tv The Exchange CNBC September 22, 2022 1:00pm-2:00pm EDT
josh >> lng, giving very little back in the market sell-off this fall and winter are going to be very tough. natural gas demand and electricity shortages are going to be a big story. >> kari, real quick? >> crm, analyst day very positive yesterday >> good stuff. thanks, everybody. i'll see you in overtime . zs time now for the schaing. i am brian sullivan in for kelly once again here is what is ahead. fed fallout. reaction to another big rate hike it's going to hit every aspect of the economy from debt to housing and maybe the stock market tech stocks exposed when rates rise and it shows the nasdaq now down 10 percent in just a month. big names all getting hit, but is now the time to buy >> and fedex shocked the world with its dire revenue warning. now the company reports for real will it change the narrative
we'll trade that as well as costco ahead of their numbers coming up in earnings, exchange, let us begin now with the markets. dom chu, a very welcome and respected afternoon off. so you got me. let's talk about it. the dow, the s&p, and the nasdaq, they are all in the red. this is coin-based global, by the way. they're down 5.5%. technology, i guess you consider them part of technology, getting hit the hardest. now, within the sector, technology, not crypto, look at that there we go. the chip stocks seeing some of the biggest losses, amd, nvidia, on semi, all down 4 to 5%. the restaurant trade, also getting clobbered. darden, the parent company of olive garden, reporting same-store sales that came in short of estimates and as you might imagine, food and beverage costs rose slightly more than expected have you eaten out recently, seen the prices? chipotle and brinker international are down as well a pair of home building stocks moving in opposite directions.
kb home down 4%, lennar up 2.5%. both reporting be better-than-expected earnings. kb home taking a bigger hi on that front with new orders down 50% in the third quarter versus just 12% over at lennar. maybe some geography at work, where they're building homes, where their base, kb, primarily on the west coast. all right there are your numbers. now let's dig a little deeper and begin with the fed decision fallout and the impact on your money. and as always, we've got every angle of the story covered from macro to main street to the markets. steve liesman looking at what is next for the fed and fed hikes around the world diana olick is all over the impact to your home, the mortgage market and the housing market overall and bob pisani is at the nyc with how the fed's hawkish statement might impact the fed's earnings outlook steve, let's start with you.
i don't know if you've slept in the last 24 hours, but this is a big story moving anything. >> not a lot of sleep and no place to hide, brian, anywhere in the world from rising interest rates global central banks today reacting to their own inflation problems and to the fed's outsized rate hikes, trying to keep pace. one major exception, you can hide in istanbul, well, kind of, sort of, get to that in a second uk raising rates by 50 basis points three of the nine voters wanted to go 75 norway up by 50. indonesia up by 50 switzerland, 75. japan, keeping rates unchanged, but doing foreign currency sbr vengeance for the first time since 1958 turkey going its own, cutting rates by 100 basis points. and of course, weakening its currency there all of this coming after the fed's third 75 basis point increase, signaling more to come than markets expected. here's the outlook for the fed
topping market expectations. significantly fed chair powell says he thinks it's likely the fed actually hits that forecast, so he embraced it. powell said that there may come a time when the fed stops and waits to see what impact it has on the economy places like housing, but now is not that time. >> first off, turkey, to your point. fleetwood mac of central banks going their own way. i don't know how that's going to play out we'll find out steve, i saw you try to pin down chair powell yesterday you asked about linear moves basically, why not just take sort of a pause between meetings he kind of dodged and weaved and of course, he's not going to say, steve, we're right, we'll take a big pause is there a chance we do take a breath between meetings? >> i think there is a chance, but the data has to really cooperate. i think what i may not have appreciated, i talked to some people today about powell's answer to that question is, the fed was very disconcerted about the market's reaction in june,
and all the work that it had to do to get the market back. the market, as you remember, had a rally from june, interest rates came off and the fed had to do a lot of work over the summer, punctuated, if you remember, brian, by that jackson hole speech by the chairman, to get back the tightening of financial conditions it thinks is necessary to slow the economy. any notion of a pause, any give could give back those hard-wined gains from the feds. there may be a pause out there, maybe after they get done doing another 100 basis points, but paul will not let on to that right now. >> steve liesman down in d.c., thank you very much. from macro markets to main street, how well the fed decision affects home buyers and home builders. diana olick also in dc, here with more on that. diana? >> brian, in order to understand, we need to take a close look at affordability, of course, and how rates played
into that in the past. take a look historically at the share of your income you'd for a monthly payment. it tracked right along with interest rates, until the subprime mortgage boom then it split, because people didn't get 30-year fixed mortgages, they got no down payment loans, so basically paid nothing for a house. prices went way up, but a massive crash ensued then the lines moved closer again, but not quite together, because the fed kept rates low, so the economy didn't crater fast forward to now. and a massive split again. why? because the government again stepped in due to the pandemic and mortgage rates hits more than a dozen record lows, pushing home prices up over 40%, in just two years. suddenly now, rates more than double in a matter of months, thanks to the fed's push to ease inflation. so now, the median home price, as a percentage of income, is up about 46% in just two years. and rates are well over 6% that means home prices, which are already starting to soften
pretty quickly will likely soften further whether that's good or bad news, that depends on where you sit in the market buyer, seller, investor, or homeowner. >> there's two sides to your point. if you own a home, you don't want prices to go down if you're buying a home, you need prices to go down >> unless you're selling your home are you a first-time buyer or a current home buyer you don't want prices to go down if you want to make enough money to buy the new expensive home. >> fair enough do you think there's a limit to how prices could go? >> we did see back in 1980 when mortgage rates hit 18% and the housing market just crashed, down -- sales were down 50%, i believe, back then of course, we all know i wasn't alive, right no, i was. but we don't expect the fed to let that happen. we expect to see rates probably in the 6% range. i've heard some say it could push towards 7%, but barely three months ago, people were saying, oh, we're looking at
5.5% for the end of this year. i think it's really a toss-up of how they go. i don't see them above 7%. >> there's no 18 -- there's no way that's happening again, right? i mean, we're not going to see a 10% mortgage in the next five years? >> no. >> no. there we go. diana, thank you very much for those who may still have an a.r.m. not an arm, but, you know, adjustable rate mortgages. so what is the bottom line for stocks and your money? that all depends on the bottom line for corporate america earnings bob pisani is here to explain that and how rates, bob, impact everything >> yeah, they really do. and remember, mortgages and bonds compete with the stock market for yields. the fed higher and longer mantra is the problem this creates a very wide range of potential outcomes for stocks so the direction of stock prices, it's good to be reminded what determines the stock prices three factors really matter here first, dividends second, the direction of future earnings estimates are they going up or down? what's the direction and the multiple you're willing to put on those estimates.
this multiple is how much are you willing to pay for a future stream of earnings so here's the problem. we don't know what the right numbers should be for earnings or the multiple. nobody can agree right now so right now, for example, earnings for 2023, they're expected to be up 8% but a lot of people disagree in a recession, earnings can and do go negative should we assume a recession some people are, some people aren't should we go in between and assume, okay, earnings are going to be flat for 2023. or should we assume they're going to be down 20%, which could very well happen in a very serious recession. the same with the multiple or the p\e ratio, as we call it when the economy and earnings are growing, you might pay a higher multiple, say 17, 18, even 19 times forward earnings but if we're entering a recession, a serious recession, no, you might only pay 13 or 15 times forward earnings so, which is it? are we in a mild slowdown or are we in a serious recession? no one can agree, brian, so there's a very wide range of
outcomes on the models the wider the potential outcome, the more volatility you can get because, one day, bears are predominating, the next day, the bulls are predominating and no one can agree on where we should be going brian? >> bob pisani looking at stocks, thank you very much. appreciate it. stocks continuing overall to move lower after posting a big loss yesterday, in response, probably, to the fed's latest rate hike. but your next guest sees a window of opportunity for investors in the medium term, saying that another big market plunge is not likely this year joining this year is barry bannister, chief market strategist at stifel you have to calm our nerves a little bit nouriel roubini says maybe a 40% headline is coming you don't think we're going to get a big plush, do you? >> no, no. when you think about what happened, and if you inflation adjust the s&p 500 index, which is what you have to do to look
at any long period, if we had a 23.7% decline in the first half, bounced up through august and got jackson hole we're now back in real terms, inflation adjusted, to that june low. 36.66, if you inflation adjust so the request is, do we break down to new lows and for that to happen, the fed doesn't have to just stay where it is, it actually has to get more hawkish in the november 2nd and december 14th meetings i just don't see that. i expect good inflation data, good prints to come in lower and i think that the jobs market is going to school off jolts rates that powell has talked about have already topped again, you have to incrementally turn the screw and get more tight. otherwise, what has been done is priced in. and i think the fed has done enough to bring down inflation >> yeah, you just wonder, though, barry, by bringing down inflation, are they also bringing down the economy? and if they bring down the
economy, they bring down corporate earnings, which then brings downs multiples, which then brings down the market. how much faith do you have in the fed to navigate this -- i feel like it's that denzel washington movie where he's a pilot and at one point, he's completely upside down >> yeah, that's a good movie there were seven recessions before paul volcker, the volcker shock, around '79 to '81 and in those seven recessions, the market fell about one month before the official recession began. it was declared after the fact after volcker, there were five recessions, the market fell right on the dot a lot of those were panics or crises so the market is not going to be six, nine, ten months ahead of a recession. if you look at yield curves, ten-year minus three-month or ten-year minus two-year, they indicate a recession by mid-'23, figure june, july, august. market's not looking that far ahead. they're just looking at what the fed's going to do in the next two meetings and what's going on
with the economy in the fourth quarter. so we don't have a lot of reasons to worry about it. i guess, if you're just looking out three months, if you look out six months, nine months, yeah, i think there's real trouble. in fact, i think that the fed's rate hike that they did yesterday was the one that will be looked back on as the mistake. >> you know, the average market drawdown, i believe, in a recession, is the s&p 500 is down something like 31 or 32%. that's the average averages can -- as we know now from data, averages are generally not a good metric, because they tend to skew certain things, but that said, we're down about 25% from our high, barry. >> 27.5. >> 27.5. even better. so it feels like, if you just look at historical averages, i'm not saying that this means today is the bottom, but at the same point, history says that multiples are kind of where they should be in this economic environment. maybe in a good way. >> yeah. i mean, what really drove the market, and we've said this for
a long time, is the ten-year tips yield, the real yield that thing went from minus 1.2, repressed by qe4, one year ago, to plus 1.3. so that's a huge swing in the real yield and it accounts for entirely the drop in the market a thousand points on the s&p is about five multiples so now you've got a reasonable multiple, the fed has done a lot to bring down inflation. three-month moving average of pce or cpi inflation is already turned down. the question is, how patient will they be and will they dial up the rhetoric at the next two meetings or will they realize that central bank policy works with a substantial lag, and they've already done a lot, so why dial up the knob >> that's it we're going to find out where this thing goes, but historically, maybe some of the multiples are starting to make sense longer term. barry bannister, stifel, thank you very much. >> thank you all right.
we have got a lot left to do here on the schexchange, madman moscow, doubling down on his war in the ukraine is there any hope of a coup in the kremlin. plus, are fedex investors and the macro market in for another surprise after last week's profit warning? and can costco keep up with inflation? we'll get the action, the story, and the trade. both companies reporting after the bell tonight and do not forget, cnbc's delivering alpha conference returns in person next wednesday, september 28th. you're going to get the best ideas from some of the world's best investors you want to go there's still room go to cnbcevents.com to register "the scexchange" is back right after this
hey! if we want to build the future, matchingwe're going toription. need some things. like a high-speed internet connection that can turn my ideas into reality. like the skills to become the world's most powerful coder. way more space to collaborate. through project up, comcast is committing $1b to open doors for the next generation so they can build a future of unlimited possibilities.
welcome back to "the exchange." in the biggest escalation of aggregation since the war in ukraine has begun, vladimir putin has called for a mobilization of his country's reservist. this is something that has not happened since world war ii and it comes after a number of battlefield setbacks, outright losdss how exactly does this insane war end and what will it take to ultimately stop putin? joining us now is michael mcfaul, former u.s. ambassador
to russia, nbc news, international affairs analyst. ambassador, we saw videos of some rare public displays of anger, displays in the street. this has to be a very unpopular move, sending thousands of people, many from the far eastern regions to die, to slaughter. how does this end? >> i don't know. and i don't trust anybody who says they do know. what i can say so far is that putin is losing the war in ukraine. he wouldn't have made this announcement were he to be winning. he's desperate he did not want to do this calling up 300,000 reservists to go fight in a war that a lot of people don't understand why they're fighting is a very dangerous political move, but he thinks it's necessary, because he's losing on the battlefield
>> i was talking about this with my wife last night, and she asked, how does this end a group of generals pop their heads up and say, we are the government now, western world, you deal with us, putin is no longer in control and we're now the governing force of the nation is there any chance that happens? >> there's a chance. but i want to be humble here we're not good at predicting the future we in academia are not good at it the cia is not good at it either when they overthrew khrushchev in a scenario like you're describing right now, in 1964, a harvard professor was asked, well, why didn't you predict it? and he said, how could i predict it if khrushchev himself didn't know it was going to happen? so with that caveat said, i think it's important, there are a few things we do know. i don't think anybody's happy about this war the generals aren't happy, the
intelligence forces aren't happy, society is not happy, the elite are not happy, the business elite, especially, are not happy. nobody's winning from this war >> no. >> number two, there's now going to be greater costs as a result of this mobilization, which i suspect will trigger new sanctions. i most certainly hope it does. and that is more costly for the russian people and then, third, ukrainians have confidence now they are not just fighting a status quo war on the battlefield. they're pushing the russians out. i don't expect that's going to stop anytime soon. so you put all of those things together pb i think putin is in a very difficult position. and one more thing, even some of his closest allies are not supporting him directly in this fight. and i think he's, you know, he's not a very strong position right now. >> you feel like he's always been, i'm sure you've met him. i met him once in sochi, russia, at the olympics, as a group thing. i had no impression of the man
other than he was shorter than i thought he might be. where do you think he is now is he in some bunker in sochi or some dacha outside of moscow, three stories underground? because you can only isolate yourself so much before you almost remove yourself from power, especially to your point, ambassador, when you're angering all of the people around you, powerful people around you >> well, a couple of things. yes, he is isolated. he has been for a long time. even when i was ambassador almost a decade ago, i wasalso at the sochi olympics, by the way, as a u.s. ambassador. did not have a meeting with putin back then, because our relationships were not very good back then, 2014, they have gotten a lot worse but even back then, he does live out at his compound outside of the city, he doesn't listen to advisers he's been in power for two decades. that happens with autocrats that stay on too long most certainly, he miscalculated
in deciding to invade in february i think that is apparent to everybody now. he was told, it's going to be a cakewalk you would be embraced by ukrainians and russian speakers that wanted to be liberated. all of that was not true growsly underestimated the ukrainian military but the problem is, once you've made a bad decision, you either stop digging and compromise or you double down. so far, putin is doubling down and therefore, i suspect tragically, this war is going to go on for a a lot longer >> i hate to hear that, because that's not what the russian people need. by the way, yesterday i called it what -- i thought the war in some ways, ambassador, was a genocide if you look at the pictures of the dead russian soldiers, they tend to be from the far eastern part of the nations. is that too strong of a statement? i mean, he's sending these people from the rural hinterlands to die en masse. is this a form of genocide that he's committing? >> well, i'm not a legal expert
about the term genocide. i think what he's doing inside of ukraine is horrific and the way he's targeting civilians for political objectives, that sounds like terrorism or genocide to me for sure. but second, you raise a very good point he called it partial mobilization, right? you know why because the rich are going to pay their way out of having their sons be drafted. and over time -- and instead, the folks that are going to be drafted come from rural areas, poor areas, non-russian areas of the russian federation and over time, that will come back to haunt him. i don't know when, but over time, that is going to fuel resistance to this war remember, he can control media, but he can't control what people know about their own sons, primarily, and sometimes daughters, going to war. and that's going to be a problem for him in the future. >> and not coming home and they know that and they know that and let's hope that this ends
somehow soon michael mcfaul, former u.s. ambassador to russia, ambassador, thank you very much. >> thank you thanks for having me by the way, here's a big new headline in europe's energy crisis and a big flip-flop from the uk britain, today, reversing its ban on natural gas fracking. the country banned fracking three years ago, as part of its climate push but now the uk has to buy much of its natural gas on the spot market and you know from our coverage that prices there have soared. so power costs in the uk are out of control population is pushing back with a don't pay uk movement happening around electricity bills, which are doubling or even tripling for many homes and companies. the uk government clearly deciding that making sure that people can afford to heat their homes in years ahead is the more important policy move than their aggressive climate goals by the way, this could be good for u.s. companies that do oil-filled services around the world. not saying it is not a stock pick just say, look at names like schlumberger could be a big new market for them coming up, tech getting hit hard
lately only nasdaq 100 stocks are higher in the past month and more than 60 are down more than 10% in just 30 days does that mean now is the time to pay some value? plus, the great divide over returning to the office. the bosses want it, you probably don't. why things are bound to get more messy for emoys d rks.pleeanwoer go. go smaller carbon footprint. go these footprints. go saving energy. emerson technology can help heat pumps replace fossil fuel heating for a cleaner, low carbon future. go blue skies go. go boldly. emerson.
another busy day? of course - you're a cio in 2022. but you're ready. because you've got the next generation in global secure networking from comcast business. with fully integrated security solutions all in one place. so you're covered. on-premise and in the cloud. you can run things the way you want - your team, ours or a mix of both. with the nation's largest ip converged network. from the most innovative company.
bring on today with comcast business. powering possibilities. (vo) with verizon, you can now get a private 5g network. so you can do more than connect your business, you can make it even smarter. now ports can know where every piece of cargo is. and where it's going. (dock worker) right on time. (vo) robots can predict breakdowns and order their own replacement parts. (foreman) nice work. (vo) and retailers can get ahead of the fashion trend of the day with a new line tomorrow. with a verizon private 5g network, you can get more agility and security. giving you more control of your business. we call this enterprise intelligence. from the network america relies on. let's take a look at the markets and focus not on these, focus on the nasdaq. 1.5% decline 169 point drop the nasdaq is down on a numerical basis twice as much as the dow. the dow is not positive, it's
down 0.3%. nasdaq really getting hit hard solar stocks also getting burned sunnova, enphase, sunrun, the ticker tan having its worst month since april. when electricity costs rise, the price of making solar panels also goes up, because aluminum is so expensive. on the flip side, health care stocks are outperforming today eli lilly getting a double dose of good news the fda approving its cancer drug for new uses. merck is leading the down after one of its cancer drugs was approved for use in china. let's step out of the markets and get a cnbc news update with tyler mathisen >> hi, brian welcome, everybody here's your cnbc news update, up to the minute. an indiana judge has issued an order blocking that stale's abortion ban from going into effect the ban was passed in early august and abortion rights groups sued to block the law the judge said the ban, with its limited exceptions violated the state's constitution and is a,
quote, significant restriction of personal autonomy a mississippi official has pleaded guilty to conspiracy to commit fraud and theft in the scandal that improperly paid out millions of welfare dollars across the state john davis was a key figure in the state's welfare agency and the charges carry a minimum -- a maximum, excuse me, of 15 years in prison. remember, some of this welfare money went toward paying for a new volleyball facility that was requested by nfl hall of famer brett favre to benefit his daughter favre has continued to deny any wrongdoing speaking of football, amazon says that an average of 13 million people washed the streaming premiere of thursday night football last week that's according to nielsen's data the tech giant signed a deal worth about $1 billion a year to exclusively carry the mid-week game through 2023. we'll see what happens this evening. and tonight on the news with shep smith, the former president's legal troubles are
mounting how will trump mount a defense what's next in the multiple ongoing investigations more tonight on the news brian, back to you >> tyler, thank you very much. all right, still ahead, two big names on deck with results the first, fedex, already warning big on earnings and the economy, but call we have seen even worse today then there's costco, did inflation hurt or help the wheser, olalthe key things to watch and a position on both, coming u go. go scientist.
go software. go cure. go production. go faster and safer. emerson automation software helps breakthrough medicines get to market at warp speed. go human go. go boldly. emerson. i may be close to retirement but i'm as busy as ever. and thanks to voya, i'm confident about my future. voya provides guidance for the right investments. they make me feel like i've got it all under control. voya. be confident to and through retirement.
. welcome back to "the exchange." believe it or not, and you should believe it, there are still some companies yet to report their numbers and there are two key reads on the consumer after the bell. that is fedex and that is costco let us begin with fedex. now, likely, hopefully, not many surprises left for investors of the market after the company's major negative preannouncement last week, lowering estimates and withdrawing its guidance shares coming off their worst day ever on the news and on pace for their worst year ever. fr frank collin has the trades.
frank, take it over. what can we expect from fed gs tonight? >> well, brian, no huge surprise, as you mentioned, when it comes to revenue and epps the earnings warning kind of laid that all out. epps, 33% below the estimates. but the question is, is all the bad news priced in fedex trades on margins as well as it does revenue and epps, especially the margins for its express division, which is 50% of revenue consensus has 6.4% margin on the express division but here what we know, air freight rates are down 45% year over year. that's obviously going to hit this division. just the previous quarter, pricing was up 20%, obviously a dramatic reversal. and then we also have to look at the current-year guidance. that was pulled, but ceo raj, he's reaffirmed the fiscal year 2025 guidance. what you see is pretty ambitious. 4 to 6% revenue annual growth. margins in the freight division being incredibly strong. express being incredibly strong. so the question is, will there
be any change to that? we'll also be listening to the commentary on the call, when it comes to the dispute that fedex is having with its ground division, that's operated entirely by contractors. a faction of them want more money. and some of them have even threatened to not deliver and stop delivering on black friday, unless fedex is willing to renegotiate. a lot to talk about on the call and a lot of things to watch the question is, is all the bad news priced into the stock already? we'll have to wait and see >> we'll find out if it's a kitsch sink quarter, frank holland. frank will be on tonight with those numbers and reaction let's get the trade, though. david, down 40% in a year. fedex. i don't think they're at any risk of going out of business. at some point, is there value here >> i don't see any value right now. frank mentioned 2025 earnings. i don't care about 2025 earnings right now. the company has continued to deliver a box of because news. the preannouncement last week, as you mentioned, just calls into question the entire thesis that anyone could have on this name and it raises significant concerns about execution about what remains in my opinion to be
an underperforming asset but y'all mentioned, the cat is out of the bag right now the question is, how much of this is macro driven and how much is self-inflicted if you look at fdx really overextended themselves in returning their capacity and you couple that with the readthrough with some stuff from u.p.s., i would say this is more self-inflicted right now that's why we know this earnings ain't about the numbers. they're horrible it's all about instilling confidence in investors for the future that company can focus on profitability and free cash flow so i think if you believe that this is the only earnings cut that's going to occur, you can maybe tip your toes in here, but i'm staying on the sidelines right now. the name is going to be in the penalty box for quite some time. >> haven't heard it from u.p.s., dhl, the rails, any other trucking company it's really bizarre. let's move on. next up is costco. the retailer expected to report over $70 billion in sales this quarter and shares are up, almost 9% since their last re report back in may courtney reagan joining us now with the story on costco what's happening in issaquah,
washington, courtney >> reporter: you know, brian, it does seem like this is one of those pandemic winners that just keeps winning, especially now that we're in this inflationary environment. you have a consumer that pays a membership fee and they want to get the most out of that we're seeing an increase in traffic in all but five weeks so far, according to placer.ai. 4.22 costco. people are coming in, perhaps they're filling up their cars with the lower costs there because of the membership and stocking up on all of those bulk items and food inside the store, as we know the price of eating at home still continues to soar. you have really strong ratings on costco continuing from stifel, from bank of america, just to name a couple of them. they look at this and say, yes, there is a premium valuation here, but it's worth it. it's worth paying for because of the membership renewal rate, because of the strong sales growth, and because people just frankly see value in costco
right now, in this inflationary environment. >> i'm not joking, courtney, there's ten cars in line at every pump at the costco near me every time it's amazing how long people will wait for gas. courtney reagan, thank you very much all right, david, what's the trade? what's the investment on costco. you're shaking your head again what does that mean? >> courtney's right. winners breed winners and costco is a winner. brian, you're right, exactly, too. i think this quarter sets up pretty well for them, because we're seeing a lot of potential upside from gas margins. because they continue to leverage volume to benefit from a bunch of market share gains. and outside of that, i do think that there are some market participants out there looking for some commentary around some type of membership hike. something that happens, what, every 5, 5 1/2 years and the last one happened back in 2017. we are probably due on that. but i'm not betting or gambling on that. i don't think that they're going to announce it i understand that companies do have some opportunities to announce price increases during inflationary environments.
i don't see that right now, as a company that loves delivering on a valuable client experience, at, you know, a good price but in a nutshell, you know, this company wins through two different ways increased volume and leveraging sg&e not by increasing membership hikes. if you look at the bigger picture, the company tends to get market share gains in these type of environments this business model was born out of the inflationary 170s so i like costco here. i understand the valuation i don't have a rebuttal on that, but i do see some near-term upside, given some gas margins i'm playing it near-term >> good margins on those 12-gallon jugs of mustard, because who doesn't need that? all right, we have just 46 days away from the midterms. not that we're counting. and forget taxes or regulation one of the biggest fights brewing, it's over social issues and it's pitting typically pro-business republicans against the c-suite. that's right against. ylan mui in the house and we'll t reroheonhanext, coming up.
what do you mean? these straps are mind-blowing! they collect hundreds of data points like hrv and rem sleep, so you know all you need for recovery. and you are? i'm an investor...in invesco qqq, a fund that gives me access to... nasdaq 100 innovations like... wearable training optimization tech. uh, how long are you... i'm done. i'm okay. what if you were a gigantic snack food maker? and you had to wrestle a massively complex supply chain to satisfy cravings from tokyo to toledo? so you partner with ibm consulting to bring together data and workflows so that every driver and merchandiser can serve up jalapeño, sesame, and chocolate-covered goodness with real-time, data-driven precision. let's create supply chains that have an appetite for performance. ibm. let's create.
welcome back to "the exc exchange." with just over six weeks to go until the midterm elections, some politicians are turning their ire to new opponent in order to gain support. that is corporate america. ylan mui joining us with the first installment of business on the ballot, the first of 46 more to go. >> there are six weeks, as you said, brian. and corporate america is now in the cross fires of the culture wars, but some executives are fighting back. linked in cofounder hoffman is leading the charge to defeat republican candidates up and down the ballot who believe the 2020 election was rigged his top political adviser told me they've recruited several major dozen donors and they said they got onboard because capitalism breaks down without the rule of law. >> it's been very good for planning purposes to know that when the government that is currently in office starts making mistakes, they can be replaced by a different
government through a peaceful transfer of power that is what's at stake >> he pointed to coke and major league baseball. more recently, conservatives have called out black rock and visa and mastercard over changes that track gun purchases >> their central mission is now anti-business. are they going to come for us? yes, of course of course they're going to go after disney or major league baseball >> not all tech billion nars feel the same way. peter thiel has helped, but he has warned that republicans need a positive vision for the company and not just nihilistic negation >> nihilistic negation
three times. we have about a week left to avoid another government shutdown, but thanks to joe mannix's new energy bill, congress would be facing another round of brinksmanship and also talk to us about this potential, what's the right word? flip from schumer on the pipeline permitting that manchin agreed to pass the inflation reduction act? >> exactly, brian. senator manchin struck a deal with democratic leadership to get a vote on permitting reform, in exchange for his support of the inflation reduction act. and now he is calling in that chip ma manchin's bill would require regulators to approve the mountain valley pipeline, which runs natural gas through 300 miles of his home state of west virginia, and it requires the president to prioritize 25 energy projects of strategic national importance for expedited review that require a full environmental assessment. but there is not a lot of support for this republicans don't like it, and republicans have said they're not going to vote either
it seems doomed to fail. the problem is that the senate plans to attach this to a must-pass government spending bill the deadline to avoid a shutdown is next friday, so expect some drama on the hill before then. >> so they shove it into a bill that sort of has to pass, which makes everybody conflicted, because they want one thing, but not the other. this schumer versus manchin in a way? i know they're on the same team, theore theoretically, or can both teams win. manchin can say, it's those other elite democrats that did it, not me and they both come way with a bizarre political victory at the expense of the pipeline permitting process >> we'll see how this actually plays out. but it's true that sometimes on the hill, things need to fail in order to pass. so this reminds me of back in 2019, when the government was shut down for something like three weeks and president trump at the time was calling for the senate to pass a bill that would reopen the government, but also fund his border wall republicans knew it wasn't going to pass. mcconnell put it on the floor
anyway, let it fail, so that they could then say, we at least tried, and then move on to a clean bill that would fund the government and reopen government offices. >> that they have to strip that out -- >> exactly so you need to take a little pain in order to get to the solution and the process >> we'll see how much pain there's going to be between maybe senators manchin and senators schumer or maybe they're both going to win. ylan mui, thank you both coming up, the nasdaq, the underperformer yet again today it's down 1.5% but listen, do you want to buy low for the long-term, sell high we'll get the tech names maybe you want to think about buying right now, including this cybersecurity name, down 21% aris year it's your mystery cht, ylan. do you know who that is? i don't either we're back right after this.
that shakes your soul, that changes your destiny. i'm gonna go check on those tater tots. learn all the ways to save with amazon. municipal bonds don't usually get the media coverage the stock market does. in fact, most people don't find them all that exciting. but, if you're looking for the potential for consistent income that's federally tax-free, now is an excellent time to consider municipal bonds from hennion & walsh. if you have at least 10,000 dollars to invest, call and talk with one of our bond specialists at 1-800-217-3217. we'll send you our exclusive bond guide, free. with details about how bonds
can be an important part of your portfolio. hennion & walsh has specialized in fixed income and growth solutions for 30 years, and offers high-quality municipal bonds from across the country. they provide the potential for regular income... are federally tax-free... and have historically low risk. call today to request your free bond guide. 1-800-217-3217. that's 1-800-217-3217. not a good day for the markets. stocks extending losses from yesterday. really lost the last couple of weeks but investors largely pulling out of big cap tech. amazon, alphabet, microsoft, all down within 7% while facebook is down 12% the iphone isn't helping apple,
down 3%. joining us is james chockmock, partner of clockwise capital what do you say? want to buy low and sell high. i don't want to catch a falling knife. now they go down another 10% >> i think powell is more the problem than the solution. you know, going into this in our base case for 22, we will have a reception optically but now he's doing everything but throw the kitchen sink to ensure we have it so the calculus shifted after yesterday's meeting. the way we're thinking about it. the transformation and technology and shift to the cloud will persist no matter what and with that in mind we are looking at companies that are facilitating that change and by the shift of the cloud we're talking about either on the data
side for legacy companies to the cloud or shifting consumer behavior and think there's a reason why adobe paid 50 times sales because it's a platform that defines the future and think we're grossing up those positions and increasing our shorts and hedges. >> you got me going with your first comment. i posted something in my social linkedin and twitter showing that the fed's dot plots showed more than a 0.75% fed rate that was a year ago. now we're at 4 1/2%. i mean, they completely whiffed everything i'm sure jay powell is a very nice man but i do wonder, i do wonder can tech stocks not take off or maybe let me ask it this way, if there is a change at the fed, would that help the markets and big tech because some people do wonder how this fed continues. >> yeah, one thin i'll say about powell is that he is in a version, the realtime data, everything is just with a
telescope into the past. with that being said as far as tech we think the indices, broader indices will not -- the composites of them will not be able to keep up with the rate of change and think that from -- for the qs and s & p, the c chalkiness will continue and won't see the rebounds off the lows if you're surgical pick the cloud first company, companies we've named like snowflake, like crowdstrike and over to uber on the consumer side. we think they will continue to drive the transformation forward because growth will be scarce during a recession and those are the places where the growth will not only be most resilient but the most multiple expansion but as far as broad markets your guess is as good as mine. >> five years after a recession, the s&p 500 tends to double but you got to have the stomach to get through the recession first. james, good stuff on tech and also the fed a lot of people heard jeff tell
scott maybe powell is not the guy for the job basically. thank you very much. >> he was spot on. >> thanks, james. coming up, the return to office rift. new data showing a growing divide between what managers want and what employees want stick around go. go green. go wind turbines. go gorgeous reliable grid. go emerson software. go science people. go breakthrough meds and safe science. go space age welds for super silent cars. go big. or go home. from software that delivers new cures at warp speed, to technology that makes clean energy reliable, emerson innovation helps make the world healthier, safer, smarter and more sustainable. go boldly. emerson. [watch: heart monitor connected.] technology makes it easy to connect to everything from your wrist. [watch: speakers connected.] but to connect to all your clouds, you need more than technology. [watch: 50 feet to pin.] well that's not fair. you need cdw to implement vmware cross cloud services.
a portfolio of multicloud solutions. it'll simplify workflows, speed innovation, and secure all of your applications. how did you get here?! [watch: the backdoor is open.] vmware makes connected multicloud possible. cdw makes it powerful. i was having challenges with my old bank. lots of red flags. yellow ones, too. fees, penalties... unnecessary fees! playing dirty. so i broke up with bad banking and moved on with sofi checking and savings. now, i get up to 2.0% apy on all my money, and pay no account fees. feels good to get my money right. banker disqualified! break up with bad banking. get 2.00 percent interest, and earn up to $300 when you set up direct deposit. sofi. get your money right.
♪♪ ♪♪ ♪♪ be ready for any market with a liquid etf. get in and out with dia. 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. t. rowe price. invest with confidence.
all right, welcome back. for a brief spining moment the dow turned positive. recession over, economy booming now negative again and the recession is back on using survey data and analytics from its office suite of products microsoft found that, surprise, workers and managers continue to disagree over whether employers need to be working in person to be productive steve kovac joining us will this be more productive of a conversation >> i believe so. our manager -- let's break down the data in showing this huge disconnect between managers and employees,
that's all according to microsoft which surveyed 20,000 people and looked at analytics from its suite of office apps, microsoft office about hybrid working and the return to office the stunning find here, 85% of managers say they don't have confidence their employees are being productive when working remotely, shocker, i know. they feel more confident when they can see the productivity in the office, but opposite for employees. they say they're already productive and microsoft saying it comes from office apps proves that too so people are using their work apps while working remotely so there's this huge class set up as many companies are requiring people to return to the office this fall but if employers want their folks coming back data shows they'll have to do more. 73% of employees said they need better reasons beyond a blanket mandate to return and can vary based on age gen-z and millennial workers
generally want to go to the office because they know their work friends will be there gen-x and older employees care more about their team members being at the office. overall disconnect between the two feels like it's setting up a huge clash. >> 85% is like all the percent. >> pretty much >> basically nobody is doing anything. >> and only 12% or so of managers if i'm remembering correctly felt confident their workers are being productive while working remotely. >> listen, you can look at vpn data and where people are logging in i know people block off their calendar so you have the red dot but blocked off their calendar for 8 to 5 i know people. >> not you, of course. >> who may -- i'm on tv. you know i'm here. how does this play out do we need a movie and epic duel at the end darth vader gets thrown through the thing? >> the reason microsoft put it out. they have a solution for this, of course. >> get to the office. >> get to the office but have
tools to help you see how much productivity your workers are doing. we get these emails actually you might notice -- it's called viva. >> i get them. i delete them. >> it'll send a productive update through the week. >> they're always -- it's ray parker i always feel like somebody's watching me. that does it for "the exchange." see you monday "power lunch" starts right now brian, i don't want to know how productive i am and i don't know want to know how many steps i take welcome to "power lunch. i'm tyler mathisen along with seema mody, here's what we got. central banks around the world are hiking rates virtually all of them. global inflation fight is moving yields higher presenting investors now with new opportunities in fixed income and challenges across the book we've got your playbook. plus, th