apple is sort of breaking down right now which is not good for the overall market but below its late september lows, lower highs lower lows and doesn't report until next week which could be a catalyst >> nvidia too. almost a 3 handle which it hasn't had since the summer. to the judge and the half. >> appreciate it welcome to the "halftime report." i'm scott wapner, the good, bad, ugly of the market with the mega caps, economy and interest rates on the investment committee's mind joining me josh brown, shannon saccocia, bill baruch and jim lebenthal. a check of the markets where we have a little bit of a deterioration happening in the nasdaq as guys were just saying across the board, the russell is higher today, very much in focus on deals as well, that 5% level on the 10-year keep watching that josh, i go to you. it is good, bad, ugly. gdp was strong, pce lighter, rates towards 5% weak stock reactions to pretty

good earnings and then the ugly being the obvious. what's going on with mega caps alphabet down, meta down, microsoft now down, apple as sara was talking about, now below 170. how do you size it up here yeah it's weird it's a day you have a bizarre strength in small caps doesn't really appear to be appro po of many in particular you're probably going to get favorable pce data on the inflation front, but i think the big takeaway -- we talked about this on tuesday, judge -- the first thing is that it's probably better if you're a trader to take advantage of an earnings move post than to try to anticipate going in because what a lot of these situations have in common is, the earnings are great and then you get this p punishing reion. even if you knew the earnings would be great you didn't know

how the crowd would take it. now we know. the skds thing, i think the big takeaway is the rallies on cost cutting and the, quote, unquote, year of efficiency some of these companies have declared, are over now show us the growth, not just last quarter's growth, give us the growth outlook we want to hear, or we're taking multiple points off that stock and you're seeing that across the board you're even seeing it away from tech i think that that is the real risk for investors going into these next couple of weeks of reports. there are big ones out there, amazon tomorrow. i'm thinking about nvidia. will anything they say be enough you know to keep the stock where it's already gotten to so i think it's a really tough earnings season not because the earnings themselves but because of that reaction. >> those are good points you make by the way, i should let all of you know we just scored an interview with brad gerstner he's going to come on in a few minutes to talk about meta and

the reaction and, you know, reminding all of us really that it was a year ago almost to the day where he wrote that letter to mark zuckerberg, the open letter, calling for more efficiency he's going to join us and we'll talk about that and share more of that with you so we can talk about where the tech trade is going. josh makes good points blowout reports in many cases and the stocks are not following through. i said yesterday the worst nightmare for the bulls is you have rates backing up again and mega cap selling off substantially even on pretty good earnings reports. you have a problem with that >> yeah. those coincidence factors are a challenge. if you think about what we're facing an i think the cost cutting that josh was talking about is really important because it goes beyond the ability to insulate the business for two or three quarters. it goes to what happens in '24 and '25 so we can recapture the martha has been lost over the

last couple years. i think that, you know, it does require growth, but it also requires mix you have to be in the right place at the right time. i think what we're seeing is that if you look at microsoft in terms of cloud, they're getting a bumpp from ai. you look at alphabet they're not getting the same boost we're talking about optimizing spend. when we look at what's happening in the environment, if we didn't have rates where they are today we're going to be seeing a little bit of a different reaction to the tech earnings. again, this is what we anticipated. there is no catalyst right now for ceiling on rates until there are implications the fed is done or the treasury will back off of issuance it's going to be difficult for any specific stock report to turn the tide. >> jimmy, we needed, right your figure you're coming in and need mega cap to counteract, if you will, the move in rates. it's the whole neutralizing factor to rates going up if you're a bull like you are in the market the other problem now is that i

love the way that joe put this, the magnificent seven, becoming the magnificent five take another one off the list. now the magnificent four after meta has a good report we're talking about the stocks, okay, stock goes down. are we going to be talking about the magnificent three? now we have to take apple off the list you can't take them all off the list not with the things that are in the market right now. >> i take your point absolutely i think, though, it's actually beyond the magnificent seven, five, three, two, one, whatever you want to say it's going to be because all stocks are performing badly folks, the sentiment throughout stinks if you ask me why that is, it's what scott said, it's interest rates. we can talk about the middle east historically geopolitical military confrontations do not cause the stock market to go down in this direction and with this sort of magnitude i don't think it's the looming threat of a government shutdown or the circus in the house of representatives. i think this is squarely on interest rates being as high as they are is too much for

earnings no matter how good to power through. where that leads us to is, how long are they going to be this high are they going higher? it's still in my opinion rest on the fed and rest with what's going on with inflation. i'm tired of saying that folks, i'm really tired. >> you can't be dismissive, sounds like your a dismiss ive f the macro which if meta's cfo is talking about uncertainty regarding the macro we need to pay attention to the macro despite the fact you think it's legit or not. >> i am glad you brought this up and i had a robust discussion inside my firm with my analyst community and they said the macro economic data like last week's retail sales -- >> i'm talking about like -- >> let me finish. >> middle east, geopolitics. >> i got you >> uneasiness to spend a lot of money with uncertainty out there. >> discrepancy between what data

is saying and what the companies are saying i did not miss what meta said last night two explanations one the data is lagging, we know the big in macro aggregate data is lagging to the middle east, that is likely to be temporary in this environment you have middle east hostilities, ukraine war going on, you have a circus in washington, d.c., it is highly unwise for cfos or ceos to come out and be abule yant on the demand environment they're taking too much risk real-time data like tsa traveler account, it's extraordinarily high. >> that's not going to dictate what this economy as a whole does because people are on airplanes. i'm sorry, there's a lot of other factors. you can't constantly go back to tsa numbers and -- >> hang on scotty, i don't disagree with you that's why i look at weekly jobless claims the labor market is the most important thing.

>> i don't disagree on that. >> i hear you on tsa being too specific hear me on weekly jobless claims i'm done. >> all making some great points and i think the macro is important. granularly with the data, the fed is about goat a gift gdp 4.9% it's above analysts in the middle that's a backward looking number we're expecting 2% in quarter four and not only that, i think the culturally we've seen an evolution of how money is being spent. all summer long and year long, corporations spending money. people are going out to happy hours. conferences. a lot of money spent tied to services and underpinning services i think a lot of these experiences, travel starts to change as people hunker down for the holidays not only to mention, retail sales have been poor each of the last two years as this shift takes place because people aren't spending money in the holidays and hunkering down with families. slowing growth below 2% and the

fed will like that. >> we start the show and i know big tech is on everybody's mind. a central question as to whether the market has a bigger problem or not is whether people buy the dip. you heard stephanie link telling us she bought alphabet on the pullback, trimming meta into the print, now we get the results, the stock is down. stef joins us with hightower, chief investment officer there first thought, link is probably buying meta because that's how she rolls. are you doing that >> yeah, i am tempted. i'm going to let it set al couple days. this is a better buy than a sell for sure the quarter was outstanding. it was offset by the cautious commentary about the geopolitics and high expectations. the stock was up 141% into the print. but they just beat earnings. they grew revenue 23%. operating margins the best in two years.

you have year of efficiency and you have growth. by the way, i mean, reels going neutral to revenues, no one thought that was even possible six months ago that was a real highlight. reels drove 40% of engagement for instagram. you have advantage plus at a revenue run rate of $10 billion. ai increasing engagement to facebook and 6% to instagram so ai is certainly helping this year monetizing it. i think this is in early innings and the reason i'm more of a buyer than a seller. i understand that stock is crowded. i think all the f.a.a.n.g. stocks are crowded that's what reactions are telling you. this is not a fundamental problem. if anybody wants to chip away t guidance, the gast was fine. revenues were a lull wider because of the uncertainty macro. it's going to grow double digits next year. the things they can control expenses and capex was lowered

that's exactly what we wanted to see. you have a strong product cycle story, many different products you overlay that with ai and you have a stock trading at 14 times as well as a company that has -- is committed to keeping the cost pressures down. >> i hear you. >> it's better buy than sell. >> i hear you. it all makes perfect sense the problem with all of that is that it might not matter because if you have a different kind of market now where everything you said is true, and microsoft had a great report, and the stocks are still going down that's telling of a different kind of market. >> there is an elephant in the room - >> for now. >> go ahead. >> for now, scott. for now, absolutely. but fundamentals will eventually matter and the fundamentals of this stock, meta, was so much better than -- it's better than alphabet, but i bought alphabet because i thought that was ridiculous, 80% of their business is advertising, not

cloud, and acted like it was the reverse. meta, there's no blemishes whatsoever on this quarter or the guide. it was just a cautious commentary it will matter at some point it's up 141% on the year that's why you got to let some of the froth out let all the panic selling be done with. i'll be back in if the stock falls materially from here. >> yeah. you let us know. i appreciate you coming on we had to hear from you today given your history with meta i mentioned we have brad gerstner joining us, the al tim met ter founder and ceo. another person we had to hear from, brad, today because let's remind people as well as i hold this in my hand a year ago on october 24th is when you wrote that famous letter to mark zuckerberg which you said he, quote, i'm sharing an open letter encouraging meta to streamline and focus its path forward. too many people, too many ideas

too little urgency, the lack of focus you write and fitness is obscured when growth is easy but deadly when growth slows and technology changes you lost the confidence of investors. have they gained the confidence back have you >> absolutely. as i said throughout the year, scott, you know, i can't believe that was only 12 months ago. thanks for having me on. remember it was last december, a couple months after we wrote the letter, that mark first declared it the yore of efficiency, discipline, and rigor. and has he delivered imagine a year ago thinking that they could reaccelerate the top line of the business, while doubling free cash flow from $18 billion to $35 billion, and let's talk about efficiency. he and elon musk stand atop the heap of efficiency and reduced head count 24% year over year. from 85,000 to 65,000 employees. find me another large company in

silicon valley other than those two that can dem trait accelerating top lines while reducing head count and get more fit. there's work yet to be done. we have goodness yet ahead i think the year of efficiency is going to be brought forward to reality flabs 2024 and 2025 where they will have to demonstrate return on investments they're making or i suspect that susan lee and mark zuckerberg will also begin to trim there so aftefor us although we see a pullback in the market today, a year forward reflecting on the last year, there's no doubt that they deserve an "a." susan lee first year as cfo has done an outstanding job. >> i'm going to ask you to be a modest and say what role do you think your letter ultimately played from getting from there to here? >> you know, all the credit here goes to mark zuckerberg, susan

lee and the team i think the idea of fitness and efficiency, we were one of several calls really to usher that in silicon valley and as i said at the time on your program this was an open letter not just to mark zuckerberg and meta, an open letter to all of silicon valley for the companies that have gotten on the right side of efficiency and fitness, they're doing a great job like meta is there are companies that didn't heed the call and for those companies they've had a tough year and they will continue because the market's only going to reward those companies that get fit, that accelerate the top line, while collapsing layers in the organization the age of excess ended over a year ago and i give a lot of credit to mark zuckerberg for leading the way. efficiency is now the electioncon of silicon valley, and he deserves credit for the letter he wrote in march to make that happen.

>> meta is your biggest position what does your exposure look like as we have this conversation today >> well, as you know, at the start of the year we had a contrarian positioning remember, the mike wilson consensus around a hard landing had everybody in a nervous positioning. we were 93% net long at the start of the year. that's very long for our hedge fund over the course of the year and more recently over the course of the last eight weeks, we've had to manage around new realities a 10-year approaching 5% and, of course, the tragic war in the middle east our net exposure today is about 48%. we put on more hedges over the course of this period of time and reduced some of our exposure in the long book by selling calls and doing other things, but this is just prudent risk management when we look over the course of the next two to four years, these technology names, remember, meta today is trading

at about 15 times earnings compare that to walmart or compare that to nike that are trading at 23 and 25 times earnings for half the growth rate respectively, that doesn't make any sense and over the course of the next couple years we're going to continue to see this dispersion where companies like meta and google and microsoft out perform those companies that simply don't have the durable growth and margin expansion. >> let me ask for your guidance for our viewers on where you think a more near term these stocks are going to trade and what message is to you of these markets that, despite everything you said about meta and what others have said about microsoft, and on and on, that these stocks are trading poorly even in the face of good earnings for the most part what's the message in that that we need to take from it? >> i hope the message that chairman powell and the fed take is enough is enough. we've got a war in the middle east we have deteriorating, you know,

consumer behavior, whether you look at business tickets that are being booked on airlines, whether you look at consumer credit card delinquencies, car loan delinquencies, now corporate debt starting to turn over we have 20% credit card loans, 10% car loans. 8% mortgages the economy doesn't need any more of this they accomplished their objectives the market is voting today the market is voting that there's almost no chance we have a rate hike in november or december, and there's an 85% chance that we'll see a rate cut by june of next year even the fed itself projects two to three rate cuts next year i think we're at the end of the rate hiking cycle. the market has yet to price that in the 10-year still at 4.9 we got a super hot gdp print today. as a market manager, you have to take into account these risks, the future is unknown and unknowable but the most out of consensus view today is that we can have a

softer landing, that we can still have economic growth next year, that we can still have great performance out of these companies, while at the same time, seeing inflation come down and rates come down and just think about that coupled with a resolution to the inhumane crises going on in either the ukraine or in the middle east. so yes, those are unknowable but i think there's at least as much chance that that can occur that we're going to see rates much higher from here. >> can we agree with the comment over the long term these are the companies that you want to be in, they have the growth rates that are going to be at the forefront of where, you know, investors want to, you know, get alpha in the market, but can we also say, kokay, tech can still be over extended and mega cap stocks too rich from a valuation standpoint how would you assess that?

>> look at the facts, scott. nvidia is trading at a fraction of the multiple it was over the course of the last two years it's trading below 25 times earnings that's t same multiple as nike and walmart and it's generating 50% earnings growth and it's the beginning of the ai super cycle. meta, which just posted 100 gain year over year in free cash flow is trading at 15 times or 16 times earnings compared to 23 or 25 for those companies i'm not picking on those companies. i'm just saying that valuation disparity makes little sense to me when you have companies that are going to have a more significant role in our lives in the future, versus companies that are serving us in the off-line world you know, i think you're going to see a reversion to the mean in the short run i told you we have taken our risks from 93% to 48% net

exposure we anticipated this was going to bep choppy there would be some consolidation. i don't think you can say this is frothy. i don't think you can say these are over extended. we've seen multiple compression in technology this year, not multiple expansion the stocks have gone up a lot because the pricing we came into the year with, the expectations we came in with proved to be dramatically wrong for facebook and nvidia ended up earning far more this year and growing far faster than the consensus earnings expectations at the start of the year. >> josh brown has a question for you. go ahead. >> hey, brad, getting away from shorter term earnings concerns, just strategically speaking, is reality labs make or break for meta's longer term shareholders? meaning they have been under the thumb of apple vis-a-vis the app store, a third of all of facebook's profits and instagram's profits are getting

kicked upstairs to cupertino if meta gets the next technology super cycle right on the device side and they actually own the hardware opportunity, that's a very different future than the one in which apple's product becomes the de facto standard and then meta is just one app trying to, you know, elbow into that it's almost like a fork in the road do you feel it's that important and if so, how high of a probability would you assign to meta getting the hardware opportunity right? >> no, josh. i don't think it's a fork in the road i don't think it's that important at all which i is why i wrote in the letter a year ago double down on ai and he should quarantine the bet on reality labs to $5 billion a year listen, mark zuckerberg is more of a visionary than me when it comes to whether or not these new platforms will dominate the

future but meta's success doesn't depend on it at all. i encourage everybody to -- on whatsapp, 2 billion using whatsapp every month and they launched a chatgpt equivalent where i can have an ai chat directly in my whatsapp on things like what the best hotel is on the west side of new york and i can ask them if there's availability and what the price is they've given me a personal assistant in my pocket that is here today that is monetizeble today. much like people said that reels couldn't catch up with tiktok, it has they said reels couldn't monetize it has i think what they're doing in ai to compete for the top of the funnel by giving us all a personal assistant, that i'm highly confident in. it's a massive new expanding tam for them and allows them to challenge google at the top of the funnel like chatgpt is this new platform i view as a

call option on the future. i encourage the management of the company to continue to bring their efficiency, discipline, and rigor to reality labs, right, and make sure that the investments that we're making are quarantined, we're earning a return on those and this year we didn't see much of a pullback in terms of spend but over the next one or two years if we don't see monetization out of reality labs, hopefully we're going to see more efficiency. >> i want to ask you before i let you run, microsoft and alphabet, did the results this week underscore the positions that you have taken on both? how are you impacted or moved by what you heard from both >> both of these names again, incredible companies, generating terrific growth. in the case of microsoft, re-acceleration in azure it's incredible. they have over 17,000 customers already using co-pilot while people were a little bit

nervous about their growth rate in azure ex-ai, they're maintaining 26% growth on a $60 billion arr business with expanding margins. what they are doing at microsoft is incredible. it's the future of ai. they're going to win, continue to win the enterprise, and they own, as everybody remembers, half of openai which, you know, we now see valuations over $80 billion. they're well positioned against the future in the case of google, i've come on the show and i've said that google is not about the cloud. google is about search it represents over 100% of their profits. the future of the company is dependent on the future of search google trading at a valuation that i think makes it look very interesting, very compelling we don't own it today. the risk to the top of the fudge at goog, meta, ai, chatgpt and others compete for those

consumers in answering the question i was in new york a couple weeks ago at the javits center tooug a thousand people and asked the audience, how many have used chatgpt in the last two days half the room raises their hand. i said how many people used that instead of google. same half raised their hand. that's not a threat that is immovable by google but it is a threat they must deal with if they're going to maintain their dominant position at the top of the funnel for answering consumer questions they have to make sure they have something functionally equivalent or better than xaths or meta ai and i doubt they're going to be as dominant as that in search and that's the reason it warrants a little bit more caution than these other mega caps. it's still a great business run by terrific managers. >> i'm going to let you run. so much appreciate you joining us on a really interesting day in the nasdaq. that's brad gerstner joining us on the "halftime report. we have to get you set up for

amazon because now all the focus is on that company in overtime tonight. we do have a number of upgrades as well. software stock, bill baruch bought earlier in the week, calls of the day, amazon, the setup is next. ♪ ♪ every day, businesses everywhere are asking: is it possible? with comcast business... it is. is it possible to help keep our online platform safe from cyberthreats? absolutely. can we provide health care virtually anywhere? we can help with that. is it possible to use predictive monitoring to address operations issues? we can help with that, too. with the advanced connectivity and intelligence of global secure networking from comcast business. it's not just possible. it's happening.

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yesterday sitting below that nasdaq, though, that's where the action is, obviously a brutal day yesterday and another one shaping up today nasdaq roub down just shy of 2%. we have to keep our eyes on that after the ball dictates where we go amazon reporting in overtime bill, you own it aws growth rebound where the beginning, the middle and end of the story will be told. >> what we saw from microsoft was the re-acceleration where alphabet didn't. you can see how alphabet traded afterwards it was punished. if amazon doesn't see a continued acceleration in the growth of aws or disappoint there i would expect to see the stock to get punished after that i want to add with the retail side, mastercard and visa have been upbeat about the retailers. i can imagine you see something steady there too. >> aws growth decelerated for six straight quarters. growth 12.2% last quarter to

give perspective to where that was, it was 39% at the end of 2021 i don't know how much optimism there is, but there's enough to hope there's at least a rebound in aws growth and maybe all the hopes are pinned there. >> so this is a stock that really hasn't done anything in a couple years, judge, and for a lot of the reasons that you've cited. there's been a growth slowdown and also a profitability challenge for the company, and, of course, for all of these companies, lapping their, quote, unquote, covid quarters the comps were too difficult and it's been messy. look at a chart technically, there's nothing great going on here it's a 32 times forward p/e. to put that in perspective, the nasdaq 20022 times forward earnings it's expensive the other big thing going on here is going to get the most attention is the state of web services, aws.

like that's, to me, that's the number one stat that's going to decide whether or not we get a rally out of this stock after they report or a sell-off. amazon web services are only supposed to have grown 12% to $23 billion. it's a much more important business to amazon than it is even for alphabet. understand that amazon web services is 17% of revenue for amazon, but it's three quarters of the operating profit. $7.7 billion in operating profit la last quarter. 75% coming from aws. that's why i think that's the make or break stat that everyone is going to be paying the most attention to that growth rate better look solid and better have good things to say about next quarter too. if they don't, keep in mind, this company has added $400 billion in market cap year to date it's up a lot year to date, 40% or so. it's not going to keep that if

they don't have good things to say about next quarter. >> jimmy, look at azure. a re-acceleration of growth in the cloud as we were saying for microsoft, maybe the stock reaction is a bad omen for what might happen with amazon even with a good aws number i'm not sure if you can read one to the next. but it's not necessarily great. >> i think the interesting story here is that it seems to me like this discussion about microsoft versus google on the web services side vcr sus amazon, it seems to be ignoring the idea the pie should be growing. the relative, microsoft had better growth rates than google and buy microsoft and sell alphabet i think the idea that the next ten years this decade we're in is a digital transformational decade i think brad gerstner would agree and that pie is going to grow. if amazon web services is 12% on

the surface that's a disappointing number like 23% for google cloud services was, but we're talking about a quarter, a quarter where people are feeling a little - >> but the problem is you've been talking six straight quarters >> i'm glad you brought this up. it is six straight quarters now. give me room we haven't talked about the retail side of amazon. you mentioned it it was six quarters ago, the april earnings announcement when amazon started the last 18 months of the lousy environment when they said holiday spending season doesn't look too good going forward. that was in april. so i know we're focused on amazon web services for the report i'm looking at how is the consumer doing they're going to give us important data on that. >> the marketplace doesn't matter nearly as much to investors as the growth in aws. >> so i didn't make this clear i'm not talking as an amazon shareholder. i am talking about a highly invested equity holder in the markets. what they say about the consumer

matters to the stock market overall. >> i understand. >> doesn't matter to amazon. >> i understand. if they don't say the right thing about aws the stock market is not going to look pretty. >> okay. i will a grant you yeah, the stock for amazon is not going to look pretty and by extension the stock market is not going to look pretty. >> my point. >> the point about jim's making a point about spend increasing on cloud, and the challenge is right now, is that yes, according to the philly fed, 18% of companies will cut software spending this year, 35% expect to grow. they're spending it on cyber and other ways the challenge why microsoft is likely to come out on top of amazon and alphabet in this earnings season is that they have the ai kicker to it just like brad was talking about. so in terms of the retail, i mean, jimmy, they better come out with a big number because consumer spending was enormous in that gdp print today. i mean i would say that's sort of a base case table on the retail side. i would be looking at does

regional distribution cents cut costs for retail that's the takeaway. >> let's do a couple calls if we can. adobe. i turn to you bill baruch who upgraded it to outperform. you bought more on monday. >> i think that's realistic. adobe, it's in our top five after adding to it i think the big thing here with it is firefly sbls how they're -- as well as how they're implementing ai and bringing ai to the users and the network they've created locking these people in. they have 20 mill been subscribers anticipated. i think as we see an ai become a bigger part of their business the more data they have is going to continue to help them expand that i expect a solid report as we look farther out from them i think right now is a time where they can be under the radar as the market selling off, continue to kind of levitate. >> let's squeeze live nation upgraded to out perform at

evercore josh, do you own that stock? >> yeah. so live nation, this happens every few years. there's concerns about the regulatory environment of course, there's controversy about whether or not the ticket should be bundled with the venue management and touring management and that is what makes live nation i think such a powerful company there were rumors all year there was going to be a department of justice investigation, and then it was confirmed and they kind of did it the same day that they reported earnings which i'm sure was a total coincidence. either way, this company has had nothing but great results. the stock price got knocked down i think that smoke is going to be around for a while but people will get past it and i do think this belongs at 100 or higher. you talk about a company that's in the sweet spot of what consumers want to spend money on and is really, really good at whatthey do. and that's live nation i think this is a very cheap share price for a business that

is as dominant and profitable as they are. >> let's take a brk d meeaanco back mike santoli joins us with his midday word. halftime is back after this.

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welcome back to the "halftime report." i'm bertha coombs. your news update at this hour. cities across maine are sheltering in place after a shooting at a bowling alley and bar that saw 18 people killed last night the governor said another 13 were injured and three remain in critical condition authorities have issued an arrest warrant for the suspect charging him with eight counts of murder thus far the shooter remains on the run the ll boon flagship store in maine is also closing its doors as authorities continue that manhunt a spokesperson said its factories and offices are closed out of an abundance of caution the outdoor good's retailer is one of maine's largest employees and based 20 miles from

lewiston. congressman jamaal bowman pleaded guilty to falsely pulling a fire alarm at an office building on capitol hill last month as congress rushed to avoid a government shutdown. understands the predeal, bowman will pay 1,000 fine and write an apology letter to the capitol police chief prosecutors have agreed to dismiss the charge in three months as ngs lo abowman does not break other laws during that time "halftime report" will be back in two minutes ♪ opportunity is using data to create a competitive advantage. ♪ it's raising capital to help companies change the world. ♪ opportunity is making the dream of home ownership a reality. ♪ ...and driving the world forward to a greener energy future.

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join the millions of people taking back their privacy by downloading duckduckgo on all your devices today. we're back senior markets commentator mike santoli is here for his midday word we're going to give back 5% in two days >> looks that way. nothing and then all at once it's precarious at the index level getting down to 4100 and click through the supposed areas. it took us almost a month to get to 4100 to the upside in april and may. if you don't have buyers show up, you know, where they liked them six months ago we broke out

it's going to raise questions. on the owehand, they've been talking about small caps and it's the mega cap story today. the question is, is that one of these final surrender moves that people feel okay, we can't hide there. the economy is good until further notice can the rest of the market have a little bit of a bid. that's where we are. >> let's see the resolve of the alleged dip buyers that's what it's going to come down to. those who said don't worry, if the stocks get sold off hard the buyers will come in and snap them up. it remains to be seen at what level they do that. >> it does you have to keep in mind even though these aresharp moves in alphabet and meta you're going back one and two months where they got up to these levels, and it creates this idea maybe there's a little more to chew through on the downside before you have a new group come in in general it's hard to kind of reconcile corporate earnings coming through well, the economy still with a little more

momentum and cyclical stocks brutalized for two months. something has to give in that equation and maybe the market saying that's kind of a last gaps of economic growth. >> what do you feel about amazon coming in overtime tonight and the impact not so specifically to what they might report, but the impact that it might have? >> i mean, if you show me every line of meta's numbers last night i would have said you would probably have an excuse to buy the group today. but i think, you know, you're stretched that much more to the downside and the very short term ahead of amazon. i wonder how much it has in the way of a read through or coattails because amazon is kind of its own beast for as big as it is. >> we'll see we'll see it together. i'll see you on closing bell. coming up a pop for one housing related play after its earnings rare we've said that josh owns it we'll talk about it next

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a small cap, almost nobody knows they even exist. they've been around since the post-civil war period. what they do, very simply, water heaters and boilers. that's 70% of the business is just replacement if you own a home, you know you have to keep doing that. with one hand tied behind their back, a horrible housing market, they beat the street by 11 cents, guided higher on revenue for the rest of the year, guided higher on earnings this company is paying that different and growing it, shrinking the float by 17% i think if you're looking at small caps, and you should be, given how beaten down they are, you want to be selective think my type of name, my personal opinion, that should be on people ace radar. i also want to turn to you, bill, you own morgan stanley,

announcing their succession. pick is the pick the to be has become unraveled after certainearnings report. the wealth management revenue missed i think there could be more of a -- an anomaly >> we've been talking about an inverted yield curve for so long, also the risks of rising rates to possible credit issues, but a resteepening of the curve is good, which is at least a bright spot to hang on >> yeah, i mean, i think if you look at all of the big banks, even some of the regionals, very consistent in terms of has it bottomed the bigger bank, the benefit is they have card growth.

that really helps in terms of potential fee income if we look at the yield curve potentially steepening, there will be some winners and loser, and you need to look at the underlying credit. another quick break, we'll come back anddo final trades o the other side fiduciary, i proe to be the financial steward that you and your family need. i promise to put your long-term financial well-being above any short term transaction. everyone has a big picture. my job is to help you invest in yours. charles schwab is proud to support the independent financial advisors who are passionately dedicated to helping people achieve their financial goals. visit findyourindependentadvisor. com

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roan aye, she's outside the security house today sbf will be testifying today final trade, josh? >> ieo, i think energy is the place to be looking. temperature times estimates, iv% earns. who has alphabet >> i do. plain and simple overdone. the ad revenue beat, and i think they're one quarter behind microsoft. i think this is the ballet to buy in the 20s. >> even more upset, it doesn't bother you >> no. we're back to where alphabet outperform from july to now. we're right back from the q2 stop. jim? >> that's pretty convincing. i would like to change mire answer

actually, no nxp, 50% of their business is providing chips to vehicles. >> playing a little defense for me. great to see you all back on hq "the exchange" begins right now. \s. thank you very much, scott welcome to "the exchange." i'm kelly evans. here's what's ahead. the latest data shows the economy remains resilient. so does the consumer, and if that trend holds, our economists see two things happening in the market and the fed she's here with her forecast the recent pullback in tech provides a good intrigue point, but there's one way to play it to be a little safer and what else he 'buying we'll check back in with one real estate player, the spot a bright spot on the back of earnings the