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tv   Making Money With Charles Payne  FOX Business  October 24, 2022 2:00pm-3:00pm EDT

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from a wide range of standardized plans. each one is designed to work seamlessly with medicare and help save you money! so how do you find the plan that's right for you? one that fits your needs and your budget? call humana now at the number on your screen for this free guide. it's just one of the ways that humana is making healthcare simpler. and when you call, a knowledgeable, licensed agent-producer can answer any questions you have and help you choose the plan that's right for you. the call is free, and there's no obligation. you know medicare won't cover all your medical costs. so, call now and see why a medicare supplement plan from a company like humana just might be the answer. neil: want to take you to my buddy charles payne. a sense of what will happen in the next couple hours. charles? charles: s.n.a.p., thank you very much, my friend. i'm charles payne, this is
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making money. they are trying to extend friday's miracle reversal. megacaps are struggling ahead of a critical week for earnings. the question, should you be buying? before rumors of the fed step down friday the adult happy meal at mcdonald's was the best news in the country. so will powell disappoint like the toys in those meals? by the way did you see the stunning video, former president of china being escorted out as xi xinping secures an unprecedented third term? it feels like the world has gone mad. mary kessel on. don't forget my take on plunging test scores in america. all that and so much more on "making money". ♪. charles: so until friday, right it was really a lackluster week and a tough month and a rough year. i could tell you the only reprieve coming this month the introduction of the mcdonald's happy meal.
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people love it. take a look at this. the spike in visitorship to mcdonald's since the adult happy meal up 7%, year-over-year. of course some things never change. people still complaining about the collectible toys. everyone wants the new character, cactus buddy. fetching up 200 bucks on ebay. nobody wants grimace. that brings us to the world day probably the month, stepdown. we saw it a lot in the last week. it's a verb, right? reduce gradually resign, abdicate, inform to assume a inferior or less position. we saw the grand scale. abrupt resignation in the ology. the more inglorious one in china. they saw president xi doing a crip walk later on that day. i cannot confirm or deny that. i know he took a whole lot of power. the step down, the fresh
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speculation the federal reserve is ready to pounce, reducing the magnitude of rate hikes after this november meeting of course step down isn't the same as a pivot with the market already down so much, pessimism running so high, maybe it could be enough to spark a year-end rally. remember, this is the time of year, folks, this is the november to april time. six months of midterm years where the market does extraordinarily well, every single year. of course the big question, is hope that the fed slows down and seasonality kick in? is that enough to really jump-start this market? joining me kaltbaum capital management president gary kaltbaum. i know you put a little money to work late last week. are you surprised today, the sort of choppy follow-through? >> not really. you have to remember a couple of things. the reason why you get chop is because prices come down so far. a stock pose from 100 to 130, rally at 36, the people bought it at 36 thank the lord back out even and tend to sell.
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the dow had less losses than the technology. that's why technology is having a rougher time. it is so far down so bombed out, i think you know technology is down for the count. it will go up if the dow goes up but just not as much and again, it had years of outperformance. now they will have a good time of underperformance. nothing wrong with that. it is just the way the cycles work. charles: it is earnings season. thus far it hasn't been bad. we had 101 companies reporting coming into the week, 59% beat on earning, 70% on revenue. that is better than wall street was thinking about. we have 166 names this week, will that be enough? if numbers trend like this will this get the needle moving higher? >> i think on an individual basis you will see some things moving higher. as far as market, not so sure, mostly looking at the 10-year yield. as far as earnings, it's beat the number. ever since target and then
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really with fedex guidance has come down in a very big way in some names and so many areas. i have seen some companies beating estimates by 70 cents only because they lowered guidance by two dollars. then the stock goes up. charles: right. >> you have to be careful about that. remember in the long run growing earnings is what makes stocks go up. if companies are not growing earnings, eventually they will hit a wall and that is what we have to watch for. if they start hitting dead earnings, flat every year, you will end up with flat stocks. me i watch for companies growing like crazy. that is what usually wins the day over time. charles: what has been going like crazy are bond yields up 12 state weeks. >> unbelievable. >> this is mind-boggling stuff. you know, you have to ask yourself what happens with bonds, what has to happen with this chart in order for stocks to go up? how much of this do we have to give back before we have a sustained rally? >> let me give you the
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short-term, very good news and this is why i've been buying in once again, i have been one of the biggest bears. the market rallied two thursdays ago, even though rates went up, pretty much stayed up and still rallying that is good news. that tells me if yields come down we got higher prices. you mentioned something about seasonality. if we don't go up in this period, then we're really in big trouble. so i think the combination if interest rates come down, that's number one, seasonality, number two, i think we can go higher. probably up to the 200-day moving average with, another seven, eight, nine, 10%. have a rally like summer. we'll take every bit we can get. charles: we certainly will. i got less than a minute to go. mail-in voting has become in much of the country. how much is the market focused on the outcome of midterms? >> one word i have in mind, that is gridlock, my friend. if we stop the control freaks, you know who i am talking about dead in their tracks with their
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rules, regulations, fees, fines, mandates and taxes and giveaways in order to hey vote for me, that would be really, really good news. we got to stop that. we got to get back to we the people, not we the government. if we ever head towards that way i think we get into a virtuous cycle again versus what we're seeing right now which is the vicious cycle. so fingers crossed. look, i'm no fan of anybody in washington, d.c. but definitely i will take the lesser of two evils. charles: i know you will. we've got good view of china what exactly we don't want to end up on, the path that maybe we're heading. >> wow. charles: thanks a lot my man. i want to bring in strategic wealth manager scott tepper and kingsview cio scott martin. look at that jacket. look at that jacket. >> i wore the tie. >> look at the tie. charles: so unusual to be loved by anyone. >> that is our band, we're
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warming up. charles: tom jones type stuff. i got to ask you, mark, i look every day and i see all the firms have the checklist when the bear market is open, over, rather. you have a checklist and nothing's checked. nothing, nothing, no -- >> a million, there is a chance? come on! >> what is that "dumb and dumber"? >> you better believe it. >> the dxy needs to start coming down. that is the dollar index. the vix needs to come down. we need the fed funds rate exceed cpi. there is a lot of things we need to start checking off before we have some conviction a bottom is in. on average bear markets that last nine months are down 38%. we're down 20, 21% right now? charles: right. >> we haven't come anywhere near that i think there is further to drop. charles: scott, you like at least the last couple weeks you like the action? >> i do, like gary k. said higher rates, higher equity
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markets. tep is right. there is lot of stuff checked on that list. tep you have a great checklist in all of your life you do, let alone checklists. here is the problem i have, those checkmarks will start popping in. as a long-term growth guy -- charles: you want to be in before the check is checked. >> good point. >> the market will preempt a lot of that stuff. market is changing its mind from the hawkishness they presented so far. charles: friday we had reversal. some people say it was a setup. you saw what happened with the bank of japan. according to "the wall street journal," latest fed whisperer, and mary daily she changed her tune a little bit being aggressive with the fed, perhaps they slow it down a little bit. should investors take the bait right now, mark? >> i would say no. look, i think when it comes to the fed i don't think the fed is is vested in protecting the 40% or so of people that own stocks.
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i think the fed is more interested in making sure that those people who live paycheck to paycheck and can't afford to put food on their table, that inflation is crushed, right? we need to schwab inflation. charles: even if it means some of those people have to lose their jobs? >> i don't think they have another recipe for how to cure inflation. charles: right. >> they know what happened historically. they know where we screwed up by taking our foot off the brakes too quickly and i think they're hell-bent making sure they don't screw up again. >> i want to bring up a chart because gary mentioned something about gridlock. historically he is spot on. look at this markets do best with a democrat in the white house and there is a split in congress which some polls suggest, or there is a democrat in the white house and gop controls the congress. 16% on one, 15.9% on the other. scott, this is critical the midterm election for the market, isn't it? >> sets up nice. looks like it will go that way. markets do best, people think
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markets do best when rates are going down. markets actually do best, boys and girls, rates are stable. rates going up not good. rates going up staples good, rate stable on fed funds rate, would be great for companies and great for the market. great with the point with mark, company reassess their businesses, assess the cost of borrowing create more jobs, with stable rates. charles: even if a new normal because of -- >> we're still, tep made the good point. that is tepper if you're preying at home, boys and girls. mark tepper. tep, rates got too far low up and too far down, they will be stablize with the reality of the 3 to 4% rate. charles: meanwhile, tep, how are you playing the market? >> our latest buy is aaon. not to be confused with aaroon. commercial industrial, mvac company, zero residential exposure.
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95% of the business done here in the u.s. they don't have the currency risks and companies are working on increasing air quality, increasing energy efficiency. so that is a nice play. charles: i see that weldness on ceiling these buildings, that will be the next thing. what are you doing, scott? >> consumer staples. put up sector attributes where earnings power and revenue. looking at proctor & gamble and pepsi. both great revenue numbers lately. good profitability, pricing power. they have the ability to ride out some of the inflation stuff even if it doesn't get eradicated as fast as i think it does. charles: what do you -- we have a lot of stuff this week including pce has been elevated even above the cpi because of powell. is there a chance you might get a chance to check some of these boxes this week? >> it is possible but i would say unlikely. look which have a huge week with regards to earnings. pretty much every big tech company i believe is reporting this week. i don't think it will be a good week from a guidance standpoint. charles: right. >> vix has to come down a lot.
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it could start. maybe i -- >> take him out for beers tonight, we'll get some boxes checked. check with us at 8:00 p.m. tep will bring in the lastic mastercard. we'll bring it tonight. charles: don't go to taco bell. you won't be there at work tomorrow. >> have been known to overspend at taco bell. charles: taco bell don't go unless you want to take rest of the week off. >> maybe burger king. charles: guys, thanks a lot. stunning data how businesses are faring in this environment. recession, folks is either here or knocking at the door. i'm not saying that, the best economists in the country are. sentiment being felt by investors too. the question, have we hit peak pessimism. that is a hell of a box to check. we'll take you to chart school next. ♪.
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♪. charles: all right, so we know nothing is really going well for the stock market and that might ironically be the best thing about this rout, pessimism hitting levels associated with market bottoms. we've seen pessimism at these levels. this one right here is one for the record books. so with me now to see maybe if
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pessimism can save the day, ned davis research chief u.s. strategist, ed klisel. ed, you can't obviously get more pessimistic than we are right now. is this suggesting though that a rebound could be near? >> yeah, i think if you look at it several ways of pessimism really is pervasive. we have our own sentiment composite of several different sentiment indicators in it and it is at the third longest stretch ever. looking at 08, 09, 2002 to 2003 h to now. that is. hedge fund traders go show all the time, near the most short or pessimistic they have been in the last 16 years. pessimism is like kindling to a
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fire it doesn't ignite the flames by itself. you need a spark. the kindling is dry, but could be a rally that could be as strong as we think it could be. charles: i like way you put that. hedge funds, leverage funds net negative the market you know you have, mutual funds with the largest examination position ever. we're seeing that spark, that pessimism works against you. i want to ask you specifically about friday's session because we had something that is rare among technical analysis. this is outside day. for folks out there, a bottom lower than the day before, and a bottom higher than the day before. these bullish outside reversal days many say could signal the start of something good, a nice move to the upside. do you agree? >> yeah, i think, that is one very good input. you want to look at it with others that would suggest that you know we could have a decent
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rebound here. what's made 2022 fairly tricky is that a lot of these short-term technical indicators like the one you just suggested have been giving good signals but they haven't lasted very long. so what i want to see is what we call intermediate term and long-term technical indicators confirm. for example, if you look at the percentage of stocks above their 50-day moving averages, that is looking over the last few months, that needs to get really high. even in that rally from june to august it didn't quite get there. charles: right. >> that will say, hey, this could last until into next year versus just another kind of bear market bump. charles: right. i think coming into the day it was 29%. obviously a lot of work to do there but to your point that success begat success. let me ask you about advice. i have got 30 seconds left. you've already sort of pointed out there is a lot of different things to look at, lot of metrics, a lot of signals, people are getting antsy and spying the exits what should
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they be looking at? >> so i think over the next few days or a couple weeks, let's look at what the fed says for the fed pivot on november 2nd. do they signal that? let's look at the jobs report a couple days after that. let's see about election if we actually get gridlock and we got cpi. so those are four good macro indicators to keep an eye on the next couple weeks. charles: we certainly will. ed, thank you very much, appreciate it. >> thank you. charles: folks coming up one guest hates everything except bonds. of course it has been a brutal year. maybe it is time to buy them. plus we'll break down the implications of a geopolitical firestorm that seems to be sweeping the entire globe. there will be ramifications for the united states. what should leadership do? mary kissell is next. ♪.
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charles: so 20 minutes into the trading session right, it was already a wild day. the market popped, went much higher. quickly gave up a bunch of those gains and popped again in at 9:45. the release of global flash pmi. manufacturing 49.9, street thought to t would be a lot more than that. the services number, is the really the shocker, 46.6, well below wall street consensus. joining fs investments chief economist, laura roehm. laura, the services number was really surprising. companies noted not replacement of volunteer levers reported of reports around layoffs, decrease in employment was the first since june of 2020. this has been the sticky point for everyone, the strong labor market r we finally seeing cracks. >> i think it's a little too worry too much about cracks in the labor market. we're definitely seeing a lot of these indicators come off their
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highs. they are less frothy than they were, but this is an important leading indicator, we get a lot of survey data right around the start of the month so we'll continue to monitor these very closely. another one we watch is that monthly or weekly initial claims number which stayed very low. to me that is the canary in the the coal mine. charles: that is mind-boggling. nabe has the survey most of the respondents say the united states is already in a recession or will be in one soon. i saw a headline from goldman saying that is not the case. where do you stand on that? >> this is the tough one because while i don't think that we're in a recession right now, the low unemployment rate really reinforces that there is not a lot of growth. productivity growth is negative right now. it is adding to the feeling staffing -- stagnation.
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this is bringing corporate margins under some pressure going forward. we like productivity, right? gives households a sense of increase of the standard of living and makes us feel better about potential future growth. that is what we're missing right now. i think that is why, even though we don't check the boxes for technical recession that really feels stagnant. that is not necessarily great news going into next year. charles: speaking of no great news, there is no great place to hide for investors. cash was okay performer last september and last quarter. why is that? why hasn't -- usually there is a balance there. why have all assets apparently been hammered? >> yeah this is something a high inflation environment does and this is what we're really cautioning investors about going new into next year. i think inflation will be persistently high an it means correlations really rise significantly. i think in this world we could very well see interest rates stay very volatile, even move up
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a little bit more and i think you really need to dig into credit. you need to look at higher credit, high-yield bonds, looking at double bs right now. they're actually earning around 8%. it could be one of the few asset classes where you could get shorter duration and really take advantage of some higher volatility that we're seeing in traditional asset markets. charles: i have less than a minute to go. i do want your opinion on the fed, this sort of step down if you will. do you think they should start to signal they're willing or at least talk about slowing the pace of future rate hikes. >> absolutely. they have to. i think at the end of the day their policy impacts the economy with a lag. they have gone so far so fast. the most aggressive tightening cycle we've seen really since the 1970s and '80s. we need now to take a slower look at where the landscape of the economy is headed in the next year and i think the chances of recession have risen
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significantly next year. they need to give themselves some room to at least pause this tightening trajectory. charles: i think everyone agrees for one reason or another. lara thank you so much. appreciate it. >> thank you. charles: all right, folks these wild gyrations in the market really matched only by wild gyrations geopolitically. i'm talking about around the world. the plot seems to thicken every single day and that is not good knew. joining me stevens, inc. executive vice president, senior policy advisor mary kissel. so many going on. the uk has a new prime minister this morning. many think they're in period of austerity, higher taxes lower spending but how big of a blow is for the growth oriented policy agenda that liz truss wanted to push through and i know a lot of people in this country would like to see as well? >> charles, unfortunately it's a death knell for any growth prospects out of the uk not for this year and next year but for
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many years to come. liz truss was the last chance that country had to take advantage of brexit. rishi sunak will be soon by market as a stable hand, he is a smooth communicator, but he doesn't have any real policy convictions on the conservative side. he might as well be a. he was in office raised income taxes, stealth increase on the income tax, for two decades after the pandemic, uk growth was less than 2% annually. so unfortunately he is either going to bump along here, serve out remainder of about a two-year term or they will go to another general election and labour will just run home to victory because labour currently has double-digit leads. charles: right. >> it doesn't really matter whether it is rishi sunak or whether it is labour, you will see the same policy mix that failed for two decades and there is really no prospect for change. charles: felt like the media over there, quite frankly over
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here immediately attacked truss. markets went on of offensive end. i think there is a major pushback for any reasons of a notion of thatcherrism or reagan like economic policies but i want to switch to a different part of the world because the coronation of president xi was stunning. this was disturbing. what was the message sent from china, they knew the world was watching, what is the message sent here? >> the message being sent is chairman she -- xi is the general secretary ever the goal is not opening but struggle against the west and the free world that has implications for our markets, charles. when i talk to clients, i tell them you don't like the zero covid policies around the supply chain disruptions. too bad they will continue at least in the near to medium term. charles: right. >> you are only going to see more aversion to foreign
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capital. you will see more intrusions into our markets, more disruptions into the supply chains, more concentration of power in the state. so you know, all of those banking chiefs that will go over to hong kong and try to preserve their business i just think that's silly, charles. we're independent at stevens. we're private. we have a different point of view. we don't do those sorts of things. charles: sure. >> we know better. no rule of law. that is going one direction, that is bifurcating from the west. unfortunately i think we'll have more turmoil ahead. charles: oh, boy. we're out of time, mary. there are other things i want to bring you back soon i want to talk to you about. i agree with that. there is sabre-rattling with respect to taiwan that is a lot more intense. you have to wonder about what leadership will do about that. it better be preemptive instead of waiting like ukraine, the current administration knew they would be invaded and did very little to dissuade it. mary, appreciate you so much.
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thank you. >> thanks for having me charles,. charles: everyone buying options these days, just about everyone making big mistakes. before you load up we have option school. check out the dos or don'ts. what do you buy when you're bearish on oil, natural gas and gold? there is something. the answer might shock you. that's next. ♪. about the market and want to make the right moves fast... get decision tech. for insights on when to buy and sell. and proactive alerts on market events. that's decision tech. only from fidelity. who's on it with jardiance? we're managing type 2 diabetes and heart risk. we're hittin' the trails between meetings. and putting the brakes on fried foods. jardiance is a once-daily pill that...not only lowers a1c, it goes beyond to reduce the risk of cardiovascular death for adults with type 2 diabetes
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what should the future deliver? (music)
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progress... (music) ...innovation... (music) ...discovery? or simply stability... you shouldn't have to choose. (music) gold. your strategic advantage. (music) visit ♪. charles: folks, face it the market is rooting for bad news. there was an early gift as the flash pmi report this morning laid an egg, even showing weakness in the services sector with respect to employment. while investors are cheering that. my next guest is not amused. joining me the khobasi editor, adam khobasi. we just witnessed stocks rally on news of one of the weakest
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manufacturing reports in the last 20 years. bull case for stocks is recession. when recession is the best-case scenario, buckle up. buckle up for what? we've already been buckling up. we've been in a roller-coaster already going downhill? >> volatility is here to stay because markets rallied on news of weaker-than-expected manufacturing data. that means we're in recession. the fed created this whole predictment, you're either in a recession, that is the bull case but technically you're still in recession, or you're not in a recession but you're going to be a bunch of interest rate hikes. volatility is here to stay. charles: what is interesting, to your point, a lot of folks not in the market, main street don't understand why any entity, particularly someone like the fed is really unaccountable, they're deliberately trying to harm the market, the economy. >> yep. charles: for them to win people have to lose their jobs, wages have to stop going up, home
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values have to go down. it is called destruction. that is what wall street is rooting for so they will be done with this destruction. >> look, the problem is the fed moved too soon. during covid they cut-rates instantly. now they waited too long to raise rates. you're in a situation where it isn't ideal what will they do? supply side inflation is through the roof with the ongoing energy crisis, supply chain disruptions. the fed waited too long to stop raising rates. they're playing catch up -- charles: are you afraid they will go too far? >> we're definitely afraid. we're calling for last few months for a period of deflation when the inflation hits. we think the fed will swing too far, 150 basis points by end. year. 125, 150. once supply side comes down the fed will have overshot a little bit. you will see a period of deflation. that will be the go-aheaden golden opportunity because the fed will lower rates. charles: you've been talking
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about the vix a lot, making a series of lower highs and higher highs and higher lows but, again, every time we get around this 35 area it falls apart. i've had people on the show saying it has to get to 40. some saying it has to get to 70, 80. that sounds like nuts but do we need a blow off kind of thing? >> yes. we've been huge critics of the vix. go back to the 1990 when the vix was created, there never been a bear market that bottomed with the vix under 45. we have not crossed 40. you need panic selling, final flush if we see the vix spike to 45, 50 plus. that in our view is one of the last things we need to see the bottom to form in the market. we're hopefully close to the end of the blair bear market than in the beginning. >> when you look at what you like don't like you're bearish on everything. the austin powers, "goldmember"
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guy offered a smoke, pancake, flapjack, cigarette, a cigar, waffle, a crepe, there was no pleasing you. you're bearish on the s&p 500. you're bearish on crude. you're bearish on gold. the only thing you like are bonds. really, the tlt? >> this is more after short-term play. we've been bearish of tlt the entire year. last week we put out a note for subscribers, we think it's a little bit overdone. the daily rsi after, all the technical levels out there, the daily rsi of tlt is all-time low. we think it will bounce towards 100. we'll start to sell again into the end of the year. for commodities it is stuff to see a case to buy commodities with the dollar so strong, with the fed raising rates and zero yielding assets like gold and silver they don't perform well in high rate environment. it has been tough. when rates change that is it. maybe a trade that is 10% move. >> brief move. we see the selloff into year-end.
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we think in q1 in 23 you will see fantastic buying opportunities as things normalize a little bit. charles: adam, great stuff. >> thanks. charles: my takeaway on plunging test scores in america's schools. also we're looking for a grand slam in options, folks. i know it is there you read some amazing stories. we'll break down dos and don'ts before you go out there. we'll take you to option school next.
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charles: wall this volatility, folks the options market is absolutely on fire as pros and novice retreatment, it's a valuable instrument but for a variety of reasons people are doing it. the result one thing we've seen are put calls. the premium has erupted. small traders are piling into puts and you know, the message there is that, okay, you want to be there and you want to swing for the fences but there are some important rules that you need to know. with me one of the best, in fact the options play director of education product is jessica inskip. jessica, all the put buying. i want to get your input.
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all this a sign of bear rememberness? >> thank you for having me, charles. it is not necessarily so, options can be bearish or on the call vied. if you sell a put individually that is a bullish side. seeing a lot of activity on the put side is not necessary indication of excessive bearishness. there is a trade on either end. if it is bullish or bearish you have to dive a lot more deeper into data to derive that. charles: meantime a lot of folks are piling into options. i want to talk about dos and don'ts, particularly those doing this for the first time taking the plunge. >> yeah. first and foremost understanding how a options premium is compressed. that is not just the underlying stock value that makes up the price. there is time and implied volatility. hedgingis something really popular now with buying those puts. there are dos and don'ts with that. when you're considering implied volatility, for example, if you're buying something to hedge
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downside risk when there is a huge market decline you're buying something where it is more expensive. so if you're hedging you definitely should do that when there is a market rally or finding the end of that rally in you can layer on technical analysis in regard to time. we look at 45 to 60 days out because you're purchasing time, you don't want to hold the option to expiration if you're long or short because we want to close those out before that fade k really collapses. >> right. >> the last would be the price point that you choose. if you choose something, so popular i've seen with the retail traders they love out of the money options. that means a option really far away from the strike price. think about that from a hedging perspective. if you choose something really, really far away from the market price you're making your target really far. they're cheap for a reason. less likely to be successful. choose something closer. charles: if you look online you see the home runs, right?
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someone bought something out of the money, made a gazillion, 1000%. people look at that i want that. i saw something on thursday, 25% of all options expiring on friday. that has to be professionals, right? is there that much speculation going on right now? >> it is a mix of both, if you actually pull the cbo data, it is about 50-50 and they keep setting records with regards to options volume so it's a combination. if there is quadruple-witching and earnings and expiration sync up on all the series on the same day you see heightened. otherwise, no, there is an influx of retail traders. day traders might have left but the option traders are here. charles: i've got 30 seconds, okay. i will ask you, you do it for a living, train, teach people for a living, is it okay to occasionally go for the home run? okay to get something out of the money, expires in two days. i will put a couple grand on it hoping i make 20?
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>> no. i will tell you the best way to do that. you skew risk versus reward in your favor. if you trade often, if you're buying an options make sure you make three times what you buy. you do that you will be successful. charles: jessica, great stuff. love it. you grave us a great tutor eel in four mings. talk to you real soon. >> thank you. charles: for those looking three to five years out, not the next 48 hours obviously the stock market is the way to go, doesn't mean you set it and forget. people learn the lesson the hard way. welcome to last trade, joining me brit capital ceo. genevieve roch-decter. when due see the end of the bear market? >> technically we ended recession back in april, may, when we had two quarters of gdp reduction. according to charles schwab, two
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years after the stock market bottomed that would take it to may 2023. many would argue this is not a average recession. interest rates at 40 year highs. inflation at the fashionest clip since the 1980s. having the stock market, the bond market down at the same time traditionally not happens. charles: right. >> i'm positive. you know me. i'm about the long term picture but i think there is pain ahead here for sure. charles: and to that point i saw where you were actually selling or lightening up on apple for instance. i'm not used to seeing grd trim any positions. is this just a smart thing to do for everyone to have a little extra dry prouder? >> it was a big position for me. i trimmed it because i'm concerned about the consumer over the next 12 to 18 months. i'm long apple but the consumer personal savings rate has plummet thissed 6.5 trillion down to 650 billion. the dry powder from consumer is being tapped out. credit card debt, credit card debt is actually skyrocketing at
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the fastest pace in 20 years. the interest rate on credit card debt because interest rates are rising it is going up too. it is at the highest rate in over 30 years. that consumer might be rethinking if buying a new iphone is smart in this market, right? taking a little bit ever money off the table there. charles: what are you buying right now? >> i'm buying garbage stock, waste management. wm, on the new york stock exchange. there is famous line that one man's trash is another man's treasure. in this case women. this stock is $159. they're the biggest waste management company in the united states. i like it for two reasons. the reason is inflation reduction. 40% of their contracts are tied to inflation they are have protection. second, garbage keeps getting made even in a recession. 75% of their collection business is tied to long-term contracts. they have recurring revenue there. a large cap, dividend grower.
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they increased ebitda. this stock is flat year-to-date with the s&p is down 20%. charles: i love the story. by the way this is how wayne huizenga started. inherited a one pickup truck from an uncle. built it into amazing story. i love it. i love when they came into new york city to fight off the mafia but did okay there too. i got less than a minute to go. would you become more aggressive before the all-clear? in other words a lot of people are trying to guess the bottom. are you going to play that game? do you feel like you will start to get a little bit more aggressive as time goes on? >> i am not timing the market, you know me. time in the market. i'm dollar-cost averaging every month and putting more in the market but i'm watching three things closely. obviously interest rates, inflation and unemployment. interest rates are rising really fast is starting to cool demand on certain things, right? we've seen gasoline prices are down 20% since the summer. we're seeing commodity prices like copper and lumber down a
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lot. we're seeing vault dry index down a lot. shelter, shelter is a really important thing to watch in the cpi because a lot of people are saying it's a lagging indicator. if you look at real time data, rents are increasing at a slower pace month-over-month but if you look at the shelter component in the cpi it is still going up dramatically. that is something to watch. we know the housing market is starting to turn over. existing home sales are down 24% year-over-year because mortgage rates are so high. affordability is going down. charles: you want to be in position before the fed gives the all-clear signal. genevieve, too long. i appreciate your enthusiasm and your smarts. >> thank you. charles: coming up, speaking of smarts, plunging test scores among american children. this is a really bad deal. "my take" is next. ♪
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volatus aerospace provides integrated drone solutions for commercial, industrial, defense applications and public safety, maximizing the potential of drone technologies around the world. volatus aerospace. >> charles: by now you may have heard or read the heart breaking report on the state of education in america. this after the covid-19 lockdowns and remote learning according to the national assessment for progress, math and reading scores have plunged. in fact the largest score decline in math mate icks in grade four or five since the initial assessment gain in 1990 and decline in reading and
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grades 4-8 compared back down to 2019. you know, this is obviously been a long running problem and debate. it's a slow drift academically and excellence in the schools have been slipping for along time now. some blame money. i know 2019 the budget was $800 billion, only $667 billion of that was spent. what happened to the rest, i don't know. of course moreover with the pandemic and $190 billion provided by the federal government and people saying where did to go. the big ere issue for the state of education is not money. that becomes the sort of argument, it's curriculum. there's not enough faith in students to do rigorous work that prepares them for real life opportunities and this is something that's got to change, folks. it must, must change any kind of way our future depends on it. obviously our children depend on it. liz, over to you. liz: indeed. thank you so much. happy monday, charles. the bulls are enjoying a manic monday as we kick off the final


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