volume. a lot of it tax law selling and window dressing. it's about to retest that level here. i think it will hold. i'm in the stock. relatively recent purchase. >> carrie? >> a software company, autodesk. >> and bill, take us home. >> abvie. i think we could be running at a 2022 high. >> that does it for us. "the exchange" starts right now. ♪ ♪ indeed it does. thank you very much. i'm tyler mathisen in for kelly evans. here's what's ahead on a very busy hour. skrus spruce point capital out with a new report, calling it a classic case of a company failing to transform itself. that is the nicest part of the report. ben axler is here to make his case. speaking of contrarian trades, our market guest has

three of them. the names and why he thinks they are positioned for gains this year, and this election could be like -- unlike any other, and it is not just because former president trump is back in the picture. it is because deep fakes are also a part of the picture, and they are getting more and more sophis sophisticated. what you need to know. we begin with the markets and dom chu. >> losing some steam right now. it's a bit mixed in terms of the overall picture. the dow down about 100 points, one quarter of 1% declines. the s&p 500, that broader measure, is up about 0.1 of 1%. but this does represent right now session lows for that s&p 500. the highs of the session, we were closer to 4766. currently trading at 44 right now. so keep an eye on that kind of losing momentum trade. the nasdaq still up about 2/3 of 1%, 93 points to up theside.

14,948. one of the big reasons for that outperformance in the nasdaq and the s&p to a certain degree is mega cap technology stocks continue thing run where we're seeing some moves higher, maybe a flight to safety trade, maybe some growth concerns that are still kind of playing some push and pull here. apple shares up 2.75%. nvidia shares get a star. they make a record high in trading today. alphabet up about 2/3 of 1%. amazon, microsoft up. and then the stock of the day right now has little to do with the consumer health picturs of now, is discover financial services. that company perhaps best known for its namesake credit card is down 11%. the earnings report was mentioned. revenue was better than expected, but profits fell marketedly over the same period last year, because it boosted

significantly to about 1.91 billion dollars worth of reserves it sets aside for possible padbad loans down the line. so discover financial shares down about 11%. one more data point, tyler, in that mixed picture for the u.s. economy, vis-a-vie the u.s. consumer. back over to you. >> dom, thank you very much. dominic chu reporting. shares of msci are up 1% in today's session after wells fargo called it a "best in class." shrugging off yesterday's short report by spruce point capital which sees a 55% to 65% down side risk in that company. in the report, they call msci a classic case of a struggling company failing to transform itself while engaging in value-destructive and even worse nepotism-like acquisitions and share repurchases. it also accuses the company of abusive financial reporting and accounting tactics to bolster earnings. in a statement to cnbc --

>> here now with us to respond to that statement from msci is ben axler. ben, welcome. good to see you. this is going to be a lively conversation, i'm sure. let me begin with this. it says in my description about ben axler, that you ore an activist short seller, we agree. forensic financial resaler who dedicated his career to exposing schemes. is msci a financial scheme, and if so, why? >> well, i think company clearly is trying to create shareholder value, and increase its stock

price. where we think they have gone wrong is through expensive acquisitions that we think haven't lived up to the expectations. we think they're repurchasing their stock at 17 times revenue multiple. we think that should be dedicated more to dividends. and, you know, we think that, to the point about it being a mature struggling company, that they're engaging in aggressive accounting to project an image of growth, where we think ultimately they're going to struggle to meet expectations as the industry transforms and their solutions -- >> these are operational largely. that's my characterization, not yours, operational issues, how the company is being run, what it's done in terms of acquisitions, how it's handling share repurchases and dividends. these are legitimate criticisms from where you sit. but is it a scheme? >> i think every company operates a scheme to improve their share price, right? but i think where we believe that management is being aggressive in terms of how

they're portraying their growth, how they're portraying their margins and depicting their revenue. for example, in our report, we noted we have seen some aggressive revenue recognition policies on non-recurring revenue items. we also have issues about the cost allocation and whether or not the margins in certain segments are increasing. so that is -- >> one of the bones you have picked with the company, as we talk about revenue recognition and things like that, is the fact that the chief accounting officer left about six months ago, am i right on that? >> correct. >> the job is now being covered by the chief financial officer. you think this is bad. >> yeah. so we do have concerns about the governance. >> and the comptroller has gone. >> correct. so there's some improvements that can be made. we credit the ceo, he's created a lot of value. he's also the chairman. but we think as the company and

markets and customers change, that the company needs some change at the highest level at the ceo level. in addition, we believe the company should split the cfo and chief accounting officer rolls. that's a concern. we have a concern about the audit engagement partner who is not a financial service or technology expert. so we think there's certain things they should do to improve the governance and the confidence in the company's financial reporting. >> governance, operations, another thing you draw attention to from your point of view is what you call neptistic-like tendencies in terms of acquisitions and other things. explain why the nepotism factors have come into play and why they've been injurious to the company. >> msci, it starts for morgan stanny capital international. >> blue chip background.

>> right. so we noticed a pattern, a suspicious pattern of recent alliances and acquisitions benefiting either morgan stanley or morgan stanley related or msci related individuals. so we have to question, you know, are these deals in the best interest of msci shareholders, or are these deals in the best interest of people within the sphere of morgan stanley? some of these deals, they're not releasing the terms, the payments of what's being made. so we're calling on the company to be more transparent and explain why there is a pattern of deal making, nepotism-like alliances with these individuals. >> so today, wells fargo comes back and fires back at your allegations, sent in a letter yesterday to wayne edmonds, the independent board chair at msci. wells fargo said we review the short report call that msci as a

struggling company as misguided. we believe the report mischaracterizes msci's leading market position and underappreciates its high return subscription based model. we highlight his track record with other multiple business services with average performance of positive 73%. 38% outperformance versus markets since the short call. what they are fundamentally saying there is they don't agree with your assessment of msci, and oh, by the way, just to pound you a little harder, when you've made short calls in the past, the stock has done the opposite. it's gone up, not down. >> we disagree with that. you look at our recent track record of s&p 500 short campaigns. we have had a lot of traction in some of these large-cap companies. we're looking very much at the numbers, okay? so our report is very fact based. you can look at the client

retention rate of msci across their segments, they're declining. the organic growth is declining. the company is making changes to their risk factor language this the 10-k, talking about client defections. we did a survey of 1% of the clients and finding that the customers are pushing back on abusive, high price increases. >> other shorts you have had lately, generac and ao smith. you're critical of the amount of share buybacks that -- is that a fair -- >> that's fair. are those share buybacks, do you believe, driven in part that the executives at the company are heavily compensated with stock? >> you hit the nail on the head. one of our issues here is that management, long-term incentive compensation is tied to cumulative revenue and adjusted eps. what's the problem here? the company does not give

explicit guidance on revenue. so investors are operating in a vacuum. they're not disclosing what these metrics are to investors, and management has discretion to use the buyback in a way that increases earnings per share. so one can think of it they're essentially buying their potential ability to hit the targets. they will adjust out modifications to the debt in terms of adjusting this, but why not adjust out the repurchases in the adjusted eps? >> so let me ask you -- we have to go, but how the hell do they make money? >> we have an index money. >> do they license those indexes to funds and etfs? >> correct. they have an index and analytics business, but the core growth driver has been their ratings business. where our real concern is that growth driver business is slowing, as there is more competition. >> so the esg rating, a company will pay them to rate the

company on esg metrics, is that right? that's like the way s&p might charge a company to go in and give it a bond rating. >> that's correct. that's hair highest value, esg business, and that is under more pressure. >> thank you so much, ben axler. appreciate your time, and we have a standing invitation out to msci and their executives to join us to comment on this call. >> thank you very much. market probabilities for a march rate cut, coming down a bit, now sitting at 57%. our next guest agrees with that sentiment, saying a cut that soon would be too aggressive. for more, let's bring in matt orton, chief market strategist. matt, welcome. good to have you with us. >> great to be here, tyler. >> you don't argue with the fundamental thesis that the fed is likely to loosen rates this

year than not, right? you just are questioning whether the timing in march is too soon. >> yeah, that's absolutely right. it's clear that the fed has hit the peak that we're going to be cutting rates this year. the problem is, the market got really, really aggressive, tyler, in pricing in rate cuts, pricing in six rate cuts at the start of the year, and putting up to an 80% probability that we were going to get a cut in march. at the same time, you have an economic backdrop that's pretty darn positive. you have strong jobs growth. i think the trajectory to get to consistent 2% inflation target is not as easy as everyone thought. so i've been telling a lot of our clients that we have to go through some normalization first. we're seeing that play out a little this week. there's still more room to go. at the end of the day, the fundamental backdrop supporting earnings growth and a broadening of the market is still very much in play. so what i say is use downside to

diversify and set your portfolios. if you have cash, rates are going to come down, so have a plan and start to execute that plan, because there's plenty of interesting areas in the market. >> i guess one of the things that -- i may be full of it here, matt. you can instruct me if i am, and i admit i'm full of it more often than not. is the idea that -- quote, there's money on the sidelines, all this money, this tonnage fitting this in money market funds and money did go into money market funds over the last year as rates rose and the returns on those funds became more palatable and more enticing. but i'm always suspicious of the idea that that money is going to leave to money market funds and fuel a big roiz in equities. tell me i'm wrong to be skeptical. >> no, tyler. i think you're right to be skeptical, because you don't always see money leave those

short-term instruments. what i would say is you have to think about why $1.2 trillion went into money market funds last year when the market was up 26% or so. it started off as being defensive. it started off being, i'm uncertain where the market is going to go next year, and then another big part is rates are going to continue to increase -- >> i can get paid, 4%, 5% to keep my money in a safe place. that doesn't sound too bad to me after i was getting zero percent to keep my money there. >> yeah, 100%. but look at what has changed now. so those who went into those money market funds who were overweight, they missed out on the capital appreciation component that you can get both with respect to fixed income and equities. a lot said okay, 5%, it might go a little higher, i'm going to wait.

then we went down to 4%. so there's more of a visible opportunity cost to sitting there. i think at the same time, as the investors who are sitting there, who are there for more of the "i need income part of the equation," they can get that in stocks and bonds. as rates come down, i believe you'll see that money start to move, especially when the economic picture is still pretty benign and sol it. >> i don't want to let you go without a quick thumbnail on a couple of stocks. the first one i mention i'm hearing a lot of buzz about, and that is unh, the big health care company. why do you like these? >> i think health care is a great stuopportunity to have a contrarian play, because you're getting to a bottom in the ets process. so humana is not united health. the reasons humana is down so

much isn't just because of the medical cost ratio, it's because they missed expectations pretty badly. and the outlook isn't that positive. whereas you have a unh that's growing at 13% earnings year over year over year, paying a dividend with good cloth and not exposed to the same factors. so i would be using this downside to build more of a position there. and xbi, even though biotech has been such a big run, take a five-year chart of xbi and look at the destruction that's happened in the environment where rates started to move higher. we know from our conversation earlier, rates are going to come down this year. m&a activity has picked up and should continue to accelerate. there's a lot of patent clips come up, so pharma companies are becoming more inquisitive. so play xbi to get broad exp

exposure. >> matt, thank you very much. appreciate your time today. >> thank you. coming up, 2024 already being labeled by some as the year of the so-called deep fake election. are platforms and regulators ready to prevent bad actors from using ai to hijack the presidential election? we have a deep dive into deepfakes, next. plus, mortgage rates are well off their october highs, but our guest says that puts the builders at a big advantage in this market. he'll join us to make his case. "the exchange" returns of this.

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i think he's having a midlife crisis can hi'm not.build the future you imagine. you got us t-mobile home internet lite. after a week of streaming they knocked us down... ...to dial up speeds. like from the 90s. great times. all i can do say is that my life is pre-- i like watching the puddles gather rain. -hey, your mom and i procreated to that song. oh, ew! i think you've said enough. why don't we just switch to xfinity like everyone else? then you would know what year it was. i know what year it is. welcome back to "the exchange." 2024 would be the year of the led deep fake election, as ai altered videos threaten to spread misinformation to affect

the outcome not just here in the united states but all over the world where elections are taking place. julia is here now with the details. >> reporter: hi, tyler. that's right. that's the risk here, the concern that ai manipulated audio or video could spread, impacting what voters think about candidates or whether they think it's safe to go out to the polls. consumer public citizen is advocating for the federal election commission to take action, warning a torrent of deep fakes threatens to destabilize our election system, maybe even decide elections. the fec responding -- >> now, the most notable deepfake election example yet was just ahead of slovakia's october election when a fake audio clip of a presidential candidate was posted on social media, seemingly talking about

rigging that election and doubling the price of beer. now, he lost, despite thefact that he had been leading in the polls. meta in november announced plans for identifying and restricting the use of ai in political ads, including mandating that add verytizers disclose whether they used ai. youtube similarly requires content to be labeled, both on the video and in the description. adding that any content meant to mislead is not allowed on the platform. tiktok telling us that it removes "inaccurate, misleading or false content that may cause significant harm to individuals or society." but many people are saying that the responsibility for this lies not with the platforms, but with the ai companies. so openai just announced efforts to prevent its chatgbt from being used to mislead voters. including banning people from building applications for political campaigning, and lobbying with its tools.

intel is working on deepfake technology, something called fake catcher, which social media platforms could deploy to block the upload of deepfakes. in terms of regulation, there are five states, including california and texas, that have laws to limit deepfake use around elections. 16 more have introduced bills. so nearly half the states would have ai legislation in place by the election. there's also some proposed federal legislation, and it does have bipartisan support. we know just how hard it is for anything to get passed. >> julia, thank you very much for setting up what we hope will be a very interesting conversation here. thanks again. states are moving to regulate ai in elections, but what is the role of the federal government? we'll talk about that and what are the risks ahead of the absence of any national regulation. joining me now is former north dakota senator heidi highcamp

and hal lee. hal, julia mentioned many of the platforms are requiring that material that is generated by ai be labeled as such. that feels to me like a hollow way of sort of self-policing, relying on an honor system of the perpetrators of deepfakes to say, hey, this isn't really joe biden, use thing kind of language, or this isn't really donald trump doing x, y, or z. why would a bad actor self-label what they're doing as a fake? >> right. really good question. first of all, i think a bad actor wouldn't want to self-label. >> no! >> but first of all, there are a lot of deepfake detection

technologies that are very advanced. so deepfakes, the past couple of years, are much harder to hide. so you can use these advanced techniques to detect if something is deepfake, so these platforms have the responsibility to label them if they decide that you want to water mark ai generated content. >> so let me just interrupt to make sure that i'm understanding. the platform companies, whether it is a youtube or a tiktok or an instagram, they have sophisticated technology that can detect deepfake and put a water mark on it. are they doing that? >> yes. many of these social media platforms have implemented those things. i have uploaded content where sometimes it would accidently mislabel them as deepfakes. but this is something that we have been working very actively

with top institutions in academia, and i've been involved in some of these programs to develop obvious deepfakes. >> senator, welcome. good to see you. hope you're staying warm if you're in north dakota. hal just said there is technology that can detect these deepfakes and that the platforms are deploying it as they can. is that sufficient or does there need to be some national standard, and what would it look like if there was? >> i think, tyler, you hit the nail on the head when you say nefarious and wrongdoers are not going to listen to a scolding from a regulator. the problem in politics, once something else capes, lies go around the country seven times before the truth catches up. so we have to condition our voters to understand that everything they see on the

internet may not be real. we used to say, if it's too good to be true, it probably isn't. if it is so bizarre that you think that can't be true, it probably isn't. i'm not as convinced that watermarks are the answer. there's a lot of people thinking that for every technology fix that you have, that can be undone in a short period of time. and so this is a very problematic situation that has to, i think, be addressed from educating voters, not to believe everything that they see on these platforms. >> so how -- respond to the senator's comment there that a water mark is probably an insufficient countervailing factor here. i can well imagine, and the world is probably here right now, the ability to create deepfak that makes joe biden sound like a mumbling, stumbling, feeble person, and it's fake. on the other hand, a deepfake

that would make donald trump appear to be an outright, overt, antisemite or racist. by putting words in their mouth, mimicking their facial mannerisms and so on and so forth, how do you fight that? >> first of all, i think you're hitting the nail. i fully agree with the senator that just putting a watermark isn't enough, because the detection techniques on the other hand, you know, they also have limits, even though they're very advanced. the methods for -- that we have to be particularly attentive and careful are, you know, ai lipsync and voice cloning technologies. those have progressed a lot these days. so what we need to make sure is that the videos that we see, so it's relatively easy to manipulate very convincing and generate very convincing videos of an existing footage where we

would change what they're doing. so ai lipsync, and we can change someone's voice or even type the text and produce a very convincing speech of either of the candidates, using these type of technologies. so what we need to do is make sure to implement a solution that allows us to reverse search, you know, if an existing footage comes from something we have seen. >> senator, what would the solution look like here? having heard what hao li just said, what would a federal solution or attempt at a solution look like? >> i think regulators are far behind. you saw in the story saying the fec is going to release regulations by summer. well, let me tell you, summer's too late. so if we're waiting on legislation, we're going to have

a problem. i know from sitting in meetings with a lot of the platforms, they're already working on this, they're thinking about it. but it's against a backdrop, tyler, of people saying you're taking down conservative content. you're manipulating the content. so the platforms are really sensitive to an argument that they're already editing what goes up on their platform. and so, again, i think that we have to, as we think about this, we have to educate people on what can be done, why they need to be more cynical about what they're seeing, especially if the content is particularly inflammable. so i hate to say this, but it comes down to educating the voter on what this technology can do, and then yes, making available the actual footage showing what's happened. i think when the voters sees that somebody is manipulating this, hopefully the voter will

punish the manipulator and that will create -- >> i think that's a really interesting point, senator. we have to leave it there, is the idea that if i am a patron of a particular platform, and that platform becomes so contaminated with fake material and i find out about it, i'm going to migrate away from that platform and "the market will then impose a punishment on that platform or provider." >> thank you both for your perspective today. we hope to have both of you back, because this is a story that will be with us throughout all of '24 and beyond. as we stick with social media now, new details in an ongoing lawsuit against meta, shetding light on what employees did or didn't do to control the sexual harassment of children on the company's platform. aomon has that story.

>> reporter: this is a case that was brought by the attorney general of new mexico, accusing meta of failing to protect children on fab and instagram. according to the filing, a 2021 internal presentation estimated that 100,000 children each day received online sexual ha hara harassment, such as pictures of adult genitalia. the presentation was not released in those court documents. according to the complaint in a 2020 internal meta chat, one employee asked another, what specifically are we doing for child grooming, something i just heard about, that is happening a lot on tiktok. the colleague responds, somewhere between zero and negligible. child safety is an explicit non-goal this half. the complaint alleges that executives scrambled in 2020 to respond to a complaint from an executive at apple, whose 12-year-old child was so less kated on the platform.

a meta employee said this is the kind of thing that pisses apple off, from the extent of removing us from the app store and asked the colleague when we'll stop adults messaging minors on instagram. the ceo said the company has fixed many complaints. the company said it disabled more than 500,000 accounts for violating child safety patrol sis. the company said -- >> this legal fight is still in its early stages, so it's not clear how this will be resolved. back to you. >> thank you very much.

and still ahead, google planning to cut even more jobs as it ramps up investments in ai. we'll tell you what it will mean for the company's bottom line. that's next. (ella) fashion moves fast. setting trends is our business. we need to scale with customer demand... in real time. (jen) so we partner with verizon. their solution for us? a private 5g network. (ella) we now get more control of production, efficiencies, and greater agility. (marquis) with a custom private 5g network. our customers get what they want, when they want it. (jen) now we're even smarter and ready for what's next. (vo) achieve enterprise intelligence. it's your vision, it's your verizon. ♪ (captivating music) ♪

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welcome back to "the exchange." i'm pippa stevens with your news update. a new deal is in the works to release hostages held by hamas, according to u.s., israeli and arab officials.

the current discussion would pause the violence in exchange for hostages. officials warned a deal is not imminent. uber is reporting that hackers stole $7.5 million in grant money from the department of health and human services last year in cyber attacks. according to the report, hackers accessed an hhs from march to november of last year and withdrew money that was to be awarded to five accounts. the grantees have yet to receive their awards. an investigation into the theft are ongoing. some schools have banned chatgbt, but one university is embracing the ai giant. openai announced its first-ever partnership with a higher education institution today. it will join forces with arizona state university next month to give students access to chatgbt for course work, tutoring, research and more. tyler, back to you. >> thank you very much. coming up, mortgage rates

threatening to surpass 7% for the first time in a month after plunging from their october highs. now we're starting to get some mixed messages from the data, u xt.n r break it all dowfo yone

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welcome back to "the exchange." this morning,'s data showing mixed signals in the housing market. starts fell in december for the first time in four months by a little bit, dragged down by a drop in new single family home construction. the building permits, a sign of future construction, rose nearly the% beating expectations. joining us now to discuss is logan, lead am list at the housiho housing wire. were these numbers good or bad? >> well, it's bad in the sense that the apartment boom is over, right? so -- >> i thought more multifamily housing was started. >> yeah. that's done with. rates are too high. but the single family search is still going. bless the builder's hearts, they're pushing rates down below 6%, and that's good for the u.s. economy, because it keeps

residential people employed in that sector. >> as i was reading the data, i thought both the permits and the starts were still higher for multifamily than for single family. am i wrong on that? >> no. multifamily permits have been falling for sometime now. that sector is done with. so hopefully we don't lose too much employment in that area. the single family permits are still rising. that's a continuation of what happened last year. again, the builders are living in a sub-6% mort gage world, so they can grow sales. the existing home sales market doesn't have that luxury. >> there are no ways that really the sellers are inclined to offer mortgage help the way builders are, right? >> yes. the builders sell their homes as a commodity. the existing home sales market is completely different. we're very restrictive, i call it a covid-19 policy for housing. the existing home house sales is the one sector that is going

into the third calendar year of great recession lows and demand. even though we've seen an increase in demand, application data is still at low levels. we have 157 million people working, so let's put context in some of the data lines that we see and show growth in that weekly data line. >> if existing homeowners are not putting their houses on the market, that keeps prices moving up, i suppose, because there isn't much supply, right? >> yes, that's part of it. however, we do have one good piece of news. even though rates are roughly 1% higher than what they were last year, we are seeing new listings data grow this year, on a year over year basis. it's still near record lows. we're not having a silver tsunami or anything like that, but we are seeing more sellers come to the market, that's a positive. most sellers are buyers, sowe can get more growth in there. people have to live their lives. people need the household information, buy homes, raise

families. so it is a positive we saw it happen last year, the new listings data didn't take it lower. so we're hopeful it looks better this year than it did last year. >> thank you very much for your insight today. thanks for being here. have you back soon. coming up, alphabet's ceo warning of further job cuts this year, as the company shifts investments to ai. as the industry doubles down on that technology, what other companies should, could follow suit? tus cc.hen "the exchange" rernonnb dad, we got this. we got this. we got this. we got this. life is for living. we got this. let's partner for all of it. edward jones

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start for free at godaddy.com [♪♪] your skin is ever-changing, take care of it with gold bond's healing formulations of 7 moisturizers and 3 vitamins. for all your skins, gold bond. google cutting 100 employees at their video platform youtube, one of their most successful properties. the company announced a total of more than a thousand layoffs in a little more than a week, and the ceo warns that more are coming. diedra joins us for today's tech check. what's going on at google? >> last year, this is interesting, google was criticized for not cutting enough compared to say a meta or amazon. but this year, we have had headline after headline of these cuts coming at the beginning of

the year. last night in that memo, the ceo warning there's more to come. there's this idea maybe there's a different reason behind these job cuts. what if they're the beginning of a new trend. rather than correcting post pandemic, this is google getting into position for an ai platform shift that will require a different kind of workforce. i want to read part of that memo from the ceo last night. he wrote that the reality is -- >> tyler, the last few years, higher interest rates, the efficiency drive, that was the cover for layoffs, the reason, however you want to look at it. this year, you could hear companies saying, ai, or the machines made me do it. they need different kinds of workforces, and a different kind of hiring. >> is alphabet, in effect, taking a page that worked so

successfully for meta last year, when they branded it the year of efficiency, is that what alphabet is doing here and hoping to get a similar stock market result? >> that's certainly what some people think, and on wall street, there was a note from bernstein that said the year of efficiency is now the years of efficiency, plural. but what others think is happening is this new ai shift, so they kind of are feeding each other. you had these efficiencies post pandemic, because of the overhiring. especially google did that. but now they're looking for different kinds of workforce. so i just did this simple google search on openings at the company. and there was actually more open roles for data scientists than software engineers. so this feeds the idea they'll need a different kind of workforce as this enormous platform shift takes place. some of the roles like these junior engineers may not be as needed as they have been to get to this point, because

generative ai is just taking over everything. >> we all pray that you were looking at those google job openings just for research only. just wondering for a friend. thank you. appreciate it. coming up, shares of spirit arrow systems are analysts behind that quote, behind us, next. ♪ ♪ 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

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exchange. charitable but we get one of its manufacturer, spirit aerosystems, are up more than 3%. the vote of confidence from indians, auxotroph air, excuse, me ordering 150 but week 7:37 max narrow body planes. but shared are lower by 12% since that door plug blew off a 737 max 9 during an alaska air flight. that -- the form in the sheet in coverage with a bye and a 39

dollar price target. analysts calling the stop a show me turnaround story. jason thirsty, senior analyst with city research, covering aerospace and defense, they've got a lot to show, jason. >> >> well, yeah. look. that's right. the big picture thesis here is their customers, boeing in airbus, have lots and lots of backlog going out years. they need to fulfill the orders that have been placed to them. so, they're gonna be raising production rates in front of us, and with that will come higher volumes for spirit, and overtime, is better margins and better cash flow. so, the story here is really about the macro backdrop for the industry. spirit operates in, and overtime, better execution as they work closely with boeing to kind of write the ship from an operational perspective. they benefit from some better pricing terms that they got here recently with boeing, have to get with airbus in the future. and benefit from these rising production rates and expanding margins and cash flows in the future.

>> should i feel comforted that a company that has had i think you even cite this, has had some manufacturing issues over the years is going to be producing even more fuselages? they are not going to be slowing down and taking things a little more carefully, they're going to have to ramp up to meet demand so they're going to move faster. >> right. i think you would be concerned if this was a company that was experiencing these issues in isolation. but we're seeing this across the industry, right? not just the commercial side, but on the defense side. people are struggling post-pandemic with an experience labor force and supply chain bottlenecks. so, spirits not unique here. i think one of the things that makes me comfortable, is this isn't that credible amount of attention paid to. the so, we move to hire more inspectors and bring some more people into the workforce of both boeing and its spirit here, over the next couple of years. to make sure that we're getting the quality right. but this is not an issue that's

unique to spirit. >> what is this incidents involving the door plug and the grounding of these 7:39 max is going to do two spirits finances near term? is it a large number rated? it's a small number hits that they will step over relatively easy, or what? >> it's a small number right? i think they're continuing to produce. boeing is continuing to deliver aircraft. as i just mentioned a minute ago, i think there's going to be more investments by both boeing and airbus and increase inspections. if you've got a young workforce that is an experience, what you've had in the prior cycle, you probably need to throw more expected in to the mix to make sure the work is getting done,, so a small hits, maybe, to the financials as they bring on some more people. but i think over the longer term, that will be masked by the rising volume of -- the manufacturing this

experiencing higher rate. >> that's what, we're talking pennies per share? well, look. for boeing, i said it was maybe $250 million on an annual basis that they've got to throw into the mix. it would be a very small fraction for a company like spirit. boeing is the under pound gorilla here. there's the one sucking up all the revenues, and they're going to make some big investments to check the, not only their own factory with the factories of their suppliers as well. >> are there other companies that do what spirit does? are there other major competitors, both domestically and internationally? and who are they? >> well, right,, so there is a company called mel rose over in europe that the zero structures. historically, there's been a company called triumph. they are two inch, two and three for suppliers, y into spirits. one of them called to calm and that's a publicly traded company as well. and then, i think the biggest competitor to somebody like spirit would be the internal manufacturing capabilities of their customers. so, boeing and airbus. they could in source this kind

of. work >> the way themselves. >> they could do with themselves eventually. >> you've made the case very clearly, chase. and thank you very much. we appreciate, always good to have you on with us. we appreciate it. >> yeah. >> jason -- of citi bank. that goes in for the exchange. coming up on power lunch, the house had to vote in three hours on the latest wanting beloved just a day left to avoid a shutdown. will congress be able to get a bill to biden's desk in time? we'll discuss that. contested prewar is here. she's almost ready to join me onset here. big moment for her, all join her on the other side of this quick break. rylee! from rylee's realty! hi! this listing sounds incredible. let's check it out. says here it gets plenty of light. and this must be the ocean view? of aruba? huh. this listing is misleading.

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