- so, the question is... - cyber attack! as cyber criminals expand their toolkit, we must expand as well. we need to rethink... next level moments, need the next level network. [speaker continues in the background] the network with 24/7 built-in security. chip? at&t business. welcome to "power lunch" everybody alongside kelly evans i'm tyler mathisen the market pulling back. november rally taking a breather walmart dragging on the dow after its results. more on that coming up but november has still been a very, very good month for the market especially the nasdaq. kelly, up 9%. >> incredible run. awaiting president biden, speaking any moment now at the

apec summit out in san francisco. this comes, of course, after his meeting with china's president xi bring in eamon javers what to expect eamon? >> one thing wondering, exactly when the remarks will kick off we have no guidance on timing now. you can see that the lectern is set up with an impressive backdrop here in san francisco awfully colorful wait and see what the president has to say it's his opportunity to wrap up the summit with xi jinping and take a bit of a victory lap, we're saying an administration that viewed this week as very much a success in terms of lowering tensions with china, getting that military-to-military dialogue re-established, and what they view as big win on fentanyl also briefing reporters yesterday saying that the agreement on fentanyl is important and the chinese have already begun to crack down on certain companies's united states provided to china's government with the names of individual

companies that are making precursor chemicals to fentanyl and the chinese government took action on those within the past week the administration feeling bullish on that. then, of course, there's the market implications here, because geopolitical tensions do seem to be receding a couple ticks in the way of positive rhetoric by both joe biden and xi jinping here in san francisco this week. all of that i think is on the president's plate getting ready to talk to the press here in san francisco. when exactly he'll do that, we don't know we'll wait and see with everybody else. >> how did the business dinner go last night? >> fascinating i was in the room as xi jinping was honored by america's best and brightest ceos some of the biggest names in finance, larry fink was there. tim cook there from apple. albert from pfizer incredible list of ceos and executives there at this dinner honoring xi jinping last night

and xi spoke about half an hour, i would say, to the room, and made very friendly remarks didn't really speak specifically to the business community, more broadly to america as he called it "his friends in the united states." saying he wants more travel back and forth. he wants good relations. back and forth with the two countries and saying that he feels that the united states and china have an obligation to jointly lead the world, because of their size as major countries and dominance. it was a speech, tyler, i thought revealed xi jinping seeing himself ands nation of china as on par with the united states now in terms of geopolitics sort of taking china's rightful place as one of two dominant superpowers in the world. >> how would you characterize the reception he received? was it effusive? was it mused, what was it? >> he got a standing ovation striking to sit in a ballroom

with some of the most prominent and powerful capitalists in the world as they gave a standing ovation to the leader of the chinese communist party. not something that you see all that often. >> yeah. to a person that refers to the united states, described yesterday, as a dictator right? >> absolutely. yeah every one of these companies have enormous exposure in the chineers market, dependent, deep histories in china and not in a position to snub xi jinping when he comes to town right? and they didn't interesting, elon musk who showed up for the v.i.p. reception before the dinner and i don't know beyond a shand handshake with jinping or not, scheduled where he would be, didn't come to the dinner. didn't sit at the head table left before the dinner even began. the rest of the ceos though

including most prominent at the head table sat through xi jinping's remarks and gave him a standing ovation at the end. >> thank you as we await president biden's remarks from the apec summit, get to our panelist at the milken institute, joined in of the last hour and michelle caruso-cabrera joined us last hour how much have u.s./china relations thawed >> definitely an improvement seen in the last 24 hours. by the way, i'm outside the hall where president biden is going to speak in a few minutes. this happened, the secret service, letting people in presumably starting soon but people are eager to hear what he had to say eamon's right. a victory lap when it comes to what is core to u.s. national interests.

de-escalating the situation and avoiding a potential war or conflict with china. took a step towards that instead of a stay away from that based on what we saw yesterday, relationship between the two leaders. the business relationship, while they gave him a standing ovation last night and improvement when it um cans to international flights, he didn't stay a lot of things that would have been helpful. like we'll stop arresting people not put chinese membership party in your structure. make it illegal from your subsidiaries out of the country. that didn't happen foreign investment in china the last quarter, i don't think it will continue. not sure enough said for the business community >> let me ask a similar question get you to react to what michelle just said business leaders gave him a standing ovation if only to be polite, but michelle points to a couple of

key areas where things were left unsaid >> michelle is spot-on the evening with president biden and the package ahead of the meeting, we already viewed the deals. the key for president xi jinping convince investors that china is investable, and i don't think he did that last night. a huge round of standing applause because everybody was following the book already there. needed good relations with the administration and so, guess what they were friendly to xi jinping. what we don't know is whether new money is in china. other investors will pick up china as a place to go for sourcing their materials or for putting things in and invest in asia, rather right now the most investors i talked to are saying, looking

edwhere. it's almost impossible to do business as usual. information, and get the stuff we need to make an assessment in china. >> that said, most companies also have fomo, and it looks like relations with china are thawing and people will be investing there again. starbucks continues to invest. opened 9,000 stores. this feels like a moment that will give them cover for the duration of this administration, barring a significant change, to now go jump back in with china and hope that maybe a turn encaptures alpha, so to speak, at time when the u.s. may be slowing? i sense though that's the move right now? >> well, it's the commentary, xi jinping is now a boyfriend he has changed his mind before about the role of private companies in china and china's economy and now saying, well, i didn't change my mind. want foreign companies that hedging is something they

have to be cautioned by. right now xi jinping, could he change his mind again? it's very hard. >> michelle, the area, de conflicting of the relationship, and a lot of that hinged on military-to-military communications being re-established walk us through what exactly that means it's not just a red phone on the president's desk and on xi's desk. >> no. that's absolutely right. president biden made a point that there was going to be direct communication between him and xi jinping, especially when it comes to military situations, but when you have two potential adversaries working in the same theater, there are potentials for accidents, as the president said, last night during his remarks. and there are supposed to be protocols in place so when accidents happen, they don't get misunderstood, and then escalate to full-on war

the way you do that, you have military-to-military protocols, given the era of the soviet union, were very, very thick and established. there were huge manuals about what to do if something were to happen. so that way a commander in the field talks to another commander in the field and up the chains by the time the two presidents talked to each other, the two leaders talk to each other, they know what they are talking about and what their answer is going to be. what we have towait and see is okay they agreed to resume military communications a month from now. ics mosix months from now, are protocols in place when something inevitably happens perhaps in the south china sea there is a way to de-escalate what happens in the states if it is in the states. >> how institutionalized those communication lines become, i suppose. phil, your reaction on that, and anything else that comes to mind in light of these bilaterals

>> the geopolitical risk that china introduced boo the south china sea is enormous. activity there pushing towards the direction that they are going to be big players in the -- now, president xi says, yes, avoid accidents, but do we have established a communication link between head of defense and head of the military in china? no right? operations and conversations is important but we need to get up on policy levels the other thing we have to remember is, the key for a lot of our audience and a lot of our people around the world is, what's the role of china's economy in the world second largest economy, but circulation strategy put in place is upona lot of domestic activities and the rest of the world essentially shoved aside now saying, misinterpreted what i said that flip-flopping is something

i think xi and the administration has to do more footwork to convince everyone they are serious about inviting foreigners in and allowing them full access to information. >> let me squeeze in one more quick question, michelle how much do we know about how much the china-russia relationship was discussed, if at all >> that question came up during the press conference yesterday, but we didn't get a lot of detail but, you know, it's interesting. ian brenner speaking earlier and made the point there's a lot of discussion about access, what's call axis of evil between iran, china and russia, and described the world differently. iran and russia very much want chaos but in the interests of u.s. and china from particular they don't want chaos. they want stability. we've seen, we have seen, talking about this event went very well yesterday between

president biden and xi jinping if you go back more than a year ago to when putin met with xi in one of the stands, that went very poorly. putin had to basically apologize to xi about what he had done in ukraine. right? so there is -- behind closed doors, people have said xi jinping is very unhappy with putin, and what he did with ukraine, but, you know, it's his dime stand by him, but not necessarily a putin relationship it may be a relationship of convenience. >> interesting michelle, thank you. great to see you michelle caruso-cabrera. bill lee, thank you. appreciate you. soon as president biden begins we'll bring that to you still awaiting should be any moment meantime, hello to hybrids and good-bye to evs. more and more consumers are embracing hybrid over fully electric cars and the struggling infrastructure may have something to do with it.

we discuss next. plus shares of burberry down more than 10% after the british fashion retailer warns a global pull-down in spending will curve its guidance talk autbo that and retail earnings in general when "power lunch" returns. to sharpen their skills with tailored education. get an expanding library filled with new online videos, webcasts, articles, courses, and more - all crafted just for traders. and with guided learning paths stacked with content curated to fit your unique goals, you can spend less time searching and more time learning. trade brilliantly with schwab.

welcome back to "power lunch. the auto industry clearing one major hurdle with resolution of the labor strike narrowly, approved by only 54% of members.

shares down 2% another potentially bigger problem looms now. questionable demand for electric vehicles hybrids continue to outsell pure evs in the u.s yesterday toyota announced its best-selling cam bri will only build hybrids but hiyundai is unveiling a new ev joining us, hyundai motors ceo, and welcome to you both. kick things off. >> thank you, kelly. kelly set it up. news out within the last couple of hours, your partnership with amazon explain how this works if i am a potential amazon customer looking to buy a particular vehicle? how will this work with amazon >> thank you, kelly. thank you, phil, for having me very proud we announced early this morning during the early

show the partnerships with amazon, which is comprised of most importantly the possibility for the customers to buy our hybrid product online. we were established back in 2018 having a showroom experience and then we are very pleased with the evolution from within and decided to be able to go to the end-to-end experience. basically, the consumer can get into amazon environment. they can choose the vehicle they would like to shop they can choose a color and actually the dealer they would like to buy from and check out everything else. they can also finance the vehicle online and even the one developed, can trade in car or vehicle or even buy cpo.

announced the product today. start it first quarter of 2024 and starting in the second half of 2024. this isn't one dealer. second dealer is about integration of starting 2025 also a fantastic and new for consumers. they already know how alexa works. able to connect phone to car, wireless, a voice system with their phone or homes to offer the phone from the car we have -- this is -- >> jose, hate to interrupt you, getting the two-minute warning for president biden but i want to get one question in regarding ev demand. you unveil add new ionic 5n, all-trek lick ionic 5.

are you seeing demand slowing, not growing quickly as it was before what are you seeing in the market right now >> well, in our case, we continue to increase our sales drama dramatically having every month and year over year true we don't see the industry growing as fast as we originally thought it would be's we remain number two in the market you can see in this table, despite we qualified for ira through demand, we are also seeing a fantastic growth of our hybrids and that's why, for example, we just announce add new santa fe generation, also a hybrid power train all all-electrified vehicles, we see growth and on the ev see growth doing well. >> quickly, 25% pay raise --

>> apologies interrupting's president biden is beginning his remarks at the apec summit in san francisco. let's listen in. >> welcome to san francisco. [ cheers and applause this center is about as big as my state. this is -- synonymous with innovation and breaking barriers. where collaboration and coming together has always been key on locking our potential. the city that has been shaped by centuries of deep ties to the region by contribution of people of asian and pacific heritage. san francisco is a natural place to gather, innovate, collaborate at the 2023 summit, ceo summit and all events wthat were taking place this week. i want to thank everyone who made this week possible. especially those serving the

apec executive secretary and advisory council, national center and so many others. today 21 economies make up more than 60%, more than 60%, of the global gdp almost half the global trading, asia pacific projected to be largest contributor of global growth over the next 30 years. so the vision we pursue for the economic future of our region will be bound far beyond the asian-pacific. the choices that we make are going to matter, it's not high pehigh -- hyperbole to suggest for the entire world it's up to us, entrepreneur spirit of our people to unleash the unlimited potential of our partnership in order to realize a future that will benefit people not only in the asia pacific region but the whole

world and i mean that incerely people everywhere. the future of prosperity is shared and inclusive for workers that are empowered and the right to respect it. our economies are sustainable and resilient from the bridges that connect our people opportunity creates hope in our lives and most people, just hope you know, my approach here in the united states from the moment my administration took office for building the economy from the bottom out, from the middle out, trickle down worked okay sometimes but not a lot trickled down at my dad's kitchen table, but when the middle class does well the poor have a chance and the wealthy still do very well what happens, the poor have a ladder up. middle class still do well

folks, we're already seeing the result the last quarter american economy grew 4.9%. the highest growth rate in two years. more people in the united states -- [ applause ] -- because of many of you sitting there, the ceos. give credit where it's due. more people in the united states are in the workforce today than at any time in american history. unemployment under 4% for 21 straight months. inflation, come down by 65%. more due we now have lowest inflation rate of any advanced economy in the world. meanwhile, menial household growth has grown by 37% real-term, that's before the pandemic i acknowledge there's a disconnect between the numbers

and how people feel about their place in the world right now we can deal with the second part as well. we still have work to do, but our model is growing in delivering real results for all americans. significant black unemployment, latino unemployment, et cetera the strength of our economy is driving growth and spurring investments throughout our region again, because of those of you sitting in front of me make no mistake. growing investments in the united states especially from asian-pacific economy. the start of my administration companies invested over $200 billion from the united states these are historic investments creating literally tens of thousands of good-paying jobs. for 14 million since we came into office. all across america in industries that are going to shape the

future of this globe. semiconductors, electric vehicles, batteries, critical materials, hydrogen, another critical emerging technology i've long said it's never been a good bet to bet against the american people. never. [ applause ] no i mean it. think about it it's never been a good bet and we're proving it once more my message to all of you here today is, leaders of government and industries, count on the united states. we're delivering on our promises and we're doubling down on our progress. and we'll soon be, we'll soon be your strong and steady partner as we continue working together to realize being free and open, prosperous, secure, resilient and connected. by the way, twice since i've been president i've had the

leaders of the asian-pacific islands come and meet me in the united states. all part of it. the g20, vietnam, desperately wanted to see me and raise the relationship and students in front of that monument with john mccain. all my days growing up, never thought that would ever occur. today i'd like to talk a little about the work done in the region how we're going to go about moving forward. i've said for a long time, the united states should be proud. had a brief discussion yesterday with president xi. he asked why, asked me before, i reminded him, why i was in the asian-pacific. because we're a pacific nation because of us there's been peace and security in the region

allowing you to grow. he didn't disagree. by the way, a very straightforward meeting. we're not going anywhere for decades america's commitment to the reach han been a springboard enabling growth, informative growth sure, the open flow of commerce, millions of people got out of poverty. today it goes both ways. united states will remain vital in the region. in the region. more vital than ever to the united states of america. my administration's outlook from day one, clearly laid out our approach delivering across the board. including when it comes to our shared economic agenda. the united states has deep ties to our fellow economies.

more than 60% of u.s. exports go to fellow apec economies robust two-way investment between the united states and other countries supports good jobs, new opportunities across the region. american businesses significantly represented here in this auditorium are the largest source of foreign direct investment in respective economies. in fact, the u.s. companies represented here at this summit, look at their new investments and different economies in the calendar year, totaled more than $50 billion. investment announced today from companies like amazon, united, delta, microsoft make sure our region is more inclusive and interconnected investments announced today from

companies like boeing, apple, pepsi-cola, the pepsi company, i should say, make our economy cleaner and more sustainable. investments today companies like ibm, visa. l look, even more resilient. maybe make it more secure. here in this world before renowned public innovation, leading companies -- you know, up to now. better not to try, and not mispronounce than try to mispronounce small, medium sized business

start-ups are getting into action as well. all the announcement translated to real countries and real outcomes to matters to people's lives. the proof of a strong dynamic american economy is an engine's growth eck economic innovation throughout the entire region a testament to american investment and ingenuity are in high demand. because when you do business with the united states and our companies, you know what you're getting. high standards fair practices protection for workers. world-class ideas in innovation and a commitment to deal with the environment, climate. quality guarantee. look, this is how we've been able to mobilize billions in investment, including major, new announcements this morning for

our partnership goals in infrastructure. also we worked closely to deepen our bilateral economic partners throughout the region. especially on the issues that will most impact our future economic success. for example, in september when i traveled to vietnam as i mentioned earlier, our partnership of our countries, we committed to work, deepen the strength of the semiconductor supply chain with india, japan, republic of korea and singapore. launched new initiatives to shape technology and standards that will transform the future received an economic wart partnership. and critical regional bodies, including the pacific island forum. when we -- when we offer to host apec two years ago, we committed to modernizing this institution,

make it easier for us to work together, and take on challenges there are. and there are many challenges. we're going to see more changes in the next ten years than seen in the last 50 years. that brings me back to the summit. where we go from here. the world's fundamentally different than it was three years ago and in washington state. questions to answer today are not about how much we cherish but he we build resilience, lift up working people, set up our economy. how we grow from bottom up and middle out so no one is left behind. the idea behind this economic framework, partners on 14, dynamic nations all committed to initiatives like pandemic

response vulnerable supply chains climate change natural disasters. we've learned it can gravely impact our economy announced the framework in may of 2022. later today launching an important new tool the most sustainable economic growth and creating a race to the top, not the bottom. tangible commitments negotiated in record time delivering meaningful outcomes making supply chains for resilient. clean energy transition, fight corruption. for example, a new supply chain agreement allow us to better monitor the supply chain challenges before they become the kind of full-scale disruptions we saw during the covid-19 pandemic. and ensure we are better prepared to shift and adapt

where's destructions do occur, and they will. i know you all know better than i, our work is not yet done. this framework will be a platform for ongoing economic cooperation. we will continue working, better facilitate high-standard trade advance workers strong enforcement of labor, and every step, at every step we have a commitment to the union. each a framework including strong, pro-labor outcomes that will benefit workers of all economies. critical in building a stronger, more fair economy for family ace cr across the privg this week launching a new global labor strategy ensuring that workers' rights are the centerpiece for economic strategy and internationally as well as domestically primary concern to me.

last week in hanoi, congratu congratulated uaw for the contract billions of investments to company autoworkers strong and competitive. and companies investing, enters partnership with the most highly skill and dedicated workers anywhere in the world. american labor folks, i asked the treasury department to do a study labor does well what does that do to people all over non-labor folks around the country everyone benefits. by the way, many of you are here, the best workers in the world. unions. not like we show up one day and say i want to be a electrician show up one day, five years of practice then you get a card. also responsiblecompetition from the united states for

people in the republic of china. talked a little about that yesterday, president xi. that's what the world expects of us. i promise you that's what we're doing. i met with xi yesterday, making sure there's no miscommunication between us. as always, i know more than any other world leader, because when i was vice president i concluded i should get to know him and as president of the united states as well as vice president. we've had prior to this hours of private meetings, he and i each with simultaneous interpreters our discussions has always been candid and constructive. i can't emphasize to president xi that the united states does not seek conflict. yesterday we announced resumption of military-to-military communication changes. reduce of risk of accidental miscalculation it exists -- [ applause ]

-- not of my generation would say back in the day, it's not all kum ba yah, but it's both. today's both we have real differences and on an economic playing field in protecting intellectual property continue to address that. smart policy and strong diplomacy. also taking target of action to protect our vital masses of security let me be clear -- we are derisking and diversifying our economic relationship with prc. not decoupling not decoupling we'll be firm. standing up for our values and interests. and i was very straightforward, he was with me yesterday at the same time, critical

global issues sump as climate, a.i., make sense to work together committed to work together. we're going to continue our commitment of diplomacy. avoid surprises. prevent misunderstandings. stable relationship between the world's two largest economies is not merely good for the two economies but for the world stable relationships good for everyone. [ applause ] let me close with this -- the leader statement in that first summit 30 years ago captured a shared commitment to "keeping the spirit of community" among our economies. all this changed over the past

three decades. we have to continue the summit, the spirit of community, to meet the challenges of today and to see an enormous possibility, enormous possibilities say this, heard me say this the last how many years. the world is at an infliction. the decisions made today are not highyperbole but will shape the word for decades to come think of a.i particularly true in the asian-pacific. there's so much. i would argue each of us has a part to play in writing that future together. today i challenge all of us to measure our successes not based on the bottom line of our balance sheet. the lives lift up for

investment, potentially unleash the renovation and building -- let's build a global economy where everyone has a chance to succeed and workers get a fair shot and value of what they create stepping up because many of you in this room, we're not talking the talk we're backing it up with commitments. we're going to see us follow through. you're going see us follow through. i want to thank you again for joining us in san francisco. thank you for your commitment to apec and the future of the asian-pacific region and thank you for everyone you've done to make this summit a success we can do more god bless you all. thank you. [ applause ] president biden addressing the apec summit in san

francisco. we turn to eamon javers to wrap up headlines from his remarks. pretty much concludes the event? >> it does you heard a sales pitch. joe biden pitches two separate audiences. one, leaders of the asian-pacific nations themselves heard him mention vietnam several time also talking about indonesia, us a traaustralia, japan a group around china used as a buffer economically and politically against china. he was pitching that group heart of his pitch, dealing with the united states you know what you're getting fair practices it's a quality guarantee saying, deal with us not with the chinese pro-environmental conduct, less corruption, fair rule of law, all of those things in the u.s. orbit and by extension not in the chinese orbit. the other thing doing there, i think, reaching out directly to the audience of ceos in the

room american and asian corporate leaders in the room and in san francisco today, and he talked directly to them, and twice gave them specific credit remember, this is a president who was out on the union picket line here in the united states, talked very much about unions in this speech, but also gave praise to the ceos saying, a lot of the successes of the region are because of a lot of you sitting here. ceos let's give credit where it's due. biden there rhetorically buttering up some corporate leaders saying you get credit for amazing transformations seen in the economy in asia now very much reaching out to the another constituency he needs and sometimes antagonizes with unions and picket lines. fascinating. >> a phrase that stuck out to me, we seek to diversify and derisk our relationship with

china. not decouple. >> yeah. >> all about showing the stability is good for business globally, right? >> what the business audience wants to hear and what the political leaders in asia want to hear from the united states and china. we heard a similar theme from xi jinping yesterday saying that the two nations have an obligates to lead the world together and have stability in the relationship heard joe biden say that today, too. both leaders signalling to the world they don't want confrontation. saw that rhetoric in bali between the two leaders and saw a year marked by spy balloons answers other things we'll see if rhetoric holds um to r up rhetorically, they want to derisk the entire world. fe tamon javers, thank you saravels coming home from the apec summit. more "power lunch" after this.

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welcome back to "power lunch. taking a breather stocks trading lower. despite the decline dow up more than 5% this month, you see there. ed s&p up more an 7. nasdaq up almost 10 in november.

our next guest, president and chief investment officer at an asset management company kevin, you say the fed's work for this rate hiking cycle is done when rate hiking cycles finish what historically has been the best place to put your money >> great question, tyler our research shows certain circuits of the stock market end of rate hike cycles -- >> haven't had a long, long time. >> haven't had a long time, right before the fed starts cutting rate generally economic slowdown. health care, consumer staples, industrials. also like for areas in the market municipal bonds, preferred securities also done well at end of rate height cycles. >> industrials is a big, big, big category so narrow it down for us you're talking about heavy equipment manufacturers? >> the aerospace and defense

sector we know about the geopolitical conflicts across the world now and likely to escalate it's forecast military spending increasing by nearly 50% over the next decade. that's an underestimate, i think, and who are the company it's likely to benefit defense contractors, lockheed martin dividend 2.7% trading 16 times earnings and likely to be the largest benefactors of that military spending over the next decade. >> health care, consumer staples. walmart a bit of a land mine this morning consumer staples still attractive here? is that an okay place to hide out? >> sure. talk about walmart a second. they did beat earnings estimate, beat revenue estimates and increased foreign looking earnings estimate below expect aces but did cite concerns of the strength of the u.s. consumer they thought more frugal this holiday season

i agree. rink risks of inflation i agree. but they're tailwinds for walmart. right? well positioned to stand economic slowdown when the economy stabilizes later each time stock pulls back this is actually an attractive entry point. other consumerpoint. other consumer staple stocks likely to follow suit because they're bellwethers and hold up relatively well. >> if you think we have crested in interest rates, that would suggest now would be the time where you might extend duration. >> absolutely. >> agree >> absolutely. certainly in municipal bonds f you can extend duration, lock in coupons and buy their discounts, when interest rates come down bond prices go up. on a total return basis if you can lock in and take advantage of rising prices you're going to be - >> not only the higher yield, but you get capital appreciation, too, if you don't want to hold to maturity.

>> bingo for high net worth investors focused and concerned about tax-free income. >> that chart showed really under pressure all year long and all of a sudden started to get a bid, the pimco etf you like preferred securities. >> i do. >> you think this has historical twinned behind him and current environment. do you have to get tactical? >> you can do preferred securities through an etf or our preferred smart trust but preferreds are trading at a significant discount right now around 30% that's a big correction. we also know that historically preferreds are one of the best performing fixed income asset classes out of rate hike cycles. the average return of over 14% in the one-year following a rate hike cycle i believe that end of rate hike cycle started in july and now is the time to start positioning back into preferreds, take advantage of

their high dividend yields and attractive - >> you mentioned health care health care is a broad space are we talking drug companies? are we talking about health care medical device makers? are we talking about insurers? >> i'm focused on the smaller cap biotech names. immune no corps, $2.4 billion biotech focusing on developing t-immuno based cancer and other diseases we think the m&a activity will pick up in the biotech. >> you think this is idiosyncratic to m&a or that argument would apply to the areas of the market? >> i think there's going to be a pick up in m&a activity in the biotech space. large cap pharmaceutical companies have excess cash on their balance sheets and have margin pressures by price

controls out of washington, and a lot of the large revenue producing drugs are coming off patent they're going to have to be inquisitive and look to the smaller cap names trading lower now. biotech has been down the last three years. now they can pick them up at lower prices and finance at lower rates over the next two or three years. >> thank you good to see you. >> happy thanksgiving to both of you. >> as we mentioned, walmart's guidance disappointing the street and another bad sign for the consumer space shares down 8% we'll dig into their earnings when "power lunch" comes back.

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in the u.s. we see millions of cyber threats each year. that rate is increasing as more and more businesses we are citi. move to the cloud. - so, the question is... - cyber attack! as cyber criminals expand their toolkit, we must expand as well. we need to rethink... next level moments, need the next level network. [speaker continues in the background] the network with 24/7 built-in security. chip? at&t business. welcome back to "power lunch. shares of walmart are down more than 8% after its guidance didn't meet what the street was looking for. the company's cfo saying sales in november have made the company, quote, think cautiously about the consumer for more let's bring in greg mellic with evercore isi why did it land so poorly?

>> yeah. i think it was all where the expectations had gotten. walmart has been doing very well, not just this year but over the last i would say five or six quarters. a lot of traffic momentum. they have been growing ebitda double digits the last few quarters and had a good comp of almost 5 but didn't flow through to margins that's where the market is taking some back from them. >> is it almost the flip side of the target story, where target had bad same-store sales, but profit margins or bottom line earnings looked a little bit better walmart seems to be the opposite. >> that's truly true target talked about being laser focused on margins and making sure their profit model is still working. walmart didn't have that problem. what they were doing was leaning in to all the consumers and traffic they've been winning the last three years, and frankly, this quarter, because they had a high level of remodels and sales got weak they said it got better in early

november but that volatility is where they put caution in. the other thing, deflation is starting to come into the numbers in some parts of the store, and that also means the comps, while still growing, will be decelerating to around 3% in the fourth quarter. >> how tender do you think consumers are right now? >> you know, ourview is that the consumer has had a strong balance sheet from all the checks that we were flying out during covid the excess savings is probably down to 6 or $700 billion and it's not a disaster but people are making more choices. holiday sales will grow in the fourth quarter retail sales year to date are growing over 3%. and we just cut our forecast for next year for retail sales to grow 2%. this is part of a deceleration to norm is what i would say in retail. >> do you have a sleeper pick in retail >> well, you know, the sleeper today might be walmart if you look at our top five names it's walmart and costco,

kroger is kind of a sleeper if that i think people are very concerned about how deflation could also hurt them but if they're able to get the albertson's deal done we think there's margin upside into the back half of next year and '25 and sherwin williams is one we use for interest rate sensitive where we think there's nice margin expansion if volume ever comes back, that could be a nice one there. o'reilly automotive, i don't know if it's a sleeper, but we think it's a core winner. >> are we in retail deflation? >> we're in a massive period of retail disinflation and we are certainly seeing in categories outright deflation a lot of general merchandise, electronic, et cetera, and we're with learning which categories are going to pivot from disinflation to deflation. that's why watching this holiday and these trends i think are so important. that's why i think what walmart had to say today is not just hurting their stock, it's sort of taking down retail in general.

>> so final thought. you say 2% gains over the holiday season in sales. who is the main beneficiary there? is it walmart? >> we would say any retailer that has inventory right. >> right. >> has been growing traffic is in a better place to win. >> thank you for watching "power lunch." >> "closing bell" starts right now. all right. kelly, thanks. welcome to "closing bell." scott wapner live from post nine this make or break hour begins with the run withway for the rally, whether it is as long as the bulls suggest it is. we'll ask the president of merrill wealth management, her first tv interview today and we're looking forward to speaking with lindsay hawn your scorecard, it's been a mostly muted day for stocks. investors are digesting the past couple days. what can you say a big story, energy. oil dropping below $73 a b