here. despite the commercials that say hey, you deserve this stuff just for being you, the problem is you don't but the good news is the best gift that you have is that you're born in the greatest country in the world. that's something you want to remember. be investing in this market going down because we will bounce back and you know, cheryl casone, in for liz claman, i've got one for you. the market is only closed up one-time on cpi a day higher, that was in january so i'm looking at you to break that streak. >> cheryl: yeah, no pressure but you never know down 36 points real quick, though, charles you must have not been listening to me this morning because i did talk about those real earnings this morning being down 1% month-over-month, and i did focus on that. charles: i missed you, yeah, well you're one of the best, but a lot of people sweep that over and that's what matters most, the real stuff. >> cheryl: it matters a lot and the question for everybody right now, charles, has

inflation finally reached its peak. we talked about that this morning and that is the question the market watchers are asking at this hour after the june consumer price index hit a 40 year high, it was ugly early but markets coming off the lows, as prices for everything from groceries to clothes, energy, shelter, remain stubbornly elevated the dow down bias many as 466 points earlier in the session. futures market really took a hit on the news. now, the s&p, the nasdaq are higher and the dow is only down by 50 points. s&p is up more than four, nasdaq is up 543 and change so we're well off session highs. real estate prices also high but with the fed almost surely set to hike interest rates another 75, dare i say 100 basis points, is now the time to lock up your "american dream home"? we're going to talk to a florida realtor about what she sees in

the home buying marketplace. and the nations biggest banks set to reveal their quarterly reports we're kicking things off in the morning we have jpmorgan chase, wells fargo, citigroup, all on deck this week. top banking analysts dick bove will join me with his prediction on what earnings season has in-store for us. i'm cheryl casone in for liz claman and i'll turn these markets around. we're starting though can breaking news. netflix says it has selected microsoft as a tech and sales partner for its planned ad- supported subscription offering. netflix back in april had said it was looking at a service with advertising after losing subscribers for the first time in a decade, projecting a 2 million decline for q 2. well, the giant reports after the bell tuesday, the stock is down 70% year-to-date. it's up 2% right now, microsoft slightly lower. a fox market alert right now markets are scrambling after we

got that very hot inflation report this morning. the dow dropping 300 points right at the open. now, the dow has turned around. we are down only 61 points. again, off of session lows. yields of the 10 year treasury served, surged excuse me, above the 3% mark with the yield curve inversion between 10 year and two year, the 10 to the two reaching its biggest point since 2000. that's a little bit of a red flag for a lot of folks. now, the consumer price index rose 9.1% year-over-year in june this is actually a 41 year hyatt this point, came in much higher than that may 8.6% read that we got. that was the biggest increase we had seen since 1981. okay, june data has fed funds futures on the move. investors are expecting a strong chance of a 100 basis point hike

so going into the report it was only a 14% chance that we were going to get 100 basis points when the fed meets at the end of the month. well, right after that news crossed, cpi number, that jumped up to 45%, then 50%. it was very fast this morning. okay atlanta fed president raphael bostick, saying a short while ago the report shows the inflation is not moving in the direct the fed was hoping for and everything is in play when it comes to the possibility of a 100 basis point july rate hike. richmond fed president also just saying there is near term recession risk. fears of that recession have climbed as inflation rises. bank of america is forecasting a mild recession later this year, as real gdp growth declines and they are anticipating that the unemployment rates going to jump to 4.6% next year. that be 2023. former treasury secretary larry summers is anticipating an even

higher jump. listen to this. >> my best guess be that we're not out of this without a significant interval of 6% unemployment and i think it's a real question what the timing will be, whether the fed will have the resolve to carry through. doctors tell me that they always tell their patients to take a full 10 day course of an antibiotic but usually, their patients stop taking it when they feel better, and i think the proposition here is when inflation starts to come down, and when there's evident weakness, does that mean that monetary policy has moved enough to achieve a durable victory

against inflation or only a remission. >> cheryl: well depending what the fed does we might need more, everybody let's get to the floor show the chief economist, hugh johnson, and our trader scott bauer. it's great to have you both and hugh, i'm going to start with you. is the fed going to tighten fast enough to crush inflation or will it just be a bandaid, and will i need morphine or aspirin after this next fed meeting in your opinion? >> aspirin on an ongoing basis and the july rate increase should be 75 basis points. i know there's some that are somewhat historical because of the number that we saw this morning, and as a result, they're talking about 100 basis points or 1 percentage point in july. the real question isn't so much in july. that's likely to be 75 basis points i think when people start to think about this more clearly the question is really september september we've been talking

about 50 basis points. i think that might be up to 75 basis points. we're talking about increases, of course, because of the number we saw, but not significant increases. not so much that it's going to really change the game plan right now to quite frankly, so it does mean something. it does mean that interest rates longer term interest rates will head a little bit higher. it means that prospects for stocks are not quite as good as they were let's say a day ago but nevertheless, it's not that significant a change. yes, inflation is higher and keep in mind, there are a lot of things that are telling us that the rate of inflation, consumer inflation, is going to decline maybe not this month, maybe not next month, but decline as we get to the fourth quarter of 2022 and get down to maybe the 2.5% to 3.5% level at the end of 2023, so don't lose your mind on this one. don't get too caught up in the hysteria. things are not changing that much and are not that bad. >> cheryl: there's always a

way to play it, scott bauer in the first half of the way to play high inflation well first off it was bonds, and i know a lot of folks that shifted into munis and are actually, they are more in protection mode for their portfolio but then you also have the energy markets and the energy stock play that has actually been a good return. not that i want to see energy prices jump for most americans. it's painful enough to watch but at the same time, if you're trying to protect your portfolio , that's kind of how you're going to do it. >> there's no question about that, cheryl, and overtime historically in periods of inflation, energy and reit, they've been the places to be 71 % of the time, energy actually outperforms inflation, and reits 64%, but you know what? those maybe a tired trade at this point, because there was so much. we saw those gains so far, so looking forward into the next quarter, maybe into the end of the year, i'm looking a little different place here.

i'm looking more in the consumer staples and the pharma industry, so coca cola is a stock that i think is fantastic for this environment. continuous dividend increases. they've diversified and sold off their bottling companies. it is just as rock solid as a company that's out there. now, is it a high flying stellar , are you going to see 10 , 15% growth? probably not. i think it's a great company for this environment. johnson & johnson is the other one. >> cheryl: we had johnson & johnson on your screen as you were talking, that's your other pick, but scott, really quick i want to pick-up on the coca cola thing because look we already got earnings from pepsico, their foods business actually produced a very strong quarter so if you look at pepsico as a barometer for coca cola quarterly report you might be wanting to look at coca cola right now and the stock is slightly down today >> absolutely, and like i said with coca cola, it is as steady

as it comes. consistent dividend increases, the fact that they have diversified and as i said sold off their bottling business, that actually just feeds into the bottom line. that feeds into the revenue group, so i really like those two stocks. >> cheryl: final word, larry kudlow says we're getting 100 basis points. that's what kudlow just said on the air an hour ago. what do you say, hugh, final word. you still sticking with 75? >> 75 basis points of the july meeting, 50 basis points at the september meeting. don't get caught up in the hysteria, and scott, i gotta disagree with you slightly. you're still on the defensive side when you talk about staples and stocks like that. it's not a preview of what we're going to see , maybe not this month but maybe in the short-term, a couple of months. last week, when we saw the stock price rally it was consumer discretionary, technology and communication services back to the economically-sensitive as soon as we start to see the way clear, and i think

you will see that. remember another thing. one other thing. you have not seen this level of pessimism towards this stock market in a very long time and that's a good sign, not a bad sign. >> cheryl: that's when you might want to get in. >> i really agree with that sentiment, however, i'm not looking for the market to rally over the next couple quarters which is why i like those defensive stocks. >> cheryl: protecting what you have 13% last year is this years 3%. scott bauer, hugh johnson, it was great to have you both, thank you so much for all of that. >> thanks, cheryl. >> cheryl: we have breaking news for you all right now. president joe biden arrived in israel this morning for his four day trip to the middle east. biden stopped at israel's holocaust memorial in jerusalem to pay his respects to the victims of world war ii by laying a wreath in the hall of remembrance. the president also met with top israeli officials at bengurion

airport to tour the countries defense systems. the iron dome and iron beam. edward lawrence joins us now live in jerusalem with more on the president's first day of his trip to the middle east, and there is a lot of anticipation about these conversations he's about to have with opec leaders. edward lawrence? reporter: exactly and that's overshadowing this trip here, now the president spoke on the tarmac and didn't mention the cpi reports publicly but in a statement president did release a statement about the cpi report. he said this , "tackling inflation is my top priority. we need to make more progress, more quickly, in getting more price increases under control." he then outlined a series of steps he's already taken to tackle inflation like releasing oil from the strategic petroleum reserve, calling on gas companies to lower prices quickly, if oil prices drop, and capping prices for buying oil from russia. now republicans say if this trip smells of desperation because

the inflation we're seeing in the u.s.. >> joe biden wants to deflect the blame to putin and deflect blame to covid. everybody else, he wants to deflect it to, however, it's about policy. reporter: now, the inflation number came out as president biden literally walked off air force one today in israel. white house officials telling me that the president believes inflation may have peaked adding this report adds fuel to the fact that congress needs to pass the president's spending bills but republicans and senator joe manchin say too much government spending added to the mess we're currently in so, so far the president this trip has been focusing on the money his administration has sent to help israel. >> we reaffirmed the unshake able commitment to the united states to israel security, including partnering with israel on the most cutting-edge defense systems in the world. reporter: and cheryl, you talked about it at that meeting on friday, in saudi arabia, with

the saudi king, and the prince will overshadow everything happening on this trip because the president not specifically saying he's going to ask for more oil to be pumped. he is going to have energy security on the list of things they want to talk about. back to you. >> cheryl: edward lawrence live from jerusalem. edward, thank you very much for that. well, finding your "american dream home" maybe more of a nightmare these days. we're going to catch up with one of the real estate agents featured on my fbn prime show and she's going to tell us what's really going on in the real estate marketplace, that's coming up next. let's check the big board, the dow right now down 78 points again the session low was 466. we'll see how we did. the "clayman countdown" is coming right back. at fidelity, your dedicated advisor

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>> cheryl: the real estate market starting to see cracks in the foundation. soaring home prices, high mortgage rates, lack of supply, and an overabundance of demand has been pressuring the market across the country and americans are now canceling deals at the highest rate since the start of

the pandemic, soaring 14.9% in june. that's according to redfin. i want to bring in an expert on what's happening here in a fox business exclusive, global real estate advisor jenna stoffer joins me. great to see you again. >> wonderful to see you thank you so much for having me on the show. >> cheryl: we first met when you were featured in one of our episodes of "american dream home" on fox business prime but that market, key west, that you're in has really changed since we filmed with you. in particular, you were saying that actually the buyers are getting a little more cautious. >> absolutely, so cheryl, what's happened for the first half of 2022 we're definitely seeing a cool down, so things have stabilized so i would say right now out of 100 buyers about 60% are ready to go and 40 % are more hesitant at a stand still. they are concerned about the

economy. they are worried about the inflation and they are definitely more hesitant about how much they can spend each month. >> cheryl: also when we were filming with you it was still that frenzy deal, you know, it was multiple offers, it was homes on the market for just a few days. has that changed? >> so it has some, so what's interesting is i have two scenarios i can give you right now. one, i have a home that's over 4 million right now. now whenever i do an open house, i have a constant stream of people in the doors; however its been on the market now for about two months. a lot of the people that are walking in the doors they are expressing concern to me, they are watching the economy right now. they are worried about the ris ing interest rates, so they just aren't ready to buy just yet. they also are optimistic that the price might drop, so they are kind of waiting to see what happens. now, i also listed a home

recently that was on our lower price range spectrum for key west, it was around 500,000, and what happened is within 24 hours , i still had multiple shows, i had three contracts, and these were all buyers that were getting financing, and for them, they're just so sick and tired of paying high rent, so they wanted to just jump ahead and buy something right now. >> cheryl: that's interesting that you say that. the other interesting story about the market you're in key west and this applies to a lot of the markets we feature on the show is that these are second and third homes for a lot of these buyers and a lot of them are walking in with cash. is that still the same scenario since you are in more of a vacation area part of the country? >> yeah, we are seeing a lot of cash buyers and we always have seen a lot of cash buyers in the keys because as you said, this is a place where people are buying their second, third,

fourth home. they're buying a home and they're only coming down here for a couple months out of the year, so i think too as the interest rates continue to rise, we're just going to see more and more cash buyers. >> cheryl: what would you say to someone watching right now that is looking to possibly buy. what advice would you give them? >> well, you know, right now, it might be good advice to say maybe wait a little bit and see what happens. maybe wait for prices to cool down a little bit. our prices in key west are still high. our average sales price in key west is over one million. last year at this time it was in the 900s so if you're looking for the key west market there's a chance that prices could cool off some, so it might be wise to wait a little bit. >> cheryl: jenna, well we can't wait to catch up with you again later this year for season three of "american dream home", little teaser there, that we're going to see you again with us,

and also, i've gotta say, please give my best to orlando and shirley. i hope they are enjoying their new home. >> they love their new home, and they love living in the florida keys. they are really getting into the lifestyle here. >> that whole area that you're in when i was there i was amazed how its really changed, jenna great to see you again. thank you. >> great seeing you, thank you. >> don't miss the real estate block on fbn prime tonight mansion global at 8:00 p.m. eastern time followed by "american dream home" starting at 9:00 p.m. eastern time. tonight, only, on fox business. well, one billionaire venture capitalist has a fix on stich fix. we're going to tell you who it is and what he's doing in todays pop stock and take a look at the big board, the markets are the story of the day. we are down 83 points on the dow , well off of session highs. we'll see how we perform in the next 37 minutes, the "clayman countdown" is going to be right back.

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>> cheryl: a fox business alert for you shares of delta airlines lower today after the airline posted third quarter earnings below wall street expectations. delta reporting adjusted earnings per share of $1.44. the carrier said its third quarter capacity be 83% to 85% of 2019 levels. the stock, as you can see , under pressure. the forecast not what we needed almost 5% down, united is down almost about a half a percent or more, american is down about 2.5%, fyi, those numbers are coming out next week. united after the bell american is before the open. unity software take a look at this stock right now, that stock is down more than 17.5% they announced a merger and they cut full year guidance. the company is going to merge with israel ad tech company iron

source in an all-stock deal. that's valued at about 4.4 billion and tandem with the announcement unity reduced full year 2022 revenue guidance citing the mark rosenstein economic environment macroeconomic environment, as you can see the stock is up about 52% right now. all right, stich fix, take a look at this one up more than 16 % billionaire venture capitalist and stich fix director bill gurley of benchmark capital reported he purchased 1 million shares of the online styling firm at an average price of 5.43 a share and now owns over 2.1 million shares of that company. shares of construction supplies manufacture fastenall slumping after reporting second quarter profits that matched expectation s but they posted rev into you that just missed analyst estimates, just missed slightly. the company says that demand remains high but inflation fears

have softened. the home improvement market, that stock, as you can see down almost 6%. all right jpmorgan chase ceo jamie dimon, batting lead off, the big banks, get set to reveal their second quarter numbers that's in the morning. top analyst dick bove here to tell us what he's looking for on his banking scorecard. take a look at the markets the dow is down 119, trying to come back. we'll see. s&p and the nasdaq though, stories a little bit different there, we'll be right back. meet jessica moore. jessica was born to care. she always had your back... like the time she spotted the neighbor kid, an approaching car, a puddle, and knew there was going to be a situation. ♪ ♪ ms. hogan's class? yeah, it's atlantis. nice. i don't think they had camels in atlantis.

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this week. jpmorgan is going to be first on deck tomorrow morning. they are going to release that report second quarter. they are expected to hit earnings per share of $2.88. that be a 24% year-over-year drop. the stock, as you can see , is under pressure as we move into the close down about 1%. want to bring in one of the top banking analysts in the nation. odion capital group financial strategist dick bove. i'm going to be doing earnings tomorrow morning so you have to hold my hand through this. let's talk about jpmorgan. obviously, it's not just the numbers from the bank. it's the commentary that we get from jamie dimon himself and i think the question mark is going to be, how his forecast is going to line up with the inflation report and also what he's going to say about the fed. what are you looking for? >> well, i think as you just clearly indicated, the earnings are going to be very light for jpmorgan in the quarter, unless they pull some accounting trick out of their hat but this

quarter, you know, liz, to use a cliche, in other words, loan volume is up substantially, and it's up even more importantly, in the commercial sector, where it's up maybe 9% year-over-year. the increase in interest rates has resulted in net interest margins being very very strong, so what you've got is net interest income which is where you'll see traditional bank earnings showing up. they are going to be very good. the bad is anything to do with the capital markets. investment banking other than the investment grade bonds, but investment banking should be really terrible. not bad, terrible. you should see very great deal of weakness in mortgage banking. you should see weakness in merger and acquisition activity, trading is pretty much unknown and which is always is, and then is the ugly. the ugly is the two biggest factors in bank earnings in the last actually two years,

have been what do they do with the loan loss provision and what , to your point, what's re learning? the loan loss provision, if you think that we're going into a recession, jpmorgan and other banks will put up a big loan loss provision and that will devastate their earnings. if they think that we're not going to have a big recession, then they will have a very low loan loss provision and resulting in much better earnings than people think. in terms of real earnings, basically, if you take a look at the common equity of the banks, in the first quarter, they all showed profits but the common equity went down. the reason why their common equity went down is because 95% of the assets of the bank are financial in nature and if interest rates go up, you really are pulling down the value of those assets, so your equity is going down. so what is an investor do? do they look at earnings or do

they look at common equity? >> or loan loss reserves. that's what i was going to, that was actually my next question because that's what i'm focusing on because if we see those higher loan loss reserves that's the red flag from the banks and that's where jpmorgan is going to go but here is the thing. if we're looking at 75 basis point jump from jay powell or 100 basis points, banks make more money in a higher interest rate environment. would that offset in this quarter for second quarter? would that offset other issues like to your point lower investment banking revenue? lower trading activity both on fix income and on equity? >> in today's markets, because you know, markets an issue in today's market people are focusing on that element of the increase in interest rates, that it increases earnings. they aren't focusing on what they used to look at 20 years ago in which i think is far more

important, that you're destroy ing the asset value of the bank. in other words, if you got a whole bunch of loans, you know, securities, mortgages, things of that nature, which constitute your assets, the value of those assets go down substantially when you increase interest rates by 75 basis points and at the end of the day , your real equity is declining, so if you buy banks based upon some book value relationship, price-to-book, what you're looking at is book going down, so they may show higher than they show a positive earnings number. i think most of them will show lower earnings in the quarter but they may show a positive earnings number but their real book value is going to go down and if it goes down, it's very hard to argue that the price of the stock should be higher. >> cheryl: just have less than a minute, but dick, i have to ask you about the ipo market, and mergers and deals. i mean, all of that pretty much dried up in the second quarter.

it was kind of going down on the first quarter really hit the second quarter. i'm wondering if that will really hit goldman sachs. >> yes, it is. i think when you take what i said the good, bad, and ugly you would isolate them to different companies. the bad is isolated with goldman sachs. it's isolated with morgan stanley to some degree. the good is isolated with the companies in the regional banking area like pnc financial, so in essence, if you select out the product and match it to the bank, you should see that companies, the biggest banks in the country, are not going to do that. well the regional banks should do much better. >> dick bove, so great to have you as we get into the numbers first thing in the morning on fox business. thank you, sir. >> thank you. >> cheryl: well, your weekly supermarket sweep getting even more difficult due to inflation. lydia hu is pushing her cart through the aisles as high prices for groceries show no signs of coming down. closing bell is going to ring in

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change. so some eye popping numbers coming out of the june cpi report this morning year-over-year all gasoline prices up 59.9%, electricity up 13.7%, utilities up 38.4%, fuel oil up 98.5%, and if that is not enough the travel industry is also taking a hit which might not come as a surprise. year-over-year airfare is up 34.1%, gasoline up 59.9%, hotels up 11.5% but what really makes people upset, frankly, the cost of food. lydia hu joins us now live from new york city to breakdown which food groups are facing the highest price spikes. lidia? reporter: hi there, cheryl. we know that food in the grocery store is way up over 12% over a year ago, and when we take a closer look at the report there are certain food groups that are

standing out more than others and a lot of them are basic staples found in every american home, from "coast to coast." you can see here eggs up 33%, milk up more than 16%, coffee up nearly 16%, not on here but also in the report today, butter is up more than 26%. now, store management here says that these price increases, they've noticed this change in consumer behavior. >> i think people are getting away from being brand-loyal. you know, the customer that says i have to buy bounty. i have to buy hellman's. they are looking and saying what is the deal going on in that store today and should i try something else. reporter: and i've been talking to shoppers here at the supermarket. they don't need me to tell them what the government did, because they already know. food prices are up, they feel it

watch this. >> oh, my goodness. even on a bottle of water, a large bottle of water $0.35 a bottle gone up. my deli meat is over $2 for a half a pound and the prices are crazy. >> early on in the pandemic so two years ago at this point it was a matter of meal prep everything because you were only going to the grocery store like once every two weeks and now it's back to the i guess i should be meal prepping a lot to make everything stretch further. reporter: now, when we look at the month-over-month change, cheryl, the june inflation rate there comes in at 1%, which is down from 1.2% in may, but food industry insiders don't expect to see a dramatic decline in food prices anytime soon. in fact, management here tells me they were just advised this morning by their distributor for cold cuts that prices are going to go up yet again. why? because of the labor and the energy.

the gas that it needs to take to process those cold cuts and turn it into those products and then ship it to the grocery stores. not a good sign for grocery stores across the country. seems like these higher food prices are going to be here to stay for a while. >> lidia too, tomorrow morning we're going to get ppi, the producer price index, the wholesale level that's very telling because if you see a hotter number on ppi, that means that consumer prices are still going to be elevated at the grocery store like you're reporting. the only thing i could find this morning, lidia, was it was any good news? beef and pork just month-over-month fell a tiny bit , like fractionally. i thought, is that something? reporter: yes, you know, and i asked the store management about that and they say they see a leveling off in some of the meat prices, not really a decline, but maybe just holding steady for a little while. >> it was a fractional move. lydia hu, thank you very much for that live report.

appreciate it. all right, well, a major deal to fight cancer has today's countdown closer smiling. why he thinks that america and the healthcare sector can protect your portfolio from high inflation and rising rates and the dow is now down 183 points, and the s&p is down 13. we've gone into negative territory, nasdaq is down about 16. we'll keep you posted, "clayman countdown" coming right back.

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documents had has been trying to keep under wraps more than a year. charlie gasparino has been all over this case. >> why do we care about this case? this is sort of a precedent setting crypto case f the sec can win and state that xrp, the native currency to ripple's platform, their blockchain so to speak which performs cross-bored payments in different currencies, across borders of, excuse me, not of currencies of crypto, if they can win say xrp was used as a security, that opens the coarse for a lot of regulation including maybe ethereum. gary gensler at the sec he thinks ethereum might be a security. meaning a security means you're unregistered. that you're essentially operating illegally. that opens the company up to a lot of damages. it has sunk the price of xrp since they brought the case back

in 2020 but that is a big if. it looks like, we're all reading tea leaves everyone that wants to follow this the sec is starting to get its rear end handed to it. the judge is deciding with ripple in this case, motions for discovery, documents related to a guy named william hindman, head of corporation finance at the sec who was essentially part of the decision making on what is a security and what isn't during the jay clayton years, that is under trump which brought the case ultimately, the enforcement division brought the case. hindman wasn't part of that but he gave a famous speech where he said what was a security, what wasn't. he said bitcoin wasn't a security. actually said ethereum wasn't a security. everything else was, subject to the sec the documents surrounding his decision making is key to this case. sec wants to keep it under wraps, now under gary gensler

still plowing ahead with this case because he wants to regulate crypto more vigorously. the judge recently said all those documents about involving hindman's thought process is, can go to xrp and ripple. they can look at that. this is why it is big. if you ever did a freedom of information act from the sec what do they say? pound sand. cheryl: good luck, buddy. >> they don't, they never want, they never want the sausage making process at the sec disclosed. so of course they wanted to say the same here. they had some, they have always gotten decent privileged grounds. this judge, judge torres, a federal judge, is a little different. i'm just saying that the case is looking better for ripple, not saying they're going to win but i'm saying it is looking better. from a trading standpoint if ripple does win all the cryptos are under intense pressure but you probably see xrp pop above

this 32 cents. cheryl: well, not saying anything. i will get beat up on twitter if i even comment on this. >> why? does that happen? cheryl: people that follow you on twitter, if i'm involved, they are rabid, rabid about this on twitter. followers are all over it. >> the xrp people on twitter are educated. they know their business, they know the court cases. >> good. >> i would say the amc people on twitter -- cheryl: maybe that is who -- >> couldn't find their rear end with both hands the way my father would put it. cheryl: charlie gasparino. look at the markets right now. we've got a little bit of a different story after cpi. inflation coming at 40-year high. looks like major averages will finish the red fourth day in a row. nasdaq, oh, turning positive. i take that back. only take as minute.

henion and walsh head of management kevin mahn, your thoughts? >> it has certainly been a volatile day. there is uncertainty how aggressive the fed is going to be in the face of an economy all likelihood will meet the technical definition of a recession in a few weeks. we've also seen the yield curve is inverted not only between the two-year and 10-year, charles, but between the two and the 30-year and yield curve convergence has existed in every recession that has taken place in our country since 1955. cheryl: you mike merck. talk to me about merck. why should we look at that now? that was a big play during the pandemic. >> we have done the research here and the research shows the health care sectors is one of the best performing sectors during economic slowdowns and recessionary periods. in fact two of the larger cap pharmaceuticals we named are

merck, and bristol-myers squibb. they have 2.9% yields and cash flow on the balance sheet and low -- [inaudible] those with higher risk tolerance, cheryl, smaller biotech names. yes, biotech within the health care sector. we like a couple of therapeutic companies there, names like axum and corona, both which have drugs in the fda pipeline to treat central nervous system disorders. health care we believe is a good place to look to during periods of slowdown and which a recession i think we're in already. cheryl: i was going to say you think we're in the front end of a recession, final word? >> i think the recession started back in january and historically recessions last 11 and 15 months. let's hope the fed doesn't raise too aggressive in the face of that and make the recession longer than it would on its own. cheryl: the markets are reacting to the cpi i port, we'll get ppi

tomorrow. we have a lot going on this week as far as data, kevin. thank you, kevin mahn. the markets are down 190. [closing bell rings] cheryl: off session lows. we were down 466. zap is in the red. i will bring you jpmorgan chase 7:00 a.m. eastern time in the morning. "kudlow" is now. ♪. larry: hello, folks, and welcome to "kudlow." i'm larry kudlow. today's inflation report was a disaster. inflation is broadening, deepening and accelerating. senator joe manchin issued a very fine statement about this disasterous inflation report. permit me to quote, it is time for us to work together to get unnecessary spending under control, produce more energy at