RUSH TRANSCRIPT Maria welcome ░░░░░░░░ Time now for the ░░░░░░░░ on Wall Street top ░░░░░░░░ watching your money Joining ░░░░░░░░ is Morgan Stanley managing ░░░░░░░░ and private wealth advisor ░░░░░░░░ entwhisle Also with us ░░░░░░░░ Tepper nor rally underway ░░░░░░░░ industrials up 190 NASDAQ ░░░░░░░░ 291 1 and a ░░░░░░░░ percent already as we ░░░░░░░░ ahead to the data ░░░░░░░░ the morning we ve ░░░░░░░░ the final read of ░░░░░░░░ quarter GDP out this ░░░░░░░░ 8 30 A M ░░░░░░░░ Federal Reserve governor supported ░░░░░░░░ Fed s rate cut ░░░░░░░░ spoke about the future ░░░░░░░░ monetary policy at Harvard ░░░░░░░░ said while future actions ░░░░░░░░ depend on data we ░░░░░░░░ on inflation employment and ░░░░░░░░ activity if conditions continue ░░░░░░░░ evolve in the direction ░░░░░░░░ thus far then additional ░░░░░░░░ will be appropriate Kathy ░░░░░░░░ s your take Jay ░░░░░░░░ Powell is going to ░░░░░░░░ on inflation later today ░░░░░░░░ a 50 basis point ░░░░░░░░ expectations for another 50 ░░░░░░░░ point cut by the ░░░░░░░░ of the year to ░░░░░░░░ that tells me the ░░░░░░░░ is in trouble How ░░░░░░░░ you see it Yeah ░░░░░░░░ s interesting because I ░░░░░░░░ everyone was unsur ifsure ░░░░░░░░ wasunsu she came out ░░░░░░░░ interesting insights and provided ░░░░░░░░ road map in terms ░░░░░░░░ trying to figure out ░░░░░░░░ s next I think ░░░░░░░░ tomorrow s numbers with ░░░░░░░░ price ex opinion E ░░░░░░░░ things like that if ░░░░░░░░ re in line with ░░░░░░░░ we might see more ░░░░░░░░ Maria normally when interest ░░░░░░░░ are lower stocks go ░░░░░░░░ But there s two ░░░░░░░░ to the look 59at ░░░░░░░░ Do you want to ░░░░░░░░ stocks because rates are ░░░░░░░░ down or do you ░░░░░░░░ to hold back on ░░░░░░░░ stocks because rates are ░░░░░░░░ down and the economy ░░░░░░░░ weakening That s a ░░░░░░░░ question I agree on ░░░░░░░░ second part of it ░░░░░░░░ other consideration you have ░░░░░░░░ have is a lot ░░░░░░░░ times stock prices go ░░░░░░░░ in anticipation of cuts ░░░░░░░░ we ve seen a ░░░░░░░░ of this already The ░░░░░░░░ of what s coming ░░░░░░░░ already driven the markets ░░░░░░░░ They re very rich ░░░░░░░░ terms of their valuations ░░░░░░░░ could be baked in ░░░░░░░░ Maria stay cautious meaning ░░░░░░░░ away from adding new ░░░░░░░░ into equities and think ░░░░░░░░ sitting on the shrines ░░░░░░░░ a little bit and ░░░░░░░░ and waiting for opportunities ░░░░░░░░ come Maria do you ░░░░░░░░ he Yeah We ve ░░░░░░░░ positioning ourselves more and ░░░░░░░░ defensively so that s ░░░░░░░░ One of the most ░░░░░░░░ purchases we bought was ░░░░░░░░ which is a super ░░░░░░░░ stock Maria big dividend ░░░░░░░░ dividend as interest rates ░░░░░░░░ down dividend paying stocks ░░░░░░░░ become more and more ░░░░░░░░ to investors Maria that ░░░░░░░░ good Yeah we are ░░░░░░░░ much more defensively because ░░░░░░░░ conversation I m having ░░░░░░░░ clients right now is ░░░░░░░░ hey what mark will ░░░░░░░░ S P reach 6 ░░░░░░░░ or 7 000 they ░░░░░░░░ like what if this ░░░░░░░░ There s unknowns uncertainty ░░░░░░░░ there We ve got ░░░░░░░░ election we ve got ░░░░░░░░ Fed don t know ░░░░░░░░ they re doing the ░░░░░░░░ may be slowing how ░░░░░░░░ we protect the downside ░░░░░░░░ s what we ve ░░░░░░░░ doing Maria how about ░░░░░░░░ fact the quarter ends ░░░░░░░░ four days We re ░░░░░░░░ to end the third ░░░░░░░░ and then it s ░░░░░░░░ earnings season The market ░░░░░░░░ expecting earnings growth of ░░░░░░░░ next year You said ░░░░░░░░ the commercial break that ░░░░░░░░ way too high Are ░░░░░░░░ cuts going to impact ░░░░░░░░ That s probably the ░░░░░░░░ way you can potentially ░░░░░░░░ that number because typically ░░░░░░░░ the Fed cuts by ░░░░░░░░ basis points it s ░░░░░░░░ rare that you would ░░░░░░░░ double digit earnings growth ░░░░░░░░ if there is earnings ░░░░░░░░ it s going to ░░░░░░░░ in the single digits ░░░░░░░░ 15 that s very ░░░░░░░░ and that would also ░░░░░░░░ record margins So there ░░░░░░░░ a lot of things ░░░░░░░░ has to go perfectly ░░░░░░░░ in order for us ░░░░░░░░ hit those numbers P ░░░░░░░░ again just another reas ░░░░░░░░ these conversations with clients ░░░░░░░░ expectations are very high ░░░░░░░░ chance of disappointment is ░░░░░░░░ high Let s play ░░░░░░░░ little bit of defense ░░░░░░░░ If we re wrong ░░░░░░░░ the market s up ░░░░░░░░ between now and the ░░░░░░░░ of the year and ░░░░░░░░ re only up 7 ░░░░░░░░ 8 who cares My ░░░░░░░░ don t care They ░░░░░░░░ rather protect the downside ░░░░░░░░ that s what Tom ░░░░░░░░ from from fund strat ░░░░░░░░ short term equity trends ░░░░░░░░ bullish likely begin to ░░░░░░░░ higher going into mid ░░░░░░░░ before finding much resistance ░░░░░░░░ he s still on ░░░░░░░░ bull train which he ░░░░░░░░ been on Kathy do ░░░░░░░░ think analysts are going ░░░░░░░░ start taking estimates down ░░░░░░░░ think we re going ░░░░░░░░ see some earning estimates ░░░░░░░░ on the downside Maria ░░░░░░░░ 15 is a big ░░░░░░░░ It s a huge ░░░░░░░░ I m with mark ░░░░░░░░ well Defensive value dividends ░░░░░░░░ We re in the ░░░░░░░░ of protecting our clients ░░░░░░░░ in times like this ░░░░░░░░ earnings start in a ░░░░░░░░ weeks Maria three weeks ░░░░░░░░ July 1st earnings growth ░░░░░░░░ expected to be 7 ░░░░░░░░ It s now 3 ░░░░░░░░ So earnings estimates are ░░░░░░░░ down We re seeing ░░░░░░░░ happen Maria we ll ░░░░░░░░ if they come down ░░░░░░░░ 2025 because that s ░░░░░░░░ 15 number There s ░░░░░░░░ layer of this and ░░░░░░░░ s this poe done ░░░░░░░░ t strike There could ░░░░░░░░ a major stoppage of ░░░░░░░░ along the East Coast ░░░░░░░░ gulf of Mexico Big ░░░░░░░░ I ve heard that ░░░░░░░░ two week strike could ░░░░░░░░ supply chains into 2025 ░░░░░░░░ s pretty devastating And ░░░░░░░░ they want a 77 ░░░░░░░░ hike I get it ░░░░░░░░ wow 77 They also ░░░░░░░░ no automation and a ░░░░░░░░ whatsoever which includes the ░░░░░░░░ automated gate which opens ░░░░░░░░ cars come and go ░░░░░░░░ they want a human ░░░░░░░░ out there Maria behind ░░░░░░░░ and let China lead ░░░░░░░░ I We can t ░░░░░░░░ have to a take ░░░░░░░░ lead have to be ░░░░░░░░ m they in the ░░░░░░░░ of a I a ░░░░░░░░ port strike if it ░░░░░░░░ it will hit right ░░░░░░░░ holiday shopping season is ░░░░░░░░ off All the companies ░░░░░░░░ businesses included that rely ░░░░░░░░ black Friday cyber Monday ░░░░░░░░ business whichever day that ░░░░░░░░ they re going to ░░░░░░░░ consumers won t have ░░░░░░░░ products they want higher ░░░░░░░░ it s not good ░░░░░░░░ in the a I ░░░░░░░░ it opens the gate ░░░░░░░░ they want a man ░░░░░░░░ want a person to ░░░░░░░░ that That s the ░░░░░░░░ I read it They ░░░░░░░░ no automation even at ░░░░░░░░ front gate For a ░░░░░░░░ of us you pull ░░░░░░░░ your fob or something ░░░░░░░░ gate opens it s ░░░░░░░░ of a nice he ░░░░░░░░ I don t think ░░░░░░░░ want that They want ░░░░░░░░ people out there rolling ░░░░░░░░ thing open I don ░░░░░░░░ know Maria unbelievable Kathy ░░░░░░░░ you worry about this ░░░░░░░░ I do Supply and ░░░░░░░░ we just had over ░░░░░░░░ last few years the ░░░░░░░░ supply chain issue We ░░░░░░░░ t want that coming ░░░░░░░░ again We finally normalized ░░░░░░░░ little bit there so ░░░░░░░░ I think it could ░░░░░░░░ an issue Maria I ░░░░░░░░ I don t think ░░░░░░░░ ll let this happen ░░░░░░░░ into Christmas in an ░░░░░░░░ year We ll see ░░░░░░░░ has gotten involved in ░░░░░░░░ before so Do you ░░░░░░░░ after he was ousted ░░░░░░░░ has any compelling reason ░░░░░░░░ do it this time ░░░░░░░░ s the only thing ░░░░░░░░ m questioning Maria we ░░░░░░░░ see Kathy you said ░░░░░░░░ defensive and apyou do ░░░░░░░░ to put money into ░░░░░░░░ payers want to put ░░░░░░░░ into value Value difficult ░░░░░░░░ t payers stay dividend ░░░░░░░░ stay away from the ░░░░░░░░ seven the growth names ░░░░░░░░ now Maria that s ░░░░░░░░ step with what you ░░░░░░░░ with Verizon Absolutely Maria ░░░░░░░░ that s looked at ░░░░░░░░ value and dividends If ░░░░░░░░ re wrong you re ░░░░░░░░ pocketing 6 dividend It ░░░░░░░░ the best way to ░░░░░░░░ fence right now Maria ░░░░░░░░ you surprised the marketthemarket ░░░░░░░░ as much has Look ░░░░░░░░ the fees call the ░░░░░░░░ last quarter the economy ░░░░░░░░ by 360 billion It ░░░░░░░░ cost us 900 billion ░░░░░░░░ deficit spending to realize ░░░░░░░░ So that s going ░░░░░░░░ the economy That s ░░░░░░░░ into stocks So I ░░░░░░░░ it doesn t surprise ░░░░░░░░ given monetary and fiscal ░░░░░░░░ Maria be look at ░░░░░░░░ headlines out of China ░░░░░░░░ China is weighing injecting ░░░░░░░░ billion in capital into ░░░░░░░░ top banks doing everything ░░░░░░░░ the can to fix ░░░░░░░░ economy They built ghost ░░░░░░░░ We don t have ░░░░░░░░ housing Had thethey had ░░░░░░░░ way too muc maybe ░░░░░░░░ can borrow some of ░░░░░░░░ kathy great to see ░░░░░░░░ Mark you re with ░░░░░░░░ all morning long We ░░░░░░░░ that Let s get ░░░░░░░░ quick break in and ░░░░░░░░ right back Stay with ░░░░░░░░ Maria: welcome back, more