Weight loss drug trial and we look at one business segment critical to growing the economy but unaffordable for many child care the ceo of Bright Horizons joins us with the stock up more than 45 so far this year first, though, lets talk about the market dom chu has the numbers. Down and in the red if you look at the picture overall, were hovering towards the lower end of the trading range. The dow is down about 290 points or three quarters of 1 to the downside the s p 500, the broader measure of the market, up 4479, down 39 points, or about nearly 1 , as well you can see there just for context, its been a down day overall. At the highs, we were still down 20 points and down 54 at the lows ill call your attention to just one number, were not really there yet. But watch 4421 some traders are talking about that as a target that they are watching right now, the 50day moving average for the s p 500 we havent been towards these levels since going back to the memorial day holiday, around that time. So watch that. The nasdaq composite down 1. 25 . Kelly mentioned the banks. Very much in focus for the moodys downgrade. A lot of them seeing some downside pressure. Among the names downgraded by moodys, webster financial, down about 2. 5 capital one and citizens financial, those stocks down 1 to 3 . Even the s p 500 Regional Bank etf is down 2. 5 as well, right now. So watch the fallout from that moodys report and kelly mentioned the two really bright spots in the market today come from drugmakers eli lilly and nova eli lilly with a better forecast these both make drugs that treat diabetes, weight loss. With novo, their drug could reduce the risk of heart attack or stroke by 20 , better than expected eli lilly has a drug, a diabetes related meld case, that is getting approval right now for possibly using in weight loss down the line. So watch these two ill show you one more chart, kelly. The two of these guys, up 42 for lily novo, up 40 both get gold stars because both hit record highs on that craze over obesity drugs more later on that. Now to that blockbuster news from moodys, out with a big warning about capital and liquidity for larger u. S. Banks. That has led to private lenders to step in to fill the void. Don peebles just told us how this works the competitors in this process for this loan were all private credit in the past, it would have been a mixture of a National Global bank, a couple regionals, and one or two private credit lenders. But we have done deals previously with private credit, but the bulk have been with global or Regional Banks my next guest provided the credit for that deal Peach Tree Group invests in commercial real estate and have completed hundreds of transactions lets bring in ceo Greg Friedman thank you for being here with me thank you private credit, i wasnt even sure what it was trying to describe it felt like an area where there was a lot of pension fund money, and now people talk about it as if its a common sense alternative to going to a bank this industry has really boomed over the last since the great financial crisis, given the fact that banks have been a big part in financing commercial real estate you know, it wasnt as significant going back 40 years ago, but you have had this consolidation across banking, that has made this more impactful. Fast forward to today, private cred sit a bigger piece, just given the dislocation. Even without the dislocation, private credit has grown like 5 x over the last 12 years so about 1. 5 trillion peach tree, i assume youre based in georgia or active down there. One of the reasons why banks got involved in commercial real estate, they know the Market Private credit, i always felt like it was a step removed maybe thats no longer the case. Its not like you have Loan Officers out on the streets. How do you solicit and source and place and underwrite these deals . We do have a team of ri originators. We have a large focus towards the Hospitality Industry and we have about 2. 5 billion of equity we are vertically integrated, so part of the ecosystem, we have built a platform called stone hill, and so theyre underwriting asset managing, servicing all the debt investments. So we have the ability to do direct loans and take advantage of whats happening in the marketplace with the void being left by banks. But we also have the ability to pivot and during the pandemic, we were one of the biggest buyers of debt from Regional Banks, Community Banks looking to off load loans. Youre so similar to a bank in some ways you dont have the same capital requirements, but you have other kind of investment firms do you think that this allows you to offer funds at better rates . What is your competitive advantage in the market, is it the cost or availability of capital . In this market, being able to execute and have capital available is huge. Thats a big advantage more importantly, we really understand, because we have a 360 degree view of the marketplace, give tp fact that we have vertically integrated. So we own, operate, and develop commercial real estate so we understand the issues that different ownership groups face, what it takes to operate assets, and so because of that, we can really structure loans that are flexible and meet the needs of our customers, which are the owners of commercial real estate you had loans in mesa, arizona, Hotel Conversions in florida and huntsville a mobile home park, you know, activity near detroit. You have really done kind of a lot of different things. I guess just tell me how you think the economy and lending is doing right now, as we are all concerned that this pullback could manifest in six to nine months from now. Its created within commercial real estate a pullback theres less transaction volume occurring, because we dont have an efficient lending environment, although its great for us, because we are filling that void. Theres 1. 9 trillion of dollars of commercial real estate loans between now and 2026 but there is no question, this is going to put further pressure thanks today, when you look at regulated banks today, they have pulled back like 75 of what they were lending compared to last year. Thats going to put further pressure on just activity and availability of capital. So groups like us will benefit, and it will definitely going to impact the environment have you been through a down market before . In the sense that we worry about banks and exposure, and we are worried and depositors whats the contingency plan if you lose 20 to 40 because some of these loans go bad . As a firm, i started my company back in 2007 before the great financial crisis we have been through the pandemic, which we have a large exposure in the Hospitality Industry so that industry was really tested through that period of time our loan book was tested and held up extremely well we feel very confident based onldz how we underwrite and fund our loans. We feel very much that we are protected and we dont have some of the same challenges that the banks have greg, thanks for your time today. Thank you for having me speaking of commercial real estate, new data shows delinquencies are on the rise. And that could be the next shoe to drop for some banks diana is here with the details office is a major component of commercial real estate stress right now, but its not all of it thats what i want to show here, with new data. Overall, delinquencies are rising, even when you take out office, hitting 4. 16 in july. When you put office back in, the rate is 4. 41 , the highest since the end of 2021. A big chunk is from hotels in san francisco, but four out of the five commercial sectors saw increases. Only industrial continues to do well now, to office, where delinquencies have more than doubled sense the start of 2022, they have hit 4. 96 , and many loans havent even come due yet. For Office Properties that are already shown signs of distress, that has missed a loan payment or maturity date, values on new properties are down 50 , and for older properties, theyre down about 60 . The cre distress will leave marks on some banks. Kelly . Diana, thank you. One of my next guests is a buyer of the Regional Banks here even after the downgrade and in light of the commercial real estate market. Welcome to you both. Mark, kre, i mean, oh, man, dont just tell me its leverage well, we talk ed about the ke for the past two months and its up more than 15 in the past month. So it hasnt been a bad mplace o be theres nothing new in this report we are aware of the higher cost of deposits, and thats legitimate no sector is better poised for expense reduction and mergers than the banking sector. Its the one area where even the Biden Administration can get behind aggressive merger and cost cutting activity, because were overbanked and its long overdue. As the pressures mount, we expect wellmanaged regionals to not be stuck like a deer in the headlights so jeff, i dont know if you have been dipping your toes in this area or have any thoughts of the moodys downgrade i think marks right. They were late to the party. Theyre acarric in nature. Its 2023, not 1923. You know, theyre still impactful. They are, but not like they were at the end of the day, i just dont think its that impactful. We start with fitch last month, i think the ratings are a little overblown, but there is a reason here when you see this trying to get the 50 day moving average, but you look at some of these names, theyre getting hit on the chin today, but they have also had a nice run we see Interest Rates moving in a historic manner. Is the market getting choppier i am thinking about tom lees morning from a week or two saying its going to be a toucher slog here. You talk about volatility im optimistic, but when you talk about the vix, those are the expectations for the s p 500 for the next 30 days where we just came from, this is a little wowonky, but realized volatility is what the s p 500 does daily so that was less than half of a percent, the market has been slowly moving. We have seen the vix above 19 today. So now this is not panic we are not seeing people buy protection i think this is very healthy consolidation, when you see it come back down all right so mark, lets turn back to some of your picks. We mentioned the kre thats so controversial. And dramatic some of the others, you have apple, microsoft, oracle, meta, do those names ever come out of the portfolio . No, i think theyre here to stay i think since they make up part of the index and a big percentage, just about everyone owns them any way. Each one has its own story, and i like the fact that apple and microsoft have pulled back it might even continue, and thats going to create opportunities for valueminded investors to buy Great Companies at better prices the story with meta, we have an Election Year coming up, and its going to be huge, huge advertising dollars. Google will benefit from that. Metas had a huge year this year looking into the 2024 election cycle, i think were going to break all sorts of records for add spending, and theyre both very well positioned for that cycle. I think if you consider how youown those tech darlings, right . I think owning them in an equal weighted manner makes more sense. In 2022, im going to new jersey and talk to the folks over there, because there is a motion in this marketplace. But when you talk about the leadership, we have seen in 2023 kelly, the tech leadership, i think it persists because the tenyear should stay under 4 . Thats been the Guiding Light new york doubt about it, the tenyear note. Mark, you do like disney. Is this an opportunity for people here . Longterm patient investors, im not going to bet against bob iger he came out of retirement. He didnt do that to soil his stellar reputation all the bad news is out, and the last time i checked, were supposed to buy low when theres blood on the street, and disney will be poised longer term to benefit. Lets move on to this if im not mistaken, we were talking about defense. We thought it would benefit from bipartisan support ukraine was bringing people together but the stocks are still struggling it seems as though budget in d. C. Is trumping everything and has people concerned two thing that is highlight in that space. One, boeing is one of the Largest Companies that is a winner raytheon had a single stock, out of the blue event. Its going to cost them some money in the longterm i think for a countertrend purchase, investors could use defense as a hedge against these events so i dont think its necessarily a bad place to be. Theyre two of the three Biggest Holdings lockheed martin, down 6 all year it fits that narrative, kelly. So owning a name like that is essential. You still feel comfortable owning it when it feels like the stock is telling you, despite all the great narratives and the positive tail winds, this isnt their moment theres too many head winds. That was the exact narrative for boeing you have to be patient with some of these naming and own them when the rest of the folks dont want to. Theres a buyer for every seller and a seller for every buyer mark, jeff, thank you both. Really appreciate your time and thoughts on the markets today. Coming up, child care spending accounts for a fifth of a familys income. The former fed president says we have to make it more affordable. What will it take to bring down costs . Well ask the ceo about that next on the heels of their Second Quarter results and following the pharma stocks, hitting record highs today well look at the impact the obesity drug boom is having on consumer staple stocks and here is a glance across the markets, where the nasdaq and russell are neck and neck. The s p down only three quarters of a percent, 243 point drop for the dow. The exchange is back after this vo Verizon Small Business days are back. From august 7th to the 13th. Get a free tech check and special offers. Like a free 5g phone. Plus, switch, keep your number, and get up to 300 off. With verizon business. Its your business. Its your verizon. If you wake up thinking about the market and want to make the right moves fast. Get decision tech from fidelity. [ cellphone vibrates ] youll get proactive alerts for market events before they happen. And insights on every buy and sell decision. With zerocommission online u. S. Stock and etf trades. For smarter trading decisions, get decision tech from fidelity. Icy hot. Ice works fast. Heat makes it last. Feel the power of contrast therapy. So you can rise from pain. Icy hot. Wow, you get to watch all your favorite stuff. So yoits to die for. Pain. And its all right here. Streaming was never this easy, you know. This is the way. You really went all out didnt you . Um, its called commitment. Could you turn down the volume . Here, you can try. Get way more into what your into when you stream on the xfinity 10g network. Welcome back to the exchange. The dow down 250 points, as it continues to reelsome what of the moodys downgrade of Regional Banks we saw bond yields moving, as well now, nasdaq is down 1. 15 . Beyond meat is plunging 16 today after missing revenue expectations by weak u. S. Demand, having its worst day since may, down 95 from its alltime high of 240 a share. Meantime, every name in the kre Regional Banking etf we were just discussing is negative, with the group tracking for its worst day since june 1 as you just heard, our last guest was a buyer. And regulators are also fining global banks for 500 million for long standing failures to maintain internal records and communications, including allowing employees to use channels like whatsapp bnp, and bank of montreal was fined 60 million. For a full list of banks facing fines is at cnbc. Com the soaring cost of child care is getting more attention as politicians look to keep the economy growing. Take a listen. I would love to see us reprioritize or increase the priority of educational attainment, 0 to 5, the whole ecosystem, skills training, secondary education. I think we have let that lag a bit. But just real quickly, do you throw money at the problem how do you fix it . Teachers salary is part of it child care that is affordable. Well, as costs have risen sharply post pandemic, parents are spending 20 of their annual income on child care, compared to the 7 experts say is sustainable. Im joined by a ceo who runs a child care company and the stock is up 40 year to date they just reported a slight beat on the top and bottom lines. Lets bring in Steven Cramer, the ceo of Bright Horizons teach, welcome thank you very much its a pleasure to be here great to have you describe to us how your company works. So back 35 years ago, the founders recognized that there was a real challenge for working parents as it related to accessability affordability, and the quality of child care. So starting back 35 years ago, we started partnering with employers who had a vested interest on behalf of their employees to invest in child care and so through the capital that they provide, as well as the ongoing subsidy, we have the ability to serve working parents who have that added benefit from their employers. I think our Parent Company is one of them. So how does the benefit work does the employer and the customer split the cost effectively . Yeah. So comcast is a client so thank you very much for that. So we have clients of our Child Care Center business, and in that regard, we have onsite centers at more than 300 sites across the country for employers. And essentially, the employer is responsible to build out the site, typically on their campus or in their building then they provide typically ongoing subsidy to offset the quality of child care for their employee in addition, in the case of comcast, and nearly 1100 employer clients, we have something called backup care thats really when an employee has an intermittent breakdown in care arrangement, and that employee can bring their child to one of our centers or send a caregiver to their home for that day. The shares are up 46 this year it seems more and more people are turning towards needing this kind of support. The only thing i can see being a longterm threat is if we offer universal prek or something to that effect. The cost of getting the kids from 0 to 5 years old is astronomical for a lot that is unaffordable the reality is that i and the Company Believes investment in child care, whether its three employers or government, is positive for working parents so universal prek is an example. There are some municipalities that offer that. New york city is a great example of that. We actually participate in those programs we look outside the United States, we operate in the you can, netherlands and australia they have formed a government supporting child care. We flourish in those environments, as well. And so from the perspective of what is good for Bright Horizons, in addition to that, we would welcome government support. I take your point universal prek would be better and the government could pay you. It would be like college where it costs 50,000 a year but no one is paying. My question is, why has the coast gone up the last couple of years, sit labor costs driving that weve all noticed it, anecdotally, most of the providers we have seen annual costs go up by several thousand dollars. So delivering high quality child care is expensive. So ultimately, we have looked to invest in our teachers so that comes at an expense. So our view has always been that employers are the remedy to try and keep costs down for working parents. Certainly, we have had to raise tuition as we accelerated our wage investment. On the other hand, its really important to make sure that we are providing the best experience for young can children, given that 90 of Brain Development happens in the first five years of life question about the high turnover that people sometimes experience your earnings speak to the fact that you do have some cash to throw around could you raise wages, become an industry leader, and thus reduce turnover just talk about how hard its been or might still be to find qualified workers . Yeah. So its certainly cha ly challeg our belief has always been to hire people with skills. So one of the most important innovations we have brought to the industry is the Teacher Degree Program where someone who works at one of our centerses that ability to earn their fouryear degree free with no out of pocket expenses so we are trying to increase the number of Early Childhood educators in the field, and for us and for the field, thats a really important element to it wages are certainly important, and we have continued to professionalize our field and increase wages but we believe that growing our own has always been the best solution anything that we can bring the cost down at this point or keep it from not rising as quickly . Look, i think that wages continue to increase, and the largest component of any Child Care Organization and certainly Bright Horizons, is labor costs. So the Early Childhood practitioners doing the heroic work in the classroom are the beneficiaries of the wage increases. At the same time, you know, that obviously has to either be offset by increases in tuition, or we have really important relationship wls our employer client that allow that to suffer some of those increases that are normally passed on to parents. Its certainly heroic work. Steven, thank you for joining us today. Hope to check back in soon thank you Steven Cramer with Bright Horizons still to come, its telecom tuesday. Well tell you what they are saying about this deal and the underperformance of dish the exchange is back after this ah, these bills are crazy. She has no idea shes sitting on a goldmine. Well she doesnt know that if she owns a Life Insurance policy of 100,000 or more she can sell all or part of it to coventry for cash. Even a term policy. Even a term policy . Even a term policy find out if youre sitting on a goldmine. Call Coventry Direct today at the number on your screen, or visit coventrydirect. Com. Welcome back to the exchange. Im Tyler Mathisen the federal grand jury that invited former President Trump is meeting again today that could signal that the special investigation into trumps efforts to overturn the 2020 election could add more defendants soon. Trump was charged with four felony counts last week and the indictments detailed the alleged coconspirators played in the scheme there is speculation that some or all of them could be criminally charged, as well. The Biden Administration can enforce regulations on ghost guns from the Supreme Court today in a 54 decision. The regulations are aimed at reigning in privately made firearms that are difficult for Law Enforcement to track the and americans are pulling money out of their 401 k accounts at alarming rates because of financial distress bank of america reported that the number of people making hardship withdrawals during the Second Quarter was 36 the bank saw a dropoff in average contributions, kelly, to the accounts back to you. Too bad tyler, ill see you shortly. Coming up, eli lilly and norvo hit some record highs. Well look at the impact their obesity drugs could have on the food ecosystem hexcng iba aert ehaes ckft this dude, whatre you doing . Im protecting my car. Thats too much work. Weathertech is so much easier. Lasermeasured floorliners up here, seat protector and cargoliner back there. Nice out here, side window deflectors. And mud flaps. And the bumpstep, to keep the bumper dentfree. Cool its the best protection for your vehicle, new or preowned. Great. But where do i . Order. Weathertech. Com. Sfx bubblewrap bubble popped sound. Welcome back to the exchange. Obesity drugmakers are posting huge gains today the data shows that not only does obesity drugs help people lose weight but reduces the risk of heart attacks and strokes by 20 . That could help insurers and employers justify the high monthly cost of these drugs and sending shares of novo nordisk up as much as 17 . Eli lilly up 13 , partly after it posted stronger than expected earnings and a guidance hike now, its just the latest buzz surrounding the industry that Morgan Stanley expects to reach 54 billion in size by 2030. With that demand, they are looking at the impact you could have across the food and beverage space here to talk more about that is pam kaufman from morgan sltanley welcome, pam thanks for having me. Is this effect already showing up, you think . We see this as a longer term implication for the food ecosystem. The growth in the drugs is exponential, and we see impacts to the Food Beverages and restaurant industries. Our biopharma analyst expects drug use to grow five fold over the next decade. And given that these drugs reduce hunger, we see impacts to the Food Industry over the longterm. So its still too early to see an impact now. But we think this is a longerterm risk that investors need to Pay Attention to, and the Food Industry will need to adapt to its fascinating. One thing to say hey, theres a weight loss drug out there, or maybe even, hey, you can keep eating like normal but the idea is this would impact we heard that it does impact what people desire to eat. And as a result, talk to us about who you think some of the biggest losers could be. Sure. So our Research Shows a Significant Impact on Consumer Behavior when theyre on these drugs. Which could have significant consequences for the Food Industry we did a survey of patients on these drugs. They cut down on the number of meals they eat by 20 , the number of snacks by 40 . Overall, it results in about a 30 reduction in daily calorie consumption. So really, we see this as having an impact across the board on Food Companies and also fastfood restaurants. In particular, we found much more pronounced impact on snacks, sugary drinks, and fast food so within my coverage, the companies that can be most affected are names hick hostess and hershey. Its hard to be so happy, but i kind of am i go, you know what . Maybe the economy would do a little better with a little less market cap in those things maybe im a grinch for saying that, but you have some beneficiaries, as well the protein drinks with protein bars so you think consumers might reach for healthier options . Yeah. So what was interesting in our work is that consumers happen to be eating or patients on these drugs are eating fewer categories across the board. But there were only a few categories that stood out where theyre eating more of them. And those were Weight Management foods, also higher protein foods like poultry the companies that have exposure there are simply good foods, they make readytomake protein shakes and bars. I think that coincides with people choosing to have a healthier lifestyle when theyre on these drugs fascinating fascinating that you can inject yourself or take a pill one day and it has that pronounced of an impact across every aspect of what your taking i know you dont cover the restaurant industry, but some may be exposed pam, thanks for joining us today. Thanks for having me. On that note, dont miss an interview with eli lillys ceo thats coming up tonight on mad money. After a short break, well tell you what else is going on in the stock market. Plus, the latest tensions between the u. S. And china, including that flotilla near alaska back after this. Dad, we got this. We got this. We got this. We got this. We got this. Yay we got this. We got this life is for living. We got this lets partner for all of it. Edward jones welcome back, everyone lets show you a chart and tell the story. Dish and echo star higher after announcing plans to reunite 15 years. The merger ties dishs pay tv Satellite Service and 5g network with echo stars satellite communication network. Im a big investor in our company, so certainly im disappointed in our performance. But i also have the confidence to know thats shortterm, and that youre going to see the culmination of the things that we put together. Youre going to see all of that pay dividends for us our investor also be rewarded for that dish shares are down 40 , and echostar is up 40 this year but echostar did surge 21 yesterday ahead of this announcement the stock was upgraded to a strong buy partly due to its strong balance sheet. So including yesterdays move, shares were up about 16 from jan 1 through fridays close there you have it. Coming up, joe biden expected to issue an executive order to limit investment in chinese tech this timing could ultimately hurt the United States well explain that, next you ok, man . The internet is telling me a million different ways i should be trading. 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Lets create. fan 1 there ya go thats what im talkin about what will you create . josh allen is this your plan to watch the game today . hero fan uh, yea. I have to watch my neighbors nfl sunday ticket. josh allen its not your best plan. But you know what is . Myplan from verizon. Switch now and theyll give you nfl sunday ticket from youtubetv, on them. hero fan this plan is amazing josh allen another amazing plan, backing away from here very slowly. fan 1 that was josh allen. fan 2 mmhm. vo for a limited time get nfl sunday ticket from youtubetv on us. A 449 value. Plus, get a free Samsung Galaxy s23. Only on verizon. Welcome back to the exchange. The Biden Administration is expected to curb u. S. Investment in china has part of the on going efforts to restrict u. S. Tech, things like semis and ai republican mike urged the president to go further, including limiting investments in stocks and bonds as well. It comes as chinas economy continues to flounder with exports showing the steepest drop since february of 2020. Imports from the u. S. Were also down 12 and my next guest says this is classic decoupling which could wind up hurting the u. S. And spark retaliation. Joining me is steven roach and david reedle welcome to you both. Steven, ill start with you. It sounds like youre not saying these moves are a bad idea just we shouldnt think they are without risks or consequences. Well, thank you for having me on u. S. Politicians have figured out decoupling is bad. It raises costs and exacerbates tensions with china. So guess what, you know, they decided to rename the concept and call it derisking. Whatever you want to call it, the numbers are very clear in 2018, the on set of the trade war, china accounted for 47 of our total merchandise trade deficit, and now the number is 32 so we have decoupled, whether they want to call it that or not, and these actions along with Mike Gallaghers illinformed efforts to decouple capital flows i think will exacerbate problems in the United States and lead to further conflict with china. David, do you agree well, i think youre quite right. Because of changes in supply chains and trade flows, the trade flows today are very different than they were prepandemic and i think that thats partly political and partly economic. I think the world discovered that they couldnt rely entirely on china for so many oftheir trade routes and trade linkages. So thats been diversified china trying to come out of the pandemic hasnt been able to find its footing because people have found other solutions to their manufacturing. I completely agree on cutting off the Capital Market connections. I dont think thats a wise move for the u. S. To ignore entirely as an Investment Option the second largest or maybe the largest economy in the world depending on how youre measuring it. What do you think the impacts will be if any day now were expecting this executive order to come down, david . Well, my view is the executive order is another brick in the wall of stuff thats already been announced this is u. S. Trying to control flow of u. S. Resources and knowledge and electrical property and funding into the development of ai and chips and semiconductors in china. The industry already knew this was coming they knew this was the u. S. Intent was to shut off flows into those particular sectors. So i think thats pretty limited. But i think if you start to really attack some of the u. S. Listed chinese names, alibaba and these names are very heavily held in Pension Funds and other funds to provide exposure to the Chinese Market i think that would be unwise and it doesnt sound, stephen, like were necessarily going to go that far so is this intermediate step warranted . I see at the same time today we have some lawmakers calling on the ftc to address potential threats in the internet of things from chinese cellular modules. Well, first of all, kelly, keep in mind the select committee on china that Mike Gallagher is the chair of, has no policy authority whatsoever all they have is a bully pulpit and gallagher is using that very effectively to moan and scream about chinas what do you call techno authoritarianism, and put enormous pressure on two companies, black rock and msci to respond to a whole slew of questions and other forms of interrogation. But they cant make policy in this committee and thank god for that so, finally, then stephen, as people look at the chinese stock market, which has been underperforming i would think about comments that china has simply not been a good investment, a good steward of anybodys capital. If you think thats going to change or where do we go if we continue down this path . I think ultimately the stock market will be driven by the fundamentals of the chinese economy which are terrible the trade data released over night, its not just that exports were down. Its that imports were down much more sharply than expected which indicates the weakened state of internal or domestic demand. China increasingly has more of a japaneselike problem with an ageing work force and weak productivity and a debtintensive response to these problems, which borrows a page right out of japans script. So they have very Serious Problems to address and the policy actions that they seem to be taking right now do not appear to be forceful enough to address this problem. Yeah. That seems to be widely agreed, david, that for whatever reason, maybe lack of capacity or because theyre focussing on National Security or what have you they dont seem to be pulling out any kind of big bazooka, are they . E. Well, thats right. They held a lot of dry powder for stimulus i think youll see fiscal stimulus and white goods support and support for ev sales domestically they realized with the falloff in imports and exports they really need to focus on their domestic market. Mr. Roach is right, thats proven to be difficult for them to mobilize that domestic demand in high youth urban unemployment and other challenges throughout the economy. But i do suspect youll see beijing come in with some sort of stimulus here in the coming weeks. What kind of stimulus i think it will be to spur domestic demand, rebates on buying new washing machines and air conditioners that are domestically produced, installing solar, things like that stomping out the capacity in their economy with domestic demand its an old tool they often use. David makes a point, those are essentially the types of stimulus actions that china has already unveiled on monday they introduced a 20point plan to stimulate domestic private consumption. But these measures were driven more by their central planners who have a micro focus in looking at products in very narrow pieces of consumption china needs a macro solution to its consumption problem. I stressed around written books for years without the failure of them to reform their social safety net for health care and retirement until they do that, chinas consumers will save and not spend and theyll be stuck with failing to deliver. And the pandemic only worsened that anxiety for sure thank you both stephen roach, david riedle. We appreciate your time. We wait this announcement from the Biden Administration next on power lunch, well get trade on some of the biggest earnings movers, amc, u. P. S. Tyler is getting ready ill join him after a break. This thing, its making me get an ice bath again. What do you mean . These straps are mindblowing they collect hundreds of data points like hrv and rem sleep, so you know all you need for recovery. And you are . Im 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. Im done. Im okay. Ah, these bills are crazy. She has no idea shes sitting on a goldmine. Well she doesnt know that if she owns a Life Insurance policy of 100,000 or more she can sell all or part of it to coventry for cash. Even a term policy. Even a term policy . Even a term policy find out if youre sitting on a goldmine. Call Coventry Direct today at the number on your screen, or visit coventrydirect. Com. Good afternoon, everybody. Welcome to power lunch. Alongside kelly evans, im tyler mathis stocks shrugging off yesterdays rally. A big downgrade u. S. Banks from moodys stock showing serious volatility plus, lots of earnings related moves. Well break them all down. Plus, edge of your seat concert inflation becoming a big