daughter: alright. dad: side to side. when you work with someone who knows a lot and cares even more... you can do this. ...you're unstoppable. (♪♪) wow... are you kidding me? you can do this. at truist, we believe the same is true for banking. welcome to "power lunch." alongside seema modi, i'm jon fortt. stocks are starting higher across the board after the best week of the year. they're continuing the comeback from the big losses a couple weeks ago, and for the dow and s&p 500 both indices are a little more than 1% away from their record highs. >> incredible comeback, leading the dow right now at this hour is mcdonald's following a bullish note from evercore.

more on that, and health care names standing out, united health care contributing to the gains. only a handful of dow stocks are lower, but they include amazon, microsoft, and apple. we'll get into the bearish note on apple weighing on the stock now. >> we begin not with a bearish note but chips and shares of amd up more than 3% on news it is acquiring privately held server maker zt systems for $4.9 billion. and he plans to pay 75% of that in cash, remaining 25% in stock. zt systems designs and builds ai servers and could help amd test and roll out its latest ai chips more quickly for large cloud customers. my next guest is skeptical this deal is going to boost amd's chip sales in the near term. doesn't expect to see benefits until 2026. joining us for more, vivek aria, at b of a securities.

there's already experience amd has working with zt, and being able to design these systems for ai and more quickly roll them out seems to make a lot of sense. why don't you think that within a quarter or two this might start to have impact? >> thank you for having me, jon. you're right. they have been working together, but if you take a step back, success in ai, it requires success in silicon, systems, in software, developers, in networking, and that is something that nvidia has been doing for over a decade. and that is, i think, the competition that amd has to face. then the more practical aspect of it is that by the time they close the deal, that is the middle of 2025, and by the time you start to see any incremental sales start to come from this deal, it's towards the end of '25 into early 2026. so we like amd. there are many reasons to like amd. there's a chance for them to gain share from intel in the cpu

market. they're also participating in the ai market which we think could grow 30% to 50% a year. on this specific deal, we think it will take time. >> is that necessarily a bad thing? in that if you already like amd and think they have decent tailwinds, this is perhaps another one to come in a few quarters down the line, as an investor, should you look atthosis comments from you skeptically and say, well, this is a longer way out benefit, or is it more bullish saying okay, here's another boost potentially a few quarters down the line? >> sure, no, i do think that it is a positive, back to the point of when does it start to matter to numbers in a tangible way. if you take the ai market as a whole, today nvidia is about 70%, 75% of it. if you take all the custom chips from broadcom and marvell, that's another 20%.

amd is fighting for the number three position in the market. that's the remaining 10% of the market and they're about half of it. what i think this deal enables them do is maintain that market share, possibly expand it over time, but then you look at the two extremes of the ai accelerator market. nvidia on one side with all the softwares and developers proven out, and then the custom chips on the other side that have the lowest cost structure and the most customization, it essentially leaves amd narrow, about 10% of the market, to go after. so this we think is a necessary part of them maintaining that position in the market, but is it sufficient to have them go against the two other extremes of the market which is nvidia and the custom chips on the other side, that's i'm not sure of. >> the thousand engineers amd gets, does that underscore the difficult in procuring specialized talent in not only designing chips but also the

infrastructure build-out of data centers and do you think that other chip makers could use a similar approach in sort of growing inorganically to get access to good talent? >> you're right. building out these complex systems is very different than traditional sort of infrastructure which used to be a single, right, cpu based system. now we're seeing these cluster scaled from 20 to 30,000 accelerators to over 100,000 accelerators by the end of the year, to the prospect for a million plus accelerators down the line. so building and optimizing the systems is extremely complex. it's extremely expensive. so the customers can use every help that they can get. it's a case of amd and zt have been working together for some time. but by the time it gets into a place where just zt by itself is helping amd sell gpus in excess

of what they had been selling, that takes more time. you're right when it comes to the broader semi-conductor industry, for the industry, you're starting to see this vertical integration that these companies are not just selling silicone. they're monetizing a lot of software. that's the natural step in terms of the industry extracting a lot more value from the buildout of the ai systems. >> do you think this deal helps inform or influence what jen-hsun huang says on the call on the 28th or not really? >> i don't think this matters to nvidia in the short term. when we look at the next three to four quarters at least, the market is still very supply constrains. there's a lot of supply constrains when it comes to back end packaging, when it comes to the availability of advanced high band width memory. for the next several quarters, demand is very strong. so customers are willing to buy whatever products they can get their hands on.

today, a lot of that product is copper. we think that blackwell perhaps has been shifted out by a quarter or so, but just the demand for nvidia's hardware product is so strong. in the near term, we think numbers can stay strong. when it comes to the deal, i don't think it matters to nvidia for the next several quarters. >> nvidia stock up 3%. vivek, thank you. >> thank you. a quick programming note, i will be speaking with amd ceo lisa su. don't miss our interview on overtime, line 4:00 p.m. eastern. >> i'm so excited. any clues on what you're going to ask first or what we're going to learn from the interview? >> you know, i think there's a lot in ecosystems. jen-hsun huang has been talking about software, and a lot about building whole data centers. this seems to potentially build out amd's capability and data center design. i also want to hear about why she's spinning off the manufacturing piece of this and

how much she might think that is worth. >> might even fund some of this transitaction transaction. apple is the worst stock in the dow today. a price target below where it's currently trading, saying the ai good news is already priced in. steve kovac here to make sense of this. clearly, apple has done well since that august 5th low, but stock not doing well today. >> that's probably because of this. but look, it is a more bearish note here initiated coverage. the thesis, it still agrees largely with what the rest of the street is saying, apple's artificial intelligence products are going to drive iphone upgrades but the rating is neutral and that's largely baked into the stock price right now. the stock price implying 6% lower from friday's close. some of the risks they lay out are regulatory. the google payments that are at risk right now because of the doj's antitrust case. that could be up to $19 billion a year that apple makes from google. and that's part of the services business, of course.

not to mention in europe, with the digital markets act, that is another threat to services. by the way, rival epic games just launched its first app store in the eu last week. and then here in the united states, the doj has its own antitrust case against apple targeting the app store, messaging, and many more, big part of the services business there. still, plenty of optimism on ai in this report. here's analyst craig moffett, the author of the report, explaining why on money movers. >> don't change the fact that we are relatively bullish about the ai strategy, but that there are a lot of issues that make it difficult to see how the stock meaningfully outperforms not just the broader market but in particular its core -- the rest of the magnificent seven to which it is so often compared. >> i gave you some of the issues but here is what is already baked in. you need an iphone 15 pro or better to use apple

intelligence. presumably, the iphone 16 as well, coming in a few weeks. and by the way, apple is spending far less capital expenditures as a percentage of revenue, just 2.5% compared to more than 20% for meta and microsoft. also, moffettnathanson did its own survey saying 51% want to use apple siri far better than the preferences for competing assistance from the likes of google and open ai, but it's going to be many month before we have the real answer whether this new artificial intelligence product is going to drive significant upgrades. >> here is, i think, the potential fatal flaw in this neutral rating. apple actually has product coming out at the end of the year. if we see something like a super cycle, if there are lines around the block, if this software works, you know, with the new ai as well as or better than people expect, that's going to potentially ignite some analyst fears. >> one other thing i would be on the lookout for. in three or four weeks we'll

learn what the new iphone is. does that new iphone have a unique ai feature beyond what we saw announced in june? we have seen apple do this before, even if it is sort of a software feature, they say siri, the launch of siri was only on the iphone 4, although it could have probably technically run on earlier ones. will there be a unique feature that will drive up grades. >> anything else before september 10th, the launch date. >> probably a new watch. this is usually the event where they have the stuff you carry around with you every day. the watch, the airpods, and the phone. the phone is the star. ipad is done. we got through that already this year. now, the democratic national convention is kicking off in chicago. the election now less than 80 days away. should voters expect more clarity on vice president harris' policy plans especially when it comes to the economy? we'll get you that answer when "power lunch" returns.

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welcome back to "power lunch." democrats kicking off their four-day convention in chicago today. that they hope will boost vice president kamala harris' chances for the white house in november. this event comes less than a month since she rose to the top of its ticket, replacing president joe biden. he is scheduled to deliver the keynote address tonight, passing on the torch to harris. other top democrats like former president barack obama, bill clinton, are expected to speak throughout the week. joining us for what to watch is ed mills, washington policy analyst. it's nice to see you. >> great to be here. >> what do you envision harris' message to be on the economy,

what will she lead with? and will she find opportunities to break from president biden on certain policies? >> yes, it's really been interesting because since the start of her ascension to the top of the ticket, we have not gotten a lot of detail. we got some detail last friday, with her economic plan. i think generally speaking, the expectation is she's going to embrace most of what has been the biden/harris administration. but we're going to get some tweaks. we'll get some breaks. we'll get that on thursday when she addresses this crowd. but we haven't had a sit-down interview. we haven't really gotten a chance, and i think when i talk to investors here, they want to know what her policies will be, and most of what i'm able to say is look at what has been the policies of the biden administration, because most of that will continue. that's not across the board here. >> i think one policy or at least the mention of it that has been getting some attention is price gouges. taking aim at groceries and grocers, excuse me. what that could actually look

like. is the government actually price fixing, implementing price controls? how do you think she navigates that topic? >> i view this as taking the mantle of biden's shrinkflation campaign and talking about additional powers. i also kind of look at this from the perspective of in politics when you're explaining you're losing, so democrats do know that under the biden/harris administration, there's bib a lot of inflation. she doesn't necessarily want to be on the defense in terms of explaining what the administration has done that could have contributed to inflation. she wants to be able to pivot and say look, this is how i would deal with this slightly differently. i think a lot of this is about empowering the ftc, which is led by lena khan, who has been extremely aggressive, to not price fix, but look at where there might be some gouging, looking at the middle man. we have seen this over the last several years. kind of that making the middle man, the bogeyman, moving forward. but from a market perspective, what i look at is are there some

mi middlemen with outsized profits or certain deals if they were to come together, could give them even more market power, so last week, we had mars calanova. our other deals out there maybe pausing, not going to sign that deal or are those deals that have been announced going to have additional scrutiny. from a market perspective, that's how i look at those economic plans. >> ed, check me here in my impression. my impression here is that it's not necessarily the economic policies of the biden/harris administration across the board that are unpopular. it's biden that's been kind of unpopular. and inflation, of course, is unpopular. to what degree do you expect vice president harris to present herself as a change candidate even as we're seeing, you know, the golden oldies of biden, both clintons, and obama up kind of gearing the crowd up for her?

>> i think it's important. what you highlight is that every election is a choice. it's compared to what. i think that's something that was a drag on the ticket was the fact that when we look at the right track wrong track numbers by voters, they mostly say about 65% to 70% americans say the country is on the wrong track. when you're the incumbent president, it's very difficult to win re-election, changing out the candidates changes that a little bit. what harris has really going for her is the comparison that voters are asked to make is do you want a harris presidency or a trump presidency? and donald trump, when we look at favorable/unfavorable ratings. he's underwater and what has happened over the last month is harris started out as vice president underwater in the favorable versus unfavorable and she now has a net favorable rating. when you have a favorable view of a candidate, you're more likely to vote for him or her, so that favorable rating i think

is really what we're watching here at raymond james in terms of seeing who has the edge. >> let me try to widen the aperture here. we have been talking a lot about domestic policy when it comes to the economics. what about globalism and potential tariffs, particularly china. have we heard from the vice president and what more do you think we need to hear? >> we haven't heard all that much. that's kind of what i started out with. i do expect that the u.s./china relationship to be front and center, regardless of who is in the white house. how that gets dealt with is going to be very different. former president trump has argued that he would like to have a 60% tariff on certain goods that are coming or all goods coming from china, and 10% tariffs elsewhere. i get a lot of questions on whether or not that would be a second wave of inflation. is that going to be something that impacts the consumer? there's not an expectation that there would be tariffs on goods if harris and walz are elected. but we have also had a lot of

conversations here about the tech exports that have been restricted by the biden administration that absolutely would continue. the true one bipartisan issue here in washington, d.c. is getting tough on china. that does not change. but from a geopolitical perspective, something that really was a drag on biden, and it could still be a drag on harris, is the kind of geopolitical issues that have risen during his term. that has fed into that wrong track, so if it was someone other than trump, i do think that there would be an even higher poll number for the challenger because inflation, the border, and geopolitical issues are issues that are favoring the party that's not in control. and something that harris is going to ultimately have to answer for, how she would deal with this differently if she were to be elected. >> both tough on china but how they deal with it is the question. what about on the breakup of big tech? there's been some question marks

swirling around google. >> i think as it relates to google, this is something that is a long time that's going to take before this gets resolved. there are going to be appeals. if you're the justice department, of course you're going to go for the most aggressive remedies. you have been looking for a win. they finally got a win. they're going to be aggressive. what i'm watching for is lena khan, the current chair of the ftc, her term expires this fall. does she get reappointed. does a president harris try to keep her on? i think that's an open question, especially the fact she was the former senator from california, much closer to the tech industry than joe biden has been. obviously, if donald trump is elected, there would be a new chair of the ftc, but what i warn investors at raymond james is just because you could see a changeoverbetween biden to trump, the populism that's pushing for some of the aggressive actions against big tech doesn't go away.

in many ways, a lot of the concerns about big tech were highlighted for four years under his presidency, so kind of this larger antitrust populism that exists is one of those other issues that stay. but how it gets litigated is going to be obviously very different. >> good stuff. jd vance has been vocal about his interest in breaking up big tech. interesting to see. it will be interesting to see how this plays out. ed, thank you. coming up, another check on the chips. our trader has a potential options play on a well known semi-conductor stock. market navigator is up after the break. you didn't start a business just to keep the lights on. lucky for you, shopify built the just one-tapping, ridiculously fast-acting, sky-high sales stacking champion of checkouts. businesses that want to win, win with shopify.

welcome back to "power lunch." let's get a quick check on the markets. both the s&p 500 and the nasdaq are trying for eight-day winning streaks and near intraday highs. the dow has come off the highs a bit. domchu is here. >> let's talk about one of the places driving the big trade recovery wise. it's technology. it's been leading that rebound, but one trader thinks that stocks within that sector are some of them at least, getting

an undeserved ride higher with the rest of the overall group. tony zhang joins us from options play. he joins us now. you're looking to capitalize on what you see is overvaluation in one stock in particular, and i'm very curious because this stock is considered by some people to be a leading indicator for the chip space and that's applied materials. tell us why. >> yeah, it really comes down to both the technicals and the fundamentals. you have a pretty important on a technical level, 213, 215 on implied materials that's been an important support and resistance level. we have basically tested, broke below that level here on the sell-off a couple weeks ago. ore coming right back up to that level now, testing that as resistance. momentum so far has been starting to slow down, as you said, eight straight days of a streak. this really leads me to believe at least in the short run we have some concerns around the momentum and whether this can continue and break out higher above that level.

i think based on kind of the underperformance that we're starting to see of this particular stock, applied materials, to the market, there's concerns this is going to get rejected at that important resistance level and now start to trade lower from here. >> then how exactly, jon, the question becomes how do you play it? how do you take the view with the risk mitigated type facility. >> yeah, this is really where you want to utilize options. you can take a neutral to bearish view using a strategy called selling a call spread. what we're doing is going out to the september 27th weekly expiration, and we're selling the 205, 225 call spret. earlier today, you can collect about $7.25 for that call spread. applied material is up a couple bucks since we structured this earlier today. you can move it up to the 210, 230. and you can collect roughly, again, $7.25 if you adjust that based on the current price. right now, we're still trading

below that important 215 level, and the valuations i think here is concerning for me as well, the fact we're trading at roughly the same valuation of the rest of the industry but applied materials is expected to grow at a slower than industry average growth. so from that perspective, i do think the valuations start to look a little overvalued. >> tony with the call spread there. collecting premium on applied materials. thank you very much. >> thanks. >> so jon, this is interesting only for me i mentioned the idea it's a leading indicator. applied materials, asml, kla, they make the stuff that makes computer chips. a lot of people use them as this tea leaf for what the future holds for the rest of the chip industry. >> it's hard these days because that's chip equipment. there's longer lead time involved. you know, if you want the advanced, you have to have the asml equipment.

right now, the hyperscalers and the demand is so much of the issue, and that doesn't necessarily have to do with the equipment. questions about to what degree that is -- >> exactly. interesting play either way. coming up, crude reality. oil prices down 7% in the past week. we'll find out why when "power lunch" returns. ameritrade is now part of schwab. bringing you an elevated experience, tailor-made for trader minds. ♪♪ go deeper with thinkorswim: our award-wining trading platforms ♪♪ unlock support from the schwab trade desk— our team of passionate traders who live and breathe trading. ♪♪ and sharpen your skills with an immersive online education crafted just for traders. ♪♪ all so you can trade brilliantly. ♪♪

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the nasdaq up 153 points. markets are pricing in a rate cut at the fed's next meeting and the question is, 25 or is it going to be 50 basis point? the bond market seems to be hanging on every word from chair powell who is set to speak at jackson hole. rick santelli joining us from chicago with more. rick. >> yeah, i think that the fed and the fed officials are hanging on to every data point to see if they have a green light to ease. and to that end, today we had leading economic indicators, lei, and for the 29th consecutive month, we didn't have a positive number. we had zero in february this year. last positive number up .3 was

all the way up in february of '22. if we look at the two-day of two year, look at how the left side and right side are about right. we have been basically treading water today in short maturities, virtually unchanged. further down the curve you go, you see a little bit more buying, more of a drift to lower yield. and if we look at the spread, the difference between our ten-year and german ten-year, the european boon, we see it's getting ever closer together. right now, it's about one year since we have seen them as close as they are. they're hovering about 160 basis points apart. finally, hyg, high yield junk bonds. it's trading an etf at over two-year highs. what's going on? well, it's about easing when the fed eases, some of those companies that couldn't get really great credit ratings, they had to pay up to borrow, their future looks a bit brighter when rates are moving lower.

jon fortt, back to you. >> rick santelli, thank you. while those yields might be up, oil is down another 2%. 7% in just the past week. pippa stevens is with us now on more on the big move that we're seeing in oil. supply and demand, both? >> it's both. so oil is starting the week in the red, coming off a fifth negative week in the past six. it really comes down to the fact we're seeing headwinds on the supply and demand side, and you add in the macro uncertainty including what happens later this week in jackson hole and there's not a lot to like in the oil market right now. a lot of participants are on the sidelines. one headwind has been china. we have a chart showing just where their demand is. you see there on the orange line, it's both below last year's imports. this is crude oil imports into china, as well as below the five-year average. according to rbc, imports are down 320,000 barrels a day so far this year, and in july, numbers were the weakest since september. so that has been a big headwind

because for so long, all the bulls were saying once chinese demand recovers, then the market will look better. nat gas, we have a chart, up more than 4% today, catching a bid above that $2 level as some of the producers have scaled back. up 5.5% is leading energy stocks higher. >> just checking the ixe, energy etf. it's down today, and down about 4% this month. i guess that has to do with oil underperforming as well? >> we saw a lot of enthusiasm for these stocks earlier in the year. they reached a record high in april. since then, it's been kind of going nowhere. i think traders and investors see better gains elsewhere, and a lot of the factors into oil and that narrative are well known, and until we see a positive catalyst such as a turnaround in chinese demand, until we know what opec is going to do later this year, people are on the sidelines because they don't want to take the commodity price risk. >> let's talk about markets, which are higher across the

board. the s&p and nasdaq trying for an eight-day winning streak. and there's a lot for investors to digest this week with fed minutes on wednesday, jackson hole kicking off on thursday. brian jacobson is chief economist at annex wealth management. nice to see you today on "power lunch." you know, jerome powell doesn't have the best history at jackson hole. he's injected volatility into markets in past performances or speeches i should say at jackson hole. what are you expecting this time around? >> yeah, i think it could be something very similar this time. it seems like there's very high expectations that he's going to lay out that they are planning on cutting rates, maybe he's going to talk about the cumulative progress they have made and the battle against inflation, recognizing that the labor market has come back into better balance because the unemployment rate has risen, job openings have declined relative to the number of people unemployed. beyond that, i'm not sure he's going to deliver on what the

market is hoping for, which is a clear signal that they're planning on moving very quickly or by a large amount. because here at annex, on our investment committee, we think they'll deliver a 25 basis point cut on september 18th and maybe it's 25 basis points every meeting. pretty consistently. and honestly, that might not be enough to really placate the markets. >> markets have done exceptionally well over the last two weeks. s&p 500 is up 9% since that august 5th low. if he does hint at a 25 basis point rate cut later this week, will that be enough for markets to continue, stocks to continue to move higher? >> in the short term, perhaps not. i think that actually if he delivers on that messaging of 25 basis points, there's enough people hoping for maybe a bigger statement about 50 basis points that they could be a little disappointed and so prices are always set on the margin by the marginal buyers and sellers. if they're really disappointed in that move, we could see a

little bit of a pullback. one thing i'm more concerned about is when we do get that actual cut, is whether or not it proves to actually be not the giant panacea that everybody is hoping for. yes, every little rate cut helps. people who have debt, but if you think about 25 basis points, is that enough to move the needle on a person's decision in order to refinance a mortgage, get out of a 3%, 30-year fixed rate they have to buy a new home. businesses to invest, so perhaps the rate cut itself isn't necessarily going to deliver the economic stimulus that a lot of people are hoping for. >> i wonder, does powell really have to do that much? because a couple weeks ago, the market was down on fed discipline. after that -- well, before the jobs report and especially after, but then it was up on the data. people were saying, oh, emergency meeting. the fed has to do something. maybe the fed doesn't have to do as much as some people thought.

does he now have to signal that the fed is welling to do as much as people falsely hoped he would do when they thought the sky was falling? >> maybe he's actually going to push back on that idea that the fed needs to do an outsized or supersized move with the fed cuts. mainly because in the past when they have had to do those emergency meetings or something bigger, it's because financial conditions had been seizing up. and actually, even though prices were down, still markets were fairly orderly. it's not as though we were seeing credit spreads blowing out or there were a lot of failed trade, especially in repo markets and things like that. there's really no justification for some sort of emergency move by the fed. especially since the data wasn't really all that weak. it was slightly weaker than expected but not like all of a sudden we saw a hundred basis point increase or something that would be really shocking. it was, i think, really in line with what the fed was expecting. maybe a little worse than anticipated but nothing that

merited some sort of big move by the fed. >> so perhaps the consumer and the credit picture for the consumer matters more in the setup to q4, but does fed language around any of that particularly matter? >> the fed language always matters, especially all those different adjectives they use about the outlook and what they're looking for in terms of guide posts to help calibrate policy. but really it is about the consumer. if you think about rate cuts, right now, if you actually get a rate cut, the first effect is to actually reduce the income of people who are collecting a decent amount on money market funds and short duration instruments like that. and it's not really to stimulate the activity of those people who are paying high rates on their mortgages, credit card debts and such. that's why there's sometimes this j-curve effect when you get cuts, which is that it's actually a bit of a growth dampener before it results in an

acceleration of growth. maybe that's what we'll see in the fourth quarter, when we don't see a big acceleration of growth, people get disappointed, skeptical about whether or not the rate cuts will have the desired effect. >> brian jacobson, thank you. >> we have intraday highs in the past couple minutes for the s&p and nasdaq. the dow is being weighed down by boeing. let's get over to kate rooney for a cnbc news update. kate. >> hey, there. secretary of state antony blinken says israel accepted a u.s.-backed proposal that would exchange a cease-fire in gaza for the release of hostages held by hamas. he's urging hamas to accept the framework, however, the group has already expressed concerns about the deal, saying it would not agree to any proposal that doesn't include a permanent cease-fire. >> prosecutors say harvey weinstein will remain locked up in new york as he awaits a retrial there on rape and sexual assault charges. the former movie mogul made a brief court appearance today

related to california's request to extradite him to the state to serve a sentence for a separate rape conviction there. the retrial comes after new york's highest court tossed his conviction this spring. it's tentatively scheduled for november. >> and russia says ukraine hit a third bridge as troops press forward with an incursion in kursk region. meanwhile, ukrainian president volodymyr zelenskyy says so far, forces have gained control of more than 460 square miles and 92 settlements. back over to you. >> thank you. coming up, evercore is loving it. the firm upping its price target on mcdonald's shares. saying it's bullish on the chain's new business in 2025. we'll dig into that when "power lunch" returns.

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to ensure fresh investment ideas keep flowing, and to analyze the market from every angle. at allspring, we deliver the unexpected, by relentlessly exploring where others don't. allspring, follow the insight. welcome back to "power lunch." shares of mcdonald's up, let's see, 3.5% leading the dow today. kate rogers joins us with more on what's driving mcdonald's higher. >> hey, there. at the heart of evercore isi's

note today, it was a turnaround on value. that is likely what's driving the stock move here. analysts writing the company appears poised to recover in the back half of 2024 and 2025 writing, quote, last week's sales success with commemorative cups has not only bolstered free q sales but it also evidences that the brand is strong and becoming less incumbered by a poor value perception. we believe the company will be more effective in a multifaceted approach to value and stepping up the pace of menu introductions. and also notes customers have noticed price increases which are as high as 40% in the last four years, more than any other fast food or fast casual brand. it's working on a national value platform which could alleviate the problem. particularly amongst lower income consumers, the stock the down around 3% year to date, but

up 8.5% this month. >> does wall street and analysts who track this stock think mcdonald's can continue to raise prices given the environment where starbucks is talking about slowing foot traffic and generally speaking more consumers trading down? >> it's important to remember, too, the franchisees which operate more than 90% of operations will be the ones to set the prices. what's key with the national value offer they have had for more than a month is the franchisees voted to expand it in 90% of the stores. mcdonald's is on a pause right now in terms of price hikes. but now they're looking for ways to bring the prices down and bring customers back in. they talked about chicken, about extending the value platform even further, and on the call, executives did note that franchisees they say are in a good financial position to invest in perhaps extending this even further because the $5 value bag has done really well with lower income consumers. it's tracking well with them, and that's the cohort the company wants to bring back in. >> i'm troubled by the fact that

people are getting excited for these nostalgic cups. can guess from their childhood, that actually came out when i graduated from college. i don't know what that means demographically, but is there a sense of in terms of age cohorts or demographics where mcdonald's is finding success? i imagine it might be across the board given the inflation strapped consumer. >> so interesting to see who gen z kind of gravitates towards. we won't do the math on when some of those characters came out for everyone's sake here, but you know, it's interesting because they had a really successful run with the grimace shake, too, which is an older customer who would resonate with customers, but then it went viral on tiktok. they have to thread that needle witholder demo, younger demo, and the lower income cohort. everyone is a little more price conscious now, and that particularly apply to a younger cural. we talk about chipotle a lot.

they had a fantastic quarter, and they had prices, you know, nondiscounted forever and ever because they don't have to do it. customers are being really picky about where they're spending their money and why they're choosing to do that, you know, isn't hard to figure out. these companies are trying to target them correctly with the right offers at the right price at the right time. >> tough to do in certain times but clearly mcdonald's making moves here. thank you, kate. kate rogers. with the market higher, nasdaq up nearly 1%. today marks the 20th anniversary of google's ipo, and it's facing threats to its existence. should investors buy it or bail? we'll trade the stock in three-stock lunch coming up.

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. welcome back. it's time for today's three-stock lunch. here with our trade is jerry castellini, the president and cio of arc marchment. we have alphabet. today is the 20th anniversary of its ipo, up since then. it's facing some near term

challenges but what's your trade on alphabet? >> so we are holders of the stock. and we are going to stay long term holders of the stock. i understand, obviously, there's a challenge and there has been one now for a great deal of time for all these tech names, by the ftc and over monopoly issues. i'd make the point here that the ultimate line that you have to cross is that you have done harm to some material competitor. and there's just no evidence that google or alphabet has done anything to harm anyone. we're staying with it. we basically make the point, do not get off one of these materially advantaged companies in the ai space. >> i guess a breakup might not be bad for the stock anyway. next up, hp inc. shares sliding after morgan stanley downgraded it to equal weight from overweight. citing limited upside potential. jerry, what do you think? no ai pcs there?

>> no. if you read the recommendation, they felt that the stock is expensive relative to the last couple years. this is a nine multiple stock. the fed is going to ease most likely in the next six weeks. it's hard to see a cheap stock going down for valuation in the face of a fed ease. and in their case, you also have the potential here, which is i think becoming more and more a reality, that there's going to be a cycle called the ai pc cycle. which they would be built right in the center of. and you would see all sorts of upgrades across the board and be the exact time where you wanted to buy a very attractively valued company in a space like this. so we would recommend not to jump on this and just to hold on to the stock. >> finally, we have sweet greens. shares of the salad chain falling 6%. piper sandler downgraded the stock to neutral from overweight saying the risk reward for the stock is more balanced. are you a buyer of the dip?

>> absolutely. i'm a holder, our firm is a holder of this stock as well. i would, again, caution, remember, this is august. we're looking for things to do besides political conventions. and making a change in an outlook for a company just because in this case the wonder is that perhaps the economy is going to slow down and affect this business, we would take the other side. you just covered mcdonald's. we get the fact that that's a broad economically driven entity. this is a company that could triple its footprint and still not reach all the market they feel they can reach. this is a health food in a very successful casual dining idea, and it's way too early to cut this out. rr ttock up 200% this year. jey,hank you for joining us. and we will be right back.

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1% on pace for its eighth session winning streak. maybe the last two weeks of augustering but we still have a lot going on. jackt tson hole on deck. >> palo alto one of the few stocks in the hundred billion or more up more than 2%. amd, nvidia among them. that's going to do it for "power lunch." you can catch alto alto earnings on overtime. >> welcome to closing bell. i'm scott walker here at the new york stock exchange. we begin with this broad based rally in stocks. the major averages building with even more gains today. we'll ask our experts over the final stretch how far this rally can go in the weeks ahead. look at the scorecard with 60 minutes to go in regulation. we have green across the board today. all s&p sectors are showing gains today. nice action from the nasdaq, up near 1%. how about volatility? two weeks ago, it went crazy. well, there it is today. subdued, under