This is a great opportunity to rebalance fixed-income allocations, says Schwab's Omar Aguilar

Fed Chair Powell today emphasizing that the Fed doesn't need to be in a hurry to cut rates. The market immediately went to the day's lows and closed near there. You're already saying a December pause might be reasonable. I think Steve Leisman was just telling us it went from, let's see, the likelihood of a cut in December went from 75 to 61 percent. And does anything in the chair's comments shift anything for you? Definitely hawkish. And I'm not surprised in terms of the level of confidence that the Fed has, you know, going into this. I think, you know, the the results of where we are now has provided the Fed with even more options and more time. You know, we have been discussing this a long time ago that usually the Fed, you know, tends to take the elevator when they raise rates and take the escalator when they reduce rates. And this is a clear example that just by looking at the combination of potential policy implementation on the new administration, the potential that may have in terms of growth and inflation and also the data that we just received today, you know, clearly, you know, lowers the odds of a cut. You know, we we are still looking and this is the key component to it on what would the Fed think about the neutral and the terminal rate? You know, the market seems to be moving in that three seventy five to four percent. You know, clearly that's the path that I think the Fed is wanted to go. And I think, you know, taking it slow is certainly the message that we got from Jerome Powell today. Well, hold tight, folks. Applied materials results are out. Initial move is lower by about 2 percent. Steve Kovac has the numbers. Steve. Yeah, John. And that's despite beats here in the top of bottom lines. We're looking at a beat on earnings. Two dollars and thirty two cents adjusted. Street wanted two dollars and 19 cents adjusted revenues just slightly above estimates here at seven point oh five billion dollars. Street was looking for six point nine five billion. We see shares off about four percent here. We'll dig into what the guidance and so forth looks like. But that's what we have for now, guys. Up looks like is down about four percent. Oh, down. Sorry. Yeah. OK. Just make sure we're down a little. Four percent. That out, Steve. Thanks. So, Brooke May, your take on these results so far, it looks like, you know, not a big beat on the top line, but the bottom line was what the street was looking for. I guess the guidance is important here. The overall environment. Yeah, right now you look and they're down 27 percent from their high in July. And so clearly there's pressure that's being applied to the stock. And we look at their competitors who, you know, Lam Research and Teradyne. They both beat on revenue growth. However, their stock performance was mixed. So right now, with the pressure that the stock is under, we think that there's a lot of uncertainty when we look at the House Select Committee sending out letters to applied materials and their competitors last week, wanting to know who their customers are and what their sales volume is. There's a lot of uncertainty in what's going to come in the way of in the way of tariffs and the way of exports. So we're going to keep an eye on it. And right now, we wouldn't add to the position. OK. Omar, I want to get your thoughts on the fact that we're seeing a lot of push pull in the market here. And yes, in the last hour of trading, you saw the major averages all move lower. And perhaps some of that has to do with options expirations for SPX and NDX as well. But in general, there's a lot of tailwinds in this market, whether it's seasonality, whether it's the FOMO and animal spirits associated with the Trump administration taking the helm in January, whether it is earnings that, for the most part, have held up resilient economic data. On the flip side, also some concerns about future Trump policies, a Fed that maybe is not going to cut as quickly as everybody was assuming even just a couple of weeks ago. And dollar strength and also valuation. So in light of that, where do you invest in this market? Where do you find opportunities? Yeah, we have been very clear with with our clients here at Schwab that, you know, at the end, you know, these particular moments should not change, you know, your long term, you know, investment objectives and should not change the way you position your portfolio. But it does provide opportunities to reassess, you know, where the position where your exposures are today. You know, we know that, you know, over time, you know, we have, you know, created exposures and a lot of the things that we have, whether it's a large gap or whether it's domestic versus international growth versus value. This is a great opportunity to just rebalance the strategies and reassess what their risks might be. And specifically, when you think about risky assets, you know, what we know for sure is that, you know, with any changes in policies going forward, we're potentially going to have a slower rate of rate cuts. And what that means is that we went from, you know, asking and looking for opportunities to extend duration in fixed income to basically now stay flat to our duration, because we think that there is a probability that yields will actually go higher as opposed to lower, given what the prospects are or economic growth and what the prospects are on inflation. With respect to equities, clearly, you know, broadening of the market, I think we saw, you know, what happened after the election in terms of small cap performance, in terms of cyclical performance. Again, this is a great opportunity to just reallocate between growth and value in areas that we normally see in the early part of the business cycle. So rebalance, you know, going towards cyclicals, towards the early part of the cycle and be a little more neutral, a little more, you know, risk control in terms of your fixed income allocation.