Transcripts For CNBC The 20240703

Sector. Demanded december constrk the ceo joins us with what he is seeing now and what he expects from here. Lets start with the markets, though, and dom chu has the numbers. There is some green out there, kelly. Its a reversal, because we did see modest gains earlier. The dow up one half of 1 . 127 points to the upside, 33,679. The s p up about 30 points, three quarters of 1 gain. And just to put those moves in context, we were up 43 points at the highs of the session. Down ten points at the low. So theres your trading range so far, tilting towards the higher end of things. The nasdaq outpacing the whole market, up 140 points. One of the places to keep a close eye on is the oil market. You are seeing u. S. Benchmark is in the red down by 1. 5 . But at one point today, on an intra day basis, we did hit the highest levels going all the way back to august of 2022. Keep an eye on the oil prices. Again, lower for the day, but did hit the highest levels since august of last year at one point. And then the stock of the day, the worst performer in the s p 500, carmax, used car retailer, down nearly 10 right now. The Earnings Report was kind of mixed. Profits came in line. Revenues were slightly better than some estimates, but they did show slowing signs of demand for the used car market overall amid Interest Rates going higher and that dynamic in cars changing. So carmax shares, down 9. 5 . Kelly, back over to you. Dom, thank you very much. Dom chu. And its another day, another move higher in longterm bond yields. The tenyear, making moves towards 4. 7 . And wait till you see whats going on overseas. Stove Steve Liesman is tracking the action for us. Stocks are getting a little reprieve from the nudge down in yields today, but the trend towards higher yields and the challenge for stocks it presents is clear. Since early july, yields are up to near 4. 60. And now the yields are closer to 5 than to 4. Investors have to think about what that means for valuations in the stock market. The tenyear could hit 5 if you have the continued hawkish remember, they took away cuts next year and extended quantitative tightening. You have the u. S. Debt downgrade, a high er neutral rate. It is not supply that looks to be driving rates now. In fact, this upward movement is curious. Because much of this comes with repricing of inflation expectations, but without that repricing, so the move is in real yields and term premium. As long as were in this world of higher deficits and with Central Banks selling and hedge funds, theyre wary of losses. Those yields around these levels could be around to stay. And a fed that wants tighter financial conditions, dont look to them for help. They cannot be expected to do much to keep a cap on rates. Not to put you on the spot, but you have had the privilege of being there all morning long. I know rates and the economy, this has been a theme. What jumps out to you . Do people still see these treasury yoelds as a buying opportunity or as a warning point that may yet drive higher . I think theres two kinds of people. Some are thinking about it, some are hyper obsessed with it. Rates keep coming up, but im not sure that its internalized, kelly, this idea of thinking about what is the volatility in the bond market versus the volatility in the stock market . Where are we in terms ofwhat kind of paradigm are we living in . Is this a shift here, going back to a pre2008 world, where this higher bond volatility and that demands higher yields, and also a higher yield environment . Or can we click our heels, kelly, and go back to the kansas of 1 or 2 yields . I dont think thats happening. This idea of a higher neutral rate is one that we discussed on this show. That embeds itself in the baseline of the bottom of the yield world. I think the idea of hey, we dont know what yields are going to be. But if you are thinking about a risk reward ratio, cost benefit of whatever stock youre purchasing, you better start plugging in those numbers. I saw ray making some allusions to those, as well. Lets unpack this. The labor market still hot, although Economic Activity falling. Jobless claims rose less than expected. Second quarter gdp was weaker, though. Pending home sales sliding more than 7 in august, the biggest drop since last year. And the kansas City Regional survey declining in september. My next guest says it could spell trouble for the fed. Welcome. What kind of trouble . Good afternoon. Thank you for having me, kelly. So basically, our base case is that the fed does another 25 basis point hike in november, but there is a risk growing that they wont be able to do that, and theres a couple ways that could may out. One is if there is a Government Shutdown, they might not have the data for september in time for the november meeting, which case we think theyll punt on the hike in november. The other possibility is that Economic Activity could slow in the early part of q4. Theres a bunch of risks that are building up. The uaw strike would be the biggest of those, but we could have a Government Shutdown, as well. And sticky Energy Prices and student loan repayments. If you get a perfect storm of all that and youre tracking closer to zero per fcent gdp growth, the fed will probably not do that hike in november. Absolutely. The real risk to the economy and to Financial Stability is if weak Economic Data is not met with falling longterm Interest Rates. Like whats happening in germany right now. But if we dont get the data, were not going to know what that reaction function looks like. I think thats a definite risk and a definite possibility, kelly. Well see how long the Government Shutdown lasts. But kelly, i made sort of a little bit of a career of telling people that issuance doesnt matter, because it really hasnt. The markets have been able the Global Markets have been able to take down the issuance from the treasury. I dont think theres any longer the case, and i think the point youre making, is you could have these high yields among flagging economic growth, and the question becomes whether or not the treasury gets a better hold on whats happening and the president needs to understand this, Congress Needs to understand this, that you are going to keep paying unless you start to give some visibility to an end to this issuance to the treasury market. Exactly. And over at mkm this morning, they were basically saying the coming downturn will trump the deficits, and in other words, he would be a buyer of bond yields because the weakness we are heading into, like it always does, will drive yields lower. Right. So there is risks around the deficit, which could drive yields higher. However, if the economy does slow down, i guess one Silver Lining is well worry less about higher structural rates, higher neutral rates, then well have evidence that higher fed rates did impact the economy eventually. That should help bring yields down to a certain degree. I disagree a little bit on that, just a little bit. I think the problem with the next downturn, which hasnt happened yet, but how much ammunition does the fed and the treasury, how much will they have to combat a downturn . I think we might be a little bit, you know, youre kind of on your own on this one, in that yes, there will be some rate cuts on the short end, but also i dont think you can look for massive fiscal stimulus or i assistance in the event of another downturn. Absolutely agree. The fed probably has some ammunition to cut. How much will depend on the neutral rates and how they evolve. But on the fiscal side, there is a serious concern that if there is a downturn, theres not a lot of room for stimulus. You guys have been in the no downturn catch lately. Any of the recent data or the Fourth Quarter could be a slump, is that revising your view lower once again . Yeah, it is a point of concern. A lot of the headwinds for the Fourth Quarter, look likely to be temporary. So that looks like a soft patch, not the start of a recession. But if you look at the Second Quarter revisions, Consumer Spending revised down to 0. 8 growth, thats concerning. Particularly the reversions were large in services. So housing, transportation, recreation services. Those were revised down meaningfully. So thats something to watch for. Does the consumer have less momentum than we previously thought sp last word, steve. The other quick question real quickly. Because that revision down in the Second Quarter, does that mean the retail spending numbers are going to be revised down, and does that mean the Third Quarter numbers, which are sky high, are lower if that jumping off point for the Second Quarter was indeed lower . Retail sales were already revised down for june and july, so thats what we will expect to see reflected in the Consumer Spending numbers for august tomorrow. But these revisions for the Second Quarter wont affect retail sales. All right. But we do know they leave us on a weaker trajectory for the consumer than previously thought. Inflation eating up more of that spending than we realized. Thank you both today. We appreciate it. As bond yields rise, my next guest warns the u. S. Dollar and u. S. Treasuries may no longer be the riskfree assets they once were, posing a risk to the Sovereign Health of the u. S. Hes hedging that risk with gold, and with several international holdings. Joining me now is matthew mcclenen. He is with first eagle global value. Welcome. Thank you very much. Let me start with your toplevel concerns here. If i didnt come to you obsessing about it, would you come to me . You know, one of the things that concerns me is the complacency that was in markets until recently. We have had no economic landing, if you look at total payrolls relative to the total population, its still outgrowing population growth. One of the reasons we have this window of apart resilience in the u. S. Economy is while the fed was raising Interest Rates by 500 basis points, we also had roughly a 500 basis point from the fiscal deficit from the summer of last year to the summer of this year. So its very unusual to see this fiscal laxity at the peak of the economic cycle. This is a real thing that markets will have to digest in the coming year or two. Were sitting at 8 . If we dont get a recession, and the government has to roll at the current high level of Interest Rate, we could see double digit deficits. So we have a fiscal problem right now. Youre exactly right. If we dont get a recession and rates stay here, we could see wide deficits. If we do get a deficit, well forget it. Steve liesman last segment was suggesting, what happens if the fed and the policymakers cant then come to the economys rescue . Although i tend to think the fed will have no choice but to kind of restart that qe. Well, thats the dilemma the fed faces, because then its efforts to quell inflation, theyre risking a softer viability here. The fed is facing Financial Stability consideration it is we get into the kind of trouble you are suggesting, and caught in a difficult corner between reexpanding Monetary Policy and keeping rates tight. If they do enter qe at some point and we have these large deficits and the whole Interest Rate will pose a real risk to the dollar in financial markets. I think this kind of risk is not very well priced in equity markets at the moment. I cant remember many times in 40 years where you have seen this move in rates holding up. We started in 1987, it didnt end well. So theres some risk here in the markets. So its so funny to hear you say yes, but im buying blue chip companies. This is when a lot of people break out the tinfoil hats and gold bars. Gold, im looking over the past year, yeartodate, gold is down as real rates have risen. Over the past year, its up 8 . Do you think this deserves a mace in peoples portfolios now . So let me just say in terms of why we own some blue chip stocks, setting aside gold for a second. We acknowledge that the crystal ball i shared with you my concerns that valuations could come under pressure and we are seeing a decline in market breadth here. We dont know what the future holds for certain, thats why we do hold gold as a potential hedge. Gold has held up extremely well relative to the carnage we have seen. So when you think about hedge assets, gold has held very well. Often we see in the latest stage of the tightening cycle, as you pointed out, when real rates are under pressure, the gold softens a little at the margin. But what happens next . When these higher Interest Rates rolls over, if it does, then gold will have its best days ahead. And the other thing i would just mention is that when you look at the worst decades for stock over the last century, they have often been the best decades for gold, whether it was the 30s, 70s or the period around the Global Financial crisis. Its almost like youre Holding Stocks as a hedge against the world not blowing up. Which has been successful over the last 90 years or so. Let me ask you, because this relates back to the dollar, you own some international stocks. Obviously, if the dollar stays strong, that would be a headwind. It would make sense if the dollar stays strong. Why do you think the dollar will weaken from here . Well, the risk to the dollar is if there is a moment in time where Market Participants have to deal with the fiscal situations intractable, and lets face it, what political will is there to embark on a fiscal tightening in an Election Year . And what bipartisan spirit do we have to embark on this . I just dont see it. And if the markets at some point focus on the intractability of the fiscal situation, that could lead to challenges where you see more risk premium in bond markets, and also when you see currency weakness at the same time. Think of what happened to liz truss in the uk last summer. So those are risks that the u. S. Could face. We saw it in the 1970s. These are not new risks, but the budget deficit is very high to the peak of the cycle. Its a generational high. We havent seen these kind of deficits since world war ii. So this all makes quite a bit of sense to me, and i guess the final question would be, can we just kind ofkeep all of these risks in the background . I can hear a lot of veteran stock pickers saying, well, you know, weve been through rough times before and we always figure it out. You know, even those who argue that you should be buying bond yields here, because at some point we are the cycle is going to turn, and maybe thats what solves this, if bond yields come back into the 3 range. If the cycle turns down, its in the going to help the fiscal situation. I think thats the key risk. But i do acknowledge your point that there has been a lot of macro prognostication from a lot of people over many years. Thats why we continue to be a owner of businesses that have some kind of incumbency advantage. Having a diversified portfolio is one antidote to having these topdown concerns. So we do have gold as a potential hedge against these kind of fiscal and currency concerns. On the flipside, we own securities that were willing to own for the next decade that are very cash flow generative. If i may quote curry, you have oracle, maybe meta, hca, British American tobacco, Phillip Morris for a sense of where you are looking. Matthew, great discussion. Really appreciate it. Thank you, kelly. I want to mention a quick market flash on uber and door dash. A new york state judge rejected a bid from gig economy firms to block their novel law setting a minimum wage. Uber and dash are still higher today, but dash shares are pairing their gains somewhat on that news. Coming up, the Writers Strike may be over, but there is another one on the horizon, this time in the health care space. Up next, well speak with a Union Director representing nearly 100,000 Frontline Health care workers about those negotiations and well get an analyst take on the stocks most exposed to the strike. Private credit has been booming, but the feds rate hikes have led to demand destruction. And now he warns we will see a wave of defaults across the states. Were live later in the show. And here is a look at the broad markets. The dow hanging on to a 114point gain. The tenyear yield is just below 4. 62. Back after this. Welcome back to the exchange. From the Writers Strike in hollywood to the autoworkers strike in detroit, unions across america are fighting for better pay and job conditions. But just as hollywood wraps up its work stoppage, a Health Care Strike is on the horizon. Nearly 75,000 Kaiser Permanente workers are expected to walk out on october 4th if an agreement to resolve a staffing crisis is not reached by the end of this week. The stoppage would be the largest Health Care Strike in u. S. History, and could cause a major disruption to the broader ecosystem. For more on what to expect, we are joined by caroline lucas, director of the coalition of kaiser permanent unions. And jerald holts joins us, as well. Caroline, tell us about the staffing crisis you are experiencing. Thank you so much, kelly. So we have been raising the alarm as Frontline Health care workers about the staffing crisis now for years. We are really concerned about the impacts to not just worker safety, but also patient care of continuely working short. And kaiser executives are not showing up with the urgency needed to address this crisis. As i read here, patients are seeing these are mostly hospital patients, wait times for phone responses, room assignments are at dangerous levels. Kaiser wants to raise premium 15 and providing less care. Do i have that right . You nailed it. Were really concerned about a Health Care System that is showing up in a way that undermines the Staffing Levels needed to deliver the care that we count on. By the way, 75,000 workers out of 85,000 may walk out, is that because the 10,000 are critical . Im not saying that the other workers arent essential, but nurses, thats a whole other level. Absolutely. Every single one of our Health Care Workers wants to be bedside with patients. Thats what they signed up for and worked on throughout the pandemic. Thats where they want to be today, tomorrow, and next wednesday. But tens of thousands of Health Care Workers, Frontline Health care providers, feel like they can no longer show up in good faith if we are not having the Staffing Levels we need. Do you think a strike is going to happen . If its never happened before, what do you think the reaction by patients and so much else is going to be . And what are the sticking points . In the uaw strike, it seems to come down the wage negotiations. Staffing, staffing, staffing are the sticking point. We want executives to bargain in good faith. We want kaiser executives to solve the kaiser short staffing problem. And we want patients to be safe and get the best possible care when they come to kaiser facilities. So you want a lot more nurses. Are you even asking for a pay raise . Our comprehensive proposal covers a whole bunch of areas. It does include wages and benefits, because that is a critical part of attracting the folks we need in the Health Care Industry and retaining the ones that we have. As im sure you know, we are seeing an exodus of Health Care Workers without enough new people coming in. Heres the statement that kaiser gave to cnbc. What about in is not quite hitting the mark for you . Kelly, we have been bargaining for months over critical issues. While some minimal progress has been made, all of the thorniest issues, including a comprehensive solution to the kaiser short staffing crisis, are not on the horizon. So we are showing up this weekend. We will be available 24 7 until the moment we walk out on strike, to try to reach an agreement. Because every single Frontline Health care worker wants to be providing care. Would you say at this point we should expect at least a threeday strike . I would say at this point we are optimistic, but not hopeful we will be able to avert a strike, and we are trying our best to figure out how to get executives to wake up and listen to the alarm bells being sounded by Frontline Health care workers. Caroline, thanks for joining us today. Appreciate it. Thanks for having me. Lets turn to jerald holts now to go through what a potential strike could mean for the markets. It sounds like maybe this starts as a threeday effort. Unlike the autoworkers, you cant imagine Something Like this could drag on. Kelly, thanks for having me. I agree, it doesnt sound like this is going to be major strike. Were looking at a threeday strike potentially. I think this is one of the many issues that is impacting the Health Care Sector and the medical device space more specifically. But to carolines point, there is a lot of optimism, obviously it may not happen. But if it does, were looking at a few days. So looking at some deferred procedures that will take place. Before talking about medical devices in particular, what would happen if hospitals and maybe some that are not publicly traded or anything like that, if they had to increase staffing lefs to what this union would like to see happen. Well, i think thats a question for kaiser at the end of the day in terms of how many staff some of the workers there feel are needed to supplement the existing workforce and things of that nature. But i doubt it would really impact the ecosystem beyond, you know, the 40 to 50 hospitals that their operating and a lot of the other Physician Office spaces that they own, as well. So its much more specified for them and less for the broader network. Its been just an intense couple of years for the Health Care Sector in particular, having to kind of go through covid, coming out of it, and feeling now like they have chronic staffing shortages. Lets talk about why this area in particular could see more fallout. Talk me through that. Well, there are so many cross currents taking place in medical devices. We have obviously the biggest one has been, you know, the impact that these obesity medications could have on the broader space. You know, we have talked about it at length before in terms of, you know, what the weight loss medications are going to do to delay or defer a lot of the procedures that are taking place, whether its cardiovascular, orthopedic, et cetera. The diabetes medical device stocks have gotten hammered. Sleep apnea is another category as the street is thinking these patients are going to be in much better shape and theres going to be less need for some of these devices. Were going to see, i dont know, i feel like the level of degradation that the stocks have seen has been so extreme that were kind of anticipating some meaningful downward revisions for revenue. And if we dont get them, then maybe theres going to be a pause in the action and these stocks will work. But the narrative is obviously, you know, very noisy and significant, and its been very, very difficult to disprove it. Finally, any other fallout to the Broader Health care space, whether from pressure on expenses through the strike and so forth . I dont think so. Were looking at some of the impacts that some of the suppliers and Device Companies are going to kind of be held with over the near term. The strike is kind of a nearterm issue and one that has really crept up over the past couple of weeks. Hopefully, you know, that risk subsides sometime this weekend into next weekend and we can all move forward. But i dont think theres going to be a major issue with respect to Insurance Companies or providers as a result. At least not obviously. Im very curious if this ha happens. Thank you so much for your time today. Appreciate it. Thank you. Coming up, carnival is the third best Consumer Discretionary stock since january. Well ask our trader about carnival and nike and a bonus name ahead. And take a look at the sector heat map with 9 of the 11 groups in the green. Communication services, the outperformer today. Utility and energy in the red. The exchange is back after this. With your hearing, if you start having a little trouble, youre concerned that its going to cost you money. To this day i only paid what i had to pay for the device. When i go back everything is covered. Theres so much youre missing by not having hearing aids. well find you a hearing aid that fits your lifestyle and budget. Unlock your riskfree trial during our limitedtime sounds of autumn event. Call 1800miracle to book your appointment today. Welcome back to the exchange. Im Pippa Stevens with your cnbc news update. A new Biden Administration rule will cut funding to college programs. The Education Department says the policy is a move towards accountability in the Higher Education system, and will mostly impact forprofit colleges. It will revive a rule established during the Obama Administration repealed by president trump. The Union Representing hollywood actors is set to resume negotiations with studios on october 2nd. The decision comes just hours after the Writers Guild strike ended after 150 days. Actors went on strokike in mid july. Nearly 1,000 applicants are submitting their resumes for a new dream job. Usa today hosted two reporting physicians covering taylor swift and beyonce. Enthusiastic applicants were required to attach a video cover letter. One reporter shot hers from a pool. Kelly, it is definitely a treatment assignment for some. Pippa, thank you very much. Coming up, 30 Million Companies in this country are making less than 10 million in revenue. My next guest says they are all underbanked. Hell join us live with the opportunities were seeing. And as cnbc celebrates hispanic heritage, we are sharing the stories of influential hispanic business leaders. Here is vanessa aryell. My parents raised me to believe that i can do anything. I came to the u. S. , i went to college here, i pursued a lot of different opportunities before launching my company gold belly successfully. And i just know that this is an American Dream for my parents. It makes me really proud to have been able to deliver that. captivating music the first law of thermodynamics states that energy cannot be created or destroyed. but it can be passed on to the next generation. welcome back to the exchange. The boom in private credit has been a decade plus in the making, helped by low Interest Rates. According to data, the market has nearly tripled in size since 2015, with the amount of private debt topping 1 trillion last year. But as rates continue to climb, were starting to see some demand destruction. With me now is damian, welcome to the program. Kelly, great to see you again. It seems to me private credit basically has been floating loans, which might be great for people getting 10 yields, but what about the companies that have to pay that, is that sustainable . Look, thats been demand destruction. So if you have to borrow at 10 when a year ago you were borrowing at 5 , theres sticker shock. This will play out over a couple of years, because we are all in agreement. So Good Companies are hurting, and we are seeing for smaller businesses, theyre running out of options. The banks are not there for them the way they used to be. Wall street is focused on big private equity controlled businesses. So yes, of course, we are seeing some demand destruction as a result of higher rates. Tthe wall street journal talking about how this is hurting riskier companies. Youre looking at the 30 Million Companies under 10 million in revenue. These are microcaps, with debt loads exposed to high rates and maybe a more difficult economy in the next 6 or 12 months. Its interesting, sort of a pyramid if you think about it. You have 30 Million Companies with less than 10 million in revenue. But 240,000 companies with revenue of 10 million to a billion dollars. So the question becomes, who is capable of banking both segments . That is checks of 5 million all the way up to 100 million or 200 million for these businesses. Theres been a huge sucking sound where private equity controlled Companies Get a lot of attention from traditional private credit, and obviously banks had been going in that same direction. Now we have, as you point out, the employers of 50, 75 million americans in this bucket of 30 Million Companies with less than 10 million of revenue, and the 240,000 companies with revenue less than 1 billion. We need a new solution to finance those companies, and im excited to say this is a proamerican conversation, its in everyones interest to figure out how to get capital when you talk about up to 70 million americans employed by these businesses. By the end of the cycle, you are extending credit to all sorts of companies. When it starts to turn, though, that credit starts to dry up. So it will be a more difficult slog for the next couple of years, i would imagine. Can your firm, can the private credit industry, if these were coming from the Traditional Bank sector, you might talk about refinancing, especially if rates drop a little bit. Any solution that you can offer to take some of the pressure off some of these Indebted Companies . Well, i think there is, and its counterintuitive. Do the right thing. If you think about centering businesses that are outside of the coast, you know, today the private credit industry finances basically five states. More than half of the capital and private credit goes to just five states, kelly. So you have 45 states that are not getting the attention they deserve. If you segmented it by zip code, you find that 80 of capital flows to high income places. So there is a tremendous opportunity to finance good growing businesses that need the capital, and this is where value comes into play. If you do the right thing, i believe the Capital Markets will give you a lower cost of capital and a longer duration capital, either through programs like the sbas, Small Business Investment Company program, or what you are seeing in the structure products world with stepdowns for firms that send capital to communities that need it. If you do the right thing, you can get the money and help businesses using conservative structures. We dont have to bet on softwares and service. We can bet on manufacturing businesses, restaurants. Theres so many Great Industries employing millions of americans. They need the capital, and they need steady, reliable partners. This point about demand destruction on the asset side, i want to clarify, you think about it from the liability side of the balance sheet, youve got floating rate debt on that side, too. Its harder to raise capital as a private credit shop just as it is harder to find companies hg to borrow at these higher rates. This is why we have to create jobs, focus on businesses head quartered outside of just the coasts. Yeah, i think people have to get more creative. Look at other parts of the market, how to win market share and take advantage of the remaining opportunities. Thank you so much for joining us today. We appreciate it, damian. Thanks, kelly. Coming up, the shares of the big three automakers rising today. The uaw strike in its 13th day, and it involves a little more than 12 of the members. They are poised to expand their strike locations tomorrow if no further progress has been made. And now both sides are blaming each other for incidents against striking workers, including one instance where a vehicle hit five pickets in flint, michigan. The uaw Union President saying stellantis and gm is enabling violence. Shares of all are mixed since the strike began. Gm down more than a percent. Stellantis hanging on to a 2 hernan2 gain. Well get more, next. Together, we built something truly beautiful. It takes years of dedication to get to this milestone. The New York Stock Exchange is a symbol of what america is all about, the potential of an American Dream. It is day one. A lot of work has happened to lead to this historic moment. The only way you can move a Society Forward is a true expression of freedom. In the u. S. 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Every day, businesses everywhere are asking is it possible . With comcast business. It is. Is it possible to help keep our Online Platform safe from cyberthreats . Absolutely. Can we provide health care virtually anywhere . We can help with that. Is it possible to use predictive monitoring to address operations issues . We can help with that, too. With the advanced connectivity and intelligence of global secure networking from comcast business. Its not just possible. Its happening. Welcome back to the exchange. Markets hanging on to some green today. Dow is off the high when it was up 228, but also off the negative numbers we saw. The s p is up half a percent, and the nasdaq up about 0. 8 of 1 . I want to mention shares here of this spinoff of j j that ipod lately, threatening to break below 20 a share. Priced at 22 a share back in may. Here is a look at some of the other recent ipos, all moving higher today. Arm trading at 54. Instacart, its above that 30 ipo price. And klaviyo above that level as well, right now. Still to come after a quick break, Short Interest in carnival is clocking in at around 11 right now. And nearterm options imply a 6 move in nike on earnings after the bell. Well preview results of both names. Thats next on the exchange. all toooo youuuuu sean i wish for the amazing new iphone 15 pro jason sean do you mean this one the one with titanium . sean no way i can trade this busted up thing for one. jason maybe stealing wishes from the birthday boy is not your best plan switch to verizon and trade in any iphone and get the new iphone 15 pro on them. sean what . jason yup, and on an Amazing Network sean and i dont have to ruin anymore birthday parties jason yeah, that ship has sailed. Lets go get you the iphone. Here we go, come on hon. vo trade in any iphone in any condition for a new iphone 15 pro on us. Only on verizon. Welcome back to the exchange. A couple of big Earnings Reports on tap, and weve got the trades ahead of those prints. We are looking at kicks and chips, sports imports, talking nike and carnival on the exchange. New street advisor founder and ceo, delano. Welcome back. Thank you, kelly. Lets start with nikes report after the bell. These have been the worst two for the stock since 1997, down nearly 40 all together. Goldman saying foot lockers report is bad news for command. Directtoconsumer may not be better because Brand Momentum has been softening. They say china a similar picture after a strong q4, macro uncertainty and competition in the key market for them. All of that said, what would you do with the stock here . Those are things that obviously are headwinds for the stock. I still like the stock and i will be buying here. Theres a few reasons why. I do think directtoconsumer has its challenges but that area is strengthening and thats a strategy nike is looking to obviously move into more. If you look at their most recent report, 50 year over year jump in revenues on directtoconsumer as opposed to their wholesale side of the business. Even the share is trading down quite a bit yeartodate as opposed to, you know, what the s p 500 is doing. That also is an opportunity i think for investors. If you think long term, you believe will have a little bit of softness in demand in the near term. The long term, that will kind of pan out and the company will continue to grow revenues. I think it is a good trade here for investors as well as the fact that theyre doing well on the dividend yield side at about 1. 5, 2 annual dividend yield. Sticking with it, im not going to make a justdoitpun. I will move along to carnival. The krcruise ship operator tracking for its best year since 1998 despite double digit losses in september. Ubs giving a bullish and saying it has been positive and rising fuel costs priced in. Critics warn cruise lines are among the worst performers in times of high oil prices. What do you do with this one . Not only worst performers in those times, but if you look at the cruise line stocks that have done well so far this year, but if you look at carnival it has been unimpressive over the long term. I think those are one of the reasons why if you have been in the trade since the beginning of the year it is going to get choppy ahead but you would potentially hold on. There has been pentup demand for travel, for leisure, for discretionary since the beginning of the year but it may really soften now as we look at either the consumer getting weaker or inflation coming down, one of those two things has to happen. It is a trade i would hold if someone has a good entry point and looking to maybe withstand volatility, but it could be a profittaking time for carnival. 80 up yeartodate still which is remarkable. High Short Interest as well. Carnival ceo Josh Weinstein will be on squawk on the street tomorrow morning to discuss and react to the results. Before we go can we quickly ask about, is it still a meme stock, blackberry . They preannounced earlier this week, by the way, they disappointed on cybersecurity and tech revenues. Shares are down since then by about 14 . Anything to watch for here . You know, i think the meme rally could have died over 2022. It could you know, this is one that, you know, i think they have some struggles, as you mentioned, you know, the revenue on the revenue side. The sales cycles, some of those things with their partnerships, obviously idle makers going to be prolonged going on in that area. The shifting of business over the past years is tough thing to do. I would like to see it play out and probably be seen on the sidelines waiting for more of it to play out before i would jump into the stock. Let me broaden out for a second because you mentioned concerns about the economy, the market. When you see, for instance, bond yields doing what theyre doing, any temptation here to say, you know, why play around with any of these names, im not going to t bill and chill, maybe we are passed that. It is like long bond and, i dont know, dream on or something. Are you enticed by those offerings and what could be a softening backdrop . Yes. Really it is for me a barbell strategy in the sense we are looking at both sides. It could be t bill and shell. It could be you are looking at the short term or long term when it is bond to treasury because you are getting strong yield there. Then, of course, if we see even much more of a correction when it comes to growth, when it comes to tech which i anticipate we potentially will see, for those people who have been t bill and chill, they can take some of the cash and take opportunities. I would wait on the other side of the barbell, on the growth side for a little bit until theres a little bit more of the potential pull back. But thats probably the best strategy right now for investors if you are looking at Interest Rate environment, if you are looking at where yields are, if you are looking at what potentially has to happen to consumer to potentially a littler inflation. Thats kind of the strategy im keying in on. Delano, as always, thanks for you time. Appreciate it today. Thank you, kelly. Delano sapporo with new street advisors. For more analysis on markets and the economy sign up for my newsletter at cnbc. Com newsletter or scanning the qr code on your screen. Next on power lunch, we are heading to the scene of breaking bad. Thats your hint. Dom is getting ready. He is in for tyler who is busy with delivering alpha today. I will join you on the other side of the break, dom. Welcome to power lunch alongside kelly evans. Im dominic chu. Coming up on the show, stocks are higher today but in a couple of days from closing the books on a bad september, does will boil down people are investing in bonds and even gold instead of stocks . We will discuss that topic. Plus, the autoworkers could expand their strikes tomorrow as the issue grows even more polarized and politicized. How much longer could this go and how bad could it get . Dom, first lets get a check of to the market. Hey, you are supposed to be doing this normally. I think you got this. I will do my best impression. Dow is up 73 points right now, 150 points below session highs. S p is up 20 to 4295. Nasdaq is up threequarters of a percent today. Bond yields backed off the