Host: A massive barrage of earnings and economic data making its way across markets today. The September CPI report showing hotter than expected core figures and expectations for a hike at the October Fed meeting now standing at about 50/50. Meanwhile, Bank of America Morgan Stanley are out with third quarter results with the of a coming off a shock $1.2 billion Treasury penalty. Well joining us this morning to weigh in is JJ Kitnahan, SVP and head of retail expansion as well as alternative investment products at CEO Global Markets. JJ, good morning. Thank you so much for joining us.
JJ Kitnahan: Good morning.
Host: There's a lot to digest this morning, so I do want to get the market reaction this morning following the CPI figure as well as what's happening in the VIX. What do you make of the action?
JJ Kitnahan: Well, so, so far, as you said, you know, CPI came in a little bit hotter than expected. Uh, obviously, the fuel number, I think, is really where people are, uh, maybe a bit, you know, even more surprised than they could be. But if anybody's been to the pump at all this past month, they see the res. And I think one of the other areas that's really interesting that's somewhat reflected in CPI, but we've seen reflected the last couple of weeks is air travel, and I think that that's the one area that to me we're seeing the largest dichotomy in the economy. Why do I say that? Because Delta Airlines came out yesterday and talked about how strong the holiday season is going to be for air travel. Yet what we're seeing from the numbers over the last couple of days is that the price of fuel for the airlines is up. 22% year over year. So you're trying to kind of balance that overall along with some of the statements from the banks that came out this morning too about the consumer. So, uh, you know, yes, the S&Ps are down a little bit right now, you know, we're seeing the uh SPX down about 20 points, not a huge move certainly, but I think the market, we sort of sat here since the pre-market, and I think part of the reason that people are a little bit trying to figure out what to do with all these somewhat conflicting numbers.
Host: Yes, you bring up a good point there because all of us are continuing to focus on energy, especially where prices go heading into year end, and that is something that we'll be listening out for from the earnings calls as well coming out from the corporations. But of course while we're talking about earnings we continue to get results out from the Big banks and earnings from BFA and Morgan Stanley finally out this morning. Now options were pricing in 3 to 3.5% moves with Bank of America reeling from that overnight $1.2 billion fine. And Morgan Stanley also seeing heavy Pope buying. But tell us what you're seeing now that those results are in.
JJ Kitnahan: Well, I think if I look at the results overall, you know, Bank of America, you said, had the fine, but they also missed on revenue as well as EPS. So I think that, you know, missing on revenue is something that gets punished. So that's why you saw that 6% reaction on the stock here a little bit earlier. And so, with Morgan Stanley, they did beat on revenue, but You know, Morgan Stanley's advisory businesses is one where they make a lot of money, and just as importantly, they're fixed income trading. Those two didn't come in where people wanted to see those numbers. So that's why that stock's getting hit a little bit overall. And I, you know, the fixed income part is something I think we're gonna want to keep our eye on going forward because that's really important. Then the other stock that people aren't talking about quite as much, but I think tells a really positive tale is BlackRock. BlackRock actually talking about rising momentum overall. Their assets under management continue to grow. Significantly. Their revenue continues to grow significantly. So, to me, that was a, a, you know, a, a big positive. And if I can jump back to Bank of America, when I talk about the dichotomy, their CEO James Frazier talked about the fact that they see the consumer being healthy and going forward, they are bullish on the consumer. So, even with, as we see from CPI all these rising costs. You know, again, that, that, that's a little bit tough to make out why the consumer is gonna be so healthy if they are paying much more. And, and as always, gasoline is the first thing that affects people's moods because it's the first thing that hits into their pocketbook because most of America needs to drive to get to work or whatever it may be. So with that one, that's the first thing that bites people. So to speak, in their budgets. So, you know, as we talk about the Fed, we talk about heading into the end of the year. That's the biggest thing I'm gonna keep my eye on is the news that comes out, which, which side of that house of cards, if you will, gives first because either the consumer is going to continue to expand significantly or at some point, the cost they are paying for things are going to eat into their ability to spend money.
Host: Yes, JJ, I'm glad you brought that up, especially when it comes to BlackRock and what consumers are facing when it comes to higher prices. And another name that is being overshadowed by some of the headlines crossing the wires is ASML. Now those numbers are fresh on the screens after a tough session or sessions for memory names. So what are options traders are bracing for when it comes to broader tech right now?
JJ Kitnahan: Yeah, I think, you know, one of the favorites uh of the market and certainly one of the favorites of retail traders is Nvidia, obviously. You know, interestingly, we, we saw Apple at a new high yesterday, but what we're seeing in Nvidia, which is really interesting to me, is the puts that expire today. So, the stocks trading just above 225 when you and I started talking here. At 225, we're seeing a lot of put buyers yesterday and today, and at 222.5. And I'm talking about 1. That expire today on the close. So over the last couple of days, we've seen people accumulating that line. It's gonna be really interesting, you know, to watch for the next 6 hours or so, what happens to Nvidia's stock and does it go below that 225 line so that people are in the money on it. So, again, I think if, if, if you're, you know, at home and you're watching what's an interesting trade today, whether you participate or not, that to me is probably the most interesting trade I see right now for the end of the day.
Host: Well JJ, we will have to leave it there for today, but thank you so much for joining us on the heels of the CPI report as well as the latest earnings. Appreciate your time.
JJ Kitnahan: Thanks for having me, Ray. Always a pleasure.
