look at a traditional investment portfolio. this is -- we can have some fun with this for individuals and also for institutions. they've mostly lived in a three flavor ice cream world. vanilla, chocolate and a little strawberry. stocks and bonds and alternatives, so-called privates. what we're watching happen and what's going to drive our business, and i believe drive much of our industry over the next period of time is people are going to move out of this little bucket called alternatives where our entire industry has been built for 40 years. they are next going to go to their fixed income bucket. they're going to go to their fixed income bucket which has become 100% beta, no excess return, and they are going to ask questions like how much liquidity do i actually have in my fixed income portfolio.

by recent measures it would take you five days to sell an investment grade public corporate bond today because there is no liquidity. once you accept that, why should i own public? perhaps i should own public and private and the reason it's going to happen in fixed income first is because you have helpful sign posts, rating agencies. a rating agency can tell a prospective port foal manager, this is a single a and this is a single a. a buyer can make a choice as to whether to be in public or private or how much excess return they need for public and private. by the way, we take for granted there are actually differences between public and private. i will predict a year from now, you will not be able to tell the difference between public and private. >> what does that mean? >> it won't be different issuers, it won't be different ratings, it won't be different sizes, and it won't even be different liquidity. everything that exists in the public markets on the fixed income side, repo, borrowing,

easy leverage, ratings, daily pricing, is all coming to the private market initial initially focused on investment grade where most of the action is going to take place. that's why i look and i step back and i think about the drivers of our business and come back to your question on interest rates. okay. interest rates are down. therefore, the available yield on every fix the instrument is down. that's not really the question. the question is, how much more return can i get in the private market than in the public market. >> i know you talk often about liquidity discount, so to speak, or the fact you're getting obviously a lower return as a result of taking liquidity on the other side or having daily liqu liquidity, even though as you just indicated in some fixed income markets, that doesn't exist. >> i think we're going to start to change our nomenclature. the notion of a liquidity discount is going to disappear. i ask myself and i really pushed

the firm, where does excess return come from? i believe excess return comes from origination. the capacity of an investor, someone like us, and we're not the only ones who do this, who can go out and work with a company and solve their unique issues and make the commitment and structure and take the whole thing down and originate a credit, origination is where i believe excess return comes from. and for us, we are very focused on scaling origination. we've spent nearly $8 billion. we have 4,000 people who wake up every day and all they do is origination. think of the number of firms in our industry who will actually make that kind of investment and who will master the ability not just to have the people, because the people are hirable, but to other them into platforms, who specialize in originating aircraft loans, fleet finance loans, receivable loans, inventory loans, other forms of secure financing. loans to investment grade

corporates. in is a process. very few investors will actually do what i've just suggested. and we found ourselves here almost by accident. i go back and sometimes it's the historical accidents that put you in the right place. when we started our retirement services company some 15 years ago, the secret to success in retirement services is the capacity to originate investment grade credit, you're after all ensuring people's retirement, that has excess return. but if you also believe, like i believe there's no excess return in public fixed income, you better go originate it. and so we started originating for a theme. we built and scaled and built and scaled. then we did what prudent investors do, we diversified. atheen does not want 100% of anything we originate. they want to be a diversified investor. they want 25% of everything and 100% of nothing. we started building client businesses around that. other insurance companies.

other funds. it will eventually end up, as you've now seen in etfs. and so the notion that private somehow means risky or private infers a size of company really, i think, is going to be relegated to a distant way that we used to think. >> right. and you indicate we're still at the beginning of that process and obviously you believe you positioned apollo to benefit from it. where's the harder conversation, is it with the originator, in other words -- excuse me, the issuer or with the buyer? >> it's really with neither. it's about change. we are wedded to the way we do certain things. we adjust very slowly. the products that exist today will not be the dominant products 10 or 15 years from now. whether you are a regulator, an insurance company, portfolio manager or consultant, you are just getting used to the notion of change. so much in our financial system has changed because we forget in 2008 we came very close to destroying our financial system.

and then we made a ton of changes to the financial system. dodd/frank as well as numerous other pieces of legislation and practice, but none of us us have ever experienced this because we printed $1 trillion and everything went up and to the right. we're just experiencing it. we're just finding out, for instance, there's no liquidity in ficked income markets. trading capital in the world is 10% today of what it was in 2008. >> it's taken us 15, 16 years to figure that out? >> we've had a very bullish, very positive liquidity situation in the u.s. but we have already seen instances of wholesale market failure. thankfully they have not been in the u.s. >> he's referring there to the uk actually, specifically. a lot more of this interview tonight, 7:00 p.m. one of our leaders specials. and, you know, there the focus was on fixed income. he believes he's positioned apollo as a result of focusing

on origination, being able to call on so many companies and structure a particular issue for them that they are well positioned for what he thinks we're just at the beginning of a transition. it also extends to public equity markets. 4,000 companies rather than 8,000. we know about the dearth of ipos, even in a very strong market. and so so much more to come, including, of course, they believe on calling on the $12 trillion worth of 401(k) assets that are out there. again, it comes back to this idea, if you're saving for the long term, why do you need liquidity? why can't you be invested for the long term and therefore, get a higher or excess rate of return per unit of risk, as he likes to come back to. >> just the echoes of '07 stocks near highs, fed begins to cut and suspicions about market structure, although different market structures, right? >> yeah. there are some parallels there. of course, he's talking about the fact that all of the dodd/frank restrictions and the like mean the baction are no

longer real players in real markets in terms of bringing enormous liquidity to them. these are major changes he's at least positioned apollo to benefit from if he's correct. athene, annuities, insurance for your retirement and they take the money there and try to generate excess return and they have a large asset management business. >> that's what i was going to ask. clearly it's working for him. the stock is near record high. it's done remarkably well. private equity -- >> private equity, a smaller and smaller component overall of the assets under management. somewhere around 15%. he does believe equity in private hands will also be the future. not necessarily making a fund where you buy entire companies but having this hybrid approach where you both own the he can wid and debt of certain companies privately. >> banks, i'm sure, just love that. >> oh, yeah. >> that's going to be a rich conversation tonight. >> 7:00. >> 7:00 eastern time.

dow holding onto gains of almost 500 points. we're back above 5700 s&p. some top winners today, dri, airbnb, tesla and a bunch of chips. utilities and staples, the only sectors that are red. coming up next, we'll go stock picking in this record rally. $18 billion in investment advice rkolwi t fo put your money to wo flongheed's rate cut. stay with us. to earn me more cash back in my top eligible category... suddenly life's feeling a little more automatic. like doors opening wherever i go... [sound of airplane overhead] even the ground is moving for me! y'all seeing this? wild! and i don't even have to activate anything. oooooohhh... automatic sashimi! earn cash back that automatically adjusts to how you spend with the citi custom cash® card. [mind blown explosion noise] tamra, izzy and emma... no one puts more love into logistics than these three. you need them. they need a retirement plan.

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after the fed's rate cut surprise, one technician has an attention-getting observation of her own. tune into our market nigoravat segment. today "power lunch," 2:00 p.m. eastern. we'll see you there.

if you're looking for places to put your money to work, our next guest says look for value

names. john lenahan joins us. good to see you. thanks for joining us. talk more about what you think works if we're in a new kind of era. >> well, i'm not sure we're in a new era. first of all this last rate cut has been very well expected from the marketplace for quite some time. i think dividend stocks right now are very attractive. the valuations are fairly compelling. over time people might not realize this, dif tend paying outperform the market over a longer period of time. when we look right now, there are a number of names we think are attractive, both from a defensive perspective as well as from offensive perspective. >> i was looking at kmb, right, u.p.s., some others. do they naturally lead you into, for example, package goods? >> no. what i'd say first of all, our strategy, what we're trying to do is find companies that have a compelling balance between

attractive fundamentals, attractive valuation and also have dividend yield. we're not going to stretch and buy companies just because of the dividend yield. in the case of kimberly clark, i think it's a very attractive defensive name. the number one or two player in its three categories which is bath and tissue, infant care, which is diapers and training pants, as well as feminine care. the company is trading at a very discounted basis to its competitor procter & gamble. there's a fair amount of opportunity from a valuation perspective and yield at 3.8% is a pretty attractive way of generating income at the same time having good expose sure to a company. in the case of u.p.s. that's more cyclical and the economy improving from here. if the market stimulated, people can be buying more packages. businesses will be shipping more

goods and u.p.s. should be a beneficiary of that. and with the 5% yield, we think that's a very compelling opportunity. from valuation perspective, it's trading at basically decade lows on relative valuation basis. >> we've had some folks point to old school industrials and materials. i notice wire eyerhouser. >> that's a cyclical play. largest lumber producer in america as well as the largest timber landowner. a quarter of industries -- they have to improve or you'll see significant supply curtailment. both should be advantageous. >> this this playbook suggest the rest of the market, where there is momentum in mega cap tech and a.i. and even

infrastructure buildout, do you think the valuations there are overly rich? >> i'm not sure they're overly rich. i think there's a lot in a.i. we need to be responsive to. i think this it is going to be a continuing secular theme for the economy. a electric utility based in missouri and illinois, they'll be able to take advantage of rate-based growth from continue demand from data centers, from other opportunities for people to incorporate a.i., which will create additional electric generation demand. amren is a name that has a compelling dividend yield, attractive valuation. we think is well set up for that. i think the companies we're talking about aattractively valued. doesn't mean other parts aren't well valued, there's a compelling element from both valuation as well as fundamental setup for a number of the names in our portfolio.

>> that's a good point. certainly market will get fresh eyes on it if we're in the midst of a new cycle regarding monetary policy. good to see you. john lenahan. >> nasdaq zooming up 0.6%. energy turns out is the best performing sector on the week. worst performing on the month and year as questions grow around supply and whether american output currently at record levels is peaking. let's get to brian sullivan. who's live in houston with that story. good morning, brian. >> why am i sweating in front of a pile of pipes? i'll explain that in just a second here. this huge debate, guys. you probably saw jd vance on "squawk on the street" saying we need 2 to 3 billion more barrels of oil, we need to jack up output. we are at record levels. oil and natural gas are up 50% in the last decade. united states, put an eagle on our shoulder, are the world

leader in both gas and oil. so we wanted to find out, is it even possible, physically, to add more oil and gas? well, the first thing we did at the gas tech conference is we asked a bunch of big-name ceos that very question. >> for sure the friday's got the capacity. we need to invest. we need an environment, policy environment that is one that brings confidence. no doubt they have the capability to do it and the resources are there. >> it's possible but it requires all the other elements to come together and that's the difficulty in getting it all aligned so we can actually increase production to those levels. >> what the country needs is infrastructure. it's very difficult to ramp up oil production if you don't have an outlet for the associated gas that's produced. >> all day we're telling this story. you heard about physically it's

possible and it's possible because of this, guys. we are at tahas tubular. max jr. is running the show. we were here a decade ago. this is literally the straw that goes and gets the oil. all of this is one customer, one drilling site. what does that mean? to go to 2 million more barrels of oil a day, quick math, carry the one, something about a place holder, we probably need 80 more of these stacks of tubes made by the hard working folks here to do one well. physically, guys, is it possible? yeah, but you're going to need a lot of this to do it. >> you're also going to need pipelines, i guess, at least one of your guests, i assume on the natural gas front, referring to the need, when they say infrastructure, i assume that's

getting the gas out of there and where it needs to be. >> correct, david. as always, you nailed it. this is the first part of our reporting today because this is the first part of the story. you take all these, you put them together as a kid you hook straws together, you do that to take the oil and gas out. you're right. once you get the oil out of the ground, how do you move it to where it needs to be? how do you get it to a ship? how do you get it to a pipe loin? take energy. it takes pipelines. trucks, rails, by the way, it takes permitting, a lot of permitting, and that's probably the biggest sticking point right now in the story. is not the pipeline it's the paperwork. welcome to washington -- well, houston. >> that said as you pointed out at the very top of your report here, brian, what are we, 13.4 million a take right now? >> how about this, david, i like

this stat, i'm going to blow somebody's mind. call this random but interesting, david. the u.s. now produces 50% more oil every day than saudi arabia. 50% more oil every day than saudi arabia. we are above pre-covid highs hit in november of '19, and we are up 15% since 2013 in both oil and gas. we're here in texas, i get it. but a lot of this stuff may end up in pennsylvania, could end up in wisconsin where they make a lot of pipelines. i'm not a political expert, david, but i've heard those are fairly important states for this election. so i didn't come out here and sweat for nothing, so hopefully someone is tuning in. >> it's a great shot, brian. i was trying to figure out what it was. thanks for taking us through it. now you can get out and stop sweating. brian sullivan doing what he does best. let's talk stocks right now

because we're seeing this nice rally. broad based. tech is leading the way. some consumer names are at the top of the market as well. wanted to highlight darden restaurants. the biggest gainer in the s&p right now, even though sales fell 6% at fine dining restaurants. they talked about a traffic dec decline. a significant step down in traffic in july led to our first quarter earnings being lower than expected. our sales trend has continued to improve. that's good news. i guess the best news for the consumer, if you're tied to taylor swift. did you see united airlines' comment, one of the united executives was speaking at a travel conference talking about flights that did so much better when they were attached to taylor swift concerts. demand booms wherever she goes by a material amount. the airline has -- he put it in numbers. 25% increase in demand, maybe more than that on united flights

during swift's weekend concerts and goes back to normal afterwards. the taylor swift economic. >> she's an economic force, one person. a true economic force. >> only a few more concerts in the eras tour. she's back in the u.s. in miami in october. >> you'll be there. >> i'll try. the tickets have to come down. they are so expensive. >> just do it. it's a lifetime experience. >> yolo. >> i know. i thought maybe she got after political, there would be relief in tiction, not so much. i just want to hear her talk about her love life, not the politics. >> all right. we'll have a lot more coverage of taylor swift's love life straight ahead. ♪ (alarm sound) ♪ amelia, turn off alarm. amelia, weather. 70 degrees and sunny today. amelia, unlock the door. i'm afraid i can't do that, jen. ♪ (suspenseful music) ♪ why not? did you forget something? ♪ (suspenseful music) ♪ my protein shake.

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good thursday morning again. welcome to "money movers." i'm sara eisen with carl quintanilla. we are live at post 9 of the new york stock exchange. today council of economic advisers chair jared bernstein with the white house reaction to the 50-point-basis cut fro