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tv   Closing Bell  CNBC  August 16, 2022 3:00pm-4:00pm EDT

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have taken a huge share of the business. >> they own the business now some ways that's what regulators want, but this housing cycle is going to prove how well that ends for them and the industry. >> i suspect wells wants to go into a much more steady business fee-based income asset management >> thanks for watching power lunch. >> "closing bell" starts now. a mostly positive session faded in the last few minutes. retail results are supporting the dow. the most important hour of trading starts now welcome to "closing bell." i'm sara eisen take a look at where we stand in the markets. crazy intraday swings. we were lower this morning, recovered, had a nice rally in the afternoon, got as high as 329 on the dow and just lost it in the last few moments ago. the s&p 500 turning negative the nasdaq down about half a percent right now and the russell 2000 index of small caps lower. if you look at what is
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performing well and what is not, it's a mixed session staples are leaving because of walmart. more on that in a moment discretionary materials, financials, industrials and utilities all higher right now it's technology and energy at the bottom of the market the chart of the day walmart and home depot both getting a pop as they kick off a big week of retail earnings. we'll talk more about the retailers in a moment when we are joined by the former walmart ceo bill simon the coo of palantir will join us to discuss health care and why they are hiring while many other tech players are tightening their belts. we'll start with the market dashboard. mike santoli here to take a look at how big tech names are impacting the summer rally they had been doing well today, not as well. >> taking a rest today and really looking at how big growth is affecting the overall valuation of the market. now, there's a couple camps in
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opposition those that look at this rally are pointing to the breath and momentum signals these are the kind of things you see at lows fundamentalists say not much has changed and may become a headwind again the s&p 500 forward price earnings multiple is now above 18 again that's the middle line right here so you see if you take it all the way back, it's basically where we were just before the pandemic crash that was at a historically elevated level if you pull it apart just a little bit, the nasdaq 100, which, of course, is dominated by the top five names in the s&p 500, is all the way up at 24 really, it's that mega cap growth stocks that have not had their valuation come in as much. the equal weighted s&p at 15 is around the average from 2018/2019. it depends on whether inflation becomes more tame, if growth holds up in the economy, that's going to tell you whether valuation here is justified or going to be an impediment to
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further upside. >> what happened s&p was up 21 and we dropped and lost it all. >> i would say the short answer is the market raced right up the s&p did, too, to its 200 day moving average, above for a while. everyone thought it had a gravitational pull it is sloping lower and touched it and pulled back from there. we're in a little bit of a zone of a lot of mechanical systemic trading at the moment. also, the market is looking short term technically stretched above the 50-day average all those things is causing some of these ping-pong games intraday. >> unchanged doesn't tell the story. thank you. stay with us we're going talk more about the market, joining us is david bianco, cio. nice to see you at post nine >> thank you >> so when we were in the makeup chair a few moments ago, you were trying to tell me utilities are a sexier bet than big cap tech >> i'm not sure i would compare utilities to big cap tech. i would make the point utilities are the under appreciated play
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on electrification electric is the future related to vehicles andother clean forms of energy. the utilities are the big player here if you believe that natural gas prices are going to stay high, i think natural gas is the critical commodity for this decade natural gas prices, electrification, inflation protection, i think utilities are a good gift to equity investors. >> it sort of speaks to your broader view, david, which is that you're not chasing the rally. youdon't necessarily buy it. >> i wouldn't chase the rally. this rally has been faster and earlier than we expected 4300 is a big number on the s&p 500. not held today of course it's a market of stocks, but 4300 i think doesn't acknowledge the continued slowdown, the likely decline in sequential earnings ahead for next few quarters whether we have a recession or not. i think we will have a small one. the fed nevertheless we think will keep hiking through this year, possibly early flex year
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too. >> the resilience of the market, even in the last two days where we started weak both days and sort of climbed, even in the face of bad news on the economy, mixed news on earnings, david said they've been expecting downgrades, what do you make of the strength >> in the absolute keep it simple mode people became too defensive at the lows and really discounted the possibility that we could have a higher probability of a soft landing. and so once it started to seem like at least that was a greater chance that we don't necessarily descend right into recession and earnings don't fall apart quickly people were under investing. the market behaves as if large investors felt they need to ramp their equity holding back up from low levels. if you look at the bofa global fund manager survey today it says that. hedge fund positioning it tells you that we adjusted to some degree i think maybe things are looking more neutral you know you an hour ago, looked like there was a little bit of a chase going on
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people getting aggressive. the meme stocks starting to run. all these reasons to say, yeah, sure, we should give back or flatten out a little bit as i said before, i'm not really willing to dismiss the idea that the market off the lows has looked a lot like really good rallies of the past that marked short-term or even intermediate term bottoms. >> you're not going there? >> i'm not the flows and the positions will follow the fundamentals. the fundamentals are still tough yet ahead. the thing about corrections is that they tend to come in bunches. they love company. you can go for five years without a 10% plus pullback in the s&p and then all of a sudden within a year or year and a half you get two or three of them i don't think we're done with the corrections. i think we'll see another one in the autumn utilities, health care, and for those that want the cyclical risks my preferred is banks. >> why banks now we're looking at lower yields >> i'm expecting short-term
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yields, the fed's fund rate to keep climbing and i believe we'll have a soft landing in the labor market, not necessarily for the economy or profits, but with a soft landing in the labor market, credit costs are unlikely to surge, higher short-term rates benign credit costs good for the bank. >> you don't like energy >> i've been cautious on energy for a long time. right now we're equal weight on it the commodity that has been driving the performance of the sector with where it is now it better find support otherwise the sector is not attractive it's making a lot of money right now, the question is for how long. >> it feels like two things are under pinning this bullish view, mike the soft landing idea and also the fact that the fed is going to have an easier time if inflation is coming down and even if the economy weakens. it will be a clear-cut idea they should pause and cut rates it's not what they're saying, though >> no. it's not what they're saying and the makrket is trying to jump ahead of what they have to say
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right now. what were they saying a year ago? a year ago it was lower for longer and we're not even thinking about -- >> now the market is saying inflation is transitory and you're going to pivot. >> the fed has hinged its policy outlook to an unusual degree on gasoline prices. they did that in recent months it was about consumer inflation expectations both of those things are essentially gasoline prices in another gueist the market is saying it creates flexibility by the fed i don't think it means the fed stops or goes half a percent or more in september, but within the six-month window of when, perhaps, the fed is going to be able to take its foot off the brake. >> do you buy this idea that i guess 16 months can still be transitory and inflation is on a one-way ticket lower the disinflationary process has g begun, but the broad-based measures, wage costs and sticky
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parts, rent and health care costs, that's where the fed needs to make sure they don't take their eye off the ball and the battle too early as the mistakes made in the '70s and '80s we don't want the fed to come out with heavy artillery. >> is that why you're wary of tech stocks because you think the fed will keep raising rates? >> no. you will see more earnings pressure yet to come they are not immune to the cyclical risks >> we thought that last -- >> their probability tends to lag the funds. the more aggressive the fed is, the more likely long-term yields stay low and it's notso much a valuation problem for the market or tech but we have yet to go through the earnings downgrades yet to come. >> when, myfinal question, mike, when is bad news bad news for the economy? because lately, we got a better industrial production. that was good news soft landing a worse housing starts and worse
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manufacturing and the market rallied because it makes the fed's job easier it has to affect multiples. >> bad news becomes bad news when it's truly bad. when you really do see employment buckle more than it has right now. when it looks like a little bit more than just a little bit of an adjustment. industrial production for as reassuring as that number was, i did see work it peaked with the economy in 2007. in other words, it's not that much of a leading indicator. it's kind of telling you where we are at the moment we bought time and i think that there's -- there is still time for things to erode. i don't discount the idea that there's a lot of tightening that's already been done, financial conditions did tighten up quite a bit in the first half of the year. that hasn't fully necessarily been felt by the economy companies have good top line growth because of inflation and nominal growth, but we don't know if that's going to continue in the second half into next year. >> unchanged, s&p 500. mike, thank you. david, it's great to see you in
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person walmart giving the dow an extra boost today. quite positive, up about 200 points after earnings and revenue topped expectations. we'll talk to former walmart ceo bill simon about the quarter and asked him whether the troubles that hit the stock earlier this year are behind him. you're watching "closing bell" on cnbc. this thing, it's making me get an ice bath again. what do you mean? these straps are mind-blowing! they collect hundreds of data points like hrv and rem sleep,
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shares of walmart jumping today after beating earnings stimgt estimates this morning, coming three weeks after the retailer issued a profit warning citing inflation's impact on the consumer despite the beat, ceo doug mcmillon says the company still has challenges to navigate listen. >> we've seen food inflation be persistent and continue to tick up, mid-ed double digits general merchandise is a little better the ports are clear. the transportation issues we were focused on have cleared up as time has gone on. we have a different set of challenges looking ahead than in the last six months. >> joining us is bill simon, former president and ceo of walmart. bill, how much credited do you give walmart and the team for beating their lowered expectations >> well, those guys are plasters y -- masters tell everybody you're going to be terrible and come in a little bit less terrible and get kudos
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for it they manage the business really well given where they were headed and you have to give them credit for that. >> but you say it's kind of a mixed result why? >> yeah. i mean there's some things to like in there. they did a good job -- i mean i love how they're holding pricing down to try to give the consumer some relief, but if you look at the detail, and doug mentioned it in the clip, food inflation mid teens is brutal. i mean brutal for the consumer getting past that, it's really all they're focused on right now. until that eases up, i worry about the overall macro economic situation. also, when you look at their inventory, about a third of their inventory, 26% up, about a third can be explained by the food inflation, but they got a lot of general merchandise product to move through to have a good holiday season. so i think that's a concern. finally for me, i'm not sure what to make of their guidance, their same-store sales guidance for the back half of the year at 3% you could be optimistic and say
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they're forecasting 3% because food inflation is going to moderate if food inflation stays in the mid teens and they're only delivering up 3% and the rest of their business is going to be struggling >> right that was sort of my next question, which is, what did we learn about the consumer >> the consumer has taken a beating right now. just a beating particularly in the middle of the economy and down with food costs up the way they're up, that's taken about every bit of discretionary dollar they can have and forcing people into difficult decisions on food and rent and that's a brutal situation to be put in right now. some of that is offset by wages generally are up and employment is high so they're getting paid. all of it is going to food. so walmart is growing share in grocery, even in the tough environment and it's interesting, kroger shares are up 3.5% on the back of these results. costco is up
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sam's club numbers are good. that bodes well for the club stores like a costco's or bj's what is the read through on walmart's own grocery business relative to its competitorses at a time when food inflation is in the double-digit rise? >> that's always been walmart's strength they're really great at managing costs and, you know, able to hold their breath longer than anybody else you can see that in their numbers, their gross margins down because they're selling product. they're absorbing some of the inflation costs and that's causing customers to trade into walmart and they mentioned that as well, they're seeing even a substantial portion of their same-store sales coming from household incomes over $100,000. so people seek walmart in high cost periods and they're doing a really good job at that. that's what they're built for >>. >> whether you look across the
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landscape, retail winners and losers, it's not as simple as defensive stocks are working, like a walmart and target you might see perhaps in a re session nary environment whatstands out to you about wh wins and loses in this environment, which is sort of distorted by changes of consumer behavior around covid and inflation? it's very different. >> well, i've been around retail a long time and right now you're seeing those that are successful are the really good retailers, really talented, well capitalized, good leadership, anybody who was the least bit wobbly heading into the covid situation and now the inflationary environment and the supply chain issues, they're really struggling. guys like target and walmart are good because they have good, well capitalized companies and great market share positions and very good leadership the ones that don't are still trying to figure it out. >> bill simon, thanks for your perspective today. always good to talk to you.
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>> bye-bye. >> let's check in on the markets right now. a dow that is still going strong off the highs up about 200 points the s&p 500 just turning positive on the day. staples are your leading sector thank you to walmart you've got strength in discretionary names, materials, financials, industrials, and utilities. a lot of retailers are working well, not just walmart and other staples, but strength across the board. tjx, etsy, carmax, lowe's off the home depot quarter, nasdaq down 0.4%. still ahead the coo of palantir will join us to talk about the company's new efforts in health care why they're hiring while other tech firms are pulling back on spending at the moment later, a supersonic edition of the wall street buzz that could revolutionize the way you travel. as we head to break some of today's top search tickers 10-year yield on top selling off. yields a little bit higher 2.82 or so is the yield.
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it's ban mostly lower yield story lately walmart with the earnings reaction up a.2% home depot, which turned around after the earnings call was a little bit under pressure on weaker transactions but july is trending better and that has sent shares higher by 4.25%. tesla back a percent we'll be right back here on "closing bell." demands a lotion this pure. gold bond pure moisture lotion 24-hour hydration no parabens, dyes, or fragrances gold bond champion your skin you'll always remember buying your first car. and buying your starter home. or whatever this is. but the things that last a lifetime like happiness, love and confidence... you can't buy those. but you can invest in them. we believe that your investments should work harder for the future you imagine. and that's where our strategic investing approach can help.
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inventory. check out today's stealth mover. it is lumentum beating on the top and bottom lines thanks to better than expected operating margins. the maker of smartphone 3d sensing technology did issue a disappointing profit guidance, hitting the stock, down more than 6%. apple accounts for more than 30% of lumen tum's revenue in fiscal year 202021. up next palantir chief operating officer discussing the health care business and when investors can expect the company to become profitable we'll be right back.
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data analytics company palantir which recently reported earnings is seeing growth in their health care business across the government and commercial sectors revenue there, up more than 260% since the first half of 2020 joining us now is palantir's coo shyam sankar it's good to see you
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clearly it's coming off a low base, but there's a lot of potential. first covid, i know is big for you in terms of managing some of the government's work on vaccines and medications, and now monkeypox. tell us about it >> thanks for having me back absolutely one of the things that makes our presence in health care unique is we span the entire value chain. working with government agencies to help them distribute vaccines efficiently, plugging into the pharma companies and biomanufacturing processes that create them, driving the hospital operations that is getting those needles into your arms and driving the health care outcomes, clearing the backlog in the wake of covid >> why should investors care about this i talked to a number of our team, i reached out to a number of analysts today, wondering about the health care business and they said it's still such a tiny slice clearly there's growth there how big of a part of the business do you intend it to be? >> i think health care is massive. the number of opportunities that we're seeing to help the u.s. clear the patient backlog with
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hospital operations to deal with nursing shortages. covid put health care on its knees here it showed the weaknesses in the system it spurred innovation. it's created funding to go after and fix these problems that's as true in the u.s. as it is in the uk and canada and continental europe and japan and so we see a lot of opportunity all the way from the preclinical, clinical r&d side through clinical trials to the pair and provider side. >> broadly, what is happening beyond health care with the government business? you were expecting all these deals to close and have pushed that out >> we're really excited about the government business. it has grown at a 35% compounded rate the u.s. government business in particular over the last decade. the nature of the contracts when going after the contracts they are lumpy, some years you see 0% growth some years 50% growth what's important for us is the long-term trends to be the
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operating system for health care, defense and national security, for civil administration. >> how do you think about the resilience of those businesses and what you offer in a recessionary environment >> i think they become even more important. if you look in the wake of covid, all those people are wondering will these be enduring investments and you see crisis after crisis that those capabilities have met their moment the monkeypox vaccine is being allocated on the same fracture that the covid vaccine was being allocated on the crisis that western institutions face in the wake of the recession and the need to take care of people has only become more important. you see not only in the u.s. but western europe as well. >> do you think there's a disconnect between the stock market and what you're seeing fundamentally? do you think wall street understand your story? i'm sure it's been frustrating to watch the reaction to earnings and just what we've seen all year. the stock is down almost 50%. >> when we look at the business, the thing we're most excited about is what is going on in the
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u.s. if you look at the u.s. commercial business. the customer growth count there has gone from 34 customers to 119 customers in the last quarter. obviously, that's starting on a small base but incredible growth and how much runway we have ahead of us. the revenue grew 120% year over year and as i mentioned earlier, the u.s. government business has a lock track record of growing at 35% and so together we see a lot of growth ahead of us here i think investors are starting to pay attention to that story. >> and i'm curious, are you seeing an increase in business related to what's happening between russia and ukraine and the uncertainty of that war? >> we are. perhaps not in the ways people would expect alongside the crumbling of this 40-year geopolitical consensus the world would get safer and more predictable, simpler, i think you're also seeing perhaps the crumbling of another consensus. we thought software would eat the world. it looks like the world ate software, the world needs a new type of software built with the
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assumption that efficiency comes from resiliency. how do we help auto manufacturers keep their factories open, how do we ensure supply chains continue to work we're seeing revenue coming from folks investing in the disruptions. we plan to continue to invest through the cycle here we have seen whether it was the global financial crisis, isis attacks on europe, or even covid, that leaning in, ahead of time, working with customers ahead of revenue, has always been a good bet for us. >> right so why the decision to withdraw the long-term annual growth guidance of 30%? >> well, what we have visibility into right now is clearly full year '22 we thought it would be best to create clarity around what's going to happen there. alex mentioned on the call and we believe we'll achieve 4.5 billion in revenue in 2025. >> where does health care to bring it back to the health care situation since we're focused on
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monkeypox, still unfortunately dealing with covid, commercial applications, where does it fit in, in the long-term growth plan and ultimate path to profitability? >> health care is a part o we'r in live sciences, the providers, as well as with governments and leverages the unique abilities we have, privacy first data platform that enables collaboration. we help 70 academic medical centers pull together the largest integrated covid patient record to study long covid and drive therapeutics to market these capabilities are quite unique and they're going to position us well to see sustained growth over the last two years 91% compounded in health care here. >> thank you for joining us to highlight it we appreciate it shyam sankar, coo of palantir. take a look at where we stand in the market it's home depot contributing to the rally, above 240 points. home depot adding 86 of those points walmart adding another 40. the combo there making the dow
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the open performer s&p has gone positive up 0.2%. we're looking at our fifth day in a row higher for the dow. s&p up for up for a third day. you have a lot of consumer staples the leader, discretionary, financials, in the rally. technology is lagging. the nasdaq is down 0.2 wall street buzzing about an airline making a big bet on supersonic travel. we will discuss the potentially booming business straight ahead. we are just moments away from president biden signing of the inflation reduction act. on twainons ouo shgt a so as it happens "closing bell" will be right back.
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. what is wall street buzzing about today? supersonic travel. american airlines placing an order for 20 supersonic overture jets from boom the second carrier to place an order. united agreed to purchase 15 jets last year boom says its overture jets will fly as fast as mach 1.57 which apparently is more than 1300 miles per hour so basically a flight from seattle to tokyo which typically takes ten hours, can be done in six. however, this is still years away boom expects the first model to roll out in 2025 with the first flight in 2026 and if all goes well, then boom will enter commercial service by the end of the decade our phil lebeau joins us why is american ordering these supersonic jets right now? >> well, it's a smart bet if you are american that you believe these could eventually be built and ready to fly by the end of the decade they're not spending a lot of money. a few million dollars.
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so it's not like this is going to move the needle on the books. it does put them in position that if overture goes through the process through certification as expected and is ready for commercial service by 2029, this is a nice addition to your fleet on the transatlantic and transpacific routes. >> there you go. can't wait phil lebeau, appreciate it. >> sign me up. up next we'll discuss whether fubo tv is the latest stock to get caught up in the resurgence of meme mania. bed, bath & beyond stunning move today, up 21% off the highs of the day. it's only up now 100 -- no week-to-date 50% last month 300%. jim cramer wants to know why they're not issuing more stock walmart's big rally and a pair of software stocks getting downgraded when we take you inside the market zone coming up.
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react to fast-moving markets with dynamic charting and a futures ladder that lets you place, flatten, or reverse orders so you won't miss an opportunity we are now in the closing bell market zone chief market strategist victoria fernandez here to break down the moments of the trading day and courtney reagan here on walmart and julia boorstin on fubo tv. we'll kick it off with the broader markets. dow up about 229, home depot and walmart are helping the dow out perform. the s&p 500, though, has turned positive just in the last ten minutes or so. it's up 0.2% it's kind of a split today between consumer staples and discretionary leading on the upside and then on the downside technology, health care, real estate two types of investors right
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now. one that thinks we've seen the lows and one that thinks we're going to make new lows off the june lows. which one are you? >> yeah. i think if you had asked me a week and a half ago, i would have been in the bear market rally camp it was looking similar to what we had seen previously this year two or three times, but we're starting to see the breath and momentum come into play. that's what we were waiting on to believe this was going to be a stronger rally we're not 100% in that camp yet, but we're seeing 20-day highs being made by the majority of stocks, seeing more and more over 90% now going above their 20-day moving averages that's strong. you also have to look at some of these leaders. you talked about discretionary names. they're leading but yet still in a down trend when you look at their stock price. we want to see some of those things change before we go all-in on a sustainable rally. for us, you use these opportunities to trim some of the names you have in your
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portfolio and then wait for maybe a slight pullback to start add something others >> let's hit walmart it is one of the stock stories of the day big winner in the day beating wall street earnings estimates thanks stronger than expect the same-store sales earlier doug mcmillon told courtney reagan the retailers benefitting from a shift in consumer behavior across all income levels. listen. >> inflation is having an impact, particularly for those that don't have as much money. we see them behave in different ways we're attracting a lot of new comme customers to come to our stores and app. we shared earlier this morning that families making more than 100 thousand in household income have driven our growth during the last quarter. >> trade down seems to be one of the words of the day courtney reagan joins us after your conversation, what are the takeaways for you from walmart on the consumer across income levels?
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>> yeah. sara, i thought it was interesting that i sort of pressed mcmillon again, asking him about the state of the american consumer. is it the same for everyone. he more or less paused and said yeah, i think even that higher income consumer is feeling the strain because they can tell they're shopping more in walmart stores part of that sound bite you played he also said three quarters of the growth that they're seeing in food, which was one of the biggest sales drivers of the quarter, is coming from that higher income consumer with the ho household income of $100,000 or more that does suggest there is some strain being felt by inflation and that decisions are made differently and walmart has been able to successfully attract some of the higher income consumers. things that are still weak, apparel, home, electronic, while people are laying to spend more money on food but, of course, still trying to take the vacatioins that they put off spending is still discerning across the stratification of income levels. >> victoria, do you buy walmart? clearly people are today
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that is the reaction expectations were low. they beat 5.3% talked about strength in back to school categories, for instance. do you like the stock? it's down about 3.5% year to date. >> yeah. sara, we have exposure to walmart in our large cap strategies and options strategies we didn't add to it prior to the earnings, but we've had the belief all along that consumer, yes, they're going to pull back and there's going to be slow down, but there's still strength there and we think that's why there's going to be so much volatility going forward in this market i mean, mcmillon talked about that consumer and pulling back a little bit, but at the same time you have the inflation component that we know the fed is going to continue to fight. you're going to get this push-pull. i'm not surprised they brought more shoppers from the higher end into their store i think longer term, this is a name you want to continue to have >> all right we're going to take you to washington president biden about to sign the inflation reduction act into law. let's listen in.
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[ applause ] >> please be seated. thank you. [ applause ] thank you, thank you, thank you. thank you, majority leader schumer. chuck, you've been a good friend a long, long time. joe, never had a doubt joe had an operation on his shoulder i want you to know it wasn't because of anything we did he's in great shape. and our whip, mr. clyburn, you're amazing and i am reminded often by my staff were it not for you, your wife telling you to endorse me,
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i wouldn't be standing here. thank you very much. and also, congresswoman castor and my good friend frank pallone. thank you for your leadership. you know, they couldn't be here, i especially want to thank nancy pelosi who was instrumental in this law and vice president harris for the incredible work she did. i'm about to sign the inflation reduction act into law one of the most significant laws in our history let me say from the start, with this law the american people won and the special interests lost the american people won, and the special interests lost we're in a session of -- for a while, people doubted whether any of that was going to happen. but we are in a season of substance. this administration began amid a dark time in america as jim said, a once in a century pandemic, devastating
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joblessness, clear and present threats to democracy and the rule of law, doubts about america's future itself, and yet, we've not wavered, we've not flinched, and we've not given in instead, we're delivering results for the american people. we didn't tear down. we built up. we didn't look back, we look forward. and today, today offers further proof that the soul of america is vibrant, the future of america is bright, and the promise of america is real and just beginning. [ applause ] look, the bill i'm about to sign is not just about today. it's about tomorrow, it's about delivering progress and prosperity to american families. it's about showing the american people that democracy still works in america not withstanding all the talk of its demise not just for the privileged few, but for all of us.
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you know, i swore an oath of office to you and to god, to faithfully execute the duties of this sacred office to me, the critical duty, the critical duty of the president needs to defend what is best about america. that's not hyperbole defend what's best about america. to pursue justice, ensure fairness and deliver results that create possibilities, possibilities that all of us can live a life of consequence and prosperity in a nation that's safe and secure. that's the job fulfilling that pledge to you guides me every single hour of every single day in this job presidents should be judged not only by our words but by our deeds. not by our rhetoric but by our actions. not by promise but reality today is part of an extraordinary story that's being written by this administration and our brave allies in the
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congress this law, this law i'm about to sign, finally delivers on a promise washington has made for decades to the american people i got here as a 29-year-old kid. we were promised to make sure that medicare would have the power to negotiate lower drug prices back then back then prescription drug prices guess what we're giving medicare the power to negotiate those prices now on some drugs this means seniors are going to pay less for their prescription drugs. while we're changing circumstances for people on medicare by putting a cap, a cap of a maximum of $2,000 a year on the prescription drug costs no matter what the reason for those prescriptions are. that means if you're on medicare you'll never have to pay more than $2,000 a year, no matter how many prescriptions you have, whether it's for cancer or any other disease. no more than $2,000 a year you all know it because a lot of you come from families that need
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this this is a godsend. this is a godsend to many families and so, so long overdue. inflation reduction act locks in place lower health care premiums for millions of families who get their coverage under the affordable care act. last year, a family of four saved on average 2,400 through the american residue qucue plan years ahead thanks to the inflation reduction act, 13 million people are going to continue, continue to save an average of $800 a year on health insurance. inflation reduction act invests $369 billion to take the most aggressive action ever, ever, ever, in confronting the climate crisis and strengthening our economic -- our energy security. it's going to offer working families thousands of dollars in savings by providing them
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rebates to buy new and efficient appliances, weatherize their homes, get tax credits for purchasing heat pumps and rooftop solar, ovens and driers, electric vehicles, fuel cell vehicles new or used and a tax credit up to $7,500 if those vehicles were made in america. american auto companies along with american labor are committing their treasure and their talent, billions in investment to make electric vehicles and battery and electric charging stations all across america. made in america, all made in america. this new law provides tax credits that's going to create tens of thousands of good paying jobs and clean energy manufacturing jobs solar factories in the midwest and the south. wind farms across the plains and off our shores clean hydrogen projects and more across america every part of america. this bill is the biggest step
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forward on climate ever, ever, and it's going to allow us to boldly take additional steps towards meeting all of my climate goals and the ones we set out when we ran. it includes ensure we create clean energy opportunities in front line and fence lined communities that have been smothered by the legacy of pollution and fight environmental injustice that's been going on for so long. here's another win for the american people. in addition to cutting the deficit by $350 billion last year in my first year in office and cutting it $1.7 trillion this year, this fiscal year, we're going to cut the deficit by another $300 billion with the inflation reduction act over the next decade. we're cutting deficits to fight inflation by having the wealthy and big corporations finally begin to pay part of their fair
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share. big corporations will now pay a minimum of 15% tax instead of 55 got away with paying zero dollars in federal income tax on $40 billion in profit. i'm keeping my campaign commitment -- no one, let me emphasize, no one earning less than $400,000 a year will pay a penny more in federal taxes. folks, the inflation reduction act does so many things that for so many years so many of us have fought to make happen. let's be clear in this historic moment democrats sided with the american people and every single republican in the congress sided with the special interest in this vote. every single one in fact, the big drug companies spent nearly $100 million to
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defeat this bill $100 million and remember, every single republican in congress voted against this bill. every single republican in congress voted against lowering prescription drug prices, against lowering health care costs, against the fair tax system every single republican, every single one, voted against tackling the climate crisis, against lowering our energy costs, against creating good paying jobs. my fellow americans, that's the choice we face we can protect the already powerful or show the courage to build a future where everybody has an even shot that's the america i believe in. that's what i believe in [ applause ] and today, we've come a step closer to making that america real today, too often, we confuse
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noise with substance too often we confuse setbacks with defeat. too often, we hand the biggest microphone to the critics and the cynics who delight in declaring failure while those committed to making real progress do the hard work of governing. making progress in this country is a -- as big and complicated as ours is not easy. it's never been easy but with unwavering conviction, commitment and patience, progress does come your dad was right when it does, like today, people's lives are made better and the future becomes brighter and a nation can be transformed. that's what's happening now. from the american rescue plan that helped create nearly 10 million new jobs, to once in a generation infrastructure law that will rebuild america's roads, bridges, ports, deliver clean water, high-speed internet to every american to the first
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meaningful gun safety law in 30 years, and if i have anything to do with it we're going to have an assault weapons ban that's another story. to a groundbreaking chips and science law that's going to ensure that technologies and jobs of the future are made here in america. in america. [ applause ] and all this progress is part of our vision and plan and determined effort to get the job done for the american people. so they can look their child in the eye and say honey, it's going to be okay everything is going to be okay. everything is going to make sure that the democracy delivers for your generation. i think that's at stake. and now, i know there are those here today who hold a dark and despairing view of this country. i'm not one of them. i believe in the promise of


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