tv Making Money With Charles Payne FOX Business July 28, 2022 2:00pm-3:00pm EDT
a battle of semantics here but she does not buy her boss does not buy the two back-to-back negative quarter thing as classic definition of a recession. up to the national bureau of economic research, dozen are or so economists that weigh on what a recession started and ended. they haven't decided that stocks racing to the high of the day. they're not worried so far. let's go to charles payne. charles: in weird way market is celebrating recession, neil, during the show. it has been remarkable. can't wait to talk about all of it. neil: all right, bud. charles: good afternoon, i'm charles payne, this is "making money." i know this is not new to the vast majority of americans. for the record, folks, we are in recession. the market likes news. it means the fed might stop hiking, could soon start cutting. main street hates the news. be honest the pain will only get
worse. how bad, it will be the man of the hour jay powell. maybe he can invoke actions, maybe not actions to go along with the swagger of paul volcker. many say he is not up to the challenge. i'm asking she will lay bear in a moment. he -- she la bear. the white house acting for more spending. republicans also. larry kudlow is here. apple we'll handicap not just the results but reaction to the stock. why joe biden should listen to candidate bill clinton on how he felt americans pain when he became president. that and so much more on making morning -- making money. >> initial gdp release down .9 of a percent, making it
back-to-back negative quarters. we did not want to see this. we actually got it. the report though to me, it is worrisome, the source of weakness. personal consumption. 1.0. this was the lowest since fourth quarter of 2019. this is a two-year low. people aren't spending money. that is pretty bad. particularly on durable goods. that was down 4.4%. domestic investment also very, very scared. this is a huge, huge red flag, down 13 1/2%. it was led by 14% plunge in residential investment. now the news comes on the heels of the fomc hiking rates yesterday 75 basis points. the question and answer period we saw jay powell, he tried his best, really to invoke the commitment to whipping inflation. the market took its cue from potential markers of inflation, more than necessarily the tone of jay powell. as the art of interpreting the federal reserve chairman has come a long way, folks from the days, you used to watch the
greenspan briefcase. someone who remembers that joins me now. fdic former chair, volcker alliance founding director, sheila bair. author of financial literacy books, chart come and bill the -- thanks for coming on the show. start with the gdpreport. just your thoughts, the true health and direction of this economy right now. >> yeah. it is slowing significantly. i think, i've been wanting to -- methodology of this approach is what paul volcker did. they're being too aggressive on the short-term interest rate hikes and not focusing as much as they should on long-term rates. i think we're slowing. that is good in a way because we want prices to come down but are we doing this too fast. are we doing it in the right way? charles: right. >> i think it is reducing the
changes of a soft landing given the current -- fed is employing. charles: i want to go through that you tweeted a after the decision yesterday you admired their courages not necessarily the methods. >> into. charles: you were impressed by powell, he was able to make this unanimous. a lot of people thought that was pretty intriguing. i want to start with the first part of this, when you talk about their methods, what exactly are they getting wrong right now? >> yeah. so, they're not really focusing on money supply. they are making halfhearted efforts to shrink their trillion dollars, nearly nine trillion dollars portfolio. they're focusing all-in on manipulating short-term interest rates. getting short term rates up. that sin verting the yield curve. long term are so low. inverted yield curve is strong harbinger of recession. creating a credit squeeze, on the short size they're basically paying institutions not to lend
below the policy date. that is how they do this, big banks, other institutions a lot of money not to lend basis. on long side, long-term rates low, why rend long and get that low rate when you're getting paid to keep your money tied up in short-term rates. so i do think that the strategy is one that is accelerating too much of the credit contraction too fast. they should focus on money supply. that is what paul volcker did. he did not micromanage interest rates. he focused on constraining the growth of the money supply. let the markets decide what the cost of capital would be? wouldn't that be refreshing? take some of that excess cash out of the system. let the market figure out what the appropriate interest rate is. that is really are the dynamic that led to the defeat of inflation in the early 1980s. one i wish they would pursue now but they're not. they're all-in on micromanaging short-term rates. charles: is part of that being
all-in this one method political? in other words we talk about paul volcker but since then no one's really had the kind of will, it appears in that job to be able to do that. is it political will to even be able to go out to do that, be unscathed? >> yeah. i had to give them a nod. another 75 basis points was politically courageous. i don't think it was the right move but certainly it showed independence and determination, at least with this rate hike to fight inflation but during his press conference he really signaled you know, they were going to be easing up and that this may be the last of it. that scared me because the worst thing the fed could do right now which is also something that paul volcker repudiated stop-go policies. charles: right. >> raise the rates when the economy is still pretty strong. go through recession or unemployment starts increasing lower the rates again. there is this constant whipsaw.
you never chase inflation out of the system and that is why we had, great inflation over 15 years because that is exactly what the fed did and by stopping that, that paul volcker beat inflation. he had to hold money tight for two recessions. that is the kind of bravery, strategy we need from jay powell. charles: you pointed out in that the pf, everyone told me how freight, i hadn't seen it since last night. invite everyone to check it out, your op-ed in "the ft." i want to get back to what you said, the nuance of yesterday, there was something really intriguing about that. powell harped on the necessity of pain which i think is interesting because the concept of a quote, necessary pain is well-known, even highly regarded in spheres of religion or spirituality. considered virtuous, whether you want to built your mentality or your physique but when it comes to the concept of necessary pain for the economy, a lot of folks just don't get it. to your point, powell seemed
apologetic. that his job will hurt certain racial demographics, women, overall labor participation. they won't get back to where they were in february 2020. in fact he is going to hammer them even more. so i guess the street saw that as the first opportunity he gets a chance he will turn dovish. is that what you felt as well? >> yeah. so i think he said, you know, reading between the lines recession is becoming increasingly likely. then winked and nod at the moments when that happens they will lower rates again, which is why you have this perverse outcome. we've been living through this for since the great financial crisis where we've been driving our economy with monetary policy. wall street rallies when main street gets into trouble. that is exactly what you know was signaling recession. lower interest rates, juice the stock valuations. that is what we're been living with since the great financial crisis. sounds like that is what we're going back to again. that is what he was signaling.
that is why you saw the stock market rally. i don't want a recession. if you have to pick, hopefully we don't have to pick, better to defeat inflation decisively and than to risk a recession where at least we have safety net programs to protect people who lose their jobs. inflation hits everybody. very difficult to protect people from inflation that hits everybody. you have a job. don't have a job. struggling paycheck to paycheck. your inflation is really hurting you. so we need to, you know, we may have to choose. charles: yeah. >> but you know, i think this longer term, wouldn't it be nice if this represents a paradigm shift where we're going to get away from the fed and the monetary policy driving our economy because you have these perverse out comes where stock markets do very well when we get into recession. charles: it is so skewed. i think business cycle, organic growth, things that made america great, talk again about stop and go?
pendulum swings wildly back and forth. rate hikes followed by rate cuts. i'm out of time. sheila, i appreciate you coming on your expertise. >> thanks very much. charles: market opened slightly higher. we took a pretty good drubbing. now we're surging back. when we were down it wasn't necessarily a surprise. the fact of the matter that the days s&p 500 rallies 2% or more on fed decision day it is typically down more than 1%. that has changed today. ii want to bring in slatestone chief market strategist kenny polcari. let's go back to yesterday first. the fed, jay powell, you heard my conversation with sheila bair, absolutely amazing. powell sort of to me gave me the nod, as soon as he can, as soon as he gets the green light he will shift back to a dovish position, that is what the market responded to. >> the algos herd that pivot in his conversation. that is when you saw stocks in the market go crazy.
the algos, they went into high gear, sell side canceled. void of prices, buyers came after them and sent the market. you saw the nasdaq up better than almost 4 1/2% yesterday which does make sense because it has gotten so beaten up, any talk of a pivot is going to cause money to go go into that sector which is exactly what we saw. charles: that whole neutral rate thing caught a lot of people off-guard a pleasant way if you're in the market. what about today, the gdp number, your thoughts? >> listen, i'm with you. i think it suggests that the tells us we're in recession. i don't care what they say we're not. trying to change the definition, change the narrative, i think we are. the thing surprised me the atlanta fed is usually spot on. i think they rised yesterday 1.3%. came down to .9. certainly well off the consensus economists were at plus 3%. that is just continues to suggest we're going into slower
time. we know that, we can feel it. i think it will get worse before it gets better. charles: it is really interesting to me, because listen, i think the market already saw this, kenny. you know, really amazing, we've been doing this for a long time and we always say in general the market knows, the market looks six months out, a year out. we should never second guess the market, market crashing first half of the year, in my mind it was seeing recession. what i'm concerned about, what people need to understand, we're going to hit a bottom a stock market bottom long before recession is over. i want you to take a look at this. this goes back to 1929. this is over 300 days, we, market rallied before the recession was called. it has happened almost every single time. this is the dilemma. anyone out there waiting for all clear is going to miss some big moves. so how do you make that adjustment? how do you start to position yourself for the end of recession, even when we're in the midst of it?
>> you don't make that decision by throwing everything out the window and selling everything going into cash, especially after we've had the move that we had over the last six months with the market down. over the long term, you're better off to be invested. you need to, when times like this, okay you might overweight the portfolio again, we've had this conversation. maybe more defensively, maybe more utilities stuff boring and beautiful, pays dividends, stuff not sexy all that, yet it gets you through the difficult times. charles: kenny, when do you start shifting out of some of that defensive stuff into other high flying names, you look around, all of sudden they're up 30%? we don't want to catch every nickel. some of it you want to catch, right? >> but that also goes to how you search your portfolio in the first place. i haven't gotten rid of high growth names. i haven't added them last six months i start to own them. market bottom out. looks like move higher. i'm participating. it will give me a chance to also
start to add. i haven't completely taken myself out of those names. so do i suggest, go in, go out. makes no sense. you have to stay focused. charles: i got 30 seconds. i assume you're sitting on certain amount of cash be what are you looking for now to start tilting that a little more, the portfolio? >> well i so i am starting, look, you know me, playing it defensive for six or seven months. i'm starting to look at megacap tech. names i have already own. but names are going to start to raise their heads. what are they? usual ones. remember where i am in life, risk scale, risk profile. therefore for me it is apple, it's amazon, it's microsoft, it's ibm in the tech space. i'm sticking my nose around some the industrials. honwell did a good job. a name i like to look at. a name i like to stick my toe in. charles: you mentioned honeywell, folks, this is the best time, get in the market to
take notes on earnings. they're telling you everything you need to know. put together a list. pay attention, particularly this week the biggest week for earnings including honeywell. thank you very much, my friend. always appreciate you. >> see ya. charles: shocker in the senate. first republicans get involved and help pass the chips act. now senator manchin has done a flip-flop on raising taxes and ev. i think the gop got played. larry kudlow i know will sound off right after this. ♪ this is koli. my foster fail (laughs). when i first started fostering koli i had been giving him kibble. it never looked or felt like real food.
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charles: so the white house continued campaign saying it is not a recession which should not be confused with actually fighting recession. this is really such an odd debate which i have never seen before to this degree. usually egg heads, maybe at an economic conference somewhere arguing about the exact timing of a recession. listen, the goal was to have everyone second-guess what they're actually living. i got to be honest, that is a
hell after trick to try to play on the american public. i want to bring in the host of "kudlow," larry kudlow. even conan o'brien got in on the act. check out this tweet. the white house now says it is only a recession if a salamander wearing a top hat. maybe this will stand in. golly what you do make of this full-court press to tell us it is is not a recession? >> what i make of it conan o'brien is smarter than the council of economic advisors. of course it is a recession. this is just a semantic game. by the way there is a whole bunch, we'll have clips on our show, friend jared bernstein in 2019 saying two straight quarters. brian deece. it is a silly debate. it was a lousy report. no consumer spending. housing is crashing as you may know. business investment is negative. we have worse, the july numbers
are coming in worse. so this is going to be a recession. we have not seen the worse of the recession, frankly the fed's tightening moves are not yet reflected. first half recession was about hijacking inflation and declining real wages, declining real retail sales. the worse worst of this is still in front of that. i regret to say that i don't like recessions. you don't either. reality is it things will get worse before it gets better. >> why i think this is ridiculous campaign to trot everyone out there last 24 hours. it will get worse. we saw new home sales implode, by the price of a new home go from 590,000 to 460,000. that is scary stuff. >> pending home sales? charles: down 8.6% month over month. things are not slowing down. they're crashing. i have a feeling we'll have a jobs report real soon the folks at cnbc will lose their mind, so
upset why it was a negative number [laughter]. look at household survey. don't look at it last month it was down 315,000, the household survey. >> initial claims are rising almost on a weekly basis. that is leading. charles: that is the leading indicator for the rest of the jobs market. >> you have to ask yourself, how stupid is it, knowing what the economy looks like in its slump to raise taxes by $740 billion? how stupid is that? including to remove depreciation as a legitimate writeoff which will kill business investment, kill business investment. krysten sinema may vote against the bill because she has always been a staunch defender of 100% expensing which is so vital. on other hand to say anti-inflation because the definite will come down because they will only spend $440 billion on this particular bill. wait a minute, charles, stop the presses. we forgot about the chips plus bill which is 284 billion which
wipes out the deficit reduction. stop the presses again, joe manchin is getting a doubling of the coal tax. what did he get? charles: what did he get for this? >> the thing is in washington, as you know you can't be bought but you can be rented. rental prices are very high here in new york but the rental price in washington must be very cheap, i don't know what joe got out of this bill at all. so i don't understand any of this. bad economics. it is bad politics. they're not fooling anybody. voters are going to vote against him and cavalry is coming. charles: you know, i don't know if you remember this, day, but september 4th, 195was called e-day. introduction of the edsel. lots of fanfare. they had a tv show. called the he had dell the
edsel. it was a flop. we'll pay college educated kids to get one, we'll supplement their income. eventually we'll force people to take these vehicles on. because they're not going to produce -- >> pay people to buy he had buy. charles: they did not. why doesn't the public have a fan to say no thank you, being rammed down their throats? this is central part of everything they're doing. this is creating economic havoc on american lives? >> two things, i was around for the edsel. 195. i was rather old at that point. number two, the public will have a chance in november. that is the way this will work. these moves by the democrats, schumer, basically lied to mitch mcconnell about this. charles: sure but mcconnell got played. >> he got badly played. i'm sure he is furious about
that. that is schumer tactics. public will revolt against that. seriously, no one in their right mind the policy to fight recession is a gigantic tax hike. no one will believe that. it goes deeper than that. this is all about the biden's obsession with radical climate change. charles: that is what i'm saying, centered around something that is killing the american, the heart of the economic heart of the america. >> they will do anything to get it. anything to get it. charles: larry, thank you so much. >> my pleasure. anytime, charles. charles: i don't have to remind you, you already do. for those who don't know, 4:00 p.m. eastern right here on "kudlow." it's a killer show. coming up lots of cracks in the armor of the economy. it means adjustments for the portfolio. bitcoin on the cusp of getting out of the crypto winter. i have j.c. parets on chart school. what will it take to break out? from there it is off to the
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♪. charles: all right, folks, don't look now but this market is looking really intriguing with the charts. let's start with the s&p 500. we filled a large gap right here. right there, and then we pulled back, which is what happens when you fill these gaps. we're reversing, working through major resistance points. i think we could be off to the races. i want to bring in the expert. all-star charts founder president, j.c. parets. jc, looks like the real hurdle could be 4200. do you feel better about this market based on some of the things you're seeing in the charts? >> there is no question. charles, remember we talk about it all the time, it's a market of stocks. we see 20-day high list expand,
goes into the 3-month high list expanding, when you start to see that is the beginning of breadth improvement. you will not see this on the new 52-week highs list overnight. it will be a process. that process has begun. we're seeing that. i think you nailed it, that 41, 4200 on the s&p, that's it. if we're above that, you can't be short. you cannot be short if we're above those levels. charles: want to look at small caps from the russell 2000, we've got a beautiful trend line. got above the trend line. we sort of consolidated here. i don't know, looks like we got a lot of room to the upside. obviously hammered pretty good. acts good on the upside. 193, 202, 203, what are you seeing? >> no question. looking 170 from the downside. charles, it will do this, it will go to the moon, everyone will make money, great, where are which wrong? what is the risk? what i love about small caps is that it's the 2018 highs, 2020
precovid highs. we bounced from the levels. that former resistance turned into support. as long as we're above the levels, all systems go. let's go! charles: talk about the downside, the 10-year yield beginning to collapse a little bit. one of my favorite chart formations is the head and shoulders. i'm not sure this qualifies. we have a shoulder, head, shoulder. if it is normally a bearish formation. we are coming down, gap big down here. the 10-year yield, where do you see it going from here, based just on the chart work? >> i hate to keep giving you all these compliments, charles, keep agreeing with you, i think you're dead on. i think you're dead on. listen the bottom line is this, the bond market got oaf to like the worst start ever. go back look at the data, the worst start ever. when the bond market is crashing we're talking about 120 trillion-dollar market literally collapsing. that will work its way into other asset classes. you saw the volatility in stocks.
worst start to a year in over 50 years something like that, right? charles: right. >> all the stock market needs is the bond market not to be crashing. look what happened over the last few weeks, last month. rates haven't been ripping every day. look how stocks have done. give you one more. same thing with the dollar. as long as the dollar is not ripping that is all stocks need. just some relaxation in the dollar and bonds. >> i got 30 seconds, jc, 30 seconds, got to get the bitcoin thing in there because we built support. we might have built some resistance. it is acting amazing. looks like it loves what we're hearing from the fed. look to me it could really take off. there is not a lot of resistance up to 29,000. that is a crazy number to talk about but what are you seeing? >> again, charles, nailing it again with the technical analysis. i agree, 29, 30, that is the level. saying about it coin there as a short term trade. i'm with you 100%. charles: you've been on enough with me to learn a few things. i appreciate it. so does the audience.
thanks a lot, jc. folks we love hearing from you, one of my favorite things, comment on the show, guests, what you want to hear, what you want to learn, tweet me @cvpayne. one viewer tweeted me, thank you, my man, watched your special on inflation commend you on having the little guy's back. you're a true prince of the common man. everyday blessings. bless you, brother. thank you as well. that is my main goal. if you missed the town hall, "inflation in america," the hangover edition, it will reair throughout the weekend beginning tomorrow night at 8:00 p.m. up next key components of the gdp report were worse than the headlines. we'll delve into what it means for the economy and more importantly what does it mean for your economic future. ♪
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particularly as we're reading earnings. gerri willis live from the newsroom with more on that. gerri? >> that's right, charles. the biden administration earlier trying to spin the latest economic news but wall street flashing the warning lights for the slowdown of consumer spending on its way. we have today another huge q2 earnings today including colossal names in tech and retail. so far the picture from companies, it just hasn't been rosy. we saw how much walmart slashing their forecast rattled investors. they said that spending habits are changing. less appliances, less electronics, more money spent on necessities. in an example of that, best buy is now forecasting a larger than anticipated decline in annual sales. earlier this morning you might have seen this, comcast corp failed to gain subscriberses to its broadband service for the first time in its history. it is a dicey time for silicon valley. facebook owner meta platform
reporting first ever year-over-year revenue drop. google parent, alphabet and microsoft reported earnings that did not meet wall street expectations. not all companies are seeing weakness. for example, credit card operator mastercard showed strong results on robust consumer spending. as we know rise in credit card debt can be a signal of consumer pain, charles, as folks pull out the plastic to make ends meet. charles. charles: sort of perverse relationship. gerri, thank you very. to further her report today's gdp report, final sales of domestic purchases, taking out inventory tories, taking out the net from that trade was minus 0.4. joining lgim america senior solutions strategy, anthony woodside, epb, macro research founder, eric. eric, let me start with you, for the entire audience, check it
out, to to the twitter page, check your videos out. you talked about the leading economic indicators, 10, 15% of gdp but the most important part because of the way they move around. what do you think of this report? i think actually it is worse than the headlines? >> agree with you there, everyone is focused on the headline which was contraction, if you look under the hood to residential fixed investment it contracted at 14% annualized rate. outside of the covid crash that was the fastest decline we've seen since 2010. the housing sector, even though it only makes up 6% of gdp on average, it's a leading economic indicator. in 2007 edward lehmaner an economist wrote a paper, that was called housing is the business cycle. he meant by that, where the housing sector goes, the rest of the economy goes. the fact we're having a house contraction in the housing sector right now foreshadows we'll have more deceleration ahead. charles: i saw a couple clips
from earlier this year, anthony. housing was one of the things you were worried about as well. >> that is a foremost concern for us. a few things if i point out, if you look at the technicals of the housing market, one of the things people point to, compared to 2007, 2008, the supply of houses is much more smaller. therefore you have technical support while demand remained strong. if you looked at the home sales report yesterday in particular, home sales dropped by 8% month over month, 20% year on year basis. the problem affordability particularly year-to-date has gone so much worse. mortgage rates have almost doubled year-to-date. when you look at house prices they're still pretty strong. so everyday consumers, everyday households are struggling to afford new homes. charles: one of the things you liked about the economy, part of the debate, the recession debate, is the hot labor force. i'm in this camp, i don't know who else is in there. i think we'll get one of these jobs reports real soon that will
be really a disaster. in other words wall street will be caught off-guard, like three or four firms hike the gdp number yesterday. is there a point when we start to worry about this labor force maybe not being as strong as we think. >> that is the big conundrum we're spaced with. if you look at first two quarters of gdp growth, you see contraction. that is where the technical recession debate comes from, but if you look at labor market last three months, the economy is adding just shy 400,000 jobs month-over-month basis. if -- charles: should we add an asterisk to this, because of how many we lost for covid? we're slightly below that february 2020 number. we recovered 99% of the jobs but how many net jobs have we created since covid? >> that is a good point. net jobs since covid are negative territory. even the rate of recovery has been strong, to your point we lost so many jobs during the pandemic we're just trying to restore that.
charles: eric, both you guys, one of the best parts of that yesterday when jay powell said, okay, i prefer pce over cpi. and i thought that was kind of intriguing. pce is little bit less. of course pce is dovish. tomorrow we look for number. street looking for 4.7%. what are you looking for and what do you think the reaction will be from the markets? >> everyone pointed out he likes the pce number because it is a little bit lower. it has less weighting on the gasoline component and less weighting on the shelter component which are two elements keeping the core cpi little bit higher. i'm not focused on any one month in particular. what i try to do to forecast where we're going next couple quarters using leading economic indicators. on that basis i think we're in the vicinity of peak of price pressures specifically on the pce is less weighted. charles: running out of time, peak doesn't mean we come down fast? >> totally. i think we keep peak and come
down but stay above 2%. charles: last time you were going up the quality chain on bonds. are you still doing that? >> we're still going up the quality chain. focusing on companies with resilient cash flow, high quality, management focusing maintaining credit quality fundamentals going forward during a challenging period. charles: thanks to both of you, folks these are two young dynamic guys who will kill it on wall street. i'm honored they came on the show today, thanks a lot. >> thanks, charles. charles: coming up i will give you my takeaway president biden needs to take a page from candidate bill clinton's 1992 playbook. two giants reporting after the bell, amazon and apple. reflection of consumer, reflection of megacap. they might be the answer to whether or not this market breaks out. we'll handicap for you when we come back. ♪
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before golo, i was barely eating but the weight wasn't going anywhere. the secret to losing weight and keeping it off is managing insulin and glucose. golo takes a systematic approach to eating that focuses on optimizing insulin levels. we tackle the cause of weight gain, not just the symptom. when you have good metabolic health, weight loss is easy. i always thought it would be so difficult to lose weight, but with golo, it wasn't. the weight just fell off. i have people come up to me all the time and ask me, "does it really work?" and all i have to say is, "here i am. it works." my advice for everyone is to go with golo. it will release your fat and it will release you. charles: all right, folks, megacap names are mostly higher in july but it has been a long slog for these one unstoppable titans.
the et-f was up to 47 in november. it is barely over nine now. this is one of those three times etfs. it is exaggerated but obviously it has been a very tough ride. two key names post their results after the close. joining me to discuss neuberger research analyst danielle flak. before we get to amazon and apple though, i want thoughts on meta. the stock ironically went up but was a disaster, taking a little bit of a hit today? >> charles, meta is going through a transition. the platform is important to advertisers and users but they really need to do more to appeal to younger users in their teens and their 20s. you have a shift in the industry towards more short form videos. they're making progress with reels but we're watching it closely. they have some ways to go. we prefer google and alphabet, where core search is durable and we think they have a terrific
opportunity with the google cloud plaid form next couple years. charles: we standard this is most shorted on the street, sandwiched between gamestop and coinbase. it has been down a lot, particularly the week after they report. 10 of the last 15 reports the stock has been absolutely hammered. with all of that as the backdrop what are you expecting in terms of what they're going to results might be and reaction to those results? >> charles, i think they're going to be able to meet their guidance and the immediate stock reaction is going to hinge on how the company expects to navigate through the rest of this challenging period and into next year. so we're buyers and i say that because the company investing a agressively. they're going to become even more important to consumers, to businesses with amazon web services and so we think growth will ultimately reaccelerate over the next several months. even with the cost pressures we see a lot of opportunity in
amazon at current levels. charles: dan, is there ever a time they might want to consider spinning off, ironically the consumer part of their business, focus on their web services? >> i think, all of these options have been and will continue to get considered by the company but the way they have been executing in both businesses i do think that they are better together. i think the commerce business has helped, has helped lay the foundation for the amazon web services and the cloud business. they have other opportunities for example in logistics which they're building out. that also benefits from commerce. so there are reasons to keep them together. >> i gotcha. talk about apple. lost a little bit of its luster. what do you expect after the close? same thing, the number itself around how you think the street might react? >> china has been obviously challenging for apple and others. this is a seasonally weak period. i think they achieve expectations. what matters not so much the
immediate outlook in my view which could be a little softer given the macro environment. it is about the upcoming product cycles a new iphone likely launched in september. the wearables category remains attractive one. they're innovateing with macs, ipads. service is healthy. we expect next 12 months reacceleration of the business, visibility on that, that should help the stock. charles: we like apple at current. charles: if we feel conventional shift and the fed next year will begin to cut rates when does that start to help megacap names or has it already helped these sort of megacap growth names? >> i think even were the fed to raise a few more times what is going to matter more for these companies than interest rates which are still relatively low by historical standards is whether they're going to be able to innovate, to invest, to execute on their product cycles. historically what we've seen is that higher rates haven't
necessarily been an impact on companies abilities to innovate and grow so we think select megacap other technology names like nvidia are attractive at current levels even in the face of what is of course a difficult environment, even where were rates to go up a little bit more before they ultimately plateau. charles: you know what i love about you, dan, no equivocation. you give it to us straight. we understand what you're saying. we come away with something. we know what action you're taking that maybe helps inform what actions we want to take. appreciate that very much. thank you so much, my man. >> thank you, charles, appreciate it. charles: up next, i think president biden can learn a thing or two from candidate clinton. my take on that is next. ♪ this thing, it's making me get an ice bath again. what do you mean? these straps are mind-blowing! they collect hundreds of data points like hrv and rem sleep, so you know all you need for recovery. and you are?
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biden touched on the question of recession and started to rattle off a whole bunch of dubious stats including jobs created under his presidency. we still have fewer jobs than we did in february 2020. recovered, jobs, sure. he rolled off investments and semiconductor factories and really weird because moments before that, he bragged he was going to take taxpayer money to get to ev and semiconductors. it's insulting to the public, which is screaming about the
pain from inflation and now recession. consumer confidence, all of the polls are in free fall. now the media is never going to call president biden out on his recession, but this has never been a mainstream media debate before. nobody has debated this. even with the media's help, the president seems to be cold and detached, even arrogant about the plight of every day americans always having college educated kids and child care taxpayer money and that's not the same. president biden needs to revisit the 1992 presidential town hall with three candidates and how the national debt is affecting them. the question is about recession and how it personally impacted them and it was bill clinton's i feel your pain moment. take a listen. >> in my state when people lose their jobs, there's a good chance i'll know them by their names. when a factory closes, i know the people that ran it. when the businesses go bankrupt, i know them.
>> president bide inneeds to acknowledge the pain of the nation and get the staff to do the same thing. be personal about it. you know what, it's happened under your watch, it's going to be a official recession, no matter what. the way we're going right now. forget about it and give us solutions and answers. that's what we need more than excuses. liz claman, you never give us excuses, that's why i love you. >> oh, you haven't been in my house when they say what's for dinner? nothing by accident. charles, we have major breaking news, the dc universe colliding with the cosmos of wall street with the final hour of trading and the house has apparently gotten enough votes on the chips and sciences act to help it pass. this would grant $52 billion to the u.s. microchip industry and right now at least 18 republicans have voted for it. the markets are continuing to move -- actually now it's 22 who have voted for it. it looks like it is
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