matters, so high dividend, low vol. >> bill? >> abvie. this was one of the most shorted names and now we have more record highs on our hands. >> some pressure points today. equities across the board, you see theselloff right there. yields, as liz alluded to, down. we'll track it all of it. see you on "closing bell." ♪ ♪ what we used to call a risk off day, scott, thank you. welcome to "the exchange." i'm kelly evans. in case you missed it, that ten-year yield dropped below 4% for the first time since february, but not for a great reason. we'll have the reason and debate whether more than a quarter cut could be on the table for september. meta delivered but the bar is high as apple and amazon get ready to report earnings. we'll check back in with one company that might be fitting in a sweet spot.

the ceo joins us ahead. and they are free. americans evan gershkovich and paul whelan returning home from russia following a massive and global prisoner swap. we have that and the ramifications. let's start with dom chu and the ugly numbers. >> they were prettier earlier today, kelly. now they are decidedly uglier. the dow down about 539 points, about 1 1/3%. the s&p 500 is at 5453, down 6 points or 1.25%. just to give you an idea, at one point this morning, we were up about 44 points. now down 69. at the lows of the session, we were down 75. so, again, tilting towards the lower end of that range. the nasdaq composite, the underperformer, down almost 2%. that's 336 points to the downside. 17,263. and i'm going to show you the russell 2,000. you would think with lower interest rates, that would be

good for the small-cap stocks, but some weaker economy data out this morning leading to that bid for government bonds to drop in yields. may not bode as well for the russell 2,000 and small-cap in index, currently down 3% to a level of 2185. now, as we talk about some of the themes developing here, take a look at what's happening in one key part of the market, and that's what's been happening in big tech.platform, gains of abo 5%. apple and amazon is on deck, each down about a percent or more. apple just to give you an idea, the options market right now is plussing it at a plus or minus 4% move. and amazon, plus or minus 7% on that move. so keep an eye on big technology stocks. if you are looking for a bright spot among some of the smaller names that are not maybe mega cap technology, shake shack up

17% right now. earnings came in line with estimates, better than expected revenues, and better than expected sales growth at established restaurant locations. people are still dining. there and the company says, kelly, they expect to be free cash flow positive this year in 2024. something they haven't done since 2017, i want to say. so shake shack shares up 16.5%. back over to you. >> i think it's still important to highlight those winners. dom, thank you very much. now, as mentioned, some key economic data this morning, some leading indicators on the economy as well. jobless claims sored to almost 250,000. the jump in claims below 4% for the first time since february. and with concerns rising about a slowdown in the labor market, my next guest says tomorrow's big jobs report will be a crucial piece in determining whether the economy and rates go from here.

joining us is larry linsey, and cnbc's senior economic reports steve liesman is also with us. larry, a belated happy birthday to you. thank you for joining us. >> thank you. >> there's so many global developments that i would like to bring this conversation back to. but let's start on what you think is the bread and butter on what's going on with the u.s. economy, are we slowing? >> we're slowing, because remember, we were growing at of 3%. so yes, we're slowing from 3%. i would say we're growing, you know, right around 2%, i think we had a number in the high 2s probably coming into the second quarter. current quarter, third quarter, looks to be about 2%. so, yes, we have slowed from 3% to 2%, but the fed's view of the long-term trend is 1.8%. so, you know, slow, yes. but too slow?

absolutely not. >> i've been watching commodity prices with interest, and gold as well. so gold's breaking out. oil now is not breaking down the way it was because of the middle east developments. but commodity prices have been plunging because of what's going on with china in particular, exporting deflation. what does that tell you and how should that affect the u.s. economy? >> well, i do think it's helping out quite a bit with regard to producing inflation. given the level of aggregate demand in the economy, we should be having inflation higher than what we have. and what brought it down, and here eby aggregate, i'm talking about real final sales to domestic consumers, the thing that's weakening is the imports. imports have lately been surging, helping to hold down the inflation rate. >> say that one more time, because this is not something i had in my bingo card. in other words, americans are

buying too much cheap stuff from abroad, and that's -- just talk me through that. >> sure. so first of all, the wealth-to-income ratio is at historic levels right now. when people are wealthy, they don't feel like they have to save, that they can spend. so the spending rate out of income is very high. that means there's a lot of demand out there. that shows up in something called final sales to domestic purchasers. which is down a bit. the gdp report is going gang busters. the reason that's not reflected in gdp numbers is -- i can buy something, and that's a high number, but if what i'm buying is an import, it doesn't show up in gdp. so that's holding down the gdp prints. we actually have very strong demand by domestic consumers right now, led by the

government. >> it's all temu's fault, otherwise we would have a gang buster economy, but they're importing inflation around the world. piper sandler this morning said we're not seeing good disinflation, but the kind that's coming from a slowing labor market. so i'm trying to decide whether we can celebrate these developments and lower bond yields or if we need to be very concerned about that. steve? >> well, you know, i think it's -- for the fed, it's -- they don't much care how you get there as long as you do get there. we did have disinflation from the recovery of the supply chain. some of that still remains. but that's a pretty good yield to it, and they needed more and they still need more, and the supply chain may have given all that it could give and the rest of it needed to come from someplace else. i would point out among the numbers you talked about that

caught the attention of a lot of economists this morning was the ism manufacturing index employment component, down 43. we have not been that low since we were coming out of the retrenchment from the pandemic. so that's an ominous sign. some of the other high frequency data i like at, home base is also not looking that healthy. i would be a little bit careful here, it could be a summer swoon. it's entirely possible what -- that you have a little bit of a break in the torrent pace that we have had in hiring. i wouldn't necessarily start to, you know, man the lifeboats so to speak. but what we are looking at right now, which is the sort of paradox of all this, larry gave a summer of 2% now. a lot of folks were upgrading their gpdz fdp forecast for thed quarter at 2.5%. so the gdp numbers seem to be okay. perhaps it's powered, kelly, by

some of the wealthier consumers out there and some other things going on in the economy. but right now the gdp numbers look good. the concern with the fed is that there's deterioration underneath. >> an interesting theory, i just want to ask both of you comes from jim hallson who says, you know, the fed -- because they kept rates high as we have experienced disinflation from the past 18 months, their high overnight rates are keeping the ten-year higher than otherwise. once they cut, that could sent us back to 3% or 2% or low. listen, listen, is it possible? >> i really think that's unlikely. you have a budget deficit right now as far as the eye can see, and probably no matter who wins in november, that's 6.5% of gdp.

that's eating about 80% of domestic savings. it's very hard to imagine that you're going to attract foreign saving, enough to fill our total need for capital, when you have yields at those levels, just impossible. >> you really think that -- because yields are dropping globally. it's not like you can get a great bargain somewhere else. >> well, yields are dropping in large part because central banks, they own a good portion of those assets. one thing that could hold yields down is if you back to qe. it's interesting that the -- >> which china migd do by the way. >> which china may do. ja japan, it's scaling back its quantitative easing until the first quarter of 2026, which has

got to be forward guidance like i've never heard before. so that's not happening. we're not seeing any other central banks starting to shed their balance sheets. the primary dealer survey suggests they expect us to start expanding our balance sheet again by the middle to late part of next year. and it comes from the fact of how much demand for funds is out there, largely by the government sector. i don't think it's possible to -- >> kelly, can i -- >> steve, last word. >> can i offer an amendment to what larry said? and i offer it up as a proposal, not necessarily a definitive. larry, you're right that we can't attract that kind of foreign investment that we need at those rates. and i would just offer, unless there's a credible plan to bring

down the deficit over time. and i'm making that point to say -- >> he's wincing again, steve. >> i'm smiling. >> there's not necessarily a need to bring it down, there has to be a belief that a, it's not going substantially higher. and that over time, it will come down. i think that's one of the reasons for the differential for example between say the u.s. not necessarily the level of debt but the trajectory that there are some controls in a place like germany, whereas here we don't. >> we good good news on the refunding this week, larry. last word. >> yes, is there a credible plan out there, to look at biden -- >> no! >> at his 2025 budget. they are able with various measures to hold our deficit to a mere $2 trillion for the next

decade. they do so by cutting defense spending by 21% of that period. now, this year they want more spending now, but 21% reduction over the next decade. i personally do not see, you know, qume kumbaya and peace breaking out. >> we have to go. steve. >> be, fair, larry, do you think former president trump has a credible plan? >> he doesn't have any plan. i'm just saying -- you prefaced it on a credible plan. there is no credible plan. >> i did. >> the democrats don't have it, trump doesn't have it. >> to your point, larry, in the '90s it was because of the peace dividend we were able to shrink the defense spending.

>> now it's going the wrong way. >> gentlemen, thank you. always a pleasure. larry lips linsey and steve lie. talking apple and amazon. earnings are on deck and there are the numbers. plus, a look at whether the ai enthusiasm in the market has been overhyped. but first, a prisoner exchange taking place between the u.s., russia and number of other countries. we'll bring you the details and look at the implications. "the exchange" is back after this. >> this is "the exchange" on cnbc.

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welcome back. the largest east-west prisoner swap since the cold war taking place today, involving two dozen people and half a dozen countries. aemon has the latest. >> reporter: that's right. we saw some emotional moments tat white house earlier today, as joe biden was joined there by members of the families of those americans who had been released, those americans include evan gershkovich, "the wall street journal" reporter who has been held for more than a year in a russian prison. you can see them all gather thing with the president of the united states. joe biden discussing the behind the scenes details of the negotiations surround thing release. and explaining that it was the hard work of diplomacy that got it done. here's what he said. >> for anyone that questions if

allies matter, they do. they matter. and today is a powerful example of why it's vital to have friends in this world, friends you can trust, work with, and depend upon. especially on matters of great consequence and sensitivity like this. our alliances make our people safer. and we begin to see that again today. >> kelly, i can tell you now that we have been working behind the scenes for months now on a new cnbc documentary on one of the russians who was traded back to russia out of the united states prison earlier today. he was the mastermind of a massive wall street insider trading scam, based in moscow, done with hacking, stealing documents from american companies, and then trading on that information on wall street and victimizing american traders. that documentary is called "putin's trader," and thanks to

some heroic efforts, it was scheduled to go up tomorrow. it's now going up live right now. you can watch that right now if you look at the qr code. you can see our investigation that we've been working on for almost a year. >> when people watch that and become familiar with who was released and why, the reactions are quite celebratory that evan gershkovich and others are home. is there any concern about who they were all exchanged for? >> that's a really interesting question. we have exclusive access in this documentary to the fbi and doj team that worked on the case for years. as we were doing this documentary, it was always a question of whether or not the russian would be traded back as part of one of these prisoner swaps. i asked the fbi agents and the department of justice officials about that prospect. they were philosophical about it. they said, look, our job is to make our case to get the bad guy to make sure he's in the prison.

the president of the united states has bigger calls to make, and that was the attitude of the people who worked on that case for years. they make the case, they get the arrest, and the rest is up to the president. >> indeed. thank you. we'll see you next hour. for more on this prisoner swap, let's bring in michael o'hanlan and michael mcfall, former ambassador to russia. great to see you. mr. ambassador, what are your reactions here? what stands out to you as most significant about this deal? >> well, my first reaction is joy. this is a fantastic day for the families of those that have been released. i know three of the russians that have been released personally. this is a fantastic and unexpected day, at least for me. they've been working it for a long time. there's been hints, especially round earlier this year when there was hints that navalny

might be involved. but it's a fantastic day for diplomacy. this is an extremely complex deal that has been done. my suspicion is that it involves people from the president and the secretary of state and national security adviser, the special roger carsons, because it was a very complex deal involving multiple countries and some very difficult decision trading real criminals for innocent people. those are hard deals. but people keep saying it's the biggest deal since the cold war. i can't remember a deal this big during the cold war. and then third, it's also a day of sadness for me, because one of the americans left behind is mark fogle. i knew mark when i was ambassador. he was a teacher to my kids. i wish he was in the deal. there's still hundreds, if not thousands of russians, including people close to the navalny group, that are still sitting in

jail. four got out, but hundreds of thousands are -- hundreds if not thousands are still in jail today. >> michael, of course, we're all curious if you could answer that question about the historic significance of this, and also is there any concern about the precedent it sets? i'm sorry, mr. o'hanlan. >> first of all, ambassador mcfall did a great job laying out why this is a good day and i agree. but yes, there has to be concern about the process, the mechanism, and the incentives that have now essentially been sew solidified by this deal. it makes it clear to vladamir putin if you want to get other russian bad guys out of western jails, just kidnap some americans. it's a tough call about who you're going to let go. i would not let a mass murderer go back to russia if they were likely to do it again. somebody who has carried out one political assassination or a

wall street scam versus getting some very decent back, i'm prepared to hold my nose and make that bargain, but i'm worried how many more people putin will try to seize. if i were thinking of going to russia now, if i were russian-american by background, if i were in a politically prominent role, each for example, as a non-governmental negotiator over some exploratories process to set up a peace deal, i would think twice, because putin has made it clear he will find pretext to grab people to get back home individuals he wants liberated and back in mother russia. >> so you think it's unsafe for any mamerican to travel to russa today? >> i have that sense. my sense is if you have any reason to think that putin might put you in his sights, i would think at least twice and seriously consider avoiding the trip all together. >> ambassador? >> i agree completely.

and the state tempedepartment g that warning to american citizens. particularly for all those american business people that chose to stay in russia and subsidize putin's war machine to kill ukrainians, they should get out now. those, i think, are the next wave of people that could be exposed. opposition people are not going to go back, diplomats have immunity. but americans who chose to stay against the advice of many people like me that said you should get out and stop subsidizing this war, those companies would be thinking twice about staying in russia today. >> fair enough. michael, evan was a journalist, and if we want any sense of going on in russia, there will need to be journalists working there. missionaries, they're going to say, this is what we do. so should they be included in the ranks of those who steer clear of the country? >> like i said, think twice or

three times. maybe don't go, but i didn't suggest there was a blanket prohibition. ied eadmire the people taking risk and still trying to get some semblance of media and journalism out of russia to the extent possible. so i want to tip my cap, as i'm sure the ambassador does, to all the brave people still trying to resist. i'm just saying we have this additional dimension, which is if you go over and get incarcerated, you're giving putin the opportunity to trade for some really bad guys to get back home. that's one more part of the calculus that should be on your mind. >> more than ever. gentlemen, thank you for your time today. we appreciate it. let's take a quick look at the markets. amid all of these international developments, including the economic data this morning, we're at fresh session lows, with the dow down 621. the russell 2,000 small caps, down 3.5%, having their worst

day since feua.brry we'll have more on the other side of this break.

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i'm tyler mathisen with your cnbc news update. the deadly osprey aircraft crash last november off japan was caused by cracks in a gear and the pilot's decision to keep flying despite warnings to land. that according to a report released today by the air force. the crash killed eight service members and led to a months-long grounding of the osprey fleet. the crash also renewed congressional investigations into the aircraft's safety record. eli lilly's weight loss drug found patients were 38% less likely to be hospitalized or die of heart complications. the findings, which have yet to be published, add to growing evidence that glp-1 drugs have benefits beyond diabetes and weight loss. some instagram users posts have been deleted from the apps archive after a technical glitch. meta says the glitch has been

fixed but the deleted contempt cannot be restored. affected stories show a black screen which will be gone by july 2025. so a year to wait, kelly, for that. >> probably a good thing for some of us. tyler, thanks. coming up, apple and amazon are on deck to report after the bell. we have the numbers, and how to position ahead of those prints. and here's a look at some of the names hitting new lows in this selloff, which is broad and deep, including dollar tree, las vegas sands, wynn. "the exchange" is back after this.

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welcome back to "the exchange." markets are at session lows just ahead of another big day for tech earnings with two of the mag seven reporting after the bell, apple and amazon. investors are focused on cap ex spending. remember, both microsoft and alphabet have yet to recover after posting mixed results. so let's get to it for some thoughts on the apple trade. joining me now are my three guests.

steve just made some ai adjustments to his portfolio and will tell us what they are. great to see you all. amik, kick things off with apple. where does this leave them ahead of the print? >> listen, i think the focus is going to be any update in terms oh of what apple intelligence can mean for apple iphone 16 launches. so how they guide will be critical and any insights are -- [ inaudible ] that's going to be the big focus is apple intelligence potentially trigger a super cycle for them. >> what's the cap ex line? what's the number you're looking at, what would set off some alarm bells here? >> listen, i think one of the

things with apple, they're able to do apple intelligence and play their ai narrative cycle with a cap ex-like model. a lot of the investments are around some of the internal service they're building. but the cap ex numbers at apple are a couple billion dollars incrementally. i do feel they're able to accomplish ai tail winds without the high intensity cap ex that sort of the other mega caps have had to deal with. >> why is that? there's still a cost associated with this, why sitis it lower, because they're not directly buying the nvidia chips everybody else is? >> that helps a lot. one is fundamentally the way that apple runs ai is run it on your iphone. so apple silicon is setting in a billion iphone devices.

so that's one part of it, which is able to use something out there that is already out there. the other part is their partnerships with openai where, you know, they can leverage their resources and compute power. but i think using their own iphones to run ai is a huge issue. >> that's still a ways off on the iphone. thanks for joining us. we appreciate it. and look forward to what they say after the bell and maybe they can meet these lower expectations the market has. let's move along to amazon, also on deck. aws will be in focus especially after microsoft's azure service missed expectations. let's bring in james chuckmuck. james, great to see you. a lot of love for amazon when we talk to tech investors lately. what do you think would deminish those flames?

>> we've been worried about big tech a lot lately, particularly with apple and microsoft. but that being said, meta and amazon were the two out of the big tech that were standouts in terms of most favorable risk/reward. that being said, i do think that you should be able to continue the accelerate on the aws front, improving on the 17% growth last quarter, up to 18% this quarter. continued efficiencies on the operating expense line and driving that upside surprise in terms of operating profits. so they have a lot of levers to pull. we think the setup is decent here, but that being said, you've got to stay aware of the broader economy slowing down and the implications of that for the third quarter. >> you're looking for operating efficiency when others are seeing higher investment. amazon should be the beneficiary of some of those dollars but they also have to buy the chips.

that's obviously the big question mark. >> sure. cap ex is certainly front of mind for all investors. i think that the commentary out of microsoft, as well as meta, they've been investing in ai for quite sometime. so in terms of are you going to see a step function incross of the investments or will it be just an incremental one? i think it's going to be more the latter, which should be favorable. but you've just got to stay cognizant. at the end of the day, it's a discretionary spending business, with retail comprising the majority of it. >> james, thank you. behind multiples on some of these names like nvidia, one of the reasons any next guest just trimmed his exposure. steve ott is chief investment

officer. while, look at nvidia, you were on this a couple weeks ago. walk us through the thought process. >> it's great company, nvidia, kelly. it just had become too much of a mental story for us. made a lot of money on it, stock trading at 40 times earnings. and i think we're kind of in a digestion mode here for ai. importantly, stocks like nvidia, once they're big momentum stories like that, they just don't need solid earnings growth and order growth, which i know a lot of bulls like to talk about, but they need accelerating earnings growth. we're kind of past the acceleration mode here. at the same time, we're entering the rate cut cycle. today's news only, you know, cast the final dye on that one, so off we go. we got probably 200 basis points

of rate cuts. these were the only game in town with rates up. they don't need funding. so financing is not important. but the other side of the market, that mostly funds itself short, the value stocks, the cyclicals and the small caps are the real beneficiaries once rates decline. that's where we want to be right now. we thought it was time to take chips off the table. >> as a trading strategy, is it just something psychologically or a gut feel where you go, huff, it's gone too far, or is it like an eps, a forward multiple, something like that? >> well, both, kelly. we look at all those things. i was on vacation the week of july fourth. i came back and the market had taken off again. it was crossing in at that point on our 2025 target, which was

5700. you know, we thought we were being pretty aggressive 18 months ago when we set out that 6,000 target. a lot of people accusing me of being a pollyanna. but boy, there we were. yeah, it felt maybe a little bit of a gut, but the numbers cross hatched against that. when all those things come together, i think it's time to make a move. we have a pretty bigm macro tea. we just seen much better earnings growth, if you look at it back half of the year. small caps the the first half of the year, value stocks, the entire growth of earnings and the s&p was coming from big-cap stocks, particularly the mag seven. and in the back half of the year, that really starts to spread out. and by next year, the growth rates on the small-cap stocks are significantly higher than

the growth rates on the mag seven. so you've got the growth shifting in your favor, it's been against you until now. you have rates shifting in your favor. the small caps are the beneficiaries of lower rates and have been hurt by the higher rates. and valuation is at your favor. so it just seems to us like everything is lining up here. it doesn't surprise me with this pullback today. these stocks with, you know, they went straight up. it was almost too good to be true. >> oh, sure. >> we needed a little bit of a pullback. this doesn't surprise me at all. i think it's a great reentry point. >> what about the small caps? we were speaking with tom lee who says they'll be up 40% or something, philosophically those same reasons you're describing. do you think this is an entree point for the s&p, the russell 2,000.

>> tom and i are often on the same page, kelly. i was actually just talking with him yesterday, and i'm with him on the small-cap calls. i would say reentry point for this russell 2,000 trade, it has significant ways into the back half of the year. i think it's only getting going. tom saying 40%, that's pretty adress save, but it's certainly something north of 20% i would guess. you have a nice little pullback here to get on board here with that. we saw how powerful this could be. the fed starts coming in september, they're going to tell us, you know, at jackson hole in august, but i think the market knows it now. so off we go. >> i think it's pricing it in. if you're right and this is a healthy rotation, everything else can work and not just the mag seven, that's tremendously powerful, especially if rates have a three handle and could fall from here. so i guess the last on that

front, you and your team don't seem to share those concerns, recession concerns. >> well, you know, the jobs numbers is going to be weak tomorrow. you know, part of that ism number was a big inventory cutback, which could have been a seasonal adjustment. there was an employment cutback that was a little worrying. so we're not just whistling past the graveyard there. any kind of soft landing, kelly, it's not like you're landing on a pillow. it bounces around a little bit. this is the middle of summer if we get a few more numbers like that. but remember, the ism manufacturing index has been under 50 virtually every month the last two years. so this little bit of acceleration, but it is the middle of the summer. we've been dealing with a weak ism for some time on the manufacturing side. >> a couple of years actually. >> yeah, that's part of the

reason why they do that. so off we go. i see it as, you know, positive really. because it really gives the fed confidence that they're trying to stick this landing between getting inflation down without killing the economy, and to do that, they're going to have to start cutting again. >> steven, great to check in with you. really appreciate it. thanks to steve ott. still to come, this stock was up as much as 17% earlier. it's pairing those gains now, but still up 3%. we have the game and the story and what's behind the move, next. and with the market selloff accelerating, the dow is down 642. the russell 2,000 down 3.5%, but you heard steve ott saying it's an entree point. more of the day's biggest movers on the other side of this break.

welcome back to "the exchange." we can show you here the selloff we're experiencing with the dow

down 658 points today. nearly 3% for the nasdaq. and 3.5% for the russell 2,000. the ten-year again slipping below 4% for the first time since february. semiconductors are getting hard, with the smh having its worst day sense july. nvidia down 7.5%. qualcomm down 10%. and the flip side of that is that gold is hitting a new all-time high today at $2481, on pace for its best week since april. this is one of the few commodities to end the month higher in jouly. often seen as a bit of a worrisome sign for global growth, and we're experiencing the flip side with yields up 20% this year. and lifetime fitness is trying to stay in the grown after being up as much as 15%, and then nearly giving it up, and is now

free cash flow positive. we'll talk to "the exchange" about that tomorrow right here on "the exchange." remember, they had those student loan headwinds they were concerned about, but we'll see what he thinks about that now. coming up, if you bought a house, car, or gotten a new credit card, car, or gotten a n credit card. today's earnings show it's one of the few companies already successfully monetizing ai. the shares are down 2% but up 88%. william lansing joins us with the outlook next. your shipping manager left to “find themself.” leaving you lost. you need to hire. i need indeed. indeed you do. indeed instant match instantly delivers quality candidates matching your job description.

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welcome back to the change. shares are down in line with the market. they did beat on the top line posting a revenue of $447.8 million. they will acquire up to $1 billion worth of shares. let's dive into the results with fico ceo william lansing. welcome, good to have you. >> thank you. good to be here. >> explain how people are being

scored, be ut how do you actual make money? >> we have two businesses, the software and the score business. it's part of the credit system in the united states and we sell the scores to lenders through our partners, the credit bureaus. so that's one way we make money. the other side of it would be the software business, which is not nearly as profitable, but it's a business in which we apply analytics to data to make decisions typically about credit but anything that's consumer-facing. >> which of the segments has the application right now? more of the software piece? >> certainly the software piece. so we've been in the ai business for a long time, going back over 20 years with the threats and credit card fraud detection business. we don't use ai for scores due to legal laws.

it explains transparency and explain to consumers why they do or don't get credit. ai is something of a black box, so it presents some challenges when you're talking about credit and complying with credit laws. so although we use it in synthetic data, there are places where we use it, we don't actually use it in our scores. we have some patents in the area that i think some days will be useful. for example, we apply blockchain to be able to trace -- to log and trace the path that the ai took to make the decisions that it makes. >> the stock is a head scratcher for me. it's really taken off in the last couple of years as i'm sure you know. the market cap is $38 billion. the multiple is really high. yes, you have some ai applications, but what is the moat? is it really around the scores

piece of the business? what do you think? >> i think as between the two businesses, there's more values. they're both great businesses. i think that the stock has taken off over the last decade. it's been a pretty steady progress, 34% over the last 12 years. it's there because of our prospects because looking forward, it's very clear that we're pretty cold with the credit system. we made credit available to a tremendous number of systems. it's the lowest cost, most efficient, most effective way to evaluate the creditworthiness of a large population. for lenders, it's a tremendous tool. that's not changing. i think that will continue for a long period of time. we're working on innovation and bringing it to market to lenders. when we look at it, there are a

lot of things. >> you're all using the algorithms concerning the fico scores. look at buy now/pay later, a novel sort of system that could circumvent around the thing you built. >> we work with the buy now/pay later folks. >> you're there too. >> that's just more data. we're not a data company. we're an analytics company. we look at whatever the consumer beige is as it's reported by creditors, whether it's banks, buy now/pay later, and we then use analytics that gets passed back to lenders. >> if i could only have figured out ahead of time, i think investors were well ahead of me. william, it's a pleasure to check in with you. thanks for your time. >> thanks so much. that's it for the exchange

on a tough market exanchge. tyler is getting ready for "power lunch," and we'll pick things up on the other said of this quick break.

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welcome to "power lunch," everybody. alongside kelly evans, i'm tyler mathisen. stocks are sliding ahead of bigger reports due out after the