Trading the major week ahead: The Investment Committee's strategy

FED CHAIR SPEAKS IN JACKSON HOLE. WE GAME IT ALL OUT WITH THE INVESTMENT COMMITTEE. JOINING ME FOR THE HOUR JENNY HARRINGTON, AMY RASKIN ROB SITCH AND JOSH BROWN TAKE YOU TO THE MARKETS HERE. ONCE AGAIN THE FOCUS IS ON STOCKS. WE ARE GREEN BUT THE FOCUS IS ON RATES AS WELL. AND WE ARE GREEN AS THEY SAY THERE TOO BECAUSE YIELDS ARE BACK UP AGAIN. BUT REALLY WE'RE WE'RE TURNING OUR EYES TOWARDS NEXT WEEK AS IT PLAYS INTO EVERYTHING. HOW WE JUST STARTED THE SHOW AND NVIDIA EARNINGS THE FED CHAIR SPEAKING THE NASDAQ 100 TRYING TO AVOID ITS SIXTH STRAIGHT DOWN DAY TODAY. BY THE WAY NVIDIA IS HAVING ITS BEST MONTH SINCE APRIL. ROBERTS LEADING THE MEGA-CAPS THIS YEAR NOW AS WELL. IT'S UP 16%. THAT IS THE BEST PERFORMANCE. IT HAS WOKEN UP AS THEY'VE BEEN SAYING. AND NOW WE HEAD INTO A REALLY CRITICAL WEEK. HOW DO YOU SEE IT? >> I MEAN, TO ME NVIDIA IS ALWAYS IMPORTANT RIGHT. AND THEY'VE CONTINUED TO DELIVER AGAIN AND AGAIN AND AGAIN. BUT THE MORE IMPORTANT STORY, AT LEAST IN THE VERY SHORT RUN IS THE FED MEETING. AND IN MY MIND THEY REALLY HAVE ONLY A COUPLE CHOICES TO DO WHAT THEY WANT, WHICH IS IN CONTROL OF THE LONG END OF THE CURVE, NEITHER OF WHICH I THINK ARE PARTICULARLY PALATABLE. THEY CAN OBVIOUSLY RAISE RATES AND, YOU KNOW, TO DEAL WITH THE INFLATION PROBLEM THAT WE SEE OUT THERE. ALTERNATIVELY, THEY CAN CONTROL THE LONG END BECAUSE THEY'RE LIMITED RIGHT NOW IN TERMS OF BORROWING SHORT, JUST BECAUSE OF THE SIZE OF SHORT TERM BORROWING TO BUY AT THE LONG END SO THEY CAN ENGAGE IN QE, WHICH WOULD ALSO BRING THAT DOWN. BUT THEY OBVIOUSLY. >> THEY AREN'T DOING IT. THERE'S NO FED MEETING NEXT WEEK. >> IT'S THE I MEAN, IT'S BUT THEY CAN INDICATE RIGHT. THEY CAN INDICATE KIND OF TIP THEIR HAND IS WHAT THEY'RE GOING TO DO. HEAR ME OUT ONE SECOND. THE THING THAT WOULD SAVE EVERYTHING IS OPENING THE STRAIGHT BECAUSE IT RELIEVES THE INFLATIONARY. >> YEAH. OF COURSE. GOOD LUCK WITH THAT. LIKE IN THE IN THE NEAR TERM THOUGH, NOW THAT YOU HAVE RATES BACKING UP, DOES THIS SPEECH. DOES THAT PUT MORE PRESSURE. >> AT 100%. >> ON WHAT HAPPENS NEXT WEEK FOR THE NEAR TERM DIRECTION OF THE MARKET, MAYBE EVEN MORE SO THAN NVIDIA OR. NO. >> I THINK IN THE NEAR TERM DIRECTION. YES. BUT LISTEN, YOU NEED BOTH THESE. THIS IS A TWO HEADED MONSTER. NEXT WEEK. I FULLY EXPECT WITH WHAT'S GOING ON IN THE AI COMPLEX NVIDIA TO DELIVER STRONG RESULTS AS THEY ALWAYS HAVE. THE QUESTION IS WHERE DO THEY INDICATE THE THE THE KIND OF FORWARD EXPECTATIONS ARE. AND THEY'VE CONTINUED TO RAISE THAT BAR. SO I THINK NVIDIA IS A SAFE BET. I THINK THE FED COMMUNICATION IS SOMETHING THAT'S UNCERTAIN THUS FAR. WE'RE STILL DIGESTING A NEW COMMUNICATION STYLE FROM FROM OUR NEW FED CHAIR. AND. BUT IT'S CLEAR THAT THE ADMINISTRATION IS WANTING TO CONTROL LONG TERM RATES. >> YEAH. OF COURSE IT'S AS MUCH POLITICAL AS ANYTHING ELSE, I THINK AT THIS POINT. SO WHAT'S WHAT'S. AMY, THE, THE BIGGER EVENT IN YOUR MIND NEXT WEEK, THE SPEECH OR THE EARNINGS BECAUSE THE EARNINGS ARE WEDNESDAY. THE SPEECH IS FRIDAY. >> THEY'RE BOTH BIG I EXPECT. I MEAN, NVIDIA WILL BE HUGE IF IT DOESN'T DELIVER EXACTLY WHAT PEOPLE EXPECT IT TO DELIVER. BUT I'M NOT IN THAT CAMP. I THINK THEY'RE GOING TO SAY GREAT THINGS. I THINK THEY'RE GOING TO HAVE GREAT NUMBERS. WE'LL SEE WHAT THE STOCK ACTUALLY, IN SOME WAYS I'M MORE INTERESTED IN WHAT THE STOCK DOES RATHER THAN WHAT THE NUMBERS ARE, BECAUSE THAT WILL TELL YOU WHAT PEOPLE ARE EXPECTING AND HOW OPTIMISTIC PEOPLE ARE. AND THAT'S WHAT WE REALLY DON'T KNOW. THE NUMBERS ARE GOING TO BE GREAT. >> THE STOCK, THE NUMBERS HAVE BEEN GREAT, RIGHT? THE STOCK HASN'T ALWAYS BEEN GREAT. >> RIGHT? EXACTLY. SO THAT'S THAT. SO I'M ACTUALLY INTERESTED IN THE REACTION TO THE NUMBERS IN SOME WAYS EVEN MORE THAN THE NUMBERS. WITH REGARD TO WHAT KEVIN WARSH COULD DO NEXT WEEK. HE'S IN A HARD POSITION. HE HAS TO BE HAWKISH. I DON'T THINK ANYBODY'S EXPECTING HIM NOT TO BE HAWKISH. BUT THEN THE QUESTION IS DOES HE DELIVER? AND THAT'S WHAT HAS BEEN THE QUESTION SO FAR IS THAT ALL OF HIS SPEECHES HAVE BEEN VERY HAWKISH. AND I THINK THAT'S WHAT HAPPENED AT THE LAST FOMC MEETING, IS EVERYONE WAS LIKE, YOU'RE SO HAWKISH, YOU'RE SAYING IT HAS TO BE 2%. IT'S NOT 2%. WHY AREN'T YOU RAISING. >> BUT HE DOESN'T NECESSARILY HAVE. HE SORT OF GETS OFF THE HOOK DOESN'T HE. BY A WEAKER RETAIL REPORT THE LAST TWO JOBS REPORTS BEING WEAKER. THE LAST TWO INFLATION REPORTS CPI PPI BEING SOFTER. SO THAT KIND OF TAKES THE EDGE OFF DOESN'T IT. MAYBE HE DOESN'T HAVE TO BE AS HAWKISH AS HE OTHERWISE FABER. >> BUT PEOPLE ARE GOING TO SAY LOOK INFLATION IS STILL ABOVE EXPECTATIONS. WE STILL THINK THE FED IS RELATIVELY EASY. AND SO WHEN ARE YOU GOING TO DO SOMETHING ABOUT THAT. AND ARE YOU GOING TO TELL ME AT ALL HOW YOU'RE EVEN THINKING ABOUT IT? AND I THINK THAT'S WHAT. BUT I THINK HE IS GOING TO SAY 2% IS STILL OUR NORTH STAR. WE STILL WANT 2%. I DON'T SEE HOW HE CAN SAY ANYTHING BUT THAT. AND THEN I THINK THAT OPENS IT UP TO THE NEXT MEETING OF LIKE, OKAY, SO IT'S YOU'RE SAYING 2% AND WE'RE STILL NOT THERE. AND PEOPLE WILL SAY THE THREE MONTH, YOU KNOW, AVERAGE IS 1.6. AND, YOU KNOW, HE CAN, HE CAN USE THOSE NUMBERS, WHICH ARE RIGHT. BUT THE 2% IS STILL FAR AWAY. >> SO. JENNIE, SO WE'RE AT, LET'S JUST CALL IT 7700 ON THE S&P, EVEN THOUGH WE'RE JUST A LITTLE BIT BELOW THAT ONCE AGAIN NOW DOES IS THE DETERMINING FACTOR BETWEEN NOW AND LET'S SAY, YOU KNOW, THE NEXT COUPLE OF MONTHS DETERMINED BY. BECAUSE LET'S ALSO SUGGEST THAT WE DON'T THINK THE FED'S GOING TO DO ANYTHING AT THE NEXT MEETING, RIGHT. WE DON'T THINK THEY'RE GOING TO HIKE. THEY'RE DEFINITELY NOT GOING TO CUT. SO LET'S JUST ASSUME THAT THEY STAND PAT. SO THEN THAT MAKES NEXT WEEK. AND THE SPEECH MAY BE EVEN MORE IMPORTANT. BUT THEN I GOT NVIDIA LOOMING AS WELL. SO IF I THINK THAT THE STOCK MARKET CAN HIT, LET'S JUST SAY 8400 BY THE END OF THIS YEAR OR EVEN STRONGER THAN THAT AS SOME FORECASTS ARE NOW COMING TO BELIEVE WE CAN DO. DOES NEXT WEEK HOLD THE KEY ON BOTH EARNINGS AND FED SPEECH? >> I DON'T THINK NEXT WEEK EVEN MATTERS. AND I'LL TELL YOU WHY. >> THAT IS. >> A CONTROVERSIAL SUGGESTION. SO PLEASE. EXPLAIN YOURSELF. I THINK WARSH IS OFF THE HOOK BECAUSE EARNINGS ARE DOING ALL THE WORK RIGHT. WE'VE HAD A YEAR WHERE THE TEN YEAR HAS GONE FROM 4.2 TO 4 AND THREE QUARTERS, AND THE MARKET'S UP. IF YOU TOLD ME AT THE BEGINNING OF THE YEAR, THE INTEREST RATES ARE GOING TO BE UP THAT MUCH. YOU WOULDN'T THINK STOCKS ARE UP THAT MUCH. WHY ARE STOCKS UP BECAUSE OF THIS SPECTACULAR EARNINGS GROWTH. WHAT HAPPENS EVERY TIME NVIDIA REPORTS EVERY TIME THEY HAVE GREAT NUMBERS THEY'RE ALREADY ANTICIPATED. AND THE STOCK YAWNS A LITTLE IN ONE DIRECTION OR THE OTHER DIRECTION. I DON'T THINK ANYTHING THAT NVIDIA SAYS NEXT WEEK IS GOING TO MATTER TO NVIDIA. WE ALREADY KNOW WHAT THEY'RE GOING TO SAY. IT MIGHT MATTER MORE TO CORE WEAVE OR MICROSOFT OR OPEN AI. ISN'T THAT. >> ISN'T THAT BUT BUT THEREIN LIES THE CONFLICT IN WHAT YOU SAID. >> NO, NO, NO. HERE'S THE THING. ALL THAT MATTERS BETWEEN NOW AND THE NEXT FOUR MONTHS IS, IS Q THREE EARNINGS REPORTS THAT WILL START TO GET IN NOVEMBER. AND SO I THINK WE'RE IN A PERIOD WHERE I THINK THE REASON WE'RE FOCUSING ON NEXT WEEK AND WATCHING NVIDIA IS BECAUSE WE HAVE NOTHING ELSE TO TALK ABOUT. HEY, WE'RE JUST HOLD ON. WE'RE JUST IN A WAITING PERIOD UNTIL EARNINGS START TO BE REPORTED. AND BY THE WAY, I THINK EARNINGS ARE GOING TO BE SPECTACULAR AGAIN. SO IF YOU WANT TO KNOW WHERE I THINK THE MARKET ENDS I THINK THE MARKET ENDS UP MIGHT BE HERE MIGHT BE 8000. WHO KNOWS. I THINK THE EARNINGS FOR THIS YEAR AND EARNINGS GROWTH RATES THOSE ARE PREDETERMINED. THEY'RE MATHEMATICAL. THEY'RE COMING THEY'RE HAPPENING. AND NEXT WEEK IS JUST INTERESTING. BUT I DON'T THINK IT'S A DETERMINANT OF ANYTHING. AND I DON'T THINK IT'S TERRIBLY INSIGHTFUL BECAUSE I THINK WE ALREADY KNOW HERE AND NOW TODAY, EXACTLY WHAT BOTH OF THEM ARE GOING TO TELL US. >> SO, JOSH BROWN, WHAT DO YOU THINK? >> JENNY, I HATE TO SAY THIS. I'M ON THE COMPLETE AND TOTAL OTHER SIDE. OKAY. I, I, I UNDERSTAND YOUR POINT. I, I WON'T THE PART I'M NOT DISPUTING IS THE PATTERN WITH NVIDIA IS IT RUNS INTO THE NUMBERS. AND THEN PEOPLE LIKE GO TO BARS TO WATCH THE EARNINGS REPORT ON TV AND IT GOES DOWN 2%. AND I TOTALLY AGREE WITH THAT PART. THANK YOU. NO, BUT BUT BUT YOU TOOK IT TOO FAR AS YOU ALWAYS DO. JEN-HSUN HUANG JEN-HSUN HUANG IS THE AI FED CHAIR. YOU UNDERSTAND HE IS TO THE EARNINGS GROWTH OF THE S&P. WHAT KEVIN WARSH IS TO INTEREST RATES. AND I HAPPEN TO THINK THAT IF WE JUST FOCUS ON THE STOCK PRICE REACTION IN NVIDIA, WE'RE MISSING THE WHOLE POINT OF THE EXERCISE. WE KNOW IT'S GOING TO BE A SPECTACULAR REPORT. IT ALMOST ALWAYS IS. WE DON'T KNOW ABOUT THE GUIDANCE. BUT EXPECTED REVENUE OF 92 BILLION. JUST FOR CONTEXT THIS IS THE LARGEST COMPANY IN THE WORLD. NOW THAT WOULD BE A 97% YEAR OVER YEAR INCREASE NOT IN EARNINGS IN SALES. IT'S INSANITY. I CANNOT BELIEVE THIS STOCK SELLS AT A NEAR MARKET MULTIPLE. THE EARNINGS WILL ALSO BE UP 99%. BUT AGAIN EVERYONE'S GOING TO YAWN. WHO CARES? THE BIGGER PICTURE THOUGH IS THAT THERE ARE 2 TO 300 LARGE CAP STOCKS WHERE. WHAT NVIDIA HAS TO SAY ABOUT 2027 AND 2028 ON THE CALL NEXT WEEK WILL ABSOLUTELY HAVE AN IMPACT ON ITS. YOU'RE TALKING ABOUT DOZENS AND DOZENS OF HUNDRED BILLION DOLLAR PLUS STOCKS, AND THEY WILL TRADE UP OR DOWN BASED ON WHAT THE AI FED TELLS US. >> BUT HERE'S. >> MY POINT. THE BACKLOG IN THE ENVIRONMENT. >> AND DO YOU THINK HE'S GOING TO SAY ANYTHING OTHER THAN THAT THE BACKLOG IS ROBUST, THAT EARNINGS ARE ROBUST, THAT THIS IS TRANSFORMATIONAL. YOU THINK YOU DO YOU THINK HE'S GOING TO SAY ANYTHING NEGATIVE? NO. AND DO YOU THINK THE Q3 EARNINGS WHEN THEY'RE REPORTED ARE GOING TO BE ANYTHING BUT SPECTACULAR AS A RESULT? NO, WE ALREADY KNOW THESE THINGS. IT'S PREDETERMINED RIGHT NOW. HE'S NOT GOING TO TELL US SOMETHING NEW. CAN I BE AS GOOD AS WE EXPECT. >> CAN I JUST SUGGEST THAT I THINK WE'RE AT THE STAGE, THOUGH, WHERE WE DON'T NECESSARILY NEED REVELATORY, WE JUST NEED CONFIRMATORY. WE JUST NEED TO HEAR FROM HIM TO JOSH'S POINT OF WHAT HE SEES OVER THE NEXT FEW QUARTERS. >> SCOTT, PASS THE BALL. >> BACK. >> 99 PISANI TAKE, TAKE, TAKE A BREATH. >> TAKE TAKE A BREATH, THOUGH, BECAUSE CONFIRMATORY IS ENOUGH. WE HAVE MULTIPLE CONTRACTION THIS YEAR. WE WE HAVE AN UP STOCK MARKET, BUT IT'S NOT AS. IT'S NOT AS IF PEOPLE ARE EXTRAPOLATING AND TAKING MULTIPLES UP FOR, FOR THE MARKET THIS YEAR. SO SO CONFIRMING GUIDANCE AND TONE IS EVERY BIT AS IMPORTANT. AND I'M GOING TO TELL YOU RIGHT NOW, DELL IS A $300 BILLION MARKET CAP. HPE IS 74 BILLION. HOW DID THAT HAPPEN? ARISTA NETWORKS, YOU PROBABLY DON'T EVEN KNOW WHAT IT IS, IS A $235 BILLION MARKET CAP. MARVELL 200 BILLION. BROADCOM 1.7 TRILLION. WE KNOW MICRON, WE KNOW AMD, ETC. NOW THINK ABOUT GE. NOVA IS A $270 BILLION MARKET CAP. EATON 165 VERTIV 100 BILLION. YOU CANNOT TELL ME THAT THE THAT THE THE AI FED AND JEN-HSUN HUANG IS AI FED CHAIR, THAT THOSE REMARKS ARE NOT GOING TO AFFECT VAST SWATHS OF THE S&P 500. YOU CAN'T CONVINCE ME THAT IT'S A NON EVENT BECAUSE I KNOW IT'S NOT. I KNOW IT MIGHT BE FOR NVDA. >>