RUSH TRANSCRIPT Stunning 519 ░░░░░░░░ since January So what ░░░░░░░░ veering off the bull ░░░░░░░░ today Energy health care ░░░░░░░░ materials Those are the ░░░░░░░░ sectors here What can ░░░░░░░░ glean from any of ░░░░░░░░ movers Let s get ░░░░░░░░ the floor show Joining ░░░░░░░░ economist John Lonski president ░░░░░░░░ the lonski group along ░░░░░░░░ Bank of America chief ░░░░░░░░ Matt dizok The wind ░░░░░░░░ at the back of ░░░░░░░░ NASDAQ at the moment ░░░░░░░░ do you make of ░░░░░░░░ really dramatic move The ░░░░░░░░ in equities is based ░░░░░░░░ a solid foundation of ░░░░░░░░ profits That s the ░░░░░░░░ story We don t ░░░░░░░░ to make it more ░░░░░░░░ than that People complained ░░░░░░░░ deficits People were worried ░░░░░░░░ deficits That adds to ░░░░░░░░ debt level At the ░░░░░░░░ time that is the ░░░░░░░░ reason behind economic resiliency ░░░░░░░░ the simple reason why ░░░░░░░░ profit growth continues to ░░░░░░░░ If the federal government ░░░░░░░░ dissaving spending more than ░░░░░░░░ in on revenue some ░░░░░░░░ sector has to be ░░░░░░░░ The deficit of the ░░░░░░░░ government is a surplus ░░░░░░░░ the private sector that ░░░░░░░░ keeping corporate growth strong ░░░░░░░░ now Liz I have ░░░░░░░░ say you throw this ░░░░░░░░ the cake batter recipe ░░░░░░░░ Federal Reserve kicks off ░░░░░░░░ final meeting of the ░░░░░░░░ tomorrow The announcement on ░░░░░░░░ rate cut possibly Wednesday ░░░░░░░░ say is going to ░░░░░░░░ here and what should ░░░░░░░░ We re going to ░░░░░░░░ a rate cut on ░░░░░░░░ We ll have fed ░░░░░░░░ lowered from a 4 ░░░░░░░░ 4 38 but that ░░░░░░░░ be the last rate ░░░░░░░░ for a while I ░░░░░░░░ the Federal Reserve wants ░░░░░░░░ see how well the ░░░░░░░░ does how well the ░░░░░░░░ market does and whether ░░░░░░░░ not we are still ░░░░░░░░ the trend towards disinflation ░░░░░░░░ want to add one ░░░░░░░░ to the earnings outlook ░░░░░░░░ think this is important ░░░░░░░░ was receipting I think ░░░░░░░░ third quarter of this ░░░░░░░░ S P profits up ░░░░░░░░ year over year but ░░░░░░░░ was unequaled We had ░░░░░░░░ 33 year over year ░░░░░░░░ for their magnificent seven ░░░░░░░░ other 493 member companies ░░░░░░░░ the S P 500 ░░░░░░░░ profits were up by ░░░░░░░░ 44 year 4 year ░░░░░░░░ 4 earnings growth isn ░░░░░░░░ all that high and ░░░░░░░░ may not take much ░░░░░░░░ terms of lower than ░░░░░░░░ revenues or greater than ░░░░░░░░ labor costs to cause ░░░░░░░░ growth for the other ░░░░░░░░ companies to slow Liz ░░░░░░░░ yeah If you look ░░░░░░░░ what the market has ░░░░░░░░ gotten its strongest tail ░░░░░░░░ from it has been ░░░░░░░░ Fed lowering rates However ░░░░░░░░ you look at the ░░░░░░░░ fed funds futures the ░░░░░░░░ contract there there s ░░░░░░░░ something like a 17 ░░░░░░░░ that we will see ░░░░░░░░ 16 3 now of ░░░░░░░░ 25 basis point cut ░░░░░░░░ January So is it ░░░░░░░░ we basically looking at ░░░░░░░░ I guess moment where ░░░░░░░░ expect a pause like ░░░░░░░░ for a maws Pause ░░░░░░░░ agree with John I ░░░░░░░░ a pause is likely ░░░░░░░░ will be more in ░░░░░░░░ and see mode Very ░░░░░░░░ see what Powell says ░░░░░░░░ the press conference Bank ░░░░░░░░ America securities research has ░░░░░░░░ rate cuts baked in ░░░░░░░░ next year but that ░░░░░░░░ only of possibly be ░░░░░░░░ They say they re ░░░░░░░░ on 2 inflation but ░░░░░░░░ re not near 2 ░░░░░░░░ terms of CPI We ░░░░░░░░ sort of stagnating around ░░░░░░░░ 3 level They don ░░░░░░░░ seem too concerned about ░░░░░░░░ with 50 basis point ░░░░░░░░ another one in December ░░░░░░░░ is some risk of ░░░░░░░░ cuts as we come ░░░░░░░░ next year if the ░░░░░░░░ is on the strong ░░░░░░░░ Liz when we see ░░░░░░░░ back to earnings that ░░░░░░░░ were disappointed with nvidia ░░░░░░░░ I mean nvidia is ░░░░░░░░ in correction territory down ░░░░░░░░ from its most recent ░░░░░░░░ which is crazy I ░░░░░░░░ they expect to make ░░░░░░░░ lot of revenue next ░░░░░░░░ But people are anticipating ░░░░░░░░ the bar is so ░░░░░░░░ high they like to ░░░░░░░░ more and more Is ░░░░░░░░ going to work in ░░░░░░░░ psychology of the markets ░░░░░░░░ the economy of oh ░░░░░░░░ have you done for ░░░░░░░░ lately That very well ░░░░░░░░ be the case Let ░░░░░░░░ not forget with the ░░░░░░░░ administration poply Is one ░░░░░░░░ the undercurrent of Trump ░░░░░░░░ economic policy My view ░░░░░░░░ if you follow the ░░░░░░░░ of populism you ll ░░░░░░░░ faster growth One of ░░░░░░░░ reasons we ve got ░░░░░░░░ margin ratios up to ░░░░░░░░ high levels is because ░░░░░░░░ had a slow darn ░░░░░░░░ by employee compensation If ░░░░░░░░ compensation were to gain ░░░░░░░░ for one thing we ░░░░░░░░ not going to see ░░░░░░░░ much lower rate of ░░░░░░░░ for another we re ░░░░░░░░ to see a squeezing ░░░░░░░░ profit margins that is ░░░░░░░░ to weigh on equity ░░░░░░░░ sentiment Liz and yet ░░░░░░░░ you re saying at ░░░░░░░░ Bank of America that ░░░░░░░░ s time to go ░░░░░░░░ from row row meaning ░░░░░░░░ of world and stay ░░░░░░░░ U S Equity large ░░░░░░░░ small cap what part ░░░░░░░░ on U S equity ░░░░░░░░ of the rest of ░░░░░░░░ world We do like ░░░░░░░░ Within the U S ░░░░░░░░ expect a broadening out ░░░░░░░░ the 49 4933 aw ░░░░░░░░ the mag seven We ░░░░░░░░ prefer more S P ░░░░░░░░ weighted as opposed to ░░░░░░░░ market cap weighted At ░░░░░░░░ same time we agree ░░░░░░░░ are quite high We ░░░░░░░░ very good about fixed ░░░░░░░░ especially at these real ░░░░░░░░ You want to make ░░░░░░░░ you have a large ░░░░░░░░ of fixed income in ░░░░░░░░ the forecast for the ░░░░░░░░ side is wrong Liz ░░░░░░░░ quick I think the ░░░░░░░░ coat is ma overvalued ░░░░░░░░ m looking at the ░░░░░░░░ junk bond yield spreads ░░░░░░░░ June of 2007 We ░░░░░░░░ what happened beginning in ░░░░░░░░ Liz good point to ░░░░░░░░ That s what we ░░░░░░░░ here for We have ░░░░░░░░ flag people on what ░░░░░░░░ happen Great to see ░░░░░░░░ Happy holidays.