but, hey, maybe that'll be q4, q1 i don't know, everyone is watching and waiting >> we'll wait for those big prints tonight and see what it might mean for some megacap tech as dan niles said as we get into next week. for now let's get to the judge and the half all right, carl, thank you very much. and welcome to the halftime report out front funds and interest rates. we discuss and debate that with the investment committee joining me for the hour today. we do have a pretty nice move in the market going on. let's check the markets today. we do have best week since late july for the s&p and the nas the dow is holding on 200 plus the yield on the ten-year note

we're going to get to all of that but steve liesman is at the desk that means we have something important and those are the headlines from if philly feds patrick harker >> yeah, he's going to talk about monetary policy saying he expects the funds rate to be well above 4% by the end of the year that is in line where the market is priced. so the fed is going to stop hiking rates some time next year, but when it does it will hold policy at a restrictive rate, let monetary policy do its work says the philly fed president. if we have to tighten further he says we can tighten further based on the data so no friend of labenthal on my right here. a sustain on tightening. on the outlook he sees flat gdp 2022 inflation goes 6, 4, 2.5

unemployment goes to 4.5 to 4% where it will peak russia, pandemic, fiscal and monetary policy. interestingly here, folks, this is something i'm seeing a little bit more of. fed officials talk about the fiscal side of things. u.s. government policy contributed to supply side issues he mentions tariffs, immigration policy, not building enough housing as well as fiscal spending and he does blame the fed, too, just to be clear >> you reference labenthal because labenthal can't have the fed continuing to hike into next year into what is already a slowing economy, right that's the worst -- >> i mean, scott, you're exactly right, right i think the market this week took comfort from mr. bollards's comments on sunday i think what the market is seeing -- and it's not just me

the market is seeing, look, you can get through this you do two more rate hikes and stop and look around what's going to happen there you're going to be at 4.5% over the course of nine months. >> he's already in the hole but go ahead >> i don't want to not give you your say here, but you don't mind take a look at the fed rate outlook. >> are we at like you said earlier 5 -- >> for may 23 $5 5% in may, and what's also interesting, jim, you see that gap between the may and january number, that gap has come down so there was like this big easing built in, and that was -- i'm just saying, jim, you could be totally right i'm just pointing out where the market is priced right now not for stopping at 4 but for going

all the way to 5 >> i'll make this very quick we know you would admit the fed funds futures market is awfully bad at finding its final rate. i mean it's very good at going along with the trend where it is right now, but frankly this is a very schizophrenic market, the fed funds futures market if anyone want to throw a brick at me -- >> it's been a very consistent fed in suggesting that rates are going to continue to go up, and once they go up they're going to continue to keep them at elevated levels. >> keep them where they are. >> your hope is that the strengthen in the consumer, which is offsetting some of the manufacturing strength holds, that they have the ability to do what they need to do for as long as they need to do it because the consumer's strong enough to let them do it if the consumer starts to roll with the manufacturing economy starting to roll, you've got a problem, we've all got a problem. >> you sure do so part of this thesis is based on what we're hearing from businesses that they're frankly

just not letting workers go because they know how hard it is to rehire them look, if you go above 5% and that's the funding cost for businesses, that may change. that may change in a hurry >> see, josh, the danger is -- and we asked this question at the very top, are earnings good enough to the overcome higher interest rates for today or this week they appear to be the question is can you trust the earnings today for what they're going to be tomorrow, right? this is the now and later market as we've been describing to people they're two very different things if you think the economy is going to slow and earnings are going to follow. >> well, i think we have good trends in earnings in terms of beats, but we all have to remind ourselves these are companies beating estimates that have been lowered and lowered again really since the start of this year it's good enough for short-term sentiment. people here companies they're invested in say constructive

things, demand has not fallen off a cliff, there aren't any real blow ups to speak of. there are certainly areas of concern. you listen to the trucking companies, some of the stuff they're talking about, they're using the r-word in some of their commentary, but, like, you're just not seeing anything to say that earnings is the concern. the real concern is that we've done a lot in a very short period of time, and we really don't know what the ramifications will be in funding markets, in emerging markets we don't know what's going to happen with the rapidly increased cost of borrowing and how many blow ups we'll end up getting. like none of that has happened yet. so as much as it may potentially halfway through the game or late in the game of the hikes themselves in terms of the ramifications of all that hiking and tightening, coordinated tightening around the world, we really have no idea what that's going to lead to

i think that's a 2023 story. >> it is >> and that's what keeps a lid on -- that's what keeps a lid on whatever optimism you want to have about how close we are to the end of the cycle >> that's why you've got to be careful to not read too much into the fact it's all good now but night not be all good then not yet. but people are betting on the fact it's going to eventually happen i've had many conversations over the last handful of days with some pretty big time and smart investors who say, okay, nows now but eventually it's going to definitely come home to roost. so shannon, i'd like your view >> well, if our -- we're anticipating in 2023 it comes home to roost, shouldn't the fed be anticipating that as well i think that's the question that i would pose to steve and jim around, you know, these expect eggs of the fed, and josh said it best i think a couple weeks

ago terrible at forecasting where fed funds are going to be because we do not know what the ramifications are of the pace of hike we've seen. we also have what's going on behind the scenes really and lost emphasis on is quantitative tightening six months ago we didn't talk enough about how the balance sheet was going to be rounded down and i think that is the lever we're really not talking about in terms of what the fed could do behind the scenes that transmission mechanism they could be sort of taking that lever down in terms of the balance sheet and providing a little bit of a cushion. i think the other thing we need to think about is are we talking about an economic contraction? are we talking about negative gdp of, you know, 1% next year, or are we talking about a deep and sustained recession? to get a deep and sustained recession we need to lose a million and a half jobs this year i don't know about you but when

i talk about companies in the real world to jim's point they're thought laying off people so i have a hard time seeing the expectation for a deep and sustainable recession from late 2023 to mid2024 because i don't think we're going to lose jobs to create that environment >> liesman, they want -- i mean you have to be pretty open with what they want, the fed. they want growth to slow, spending to slow they want jobs to slow they want everything to slow they're telling you they're going to do whatever it takes essentially -- essentially to make it slow, but people like jim are still out there having a rosy view. >> i want to take something josh said >> you gave us the hawkish headlines. >> hae's not going to lead the

pack down the hawkish path i want to emphasize what josh is saying and it gets back to the great conversation i had with professor siegel a week or so ago as follows the fed says it just became restrictive, so if you think about the idea the fed just became restrictive, all of the monetary policy up to the point it became restrictive is prospectively into the future stimulant to the economy restrictive and the impact of a restrictive funds rate is what's in our future. and that's when i said josh said it perfectly understandably that's a 2023 story. so i'm saying the impact of a perfectly restrictive rate, that explains why the fed had to get to where it wanted so quickly. it wanted to get restrictive so the future we had was one of restrictive policy our survey today, the all america economic survey finds that 33% are affected by higher

interest rates that number is going to get higher and slow stuff down in the future >> i just want to point out, too, because this is happening at the moment as well that it looks like adidas has updated its guidance and has cut its outlook in part on higher inventories. there's a stock down 4.25% the same thing we heard from nike nike is down in sympathy here, and it's affecting a lot of retail, right? you've got a lot of inventory. you're going to have to cut prices as a result of that they cite what they call lower consumer demand in western markets since the start of september. i throw it back to you in what is a strong consumer is undoubtedly weakening in certain pockets. >> i will agree with you that the consumer is weakening a little bit, but i don't think the adidas if that's how you

pronounce is reflective of >> i'm just telling you what they said. >> i'm explaining what they said >> they said it's due to lower demand, lower consumer demand. >> but look at the airlines. people brought their sneakers in 2021 >> you wear sneakers for -- you wear the same pair of sneakers for more than like a few years hold on, let me take a look. >> i want to see this. i love these stories of too much inventory. >> he looks like he's been wearing them for like five years. >> i love these stories of too much inventory because it's something going to help out in the cpi. i know it's not good for earnings and good for stocks you end up cutting prices and ends up showing in the cpi that's great >> it is great here we go, scott. you said the fed wants to cut jobs, it wants growth to slow.

i disagree the fed wants prices to come down growth and jobs are a derivative of prices. if you can get prices to come down because there's too many darn nikes and adidas out there going back to the old pronunciation, that's good >> you can spin it however you want but they're telling you pretty explicitly that -- look, sometimes debating with you is like arguing at a brick wall they're telling you things you don't want to believe. that's okay. my point at the verytop of the show is that -- >> hey, scott. >> hold on you've got 83% beat rate, 53 s&p companies that reported this week 44 beat earnings. my biggest question is whether a better than expected earnings season, josh, is important and powerful enough to offset all of the other stuff and keep the rally going for some period of time before things get a little dicy again

>> well, i'll tell you next week when we hear from google, amazon, apple because those are the real earnings stories that matter mathematically to the index. a great scenario would be that prices come down and the consumer calms down and doesn't roll completely over and there is historical precedent for that it is possible a lot of the leading indicators that started to get our attention on the inflation front, you could say nature is healing to some extent like when you look at the index of used car prices that is crashing and we say oh, who cares, used cars, that was one of the first canaries in the coal mine this cycle, hey, wait a minute, something here is going very wrong. so you've got that you've got the semiconductors demand slow down it's a huge story. those stock prices and market caps have all been reflecting

that you're at 117. it was 100 before the invasion that has made a huge round trip lower. so a lot of those early indicators there was this serious inflation issue in the system, they're starting to go the fed's way which obviously is important. >> is josh brown spinning positive outlook i'm a news guy >> i'm making the case the things i'm referring to are completely outside the control of the fed, but they're going to help the fed be able to say, look, a lot of progress all of a sudden and the problem, though, is that the plural of anecdote is not data so i'm giving you a lot of specific examples of a lot of early inflation items now getting back to a place where, hey, look a lot of that is coming out of the system the thing you're going to have

to really contend with, though, is balances and bank accounts are still very high and activity is ferocious in travel, in hospitality. it just is not backing down the services side. it could take a really long time for that to happen >> exactly so if that's the case and maybe the evidence is in josh's camp that it's going to take a lot longer for thing said to potentially get bad in the economy than maybe we first thought. so as an investor if your runway is a little bit longer than you expected, shan, what am i supposed to do if i think that i could have a year, i don't know, 8, 12 months minimum before we start seeing all of this start to show up in earnings >>. >> yeah, i disagree with that thesis that we're going to be waiting that long. i think from an investment perspective if you look at the earnings season this quarter and you look at some of the guidance for the fourth quarter, i agree

we haven't seen the full pain of the rate hikes this year however, what we have seen are management teams able to execute in an environment to josh's point we saw estimates come down significantly and we were anticipating there'd be disappointments lower to those what are the potential drivers in a slow growth environment areas like health care jim talks about a lot about manufacturing, the reshoring, the additional productivity enhancements we're going to need you need to think about it in terms of if the expectations are slow or negative growth in 2023, 2024 from an economic perspective. i don't think we're going to see another year where we're down 20% next year, scott i think you're looking at a combination of valuation and ability to grow both top and bottom line and maybe perhaps we start to see some differentiation amongst some of these companies who have managed to execute in a time where i've been told companies don't know how to execute in a reflationary

environment. i think there's some out there >> i think things are still pretty good, by and large they're pretty good. even in the philly feds and all these other things that have been below expectations, it's not like a horrific scenario is being painted in the economy so maybe there is a longer runway until things potentially go sideways depending on what happens with inflation and what the fed ultimately has to do >> it is true that people remain employed it is true they're getting wages. we've had relatively strong job growth as we go through this >> guidance isn't horrific it's not terrible. >> the worst part right now are consumers's attitudes when it comes to inflation they're concerned about recession. >> why shouldn't they? they're mad, okay, but they're

still spending because they have no choice. >> the concern right now is what happened to the savings and whether or not they choose to use the time of the christmas season to rebuild their savings rather than spending >> it doesn't show up at the cash register. it shows up at the polls >> it shows up at the polls but can also show up at the cash register >> but right now it's not. >> i wanted to add one thing to josh brown's potential good signs out there, which is yesterday's beige book had this idea there were signs supply reductions were easing and i bring that up, scott, because you may not remember but back in 2021 you may not have been on the desk but they came out and made a huge deal we were counting the number of times they mentioned to buy the services now the way josh was saying it, early days, early signs of things clearing. >> green suits

>> i hate that -- look, josh has been a beacon in the fog here. he's always kept focused on this if he's ready to think about a turn i would maybe think -- josh, you have always been like forget all this nonsense over here, this is what's going on. and i like the way you've been like we're not clicking our heels and going back to kansas and the way things were. you've been steady on that but if there's now a possibility some of these things are beginning to clear, then maybe the labenthal idea, which is a crazy idea, you do two more 75s, which will bring you to four and change, if they could stop and hold there for a bit instead of going further because one of the things we're discounting -- there's two things we're discounting, the actual rate and the probability of a mistake the both of those things you have to factor into your investment thesis here >> but remember a few weeks ago you were thinking you wanted them to or thought they might do 100 and then sit and take a look

around i remember the conversation we had and now you're talking 150, so that's where the goal post has moved to in the last few weeks. josh >> we are a world awash in debt, and so when i talk about we don't know the ramifications -- look, you've got now home prices -- home sales down 23% in a year it's an incredible decline and outside of the opening months of the pandemic and let's say 2009 there's really almost nothing like it. and the only thing keeping that from really becoming a catastrophe is there's just no inventory out there, and you've got just this demographic tailwind where there are going to be buyers, but, you know, sellers don't want to go anywhere they don't want a new mortgage at much worse rates, and there just aren't enough places to go. that's a market where we have

basically frozen it. we don't know yet the ramifications of having done that go back to the hiking cycle in the '90s which wasn't that extreme. in 1995 when they began in earnest the pause the then they started hiking again like you dchbt know that a couple years later in 1998 you were going to have a global financial crisis because of dollar denominated debt and currencies around the world. so, like, we could have a scenario where we don't get a huge drop in unemployment in the united states, but we still get financial market crises, rolling crises, rolling panics i'm not predicting it we're saying 75 basis points november, 75 in december and then we stop and look around. the die might already be cast. there are potential for crises that could be in motion already that we're not seeing or we're not thinking about because of how rapidly -- understand something. a year ago at this time you could draw a picture of the

kangaroo, up load it to the internet and sell it for $60 $600,000 i'm not even joking around that's a thing -- and now you look at companies reported earnings go look at blackstone's earnings go look at the marks they're putting on their portfolio they're saying like private credit firms -- go look what they're saying is the quote-unquote performance of these things that don't trade in the public -- i don't believe any of that. i think things are going to come to a head in '23 because we just don't know what all these hikes this year are going to mean for so many of the funding sources in the real economy. and i don't think you need to see blow ups or fireworks. i just think it's too earl early to say the fed might pause and look around. they might see a lot of things they didn't expect and that's the unintended consequences trying to normalize policy.

we're going to take a quick break but before we do parker also says so he doesn't think they're going to get to target by the end of '24. we're still '22. s&ps just dipped negative by a smidge you do have the dow hanging on by a 100 point gain. 'rba in just two minutes ing eas. with its customizable options chain, easy-to-use tools, and paper trading to help sharpen your skills, you can stay on top of the market from wherever you are. power e*trade's easy-to-use tools make complex trading less complicated. custom scans help you find new trading opportunities. while an earnings tool helps you plan your trades and stay on top of the market.

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all right, we do have a number of earnings movers to discuss today. they beat, they raised guidance. do tell your thoughts, please. >> well, everyone hates this stock, scott, so was happy to see a nice delivery on the earnings side. one of the things we've really looked for is this idea around executing on the business, right sizing the different components and the reemphasis on a hybrid environment. i think the results here are really showing that ibm is executing on that. if you also look at from a consultant perspective, their consulting business they tend to get higher utilization while that tends to come under focus and potentially be cut during periods we're seeing a slowing economic environment, the importance of productivity

enhancement we think will continue to support yutilizatio. will this migration go straight from on site to the cloud without stopping in hybrid that's always been the threat, but i think these results show there are plenty of companies going to be operating in this hybrid infrastructure environment for some time to come >> appreciate that union pacific is yours, too. you know what, danaher is, too you want to give me ten seconds on each, please? >> yeah, danaher, there's going to be a bit of comparison struggles over the next couple of quarters. there was some stocking inventory illness related. there's been a ton of acquisition consolidation in this space and danaher is well-positioned here union pacific they're challenge

continues to be being able to hire enough conductors and engineers. they are going to continue to struggle with that over the next couple of quarters and i think it could limit them in terms of capacity >> kinder morgan, jimmy, profit jumped 15% kinder is down 4%. what's up with that? >> they had a slight miss. you get it selling on a slight miss and the stock will pop back up remember this is a dividend yield around 6%. that dividend yield likely going higher in the years to come on not just natural gas but the flows. don't like the little miss here. there's always a bit of trading income and losses that go on and that's really what this came from long-term prognosis here is very good >> profits plunging on weak copper prices. >> this is a highly cyclical

stock and i've own this for a really long time, scott, since it was in the single digits frankly. catalyst here for freeport would be a pick up in production in china next year, but we're going to have to wait for that to be really a near-term catalyst for xcx. >> alaska air, jimmy >> united so good, american a week or so ago maybe you're in the wrong one? >> i thought that, too but all year to date they're all down roughly the same. the issue here and the reason it's down is because no matter which airline, how good the results are people are continuing to say recession is right around the corner and in a recession you don't own airlines to your point, scott, this is the one airline you would want to own because it has $3.2 billion of cash against $2.2 billion of debt.

if we do go into recession obviously that's not my call that's the strong balance sheet. >> coming up next a new investor letter we've got it we'll break it down next more than 10% of women in leadership roles quit their jobs in 2021, the highest rate in at least five years according fooa report from leeman and mackenzie. the study found that for every 100 men promoted out of entry level positions only 87 women are promoted, and 82 women of color. the so-called brok renung on the corporate ladder that's your esg fast fact of the day. our clients come to us with complicated situations that occur in their lives. for them it's the biggest milestone, the biggest accomplishment, the sale of a business, or an important event for their family. for them, it's the first and only time. we have seen this literally thousands of times,

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solving today's challenges while creating future opportunities. it takes balance. cla - cpas, consultants, and wealth advisors. we'll get you there. all right, we're back. just going through a new letter here dated october 19th from green light.

david einhorn is commenting on the market they're having a great year and obviously well beating the market this is what he says as long as as official policy is to make the stock market go down so people are less wealthy so they buy fewer things all while doing nothing about fiscal policy to that end we have reduced our long end exposure substantially this year. i'll give you the first crack on that >> i'd like to know what he's referring to by fiscal policy. is it the inflation reduction act? is it debt relief? i really don't know. what i feel is fiscal policy is not the problem. supply chain disruptionps and particularly the war in ukraine is the problem, which leads to the question how the heck can the fed solve that i don't think it can >> i think he's obviously referring to excessive spending

on the fiscal side i think it's fair to assume that but nonetheless, right, the spirit of this is don't fight the fed. >> it is don't fight the fed it is don't fight the fed. and you know what? going back to what i said if this market will rally when the fed's done that's the question when is the fed done >> not anytime soon. >> i take comfort from what james bullard said on saturday or sunday. he has been thought leadership within the fed >> so, josh, you want to weigh in on this by the way, he says other than twitter which they did purchase in the third quarter, you know, betting that musk was going to have to eventually pay full price, that was a great bet by them we expect one way or another the deal will closeout at the

orig originally agreed upon price they believe we're still in that bear market. >> i think the most interesting thing about the letter is that, you know, what they're really doing is doubling down on their belief that they're going to be mispricings and that, you know, a lot of the return is going to come from the type of market environment that you're in so calling it a bear market is important. i know earlier this year there was a lot of debate about the nomenclature why does it matter if it's up -- if it's off 20%. it does matter because as you can see from the success green light has had this year, that dictates the way you treat, for example, dips in the market. are they buyable rallies in the market. are they worthy of taking profits or betting they'll continue forward so it sounds like they're willing to bet the current environment will continue. i think the reason why, though, this letter is so important just for the investment community overall is because green light

is an example of a firm that is very comfortable not being a part of these bull market rallies or trying to outpace them, not trying to be another tiger club or tiger global they stick to their knitting and in environments like this it reminds an investor who maybe has 5 or 10% of their money in hedge funds, why even bother with hedge funds here you have a fund that's willing to go very far outside of what everyone else is doing, make the out lier bet and profit when it pays off >> he's open and honest with his investors pointing out over the last decade, quote, we have signific significantly underperformed there's a bunch more to go that said he points out the significant winners that they have had atlas air worldwide, consul energy, euro dollar derivatives,

they were short. green brick partners, housing hedge as well and of course the twitter investment significant ludsers gold and then two undisclosed shorts, and i have no insight into what those are. shan, you want to take a stab at this, too? >> yeah, i mean i think this is consistent with what i was talking about earlier, scott the reason this fund and many funds underperform is we're essentially in a beta driven environment particularly in growth sectors coming in over the last few years being able to actually look at companies and determine most importantly where to short and be able to take some of these macroeconomic trends and translate them into trades, that is really what hedge funds historically were able to do, but not in a low interest rate liquidity field market we had in 17, 18, 19 >> let's get to headlines now. >> here's your cnbc news update at this hour liz truss is out at u.k. prime

minister after announcing hthis morning. truss said that she will remain in office until a successor is chosen she did not outlast the lettuce head this justice department is lobbying congress for what it says is critical funding for the january 6th investigation. the doj has called the probe its most wide ranging in history justice department officials say failure to get extra funds will have a, quote, detrimental impact on the ability of the united states's offices across the country to fund fufture prosecutions the 3-mile causeway was badly damaged by the category 4 hurricane and cut off the island with more than 6,000 people. officials say crews worked around the clock to make the

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they say q3 sales reaccelerated modestly from the june pull back demonstrating surprising resilience defensive winners they like. mcdonald's, wendy's, qsr along with a couple others top names have the potential to outperform starbucks best idea is starbucks, mcdonald's and cisco you own shake and dutch. >> these are much smaller. the names i own are a couple million dollars in market cap. when i'm in space what i'm really looking for is not who's going to have the best operating margins next month i'm looking for chains that can go from a few hundred store tuesday a thousand or 3 or #,000. those are the types of stories that get me excited. i've seen a lot throughout my

career work out well i think shack and bros have perfect configuration of consumers who like the product, great employees, great base. >> you talked about dominos the other day, that it's come down so much that it's way too cheap fundamentally. that's what you said you're thinking about it as a potential hedge. have you thought more about it >> well, i think this is a stop that they completely threw out with all these quote-unquote stay at home stocks. and to some extent that was warranted. obviously delivery pizza went through the roof during the lockdowns i was half smirking saying that if you think we're going to have another battle with covid this fall or winter, this would be the type of stock that could catch fire i do believe that to be the case put that aside domino's pizza's

evaluation has come down way too much it's not a stay at home stock in real life. i don't own it yet it's on my radar the technicals still look terrible i want to see some sign the sellers are done, but i could end up owning it at some point later this year. >> the consumer is fabulous. why don't you own any restaurant stocks if you think the consumer is so great? >> the lack of a catalyst is really -- >> lack of a cat last? what catalyst do you need other than -- >> people are hungry >> people are hungry and they don't got money. what's the catalyst for travel tell me why don't you own a restaurant stock -- >> because there's incremental demand for any of these stocks oh, yeah, take a look at starbucks. what's the catalyst, china i can't get excited, scott i'm trying

i'm getting excited about the conversation but not excited about the stock. i just don't see it. i've got to love everything? >> no, but part of your whole entire thesis is how great the consumer is. and this is a spot you have nothing in i'm curious as to why. >> i don't think a thesis about a soft landing means people are going to eat more big macs that's not the connection for me >> coming up mike santoli has his midday word. we're right back ♪ ♪ we all need a rock we can rely on. to be strong. to overcome anything. ♪ ♪ to be... unstoppable. that's why the world's largest companies and over 30 million people rely on prudential's retirement and workplace benefits. who's your rock?

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senior markets commentator mike santoli joins us now for his midday word. hawkish harker, that's what we'll call him because he seemed to today so far? >> no doubt about it, that was the timing that's when bond yields perked up and that's been a very familiar dynamic it was interesting we got a little bit of a lift in the morning and the short end of the treasury curve softened up in yield. it seems a bit of a stretch to say that that was somehow going to set the scene for a fed pause anytime soon and we talked about it monday and tuesday, scott we were free of fed speak. we had this little rebound rally. the market was oversold. we know the inputs to what could make this a little more of a decent recovery, seasonal sentiment. earnings seem to be okay but that was the big one out there, that the fed wants to reiterate its stance

we know they need to see inflation come down, but they're just reminding us, you know, at any turn, that they could find >> i'll see you in a few hours that's mike santoli with his midday word. check out this mystery chart the sector is on pace for its best week in some two years, and every day of the committee tayod is in that space maybe you should be, too we'll hear from them, next is the planning effect. this is how it feels to have a dedicated fidelity advisor looking at your full financial picture. this is what it's like to have a comprehensive wealth plan with tax-smart investing strategies designed to help you keep more of what you earn. and set aside more for things like healthcare, or whatever comes down the road. this is "the planning effect" from fidelity. ♪ icy hot pro. ♪ ice works fast... to freeze your pain and your doubt. ♪ heat makes it last.

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the defense etf is up 7% this week alone.

it's on pace for its best week since may. everybody owns a piece shan, you have l3 harris tell me more >> yeah, we've owned this stock for a while. we talked about it last week, actually, on the show, as one of my final trades. importantly, and unfortunately, we are seeing increased defense spending outside of the united states so while i'm concerned about international exposure for other companies in my portfolio, the fact that l3 harris has both an innovation advantage as well as significant international contracting in place, makes it a name that i can see continual growth in over the next couple of years >> josh, you own the ita and it's a reasonably recent move. we're talking, what welcome a couple of months >> i don't remember, but, yeah, look, lockheed had an awesome ye earnings and that's a really big waiting year this has been one of the most resilient parts of the market this year, and i think these stocks can hold up, even if we

get worse news out of eastern europe, worse news in terms of the russia/ukraine conflict. these are the kind of stocks that tend to do better in that environment. there's both a strategic and technical reason to want to stay here >> raytheon, jimmy boeing, too, but raytheon? >> yeah, it's in the key spaces you want to be in. missiles, intelligence, surveillance unfortunately, a lot of munitions are being spent, and we all hate it, but those munitions will have to be replaced, peri oy.od we have final trades coming up next

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all right. 4:00 eastern that is overtime is the worst over for snap we'll find out, because their earnings are in the o.t. the first mover disadvantage, really, it's been in the advertising tech space oftentimes, snap has been hammered, certainly in most recent quarters. some are suggesting that the worst is behind it and we're going to find out when they put pen to paper in o.t i'll see all of you then with chris toomey,morgan stanley private wealth, chris learner, and brendan as well. why don't you give me a final trade? >> we're going to do oracle today. growing its -- expanding its business for small and medium-sized enterprises cloud is about 30% of revenue now and it's an important growing part from a margin perspective, as well as a revenue perspective.

they also have cerner. they have some touch into the health care space. that is going to be one of those longer-term trends that we'll be watching >> josh, give me a final, but also a thought on snap, we have a little bit of time not too much, but i would love your thought here. >> snap is the easiest budget for advertisers to cut of all of the big platforms. i don't want anything to do with it, into a slowdown. final trade is ieo this is a sector where everything is going well you've got 48 out of 50 stocks that make up this index etf. these are energy producers, above their 50-day moving average. 47 out of 50, above the 200-day moving average the median p\e ratio in ieo right now is 9 median cash to free cash flow is 7. these are cheap stocks, all of the geopolitical stuff is in their favor. i think they can continue to

work >> thank you for that. farmer jim, finally to you >> scott, if i can get my mind off of having a big mac for lunch, my final trade is boeing. i know where it's been, but you've got to respect the fact that it's up 15% over the last few weeks. ask yourself why there's a lot going on there >> harker, he was hawkish, stocks are now mixed i'll see you in the o.t., "the exchange" is now thank you very much, scott welcome to "the exchange," everyone i'm dominic chu in for kelly evans today. here's what's ahead. bond yields are rising, again. the ten-year back to 2008 levels, the markets not minding it so much right now, but can rates and stocks keep rising together and for the second time in two months, the uk is looking for a new prime minister this isn't just an overseas political story, though. it was the economy that cost liz truss her premiership and the policies of the next prime minister could h