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ed yardeni of yardeni research. welcome back.t's good to see you. >> thank you, scott. >> so i just read what marco kolanovic at j.p. morgan said, and i want you it address two things. rates are high and restrictive and valuations expensive. disagree? >> the bond yield is actually back to where it was before the great financial crisis. you know, we had this great, abnormal environment between the great financial crisis and the great virus crisis and now the bond yield was trading around 4.5%, 5% in 2003 and 2004, 2005 and 2006. so i think we are back to normal. we normalized the bond yield in the past three years and the economy withstood it remarkably well. i'm not convinced that the economy itself is showing that it's resilient. from that perspective i'm not convinced that these rates will crush the economy. >> so, that wasn't part of what one of the guests just said, as well. >> you know, we're back to normal, and i'll give you that. >> okay. >> 5% as i said five minutes ago is not like it was the end of the world. >> we were

charles: i was just talking with ed yardeni.l be okay, if we get some calm, live with maybe, four, four 1/2 i think but to your point the velocity. the spike up is horrendous, it is scary, it has got to stop. willie, thank you very much. your work is fantastic, really appreciate it. >> thanks a lot charles. thanks for being on today. charles: folks sam bankman-fried testifying in his own defense but without a jury. want to go to kelly o'grady live at the courthouse with the latest. kelly. >> reporter: great to see you, charles. this is actually a pretty rare thing. we were expecting a sam bankman-fried to take the stand in front of a jury but the judge sent the jury home. sbf, prosecution, defense, number of media. that is why we continue bringing the latest of this. this is a hearing to decide what pieces of evidence sam bankman-fried's testimony will be able to bring in when resumes testimony in front of a jury tomorrow. so basically there are a couple of things that the defense wants to bring in like the fact that they would

do you agree with ed yardeni? >> i agree to a certain extent.e heavy lifting with rates going from zero to 5%. i'm concerned with the shelter and still stickiness there. the fed said they want to hike again even if market forces pull back. i agree it will be premature to rule out a hike in november and december if we see price pressure. >> i know you are looking at shelter inflation specifically. that was something else that ed was mentioning. if you take out shelter inflation, then we are at the fed target. everybody needs a place to live, of course. >> you can manipulate the numbers however you want. removing shelter and seeing inflation at 2% is useful. i think the fed at this point sees housing prices ticking up. even the market base indicators are low. >> is this for 2024? >> i think it does. housing prices sticky keeps the fed higher for longer central. if they pull back on rates, that brings house back to the table and pushes price up higher. >> greg, bank of america out with research saying rates below 5% and they don't see the s&p going

ed yardeni yardeni research. i start with the word of the day we went over it with fill.enterhooks. nervous waiting, stretching reaction, nervousness. this morning for instance, we get data, the market goes haywire. 10 yield spike in the bond yields then we settle down a little bit. what do you make of it? >> i think the market has to get a grip realize the economy is doing fine, it is resilient. despite that resilience and strength we're seeing inflation continue to moderate. things are actually going very well for the economy but i think there is truly all sorts of jitteriness about the middle east situation. i mean depending on the minute that you tune in to the news we're either going to see this thing contained or see this thing turn into regional war. so i think we got to get this behind us. meanwhile the markets have held up remarkably well despite the short-term volatility. charles: you're right. listen, i started the show off saying the tape, the way i'm watching this market, yesterday, for instance, all the sectors are higher. at 1:00 today every sector but two

ed yardeni is with us, yardeni research president. u know, ed, i love what you have to say here in the sense that it's true, but, it is also, it is also tough that, if it all centers on fiscal spending or washington, d.c. everyone somehow getting it right then we're in trouble. >> i think that's a realistic concern. as a matter of fact ray dalio has been predicting we'll get a debt crisis as a result of the fiscal excesses and i think there's a reasonable story there, however i don't think it necessarily has to end badly. i think that we're going to continue to see moderating inflation. i think for the stock market we're going to see earnings in the third quarter will be better than expected and they will continue to increase in the fourth quarter. i mean the economy has proven to be remarkably resilient in the face of four to 5% interest rates. charles: right. >> that is sort of my comfort zone, quite honestly. that is where we were before the great financial crisis. if we speak round 5% have me back on the show i'm sure i will be mor

ed yardeni is breaking down the fear factor. the fed is expecting to stand pat tomorrow but could jay powell give us a glimmer of hope? the market is hoping for when the fomc wraps up. i will ask the market experts not only what they hear but how they expect the markets to react. consumer confidence hitting a five month low, financial conditions beginning to plunge. i rode a plane from orlando where there were three empty seats in first class. i ask joe lavorgna why the wall street thinks the consumer is strong. the solar climate movement is unmitigated disaster. it has caused people a lot of heart ache and it is unnecessary. i will explain. that and much more on "making money." ♪. charles: whistling past the graveyard, we all have heard of it right, to act or talk as if one is relaxed not afraid when one is actually afraid or nervous. all of the days for the market to exhibit some sort of a resolve today is kind of intriguing right? because we had this huge reflective bounce yesterday. it carried over a little bit this morning

. >> i want to bounce research off you from ed yardeni. he said hostilities expect us to raise our odds of a u.s. recession before year end of 2024 again to 35% from 30%. year-end rally is less likely now, but the geopolitical crises present long-term buying opportunities with stocks. a year-end rally less likely. recession odds increasing. agree or disagree with the buying opportunity? >> i think there are a couple of elements consistent with our thesis. there are two reasons that probably the ten-year bond is peaking and that is that when rates rise quickly, there is a response. the u.s. auto sector and housing sector are likely to slow. we don't think crash, but slow. the odds of recession are higher. we still don't think there will be one. we have infrastructure spending as an offset. we have the a.i. boom. none of which is in europe. we agree the recession risk has risen, but we will be buyers because those recession risks are likely to cool off the ten-year yield which is the overhang particularly in the market last week. >> you beli

if you look at the last cpi report, and this is courtesy of ed yardeni, if you strip out shelter, which we know is lagging, is at 2%, right where the fed wants it. we know shelter is lagging, so i think it will continue to come down. that takes a lot of pressure off of the fed and that's one force that would counterbalance what's going on with deficits. could you get to 5%? of course, scott. eight or nine basis points away. but i don't think that's where you reside. i think you're looking at a peak in rates. >> look, the industrials are bad today. the transports are bad. we'll get into some of those. weiss, do you want to counterbalance, if you will, what jimmy's perspective is? obviously the rate creep is going to weigh on sentiment and 5% may be that line in the sand where if you start to get there and then above, investors will have to make some real decisions where they want to be. >> yeah, so i'd say that, yes, what happened with the hospital in gaza was a contributing factor, of course. that was stark to me yesterday despite the tremendous run-up in yields yesterday, really, reall

we'll see what the market does and walk it right up to the finish and ed yardeni on the technical.o our finals, jonathan krinsky of btig just publishing a note in which he suggests faang remains the only game in town according to him talking about what's going on in the market and even that is approaching what he determines to be the end of the runway. we mentioned that communications services, technology today. those two sectors are the only green ones. discretionary just trying to get there. basically it's flat, but man, utilities are getting smoked down 5 1/3%. energy is terrible today, down 2%. materials down nearly 2%. health care is weak. staples are weak. we'll keep our eye on, joe, utility, too, as we head toward the exits today. rates have been elevated and that's the picture you've seen on your screen for most of the day. >> small caps are equal weighted, as well. >> okay, shan, give me your final trade, please. >> consumer staples. discretionary to staples will happen and we're particularly interested in beverages and hous household goods. >> mr. belski? >> doordash. whe

off, yes, i think the cycle can get extended >> that's one of the views, by the way, of jimmy and ed yardeni, people who are positive about the market, do think you're going to get that and it will offset some of the negatives that are predicted to occur. let me ask you this. your price target at the end of the year is roughly where we are now. you're looking, for the most part, nothing to happen here your mid-picture view is more that earnings estimates are overinflated and stocks will have to come down as we get into '24. we're about to have a fed decision we will not get much of any decision what if the fed is done and what if the next move they make is a cut? what if the economy holds up strong enough earnings don't collapse to the degree you think they might >> the market and risky assets in the recent weeks, maybe even recent month or two or three, have been largely trading off of two key risk factors what's happening with rates on the back end and obviously the situation in geo politics, the middle east, oil, that you discussed earlier. the fed may be done, very well, but the back end

reporting what the market activity was about we'll see you later on in the show let's bring in ed yardeni and emily roland of john hahn kok investment management. ed, i'll begin with you. your note caught my eye. for somebody who has been so positive on the market, s&p not likely to he regain what's been lost since july over the rest of the year still think a rally is possible, but between now and thanksgiving, easier to see downside given the developments in the middle east and jitteriness in the bond market explain. >> well, the middle east situation is horrible, and it has the potential to become a regional war we've already seen the united states attack some facilities over in syria and iraq and so it's not over by a long shot, and unlike previous crises like these, this one may last a while. i think we are going to continue to have uncertainty with regards to how that plays out. now if there is a disturbance to the flow of oil the saudis will produce more unless they get involved in some ways in this whole thing. meanwhile the jitteriness we see in the bond market over the supply i t

. >>> big apple, event tonight "closing bell" at 3:00 eastern, and ed yardeni will expand on what heim, you first. >> not every trade has to be a cyclical stock that may or may not work in the short term and i have to take heat for it let's go with alphabet it's easy at this valuation. it's got a valuation and that's the final trade. weiss? >> the stock's still very cheap. we'll continue to act well and i'm not in the mood to add more coverage >> ww granger. >> good stuff. the dow is good for 3.45 and walk you through the final hour. closing bell "the exchange" is now. ♪ >>> thanks, scott. welcome to "the exchange." i'm kelly evans and here's what's ahead fresh signs that the economy is slowing regardless of the stock market rally we're seeing today and hedge fund manager kyle bass says things are about to slow down a whole lot more from here. we'll talk about what he's seeing ahead for the u.s. economy. what is means to fund global allies and the war efforts and his thoughts on japan, gold, the dollar and the marks right now an

joining us, ed yardeni. it's good to see you and have you -- >> thank you. >> -- articulate, i guess, the sort of reiteration of what you were seeing back in the '90s, although i wonder about something. there's no doubt about it, the supply concerns have been very heavy on this market. as soon as the treasury announced its issuance schedule back in july, it seemed like we released higher in terms of treasury yields. on the other hand, we also had the fed say higher for longer for the millionth time. >> right. >> and we got some relatively firm jobs data this morning, in the form of the jolts report, and the yields responded to that, too. it's almost as if everything is pushing in the same direction. >> yeah, i think that's true. and, look, if you allow me for a second put an optimistic spin on all of this, the reality is, we're kind of going back to normal. before the great financial crisis through the great virus crisis, which was the new abnormal, we had interest rates historically extremely low during tha

i appreciate it as always, ed yardeni, thank you very much. >>> up next, we're tracking the biggest movers one dow component is seeing an injection of optimism. we've got the details coming up next. >> announcer: the bond report is brought to you by pimco, the global leader in active income. this is american infrastructure, a prime target for cyberattacks. but the same ai-powered security that protects all of google also defends these services for everyone who lives here. ♪ somebody would ask her something and she would just walk right past them. she didn't know they were talking to her. i just could not hear. i was hesitant to get the hearing aids because of my short hair. but nobody even sees them. our nearly invisible hearing aids are just one reason we've been the brand leader for over 75 years. when i finally could hear for the first time, i could hear everything. try miracle-ear hearing aids with no commitment during our limited time sounds of autumn event. call 1-800-miracle now. that first time you take a step back. i made that. with your very own online store. i sold that. and you

>> look, i've kind of a -- a very longwinded way of saying that, yeah, ed yardeni was right.d is also talking about the im immaculate displaegs inflation. david, you remember this. the rates of the vigilantes were much higher than they are now. but there's also a sloping curve that we had then, and right now, why is the 30-year treasury, i posit, giving you 4.8% return and you're getting a much higher return from the fed funds rate, even though when you go out that far in time, there's a lot more risk? >> yeah. it's a reasonable question. i don't have an answer, as you might expect. i do know that if you've got to refinance something in the next six months, you're not particularly happy about it, and anybody who did refinance whatever piece of paper it was over the last year is probably a bit happier than they might have been otherwise, even though it was higher than it was the year prior. and then, if you're trying to buy a house, well, we can see that almost 8%. that's got to lock up the housing market at some point, doesn't it? not to mention, again, also, with the move of

jonathan: this imperfect time to catch up with edward yardeni, he coined the phrase bond vigilantes. are the bond vigilantes back? edord to over 4.5% recently. supply clearly matters and it is a result of fiscal policy out of control. monetary policy is under control. you can see, they can even get a speaker of the house. jonathan: and sometimes supply doesn't matter. people would be able to finance the deficit. can this be addressed with bad economic data? with the auctions do better if the economy were worse? ed: the volatility we've had since the summer, we are looking for a yield level which the market will clear and 4.5% should do it. some of this recent volatility, as long as it is range bound it's a good sign that the bond market fitness is in balance with the output. the cpi headline were at 2% and it's that shelter that is way too high that has been the problem. we know new leases have come down substantially. lisa: is what everyone is doing. a lot of people are looking at the volatility of the bond market, we heard that something could break and it will be problematic for the markets. do you have the same