1100. has come back down to 900. i think you have another chance to buy it. >> jason? >> goldman sachs. ib is sarting to come back. >> and amy? >> pfizer. >> and jim? >> cheniere energy. >> "the exchange" with kelly evans is coming up right now. thank you very much, dom. welcome to "the exchange." i'm kelly evans. here's what's ahead this hour. the gop ticket is in place, and it has big implications for markets, for energy, big tech, and health care. we'll break it all down. plus, with the election up certainty is make -- uncertainty is making you look overseas for dollar, we'll help you take a look. but one of our guests is bullish on the u.s. economy because of one particular trade. i'll give you a hint, this is a

whole index, not just a single name or a sector. that's all coming up ahead. let's get a quick check on markets. the dow is hitting a fresh record high on another 600-point rally. we're on track for a fifth straight day of gains. best day sense may 31st. the number to watch is 1.65%. the nasdaq is sitting out the gains, as a picture of rotation out of big tech into the rest of the market continues. the s&p 500 add ing 21 points. the ten-year at 4.19 as more tension is whether it will go below 4%. we begin with breaking news this hour. new jersey senator bob menendez's verdict is in. contessa? >> the verdict is that he's guilty on all charges. senator bob menendez found guilty of 16 points, including corruption, bribery, extortion, fire fraud, conspiracy, acting

as a foreign agent, obstruction of justice. 16 charges, guilty on all of them. the jury had deliberated for 12 hours over three days. the trial has lasted some two months. the lawyers said recently that the evidence against the new jersey senator was very thin. in the meantime, he has insisted on staying in office and continuing his run for re-election. in fact, doing so now as an independent. cory booker was just on m nbc moments for the verdict came in and said his heart aches over this, that he called on his colleague to resign. he says this is a person i've served with for ten years. the things that he's accused of i've not seen in my working with him. but, again, menendez has refused to step aside. and now guilty on all 16 counts. we'll continue to monitor the hearing, and if we get new news on this, we'll bring it back. >> just thinking this for a moment, the implications would be, guys, you're talking to me again in the control room.

contessa, in this case, senator menendez is not required to step down as i understand it. he would have to resign or the senate could require him if they get a 2/3 vote, so they probably keep their balance of power, even if they did. >> so the democrats have a rule, and this is what forced the senator to step aside from his position on the foreign relations committee, and that happened as soon as he was charged. but the rules do not require him to step aside until -- so let's see what he does now. let's see now that the guilty verdict comes in, he's shown himself to be defensive and insistent on his innocence, and willing to fight. so he may decide that he's going to continue with the run, continue to serve, and try to institute an appeal here. but, remember, this is his second trial on federal corruption charges. he was also charged in 20 -- he had a trial in 2017 that ended with the jury saying they

couldn't get to a decision. there was a mistrial there. the judge then acquitted him on some charges, and the justice department, at that point, dropped the remaining charges against him, allowing him to continue his campaign and running for office. and then serving as senator of new jersey. pi the way, the governor of new jersey had also called on menendez to resign after he was charged in this federal investigation into corruption. and the details here about the gold bars and stacks of cash, they were just shocking and really salacious when they were coming out in trial, as the details came through. the jury clearly came to a consensus here, because every single charge against the senator, every charge against his co-conspirators, one a new jersey state real estate developer, the other a u.s. businessman with ties to egypt who was working with tnadine menendez. her trial is postponed because she is undergoing cancer treatment.

>> so he's up for re-election right now. so if there were a republican challenger, that would be probably the only way the seat flips, if that republican gains the seat. otherwise, i don't know if there is another name, a democratic name on the ballot that could replace him, i don't know, maybe he's going to try to ride this out. >> it definitely puts new jersey in play. and what's more, new jersey, which was always seen as a staunchly blue state, firmly in the democratic camp, there have been some polls recently that indicate there's some cracks in the democratic strong hold here. and so with this conviction, and really even allegations before the conviction, it tended to paint this opening for republicans to say look, the democrats are a problem in new jersey. so we'll wait to see what happens now. politically, we'll wait to see at this point he goes in for sentencing, as well.

and this could -- this could put new jersey in play as we head into the heat of the presidential and congressional election season. >> another fascinating development this season. contessa, thank you very much. let's turn to the ripple effects offormer president trump choosing j.d. vance as his running mate. here's what that selection signals about the rise of economic populism in the gop. and chris krugen is here with the market impact. and andreas is joining us with the outlook of green energy under this new administration potentially, and mike has the health care implications. great to have you all here. kick it off for us, what are people saying? >> look, it's an enormous change in terms of economic policy. this is a generation change with j.d. chance being just 39. he will be the heir opponent to the maga movement, easter in 2024, if donald trump loses, or

if 2028 if donald trump wins re-election to a second term here. so all eyes shift to j.d. vance and his approach to the economy. it's very different than what we have seen from republicans in previous generations. vance approaches this as an economic populist. what does that mean? that means that conservatives now don't necessarily see themselves an ally with corporate executives in c-suites. they don't see them allied with big american iconic companies. they see some of those corporate leaders as hostile on cultural values, on lbgtq issues, on diversity and inclusion issues. they look at those executives as suspect and bearing values they don't necessarily agree with. take a look at j.d. vance back in december. >> and every time you guys get involved in these cultural war battles, it makes it harder for the american people to see you guys as neutral financial

institutions, and it frankly makes it harder for us to do the same. >> so the big change here in approach is from a view of the economy that said the best thing we can do is get prices down for consumers to a view of the economy under the economic populist which says, the best thing we can do is get wages up for workers. that improves workers, improves families and community. that focus leads you to a whole different set of policy prescriptions, including rejecting globalization of the economy and tariffs. one of the things that he's signalled is he's opened to the devaluation of the u.s. dollar to increase exports. take a look at a quote from vance earlier in the year. he said, devaluing is a scary word, but what it really means is american exports become cheaper. that is a very different approach from the king dollar, strong dollar approach, globalization, free trade that we have seen from republicans over the course of several

decades. i think it's going to bear exploration as to what a trump/vance administration might look like. i talked to one person in d.c. today who is very familiar with all this, who said the expectation is that a trump/vance ftc would be much more aggressive on this idea of mergers and acquisitions than even say the biden ftc has been, let alone a trump/vance doj. the expectation here is that not a chance, kelly. back to you. >> so they're saying that, you know, take lina khan and everything that's happened, to put a stop to big deals and put everything under review. i think they tried to stop the handbag merger. the point being, they think that j.d. vance would push the trump administration in a direction that was even more unfriendly to

deal making that she and biden have done? >> yeah. the assumption is that j.d. vance would have enormous amounts of power, but his selection signalled that trump is heading in an economic populist direction. there are a whole bunch of people in the senate and sort of conservative republicans generally who put a lot of thinking into this over the past five years. this would be a very different trump administration than what we saw back in 2017, when it was staffed largely by establishment republicans, and there were establishment republicans like paul ryan, for example, on capitol hill to work with. this is a populist conservative, economic movement. and they're skeptical of mergers and acquisitions and of big-tech corporations, in particular getting bigger and buying out competitors. they would like to see more competition, more jobs, not necessarily lower prices. i think that's an important frame to approach all of this so you understand what this means for the economy and what this means for wall street.

>> they're trying to make it a verdict on inflation under biden. but a lower dollar brings in inflationary problems, as well. eomon, thank you very much. for more on the implications of a trump ticket on taxes and more, let's bring in chris krueger. conceptions, misconceptions, what do you think? are we overstating the significance of his choice to the ticket of j.d. vance? >> well, look, it's a historic pick for sure. it's also more of a governance pick, meaning that there were some obvious electoral picks i think who would have really moved the needle in the electoral college, whether that's nikki haley or glenn youngen or other. j.d. vance very much a maga supporter and enthusiast for those america-first principles in the senate. i think it underscores what a second trump administration would look like. really leaning in on trade

policies, immigration policies, that are driven by, you know, former president trump's america-first policies. when you look at some of the core themes that we see at t.d. cowan happening regardless of election outdom, the selection of vance underscores higher deficits, more protectionism, greater industrial policy, and the continued u.s.-china de-coupling. vance really, i think on all four of those, really will advance the ball downfield. >> a lot of people are say thing is the end of any party championing small government. david bonson has been critical, worried that this basically turns the u.s. more into something europeanesque, where both parties are statist. and if you believe that a more vibrant economy comes from a smaller role of government, is there anywhere left where that's

even a policy choice? >> well, look, i think, again, this sort of underscores the unwinding of globalization. the realignment of the republican party that started in 2016 when trump beat hillary clinton is now, you know, fully, you know, fully in play. it wasn't just vance's selection yesterday at the convention that underscored that. it was also the president of the teamsters, speaking from the republican convention floor. >> yep. >> so i think you're seeing a -- the realignment is now there. this is not just george w. bush's republican party, this is donald trump's republican party. and j.d. vance, as the vice president, should really put any questions oh of that to bed. >> the only pushback, when i think about it, okay, well, we did see up thes of de-regulation. they talk about this all the

time, trying to take out regulations where they aren't necessary and kind of unhindering businesses in that way. we know that revenues, because of the tax changes, well to something like 17% of gdp from maybe closer to 20% historically, something in that range. in other words, it was true that in a way government revenues -- i don't want to say declined. they weren't as big as maybe as they had been in the past. so is the an administration that's not necessarily a big statist, you know, interventionist one, but one that looks more like the traditional republican administrations of the past for all of its policy changes or you might say all of its bluster? >> i think it's going to be very sector specific, right? candidly, very company specific. we saw that in the first administration. you look at the republican platform and some of senator vance's policy positions, particularly in the oil and gas space and others, i think you will see meaningful

de-regulation, you know, across varying sectors. but when it comes to, you know, other sectors where vance has been more skeptical, whether it's, you know, some of the big banks or the rails, right? that was sort of a signature moment for vance with the east palestine train derailment. i think it's sector specific. big isn't necessarily bad, but smaller is better from a business standpoint. you know, i think vis-a-vie our regulations and potential anti-trust. >> i guess plenty sees this as vance spends a lot of time call it the rust belt, those states, trying to make sure that those are states that the trump ticket can win. do you think that we're overstating his policy significance, or it's just more about somebody who appeals to a certain important number of

voters in states that will be important to the election? >> look, there's not a lot of daylight between trump and vance on policy. you know, vance has always said he is one of former president trump's most stalwart defenders in the senate, and they line up pretty, pretty close on that diagram of policy, whether it's immigration, whether it's trade, whether it's, you know, some skepticism about big tech and other things. when you look at the -- the only thing for the presidency that truly matters, how you win, that's 270 electoral votes, joe biden's arithmetic in the electoral college is such that pennsylvania is an absolute requirement for joe biden. now, you know, vance representing ohio, if vance can help in western pennsylvania, the trump campaign has said that

he will be spending most of his time in pennsylvania. some of vance's social policies i think will negate some of his upside in more rural pennsylvania, with the philly suburbs and the pittsburgh suburbs. but i think this was more of a governance pick than a political pick, because you did have a handful of candidates, i think, who really would have moved the needle, but i think the view is that from trump's standpoint, they need -- they don't need the help. they feel pretty confident. >> real quickly. you said -- in other words, whatever vance believes is what trump believes. but on the issue of lina khan, do you think that's the case? vance has said, she's the best person in the biden administration, indicating some level of support. has trump ever indicated that, though? his administration was much more hands off when it came to deal making. i would have expected that if he is elected this fall, but maybe

i shouldn't. maybe it will change its tone. >> you know, with former president trump, it's very company specific and very sector specific. but i think also, you know, personnel is policy. so let's see who is put up in those positions in a potential trump administration. but the -- sort of the republican party vanguard is much more in line with j.d. vance, with josh holly than with others from previous administrations. this is a fundamental realignment of the republican party. >> maybe we should give people pause if they're looking to put on m&a trades. chris, thank you very much for your time today. the increased likelihood of a trump presidency has been putting pressure on green stocks, including aes. it's rebounding today, but

adding vance to the ticket could pressure it from here. he's a strong supporter of the fossil fuel industry. joining us for more is andreas, the ceo of aes. they sell renewables to big-tech companies. great to have you back. welcome. >> thank you for having me. >> do you want to correct any misconceptions that might be out there, about how your company would be affected by this election? >> yes. thank you very much. i think there is a big misconception in the sense that we're totally dependent on -- for example, subsidies. renewables today are the cheapest source of mega watt hours. so if you're going to power a data center, you're going to do it with large part renewables. so what we are seeing in the states is a growth in dedemand. data centers want time to power. so if you look at the interconnection cube today, most

of that is renewables, which will continue to grow. the things that affect renewables are the investment and production tax credits. those have been around for 30 years. and further more, if you look at where the projects are being built, 80% are going into rent districts. so regardless of who wins the election, there's going to be great growth of renewables over the next decade. >> i think you're right, but you guys operate in indiana and ohio where vance is from, is that right? >> that's correct. in fact, we have -- we serve dayton. dayton is finally growing again after decades of being a poster child for the rust belt. so what we are seeing is the reindustrialization of america. that goes hand in hand with clean energy. >> so do you think your company should be a reindustrialization trade? how important is the renewables piece of this, in other words? >> i think renewables, our

business is growing 25% a year. and what's very important is we had a backlog of signed commitments to deliver clean energy of 12.5 mega watts. that's more than three years of building. so basically we have tremendous inertia in the stock. so that's the only way we're going to power the growth of data centers and the reindustrialization of america to a large extent will be green power. there will be a need for gas to satisfy the needs when green power is not available. nighttime, et cetera. but i think the whole idea that green energy renewables are totally dependant on the investment -- on the "inflation reduction act," is just wrong. >> that said, i think we can look more critically at renewabling and say they have major problems and we're fund thing buildout of all of this solar and wind with incredible

cost and a lot of subl s-- subsidies, creating these issues of huge power backup. so it's not just clear whether this is really in the long run a cost-effective solution contra something like nuclear, albeit that's expensive, as well. >> the united states has built one nuclear plant in the last 40 years, and it was a multiple times over budget. so nuclear is not going to satisfy the energy demands of the next decade. second, aes developed lithium batteries for energy storage. so you can provide around the clock renewables, and we do do that. in terms of subsidies, we operate international. in countries that don't have these subsidies, and we produce clean power cheaper than those

countries. because solar panels cost three times as much in the u.s. due to restrictions on imports. so, again, if you just took away all tariffs and all subsidies, renewables are still the cheapest source of energy. >> they are, but i don't know how you make this comparison of the localized cost, but the point being, hour to hour, know the infrastructure has to be in place to step up and backs it, the quick last comment i just wanted to make is that you have seen them say get rid of the $7500 subsidies for evs, maybe that erodes demand, but for you guys, ai is the bigger long-term play in terms of power. >> absolutely. ai is making the demand for energy growth in the u.s. again. total demand from the systems

growing at 4%. for many years, the demand for electricity was flat. so the only way that the demand goes not grow is if the ai revolution stops. >> right, exactly. i don't think we're -- even if it doesn't live up to the hype, it's not stopping. thank you for joining us today. appreciate your time. >> thank you. let's turn to health care now where my next guest says rural health care will likely get a lot of attention because of j.d. vance. mike, look, it's good to see you again and health care is one space we talked to investors about yesterday that they thought could do better under a trump administration. talk to us about what you might expect there. >> absolutely. you nailed my name. so good to see you again. yeah, i think we have somewhat of a unique experience where the form er president is the former president.

if i had to look at the sector, i would look to medicare vantage. i would expect growth there. i think they added under the first trump administration 10 million lives to medicare advantage. it was a 75% growth. i think both will be in lock step on competition and looking to sort of reduce cost. so i would expect to see that as the first go. >> what else? you mentioned this rural aspect to things. i don't know how much of this is wishful thinking versus potential actual reality. >> i would expect it to be reality. you know, the last guest that you had on talked a lot about j.d. vance as senator. but i look at him as a millennial and he wrote "hill billy elegy" which i had an opportunity. i live in virginia where we have tremendous challenges with o

opioid crises. he's written a lot about it. i would expect him to circle back to that in a big way. he spent a lot of time in venture capital, and a lot of the innovation coming in reducing care and increasing access is coming from the startup community, working with large providers and large insurers to bring care to the rural areas. so when you combine his previous experience with technology and venture capital and having grown up in appalachia, he combines some interesting experiences that would lead me to believe that he's going to take some shots there. >> when you were last on, i said to you, can we really change anything in health care? it feels like the system is so entrenched. there's so many rules and big stake holders, i mean, would this potential administration -- i know we're talking hypothetically, but can they really -- what can they really change that would make a practical difference in lives of

evidence people, either -- everyday people to look at the fentanyl issues and the other things we have discussed here. >> i think it starts with the old saying you get what you incentivize. there's been conversation about taking telehealth and saying let's center that around where the clinician is located whether than where the individual is, allowing folks in rural areas to access clinicians across state lines. that could happen at the policy level that would jump-start competition to reduce that barrier. so to me, i think you're right. there are large incumbent, entrenched interests, whether they are insurers or large health systems is. i think there can be some regulatory approaches that free up opportunity for some of these more kind of startup or smaller organizations to get in there and show some opportunity.

i think if you were to, for example, incentivize some of the larger organizations to actually bring care in a bigger way to those areas, you might see change there, as well. it comes back to the incentives. if you make it hard from a policy perspective from those incumbents to sort of sit on innovation, i think you could start to see it. >> again, you guys are on the front lines trying to change the system from within, using ai. united talked about this today. michael, we'll leave it there. >> yeah, thanks for having me back. coming up, it's the hottest trade in the market right now. the russell, the small caps roaring to their highest level since january of 2022. and one money manager thinks this trend will continue with small caps leading the market for the rest of the year. that's next. but are small caps gaining, the mega caps paying? they are today.

we'll ask my guest if these four names are moving lower today. "the exchange" is back after this. >> this is "the exchange" on cnbc. ♪ (alarm sound) ♪ amelia, turn off alarm. amelia, weather. 70 degrees and sunny today. amelia, unlock the door. i'm afraid i can't do that, jen. ♪ (suspenseful music) ♪ why not? did you forget something? ♪ (suspenseful music) ♪ my protein shake. the future isn't scary. not investing in it is. you're so dramatic amelia.

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introducing the comcast business 5-year price lock guarantee. powering 5 years of savings. powering possibilities. welcome back to "the exchange." the russell 2,000 on pace for a fifth straight gain of 1% or more for the first time since 1979. we're up 10% in just five days time. senior markets commentator mike santoli is tracking the

significance. do you think this rises to the level of pretty significant, mike? >> i do. although whenever you see an extreme move like this, kelly, you have to consider what the initial conditions were. so one week ago, the russell 2,000 relative performance against the s&p 500 was at like a 22 or 23-year low. so you were at these complete washed out relative extremes, and therefore, a little bit of a snapback makes more sense. obviously, you have a lot of things pushing in that direction when it comes to expectations to the fed, the policy mix that we're recalibrating here. so, yes, i do see it as significant, although as you see in that chart, you're not even catching up on a one-year basis. even it's just reversion to the mean to last a little while, and you also had a very heavy short position in the russell 2,000. speculators were leaning against this part of the market. to me, it's a little bit of the flipside that it's been a narrow

market, only five stocks. everything is concentrated. people were crowded in the most defensive high quality growth names. you have a little bit of a check on that, so it's a positioning shock, as well as a fundamental move. i would start short of saying that the russell 2,000 can keep galloping higher at this pace while the rest of the market just kind of sits there or doesn't participate to the upside or avoids a correction. i just feel like right now, we're in the perfect zone of everything holding well as the russell catches up. >> michael, thank you. appreciate it. our next guest says the small and mid caps will lead for the rest of the year into 2025. it's ryan detrick from the carson group. i play this up so people know you're not just a small caps, unless i'm mistaken, this is a change of call in some ways. what are you saying? >> that's right, kelly. nice job pronouncing the previous guest's last name. that was a mouth full.

but no, we chang a lot of money. we have liked small caps for a little while there. i love what mike said. i took a look, just looking at five days in a row up 1%. since 1979, i found 11 times the russell 2 was up 1% every day four days in a row. one year lower, a 25% average return. lots to talk about here, but what we have just seen is kind of that kickoff to what everyone is saying, more rotation in the small and mid. we think small and mid-cap also lead the second half of the year. >> do they have the earnings power to justify that kind of leadership? >> yeah, we think they do. you look at earnings this year, sure. the 600, s&p 600, like 5%. next year, it's like 18%, growing more than large caps. those are estimates, we all know estimates, but we're optimistic this economy will avoid a

recession. the consumer is going nowhere. the consumer is still solid. so we think those earnings are justified. small caps are as cheap as they've been since 1999 relative to large. we think small cap outperformance is here and will stay. >> was it 13 years out out performance they had in the outcome of the dot com crash? >> small caps outperformed significantly. were they still down? yes, they were. but significant outperformance. so it lasted a lot longer, but that bear market, small caps can outperform in a bear market. >> i would almost slip the question on you and say, you know, if you assume bear market or certain kinds of bubble implosion event, it would seem that -- can small caps outperform if that doesn't happen, if things just continue

along? they need broad economic and earnings growth to keep going well, but what are the conditions that they need to see to meet the call that you expect? >> right. one thing we have said all year, two things we're looking for. inflation getting better and the markets should realize. clearly i think we're there. and then the economy just hanging in there, coming in without a recession. those two tail winds can be there, with the fact that things are cheap and, again, the fed -- we were always in the camp the fed would cut. it's happening. inflation is back, a dovish fed. two weeks ago, people were outright saying why should anybody want to ever own small caps? that's the reason, because nobody wanted to. that is a peak in pessimism. now we see what happens in the last five days. we released our mid year outlook a week ago. we said we like small caps.

russell 2 has been up 1% every day since then. so people have read it, thank you. >> brian, appreciate your time. we'll check back in and see how this does and if it's the beginning of significant stretch of outperformance here. there is the case for small caps, but what about overseas? the imf raising its gdp forecast for india and cutting for japan and france. ea'll have the trends after a st ay with us. do you have a life insurance policy you no longer need? now you can sell your policy - even a term policy - for an immediate cash payment. call coventry direct to learn more. we thought we had planned carefully for our retirement. but we quickly realized we needed a way to supplement our income. our friend sold their policy to help pay their medical bills, and that got me thinking. maybe selling our policy could help with our retirement. i'm skeptical, so i did some research and called coventry direct. they explained life insurance is a valuable asset that can be sold. we learned we

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welcome back to "the exchange." the dow hitting another record high today. as the market rally broadens out beyond the magnificent seven. you can see tech lacking there, the worst performing sector with chip stocks taking a hit.

broad come, nvidia, some of the biggest laggards. but our next guest is staying bullish. joining me is tom hancock, head of the gmo focused equity team and portfolio manager. it is great to have you here, tom. welcome. >> thanks for having me. good afternoon. >> am i -- i think of him as a bearish guy. >> jeremy is a cautious investor, that's for sure. that said, gmo has always been really focused on high quality investing in companies that can get sustainable profitable growth. those companies are worth a premium multiple. that's the focus of our investing style. >> i had no idea that while he was espousing one yield, always concerned about valuations and so forth. you are in some of those most controversial high value stocks

and some of the best performers this year. having sat on these gains, hearing all the talk about rotation and it's time to broaden out, what would you tell people? >> well, i think it's always good to be diversified, certainly. we hold other stocks in the portfolio. but if you think about those characteristics of profitable, sustainable growth over the horizon, that is very much focussed in the technology sector today. names like apple, microsoft. they're not the highest multiple stocks, there are stocks that are higher that we're a little cautious about. but we see the investment opportunities, what they're around ai or other areas as being attractive for a long time to come. >> it looks -- correct me if i'm wrong, you're not necessarily a mag seven, you're more of a fab five. i see a lot of the core big tech platforms, is that right? >> that's right. for different reason it is you think about the stocks we don't

hold. tesla, a little cautious about their profitability. vehicles is a very profitable market overtime. we're not sure that's sustainable for a car company. nvidia does have a great mode around their business. the issue at this point is the valuation and the fundamentals of the company are all in bed on ai. it's a bet that we think you can take at better prices amongst the more diversified businesses like microsoft or apple. >> the chip stocks that you have exposure to, is that because of an ai thesis or almost in spite of the excitement around it? >> a little of both. i think of lamb research for example. it plays in artificial intelligence. they make essential tools to build the memory that's packaged with gpus and artificial intelligence systems. while ai is doing very well, a

lot of the semiconductor industry is still coming out of a cyclical downturn. so we see a lot of potential for the rest of their business to play catchup while the sector continues. that's one of our favorites. another favorite of ours in this semiconductor space is texas instruments. that's kind of an industrial stock in a semiconductor sector. so, again, the cyclical forces are negative. now, that's something we see turning around going forward. jouz also have a number of tokyo names, you also have coca cola. are you satisfied that unh can continue posting strong gains? >> yeah, we're very satisfied and confident that the fundamentals of unh and that industry in particular. if you look back, these have been very, very consistent double digit earnings growth companies across the economic cycle for a long time now. they're certainly demographic trends that support that, innovation and health care. ultimately they grow with health care spend.

really, the issue on these stocks is one of political overhang. that's something that comes and goes in cycles. but we think where the stocks are priced and given there's a negative -- a strong negative sentiment, this is a pretty good opportunity to enter it. unh is a stock we like. another stock reporting tomorrow is elevance health care. this is a sleep well at night stock for the next six months or so. they control the blue cross, blue shield brand in a number of states. and a little besless exposed toe pharmacy market, which is under some regulatory scrutiny. so we like where they sit in particular. >> you answered all of my questions. i think i own blue cross, blue shield. but with all the hype around the election that's coming up, a good chance to hear from you and looking through all that.

tom, thanks for joining us. >> my pleasure. >> tom hancock with gmo. coming up, j.d. vance is warning that china is the biggest threat to the u.s. what could a hawkish stance mean? we'll dive into that next. and the 30-year just above 6.8%, down significantly so far this month, giving the home builders a boost, despite july sentiment declining for the third month and posting its lowest reading since december. 31% of builders cut prices in july, but others are hitting all-time highs today, while kbm sits at the largest move of the year. car, this isn't the way home. that's right james, it isn't. car, where are we going? we're here. (♪♪) surprise!!!

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welcome back. chinese president xi jinping finishing third plenum. chinese large cap etf down since 2019. meanwhile, the india 50 etf recently hitting new highs and the imf optimistic on both,

upgrading their outlook saying both countries will account for half of global growth. what should you do as an investor? let's ask tim seymour, a cnbc contributor. tim, this is welcome to you. >> great to be here. >> this is put into sharper relief given the potential trump administration could take -- do we say a tougher line on china? >> i think he can get tougher, especially in terms of tariffs and restrictions on semis. i think jd vance has proven to be a china hawk, even more so than what we're seeing here. piling on china has been an important thing. if you're investing in cline, when you add that to china has been piling on china themselves. not only from a macro perspective, think of all the tech-friend tli china plays you could have been investing in the epic of all epic tech rallies, mostly dead money, mostly value destruction. when you think about china and

the new administration, i think the pressure will be there. if you're an investor, the good news is sentiment is so poor that you clearly are coming in. if you look at the kweb, i only a handful of names in the kweb but it had a 40% rally and now pulled back 20%. ultimately, i look at an alibaba, i'm less concerned about the china macro we got that was so poor when i invest in alibaba than alibaba themselves in terms of the relationship with government and spinning out assets and value creation. for international investors, it's a fascinating time not just for china but around the world. and i think you've priced some of that in. >> before we put china to the side, it seemsto be coming up with a lot of luxury results now as a weak spot. should we have seen that coming or is this telegraphing more problems that companies have largely structured them around this expected chinese pull of demand? >> burberry yesterday, the level

of decline and the sequential decline is what surprised people, the severity of it. we heard from swatch, too, which i don't wear a swatch but i wouldn't call that luxury. >> seiko, is this japanese? >> i'm not sure. i'm sure it's lovely, though. when you think about what we heard from lvmh, even diegio, estee lauder, i think those trends continue. i think discretionary is under pressure across the board, even here as a function of china. all we do is speculate when apple is really going to get pushed back in china. we kind of have that feeling it's possibly going on with nike, we're worried about starbucks, mcdonald's. we know the china growth trade has played itself into u.s. names, but clearly in terms of the global luxury, i think china is a bigger name and there's more to go. >> at the same time we have this talk about whether the dollar

could be devalued in the new administration or not and we were talked to dave servos who said a stronger dollar makes sense. how do these dollar dynamics figure into where you want to be or avoid when you're looking at international stocks? >> if you're investing internationally, i typically, and certainly in emerging markets, i feel like currency can be 25% to 50% of your return profile. people have taken a view and largely been wrong about the strength of the dollar this year. a lot is central bank differential. so, if you -- i still would get back to, if the fed is getting into a period where wherever that number of cuts we're getting this year and next year, but a fed that we still hope we have independence of our central bank, but if the fed is under more pressure to be cutting rates, that's dollar negative. central bank differentials to europe, who got out of the gates earlier and cut rates, but i think the dollar is -- >> dollar negative would be positive for u.s. stocks and would be positive for

international stocks as well? >> dollar negative is great for international. and if you think about the period that international stocks as someone that's been investing for 20 years, an internally etf, focused on dividend and payout levels, often you had that period in the summer of '22 into the fall where international looked like it was ending ten years to the performance of the s&p and smacked right into the fed. i think this back drop paints pretty well for international. i think the other dynamic is if we're getting market broadening, i know you're just talking about small caps and iwm, that's a great environment and correlations for international to the broadening, to the rsvp, to the -- >> reassuring after the political talk, it really comes back to the fed. maybe you're just catching up on the rate cut would do a lot to align that. tim seymour. that's it for he"t exchange." "power lunch" starts on the other side of this quick break.

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waxelcome to "power lunch." the record rally rolling on today, though the leadership looks a little different. today it's the russell 2000, the dow soaring to new highs getting within 150 points on most of d 41,000. >> that's a quick rise. the s&p only slightly higher and the nasdaq has been lower for most of the session. we call it