♪ welcome, everybody to "power lunch" alongside kelly evans, i'm tyler mathisen. glad you could join us for a tuesday. coming up, a market tug of war. the bulls want a cut to keep the -- so the rally can keep going. the bears want a cut to prevent a recession. same goal, very different views on where we in this cycle. plus, that's the ticket.

kamala harris choosing governor tim walz as her running mate. we'll speak to larry further ahead. but first a check on the markets. oh, a difference a session makes. the dow up about 600 points right now. we have a lot of ground to coffer to make up for the losses we have seen over the past few days. palantir higher. raising full-year guidance. the industrial giant caterpillar also popping on a beat. uber and yum rising after better than expected results as well. some other movers we are watching, kenvu beating on earnings on the negative side. you have your warner brothers discovery lower on reports of the struggling company is looking to pursue smaller asset sales. again, however, with the tug of war taking place in the market. a majority now seem to agree that we need a cut and quickly. the difference is why they think we need it. on the one side, you have those saying the rally is done. the recession is here. and the fed needs to make an

energy cut to prevent a further slide. and on the other side, we hear there is no recession, but the fed needs to cut to keep the rally going and ward off a recession. here to discuss is brian van kron cite, portfolio manager. brian, welcome. it's good to have you with us. i'm struck a little bit. and i don't know how long you've been calling for the fed to reduce interest rates or not. but i'm struck that over the past few months, while there was an undercurrent of people who thought the fed needed to cut and sooner rather than later, it was by no means the wide clamber that we're seeing in the past couple of days. where everybody seems to be saying, oh, the fed is behind the curve. how could they possibly let this happen. i didn't hear that kind of enthusiasm for a rate cut from, let's say, february into june and july. >> i think you're right. i personally been calling for the fed to stay higher for longer than most people have been. i think that's the right move.

inflation has been too high and the fed is doing their job and doing it very, very well. inflation is coming down. employment is becoming more balanced. but we have to slow the economy for that to happen. the fed is productively doing their job. i think calling for emergency rate cut right now would be the same thing as the women's national soccer team pulling their goalie in the first half of a nil-nil game. it might work. it might bring some offense, but it's very risky and we have to call in credibility -- call into the question the credibility of the decision makers here. the fed needs to cut rates methodically and predictably and little in the future but not right now. things are going well. >> they need to do an inter-meeting cut or 50 bases points, half a percentage point when they meet again in mid september. either of those it would seem to me, to your point, might send the wrong signal. ie, that the economy is in worse shape than we're led to believe. that there's something they see that we don't. >> that's exactly right.

a major cut right now either preemptively ahead of next meeting or a big cut at the next meeting would tell the market that the fed is scared. if they're scared, we should definitely be scared. that's the wrong message to send right now. i think we need to show a sign of calm. let them understand, the market understand things are working correctly and investors shouldn't be pushing the fed into decision making because they lost a few percentage of their capital the last three days. things are working well. let the fed do their job patiently and predictably. >> if i'm lucky now have discretionary capital laying around, got cash that i want to put to work, where would you advise people to do it? >> there's a few things you do right now. number one f you did make some money in tech, i think it's a great time to move that money into traditional defensives. not because you need to hide out. the traditional defenses of healthcare and staples look very attractive. in particular, charles river labs they report tonight. they probably have to cut

guidance. but twwhen they do, it's likely last cut. they have done a phenomenal job in insisting through clinical research and gaining market share through acquisitions and organic investments. great place for defense and offense over the next 24 months. >> similar kind of question, bryan. if we look at the labor market and all of a sudden it does weaken considerably in the next month or two, there was something more to this slow down and calls for rate cuts. even if it doesn't weaken, the fed is passively tightening because inflation keeps dropping and inflation expectations too. >> that's right. i think we want labor to continue to loosen up. we want unemployment to move higher so we can make sure we definitely squashed out the inflation issue. now we don't want to move too quickly, but the reality is the fed is balancing this for delicate fashion. so unemployment likely does slowly move higher. the fed will then take that into consideration and we'll see a cut in the future. but, right now, that doesn't

really concern me as an investor. i think there's a lot of companies that can fight through this economic cycle and control their own destiny by using their capital very wisely. >> are you concerned at all about a recession in the u.s.? >> of course. we're paid to concerned. we want to worry about that. but you want to own businesses that will both protect capital and compound capital. we don't want to ever build a portfolio that's requiring the generosity of the fed to make sure all recessions go away forever. investors have been conditioned for 40 years now that we're never going to have economic cycles and business cycles. the second we do, the fed jumps into the rescue. that's not normal. we'll go through cycles. we need to invest through those by being very cautious and careful with the businesses we own. today i think there's plenty of places to put capital work to help you navigate whatever cycle is ahead of us. >> you're supposed to look at mid caps as a strategy that puts you between the argument about whether you should go with big tech or rotate into small caps. so what, in fact, do you think happens to your favorite names

right now? >> right now i think you want to move down cap. whether it's from large and mid or mid into small. i'm comfortable with either one of those. there has been so much capital pushed up cap because of both fear around the fed missing their window and greed around the ai trade. that capital is going to find a home somewhere. layer on top of that the carry trade still unwinding. that will push more capital probably out of large caps. i feel very comfortable moving down cap and moving to value actually. in the very initial phases of the fed's challenge, economic pullback, value may struggle. i like moving down cap to mid and small and value from growth today. >> bryant, thank you very much. we appreciate your time today. >> thank you. and now it's time for today's three-stock lunch. as volatility hits wall street, we asked our trader to pick three names from a cnbc portfolio protection screener, whether he agrees or disagrees with owning the stocks. the criteria has to be s&p 500 member, be low volatility stock with beta less that be 1.

eps growth of 10% or more in the past 3 years and consensus buy rating price target upside of 20% or more. so, chris agreed to this. chief equity strategist at m.i.a. capital investment. great to see you. you disagree. why wouldn't you want to own it here? >> yeah, kelly, good to be with you guys again. so the exercise here is to try to pick some safe stocks that ought to do well even if the market doesn't. i don't think deere fits into that category. it's a good, strong company with a good balance sheet. the beta is not that low, it's .94, so almost 1. deere is susceptible to recessions. just not industrial recessions that we're used to but more farmland recessions. and i fear that we're kind of due for something like that. so if you're looking for a

company that can sail through a recession, i think you should look elsewhere than deere. >> let's look at one you pulled as one you agree with. the animal health company, zoetis. >> yeah, thank you so much. so the zoetis is a terrific competitor. not that many competitors that focus just on animal health. they just reported earnings this morning. it was double digit revenue growth and earnings. this is a company you can imagine doing well during a recession because, you know, folks will stop spending money on travel and other things but they'll continue to spend money especially where the health of their pet is concerned. finally, it's not a cheap stock. but it's growing nicely and it's exceeding expectations. so this is the one i would put into a safety portfolio. >> okay. another one now that you disagree with is lam westin. the upside to average price target on this one is about 20%. it has the eps growth over the past three years of 31%, but is

the tide turning now? everyone is wondering after those poor results. sounds like you're a little bit concerned about that. >> i am, kelly. and this is a tough one because i'm a value guy. and boy, lamb weston screens as very cheap. the problem we have here is we have a lot of research in the french fry industry. this is not ai, it's french fries. it's not terribly controversial. but our research tells us that stuff is really quite difficult at lamb weston right now. they kept prices high during the pandemic, alienated a lot of customers. now that supply is more available the customers have gone elsewhere. so this is a real show me stock. i'm afraid right now it's a value trap. i would stay away. >> how, chris, do you characterize or describe this period of market spasm we seem to be going through over the past three or four weeks. some of it feels kind of seasonal to me.

it feels like an august, like i have seen this movie before. >> yeah. i don't want to be glib, tyler, but we love this stuff because finally folks understand that equitis don't go in just one direction. so it presents opportunities for investors like us to take advantage of the panic. and there have been several times over the last five years where the vicks has spiked. you go back and look at what caused it, you can hardly remember those events. so i think we're in a place like that. i think the economy is pretty decent right now. so i would say, gird your loins and step in after you do your math. >> chris, i'm going to start girding. thanks, man. >> you and me both. vice president kamala harris choosing governor tim walz of minnesota as her running mate. the veeps matter most in this election. how does walz measure up to

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welcome back to "power lunch." vice president kamala harris now the democratic nominee or presumptively so for president choosing minnesota governor tim walz as her running mate. walz is the first kbofr to be a democratic vice president nominee in 100 years, or more than. he is scheduled to appear later today in philadelphia with harris. here to discuss how this impacts the race for the white house is larry, director of the center of politics at the university of virginia. which has done very well in the olympics by the way. i must point that out as an alum. and our washington correspondent megan cassella joins us on set. larry, let me start with you. what do you think put walz over the top? >> well, it could be been process of elimination. you can never eliminate that as a possibility in presidential or vice presidential selection. but i think partly it's because,

as the democrats have been telling us, it's about chemistry between kamala harris and the person she wanted to pick as her running mate and potentially governing mate during the next four years. so that problem explains most of it. >> how about you, megan? do you see it that way? in order it's probably chemistry or maybe a process of elimination that there was a reason not to pick governor shapiro of pennsylvania, maybe a reason not to pick any of the others who were on the short list? >> i think that's right. she was really looking for somebody that she vibed with for lack of a better way of saying it. she was looking for compatibility and definitely found that in walz. he doesn't have negatives in the way that some of these other candidates had. worried about some -- there was an opposition campaign against josh shapiro. old sexual assault allegation about an aide in his office and concerns that he was too moderate or unions weren't a fan of him because of support for private school vouchers and some concern that maybe he was too

supportive of israel in a way that would jeopardize in some people's view the administration, the future administration's handling of conflict over there, the war. so walz didn't have those negatives. there's a question of whether he had as many positives as some of those folks, mainly i'm thinking about he doesn't come from a big state that will bring a big electoral prize. >> not a swing state. not bringing pennsylvania with him the way shapiro might have. which larry, brings me back to that. i kind of thought shapiro would be the choice. he's forceful. he's from a swing state. he's popular in that state. >> well, you're right. i think that's why he was the betting favorite. all the betting sites had him as a heavy favorite, at least the last time i looked. and at one point senator kelly, mark kelly from arizona, was second but also quite high. walz was way behind a number of others. even pete buttigieg was ahead of

walz at a certain point. so it's a surprise. but you know, if you look at vice presidential history, there have been lots of surprises. some of them work out well. some of them don't. we'll have to see. this campaign will tell the tale. >> now we turn our attention to the convention, which is next week, the week after? it's coming up quickly. that was partly what pushed her to make this decision now. then what? we don't know yet if there's going to be the september debates or singular events or whatnot. >> it's all up in the air. of course there could be an october surprise as it's known. the convention two weeks from now in chicago will be sort of the big event. it's going to be more important than usual for the democrats this year because both of these candidates will really be introducing themselves. harris slightly better known on the national stage. walz not hugely known on the national stage. a lot of work to introduce them. they want to carry that for sort of an enthusiasm bump. they have this shortened campaign.

the benefit of it, it's a major benefit for them in a lot of ways. there's no time to lose enthusiasm. no time to get distracted. so they really want to seize on the convention. they're going to seize on those debates whether they happen or not. the fact that they didn't happen perhaps to keep driving interest and enthusiasm and hopefully all the way through november. >> larry, as megan points out the convention will be an opportunity for kamala harris to introduce herself. it will also be an opportunity for her perhaps to lay out policy -- we don't know much about what her policies are and how they might difference from joe biden's policies and maybe she'll start to explain some of that. you and i haven't spoken since biden pulled out. i was on vacation for some of that time. what does harris mean to the democrat's chances in the fall? >> well, she dramatically improved them. they were headed -- and this came from within the democratic party, with access to a lot of

private polling information, with joe biden, whether he wants to admit it or his aides want to admit it, the democrats were headed to a landslide, landslide defeat in the electoral college. harris has restored the democrats. this is a tie. i mean, it could go either way. and you could argue the electoral college makes trump the favorite in a tie situation. i don't know. it's too early to say. but the democrats are in this race, and they were out of this race when biden was still in it. so it's meant a lots. and the other factor, megan referred to this, the amazing thing is people know very, very little about kamala harris. and of course they know even less about tim walz. i've had calls from all over the globe and the question they're all asking in one form or another is, tim, the last time

we had this was jimmy carter. jimmy who? they just never heard of him. know nothing about him. and that can be an advantage. the more you know, contempt creeps in. familiarity breeds contempt. you never know what will come out as jd vance discovered. >> it's very interesting how will kamala harris' policies differ from bidens and how will they differ from the policies kamala harris ran in in 2020 when she was a candidate and quite a -- staked out a progressive position on most issues. folks, we'll talk about this for the next couple months, i think. don't you all? >> i hope. i hope so. >> larry, good to see you. megan, thanks. good to see you on the set. >> thank you for having me. politics to protecting your portfolio, coming up, a brand new way to hedge volatility or profit from it. our newest daily segment, market navigator, is next. 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? 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

welcome back to "power lunch." and this, hi, dom. the first of our new market

navigator segments. we'll be on the hunt for or looked market signals and guide you through advanced trade ideas to look to general rate some opportunistic gains on the side. mr. chu, thank you for joining us for these. >> sure. >> what are we doing today? >> what we're going to look at are the massive amount of moves that we're seeing in the volatility, the fear gauge. right now, indicative of what's happening or what's going to happen in the future? or is something else at work behind the scenes. in other words, just how much should we fear this so-called fear index. that's going to be our key question. >> okay. >> so joining us today is the chief investment officer of equity armor investments. you can see him right other here. brian, thank you for being with us today. if you look at the vix, what stood out to you with regard to the index? what kind of charting did you see? and can you walk us through what exactly was the biggest thing for you during the market

volatility? >> well, when you look at the vix here, it actually has a lot of feel of what happened back in august of 2007, what happened in the fall of 1998, these market moving events where you have few things go wrong for the market. a little of lack of liquidity occur and then all of a sudden you get the third strike, people blame the yen carry trade on. we saw a lot of selling of the mag 7 here the middle of july. those are major weightings in all these indexes and etfs. now you have billions of dollars being sold in areas of the market across the board. that ripple effect really carried over and we saw the huge spike and the vix volatility levels indicative of what happened here and the selling sort of progressed very, very quickly and people basically dealers looking to cover some hedges and just sell into this market. >> in other words, brian, there have been a regime of low volatility and people basically collecting insurance premium for

months and quarters now without any fear of having to ever pay out on the insurance policies that they collected premium for. is it fair to say that the volatility spike that we saw is because all of a sudden the chickens came home to roost and all of a sudden these insurers would actually maybe have to start paying out against the policies they collected so much money for? was it like picking up pennies in front of a steam roller? >> dom, it really was because what basically happened is what we saw is massive amounts of demand for puts to the downside, whether it was people covering all these short positions that they had in the volatility space or whatnot. call buyers dried up. put buyers came into the market and of course the market makers and the dealers now having to sell puts to people trying to cover their insurance basically have to sell into the market to stay neutral to it. so, masses amounts of selling from dealers and then obviously all those people trying to pick up the pennies in front of a

steam roller, getting steam rolled and having to panic and get out of this market really caused a spike in volatility. we see the high demand for puts on the downside like we saw, this only happened a handful of times literally over the last 15 years. this level of demand for put can really shake up the market. i think that's what drove the vix to significantly high levels. >> brian, give us your trade. now we have seen today unwind a good bit of what happened yesterday, a billion dollar idea for the next 24 hours or longer term idea or anything come to mind? >> actually i do. this is something i have been looking at for clients throughout today. when we seen this occur before, i said this happened maybe five times the last 15 years. what happens the next couple days of the market afterward, we get a sense is there going to be a reversal or people covering back to what we had. we did, in fact, see a little bit of that. we saw call buyers come into the market on the s&p 500. and now, all of a sudden we have some upside momentum going.

and so i think you can put together an options trade that i've constructed where i want to buy a call spread and finance it. i want to play to the upside here because when this has happened, we had this level of panic in the market there's opportunities to be had. i can buy the call spread while at the same time minimizing some of that cost by selling the downside put. this is the spider etf on the s&p 500. looking to buy that call spread and sell the 500 strike put against the 538, 558 call spread out to september. i only have to pay $1 for this. this is a billion dollar idea. i pay a dollar. i don't have to own the market until down 500 on the spider etf. that's 5% to the downside. i have a push in here. and i get to participate to the upside from 538 to 558. when we had these wash-outs before, like i talked about, seems like the next three to six months there's a rally. i'm not sure if this is august, 2007, and all of a sudden we're

in trouble six months from now. or if this is 1998 and there's this euphoria and the market will retire. looks like they have to cut 50 bases points now in september. >> very good. that's the strategy if you're not sure and something to do in the meantime. brian, we really appreciate it today. thank you for kicking things off with us. dom, thank you as well. dom chu. >> folks, thank you. coming up, new data shows that america's household debt is climbing by $100 billion. we'll dig into that data and what it could signal about the economy when "power lunch" returns right here.

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♪ welcome back. with a check of the markets now, we see a rebound from yesterday, although not making up all of the declines. kind of a similar story playing out in the bond markets. rick santelli with the latest from chicago. rick? >> what a wild couple of days, right, kelly? if you look at a 3-year intraday, this is important, we had a very solid intraday auction, but what you should notice is that yields moved

higher right through it. they're not slightly reversing and we have reversed everything from yesterday. and if you look at intra-day of 10, you can really see that 1:00 eastern auction, good auction, but basically the day has been all about reversing yesterday. yesterday was about the carry trade and the collateral damage and the flight to safety, well that involved the u.s. and many markets around the globe. if you look at a two-day chart of 10s what should jump out at you is how much work we have done above yesterday's high yields, which reflected the big comeback from significantly low yields. 3.66 was the low yield on a 10 year yesterday and right now we're at around 3.90. the week to date of the dollar yen, this is important, five days we broke that street. now that's the dollar index. so for five days it went down. the yen went up. today the dollar is higher the yen is lower. all the pieces fit. but what should probably be the

story today is that chapter isn't over. the back to of reversing that carry trade, it's going to be a long book with lots of chapters, but yesterday does give us a taste of when everybody around the globes to be in the same trade, you can't let the water out of the tub at once, but we still have a lot of water in the tub, so we need to be careful. tomorrow is a 10-year auction followed by 30s. this is really going to be quite enlightning considering the one-two punch that reflected treasury prices over the last 48 hours. kelly, tyler, back to you. >> thank you, rick. rick santelli. as mentioned, economic data is more in focus than ever before. after the jobs report played a large part of the global selloff we have seen in recent days. now the fed out with new data that could tell us if another recession is coming. household debt climbing $100 billion in q 2, bringing the total well over to 17 trillion nationwide. auto and credit card delinquency

rates hitting a record high. here to discuss the state of household date is co-host of the ramsey show. jade, great to have you here. as we're starting to see delinquency rates tick up a little bit in some of these data sets, what does that tell you? >> thanks for having me. right now americans are just facing financial volatility across the board. the struggle is real, as they say. we've seen -- a lot of us thought by now the fed would have lowered interest rate. we haven't seen that. now we're seeing that play out in the job market. that's really scary. we have the election coming up. we saw monday's dip in the stock market, right? even though inflation has continued to tick down, it's still really, really expensive out there. and so americans have a lot that they're dealing with right now. their dollar is not stretching as far as it once did. >> yeah. and on that note, i guess the question is with inflation coming down and waging still holding in there? could things get better or

should we assume they get more stressed? >> i think you always have to be prepared, either way. ever a time to get your house in financial order, the time is now. we teach you to get to financial peace. i think if americans can hone in on the first three baby steps. baby step one is getting $1,000 saved. most americans could not cover $1,000 emergency without going into some form of debt. so having $1,000 cushion is a game changer. focussing in and paying off the consumer debt, the car loans, the credit card debt. getting that cleared out so that you can go back in, do baby step 3 which is saving up three to six months of expenses. honestly during a time like this, a lot of americans might choose to have six months of expenses laying around. >> how much have rising prices played into the rise in consumer debt? i actually thought american's balance sheet were in pretty good shape. but how much has the cost of living increased over the past

three years played into the idea that americans -- many of them need to borrow just to make ends meet. >> absolutely. at the end of the day, our money is our money, right? we see it play out in realtime when we go to the grocery store, when we go to the gas station. we feel the pinch. and so, budgeting is a core principle into all of this. if we can look at our dollars and cents and say, okay, here is what i can spend. here is what i cannot spend. and really accepting the fact -- my colleague says all the time, we have to choose reality. so there's a reality here where we have to accept. it might feel very uncomfortable for a while, but the slogan that i want all americans to kind of take to heart right now is when it comes to debt, just say no. debt is the problem. debt is what is making us feel this stress and this anxiety in our finances. we have to choose to draw a line in the sand. you can't solve a problem while simultaneously creating it. so getting on a budget is going to be that solution. >> let's say i want to invest in

my home. and i live in an area where home prices are going up. and i want to do an addition to my home, but i don't have $200,000 lying around, so i think, well, let me take out a home equity line of credit. is that a wise move, or do you recommend against taking out home equity loans and lines? >> i always advise against it. and in this case you're borrowing against yourself. and you're putting your biggest asset on the line and at risk which is your home. the whole purpose of a home is to build equity. we pull out of that in the form of a loan, in many ways we're robbing ourselves and putting that asset at risk. in times like these when things are volatile, we don't know what will happen from day to day. the last thing we want is more debt and more risk in our life. save up, pay cash, make reasonable choices. when you pay cash, you think things through a little clearer. >> jade, thank you for joining us today. >> thank you for having me.

let's go to kate rooney for a cnbc news update. palestinian militant group hamas announced it has chosen the presumed master mind of the october 7th attacks on israel as its new leader. yahya sinwar hasn't been seen in public since the attacks that sparked the attacks. meanwhile, more than 8% of americans or about 27 million people did not have health insurance in the first quarter of the year, that's according to the cdc today. which says it represents an increase of 3.4 million over the same time last year and breaks a streak of record low uninsured streaks following the pandemic. vladimir putin is now looking to export russian values around the world today. putin called for the development of a program abroad to spread, quote, traditional russian spiritual and moral values. unclear from putin's order as to what values would be promoted. putin has called the west satanic and accused it of

undermining russia by exporting liberal idealogies. tyler, back over to you. >> i wonder if murdering political opponents would be part of those moral values he would wish to foment. >> sorry for the editorializing. pretty rich. kate rooney, thanks. shares of sun power plummeting after the solar installer filed for chapter 11 bankruptcy protection and announced plans to sell off its assets. we're going to dig deeper into that and the rest of the energy market when "power lunch" returns.

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you're eligible, help you enroll over the phone. it's that easy! call today and we'll also send this free guide. humana. a more human way to healthcare. ♪ welcome back, everybody. sun power plummeting on its bankruptcy announcement. you might expect that. pippa stevens is here with more on the energy. >> last night they officially filed for bankruptcy. and it's not all that much of a surprise given the number of challenges they faced recently. they had a new ceo. their accountant left saying they didn't want to be associated with their financials. and then finally a couple of weeks ago they said they were pausing all new installations. you look at a one-month chart of

the stock, you can really see the big drop off. there you go. is when they said we were pausing instillations. and you know, it's still, though, very jarring for this industry because they had been founded. they were founded in 1985. they were a pioneer for a very long time. but the issues started to happen -- first in 2020 they spun out their manufacturing to maxion and really focussed on what at that point was a very rapidly growing consumer, residential solar market. they had a very big footprint in california and also focussed on a lone model. then demand started to dry up, particularly in california, after the state rolled back some of its incentives. rates went higher, leases became the more popular model. they have really, really struggled here. now the next question, of course; is this going to happen to other companies like sun run and sonova. joseph one of the analysts said that this is really company specific versus industry specific. of course they're all getting hit by higher rates. but sun power because of their

loan and exposure to california really had its own set of problems and challenges. two other stocks to point out here, marathon petroleum the top performer in the energy sector up 7%. hotter than expected earnings. eps of 4.12, finally constellation energy are one of those ipps seeing a massive up boost from all the data center ai load growth. >> just tells you old energy remains better return on capital for the most part than solar. this was years ago going into the pandemic who said half of the company ever created in the space have gone bankrupt. i don't know if the economics are so daunting because the way the panels are manufactured. all the help the industry has gotten to go through covid. >> it's a reason why it's called the solar coaster. hey, we have seen this before. the industry is still better

positioned than when it was with the first wave of bankruptcies about a decade ago. the point is it's ultra, ultra competitive. the margins are really thin. in the united states you have really, really soft costs. customer acquisition. people are still knocking on doors as a way to acquire customers. until those costs come down, it remains a very challenged industry. >> pippa, thank you very much. pippa stevens. shares of caterpillar on pace with the biggest gain since january. after reporting earnings and beating them for the sixth-straight quarter, but not all of its results were rosy. we'll get insights into this industrial when we return. don't go anywhere. do you have a life insurance policy you no longer need? now you can sell your policy - even a term policy - for an immediate

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when you automate sales tax with avalara, you don't have to worry about things like changing tax rates or filing returns. avalarahhh ahhh ♪ welcome back to "power lunch." shares of caterpillar are up 3% today on pace for its biggest gains since january. the move comes after the industrial giant beat earnings per share expectations for the sixth straight quarter posting a

15% year over year boost in sales. still, the brand reported a 7% decline in construction equipment sales and i 10% decrease in mining equipment from the prior year. let's dive in further here with stephen volkmann, machinery and industrials analyst at jefferies. so, stephen, how do they do it if those key portion parts of their business, construction and mining were down? >> right. tyler, we knew those would be down and that's part of the equation here, but really what worked well was more the energy and transportation business. as you guys know they have a power gen business. i heard you talking about some of the old economy power gen and that is, indeed, what's helping caterpillar. a lot of this is for data centers and other types of power gen, as well those were the offsets and they did a better job with margin even though the

end marks are choppy. >> so internal cost control is what you're talking about there. >> right. >> cost of manufacturing and were able to bring that down. >> so what does the future look like for this industrial giant? >> yeah, so i think the future is fairly bright here. at the end of the day we're going through a bit of a soft patch across industrials, but really caterpillar is telling us and everybody else is agreeing through earnings season that nothing is falling off a cliff. nothing is getting meaningfully worse. we are sort of managing our way through this. as we come out and as we get fed rate cuts and as we get this mega project revenues kicking in as we get to '25 and beyond i think you will see more activity in mining, and i think you will see for cat and i think things will look fairly good once we get out of the soft patch. >> it's reassuring, stephen, because for years we looked at this as a bellwether of the

global economy. china in particular. what are we learning? >> yeah. so there's nothing really here at the margin that's much different. so china is fairly weak for them. by the way, that's become a pretty small piece of the pie for cat in recent years. certainly well less than 5% sales even though we looked at it as a china play, right? >> nothing at the margin, nothing is really changing dramatically. so it's not telling us a lot about the economy, but i think the most important thing it's telling us that we are not in sort of this big downtrend, that we're not sort of approaching a cliff event, a big recession in the industrial space, and i think some investors may worry about that and cat's telling us that's not the case. >> how much is cat picking up from the infrastructure spending that the biden administration was able to get through congress? >> that's helping at the margin, but it's in the early days, tyler, because it takes a long time for these projects to get

funded and for the funds to start flowing. there has to be design and environmental improvement and you have to hire people, so this will be a multi-year kind of process. it's starting now, tip of the spear kind of thing, but i don't think -- well, let me say it the other way. i think you will see a lot more as we get into '25 and '26. >> and still, it's at the margin kind of influencer. >> yeah. i think once we get further into this. call it '26 and beyond it could be a little more than at the margin, but it's a slow ramp. >> very interesting. >> thanks so much, stephen. appreciate it. >> thanks. >> you got it. >> remember, you can always catch us on our podcast. if you don't get a chance to watch, be sure to stlien and follow "power lunch" on any platform you follow. we'll be right back. power e*trade's award-winning trading app makes trading easier. with its customizable options chain,

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♪ ♪ welcome back. that graphic tells you we're in a nice market rally, but it does not do much, about 50% of it. the dow was up briefly more than 700 points and pretty broad-based, tyler, as well. >> that rebound has gone around the world and japan back sharply from the loss yesterday. we only have two minutes left in the broadcast. we have several more stories we'd like to tell you about, so let's get right to it leading with uber, surging on total revenue. it increased 16% from last year including a 23% jump in gross bookings for its mobility unit. uber shares have now turned positive for the year. this was a company that for many years, kelly, was profit challenged, but has turned that corner very nicely. >> right. that's a big move today although people complain about it being too expensive. so how long that can last? they had to charge to cover costs. >> and can they retain

ridership. >> the flip side is yum brands on q2 results including kfc blaming the middle east and headwinds from a more cost conscious consumer and taco bell same-store sales those climbed 5% and yum is expanding lanes across hundreds of locations. >> that sounds good for taco bell. >> let's talk about mortgage analytics, ash compiling the most expensive u.s. cities and the salary that you need to buy in that market. the number one most expensive city is san jose, california. the necessary income of $463,000 to buy a median priced home. the median priced home $1.84 million and the average income needed is 104, 339, well above the income of $74,500. many of these most expensive cities were, as you might

expect, in california, san diego, l.a. and a couple of others in the bay area. san francisco. >> and in other markets, too. we are talking about the, affordability costs and the associated things and this is the biggest affordability challenge for sure. >> it's been a busy day. thanks for watching "power lunch." >> see you tomorrow. "closing bell" starts right now. >> kelly, thanks so much. welcome to "closing bell." i'm scott wapner post 9 at the new york stock exchange. this make or break hour with the bounceback. the extraordinary events of the next couple of day and whether the worst is behind us. we'll ask the experts over this final stretch. in the meantime, let's show you the scorecard with 60 minutes to go in regulation and lots of green on the board and you have the nasdaq bouncing back by 2%. s&p by about the same amount, 1.5% to the upside and getting a good chunk of yesterday's losses and yields are rebounding following that volatile session on monday and maybe that's