kingdom wouldn't make it worse. queen elizabeth ii, now dead at age 96. fox business continues. charles: good afternoon, i'm charles payne and this is "making money." right now, queen elizabeth ii is dead at the age of 96. we will have details as we mourn the world's longest serving monarch. meanwhile the stock market showing moxie after getting spooked by jerome powell's aggressive vow to keep rate hikes until, quote, unquote, the job is done. i got to tell you the bigger question though, why doesn't the market really believe powell and what are the measuring sticks? what does powell need to see

before he declares mission accomplished. i have top market watchers brains, jim paulsen, david bahnsen, kenny polcari, nancy tengler all here to help you with your guidance throughout the hour. jim bianco will have some choice words on that. his surprising research that company guidance is actually moving higher when everyone else says it should be going lower. my take on a tesla that needs gas backup. the awful story what california is doing to its citizens. all that and so much more on "making money". ♪. charles: all right, folk, central banks on the move. the question, where are they going? so this morning the ecb goes jumbo, that is the word they used, hiked the key rates 75 basis points, updated their guidance, economic forecast. that is really interesting so you can see they took the inflation numbers up.

their gdp numbers are holding in there, so the big question is, no recession? they don't see any sort of recession in europe? meanwhile of course jay powell he spoke right after this all happened and of course he stuck to the same script. here's the thing, folks, again though jay powell was tough, if you look what is going on here, same sort of scenario. 75 basis-point hike, then a 50 basis-point hike and then we see a 25 basis-point hike but for 2023, so far wall street doesn't believe jay powell. so here's the thing, there are some folks out there though that do believe and when i say they believe, they believe big time. the institutions, eight billion dollars in puts, one billion in calls. look at this, this goes back 22 years, never, never, have you seen this kind of negative hedging. institutions are in this like it will completely collapse. mean time it is starting to feel like trench warfare, battle of attrition.

to start us off i want to bring in the leuthold group strategist jim paulsen. jim i saw in your current note there could be recess of the june lows but the undertones of this current slide are much healthier than before. explain that. >> when i looked at, charles, was i looked at sort of what are traditionally aggressive investments and how they performed here in the downdraft, this most latest downdraft kind of the fifth one we've had this year in the s&p 500. in every case i looked at things like the s&p high beta index, the s&p lowest quality stocks, the, the microcaps, the small caps overall, the cyclical sectors comprising the s&p and in every instance i found their pullbacks, certainly come down during the drawdown but the pullbacks are so much less than the previous four pull backs that we had, they have held up

remarkably well in the face of this downdraft in a way we didn't see earlier. charles: right. >> i'm wondering if that gives us a sense of maybe we're getting closer to the end of this than we think with some of the most aggressive sectors starting to hold up even in big pullbacks. charles: you acknowledged technology which the bottom fell out for a moment or two. at some point it seems the way the construction of these indices, particularly the s&p are right now, don't they have to lead the way, or at least get in the parade? >> i agree with you on that and i think they're going to. most of this pullback was tech. most of this pullback was tech and some other large cap popular growth names with a big surge in rates. outside of that i'm saying it was not a broad-based aggressive investment sell. i do think it is encouraging and i do think tech has got to see rates, the idea that the fed is going to pause. then i think it will join the party, i really do. if it does, with the other

cyclical and aggressive components already doing better, i think that will be enough to finally take the s&p maybe back up to new highs. but i agree with you, i think tech has to join the party. charles: sounds like that is the perfect one-two punch. meantime last month you introduced you called the offense-defense portfolio. it has been very impressive. we have a minute to go but kind of walk us through the composition. why is this working? >> i monitor an offense to defense relative portfolio. it has pot the stuff you think in it, offense is some of the stuff i just listed and defense would be defensive sectors and s&p low volatility and hedged equity and things and i look at the relative performance n the previous four selloffs in the s&p this year, charles, offense relative to defense did horribly, came down dramatically relative to defense. in this latest rally off the june lows offense beat defense by more than twice as much as it did in either, either of the previous four rallies, and,

during this pullback it is hardly come off at all. in fact for the first time this year broke above its 200-day moving average and it stayed above that average even as we speak right now. historically at least back to 07, that has been a very good sign for the overall tock market. charles: you navigated this very well. bearish at beginning of the year, changed in the nick of time, so far so good. thanks a lot. we appreciate it. >> thanks for having me, charles. charles: all right, folks i want to bring from the bahnsen group managing director david bahnsen. i have to ask you what the heck is going on with crude oil? yesterday it fell through a trap door, david. >> yeah, there has been a lot of volatility around crude, tends to go into the low 80s back up into the 90s last few weeks. interesting doing that with natural gas at very high levels. there is quite a divergence between crude nat-gas, crude is

further going backwardation. the curve itself is pricing something very different. my view there are a couple event driftedden things that can push it way higher. i hope that doesn't happen, if god forbid this administration does go forward with withinan iran deal, let iran put a lot more crude on the market that could put prices up. if that deal gets done it could push it lower. if it falls apart it could go lower. i said it backward. the chinese saudi discussion, people a applauding u.s. backs taking their own hands world oil supply. i'm kicking and screaming we take our own matters in our own hands. other people are following advice and i wish we would follow it ourselves. charles: to that point the uk is doing all things of price caps but on the other end they

announced they would lift a fracking ban. that is a great message to everyone, particularly the davos crowd, tell us we don't knee fracking do this, do that. they can afford it. the fact we need to push back against this notion that fossil fuels are bad for us, shouldn't we? >> well, yes, there are two things talking about fracking. first of all we need these fossil fuels so that people don't freeze to death and people don't starve to death. we need fossil fuels to meet basic human needs whether as you call them davos folks or anybody else. nobody is able to live without the reality of energy and our energy production relies on it. when we talk about transporting these things around, the environmental movement is really lost it because there is a safer way to do so and they oppose that too. charles: yeah. >> the building much new pipelines. they would rather put it on trucks and rail then use

pipeline to transport our energy needs. there is a lot of things wrong with contemporary energy policy. charles: before i let you go, david, i have to ask you about dividend stocks. right now, this is really amazing, about 10%, only 10% of stocks in the s&p 500 have a higher yield than the 10-year treasury yield. when you take into account risk and things like that, does it even make sense to seek yield now from equities? >> well it makes sense to seek yield from those 10% of equities that are higher than a 10-year. charles: [laughter] >> i will add to it. i don't even want to own the 10% that is paying more than the 10-year. you have to have a growing dividend because that shows you confidence in a company's future projection. we don't look backwards. you look forwards. and you know, i love jim, your prior guest. he is really smart. has a lot of great market commentary but i don't agree big tech has to lead the next rain

forward. that is not the historical precedent that what led the past decade leads in the next decade. it never has happened. charles: right. >> i don't think big tech will be savior of this market. i think good value dividend growth will be and there are high yielding companies that can pay you more than a 10-year and a heck of a lot more than the s&p's yield. charles: 10 seconds, share one name with us. >> 10 seconds. simon property, 7% yield will not go away. they are collecting rents. they own the best assets. huge real property underlying, simon property group. spg. % interest. charles: i love they have done during the pandemic they started to buy some of these stores names on the cheap. brilliant, brilliant. by the way hard assets, coming back in favor. david, thank you so much, appreciate it. >> yes, sir. charles: joining me now slatestone wealth chief market strategist kenny polcari. kenny you have taken a cautious approach to this market. i always tip my hat to you.

here's the thing, there is a ton of value out there including mint and small cap stocks. they are trading at levels that are extraordinarily low. have you been refining your potential buy list whether you become more aggressive? >> yes. because i think you're right. at some point you have to really start to consider them more. so yeah, there is some things in there that i like, a whole list of names in there that we could like but i particularly like names in the energy space just because i'm overweight energy and i think i'm going to remain overweight energy so within that space there are a couple of names we can look at, right? dt midstream, xterra energy partners are two i like. they are strong. they performed well. they're up on the year. they have got good stories. it is natural gas. gathering, piping those are good stories. those are two names i keep my eye on. when i feel like most of the turmoil is over then then i jump in on some of those names. look, there is a lot of names in that space, not just those two for sure.

charles: by the way so the audience understands what i'm talking about this is where you have your mid-cap valuations this is the historic level. small cap valuations versus the historic level. amazing value opportunities there if you're a value investor. kenny, having said that, there's a conundrum, right? viewers of the show have a conundrum overall. the market doesn't seem to believe jay powell but 95% of my guests, the experts do. so, what do you go with? go with the message of the markets or the collective wisdom of all the brilliant folks that come on with "making money"? >> with this case i'm with the herd, right? i think the guests are right on this one. i'm not really sure why the market is fighting so hard on this because we heard it from every fed head out there, heard it from "wall street journal," heard it from goldman sachs, heard it from jay powell again today, he will remain aggressive and remain focused on inflation

until he gets it to a level where he feels like they finally broke the back. it will be painful a little bit. do i think the bottom will fall out? i don't think the bottom will fall out. to your point, a lot of hedging thinking the bottom will fall out. i don't think the bottom will fall out. i am in the camp i do believe what jay powell has to say. he rerated that again today. if he pulls all that now after the all the narrative last couple weeks after what they have been doing he will lose complete credibility. charles: let me ask you, kenny, i have a minute to go. the next big driver, consider we have a range. take the june low, august highs, feels like we might be range-bound hire. what breaks us out either side of this? what will be compelling, cpi number, next jobs report, what gets us out of this range? >> what i think it will be i don't think it will be the cpi, ppi, i think he made it clear no matter what it is next week he

is still going ahead. what i think it will be, revisions to estimates ahead of third quarter earnings which start four 1/2 weeks from now that the beauty pageant starts all over again. remember last time, last quarter we heard them very cautious in the c-suite. cautious going forward and what the economy will be and i think these earnings estimates have to come down. i don't think the market priced it in yet. that will be the key that will rock the market a little bit once we start getting more of those estimates starting to come in. charles: kenny, loaf, appreciate it. thank you very much, my friend. meanwhile buckingham palace announcing britain's queen elisabeth has died ate 96. ashley webster has more. reporter: she died peacefully at balmoral castle, her beloved estate in the scottish highlands, charles. she served for 70 years, the longest reining monarch in

british history. she was 96 years old as you pointed out. the family gathered at her scottish estate after a statement that doctors were concerned about her health. don't forget the queen came to the thrown in 1952. she has witnessed enormous social change and with her death now her son charles, the former prince of wales, will lead the country in mourning as the new king. in a statement prince charles saying, king charles i should say now, says in part, that we mourn profoundly the passing of a cherished sovereign and a much loved mother. i know her loss will be deeply felt across the country, the realms and commonwealth by countless people around the world. and in a statement again from buckingham palace saying that the queen whose health had been failing in recent week and months, she actually was seen on tuesday greeting the new british prime minister, liz truss at balmoral, part of the ceremony

of asking liz truss to form a new government. she looked good in the photo. she looked frail but was smiling. from that point onwards we glad she became very tired. she had to cancel an appointment last night. then news her health was failing this morning and her four children, charles, anne, andrew and edward managed to get to balmoral this afternoon. there you have it. the queen remarkable. now we will witness 10 days of mourning and then after which time the new king, king charles, will meet with the prime minister and address the nation. there will be a ceremony for him to become king and of course his son, william, now becomes the heir to the thrown as his father who is now 73 years old has been waiting sometime for this but again, queen elizabeth, 96 years old, absolutely remarkable, revered around the world for her duty and her sense of service a

new era begins, charles. it is hard for many people in the uk to think of anyone else but queen elizabeth at the top of the royal family. she has certainly been a part of the national life fabric and now a new time begins. charles. neil: ashley webster, thank you very, very much. folks we'll be right back. nolt. your shipping manager left to “find themself.” leaving you lost. you need to hire. i need indeed. indeed you do. indeed instant match instantly delivers quality candidates matching your job description. visit indeed.com/hire finding my way forward with node-positive breast cancer felt overwhelming at times.

but i never just found my way, i made it. so when i finished active therapy, i kept moving forward and did everything i could to protect myself from recurrence. verzenio is the first treatment in over 15 years to reduce the risk of recurrence for adults with hr-positive, her2-negative, node-positive, early breast cancer with a high chance of returning, as determined by your doctor when added to hormone therapy. hormone therapy works outside the cell while verzenio works inside to help stop the growth of cancer cells. diarrhea is common, may be severe, or cause dehydration or infection. at the first sign, call your doctor, start an antidiarrheal, and drink fluids. before taking verzenio, tell your doctor about any fever, chills, or other signs of infection. verzenio may cause low white blood cell counts, which may cause serious infection that can lead to death. life-threatening lung inflammation can occur. tell your doctor about any new or worsening trouble breathing, cough, or chest pain. serious liver problems can happen. symptoms include fatigue, appetite loss, stomach pain, and bleeding or bruising. blood clots that can lead to death have occurred. tell your doctor if you have pain or swelling in your arms or legs, shortness of breath,

chest pain, and rapid breathing or heart rate, or if you are nursing, pregnant, or plan to be. i'm making my way forward, my way with verzenio. ask your doctor about everyday verzenio. i'd like to thank our sponsor liberty mutual. they customize your car insurance, so you only pay for what you need. contestants ready? go! only pay for what you need. jingle: liberty. liberty. liberty. liberty.

♪. charles: welcome to chart school. today is the perfect day to give a shoutout to leonardo, known by his nickname, fibonacci. he traveled widely with his diplomat father. where he saw the enormous advantages of mathematical systems used out of the europe originated in the valley. he laid out the fbi gnawchy sequence which many say is nature's secret code. see it all relatives in nature, trop storm formations, curves and flowers, seashells. of the technicians adopted the fbi gnawchy fibonacci sequence to help establish turns. the qqqs, russell 2000 hit a

popular sequence number, 61.8. that retracement often signals a reversal. joining me the head of technical analysis at evercore isi, rich ross. i know you're not necessarily a big fibonacci user, but there is always a sense you get a certain retracement whatever the number might be helping you to pick bottoms. do you believe in a at all in. >> yes i do. i think the key concept when i think of fibonacci is in proportion. the proportion of the move before it. we do see that, point, counterpoint, that math that overlay it works behind the scenes to identify the key inflection points technically. charles: we have the s&p 500, another key number into the week was 3900. we hit that as well yesterday. we held. we're still below the 50-day moving average. i have is did you have but give us the key parameters you see right now. >> fibonacci is it one of the tools in the tool kit.

you want to overlay that on top much the bigger bod i of evidence. i think as we coalesce over 3900 level that is critical support. we held it 10% from the top after the powell speech in jackson hole that set up us for strong fashion from a period of weak seasonality to a period of strong seasonality. charles: bring up russell,wim, etf similar. 61.8. held it like a champ. still below the 50-day. a lot of people say this is where the opportunities are in these small caps. what does i had need to get going? >> in order to lock the bottom up from the terms of stocks we need top down. crude oil, interest rates and inflation. the consumer is on the receiving end of all of those headwinds but we're seeing those inflationary headwinds recede. gasoline is collapsing, crude oil is falling sharply, food prices are falling sharply. we're getting a lot of help on the inflation front and that is going to come back around to help the consumer but of course we need the mortgage rates to

start to come back too to help housing. >> they're going in the opposite direction today. >> exactly. it is not all rainbows and unicorns out there overall. charles: this period ask difficult, seasonally difficult, historically midterms is difficult then ad on aggressive layer of central banks. what is the key thing investors should be thinking about? this is long-term thing we are trying to do here even though the near term is tough. >> you outlined it extremely well. we've been in a bear market. s&p a declined 25%. nasdaq 35%. parts of market, what have you down 75% off the top. this is going on nine months index level, 18 months on some cases i think we're transitioning from a bear market to a bull market this is the type of action we often see at critical inflection points this is often an exorcism thrashing about. i don't want invests to chase every up move, every down move but sort of trust the process. this is what the bottoming

process look likes. charles: this is definitely a wrong time to be selling? >> this is the wrong time to be selling. i would be buying. >> thank you. >> my pleasure. charles: this self-made disaster from california. wait until you see the image after tesla i will show you. investors don't seem threatened by jay powell at least the market. he vows to do the job until it is done. how should you weather this? that is the common theme we throughout the show. stay with us. we'll be right back. ♪. financial advisor, i stand by these promises: i promise to be a careful steward of the things that matter to you most. i promise to bring you advice that fits your values. i promise our relationship will be one of trust and transparency. as a fiduciary, i promise to put your interests first, always. charles schwab is proud to support the independent financial advisors who are passionately dedicated to helping people achieve their financial goals. visit findyourindependentadvisor.com

♪ ♪ ♪ ♪ ♪ ♪ ♪ ♪ ♪ ♪

[acoustic soul music throughout] [acoustic soul music throughout] [acoustic soul music throughout] [acoustic soul music throughout] [acoustic soul music throughout] my husband and i have never been more active. shingles doesn't care. i go to spin classes with my coworkers. good for you, shingles doesn't care. because no matter how healthy you feel, your risk of shingles sharply increases after age 50.

but shingrix protects. proven over 90% effective, shingrix is a vaccine used to prevent shingles in adults 50 years and older. shingrix does not protect everyone and is not for those with severe allergic reactions to its ingredients or to a previous dose. an increased risk of guillain-barré syndrome was observed after getting shingrix. fainting can also happen. the most common side effects are pain, redness and swelling at the injection site, muscle pain, tiredness, headache, shivering, fever, and upset stomach. shingles doesn't care. but shingrix protects. ask your doctor or pharmacist about shingrix today. ♪ like any family, the auburns all have... individual priorities. some like strategic diversification. some like a little comfort, to balance out the risk.

others want immediate gratification... and long-term gratification,too. they have their own interests, but at the end of the day there's nothing like being... a gold-owner. visit invest.gold to see why gold is everyone's asset. charles: folks, the stock market continues to exhibit some spunk here, right? some would call it "true grit." it is an admirable trait especiallyamericans, we like to see that but it is supposed to be bowing lower because that is what the fed wants it to do. to help me straighten it out

laffer-tengler ceo nancy tengler and bespoke group, paul. i love bespoke. go to your twitter site, get examples of it. i don't know what kind of trials you have, it is amazing stuff. often i look at your research. i look at it, i don't hear the noise. you give me historical stuff, right? we don't hear what the fed was doing, what wall street was doing, sentiment. we kind of just get the facts. isn't that important, particularly in this kind of a period where people keep hearing the noise? >> oh, yeah, putting things in perspective, taking a step back, relaxing a sigh of relief, everyone relax, focus on what is going on in the markets. we do discuss what is happening with the fed and we do discuss the economy but put that into perspective of -- charles: looking at tables and charts, i don't hear that. i hear historically where something may be going. it's a great reference guide. >> no, we definitely like to look at that, focus a lot on

history. today we're talking about queen elizabeth. she oversaw 15 pms in her reign. during her time as queen u.s. saw 10 recessions and 14 bear markets. i'm sure at the time everyone of those recessions an everyone of those bear markets was the end of the world or seemed like the end of the world but every time we come across. investors have to focus on the long-term, when you have a market lost 25% of its value or nasdaq lost a third of its value, those are times investors if you have more than a few month time horizon, those are good periods looking to add exposure. charles: that is where you're the master, nancy. you don't listen to the noise. often you push back against it in part because you are a longer term investor but you see these as opportunistic moments? >> i'm the youngest of all boys. contrarian feisty by nature. you know, i cut my teeth on black monday. that was my first institutional client meeting.

we starts the day 22 1/2% higher than we did at the end of the day and from that i learned if you buy quality and if you focus on companies that have the secular narrative behind them that you will that you will find these opportunities as great sales you can step in and add. charles: right. you were showing your first day of work. on black monday i left at 12, went to a bar, came back to the office after the close. i just started as a broker. i thought my career was over already. i noticed that you mentioned individual investor aaii. i got to tell you for as much ribbing as individual investors get from wall street they have been spot on in terms of they're being bearish when the market is down getting a little more bullish. the reason i'm asking about this, what kind of signal is that? is this a contrarian signal for you, paul? >> from a a longer-term perspective outside of a couple months it is more of a contrarian signal here. you just had rich ross on

earlier talking about how the stock market has been under pressure almost nine months. the individual stocks have been in a bear market for almost 18 months. we're getting to this period, when you tend to see the peak pessimism. another interesting thing we looked at, yale school of management does the poll every month where they ask investors how likely a crash is, if the market was to drop 3%, should you buy the dip, how confident are you its rebound? that hit buy the dip question reached a peak in november 2021. at that point individual investors would so confident you should buy the dip that ended up being the peak in the market. end of those periods it is good to go against the markets. to your point institutions were most confident buying the dip. we always talk about the little guy how they're wrong all the time, tendses not just -- charles: ironic the first chart i had today was on hedging or put call action by institutions and the spike on the call side

was in november. >> right. charles: got less than a minute to go, what are you buying here, nancy? >> we still like risk. we added to risk in june and then we sat back an waited. we thought we would get a correction. i don't think we retest the lows. buy companies with great earnings, not down 70, 80% in technology. charles: right. >> you want to buy companies that surprised to the upside. there were plenty that also expanded margins. look at lulu. talked about it. charles: you did, i thought about you when i saw the number. >> i'm heading over there. charles: what is the belt thing, belt bag? >> that is not my thing. charles: they say 80%, it drove sales. you like quanta. if the last week in california was not perfect endorsement for quanta, all electric vehicles by 2035, next day they say plug in your cars the electrical grid in the united states is under a lot of pressure. it will be only under more pressure when we move to all

evs and more electrification and quanta services does grid infrastructure. per environment. charles: perfect stock symbol, pwr, power. thank you, nancy, paul. appreciate it. coming up, jay powell takes a shot at crypto. take a look. >> unbacked cryptocurrencies as such don't appear to offer, have not offered, don't appear to offer much in the way of public interest in using them as payments. it is not a great store of value. what it is, is a speculative asset. charles: we'll put him down as a maybe. we'll ask jim bianco for his reaction after this. ♪

go. go green. go wind turbines. go gorgeous reliable grid. go emerson software. go science people. go breakthrough meds and safe science. go space age welds for super silent cars. go big. or go home. from software that delivers new cures at warp speed, to technology that makes clean energy reliable, emerson innovation helps make the world healthier, safer, smarter and more sustainable. go boldly. emerson. ♪ i got into debt in college and, no matter how much i paid, it followed me everywhere. so i consolidated it into a low-rate personal loan from sofi. get a personal loan with no fees, low fixed rates, and borrow up to $100k. sofi. get your money right. another busy day? of course - you're a cio in 2022. but you're ready. because you've got the next generation in global secure networking from comcast business. with fully integrated security solutions all in one place.

so you're covered. on-premise and in the cloud. you can run things the way you want - your team, ours or a mix of both. with the nation's largest ip converged network. from the most innovative company. bring on today with comcast business. powering possibilities. (dad) we have to tell everyone that we just switched to verizon's new welcome unlimited plan, for just $30. (daughter) i've already told everyone! (cool guy) $30...that's awesome. (mom) it's their best unlimited price ever. (woman) for $30 a line, i'm switching now. (vo) the network you want. the price you love. only from verizon. (lighthearted music) - "best thing i've ever done." that's what freddie told me. - a person like me needed to get a reverse mortgage to change my life. it was the best thing i've ever done. - really? - yes, without doubt!

- [tom selleck] joanne said just about the same thing. - it absolutely is the best thing i ever did. - jack put it a different way. to him, it was about having his grandkids over. - you want to have the kids over, you want to have the grandkids over. - yeah. - you want to have the family over. you want to say, "this is my place." - great people, different people. that's for sure. and all of them had different reasons for getting a reverse mortgage. but you know what? they all felt the same about two things. they all loved their home, and they all wanted to stay in that home. - [announcer] if you are 62 or older and own your home, find out how you could access your home's equity to give you cash now. and when you need it in the future. a reverse mortgage could put more money in your pocket by eliminating your monthly mortgage payments. it could also pay off higher interest credit cards, medical costs, and give you some extra cash to help your retirement lifestyle. - i don't have any anxiety about money anymore. - it allowed me to live in my home

and not have to make payments. - a whole lot of families have gotten tax free cash from a reverse mortgage loan for a better retirement. - i don't have to worry about a mortgage payment every month. - it's a good thing. - [announcer] call right now to receive your free, no obligation info kit. the kit will show you how you may get the cash you need using your home's equity as a reverse mortgage from aag. - call the number on your screen. - look, why don't you call aag and find out what a reverse mortgage can mean for you? - [announcer] call aag, the country's number one reverse mortgage lender. - call the number on your screen. ♪. charles: so lots of moving parts in the day's session and we got just the right guy to hon carve all of them, president of bianco

research jim bianco. jim, i know you think the fed will stay the course but i'm not so sure. i will lay out my theory for you. this morning during this q&a session with the cato institute jay powell was asked about paul volcker and he focused on the failed efforts before volcker got the job. this is what he had to say. >> it is very of our view, my view that we need to act now forthrightly, strongly as we have been doing and we need to keep at it until the job is done to avoid that. we think we can avoid the kind of very high social costs that paul volcker and the fed had to bring into play in order to get inflation back down. charles: very high social costs. that to me was the key phrase. i really, i know he wants to be hawkish but i believe when it comes to the very high social cost i think he is going to blink. what are your thoughts on that? >> i think he was talking about inflation being a very high social cost.

inflation impacts 100% of the population. i don't want to be callous about this but a recession and unemployment does not impact 100% of the population. really what he is trying to get at is that, and he said this in previous meetings too, if you don't get inflation under control, pretty much can't do anything else with the economy. so that is what he is focused on. now maybe he is right after outsized rate hike and we're expecting 75 basis points in two weeks and couple of others before the end of the year, that's all it will take to bring down inflation and then we can see it moderate in 2023 but if the question is, you know, very high social costs i think he is talking about inflation and we're not, by the way the other thing is is that unemployment is not really struggling, right? we produced 300,000 jobs last month. so that is nothing that should get the fedex or sized about it yet. charles: what do you make, everyone, the preamble to all of

that the notion in the '70s, they had the stop go, stop go. what if you do get a couple of signs, one good cpi number, maybe a big miss on jobs, do they keep staying the course? that is going to be the test, right? do they pause when they start to see what they want to see knowing that it could be a temporary blip? >> you know that is the 64,000-dollar question. it is easy for the federal reserve to beat on their chest, we're going to rein in inflation and we're going to do whatever it takes as i said when you're creating 300,000 jobs, when the stock market is holding the june lows. if there is a scenario where the stock market takes out the june lows, job growth goes to zero, now, jay, will you still want to raise rates? i think they will but i will admit we haven't tested them yet. charles: right. >> that's going to be the real thing is that when the economy gets weak or should i say if the economy turns bad do they still maintain this course? they say they will but we

haven't really put them to the test yet. charles: i got less than a minute to go but i got to get your thoughts on powell's comments on crypto not saying they are a store of value. going after stablecoin, they need to be regulated. you're more on the defi revolution aspect of this but that was a pretty big statement. >> yeah, it was and it reminded me, if you google david letterman, bill gates internet, 1995 when he was on tv. , they were mocking the internet, they were laughing at him as bill gates was explaining the thing the internet. no one thought it served any purpose that is where we are with cryptocurrencies. i think what jay powell, peter gottlieb, the guy interviewed him pretty much said it it is still an experiment, work in progress, you're announcing it is all dial-up, ugly looking, it will not amount to anything. check back in five or 10 years, mr. powell. maybe what we'll see might be something completely different. don't write it off just yet. charles: i think i have seen the

one on "the today show" where they dismiss it out of hand the internet. i have to google that one, jim. why we bring you on for the good tidbits. thank you, my friend. appreciate it. >> thank you. >> folks coming up i will give you my takeaway on california's growing economic pains. it is not really funny at all. we'll look at retail earnings. we have names after the bell, but more importantly there are some buys in all of this. kristin bentz has a list. she is next. ♪. your record label is taking off. but so is your sound engineer. you need to hire. i need indeed. indeed you do. indeed instant match instantly delivers quality candidates matching your job description. visit indeed.com/hire

when you shop at walmart, you get it. ♪ you spend a little less... ♪ and you can carry a whole lot more. ♪ only at vanguard, you're more than just an investor—you're an owner. we got this, babe. that means that your dreams are ours too. and our financial planning tools can help you reach them. that's the value of ownership.

as a business owner, your bottom line is always top of mind. so start saving by switching to the mobile service designed for small business: comcast business mobile. flexible data plans mean you can get unlimited data or pay by the gig. all on the most reliable 5g network. with no line activation fees or term contracts. saving you up to $500 a year.

and it's only available to comcast business internet customers. so boost your bottom line by switching today. comcast business. powering possibilities. ™

♪. charles: so the federal reserve trying to engineer what they call a reverse, the reverse wealth effect, right? in order to get people from spending money, it is just that point-blank. the thing is cash keeps coming in. soon we may have another trillion dollars washing over the land to forgive those big chunks of college debt. while it is obvious inflation is limiting what people can buy they just haven't stopped shopping. joining me kb visor group founder kristin bentz. yesterday the fed, "beige book" reported steady spending. they did note households continued to trade down with discretionary and food and other essentials. what are you seeing? >> what do i think? i think this market is bifurcated like you and i talk about all the time. so the high-end is doing well.

the low end is struggling. people definitely will trade down in this environment that is inflationary. charles: what about those major inventory gluts that helped spark selloffs earlier in the year, the big box stores are, they working those off? there has to be some opportunities out there? >> oh, there are plenty of opportunities. there is always a bull market out there, right? some of these companies, walmart thank god was quick, target the same, admit they were overbought. honestly they are trying to get the supply chain to the consumer. with all the gluts they would have a dearth of items to get rid of. that is something fantastic for the consumer especially during back to school to profit off of, but again when it comes down to the margins and the bottom line as you're seeing with american eagle's performance yesterday it is really hitting these companies hard. charles: yeah. the latest update on consumer credit comes out today, 3:00 p.m. this thing has been a

rocket ship. people are really, really resorting back to their credit cards. looking at 33 billion. that is the estimate. how much longer can we keep using plastic until we run out of that? >> depends on who the consumer is. so that low end consumer is taking one credit card to pay off the other credit card and they're being forced to decide, okay am i buying food this month or am i paying my utility bills? so that's a problem. high-end it is just a nuisance to them, but low end you're really going to see that that consumer start cracking especially back to school, heating bills, when we start cooling off, not here but the rest of the country. so i don't think that consumer can sustain that much longer. charles: of course the other end we keep talking about that you point out the stocks are starting to reflect that. do you like real high-flyers there? >> i really do. i kind of stick to my knitting in situations like this and luckily the market has reacted

in kind. so i obviously am very constructive with lululemon, nike, lvmh and hr and i'm stick being to those. charles: all right. restoration hardware which i think was the most oversold stock in the market a few weeks ago. certainly acting a lot better. kristin, thank you very much, appreciate it. >> thanks for having me. charles: the market continues to sort of bob and weave here. it is really kind of marking time it looks like ahead of the next big inflation number which obviously is going to have a big impact on sentiment one way or the other. meanwhile investors are using options, right? they're trying to capitalize on these gyrations which we've seen in today's session. option play director of education and product, jessica enskip. i was checking out your site. you're having webinar in option strategies after the market close today. i know you don't want to give away too much r there tried and true rules playing options in a

bear market? >> for charles, i'm happy to give away something for you. options are such a wonderful vessel. you can utilize them to gauge market sentiment to understand maybe there is a directional bias or bullish or bearish. that could be the overall market, an individual security or a sector around because you can use that as a sentiment there is a way to structure options to profit from any type of environment. so whether you feel a security or a market going sideways drastically up or even down, so that is definitely the beauty of options. charles: i guess it would be important for hedging as well, right, in this sort of environment? >> absolutely. that is common strategy, something that's employed quite often bit institutional side, a very famous mutual fund comes to mind, jpmorgan fund they hedge buying a put. when you buy a put, much like an insurance policy it allows you to capitalize on any downward

movement and in exchange for a premium of period of time but buy the put on something you currently own, if it goes down you make the difference. that allows you to have protection during the down times. charles: i notice on the options play twitter feed, a lots of technical analysis. does that help you with price targets and stop losses? because for me the key problem with options for a lot of knew business new business. >> number one having proper trading mind set you need to new risk versus reward. any time you make a decision trading options or not it needs to be calculated and calm and understood and do your homework all the way back to those warren buffett rules if you will. charles: right. >> regarding technical analysis though it helps you determine key areas of support and resistance, supply and demand that allows you to select your

strike prices which is a really important component of options trading. >> jessica, what do you like here in this market right now? >> yeah. so that is, i'm a little different with my thought process sometimes. i really like to balance macro versus micro and understand those macro headwinds how we can capitalize on those and sometimes contrarian approaches. for example, we were talking about record low unemployment. in addition to record low unemployment, we also have record low productivity. there are a lot of job openings and people are not working. what that says to me there is need for automation, great balance macro versus micro. the that is the headwind. the micro we invest in security with automating processes efficiencies and things of that nature. charles: i like that too. in fact look look at the that gp report. i don't care what it is if it missed one column is always robust that investment in productivity. jessica, thank you very much good luck with your call after

the close. folks, we'll be right back. >> thank you. ♪ if you wake up thinking about the market and want to make the right moves fast... get decision tech from fidelity. [ cellphone vibrates ] you'll get proactive alerts for market events before they happen... and insights on every buy and sell decision. with zero-commission online u.s. stock and etf trades. for smarter trading decisions, get decision tech from fidelity. ♪ ♪ ♪ ♪ ♪ ♪ ♪ ♪

♪ ♪ 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? i'm an investor...in invesco qqq, a fund that gives me access to... nasdaq 100 innovations like... wearable training optimization tech. uh, how long are you... i'm done. i'm okay.

charles: all right, so i'm sure that if you've got a twitter account, folks, i know you saw this photograph today. i mean, you'd first crack up it's a at the scene la toting ac

generator and a couple gas buckets on either side. it's a commentary on the self-made issues in california. people that buy the teslas have raked in $1.8 billion since 2010 in a series of programs to help them buy these teslas. like so many other free money schemes of course that cash has only helped make prices go up, check out the markups, 15,000. since 2010, california allocating money outside of these programs and clean energy programs as well, these rebates have helped as well. on the other internet spectrum, folks, that's the real pain. per capita california has the largest poverty of any state out there. think about that for a minute, the teslas drivers are getting checks to help pay for the teslas and on the other end the pain is building and building and building and it'll get a

whole lot worse with a spike in energy prices and it's a huge dilemma and has to stop and should never been visited upon in the rest of america. other states are looking at adopting these policies. please don't. let nature take the course and the green revolution come in a timely manner and no more average pain and they can't afford it with a tesla nor the gas buckets. liz claman, you're from the golden state. you know what i'm talking about. liz: i am but i'm a diff tay of evs and i don't have to go to the gas station, it's awesome. i'm telling you, charles. charles: you can afford it but the other people paying all the money, it's devastating. liz: price haves got to come down. charles: we can't keep making gas -- we need to use the gasoline and make it cheap and one day everybody can afford a tesla. liz: we'll talk about that transition and how long it should take according to one of the greenest guys on wall street, that would be larry fink in just a moment. charles, before we get to the markets and all that's bre