welcome to "power lunch" on this friday afternoon. alongside kelly evans, i'm dominic chu. first a selloff, and now a rally. despite today's gains, we have seen a few cracks forming in the consumer and the market overall. we'll discuss that next. and "deadpool & wolverine" hitting theaters and that theering some records, and we'll discuss what means for the media giants. and the dow rallying more than 600 points right now. a stark change from earlier this week. at one point, we were pushing that 800 point mark as well.

sh shares are leading the charge on the blue chip side of things. 3m kind of a blue chip company, and health shares up 2.5% on their own. >> another mover we're watching up 4.5%, a rise in bitcoin. >> and medical device maker, down a staggering, get this, 41%. missing on its revenues and cutting guidance for the year. kelly, those shares again, down 41%. >> going the other way is coursera. a revenue beat even after it missed on earnings. so many earnings movers. >> a tale of two different stocks for sure. we'll start today with the fed's key inflation gauge rising from a year ago to t2.5% in june. all the data was in line with expectations, easing the path to an interest rate cut hypothet

c ically. let's bring in megan xu. this is yet another data point. is it enough though for the fed to act by that market predicting september time frame? >> yeah, dominic. thank you for having me. i do think it is. what we've gotten this week has definitely been a threading of the needle that we have been looking for, that goldilocks scenario where you have growth coming in still solid. gdp surprise to the upside, and some of that was swinging around inventories, but underlining that data was really solid consumer spending as well as cap x, and then on the inflation front, we are getting continued disinflation, housing, that lag that we expected to kick in is finally starting to show itself in the data. i think that definitely opens the door for chair powell to very clearly telegraph an upcoming rate cut when he speaks in july, but that rate cut to first occur in september most

likely. they probably could, and maybe even should cut in july, but i think there's not a big difference between july and september, and we think the first cut will happen in september, and then more importantly, we think the fed will be in a position to cut by 25 basis points at almost every meeting thereafter looking out about a yearfrom now. so that sets up very favorably for the soft landing and for stocks to continue the bull market. >> you know what it does set up for as well, megan, this idea that we're seeing some of the muscle memory perhaps rightfully playing certain parts of the market. i wonder if you've watched the price action we've seen over the last week, and specifically between the first part of this week and the last two days. it has been a resurgence in megacap technology, media, and telecom stocks, and the value parts of the market. do you think the overweights should happen from here on out still in technology and com

services? >> well, we are being very careful to spread our bets out. that's not maybe the most exciting answer, but i think in this type of a market, diversification is really critical because what we've seen early on in the past, and i say early on. it's really just been a couple of weeks since this rotation, but it was really a flow of funds out of the high momentum stocks into the laggers, namely small cap and some of the reciprocals. so that was kind of more of a bearish rotation, but it doesn't have to play out that way. today we're really seeing a rising tide lifting all boats with nice participation from megacap tech as well as small cap. so we actually have an evenly placed overweight on u.s. large cap and u.s. small cap, so we're going to pick up some of that momentum, and megacap tech trade, but also hopefully benefit from some of the broadening, and i think that that can occur with both being

winners, maybe not on the same day, but if you look out over 9 to 12 months, we think large cap and small cap will both do well. small caps should continue to close the valuation gap between large cap. you i don't think it gets all the way back to par, relative to history. i think there's some real structural advantages happening in large cap today over small cap, be you the rate cuts story is definitely benefitting those smaller companies that carry more leverage. i think what's unique is we don't have too many data points where the fed cuts as we expect into a soft landing. typically a rate cut cycle benefits small cap, but that's also wrapped up in a recession story and a bouncing off the bottom. so this is a little bit of a different scenario, and i think that's why diversification is really key. >> amen to all of that, and megan, i wanted to pick up on what you said there because as more and more people are talking favorably about small caps, i feel lukeike i'm picking up a b more caution.

you have 84% earnings growth and 5% for the rest of the growth in q1, you can understand why they have been outperforming. if you would expand a little bit more on that, i'm curious. >> yeah. we do expect the rest of the market to pick up some of the slack when it comes to earnings growth, and you're probably going to see megacap tech continue to deliver the best earnings growth, but at a slower pace. the rest of the market should dr deliver earnings growth at a better pace than they have been, but kelly, you're absolutely right. when we look at small cap, we cannot ignore the fact that about half of the russell 2000 earns no profits, and we are talking about the fed cutting rates because of a softening economy. so within small cap, we are still tilted and biased towards higher quality stocks. that tends to play out a little bit better when you lean on active management in the small cap space. that's not necessarily what we've seen. on some of the big days for small cap, you see a junkier

rally, but we want to be inspect higher quality companies that have a little bit lower leverage and really good profits. >> your rally. >> megan shue, thank you so much. have a nice weekend. >> thank you. you too. this week we also saw some significant cracks forming in the consumer especially in the restaurant and retail space. food chains took a hit wednesday after the french fry maker reported a slowdown in u.s. traffic and sales. over in retail luxury names like lvmh had similar warning signs saying europe, the u.s., and china were most affected by lower consumer demand. it comes as short bets against retail are on the rise. kohl's has 37% short interest, guess 36%, and other names as well. let's dive in with our analysts. it's great to have you both here. simeon, it's kind of a -- one ne nervous point after another.

why are so many stock names not working? >> great to see you. you and i always love this conversation because this is a conversation where there's uniformity of fear, uniformity of narrative, maybe even news uniformity of stock performance, but there is not uniformity of actual performance. we're seeing a distinction. you had lvmh up there. hermes as well. it's clear we have the consumer environment as we see it is no longer as healthy as it seemed to be, but you're actually where execution matters and we're seeing distinction when it comes to actual company specifics. with the election and all the macro and that's taking a backseat in terms of the stock market today, but what we're supposed to do is look beyond. we see businesses doing better than others and unlike in the last three, four years with the pandemic with the rising and receding tide, the answer to that right now is yes. >> so you think this kind of goes back to pandemic, and we've seen in other industries where there were -- there were areas that worked really well, and

steve mentioned as well in the gdp numbers, we have seen inventory destocking and restocking and it could be a bad back-to-school season or christmas. just unpack that for us a little bit more. >> the beauty of this sector, it's so easy to create these stories. so easy to just effectively round everything up into one narrative, but to your point, the beginning of covid, there was no inventory at all, and it was stimulus. so everyone spent, and retail looked great. the next year there was too much inventory and we were on the other side, so everything looked bad. it didn't matter how good of an operator we were. everyone was winning. there's a complete distinction there. we'll see what happens in the next three weeks so to speak, but in the last order, you watched coach, michael kors, aerie, victoria's secret, not. companies sell the exact same thing to the same people, and it's different results. you want to see if you are a good operator and a good stock picker. i think when everything clumps together, that's when these

things get difficult, but when you take a step back, you're seeing that delta inperformance. if you look at this week, it looks like, because the largest companies are telling us there's a problem, it looks like there's a problem, but one step deeper and you're seeing different results from different companies, and that's what i think is worth keeping an eye on. >> simeon, it's dom. if you look at the chart for stocks like tjx companies, it lends you maybe to believe that that kind of value orientation, that tilt towards value spending, the lower end of the consumer income spectrum has been where the momentum has been so far this year. does it continue, and if it is to be true, what exactly does that then say about the huge fourth quarter retail season that we have coming up at the end of this year? >> right. hey, dom. yeah. no. i think it makes total sense. tj is a fantastic business, and the amazing thing for -- i'm very sad for what i'm about to say because it's a lazy comment.

they win all environments. i looked good, but it looked great if we cycle backwards a little bit as the luxury businesses do as well. tj is important to venn dors. they're important to consumers and we get the trade down you're talking about, but on top of that, the vendors that need to move a lot of consumers, they do it visibly with tjx. we talked about this before. i think they win because they don't have ecommerce, not spite of it. you drop all your palettes off at tjx, and it just moves. i think that you will see in a trade down environment, tj do well, but i think they do well on the other side too, and i think that's a tj-specific thing, but your overarching point makes a lot of sense. in an environment where we are belt-tightening, you will see that trade down. my point though, is to say, there will be winners at the high end as well, and there will be losers at the low end as well, and you have to be a good operator, and that's what this environment leads into, and that's a good thing. >> you've got to buy. i think people are familiar with the names that you like in this environment, simsimeon, but jus reminder of those executers and

those who have good niche s and those who don't. let's move to the restaurant space, shall we? >> let's do it because texas roadhouse is higher after the company topped second-quarter earnings expectations and reported a year over year same store seales increase, of, get this, 9.3%. however, cautious forecasts are emerging across the entire space. here with his insight is nick setyen. you cover many of these restaurants. texas roadhouse is just one of them, but is texas roadhouse indicative of where we could see the rest of the industry go from here to the balance of the year? >> no, texas roadhouse is a unicorn within restaurants. texas roadhouse is probably the most unique restaurant out there. that benefits from grocery inflation, over and above what restaurant inflation has been. it's places like longhorn, within darden, they have been exceptions to the rule, because

what's really happening within restaurants is that lower, you know, income households, they make up about a third of transactions within the quick service category, and historically, including in a 2016 to 2018 period, which is the most recent period where we had grocery inflation, you know, kroes grossly prices that are lower than restaurant prices, you tend to see a third of those transactions that are direct meal replacement. hey, go to the grocery store, and vice versa when restaurant prices are lower than grocery prices. right now we're just in an extended period of when, you know, grocery prices are lower than restaurant prices so you're seeing those customers, you know, on the margin go to grocery, particularly value grocery. some responding, including the $5 meal that you saw, you know, mcdonald's. everyone else is responding to mcdonald's. so we're seeing weakness across the board, and you're seeing it. you've seen the contamination of the price war within restaurant,

but the root cause is simply those third, you know, the third of that traffic shifting to groceries. >> nick, the vast majority of the publicly traded universe for these types of restaurant operations are more towards the quick service restaurant and mid scale value type part of the spectrum for shoppers and diners. there are very few peer play luxury ends that are not private or held in some kind of conglomerate format. what exactly then leads you to believe that there is a broader consumer theme that developments looking just at the companies that you can look at and which ones are the best positioned for the coming 6 to 12 months? >> so literally, you know, five names that you can confidently say can have positive transaction growth which is really what's going to drive valuations within restaurants, and those five companies are wingstop, chipotle, texas

roadhouse, kava, and domino's. literally those five. there's a couple that are having near terms in terms of transactions, but structurally, those are the wimnners, and you can have arguments on valuations, and whether those transactions will slow down, but those five, you can count on having positive transactions a year from now. >> nick, pick up on this where we left off with simeon. so for those who say, wait a minute. we have individual names who are really struggling, but we're told the consumer overall is still holding up okay. do you broadly think that statement is accurate? >> yeah, i mean, when you look at essentially the median to, you know, the highest income bra brackets, they're holding up fine, but the luxury, when you think about capital grille, when you think about stk steakhouse, and those names, we saw a lot of weakness, you know, starting a little over a year ago, and that was just a normal relation, right? you have a lot of aspirational

spending, you know, coming up to those categories when stimulus checks were going out across income brackets. we saw weakness in fine dining, and so, you know, that was a different normalization last year. we had to deal with that, and now those actual, you know, fine dining categories are actually starting to normalize a little bit as we go over those ye year-over-year numbers and we have to contend with this competition with grocery, and i think that takes care of itself. in the first half of '25 when grocery prices end up normalizing versus restaurant prices. >> interesting trade for sure between the consumer there on the eithating side of things. nick, thank you so much for ending the conversation out. have a nice weekend, sir. >> thank you. let's turn your attention now to another sector that's not getting a lot of attention, but has been lately, and that's the material sector. it's the second smallest sector in the entire s&p 500. it's only worth about 2% of the overall index compared to the

near 30 for technology. >> it's practically immaterial. >> i see what you did there. take a look at this chart because you can see the underperformance in the blue line which is the spider versus the orange line, the broader s&p 500, spider spf. we've seen this. let's look at some of the ones that are trading at the biggest premium to where they have over the medium term. the data team and analytics term over at y charts crunched the numbers about the current forward price to earns ratio for the sector and looked at which ones have the biggest premium to where they've traded on average since december of 2020. st steel dynamics, nucor, cf industries, all trading between 30% to 72% over their one-year forward price evaluations, since december, 2020. the other side of the spectrum, look at these particular names trading at a disdown the where they have been, and that's

newmont, gold, the lithium trade and electric vehicles and batteries and that sort of thing, trading at a 45% discount to where it has on average from a forward valuation in 2020. an interesting move there or look at where the relative valuations are. >> just the fact that the sector itself is so small, you wonder, you know, if you don't think that's warranted, could be an interesting opportunity. >> there you go. >> thanks, dom. still to come, regardless of who wins the presidential race, we know what's likely to be the first battleground in washington for the next commander in chief, and that is taxes. we will have more on that next.

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one faces if they're elected in november is what to do about taxes. as many of those 1017 provisions are getting set to expire, emily wilkins has more for us, and focus shifts as to how kamala harris could handle this issue, potentially. >> yeah, kelly. everyone is kind of digging into it because, of course, if harris wins the white house in november, she will become a key player in this tax battle next year as major provisions of, yes, that 2017 tax law are set to expire. she also proposed a tax credit for renters who spent 30% of their income on rent and utilities and made less than $100,000. on the campaign trail in 2020, she proposed a financial transaction tax on certain wall street trades, and look. while her progressive streak could show up in some of these negotiations, those who have worked with harris said that

she's probably going to adopt biden's tax stances. that includes things like not raising taxes for those making $400,000 or less, and a corporate tax rate of 28%. of course, it's 21% right now, so they raise it, but perhaps not as far as bringing it back to where it was before. harris has called for a full repeal of the tax law, but letting it expire completely would lead to tax hikes for most americans. they're gearing up for negotiations over what goes and what stays. members are planning to focus on increasing taxes for corporations and the wealthy and bringing back tax credits for parents as well as assistance with housing, child care, and paid leave. now most of these proposals probably won't be possible if there is a divided government next year, but a few items like the tax credit for kids have gotten bipartisan support in the past, and kelly, democrats will be shaping up to push for those again if they are able to control either the white house or one of the chambers in

congress. >> we spoke with james about this yesterday, and as people try to ascertain what it could mean, let's say for instance, she won, and maybe you get compromise where there's a little bit on the child tax credit or on taxes and a little bit of the inflax redtion reduc act or what have you. what are you hearing if it has to be bipartisan in some way, shape, or form, that compromise could shape up? >> you are seeing some agreement right now in congress. you have seen things like the child tax credit get bipartisan support. when paired with a number of provisions, tax credits, tax deductives, things that would help businesses with research and development as well as others. that package wound up moving with strong bipartisan support through the house, and for the most part, it's not like you're talking -- hearing republicans talk about raising taxes on low and middle-income americans. there definitely seems to be agreement there. i think there's a huge question of what happens with the corporate tax rate, and a huge question what happens with some of these other loopholes and

taxes that are on wall streets and businesses and exactly how those go forward, and of course, with democrats, it's very important for them to hold onto at least one chamber or the white house because if there is a republican sweep, then they can use that process of budget reconciliation and really be able to move most of the bill through just like they did in 2017. >> yep. i think that makes sense. emily, thanks so much. we appreciate it. emily wilkins. all right. coming up on the show, elon musk's daughter responding to his controversial comments about her and her transgender identity in an exclusive interview with nbc news. we'll get a live report from that reporter when we return after this break. this is our future, ma. godaddy airo. creates a logo, website, even social posts... in minutes! -how? -a.i. (impressed) ay i like it! who wants to come see the future?! get your business online in minutes

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♪ welcome back. over the last few days, we've seen elon musk weigh into an emotional battle over california's new transgender law, the law which bars school districts in california for parents to be notified of a child's gender identification. saying he'll remove spacex to

texas. that has consequences on both the corporate and state level. he went on to say he was tricked into authorizing his own transition, and now his son is dead, or dead to him. we're getting a rare look into what drives the psyche of a powerful billionaire, speaking with the billionaire's transgender daughter. david? >> it's a pleasure to join skblu what did you learn from this discussion? >> so i spoke yesterday with elon musk's daughter, vivienne jenna wilson, and she has quite a bit to say about growing up as elon musk's daughter. she came out twice in life, first as gay in eighth grade, and then several years later, she came out as trans, and i think that this relationship between vivienne and elon musk really is, i think one of the

un undertold elon musk stories told over the past few years. we've all seen how elon musk has taken on certain campaigns, political campaigns and social campaigns including on x and his purchase of x, and this, i think, helps to explain some of the motivation. i mean, he said on monday that after this experience with his daughter transitioning, that this is what pushed him to attack what he called the woke mind virus -- woke mind virus, and he -- and so i think that really gave her an opportunity and i think, in her mind, a requirement that she speak out and address this allegation from him that he was tricked into approving her hormone treatments. >> it's -- the development here, we're talking about vivian jenna wilson who's generally a relatively private person. we haven't heard too much with regard to the story from that

perspective. what exactly would have to happen for this kind of a response, for her to want to talk to you and perhaps be viewed as trying to set her record straight? >> clearly she had been thinking for quite sometime about whether she wanted to tell her story. you know, i think she's someone who does value her privacy and didn't seek this spotlight. i think what had to happen was musk speaking really in a very personal way, and talking -- revealing some personal family details on monday and doing so in a way that she thought was just untrue. he spoke about what it was like when she was growing up, when vivian was growing up, and she says that those weren't true, and that he also probably wouldn't really know much about what she was like growing up because he was largely an absent father, and that was one of her main points is that musk and

she -- they haven't spoken in four years, and he was not really present when she was young. so i think that's what pushed her to come out and sort of tell her side of the story, the fact that he was telling what she thought was a one-sided story. >> now in many ways the struggle of one family becomes the struggle of many companies and states really. thanks for bringing that us to. we appreciate it. ab nbc's david ingram. let's get a cnbc news update. >> dom, former president donald trump pledged this afternoon to work for middle east peace and combat anti-semitism. the promise came as he sat down with israeli prime minister benjamin netanyahu in florida who posted a video of the meeting to social media. alleged mexican cartel drug lord ismael pleaded not guilty to drug trafficking charges today. he's being held without bond following his arrest last night

in texas alongside the son of jailed cartel boss, joaquin gu guzman, or el chapo. sources tell nbc news investigators are looking into whether he may have fooled him into getting onto the plane to el paso where they were taken into custody. and hollywood video game performers began a strike today after negotiations over artificial intelligence broke down. the union claims the studios refuse to agree to protect performers from things like using a.i. to replicate their likeness or voices. a representative for the studios which included disney, activision, and electronic arts are saying they're disappointed the union chose to walk away when a deal was so close. but dom, some actors are being allowed to work at other studios that have already signed such agreements. so it's one of those situations where not all games are stopping now. >> a.i. and labor continues to be in the headlines.

thank you for the headlines there. we appreciate it. coming up on the show here, "inside out 2's" record run has been a boom for the box office. "twisters" putting some fans in their seats as well. so could "deadpool & wolverine" keep the sequel surge going this year? we'll dive into that trend when "power lunch" returns after this break.

♪ welcome back to "power lunch." ever since the marvels flopped in the fall, studios have been concerned about superhero fatigue. disney ceo bob iger even admitted to the diluted quality of the marvel cinematic universe, the mcu, but disney is taking another crack at their comic book heroes with the release of "deadpool & wolverine" this weekend. the movie is projected to be the biggest opening of the year so far beating disney's record-breaking "inside out 2." fandango says it's the top seller of 2024, and the most anticipated movie of the year. so are superheroes back, and

what about the cinemas themselves? joining us now to discuss is laura martin, needham's senior internet media analyst, and also senior media analyst over at comscore. thank you both for being here. let's talk about the macro, big picture first. paul, to you. is the box office back? we've heard from ceos, executives at movie theater companies that it kind of feels like we're back to pre-pandemic. is that the case, and does that mean people are going to go back to the theaters en masse? >> it is, and, you know, really we had a first quarter of the year that was really quite slow and compared to 2023 at the same time, when "avatar: the way of water" was doing great business, we were heading into the summer down year to date versus last year about 26%, and then we had a terrible month of may at the box office lacking a marvel movie to kick off the summer this year. we had a historic low grossing

memorial weekend, but then everything turned around in june and july, and we've knocked down, according to our com score numbers, the jyear to date deficit, about ten percentage points which is quite astounding in just a short amount of time. it's a very fragile ecosystem. every movie that underperforms, that affects things very profoundly, and likewise having many movies in a row overperforming from "bad boys: ride or die" in early june, "inside out 2," an absolute juggernaut, now the highest grossing animated film of all-time, "quiet place," "despicable me 4," "twisters" most recently, and now "deadpool & wolverine," movie theaters are on a roll, and if you compare the headlines now to what they were in may, totally different story. that's for sure. much more positive story right now, but i think "deadpool," it could even surpass those expectations that you put up

there. it may, you know, if it pushes in on $200 million in its domestic opening, i wouldn't be surprised given the buzz and the tail winds for this movie. >> all right. laura, let's talk about these companies that make the content, and then distribute them in theaters. i have a kind of loose rule of thumb. i only go to the theaters to watch blockbuster action and special effects superhero flicks because i think it's worth it. i, though, did take my kids to see "inside out 2" at their request. it is still a matinee $15 ticket. you factor in popcorn, a family of four spending about $110 by the time it was done. what is it about these movies that it's going to be trendworthy to get these studios and their owners back into some feeling of return on investment? >> so i think what we're trying to do is break the consumer habit of sitting home which we created that habit during covid. you got big-screen tvs and people want to stay in the -- stay at home, but it's probably not true what you just said about yourself, because i bet

you went to see "barbie" which is not -- you probably saw it in a theater. "oppemheimer," too, not an otherworldly action adventure. you are probably going to see "deadpool." most people will according to these box office projections. it happens to fit that mold, you said, but people are going to the box office for fabulous content, even if it's "a quiet place," which you don't need to see on a big screen, but the sharing, the gasping in horror, is the sharing of the experience in a theater. we're try ing to get people to o back to the box office and do things with shared emotion in a big screen environment. >> dom's shaking his head. he didn't see "barbie". >> i didn't see "barbie" or "oppemheimer" in theaters. waited for them to come out on streaming before i watched either of those movies. it was "oinside out 2". >> i thought all of the world saw them.

>> this is no commentary because, you know, "oppemheimer" was released by universal studios, but "deadpool & wolverine," i would go see that in theaters. >> and dom, you have to go see it in a theater. that's your homework from me. you have to go see "deadpool & wolverine." if you were to miss out on that, and laura's totally right. it's the experiential point, the communal part of going to the movies that's so appealing, and i always say. mo the movie theater will never go the way of the telephone. why? there's nothing like it. even though there's an old-fashioned, old timy experience, that's the appeal of i it. you can go into the theater for a couple of hours, turn off your phone, and enjoy the movie like this. "deadpool & wolverine" is getting great reviews. i think like with "twisters" and "deadpool & wolverine" this weekend, maybe a barbenheimer-style double feature in the, you know, in the makings. i don't know. we'll have to wait and see. i don't know what you would call

it. maybe twisterine. i don't know. >> what are the investments for it? what are the takeaways? >> so this is going to -- this is a big film for disney. it will help their earnings because they're -- what's pulling down their earnings performance right now is their box office. with "inside out," and if this movie is again, big, it will help their earnings for share, and it will offset some of their driving to break even on streaming. it will help their earnings for share growth if the box office pulling more of its own weight. it's important for the walt disney company, and if it can actually break the back of people staying home like your co-anchor, we want them coming to the box office and eating popcorn. so we want to get those people back permanently into the box office like they were pre-covid. >> $15 popcorn. >> i'm hearing that $110 for a family of four and thinking -- >> that was a matinee. that was $15 for a matinee. if i want primetime, it's $20 plus per person. >> that's a deal. the companies don't want to hear that.

>> if you took the family on a vac vacation, it would cost a lot more than that. >> yes, sir, it would. >> thank you both. paul and laura. meanwhile, disappointing results from tesla and alphabet ramping up the pressure on the other seven names. we will break down what to watch after this.

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so what we've learned this week is that big technology names are facing pressure as earnings season rolls out and especially going into next week, steve kovach with what to watch in the preview for the busiest week of earnings next week, steve. >> that's an understatement, dom, and look. tesla and alphabet, they set a pretty ugly tone ahead of the magnificent seven that we have earnings, that we have on deck next week. that puts enormous pressure on

apple, meta, and amazon. the big concern that alphabet's results showed, the massive spending it has to build out a.i. capabilities. outgoing cfo ruth said it will be at least $12 billion each quarter, and while that's helping google's cloud unit grow, it still has quite a long way to go to catch up to the leaders amazon and microsoft. plus, the sentiment when he said he would rather overspend than underspend on a.i. for microsoft and amazon, those are the two companies to pay attention to on the hyperscale st side of things. microsoft said they cannot meet the demand, and they made a deal with orr acle to offload some o that. they made deeals with anthropic and hugging face, and meta is spending a ton on that as well. for apple, we saw what that looks like last month, and raymond james analysts this morning called it a more stable

a.i. investment after what we saw this week with alphabet, dom. >> i think i'll pick it up, steve. i think it'll be a fun ride to see if they can find a sweet spot for investors that we didn't seem to get this time around. steve kovach. you can see us on our podcast, and follow those earnings and so much more. our moviegoing habits. anything you want to know. find "power lunch" on any platform, and we'll be right back.

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it's piled high with tender beef that's slow cooked and smothered in tangy memphis style barbecue sauce. it's no fuss, no muss. just tons of flavor. the best barbecue beef is only a togo's. try one today. welcome back to the show. dow climbing more than 600 points at this point. off session highs. up towards 800 at one point. treasury yields lower after the preferred inflation gauge. pce. which matched economists expec expectations. rick santelli is stracking all the action from chicago. rick, this is a situation where, is it a green light for september? >> it certainly looks like that,

dom. you know, fed fund futures is utilized for many things. maybe beyond its real reach, but for the next meeting especially when you move within that two week window, the accuracy is in fallible. july obviously not priced in. we're not two weeks from september, but september's heavily priced in unless something extreme happens i can't imagine the fed would deny the market something its already priced in. the best way its communicates its ideas and strategies with all investors around the globe. what a week. you pointed out. pce inflation expectsed. michigan, sentiment challenged and huge moves in short maturities. the twos, 438. down 13 basis points on the week. 420 for tens. 0.2 spread moved roughly 10

basis points. open it up to one month and you see we've gone from basically minus 50 to minus 18. that is a dramatic move and really underscores the dynamic of the fed and dollar/yen. dollar closing three-month low versus the yen. back in japan. three weeks ago dollar at the 38-year high against that currency. back to you. >> all right. thank you very much. rick santelli with the update there. now, imagine if a restaurant used personal data, like your income, or your zip code, to charge you more than another customer. well, the ftc claims that could actually be happening right now. we'll get that story about surveillance coming up next.

over the last few months we've seen a wedge driven between companies and consumers as we saw with brands like chipotle and red hot about issues and this week launched an investigation. ftc. into the usa of a.i. to rapidly change pricing and some of them are now firing back. contessa brewer has details on surveillance pricing. what exactly does this mean? >> yeah. basically they're bemanneding information from the likes of chase and mastercard and reserve onices saying they want more information about the way that these companies can aggregate lots of data and then tell their customers how to change pricing depending on who's buying. so the worry is that you could be sitting next to somebody at a fancy restaurant and year getting charged more, because

this restaurant knows you frequent nice restaurants a lot based on, say, your phone number. where the other person is known for fast casual and make it a different price point, different menus, based on what's a qr code. ftc says looking for information. since i first reported this story i've gone out to all a companies, ftc is demanding information and asked for response. chase, master kard, all said, look, we're looking forward to working with the ftc and helpen enlighten them. another more enlightening responses from revionices, home keep oh and grocery chain hanford of customers. ftc says -- this isn't it. go -- here it is. the spokesperson said does not develop software that recommends pricing to specific individuals. it does not use individual consumer data in anyway conduct

operations related to the surveillance of customers. really pushing back there and saying, dom, they are looking forward to educating the ftc what they actually do. >> all right. contessa brewer, crazy story for sure. >> thank you. if dom and i walked into a restaurant, would we -- look at dom and say, yes! >> thanks for watching "power lunch." have a great weekend. >> "closing bell" starts right now. welcome to "closing bell." i'm mike santoli if nfor scott wapner. mobilizing to finish out a bumpy week on wall street. traction in hard-hit tech. continued flow into financials and smaller stocks after a largely as expected inflation reading keeps fed rate cut expectations for september pretty well in place. here's our scorecard with 60 minutes to go in regulation. s&p 500 up about 1% now making a built of a stand after a 5% setback from peak to the low