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  • STOCKS CLOSING

  • HIGHER THIS AFTERNOON, EDGED

  • HIGHER BY ENERGY SHARES.

  • STOCKS,IGHS ACROSS U.S.

  • BUT IS THIS STILL A HEATED BULL

  • RALLY?

  • WE WILL GIVE YOU THE EVIDENCE

  • AND LET U.S. -- LET YOU DECIDE.

  • JOE: PLUS, A NEW KIND OF

  • GLOBALIZATION.

  • MARK: AND WE WILL LOOK AT THE

  • RESULTS FOR WALMART MEAN FOR

  • RETAIL.

  • SCARLET: WE BEGIN WITH OUR

  • MARKET MINUTE.

  • OIL AND HEARD A BULL MARKET.

  • IF YOU LOOK AT EQUITIES.

  • IT WAS KIND OF MEANDERING FOR

  • MUCH OF THE DAY.

  • JOE: MEANDERING IS RIGHT, BUT I

  • WOULD SAY IT'S A CONTINUATION OF

  • WHAT WE SAW DURING THE FED

  • MEETINGS YESTERDAY.

  • ESSENTIALLY, IT WAS A

  • SLOW-MOTION CONTINUATION.

  • MARK: I THINK MEANDER IS A GOOD

  • WORD FOR STOCKS.

  • I WANT TO START WITH A GROUP

  • THAT LED THE MARKET HIGHER.

  • WE TALKED ABOUT OIL GETTING INTO

  • A BULL MARKET.

  • HERE WE GO.

  • THE ENERGY INDEX HAS BEEN A

  • PRETTY BIG PART OF THE RALLY.

  • YOU CAN SEE HOW MUCH IT GAINED

  • TODAY.

  • IT WAS UP 60 BASIS POINTS AT ONE

  • POINT.

  • HIGHER, NOTMARKET

  • AS MUCH WEIGHT ON THE S&P AS IT

  • USED A HAVE, BUT STILL AN

  • IMPACT.

  • WE HAVE UTILITIES AND

  • FINANCIALS.

  • THE TWO THAT MAKE

  • HEADLINES EVERY DAY.

  • IT DEPENDS ON HOW THE MARKET

  • FEELS ABOUT INTEREST RATES RIGHT

  • NOW.

  • RIGHT NOW, WORK EXPECTATIONS

  • HAVE GONE DOWN.

  • FINANCIALS STILL HANGING IN

  • THERE.

  • I HAVE TWO COUP KIND OF FUN

  • STOCKS THAT POPPED UP TODAY.

  • STOCKS -- WE GOT

  • NEWS TODAY THAT PRIVATE PRISONS

  • WILL SHORTLY BE NO MORE OR AT

  • LEAST CEASED TO EXIST IN THE WAY

  • THEY DO NOW.

  • THE PRICE OF PRIVATE

  • PRISONS GOT CRUSHED.

  • DAY ON THE QUIET

  • GOVERNMENT BOND MARKET,

  • CONTINUING YESTERDAY'S TRENDS.

  • AND 10 YEARAR

  • YIELDS AS EXPECTATIONS OF SAID

  • POLICY CONTINUE TO EASE.

  • EASE, ANDONTINUE TO

  • THE DOLLAR DECLINED AS WELL.

  • THE POUND WAS A BIG JUMPER AS

  • HARD DATA OUT OF THE U.K. SHOWED

  • ONCE AGAIN THE ECONOMY HOLDING

  • UP BETTER THAN EXPECTED AFTER

  • THE BREXIT VOTE.

  • YOU TALLIED UP,

  • INFLATION, UNEMPLOYMENT CLAIMS,

  • AND RETAIL SALES HAVE ALL DONE

  • BETTER THAN FEARED.

  • THE YEN IS CURRENTLY BELOW 100.

  • YOU CAN SEE THE HEAD AND

  • SHOULDER PATTERN OUT THERE.

  • THE NECKLINE THERE, AND

  • FXORDING TO BLOOMBERG'S

  • CURRENCY TOTHE NEXT

  • WATCH IS DOLLAR-YEN.

  • JOE: BOYLE IS UP 30% ON THE AIR.

  • IT FELT LIKE JUST A FEW DAYS AGO

  • WE WERE TALKING ABOUT THE OIL

  • BEAR MARKET.

  • NOW, IT IS BACK IN A BULL

  • MARKET, UP 22% FROM ITS LOWS AT

  • THE BEGINNING OF THE MONTH.

  • IT IS AMAZING TO ME HOW FAST THE

  • STORY CHANGES.

  • JUST A FEW MONTHS AGO, WE WERE

  • LIKE, THERE IS ALL THIS SUPPLY,

  • INVENTORY, SPILLING OUT OF THE

  • TANKS.

  • SAW WHAT HAPPENED

  • EARLIER THIS YEAR ON

  • SPECULATION.

  • MARK: IT'S A PRETTY BIG MOVE ON

  • HOPE.

  • SCARLET: YOU JUST NEED PEOPLE TO

  • BELIEVE IN IT.

  • THAT IS YOUR MARKET MINUTE.

  • LET'S TAKE A DEEP TIES INTO THE

  • BLOOMBERG.

  • YOU CAN FOLLOW THE FUNCTIONS AT

  • THE BOTTOM OF THE SCREEN.

  • TRY LOOKING INTO THE RETAIL

  • RUMBLE.

  • TARGET SALES DISAPPOINTED IN THE

  • COMPANY SAID U.S. SHOPPERS ARE

  • CAUTIOUS.

  • MEANWHILE, WALMART SAID

  • CONSUMERS ARE OK.

  • WALMART SHARES HAVE OUTPERFORMED

  • TARGET, AND YOU CAN SEE IT IN

  • THE RELATIVE SHARE VALUATION.

  • , SHARES LINE GOES UP

  • ARE INCREASING.

  • RIGHT NOW, WALMART'S SHARES ARE

  • AT A 20% PREMIUM TO TARGET

  • SHARES.

  • >> EACH HAS ITS OWN ISSUES.

  • LISTEN CAREFULLY WHEN

  • SOMEONE SAYS CONSUMERS ARE

  • CAUTIOUS.

  • MARK: TARGET IS STILL TRADING

  • BELOW AVERAGE.

  • SCARLET: GOOD POINT.

  • AT INITIALOOKING

  • JOBLESS CLAIMS AS I DO EVERY

  • THURSDAY.

  • THEY KEEP IMPROVING.

  • THE WHITE LINE IS NOT JUST

  • SEASONALLY ADJUSTED CLAIMS.

  • THE DOTTED LINE IS THE MOVING

  • AVERAGE.

  • MOVING OUT TO GET A BROAD TREND.

  • ANOTHER POST CRISIS LOW ON THIS

  • MEASURE.

  • WE JUST DON'T SEE ANY SIGNS OF

  • LABOR MARKET WEAKNESS.

  • IT GOING TO BE A

  • BIGGER DEAL WHEN THE LINE STARTS

  • TO MOVE UP OR WHEN IT STARTS

  • FALLING?

  • JOE: IT TICKS UP FROM TIME TO

  • TIME, BUT THE DEGREE TO WHICH IT

  • IS CONSISTENT IS PRETTY

  • ASTOUNDING.

  • MARK: IT LOOKS LIKE THE WORLD'S

  • MOST BORING ROLLER COASTER.

  • JOE: GOOD ONE.

  • MARK: I AM GOING TO LOOK AT A

  • CHART THAT LOST, BUT I AM GOING

  • TO DOUBLE DOWN, RMB ON THE US --

  • RESEARCH AND DEVELOPMENT ON THE

  • S&P 500.

  • I AM LOOKING AT THIS WITH THE

  • HELP OF MY COLLEAGUE, KEVIN

  • KELLY.

  • WHAT HAPPENS WHEN

  • COMPANIES AREN'T SPENDING AS

  • MUCH AS THEIR PROFIT MARGINS ARE

  • FALLING.

  • WE ARE BASICALLY SHOWING PROFIT

  • MARGINS GETTING THINNER AND

  • THINNER.

  • THIS IS A NORMALIZED CHART BACK

  • TO 2014.

  • PROFIT MARGINS HAVE SHRUNK BACK

  • TO 14%.

  • ONE THING HAS EXPANDED QUITE A

  • BIT, AND THAT IS RESEARCH AND

  • DEVELOPMENT.

  • YOUR BALANCE ON

  • SHEET AND WILL EAT AWAY THAT

  • PROFIT MARGIN.

  • MAYBE COMPANIES WILL BE

  • REASSURED THAT THEY ARE SPENDING

  • A GOOD BIT ON RESEARCH AND

  • DEVELOPMENT.

  • JOE: MOORE AND MCCARTHY JOINS US

  • NOW.

  • THANK YOU.

  • HAVING A BIT OF A RALLY

  • HERE, NOT HUGE.

  • WHAT DID YOU LEARN YESTERDAY

  • FROM THE FED AND WHAT IS THE

  • CORRECT INTERPRETATION?

  • >> THE FED IS IN NO PARTICULAR

  • START RAISING

  • RATES.

  • THEY DO SEEM INCLINED THAT THEY

  • WOULD LIKE TO GET A RATE HIKE IN

  • BY THE END OF THE YEAR.

  • THE MINUTESTHING IN

  • THAT SUGGESTED IT WOULD HAPPEN

  • AS EARLY US UP AMBER.

  • THERE IS STILL A WIDE RANGE --

  • AS SEPTEMBER.

  • THERE IS STILL A WIDE RANGE OF

  • INTERPRETATION ABOUT THE

  • ECONOMY.

  • THEY ARE STILL TRYING TO FIGURE

  • OUT WHAT, IF ANYTHING, BRAGS IT

  • MEANS FOR THE U.S.

  • FROMHEY ARE STILL SMARTING

  • THE SPRING, WHEN THEY THOUGHT

  • THEY WOULD BE ABLE TO RAISE

  • RATES, AND THEN DEVELOPMENT

  • PREVENTED THEM FROM DOING SO.

  • THE RISKS OF BEING LATE ARE NOT

  • AS BAD AS THE RISKS OF BEING

  • EARLY.

  • M.O.IS THEIR AMMO --

  • NEW NORMAL SAYS THE

  • MEANS ONLY 80,000 JOB GAINS

  • NEEDED PER MONTH.

  • DOES THE MORE HAWKISH FED

  • DOVISHN THE HEELS OF

  • MINUTES THREE WEEKS AGO TELL YOU

  • ABOUT THE FED'S CONFIDENCE IN

  • THEIR MODELS?

  • >> I THINK WHAT THE FED IS

  • TRYING TO DO RIGHT NOW IS WALK A

  • FINE LINE BETWEEN BEING

  • OPTIMISTIC ABOUT THE ECONOMY --

  • BECAUSE WHEN THE CENTRAL BANK IS

  • OPTIMISTIC, IT'S EASIER FOR

  • PEOPLE IN THE MARKET TO BE

  • OPTIMISTIC, BUT AT THE SAME

  • TIME, STILL VERY CAUTIOUS,

  • BECAUSE THEY DO NOT WANT 2-D

  • RAIL WHAT THEY HAVE ENGENDERED

  • THAT WHICH IS A RECOVERY

  • HAS LASTED QUITE A LONG TIME.

  • KEEP IN MIND, WE HAVE JACKSON

  • HOLE COMING UP, AND IT SEEMS

  • LIKE THE MESSAGE FROM JACKSON

  • HOLE IS GOING TO BE THAT THE FED

  • WANTS TO RESET THE FRAMEWORK IT

  • USES FOR IMPLEMENTING MONETARY

  • POLICY.

  • THAT'S ANOTHER REASON IT'S A

  • LITTLE DIFFICULT TO DECIPHER

  • WHAT THE MESSAGE IS BECAUSE IT

  • SEEMS LIKE THEY ARE CHANGING

  • THEIR VIEW OF THE WORLD AND

  • CONSEQUENTLY HOW THEY WANT TO

  • AFFECT THE WORLD.

  • ARE LOOKING AT A FEW

  • METRICS HERE THAT THE FED

  • CONSIDERS INFLATION.

  • AVERAGE HOURLY EARNINGS.

  • EVERYTHING IS TRENDING UPWARD

  • OVER THE PAST YEAR, GETTING

  • CLOSER TO WHERE THE FED WANTS TO

  • BE AS WELL AS JOBLESS CLAIMS

  • STABILIZING AT A LOWER LEVEL.

  • IF YOU LOOK AT NOW VERSUS LAST

  • YEAR, THE PROBABILITY OF A HIKE

  • .AS SO MUCH HIGHER

  • IS THERE SOMETHING WE ARE

  • MISSING?

  • >> I THINK THE MARKET HAS BEEN

  • LEARNING FROM FED BEHAVIOR.

  • THE FED TOLD US THEY WOULD RAISE

  • RATES FASTER AND MORE OFTEN THAN

  • HAS ACTUALLY OCCURRED.

  • .ARKETS TEND TO LEARN BY DOING

  • SAID FUNDS FUTURES CONTINUED TO