>> fortinet. i think 2024 setup is really strong >> all right j.b. >> toast, getting toasty >> all right dow, trading at an all-time high i will see you on "closing bell." "the exchange" begins right now. ♪ ♪ thank you very much, scott welcome to "the exchange." i'm kelly evans. here's what's ead this hour. the toothpaste is out of t tube and a recession is coming dot scream at the tv, those are the words our economist who says two things are happening athe same time, and there's no escaping it she's here to make her case momentarily. plus, it was our market guest table pounding fat pitch buy, and then came last woke's fed meeting. he tells us the trade, what's chand and what he's bullish on from here. and shares of coinbase have tripled this year with another

30% to go, with the industry in limbo, and some argue a bitcoin etf will hurt their prospects. we begin with today's markets. dom chu has the numbers and some superlatives to mention. >> we have a record high in certain parts of the market. mega cap technology and among the three major indexes, we put some stars up here for the dow industrials, right now near session highs, 37,492, because we hit a record intraday high in today's trade so far the s&p 500 is up about one half of 1%, 4760. we're just 1.5% below record highs, but we have hit a high for the year so we will put a check mark next to them. and the nasdaq, up one half of 1% again, the mega cap nasdaq 100 has hit a record high, but the nasdaq composite, a high for the year the dow industrials really

leading the way today. watch that this is the season for retail, and a lot of these consumer focused retail names have had a rough year in 2023 but they have been trying to stage a near-to-medium comeback off the lows we saw this fall. among those top performers in the s&p 500 today, estee lauder, up 4.5%. vf corporation up 3.5% et si, ebay, paypal holdings, companies that are all moving to the upside there so keep an eye on those stocks and the stock move of the way, buy now, pay litter in affirm. up $50.42, surging to a high they are joining with walmart, so watch affirm shares big tieup with a big retailer that is driving the action there. back over to you >> dom, thank you very much.

our dominic chu. now, let's talk big picture here as we move through the holiday shopping season. steve liesman has the results of the latest cnbc all-america survey also with us is francis donald welcome to both of you nice and cozy here together. what are we learning >> click, click, gift. that's what i'm saying today after a two-year slump below the pandemic high, online shopping made a comeback this holiday season think of the numbers, 57% of america's online shopping as their top one or two christmas gifts. big box stores down three points 18% when we started -- look at this, kelly. >> wow >> i think you had fewer kids and i had more hair when we were asking this question it was 18% in 2006 now look at that

you see that little dip there? the pandemic high, and then down for two years, and now back above for a new high that he had. income lower than 30,000, no investments in the stock market. income 30,000 to 50,000 and those spending under $200. that suggests to me that people may have gone online shopping, looking for bargains, keeping costs down amid inflation here while americans differ over how much they spend online, they don't much argue about where they spend you know the answer to this one. amazon, unchanged, 74% walmart did get up four points interesting to see the specialty good stores like etsy, and local websites also in that group there, up by six points. 31% say they're going to use debt, which is kind of unchanged. and really not a big deal in terms of the use of debt there but that buy now, pay later, which is what dom was just talking about, 10% of all

shoppers we had not asked that question before, so we don't know how that compares. but not bad entry for the pirs year courtney says she's being doing this for three years >> after the black friday numbers, the question was are these people just borrowing from the future is that a bad trend or just a different way of using credit >> when interest rates are super high it's interesting to me, i don't know that i personally anymore think of online as a place to go for a bargain. it's just >> amazon is not that cheap. >> but you do that, is there a cheaper or bter way to do it it's also just a way to shop, convenience. >> quickly before we bring francis into this, would you say the takeaway from the survey is that consumers are feeling stretched or feeling more flush this holiday season? >> more flush. the takeaway for me has been lousy, lousy views on the economy,ut hardy spending

plans. >> francis, what about you i know you're a little more cautious, worried about a combo of things, the consumer being one of them. >>conomists get pigeon hed into this recession or no recession. we have a recession base cas things can change, but more important is when do you start trading that we just had a rmidable pivot from the fed, indicating no mor rate hikes on the horizon. the data is still strong, so we're in tactical goldilocks you can be concerned about the recession ahead and know it's not time to trade it >> remind me how long -- for instance, 2023 was what kind of year >> too long, kelly we've had this view for too long i think the big mistake that a lot of economists made in the 2023 recession call was not in saying oh, this time is exactly the same it was this thinking that the lags in the economy would be shorter. the average time that it takes

for these rate hikes to work their way through is about two years. the make or break for this economy, to throw out that recession call, i need the next three to six months to not have a rise in the unemployment, to not see cap ex decline expecting that to happen earlier, that was the mistake. not recognizing how pro-cyclical fiscal would be, that's what landed a lot of economists in the 2023 recession camp. if we're talking six months from now and we have not seen this develop, yes, this time is remarkably different, kelly, and we'll have to change our tune. but we have not yet seen that relationship between rates and the economy break just yet >> steve, what do you think? >> well, i do sort of land in the camp of this time is very different. and i just think that so much of the inflation improvement that we have had has been the result of supply side coming back, and not much in terms of the fed interest rates biting. i think that the analog -- the reason the analogs don't work,

you're going to be hard pressed to find a time when you had zero, and then 5.5 so much of the economy went in on that zero bid so you have mortgage rate below 3% you've got car loans are playing out over that period of time >> i think about all of wall street >> that was the next thing the corporates, the private equity so i don't think you want to rule out recession but i do think we're in an interesting footrace here. and the footrace is as follows, and i don't know that frances could disagree, but it a es a footrace between the fed and the market lowering rates, and the refinance cliff. so do the people right now who are sitting there with 2%, 3%, 4% coupons or debt, have to refinance into 7%, 8%, 9%,r 5, 6, or 7? think those tcomes are different aso whether or not

we see extended laffs and ba bankruptcies >> another big reason frans and peop think we've been able to dodge a bigger impact >> we get caught up in this recession question asset magers are not asking me are you recession or not, they likely, recession or reinflation of those prices? which central bank cuts rst? as much as we're talking about u.s. recession, whether i'm in europe, canada, asia, they don't need to be convinced that they're in a hard landin the rest of the world is firmly in recessionary type of enronment. so this is very different from the relave trade, which is where in the world is th cleanest dirty shirt that's still the u.s >> we have some headlines from bostic, who says there's still a ways to go on inflation, even

though the fed has made tremendous progress. he expects inflation to come down slowly but unevenly wages, he says, are trailing indicator and have to make sure output doesn't become too weak so this leads in the direction of don't be so quick to assume, you know, 25 rate cuts by jowl or whatever. >> i can tell you the fed is a little perplexed at the market reaction >> come on, they don't know the market by now? you give them an inch, they take a mile >> what they're thinking about, was there a different way to calibrate the message, to get less of a -- >> not cut out the jobs. >> -- of an extreme market reaction the dots are an interesting thing. it's a bit like they're trapped in a web of their own transparency that's a mixed metaphor, but they have to put the dots out, and i can't emphasize enough the dots are not policy.

they're an artifact -- you know what they did in terms of policy on wednesday >> nothing they changed one word. >> only one word they did make a nice comment on inflation, but only the addition of any was the collective policy of the committee >> and powell has normally been kind of hawkish in his pressers, but wasn't so ch -- >> i think that reflec a change in the chair from being haish to being more in the center >> which is a ange, right? >> that a change. but why do they take three rate -- i'm not saying it's wrong. the market could be right. but why take three rate cuts and make it into six why did they take a 4.6% ye-end fed funds rate forecast and turn it into 3.85% >> i think is because -- i don't think it's just because of the femeeting, but it's the inflation data when you have the recent trend in core pcr approaching 2%, 3%,

i think they view it nor as the fed's going to step back from that if that trend continues, which the market says it's going to, they could start doing more cuts >> this is semantics mark is just too early for the first rate cut and the fed is pushing back against that, but every major central bank said there will be no more rate hikes. the entire discussion is when are they going to cut? can you imagine six months ago that we would be talking about what does the next rate cutting cycle look like? >> i can, because it was supposed to have started by now. >> macro matters most at inflexiopoints this is a massive inflection point for investors. bond rates are going downwards, and for most invesrs, all that cash on the sidelines, those cash mffs, those are not going to be interesting in this next phase of the cycle >> that's an interesting

development, because cash is suddenly trash before such a great thing that's going to come down. we were on the show when we said, one year, the great thing about one years, it's only one ars, the terrible thing about one year, it's only one year so you have to make another decision comg up the other interesting thing is all the folks who said we were going to, i don't know whathe word is, have an apocapse in terms of the government to fund itlf, all of a sudden we're funding it below 5%. >> still at these levels it will be a challenge thank you both very much frances and steve both joining me here today. my next guest is changing his market outlook after the huge rally in stocks he says small and mid cap value are no longer the table founding fight pitch buy they were in october. joining me now is charlie. direct me if i'm wrong, charlie, i don't know what to say >> what you should say is when

the facts change, you need to change your outlook. that is what has happened. we have gone from -- i want to be careful here -- table pounding, fat-pitch buy, which is what small cap value stocks were, to approximately fairly valued right now that's not the end of the world. that doesn't mean bubble or overprice, or sell all your stocks, it means that our expectation is that returns from here will be normal, which for small-cap value is 10%, not bad. but that we are no longer ridiculously cheap and we were ridiculously cheap in october >> so what does that -- walk us through tactically what you're doing now as a result. >>irst of all, we don't think it's smart to trade tactically and to come in and out of markets. when people do that, they come in at the wrong time they buy when everyone is happy and bullish and sell when markets are down so that's e wrong thing to do.

but what you should do is look at valuation when we look at our calculation of the instrinsic value ofur portfolio, that was a 36 discount in october of this year 36% less than what we thought they we worth. today, that's abou23%. that's not terrible. but 's about average historically so, you know, the endowment effect says we probably like our stocks that we own, maybe more than we should so that's about an average discount to intrinsic value. that means now is not the time to do anything dramatic, but it's not the table pounding buy time that it was four months ago. >> i'm trying to think of -- so it almost sounds like what you're saying as a result, charlie, you're just sitting tight, showing some of the companies you like, like bank of oklahoma, mohawk are you stating tight here and wait thing out you're not going long with the g seven or something like

that >> that would be really bad. that is the -- i'm glad you brought that up. the one area still overprice maybe even bubble priced, would be the large-cap tech. we are worried about the magnificent seven, who have underperformed the last month. that doesn't make a trend, but those stocks are seriously overpriced and they have a huge impact on the s&p 500. so i would personally be modestly bearish on the s&p 50 and call me fairly priced for small cap and mid cap value. >> which goes back to the question about the russell 2,000 versus the s and a few things like that. i knowou're not a big fap of investing more in the indexes broadly, but you think head winds for the magnificent seven will keep the s&p from shining more brightly here on out? >> that's right. if you thought a recession was coming, you avoided cyclical stocks and sectors, you avoided banks, you avoided oil, consumer

discretionary. and you bought things that you thought would do fine no matter the economic outlook amazon, microsoft, apple, those names tend to do fine in any economic economy and so people have been hiding in the magnificent seven i think that trade is going to unwind as people realize we are progressly not going to have the -- probably not going to have the recession that the bond market was telling us was a certainty. >> so the russell 2,000 value is up 21% since october so finally, there's been this amazing catchup trade in a sector that's one of the worst performing for the last decade was that it? was that six-week move -- have you already missed it? is it time to now put that back on the shelf for another five or ten years? >> no, because since926, small cap stocks have outperformed broad market and value stos have outperformed the broader market so small cap value has been for almost a hundred years a wonderful place to be.

again, our expectations for this sector are still fine. call it 10%. it's jt not ridiculously cheap the way it was in october. we have good names the benchmark is probably trading around 14 times right now. it was around 12, 11, in october. that was silly in this kind of environment. so just i want to be careful, n't sell all your stocks today. we're just no longer at stupid cheap the way we were in october. >> no longer at stupid cheap charlie, thank you for joining us >> thanks, kelly coming up, the home builders are riding a seven-week win streak in that seven weeks, they have shot up 41%. now with housing starts at their highest levels since may, is that good news fully priced in or not plus, we'll kspeak with brin armstrong about the crypto rally next year, and what impact a

bitcoin etf will have on their business as we go to break, the markets sitting near session highs dow is up 183 points on its way now towards 37,000 and 38,000 we're back after this. ameritrade is now part of schwab. bringing you an elevated experience,

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welcome back to "the exchange." u.s. housing starts surged more than expected last month as mortgage rates fell. construction of new homes rose by nearly 15%, the highest level since may. that is boosting the builder's stocks today these three names are among my next guest's top picks for 2024. for more, let's bring in a research analyst at deutsche bank joe, welcome first of all, you mean a traditional spring selling could be a headwind for the home builders >> thanks for having me, kelly what i'm really talking about, if you look at the starts number today, look, i would be real excited to talk about this type of number in april or may, but this is a seasonally unimportant time of year for builders. we're in november, talking about

a number that is lower on a monthly basis than what we were building to in may, june, and july if we built to the same number next week, we're go to sewe a 9% increase so i caution people to look at this as not necessarily indicative of a really big acceleration in starts simply because rates are coming down. i would think of it more as builrs are putting inventory in the ground preparing for a normal spring selling season >> so that to you says even though the all-time highs -- you've been bullish. i remember our previous conversations where you said they will continue to perform. that sounds like today's data point continues to underscore that >> i totally agree i've answered this question three times on the program, what do we do with the stocks at the all-time highs here? the book values, though, are also at all-time highs

so yes, they're closer today than earlier in the year, but valuation on book is still attractive relative to some of the stronger returns on inventory and returns on equity we have ever seen in the builders we put out this outlook report two weeks ago. we had a lot of discussions with people about how to conceptualize valuation at a time when cash flows are much, much stronger. balance sheets are in a much better shape than they've ever been, so should we value these on t historical cost of inventy or look at them on the basis of future cash flows like any investor does with any company. we think that's the right way to thk about it, and looking forward to having mo of those conversations as builds continue to drive good free cash flow by not necessarily reinvesting in land but returning cash to shareholders through buybacks >> what is the biggest pushback you're getting on your bullishness? >> it's the typical, almost a

lazy thesis of this is how it's happened in the past the stocks get expensive, people talk about rerating. the builders get undisciplined, buy something. it does depend on what the builders do from here, not necessarily what investors, how they decide to think about it. the builders, the ball is in their court. if they decide to say we'll be more disciplined, not necessarily chase bad land deals just to continue to pursue growth, but actually shrink the business potentially on purpose to dve higher value per share and higher free cash flow per share, that would force investor's hands around valuation. >> our last home builders guest said they're using options, it's a little more of an asset like strategy, but it kounld sounds e discipline in that area is a top concern for investors. this reminds me of talking about the oil companies and the ways they traditionally invest and spend over their cycles.

>> absolutely. i really like that you drew that comparison looking at options, it's great you can put down 10% of the whole value, insteadf 100% that's more capital lightweight to do it it doesn't necsarily mean you're doing better deals. you can put down 10% on a teible deal, or you can do 20 times as many deals at 10% and put more capital down. what i think is important about wh you just said, though, is in the oil and gas industry, not that i'm an oil and gas expert here, but capacity was not the best incrental use of capital when it came time to looking at dividends and increasing leverage it's the same thing here, home builders should look at the constraints that they are talking about on the labor and materials and land side and say, is it really the best use of capital to pursue at is likely to be higher and higher cost deals, when our stocks are something that's relatively attractive in our view >> it reminds me of the insurance industry where you can give up prices or keep market

share. my quick final observation, when the fed pivots, builders traditionally outperform and that's what has happened over the past six weeks they are up 41% in sevenweeks. do y worry if we ignore the fundamentals that we outlined that this move is simply the -- you know, operating off of the fed pivot and nearly out of gas? >> yeah. this has been a crazy year if you look at the charts from a year-to-date perspective, they went up, then down, then up again. so the 40% that i heard you quote, that's off of a trough that came off of a peak earlier in the year. rates went up, so i don't know that i'm looking at the relevant strength of the stocks or anything like that but if you look at the tangible book valuables, that would mean into next year they face a

little bit of a valuation head wind so i wouldn't expect the stocks to be up 100% next year. >> joe, appreciate your time good to check in with you. thanks so much >> thanks, kelly coming up, shipping giants are rerouting their vessels around africa to avoid the red sea. after the break, we'll tell you what the ceo had to say about shipping delays. "the exchange" is back after this

welcome back to "the exchange." shipping giant mersk is redeveloping vessels to avoid the red sea conflict area. the new route could add up to four weeks to a journey, being reflected in shipping rates. here's what the ceo said this morning. >> what we have seen already in the last 48 hours is sharp

increases on some of the freight rates because of fear in the market that tonnage will be short in the coming weeks and there will be a shortage of capacity as a result of these longer trade routes. we do believe that the international community will mobilize fast to reopen these trade routes to guarantee safe passage, and that should resolve in the weeks to come so not something that should be with us a long time, but something we need to see actually happen. >> around 12% of global trade passes through the red sea, including 30% of container traffic. and goldman echos the concerns about freight prices, saying they could see a bigger impact than commodity prices, estimating a 1% increase in oil tanker demand leads to a 5% increase in oil freight. let's get to tyler mathisen for a cnbc news update >> thank you very much, kelly. joe biden gave eulogy today at the funeral for sandra day

o'connor mr. biden called theirst woman to serve on the supreme court pioneer who broke down barriers in the political world and the nation's conscious she died earlier this month at 93 the jeff bezos owned blue origin launched successfully this morning the new rocket, uncrewed, had dozens of experiments on board it returned to earth 7 1/2 minutes later. a successful project there ricardo the bull, who gained national attention last week when we wandered on to the train tracks in newark, new jersey there's a lot of bull in new jersey getting a little help from his friends. new jersey transit announced that it's selling a stuffed animal in honor of this bull a portion of the proceed also go to ricardo's care at an an you

will -- at an animal sanctuary kelly, new jersey. you've got to love it. bring on the governor. he will be on power lunch and we're going to ask him about this bull. >> if they can move that quickly on stuffed animals >> see you then, kell. coming up, coinbase shares hitting a 52-week high, up 350% this year. although they're still 60% below record highs we'll speak with the ceo about the ongoing efforts to regulate crypto and what a potential a oietf would mean for the company. back after this. do you consider climate risk? changing weather patterns are impacting the way we live and the value of businesses large and small. this can mean disruption to supply chains, changing demand for products and shifting regulation. what does this mean for your business, your clients, and your investments?

ice offers data and maets that can provide iticalnsight manage your climate risk with ice. (fisher investments) it's easy to think that all money managers are pretty much the same, that can provide iticalnsight but at fisher investments we're clearly different. (other money manager) different how? you sell high commission investment products, right? (fisher investments) nope. fisher avoids them. (other money manager) well, you must earn commissions on trades. (fisher investments) never at fisher investments. (other money manager) ok, then you probably sneak in some hidden and layered fees. (fisher investments) no. we structure our fees so we do better when clients do better. that might be why most of our clients come from other money managers. at fisher investments, we're clearly different. all right, tandy, what's it gonna be, the drink made from whatever was laying around, or the one made with your drizzly haul?

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welcome back to "the exchange." check out some of these crypto stats. bitcoin is about to ose out its best year since 2020, more than 150% up it'siving a boost to companies like marathon digital,p more than 500%. coinbase shares have quadrupled this year, but will it continue into next year let's ask ceo of coinbase brian armstrong who joins us with kate

rooney kate >> thanks so much. brian, thank you for making time today. i want to start with some of the news this week you're donating $is million as part of this massive crypto. what kind of influence are you hoping to garner here? >> yeah. this has been a big moment for the crypto industry. i donated and so did a handful of other companies so raising $78 million for a super pac is a big milestone the goal of that pac is to elect pro crypto and pro innovation candidates in 2024 there's 52 million americans out there who have used crypto now that's five times the number that had a union card, three times the number that have used an electric vehicle. so if they don't feel like their voices are being heard in d.c., so it's time to make sure that people know that being anti-crypto is bad politics in d.c. >> so speaking of d.c., congress is one thing would support in that branch of government be enough to leapfrog

what's happening on the agency level, what feels like animosity between that agency at least, and coinbase will congressional support be enough to offset that? >> congress could help here. you're correct that we have not seen a very cooperative s.e.c. there's been a request for clear rules in the crypto industry in the areas of the law where it's not clear. unfortunately, they ve been unwilling to do that so we have asked judge to compel them to respond to that i think in the absence othe s.e.c. acting, what wean see happening is congress can pass new legislation. this is what we have seen 83% of the countries go and do already. so the u.s. is a little behind here so congress could act. or the voters in 2024 could send a clear message. >> the scc is going to have last word when it comes to approval

kelly mentioned bitcoin prices this year. when it comes to coinbase, you can't trade etfs on coinbase it could be a net negative if it drove flow to placings like robin hood how should investors think about this >> i think the positive impact will be there for. >> caller: b -- areas of the economy where people can't directly trade crypto the other important is that coinbase has been named as the custodian in all but one of those etfs that have been filed. so we're hoping to play a piece of that value chain, as well >> brian, it's kelly here. if i could pick up on that we have spen to a guest who says it will be a head wind for coinbase maybe it a lower margin business cayou talk about that, how

profitable is current call it retail trading to coinbase and if you lose some of that, does what remain less profitable? >> when there's a new technology that comes on the scene or new product, you have to ask yourself what percent of this a substitute of the thing that came before and what percent is it a complement? it's never 100% one or the other. in this case, it's mostly a complement you can say it's 80/20 or something like that. but our goal with crypto is to get it plugged into all areas of the economy. we want the massive pool of capital out there in endowments and institutions, pension funds, they should be able to participate in this new asset class. so we'll see large amounts of capital come into crypto that's part of why we have seen bitcoin prices up 90% year to date and there will be a huge institutional segment. they don't just want to own an

s etf, they want to earn rewards on their assets or participate in a crypto economy, with commerce and other things. so those people will use our product directly, as well. so coinbase has a role to play in all aspects of the value chain here >> i want to ask you about lower interest rates heading into next year you had to adjust as rates have risen. you have pivoted now and revenue was coming from interest income. how are you going to adjust as we see interest rates potentially coming on the other side and falling next year, what is your strategy for adjusting the business in light of the macro environment? >> a few years ago, our business atcoinbase was 95% trading fees we made a big effort around the time it went public to start diversifying our revenue so we managed to get more revenue streams in subscriptions and services

the interest income from this was a big factor in the last few years. so what's great is that now we are -- we have multiple sources of revenue, some of them go up, some in the low interest rate environment go up. so our revenue has become more predictable. that's helped us and been a great story to tell wall street. >> all right we'll leave it there we appreciate you joining us for this today brian armstrong, ceo of coinbase kate, thanks to bringing that, as well. coming up, the rally in travel stocks continues. expedia at its highest level since may of last year marriott and hilton touching record highs today and the airlines, they get the attention during the holidays. can last iyear's flight remas be avoided this year? that's coming up

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welcome back last year's travel debacle costing southwest $140 million in government types alone. but airlines have put in measures to avoid another nightmare like that this year. phil lebeau has the details. >> the question is whether or not the steps that have been put in place not just at southwest but the faa and the d.o. the and what they have been doing, whether or not that will pay off. we won'tnow until big storm system hs. what we're going to see is a very crowded period here for the airlines overall you are looking at record breaking travel potentially over the next week and a half, up 16% compared to last year. the faa will open air space along the eastern seabrd, close off space flights over florida to make sure that all of

the traffic does not get backed up anywhere. we could also see the first 3 million passenger day. we've never had one here in the u.s. the number of people flying has steadily increased since the pandemic on an average daily basis, look at the growth. that 2.34 million, that is above the level that was seen by the tsa back in 2019 i mentioned easing congestion. the flight levels will increase in the next few days then it sloughs off towards christmas before picking up after christmas. part of the moves that are being made by the government, the d.o.t. working on those congested areas, like new york city, trying to make sure that they have enough spacing and enough staffing in place in order to handle the flights that are going in there, as you look at the airline stocks. remember that these guys, they were sold off bigtime, all the so while they are up today, and up aut 26% since the end of

october, they're nowhere close to their 52-week highs, kelly. they're still a well away from that, partially because investors are looking at the airlines and saying you have higher labor costs, a number of other factors that are head winds, including debt levels sit a time to get into the airline stocks for good, or is it still a trading vehicle at this point, they are mainly a trading vehicle until people are convinced that they have come out of that pandemic period and there is profitability as far as they can see >> it's interesting. so they look a lot better year-to-debt with falling fuel prices i was struck by the fact that you said air travel this holiday season will be up 16% from last year that's a big one-year surge. grant it, we have put together a string of them now i guess if we know that we should expect this kind of increase, hopefully they're ready for it >> i think they're ready for it.

the airlines are better prepared this year than they were last year the staffing is atits highest level since 2001 you've got more pilots, more mechanics, more ramp workers across the board, they have added more staffing. and they're pbetter prepared. p, kelly, look, they were coming out of the pandemic and they knew that people wanted to fly and they wanted to accommodate that as much as possible maybe they got a little over their skis in certain cases. >> all right phil, thank you. we hope it's uneventful for everyone all around. our phil lebeau. up on "the exchange" three reads on the consumer. we'll bring you the action, the story and the trade next

♪ welcome back we're looking at shipping, staples and semis in today's earninexchange delano, go to see you again. welcome ba let's art with fedexwhich reports afr the bell today the shares hit a 52-we high barcys says fedex should nefit om improvement in anwatching for updates on g

plans to merge its express and ground operations. and what do you say about the stock here are you a buyer? >> yeah. i am a buyer and been holding the stock for a while. i think some of the reasons mentioned are why. the e-commerce trend is still favorable for fedex. the new management team has also pointed to the ability to restructure and do different things for costs and they've been doingwell with that the play is to from april to expand and drive margin about 10%. that play works out. i think if you look at also the management's purchase plan, also osting the dividends, that's also pointing to theanager's belief in their plan as well so i think one thing that could help is the drop in crude oil. that's helping a lot of these consumer discretionary companies ing the packaging and shipping and wi help a lot of their business segments as well. last thing is the valuation. i think if y look when it gets to price of sales roughly to one times, that's when it's time to trim a little shares right now it's below that. i think that's an opportunity

for buyers if you look at the revenue has been slower over the past few quarters. that could boost that next to the opportunity for investors there. >> amazing run this year really. i know they had their challenges, but up 63%, still below a 15-pe for what it's worth. our attention to general mills which reports tomorrow morning that stock different story rbc expects the shares to stay under pressure, slower than expected volume growth, increase pressure on the pet category and product disinflation falling prices of the perimeter of the grocery stores is pulling customers away from the center where price have been stickier you part of the bears on this or pick it up here on the cheap >> i am part of the bears on this one this is one i'm not holding. few reasons why. the big one that was mentioned is volume. a lot of the things that these consumer discretionary companies are doing right now is to boost revenue they're doing different things that drive that raef knew

by different product things. but for them, obviously, the consumer is weakening. the volume is the interesting part because the price increases aren't going to make up for that in a lot of cases. so for me, it's one that i've been fading. i think for income investors that are looking for a dividend that's actually been strong for a very long time, this might be a play for them. but if you look at the price performance, growth and strong price performance that's one i would continue to fade. >> continue to fade general mills. up to them give us better numbers in the morning. finally, micron, shares up 60% this year interestingly, rivaling fedex and hitting a 52-week high late last week. most of the street is expecting some positive results and looking to hire on memory chips, stabilizing demands for pcs and smart phones and more inventory stabilization. morgan stanley warns this rally may have encountered up the turn where do you fall on this one, delano >> this is on my watch list.

i'm not holding shares right now. the big thing i'm watching the big driver in 2024 for micron and a lot of memory chip companies is going to be ai and how that positions their business going forward there will be a lot more demand obviously for companies like micron and all these different semiconductor companies. i think that's why i would be a buyer. some is potentially priced in now with the big strong price performance over the last several months but i think some of that is not priced in. you look at the volatile year micron had, especially with the inventory issues and things of that nature, geopolitical issues with china, those are some things that have been pushing down the price but i think if you look further out, those -- the ai demand is the thing that will drive the price forward. that's the reason why it should be on your watch list. >> indeed. delano, thank you. be a busy 24 hours we appreciate your time today. that does it for "the exchange." up next on "power lunch," it's

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only when your clients make more money? (fisher investments) yep. we do better when our clients do better. at fisher investments, we're clearly different. good afternoon, everybody. alongside kelly evans, i'm tyler mathison two topics which have had a major impact on business this year first is generative ai we'll talk to new jersey governor phil murphy about his plans to get the state ready to be a leader in artificial intelligence and senators warner and kennedy will join us as they introduce a bill aimed at protecting the financial markets from ai manipulation plus, retail theft is changing the way we shop as more items are locked away, is it ruining the consumer experience in store? that and a closer look at target's decision to close some stores due to crime rates. but first a