>> axp. i thought earnings were solid. i would buy in the pullback. >> rob. >> 3m. i think bill brown continues to execute a long-term turn around story, getting these operating margins up. all right. one more quick look at the markets before we go. the s&p on pace for its worse week in about three months. that does it for us on "halftime." "the exchange" starts right now. ♪ thank you very much, frank. and welcome to "the exchange." i'm kelly evans. here's what's ahead. former president trump delivering his rnc speech last night, as more democrats pull their support for president biden. it's a fast-moving story. we'll set you up for what could be a critical weekend. plus riding the rotation. our market guest is using history as a guide in positioning for the gains he sees ahead for small caps. he brings us his favorite names. and shares of crowdstrike still sharply lower following a

massive worldwide outage caused by a crowdstrike -- i do have teleprompter. it's okay around here. we'll have the very latest, though. but first we'll begin with today's markets. >> i've got to tell you. when i got in this morning, half the screens in our news room had the proverbial blue screen of death. it's been a rough one so far today, but things are hopefully on the mend. the markets, however, are not on the mend. we are hovering near session lows right now. it's red across the screen. the dow industrial is down about 1%. the s&p 500 currently stands at 5511. that's down about 2/3 of 1% or 33 points now. at the highs of the session, we were up 13 points, down 37 points at the low. so, that's your trading range tilting toward the lower end of that. and the nasdaq composite keeping pace with the s&p, down about

2/3 of 1%. 17750 is the last trade there. kelly referred to the global i.t. outage, the biggest in history, has led crowdstrike shares to be down 10%. it's been holding around these levels for quite some time this morning. we'll see what happens there. meanwhile, other cyber security firms, including the number one my market value in america, which is palo alto network, is up about 2/3%. the first trust nasdaq etf and others that tracked cyber, down about 1% as well. it is a big waiting. and bitcoin is where we're going to end. we've got a lot of price action here. remember it wasn't that long ago we were hovering around the 54,000 mark. we are rising to the 66,330 mark. a lot of it has to do with at least perceived optimism. if there were a hypothetical

change in administration, it might be friendly toward crypto. the biggest crypto conference each year, bitcoin 2024 held in nashville this year, is going to feature former president donald trump as the keynote speaker. so, a lot of confluence of things happening within cryptocurrency and politics. i'll send things back to you. >> a lot of hope about his vice presidential pick as well. big supporters of bitcoin. republican presidential nominee trump last night giving his speech to close out the rnc. >> i'm here tonight to lay out a vision to the whole nation. to every citizen, whether you're young or old, man or woman, democrat or republican or independent, black or white, asian or hispanic, i extend to you a hand of loyalty and of friendship. together we will lead america to new heights of greatness like the world has never seen before. >> now, whenever you thought of the speech, it hasn't stopped more democrats from pulling

their speech for president biden. in the last few moments we heard from democratic congressman lanceman and longman calling for biden to step aside. >> kelly, we already knew there were serious cracks in that wall of democratic support for biden staying in the race. in the last couple of minutes they've really only gotten bigger. there are now 27 democrats who have publicly called on biden to step down. sorry, actually 30. 20 -- this is how quickly it's all going here. 30 in total. 27 in the house, three in the senate. and those senators include tjoh tser, the senator from montana, who is fighting to keep his seat in one of the toughest re-elections this year. tester said in a statement last night that while he appreciates biden commitment to public service and our country, he believes president biden should not seek re-election to another term. many other lawmakers have raised serious concerns, including senator chris coons, who's a very close biden ally.

listen to what he told nbc today. >> i think our president is weighing what he should weigh, which is who is the best candidate to win in november and to carry forward the democratic party's values and priorities in this campaign. >> biden still has supporters on capitol hill. among those include congresswoman alexandria ocasio-cortez who slammed efforts to oust biden the in a live stream last night, noting there is no consensus of what comes after biden stepping down. hakeem jeffries told reporters today that biden, quote, has the ability, capacity, and track record to make a case to the american people that will result in us being successful in november. biden plans to get back out on the campaign trail next week, according to his campaign. and kelly, there will be a lot of folks watching very, very closely. any public event that biden is at. >> do you think, emily, the reporting is directionally accurate, that this is still a biden family that is refusing to quit? are we getting any indications -- there was an nbc report this morning maybe indicating the opposite.

but then it seemed as though the campaign came out with this memo once again saying no, no, no, no, we're staying. >> how it works in d.c. is you are running up until the moment you are not running. and nbc saw reporting on this. you also had a number of other major news outlets coming out and saying biden is taking a hard look at this. he's taking a hard look at the decision going forward. he's talking to a small inner circle. he's chatting with his family at this time. nothing seems certain yet. publicly, the campaign is going to continually say he is running, that he is staying in the race. but behind the scenes we have ample amounts of reporting that show that biden is having very serious considerations and discussions with his tight inner circle and his family about what his next move needs to be. >> emily, we appreciate it. let's talk more about the path forward. we are joining by mike madrid and former u.s. senator, heidi hide camp. both to have you here. former senator, i'll begin with you, if i may. as we watch this all playing

out, what is it telling you, the rising number of those saying he should step aside? the family's apparent insistence he is not going to. do you expect him to step aside this weekend? >> it's hard to know, but this is his decision. but i always look at what you don't see. you don't see joe biden -- jill -- on the campaign trail. if they were really serious about staying in, they would have sent her out as a surve surrogate. you don't see a lot of people stepping up sand saying, joe, stay in. you don't see what you would normally see with this kind of dust up. and you're seeing, you know, over the last couple of weeks, there's been a very quiet discussion. you saw mark warner. that didn't fall apart. it just fell apart publicly. you saw what michael bennet said. and so there's been this kind of hint, hint, hint. and nancy pelosi gave everybody permission to say it out loud. and that's what you're seeing right now. and i think the president is

definitely weighing his options at this point. and i think anyone who says that he's not considering getting out isn't reading the right tea leaves. >> mike, do you think he could -- could we get a sunday night address to the nation saying, you know, i've decided to step -- you know, i'm not going to run for re-election? and delegates, you know, you can vote your conscience? >> look, there's no question we could. the question really is -- and i think the debate within the democratic party is, should there be a change, when the potential of the variables ofan unknown are certainly an unvetted candidate could have much, much greater significant down side than upside. i think that's what's being weighed right now. i think the president's clearly hearing a lot of the public concern, certainly from within his own party. but i also, you know, just today you saw hakeem jeffries give a pretty unequivocal statement of support. you heard the congressional hispanic caucus coming out in support. alexandria ocasio-cortez says she's with him.

i don't think it's accurate to say there isn't support being rallied around the president. at this point, i think the party has to take some self-inventory and understand that time is now really on biden's side. every day that goes by becomes exponentially more difficult and problematic by making a change, when the fundamentals of this race, by all estimations, are absolutely fixable, considering it's mid-july. >> so, you think it's fixable. so, i was going to ask. if trump did enough last night to, kind of, you know, solidify the case and basically say, it's over. no matter what happens at this point, you know, with the right message, with the right -- you know, you name it. did he, mike -- did he do that successfully? >> i think this was probably the worst acceptance speech in my 30 years of politics and being at republican conventions. >> the worst? >> absolutely. it was incoherent. it was rambling. it was long. it was difficult to follow. and frankly it contradicted

every part of the messaging from the previous three days, which was to demonstrate consistency, stability, and strength. on that level, he failed unequivocally. so, look, i -- anybody other than the democratic party had to be cheering last night saying this guy is absolutely beatable because he is. >> senator, build on that. but also, some of us on the east coast might have gone to bed at 11:00 p.m. and caught only the first part, that was widely praised. it apparently went on for another hour or so. >> well, i think anyone -- there's probably a lot of people about three minutes or four minutes after the first 20 who said, i'm out. this is -- this is not turning the page. i think that the former president had an opportunity to really cement a lead in a way that we haven't seen for a long, long time in challenging an incumbent president. he did not do that. in fact, he offered a lot of hope and a lot of, i think,

understanding to the democratic party about what's at stake here. and he probably did more to unify democrats last night than joe biden could have done if he got out and made a speech. that's why i agree with mike moore. >> that's what i find interesting. i didn't mean to jump in there. you might have thought in the wake of that, perhaps the calls for biden to step down would stop or perhaps we'd come out friday morning with a more unified message, unless you're telling me biden is going to step aside, it's going to happen. and what we're seeing now confirms that. >> let's just step back. hakeem jeffries knows that this decision has not been made. and so you aren't going to go out there and say that the president is incapable of leaving. you may say, i want you to step down, you've been a great president, we need to have somebody who would have a better shot at winning. but, you know, the bottom line is that you can't look at that debate performance as a democrat and not wonder, are we going to

see another event like that closer to the election? if i were the republicans, i would be furious that debate took place in june when there was time to actually have this conversation. but make no mistake, donald trump reminded democrats why even if joe biden gets in this race, stays in this race, we will be united or democrats worldwide united going forward. >> mike, what would you do if you were the democratic party here to take most advantage of any opening you just might have been given? >> i think the senator outlined this perfectly. that's exactly right. we are unfortunately at a time in american history where people are motivated far more by what they are against than candidates that they support. and that allows the basis of each party to overlook very significant, very deep flaws in their own candidates. but when put upside by side, having a feeble, aging president in joe biden, or an incoherent, crazed, extremist like donald trump, biden's going to win that

99 times out of 100. >> you think biden wins that 99 times out of 100? >> yeah, yeah. no question. >> all right. you're the republican. all right. we'll leave it there. mike madrid, heidi hide camp. we appreciate your time. thank you for joining us today in what could be a very important weekend. many firms were out this week with baskets of best positionings under each administration we might get. joining us now is danielle shay, vp of options. appreciate you stepping your toe into the water. you don't have to talk politics. just give me the trade. we'll start with microsoft, which is an equity shifted toward trump because he's unlikely to participate in the oecd deal that would impose digital services taxes. but td cohen says jd vance could be a big downside. microsoft is on pace for the fourth straight down day. what do you do here? >> i love microsoft here.

microsoft at the 50 simple period moving average on a daily chart is typically a great spot to buy it. and especially given the i.t. issues, i would think it would be down more, which speaks to its strength. looking at microsoft, i like it for a buy between 425 and 435, especially going into earnings. and kelly, i'll tell you it typically rallies about 3% in the week after earnings as well. with this stock, i like it for a current buy. you could also sell put credit spreads, buy long calls, and outside targets are going to be 480 to 500 on this stock. >> joe kern was explaining the whole -- and why it's so attractive the other day. i'm learning on the fly. you like microsoft. you also like amd. dan clifton put that in a china trade basket as a potential risk under a china trade war. he sees tariffs in manufacturing, migration, as potential down side. those shares are on pace for the fourth down month in five believe it or not. why is this a buy for you? >> kelly, i like this one for a

buy because you look at what it did during the last trade war. go back to 2018, 2019. yes, the semiconductors traded flat while there was a lot of volatility. but afterwards, look at what they've done. amd was trading at $18 a share back in 2018. if you look at what it's doing right now, it's consolidating again, and it's building up energy on that weekly chart pattern. you have a gorgeous technical chart pattern there which i think is a great spot to build into a longer term position. really between 120 to $150 a share. i think even though there's likely to be volatility, especially with the ongoing trade war discourse, ultimately i believe it's going to break out and trade back up into 227 and up into 250. >> all right. your final buy. we should note these are stocks you like no matter what happens. this is all the strategist, danielle, trying to give us the trades. you don't just look at the

charts. caterpillar, dan clifton putting it with microsoft as an equity shifted toward trump, especially with steel and aluminum are reimplemented. it's positive six of the last eight months. you think it does well regardless of what happens in november or only if it's a trump victory. >> you know what i mean. i'm not trying to ask you about that, but what do you see the stock doing? >> i agree with your analysts and i think the charts agree with that as well. if you look at the pattern on the weekly chart, we have a fantastic consolidation pattern. you have a company that typically does well with earnings. and i think pulling back into 320 and about where it is right now at current prices, these are great buy points because ultimately i think that it trades up into 400, 425 a share. they've done really well with earnings. the reactions after earnings can be a little bit back and forth, despite the fact that they typically beat. they've also recently increased their dividend too. i like the stock, especially in

the case of a trump presidency. >> those are your buys. le let's get to the bail. biden portfolio -- baird also noting that exposure in mexico for manufacturing and sales could be a risk under trump. shares having a tough year, down almost 20%, on pace for the fourth down week in five. you've got personal experiences with inphase. >> so, when you look at inphase, starting with the charts, number one, they're incredibly bearish. the reason they did well in the beginning was a lot to do with the biden policies, right? i think especially if we do shift to a trump presidency, this space is not going to do well. i have to tell you from personal experience that, you know, i tried to go along with the whole solar panel idea, and i invested in an enphase system. it was one of the worst investments i have ever made. i had multiple realtors and appraisers tell me it didn't add value to my house when i tried

to sell it. it was a little bit of a disaster. and i could tell you that you are better off putting money in the stock market completely blind folded than trying to invest in an enphase system. so, for that reason, i'm dropping it. >> enphase i thought was more they did the inverters or seen as, kind of, you know more of the picks and shovels play as opposed to the solar house system concept. i don't know. >> well, you know, maybe. but i -- for me personally with the personal experience, i had a full enphase system and battery backup system due to the texas freeze that i experienced. you know, we were almost without power for two weeks. it was really scary. >> and you've got little, little kids. you've got bottles and all of that. yeah. >> exactly. but you know what? you can buy peace of mind with a generac or you can sink only propane tanks into your yard and it's going to go far further for you than spending the money on something like this. so, for that reason, you know, i really cannot invest in a stock

that i can't stand by the product. >> well, sinking propanes, if it's come to that competitively speaking, there's maybe some problems. danielle, thank you very much. it's great to see you. appreciate it as always. >> thank you. coming up, crowdstrike is the worst name in the s&p today. it's hitting its lowest level since may after one of the company's updates led to arguably the largest i.t. outage in history. we have team coverage tracking the impact across tech, banks, and airlines, as businesses across the country try to counselback from this blackout. as we head to break, here's another look at markets with the dow down 445. the s&p is heading towards its worse week in three months. the nasdaq lower by 1% today. and the 10-year rebounding. we're back after this. for all your skins, gold bond. your shipping manager left to “find themself.”

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welcome back to "the exchange." shares of crowdstrike are down 11% now after a software update -- a software update -- led to arguably the largest i.t. outage in history. it happened this morning. we have team coverage of the fallout, which is taking place still. steve kovach is tracking the tech names taking it on the chin. leslie picker has financial services. phil lebeau is looking at the airlines affected by the outage. >> kelly, this is what we have

so far. crowdstrike causing the windows pcs managed by crowdstrike security software to reboot and show the blue screen of death. it's taken down operations like tv networks, airlines, delta united, banks, 911 call centers, ups, fedex, so many more. but most importantly here, kelly, says this is not a hack or cyber attack. what really happened is crowdstrike pushed out an update that caused the outage, and the update has been rolled back since then and a fix has been deployed. some people are already seeing their systems recover. and crowdstrike ceo george hurts apologized for the outage earlier this morning on squauk on the street. >> i want to personally apologize to every organization, every group, and every person who's been impacted by this. >> now, kelly, it's unclear when everything's going to be back online. kurtz also told us that not everyone's system will fix automatically and you may need

to have individual i.t. workers to manually reboot your systems. we're experiencing that right here in the cnbc newsroom. satya nadella posting on x in the last hour, his company is working closely with crowdstrike to bring systems back online. the department of homeland security told us in a statement it's working with crowdstrike and microsoft to assess the outages. national security counsel also told us this morning at present, it's monitoring, and president biden has been briefed as well. elon musk said in an x most, he's deleting crowdstrike from all his systems, though not sure if that's possible. reporting at least some tesla systems have been hit with outages, possibly delaying production over there. meantime shares of rival cyber security names like sentinel one, alabama toe networks, they've been up throughout the day, and shares of crowdstrike are down about 11% right now. and we're still waiting for more updates from both crowdstrike and microsoft about when everything's going to be back

online. but more importantly than after that is what went wrong here, kelly, and how it can be prevented in the future. >> it's odd. it's both a curse and a blessing for us to realize just how important this company really is to global operations. steve, thanks so much. steve kovach. and speaking of which, banks are some of the biggest spenders when it comes to cyber security, still not immune to today's i.t. outage. leslie, it's one thing if they don't catch a hack or something. it's another if the system protecting you has a glitch. >> yeah. i mean, obviously, as steve said, this isn't a cyber security issue, but that doesn't mean that banks weren't affected. to your point, the largest banks each spent billions of dollars a year on technology. and the risk of financial service interruptions top of mind for executives across the street. now, today wasn't the worst-case scenario, but there were sporadic issues across the banking system. jpmorgan, for example, the glitches were related to log-in issues, but they weren't

ubiquitous. meaning if a trader couldn't log-in this morning, there was someone else on his or her team who could execute. it's largely been okay, just a bit slower. i'm told other banks had similar issues as well. i'm also told bank of america had earlier issues, but they have since been resolved, including at atms, which are, i am told, fully functional. across the industry it doesn't appear that there have been widespread issues at branches, but some have encouraged customers to use mobile banking for regular transactions. and i did see community banks and credit unions that had difficulties with their mobile banking as well. however, people close to goldman and morgan stanley told me they haven't experienced any major impact. i reached out to banking regulators as well, kelly, and the fdic declined to comment. the fed said its federal critical reserve systems are operating normally. i haven't heard back yet from the occ, kell.

>> alarming when something this simple or basic can cause such problems. let's turn to the airlines, where passengers around the world find themselves stranded as carriers deal with the blackout. phil lebeau with the latest on that front. phil? >> reporter: kelly, it started in europe early this morning when we started seeing long lines, flight cancellations, very few flights taking off at some of the largest airports here in europe. then when it cot across the atlantic and hit the east coast of the united states, even by the time americans said, you know what? we're going to lift the ground stop shortly before 6:00 a.m., it was too late. so many flights had been cancelled or delayed. here are the numbers, at least as we understand it, according to flight away, as you take a live look at laguardia. we've seen this at a ton of airports today, people who are there, waiting, hoping that their flight might eventually take off. more than 2,100 flights so far have been cancelled. and that's just in the united states. the big three carriers impacted

by this i.t. outage, you're looking at american, delta, and united. american, 9% of the flights. delta most impacted, almost 1/5 of its flights have been cancelled. united, 11% of the cancellations. is this going to have a long-term effect? probably not. but it will be costly. they will either have to pay the department of transportation saying, yes, this is something the airlines will have to pay for in term of accommodating passengers whose flights have been cancelled. and i talked with one airline executive today who said, you know what? they may say we have to pay, but ultimately somebody else is going to have to pay. i think you know what they're saying. they're going to have to resolve this with crowdstrike. >> wow. they don't want any reputational hits. we'll see monday when we see you for the air show. looking forward to that very much. enjoy the time meantime. our phil lebeau. you can hear more about the air show with live coverage picking

up on monday afternoon. the outage just headwinds as airlines face higher costs and oversupply of flights. for more, let's bring in citi research's steven trend. this issue itself, a temporary blip or something more? >> yeah, and good afternoon and thank you very much for having me. i would think so far this is a temporary blip. i mean, i could tell you, i took my mother to a routine doctor's appointment this morning. we had to get signed in manually. and that works if you have a dozen patients or two dozen patients. but when you're dealing with maybe 150 to 200 passengers on every flight, that's not something so easy to fix in a day or even, you know, two or three days. it might have some ripple effect. but just to give you a little context, you know, the 10, 15, 20% cancellations today are not great. but if you look back at southwest in december of 2022,

their cancellation rate during that winter storm at the worst point was over 70%. >> wow. >> so, to give you a little background, this is not great news. but this juncture looks more like a hiccup as opposed to a long-term cut. >> there's a bit of a sassy joke going around, as it does, that southwest wasn't affected because of, you know, maybe they don't have the latest and greatest systems or something to that effect. can you tell us airline by airline why you think some were affected and some weren't? >> yeah, sure. i have to be a little careful on some single stock commentary here. but certainly if you're a global network airline, you have a lot more complex operations with different aviation jurisdictions versus a carrier that's doing almost all of its flying here in the united states. so, relative to those global network carriers, yes, one can

say that someone like southwest possibly had it a little easier than some of the network -- at least today. >> interesting. would you, then, pivot from that to say, okay, we've seen the stocks struggle somewhat. i know we've seen fares under pressure. it is causing problems throughout the industry. even to see delta affected, krem de la krem, so to speak. what changes this? >> look, i think post-pandemic, i think there's been a big shift in terms of the wallet share. when we look at this q2 earnings season, the strongest u.s. airlines have already reported 2q. now we're probably going to see the tougher part of the neighborhood. and those three that have already reported, for the second quarter alone, generated adjusted earnings of somewhere close to $3.3 billion. so, this is hardly a group that on the surface is struggling.

now, certainly relative to the pre-pandemic periods, there's been a big wallet share shift towards the network airlines for a number of reasons. what you do have in terms of pressure, yes, domestic -- does not look as strong as. so other verticals. and on a short-term basis, once we start to have some moderation, perhaps, in passenger flow, it's not like these carriers can snap a finger and suddenly cut off the capacity. it takes a bit of time to turn that ship. and what we think we're going to see in the latter half of the third quarter is a better unit revenue environment. >> you and others seem to think we'll turn the corner on this, capacity comes down a little bit, fares can harden and so forth. before we go, i thought your note the other day was interesting on long-term aviation risks due to extreme heat. you talked about seasonal disruptions that could affect routes. how do you -- do you think the

turbulence is an extreme heat factor, like, kind of, a new thing that's a risk? and how does it play out across the space that you would cover? >> yeah, no, look, i appreciate the question. so, i'm a long-term basis, i certainly don't have all the answers in terms of where the planet is going and whether the powers that be are going to weigh politicians' economic concerns about climate change versus climatologists' dire warnings about where we're heading. but certainly on a long-term basis, if one looks at the extreme heat, you have a number of challenges to the space. first of all, demand to the locations in questions. and if one looks just at the united states today, extreme heat kills more people than hurricanes, tornados, and floods combined. so, do we get to hotter periods long term where demand is going to go down in some places? and today it's vulnerable people that unfortunately are fatalities.

but do we get people hiking in national parks start to get -- have heat emergencies, or this kind of thing? the other thing about flight operations, certainly clear air turbulence has gotten a lot of attention recently. >> yeah. >> it's not 100% clear -- no pun intended -- that clear air turbulence and extreme heat have a direct correlation. but there are some kinds of turbulence that are related to heat, such as thermal turbulence. that kind of turbulence, thankfully, is easier to spot with radars and what have you. and the third in terms of the brown ops, you have limited aircraft takeoff rate when the temperature goes up. so, there's an economic cost to that. you also have to worry about jet fuel. the flash point is 38 degrees celsius. that might be the daytime max temperature in some cities in

the southwest. >> right. >> we've only heard of one instance so far where a flight got cancelled because of a heat warning on the gas tank. >> interesting. >> but these are the sort of things that investors should really think about. >> we appreciate you diving into it. steven strend with citi. as presidentid fes benac the pressure from donors to drop out, we'll look at the state of political funding in silicon valley and what some tech titans are starting to say. "the exchange" is back after this. so, any pre-launch concerns? what if nobody buys them? that's mean or, what if everybody buys them? oh, i hadn't thought of that that's probably not gonna happen can we handle that kind of traffic? the network can handle it! i downloaded eight hours of true crime stories just during our last video call i'm learning a lot

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because they never stop. no time to waste. this isn't sci-fi. this is precision ai. ♪♪ ♪ welcome back to "the exchange." i'm kate rooney with your cnbc news update. a russian court convicted "wall street journal" reporter evan gershkovich today of espionage and sentenced him to 16 years in prison. the verdict came after a secretive trial and could potentially pave the way for a prisoner swap. gershkovich and t journal have strongly denied the charges.

yemen's iran-backed houthi rebels claimed responsibility today for a drone strike near the u.s. embassy in tel aviv. the israeli defense forces say one person died and several others were injured in the explosion. a warning was not sent out because of human error. two large oil tankers were on fire this morning after colliding off singapore. authorities say the tanker owners and say two crew members were air lifted to the hospital while the others were rescued from life rafts. the waters around singapore are among the busiest global sea lanes out there. kelly? >> kate, thank you very much. coming up, one portfolio manager says smallap cs will continue to outperform the market as soon as the fed cuts rates. he joins us next with that and the two arguments he's watching. i'm sorry, there was a long line at the thai place. you get the sauce i like? of course! you're the man! i wish.

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welcome back to "the exchange." stocks are looking to close out the week on a down note. the dow shedding another 400 points today, still trying to hold on to a half percent gain since monday, while the s&p and nasdaq are on pace for the worst week since april. the russell 2000, which had been on uptake, also lower.

but my next guest sees plenty of upside now. joining me now is sandy vill ri -- how do you write that on forms, sandy, st. dennis -- >> it always gets confusing. >> you try to change flights after a nine-hour wait. it's one of the best names ever. on to the task at hand which is for you to convince me that this small cap rally is for real and not just a one week thing or a juiced up election thing or a head fake. >> you know, when you go -- i think where investors were going into 2024, nobody knew, was this a recession environment. you get the 3.4% inflation print in april and it comes down 3-3 in may and you've got the 3% in join. and at that point a rate cut in september was a foregone conclusion. small caps do not do well going into recession, but they do extremely welcoming out of one.

once the fed cuts going back over the last 75 years, small caps has outperformed large by about 11%. if you look even year to date. it was one of the widest margins in history where large outperformed small by 13.5%. that's narrowed to 7.5%. i think that narrows further. and i think 2025, small caps continue to outperform. >> what do you say to those who, you know, maybe that the move is already done. i've seen the charts that are mean reversions, we're way at extremes, and now we're back on track for more ho hum. what about the fact the earnings, by the way, a great set from the other day, russell 2000 earnings did not grow at all between 2021 and 2024. >> yeah, so, when you look at earnings, you know, about 25% of the russell is in biotech and financials. so, you didn't get a lot of earnings growth. but you look forward to next year and you're talking about 17, 18% growth. and also look at the evaluation on the russell 2000, trades

about 14.5 times earnings versus the s&p 500, around 25 times. i think as investors start to dust off their small cap file, they realize this is a whole sector that's been left for dead. and there's a lot of opportunities when you dig through it. >> those opportunities you're even finding in banks, some other types of things. banks especially are a concern for people. they don't want to pick the one that's going to end up having commercial real estate problems come to fruition and take them down. so, do you have to do your homework, or do you think the evaluations are safe enough that a broad swath of them can work? >> i think you could buy the kre or index and get good exposure on regional banks in particular. we tend to take more of a rifle shot and try to find those individual banks that are very solid franchises with good core deposits, et cetera. that's how we take it. >> you've also got op option care, the largest provider of home infusion services, private

clinics, as well. sandy, thanks so much. we appreciate your time. sa am exshares under pressure following a revenue miss. strong spending by the affluent customer base, particularly among gen z and me illennials. that and a check of today's other big movers is next.

♪ welcome back to "the exchange." markets are continuing their selloff with the dow shedding another 400 points or 1% today. declines in s&p and nasdaq a little bit more moderate. the 10-year moving up to -- while the s&p is on pace for its worse week since april with a 2% decline. and the nasdaq down 3.5% is also snapping a six-week win streak. what's dragging the nasdaq down this week? here's a look. crowdstrike not helping, down 18% if you go all the way back

to monday. asml on the news of what the administration made. amd now, micron, all names that have shed more than 1% just in the past ten trading sessions. they're the biggest laggard. still to come, afternoon. we'll follow that fast-moving story and bring you any updates and dig into silicon valley's political donations. that's next after a break. it'st keep this world turning. it's the go-tos that keep us going. the places we cheer. trust. hang out. and check in. they all choose the advanced network solutions and round the clock partnership from comcast business. powering more businesses than anyone. powering possibilities.

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♪ ♪ welcome back. influential d.c.'s mark and ben horowitz has thrown their support behind president biden. the dollars flowing from silicon valley tell a maybe different story, deidre? >> reporter: don't let that loud tech trump camp fool you. silicon valley is blue. most of the donations from employees microsoft, meta, apple, amazon and alphabet are going to the dems. an interesting contrast from

2016. back then it was split with microsoft seeing half its donation dollars going to its republican party, meta more than 30%, even google saw a quarter of donations go to the gop. trump was controversial when he was elected and may have driven tech support out of the republican party. a key difference between then and now is that supporting trump has become more normalized. we're still early in the election cycle. calls for president biden to exit the race are intensifying. the venture community has been silent since that disastrous debate performance. we're seeing some of the nontrump supporters in taech ar against biden's policies, but they're waiting to see if he'll be the nominee. we're seeing more people come outputting their support against trump, not necessarily with the

democrats. >> so different from 2016 we would say when no one really, other than a handful full of people, came out in support of trump. is it truly different now? >> reporter: truly, truly different. it's hard to overstate that. back in 2016 the intel ceo planned to hold a fundraiser for trump. he was under so much pressure he canceled it. he was seen as a pariah. it's become more acceptable and falls in line with the anti-establishment or independent thinking that some vcs like to identify with. you're seeing a whole lot more come out vocally for trump, which is kind of leading the other side, those against trump, to be more quieter about it. >> does it tell us something more broadly about the state of politics in silicon valley or california? >> reporter: absolutely. the policies under biden,

regulations one of the major topics that any vc brings up to me. it's hard when you're investing in these startups. that exit strategy relies on mergers and acquisitions. they've been so hard to get done in the biden administration that it's pushed some towards trump. generally too, artificial intelligence, that's one of the threads right now, biden's regulation or proposed regulation of artificial intelligence is at odds with the venture community. still, it may be overstated that there's a huge wave of red in silicon valley. it's a small but growing vocal group. they point to things like a.i. >> no chance in other words that california is lurching towards becoming purple or red. this is all from a community that's the leading edge of the sphere. it seems significant. >> reporter: california, no, but

the venture capital community, it is shifting. when we look at the mega caps and their employees, it's still overwhelmingly democratic. what was surprising to me is back in 2016 it was more divided. silicon valley has been pro business and has been somewhat republican, but that changed when trump was elected. in fact, someone tells me that pushed a lot of folks to move towards the left. >> in many ways those of that persuasion are coming back into the fold. that's it for "the exchange." ow lchis u"perun" p next after the quick break with a down market session today. stay with us. okay, team! oh, thank you so much i couldn't have done it without you. honestly, i don't do a whole lot here. i'm really just here for the at&t internet, it's super-fast so, any pre-launch concerns? what if nobody buys them?

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and also send them away. rich is living life your way. and having someone who can help you get there. the key to being rich is knowing what counts. ♪ ♪ welcome to "power lunch" alongside kelly evans, i'm dominic chu. as the business world is digging out from a global control outage, crowdstrike shares are down 12%. it said the microsoft operating system was behind the outage. we'll get more into what was affected. >> shares down almost 12%. as all the major averages are lower on the day, the dow fell down 37