♪ what a day welcome to "power lunch," i'm dominic chu and it's a big day for the markets as fed chair jay powell seemed to do what the markets expected and wanted. he laid the groundwork for a fed rate cut at the next meeting in mid-september, and right now, stocks are bid you can see almost 1% gains for the down and the s&p 500, a 1% gain for the tech-heavier nasdaq composite index. that's how things currently stand. and check out these numbers. the dow and the s&p are now once

again within just 1%, a stone's throw, of record highs you can see right there, the dow and the s&p were not that far away and though the nasdaq is not quite as close to a record high, it is up 10% just since the lows hit that we saw on august 6th, reversing the entire so-called correction in just about two weeks' time. big move for the nasdaq, up nearly 10% joining me onset for the entire hour to break down all of the market moves and everything else is the managing partner at dc l.a. he's also a cnbc contributor let's start off with the big driver of some of today's gains, and it's seemingly the comments by fed chair jay powell. i've got the prepared remarks right here i've gone through them it has been interesting. take a listen to what he said. >> the time has come for policy to adjust. a direction of travel is clear, and the timing and pace of rate cuts will depend on incoming

data, evolving outlook, and the balance of risks >> it surely seems definitive. he says that the rate cuts are coming >> it is and it's extremely dovish. he's basically said, we're going to be there in case we see a hiccup in the economy and that's what the markets wanted. previous to it, he was like, well, we don't know what we're going to do, and we got to keep it restrictive but now you've got a fed that says, hey, if the economic data comes in line, as to what we expect, and if it gets worse, they can do faster so, i think the markets like that they took that little uncertainty that we had before and kind of back to if you had fallen asleep three weeks ago where we are now >> i saw earlier this morning, and financial markets are second to second, but the cme group's fed watch tool assigns probabilities. it's a certainty that there's going to be. the markets expect 100% chance of a rate cut coming in september, but it's now kind of split, 65% for a quarter point cut and 35% chance that there's a full 50 basis point or 0.5%

cut. what do you think right now? do we need a half-point cut or is a quarter okay enough >> i think a quarter is fine, and i think it's going to be the inflation number if the inflation number goes below where they expect, you could see 50 just as insurance if the inflation number is still higher, it's going to be tougher to go 50 what if your economy's slowing, rates are up, it puts them into a quandary, especially going into november. they have to be careful that this is threading that needle. so far, so good. we'll see how it goes, but i think the -- like you said, data dependent, but we're definitely there. >> big numbers coming up now between now and that september 18th meeting >> absolutely. >> all right, we're going get more reaction to powell's comments live from jackson hole just a little bit later on in the show, but now, let's drill down on the market reaction and where stocks can and will go from here. joining us now to discuss this is adam phillips, the managing director at ep wealth adviser. adam, thank you very much for being here with us you heard sarat and my

conversation with regard to the economic concerns facing the fed. why do you think markets largely have adopted this and are shaking off any growth scare that we may have out there >> yeah, hi, dom well, look, as sarat said, this was clearly a dovish message i don't know -- i guess the only way you could make it more dovish is if powell said they were going to come out in september and cut by 50 basis points they're not going to do that, but they clearly have the evidence to proceed with a cut at their september meeting, and the market is taking that and running with it. i think the question is, are investors, as they tend to do, maybe taking this a step too far and looking at this as a series of rate cuts that are on the way? i noticed if you look at the fed funds futures, pricing it up to nine cuts between now and the end of next year >> all right, adam, if that's the case, during my travels, i would talk to weather advisors like yourself and, you know, oftentimes, we'd just have a conversation about why the fed

needs to cut interest rates or when they can do it or why we need this as a market, and i always respond a little tongue-in-cheek by, well, what do your clients say that are earning 4 to 5% on their savings yields and treasury investments? what's the balance for a wealth advisor right now between those two parts of the market? >> i think that's right. i think this is clearly an environment of the haves and have not, those that have ample savings are enjoying having a decent -- getting a decent yield on that savings. those that have a home are happy they've locked in. those that are looking to purchase a home or first-time home buyers are -- maybe it's a little bit of a different story, those on the lower income tiers, we're seeing the fact that payments are slowing down. we're seeing a little bit of delinquency rates rising, so there are signs that there are some cracks in the consumer. on the whole, we welcome some cuts we obviously don't want to overstay our welcome in the high-rate environment. it appears that, as i said, the

evidence suggests that the rate hikes have been doing their job, and so it's time to start easing away from that, and i think if done correctly, and if the fed can navigate this environment, and really solidify this soft landing, it bodes well for not just the broader economy but also for future earnings growth. >> sarat, are you as constructive as adam is with regard to the stock market right now? and if so, what would you be buying is it just mega cap technology it seems like it's just been the muscle memory for the past ten years. >> i think that's where the money's gone but the consumer is definitely slowing. if you get rates coming down, it's going to help them the most in terms of payments, in terms of potentially, you know, what cause of interest is going to happen to them i'm a little less sanguine i think we've got a fairly market but you have to look at where the market has not been. doesn't mean you have to get rid of all your tech stocks. you just have to make sure that the sizing is right at this point, and i think they are -- you can find, you know, whether it's in financials or basic

materials or energy, utilities, there are valuation companies there that you can focus on that are below market multiples and also have better earnings growth >> all right, so, adam, let's turn back to you what goes on the shopping list where are you finding values out there? what types of stocks >> absolutely. and it is outside of tech. we have really tried to avoid being bullied into owning the index weight of these high-flying names, specifically within technology, and so i think you can find the opportunity outside, and i think that this earnings season that we're now wrapping up here is evidence that things are starting to broaden out. we expect that to continue you know, one area that we've added more recently is to -- within discretionary, but obviously, this earnings season, i think, told us that the -- those gaining share within discretionary are those that focus on discounts, and so specifically, i think about tjx, which is -- has come off a

really solid quarter they had a beat and a raise. we see this as a company that has a very strong balance sheet. it appeals to consumers in really every environment because they are an off-price retailer and really the biggest at that but this is also a company with a strong balance sheet $5 billion in free cash flow generation, and we've seen that this can go towards become acquisitive and doing so opportunistically. we saw they just recently announced the 35% stake in brands for less and it's a dubai-based company and we're -- prior to that, they announced a joint venture in south america, and so i think these are the areas that we want to focus on some of them have been left behind, but some of them are really just looking at other ways to play this market, and as we know some of these other names have become a little stretched. >> all right, and just to put a point on it, if you want to be in technology, and you want to be outside of mega cap technology in the mag seven names, where do you go >> absolutely.

and mega cap tech is not necessarily something we want to avoid altogether these are still quality names, but i think it's important to acknowledge that what was leadership in the past isn't necessarily going to be leadership going forward the other company that we like within technology that isn't necessarily part of that mega cap tech conversation is palo alto networks. this is a company that, again, reported earnings just recently here and really reported quite well if we rewind the clock a little bit, back in february, this company fell about 30% and spoke to some, perhaps, some softening in the business spending landscape, and so they were put in the penalty box for a little bit. they've now rallied back the catalyst here, i would say, over the next couple of years, is what they call platformization, and it's really just trying to get more wallet share from their companies, and trying to be the go-to for a number of these cybersecurity offerings, which will hopefully allow for quicker remediation or

resolutions on some of these cyber threats, and so i think that the recent news out of crowdstrike only helps that case, and so, that's where we're seeing the opportunities >> all right hca, palo alto networks, and what else are we talking about here tjs companies, the top picks from adam phillips over at ep. thank you very much. have a nice weekend, adam. >> thank you you too. all right, target may have solved one of retail's biggest problems, its theft, shrinkage we're going to discuss the latest coming up next.

something amazing is happening here. climate researchers are weathering a data storm. that's because cdw transformed their devices and infrastructure with lenovo thinkpads and powerful edge to cloud solutions, delivering faster insights and increased performance, giving them the scale to stay ready for whatever's next. make amazing happen. lenovo and cdw.

pete g. writes, “my tween wants a new phone." "how do i not break the bank?"

we gotcha, pete. xfinity mobile was designed to save you money and gives you access to wifi speeds up to a gig. so you get high speeds for low prices. better than getting low speeds for high prices. -right, bruce? jealous? yeah, look at that. -honestly. someone get a helmet on this guy. get a free unlimited line for a year when you add one unlimited line. plus, get a new google pixel 9 on us. bring on the good stuff.

all right, welcome back. shrink was the buzzword for retailers last year, but in the reporting for this recent quarter, we barely heard about shrink at all. and if we did, it was along the lines of target's brian cornell touting the major improvements the company has made to shrink shrink so, what have retailers and law enforcement done to combat shrink, and has it really worked or was the size of the problem never as bad as it was really made out to be joining us now is brand of el verzton consulting prior to that, he was the director of walmart's asset protection division, fighting shrink, and here on set with us is cnbc retail reporter gabrielle. thank you both for being with us i'm going to start with you, gabi, overall picture of just how big of a deal shrink was o wasn't >> so, last year, shrink was a big issue if you're looking at

the transcripts of the earnings calls, but like, how much of an actual issue was it having on profits is debatable i did a story last year that calculated just how much retailers were using from shrink lowe's was a big one they lost about a billion dollars, but that was only about 1% of their overall sales, and that's actually a healthy place for shrinks to be. so, part of what brought all of this on was, as the demand situation kind of softened, there was way more focus on profits than ever before, so retailers were more incline ed to provide a variety of reasons for why profits were soft. shrink was one of them that doesn't mean that shrink wasn't a total issue but just how material it was compared to how much they were losing from discounting, from the inventory troubles they had, it's a little bit unclear. >> brand, let's pull back the curtain from somebody who's seep it all before in the biggest retailer in the world in walmart. shrink, was it a big issue or not as big of an issue >> it was a huge issue a lot of those contributors came during the pandemic, but in my

30-plus years in the industry, the levels of shirink, and you referenced a 1%, that sounds minuscule, only 1% of your inventory if you're at the volume of walmart or some of the major tier ones, that's a staggering amount of money, and it does negatively impact earnings per share, et cetera, so it wasn't overstated. the component, gabi, that was overstated or is overstated is what part of that is attributed to theft versus supply chain hiccups, administrative, other thing that are non-malicious intent so, the distortion really is around orc that in some media outlets was fanned with the smash-and-grab videos and all the things that we saw, and the mischaracterization is, as it was stated about a year ago, half of that $112 billion that was lost in u.s. retailers in 2021 was attributed to orc, so it's an overgeneralization, but it absolutely is a problem and

is a direct impact on a p&l. >> brand, you can't help -- you can't blame viewers and even us for talking about these types of things in that context, because what we have seen, brand, we've seen a notable number of store closures, whether they be underperforming or whatnot, but many of those are in locations that have become associated with things like retail theft so, how do you reconcile that particular kind of closure aspect of these things to what the narrative is that you're trying to tell us right now about what is and what isn't the responsibility of the retailer itself >> a lot of the ambiguity in shrink -- so, when you look at the other metrics in retail sales, profitability, earnings per share, those are quantitative numbers that you understand and you can see and you can back into the hard math. shrink is not like that. so, the number that you get at the end of a cyclical inventory is simply oversimplification, but a reconciliation of what the

ledger says you should have financially, and you count your inventory and that's what you have, and if there's a delta, it's shrink, and it gets really muddy after that in other words, how much is theft? how much is administrative did we ever receive the merchandise in the first place were there billing errors? the store closures, and i'll use doug mcmillon, when doug a few quarters ago was asked about the theft problems, said, sure, it's a little bit worse than we wanted it to be, but it's in perspective of 4,700 stores, and if doug is making the decision or walmart to close x number of stores because they're not profitable, sure, shrink is a component of that, but there are many other things behind the curtain, operationally, that make that box unprofitable, and that, while it was caught up in the frenzy of shrink and theft, is the reason why, and as we all know, retailers, you know, adjust, close, open stores, certainly in my experience before, because they're simply

not profitable boxes for various reasons, but the headline that was monopolizing was shrink. >> brand, so, when you look at some of the urban stores, and now you look at all the lock-ups where all the inventory that they have, how much has that affected what you would say, sales, that's probably dampened it, the experience has not been what people expect, so in your view, how has that all affected sales? >> 100%. and you hit the nail on the head that the customer experience has been compromised significantly again, and sometimes the mischaracterization of that dollar of shrink i have, do i believe is attributed to theft, and all those measures that you see, the lock-ups, the tethering, the eas alarms, electronic article surveillance, all of that is designed to impactthe malicious intent component of shrink, which, again, we don't really know what that is. so, you know, in a generalization, the pace of which technology has been pursued in the operational and

supply chain part of a retail, has left the risk mitigation component behind, so a lot of those measures that we see were there in 1970. so, there are more innovative solutions, artificial intelligence, rfid, that are slowly making their way into the risk mitigation side of retail, but it's been a slow go. and it really depends on leadership's thought of sources of shrink. if it's all theft, you don't need to spend big money on a.i you can just lock it up. and the difference is, when gabi goes into the store today, if gabi sees what she wants is all locked up, she can have it ordered on amazon before she leaves that store and guess what she probably isn't going to come back to that store it's too much of a hassle. so it does absolutely affect sales. >> brand, you hit my nail on th head because the next question i had for gabi was, why shouldn't i just go to amazon and have

those things delivered to my doorstep and put a ring camera out and worry about the porch pirates instead? >> that's what i hear from people i talk to all the time, the degradation of the retail experience it is something that has united americans in their mutual disdain for how poor the retail environment has gotten because of that. your candy bars, deodorant, they're imprisoned behind lock shelves, and it's a terrible experience and the people i talk to are going straight into the arms of amazon and walmart.com, but that's what makes fixes to operations so important, and that's what retailers have been working on over the last year. with profits more in focus, the demand environment continuing to soften, they are bringing the essentials back, like more staff. having better inventory controls making sure that the people that you're hiring aren't stealing from you in the back room, and i think that's why we've seen some improvements >> all right brand elverston, thank you very much for joining us. also, gabrielle, thank you as well pleasant weekend for both you guys jay powell's comments on

helping -- or rates are helping housing stocks coming up, how you can make money on the home builders before rates start coming down meet kandi technologies, where innovative, eco friendly design meets exceptional performance. our diverse portfolio includes utvs, go carts, golf carts and e-bikes. explore electric investment opportunities. kandi technologies. the all new godaddy airo helps you get your business online in minutes with the power of ai... ...with a perfect name, a great logo,

and a beautiful website. just start with a domain, a few clicks, and you're in business. make now the future at godaddy.com/airo why do couples choose a sleep number smart bed? i need it a little cool and i need it a lot of cool. we're both cool like that. and you're in business. sleep number does that. actively cools and warms on each side. during our biggest sale of the year, save 50% on the sleep number® limited edition smart bed and free delivery when you add any base.

all right, welcome back to "power lunch." a quick check on the markets right now. the dow is gaining a little bit of momentum here in the kind of mid afternoon trade. we're up about 350 points. not near the session highs yet, but kind of getting towards that direction. the s&p is up about 0.75%, 5,619 the last trade there, and the nasdaq composite, the outperformer on the big cap side of things today, up about 1.25%. now, on today's market navigator segment, one of the biggest sectors impacted by the fed's pending policy adjustments would be, of course, housing interest rates any rate adjustment is still a key and still likely a ways off, but one options trader is using that time to her advantage so, joining us now is jessica inskip, director of investor research at stockbrokers.com and you're looking at using options to play dr horton. take us through the trade and

why. >> as options traders, we can utilize options to buy and sell securities from the sell-side of options because it creates an obligation to buy or sell. we collect an up-front premium so, today, the way i want to do that is i'm utilizing dhi, dr horton, you know, just like you stated there is a housing supply issue. rate cuts are certainly on the horizon, but because there is this still pressure from an inflationary perspective for houses, it's a supply side issue, not a demand issue, almost like nvidia without the technology aspect, i suppose but they had good earnings, they reported at the high end of guidance, they still are showing resilient margins that are expanding. they're up 24%, so representing, quarter over quarter increase of about 80 basis points but what really i took away from their earnings is the statement of choppy traffic patterns. now, from a technical perspective, i would take that back and say, okay, what are you seeing from those choppy traffic

patterns, and i really think that alludes to the ten-year and the choppiness we're seeing and the consumers are being hesitant to go into those houses and they're going to elude that with mortgages like we've seen. from a technical perspective, i look at the 13, 26, and 40 moving averages, that represents one, two, the and three quarters owe worth of prices. i want to see that increase that is absolutely happening. this is a beautiful chart with dr horton. when i look for momentum, i'm looking at the bollinger bands, and when it hugs, that means it's on the higher end of the standard deviation so when we're making higher highs, i want that to be aggressive and show that momentum, which is what i see, but i also want to consider the overall macropicture, which is we're getting to higher highs with the overall market, which could lead to consolidation, which means i need to mirror, really, my macro view hwith a micro view with an options strategy >> just to put a point on this, the optimal outcome is that you basically collect this premium,

and the stock just keeps going higher, and nothing happens except you collect the premium or at the very worst, you actually get put the stock by the time it's done >> absolutely. it's a wonderful way to utilize options to get a neutral to bullish view, especially if you have any type of trepidations on the market or just for consistent income purposes the way i'm structuring this one, though, i'm selling the october 4th, 2024, 187.5 puts. i'm collecting about 570 that was earlier today when dr was around $190 but that up-front premium is reducing my overall risk allocation so i'm creating a cushion if it were to move down, i've moved my break-even to about $180 so that's the way i do as an options trader and utilize that obligation and you can do the same thing, of course, on the sell side if i was put, which i would absolutely intend to do to still participate in capital appreciation while creating consistent income

that is the entire intent of this strategy. >> all right jessica inskip, stockbrokers.com thank you very much. see you soon >> thanks, dom sarat, the home builder trade, just to get your view on this, do you feel as though the bullishness is justified, given the rate outlook >> i think a lot has been discounted already i mean, rates have come down the stocks have already gone back up. you haven't really seen the economic kind of gains that these stocks have, but if you get a 50 basis points, you could see the stocks jump. it's ironic because that means things are really slowing down but momentum traders will get into the stock >> that's one of the hottest parts of the market today. still to come, we'll head out live to jackson hole, wyoming, but first a quick power check on the positive side of things, the s&p construction firm builders first source getting a boost the biggest laggard is intuit, beating results but issuing

weaker guidance. we'll be right back. this is clem. clem's not a morning person. or a night person. or a...people person. but he is an "i can solve this in 4 different ways" person. and that person... is impossible to replace. you need clem. clem needs benefits. work with principal so we can help you help clem

with a retirement and benefits plan that's right for him. let our expertise round out yours. new projects means new project managers. you need to hire. i need indeed. indeed you do. when you sponsor a job, you immediately get your shortlist of quality candidates, whose resumes on indeed match your job criteria. visit indeed.com/hire and get started today.

craig here pays too much for verizon wireless. so he sublet half his real estate office... whose resumes on indeed match your job criteria. [ bird squawks loudly ] to a pet shop. meg's moving company uses t-mobile. so she scaled down her fleet to save money. and don's paying so much for at&t, he's been waiting to update his equipment! there's a smarter way to save. comcast business mobile. you could save up to 70% on your wireless bill. so you don't have to compromise. powering smarter savings. powering possibilities. nate jones... lines things up... checks his fidelity app... looks to outside analysts to get a second opinion. nate likes what he sees... and he places the trade... talk about easier investing.

welcome back to "power lunch," i'm kate rogers. nebraska voters will choose between two abortion-related amendments at the ballot box this fall. one amendment would protect the right to abortion until fetal viability, while the other would ban most abortions in the second or third trimester nebraska currently bars abortion after 12 weeks of pregnancy. it comes as part of a wider push across the country with ten states certifying ballot measures this fall in the wake of the reversal of roe v. wade the u.s. will offer free at-home covid tests again starting in late september americans will once again be able to request four free tests at covidtest.gov, according to the biden administration it comes as a summer wave of cases hits the country and a day after the fda green lit updated covid-19 vaccines. and meta is reportedly canceling plans for a premium mixed reality headset that was intended to compete with apple's $3,500 vision pro. the information reported the company told employees to stop

work on the device this week after a product review meeting dom, back to you >> kate rogers, thank you very much for the news update now, it's time for the fed's indirect and vague language surrounding rate cuts appearing to have come and gone. chairman powell now stating loud and clear, it's for a policy adjustment and now is the time for it >> the time has come for policy to adjust. the direction of travel is clear, and the timing and pace of rate cuts will depend on incoming data, the evolving outlook, and the balance of risks. overall, the economy continues to grow at a solid pace, but the inflation and labor market data show an evolving situation the upside risks to inflation have diminished, and the downside risks to employment have increased >> comments, joining us now from jackson hole and the great outdoors is our own steve liesman, along side the professor from the university of chicago's booth school of

business steve, over to you >> yeah. and thanks, dom. and thanks for joining us. we've known each other for a couple decades, talking about monetary policy, but this is a fairly pregnant moment right now when it comes to the pivot i want to know your thoughts about whether or not the time has indeed come. >> yeah, i think he handled it well, because you didn't hear him say 50 he said, it's coming so, he gave himself enough wiggle room to where i don't think he's going to get boxed in to having to go faster than whatever the data look like in two weeks, but i would be very surprised if we aren't at the beginning of, you know, a sequence of rate cuts, and that seems pretty well warranted. >> why is it warranted how do you look at the situation and say, it's time to cut rates? >> well, i think the economy has slowed i think the labor market is somewhat weaker but still strong enough, and i think the trajectory on inflation looks relatively good. if i were them, i wouldn't have committed to say i have to get to 2.00. i would have tried to say, we

need to be headed towards it with, you know, sufficient confidence, because you know, i don't think they'll be happy if, after they've cut a ways, it levels off at 2.2% for me, that would be good enough to declare victory, but you know, they thought that they needed to anchor those expectations right at 2%, and they've put themselves in that box. >> right so, anil, you studied this stuff for a long time, and i know that economists don't get around to knowing what's actually happened until three or four years later, but powell was pretty confident we're coming toward a soft landing, but that is not something the fed has executed all that well in the past. is there something different this time that makes you think there should be some confidence they're going to pull this off >>ic >> i think it's partly the way they got into this is we didn't understand all the forces that were acting in covid, and it's clear that some of the retreat has been a reversal of some of the stuff we didn't really understand, so i think that's been good. i mean, remember, markets were

not expecting, in december of '21, that we were going to have to go anywhere near as high as we did, nor were they expecting that we were going to stay as high as long as they have. i think they took a risk to say if it comes with a recession, we've got to get the inflation back in the bottle it probably helped them. and you know, i think there's probably been some good luck if it had been a crummy weather winter, right after russia invaded, that could have derailed it. >> the price of oil or everything would have spiked >> yeah. >> what you said was really interesting. so, if the source of the inflation was supply, and the supply goes away, you don't have to crush the economy to get inflation down that's the kind of translation of that. we were just talking about transparency in there, and interesting thing comes up where one of the presenters talks about the idea that there's this big difference, and i know dom follows this, a lot of us do very closely, between how the market reacts to the statement and how it reacts to the press

conference is that a problem for the fed's communication in your mind >> i think they wish they didn't have to have it. there are benign interception interpretations, like, suppose it's the case that they negotiated the statement before the meeting, essentially, because they do pass it around, and they've agreed on a lot of it then, they get together and the conversation is actually quite, you know, more hawkish or dovish than the statement reads, but rather than trying to relitigate that in realtime, they just say, why don't you go clean this up in the press conference? that's a possibility if that's right, though, you could check whether or not the minutes match the press conference or the statement. >> or is fed chair powell freelancing a little bit on his own? anyway, dom has a question for you. >> professor, thank you very much for joining us here we broached this subject on yesterday's show, but there is this discussion right now about the relative situation that americans feel right now in that if you still have wage gains and

a job, but those wage gains are not keeping up with inflation as much, is it better or worse than the possibility of losing one's job and not having an income at all? there is an interesting line, i wonder, you know, maybe just an academic standpoint, about how economists would kind of reconcile or deal with that kind of a debate. >> well, i think, first of all, part of the feeling is that the level of prices is just so disconcerting to people. you're used to, you know, a box of cheerios costing whatever it is, and now it's 40 or 50% higher, and that's really, i think, unsettled people. so, even if they don't think that the wages that they've gotten over this period have kept up with the prices, they just feel unsettled about that i think in the end, for the people that end up unemployed, that's vastly worse than just having your real wage drift down a little bit, because the next time that the market picks up and the labor market gets tight

again, you can move, and it's important to realize that there's a lot of on-the-job training and human capital that you build by working, so continuing to work and not having interrupted work spells is really, really important. >> dom, i have an answer for that question for what it's worth. unemployment, when it gets high, affects 4 or 5% of the workforce. higher prices affects everybody in the workforce, right? so, i mean, that's just a percentage thing anil, one more question. a year from now or so, how much can you see the fed bringing rates down where do you feel like neutral is, and how do you find it >> i think they don't know and i think it does still depend on a lot of external events. the wars that we've got, certainly the thing in russia could still be a mess. the instability that you're seeing in european governments, i mean, france not having a government is an issue japan's still got to manage its exit so, there's a whole bunch of things that have to happen, and depending on how well they go,

that's going to give them more room or not. you know, i don't know what the market is pricing after this speech for what they've got a year from now. >> 200 >> 200 that seems a little rich to me, but i don't know i think it depends a lot on whether or not they really get down to 2.0% >> anil, thanks for joining us he also runs, by the way, one of the better conferences, the u.s. monetary policy forum we have every year in new york >> that doesn't surprise me at all. professor, thank you very much, and of course, our seen steve liesman, see you guys again soon still ahead, ev tax credits might be on the chopping block if donald trump is elected this november we'll dive into what automakers could be most at risk when "power lunch" returns.

(♪♪) car, this isn't the way home. that's right james, it isn't. car, where are we going? we're here. (♪♪) surprise!!! the future isn't scary. not investing in it is. car, were you in on this? nothing gets by you james. nasdaq-100 innovators. one etf. before investing, carefully read and consider fund investment objectives, risks, charges, expenses and more in prospectus at invesco.com weathertech products are designed and manufactured in america using only american raw materials. most competitors make things seven thousand miles away... and then wonder why they don't fit. with weathertech in your vehicle you may hear angels singing as you marvel, how do they do it? simple. american technology and american workers deliver quality... not imported junk for a few bucks less. get the world's best floorliners and support america. find your fit at wt.com

(♪♪)

♪ welcome back to "power lunch. shares of tesla up more than 4%

today following powell's remarks, the fed is ready to start cutting interest rates and tesla and most other evs are purchased with financing, and lower rates would help make those vehicles more affordable but our next guest says the company should brace for another massive headwind, which is another trump presidency the former president has implied he could end the tax credits under the inflation reduction act. tesla has been the biggest beneficiary so far so, joining us for more is collin langin from wells fargo take us through why this is such an issue, because frankly, tesla shares have had a nice, decent bounce off some of the lows we saw earlier this summer. >> yeah, i think there's a bit of a misperception since elon has been supportive of trump that this -- somehow a trump presidency would be good for tesla. if you really step back, we estimated in our report today that there's about $12 billion

of i.r.a. funding that's been given to the market, and about close to 7 of that has been tesla-related between their buyers who get up to $7,500 credits when they buy a vehicle, as well as production tax credits, which could be well over $3,000 per vehicle, so we're talking about $10,000 per car in the u.s if that gets removed, it's quite a material headwind for tesla, and that's really the key point in our note today. >> if that is the case, there's a reason why you have a sell rating on that stock and a $120 price target it's largely been tough to be a bear on tesla, even with some of the big drawdowns that we've seen how exactly does this, then, play out it's not a straight line, but why exactly is the fair value that you have assessed down where you have it right now? >> yeah, i mean, tesla never really ever moves in a straight line i think when we look at it, there's probably going to be some bumps over the next month i think particularly the robo taxi day, typically you get hype

into that, but also what we find is that historically, there's a lot of hype into those events, and then the stock fades off after. the fundamental reality here is the auto business has been under pressure if you look at the first half of the year, we have negative pricing and negative volumes, so you have a company that has negative elasticity at this point. so, there's a big concern that i have about where volumes, where pricing is going and what that means for margins, and i think, you know, ultimately, those fundamentals should rule and the stock should be under pressure and that's really the driver of our underweight rating >> add to this the competition can you just talk to where you think that's going to be in a year or two with so many companies coming in with lower prices you know, yes, the chinese will have tariffs on byd, but compared to the rest, where do you see that landscape >> well, we're already seeing tesla has been losing ev market share to improved competition from the traditional companies outside the traditional companies, they're struggling with profits as well, and our report today does talk about

a -- trump could be negative for the traditional players as well in the midterm there's an expectation that if he comes in, we're going to reduce the fuel economy targets, but that probably is a 2028-type event. it took about three years last time for him to reverse fuel economy standards. if he wins this time, there's a bullishness that he might do that but there's a concern in the report we highlight today that the i.r.a. credits, which are for many vehicles $10,000 a car between the production tax credit and the consumer credit, you know, those could go away faster, so there could be between '26, '27, a period where automakers have no support, and yet they have tough standards. so, we're going to see better models, more competition, but i think for the whole industry, and we're underweight all the detroit three, there's a lot of challenges, electric vehicles being one of the biggest >> tesla shares down about 12% year to date with a 78 forward multiple collin, thank you very much. we'll see you soon >> thank you all right, still ahead on the show, intuit's q4 results just beat on both the top and

bottom lines, but shares are actually down nearly 8%. we're going to dive into what's pushing this name to the bottom of the s&p coming up next. one thing we know is true: no matter race, gender, ethnicity... the need to screen when due... for colon cancer's a priority. indeed! everyone 45+ at average risk should screen for colon cancer. these folks are getting it done at home with me, cologuard. cologuard is a one-of-a-kind way to screen for colon cancer that's effective and non-invasive. it's for people 45+ at average risk, not high risk. false positive and negative results may occur. ask your provider for cologuard. i did it my way. what is cirkul? cirkul is what you hope for when life tosses lemons your way. cirkul is your

frosted treat with a sweet kick of confidence. cirkul is the effortless energy that gets you in the zone. cirkul, available at walmart and drinkcirkul.com.

welcome back we have breaking news on the presidential election. it comes from the robert kennedy jr. campaign >> that's right. rfk jr. speaking in phoenix, arizona. take a live look in here at kennedy as he's at the lectern there in phoenix kennedy just filed some court papers saying he's going to be endorsing former president trump. his campaign struggled to gain momentum he's polling at 5% in the polls. but an endorsement from ken dirks who is most well known to most voters as a vaccine skeptic, might be on the margins a benefit to trump's campaign. trump said earlier this week that he would welcome a robert f. kennedy endorsement and said he might see a role for kennedy in his administration if he wins in november.

it's a very marginal election year anything helps on the margins. kennedy polling near 5%. that could be a breath of fresh air for the trump campaign given that they have seen consolidation in energy on the democratic side at the democratic national convention throughout the week. so we'll watch this announcement here and bring you any additional details that we get >> a sennarrowing of the field thank you. by the way, three stock lunch is coming up after this short break. keep ihe t re business. it's not a nine-to-five proposition. it's all day and into the night. it's all the things that keep this world turning. it's the go-tos that keep us going. the places we cheer. trust. hang out. and check in. they all choose the advanced network solutions and round the clock partnership from comcast business. powering more businesses than anyone. powering possibilities.

daughter: hey, dad. dad: hey, sweetheart. daughter: what are you doing? dad: i'm gonna clean the fence. daughter: it's a lot of fence. dad: you wanna help me? dad: aim at the wall, but get closer. daughter: (gasps) what the?! 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. investment professionals know the importance

of keeping their clients on track. sometimes they need help cutting through the noise, 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. additionally, os therapies has several early potential revenue streams and is addressing multiple indications

including breast cancer. os therapies, stock stim . it's time for today's three stock lunch. here with our trades is vice president at rockland trust. let's start with uber and general motors they have agreed to a multiyear partnership starting next year anthony, what's your take on this deal? >> i think this continues to be an important topic for uber in

terms of atonomous vehicles an how this market plays out. whether this deal or a deal with boyd or certainly upcoming commentary around robotaxis with tesla, the market needs to figure out how uber is involved in terms of autonomous vehicles going forward. it could be pretty interesting for them in the sense this could be a centraling a degree gator or platform for this kind of market but it's so early. even though we have had an early success with waymo, it continues to be a topic of debate for investors with uber. >> what do you think >> we own it we have been trimming it the evaluation is getting to an extreme level. also the delivery business is the one if the consumer is slowing down, delivery is one of the most expensive pieces of uber so you just have to be cautious going into a slowing consumer economy. >> way to put the wet towel on

this whole thing let's talk about turbo tax owner int wit. the company did issue disappointing guidance what's the trade >> we would buy more with a significant weakness from here they reported earnings so it's a casualty of that they moderated growth targets in a couple segments, but big picture, this company is so well positioned and really at the epicenter of self-employed businesses, small and increasingly medium sized businesses with all their solutions. they are extremely well positioned and continue to take share in a growing market. so we like it here >> and finally, ly cava. it's up 20% today. do you chase it? >> absolutely not.

while i like the food, i don't like the stock i think much of the opportunity for runway growth over the next two, three, four, five years in terms of profitability is reflected in the stock i would sell it. >> he's a sell what do you think? this is aen cop assumer play as well >> i totally agree i thefrg think everything is built into the stock it's done everything it can. and the issue that you get with stocks is as they grow, they have to keep up the earnings in the same growth rate it's an extremely red stock. >> let's talk personally about whether you like cava or sweet greens >> i like to go both but sweet greens has more potential. >> what do you think last word to you sweet greens to you as a consumer or cava >> it's a tough call, but i'll probably go to sweet greens as well >> there's the call from anthony. thank you. have a nice weekend, sir >> tharngs guys. a quick check on the ma

markets. we are seeing a creep back towards the best levels of the day. the dow is up 357 points as you can see there, it's been a slow and steady move higher. we'll see if that momentum can keep up into the closing bell today. so thank you very much for watching today on "power lunch." and thank you for coming into studio for helping us today. "close ing bell" starts right nw welcome to cl"closing bell. we're live at the new york stock exchange this make or break hour begins with the post powell rally stocks shooting after the time has come signaling they are going to start cutting rates next month former fed vice chair squloins joins us to break down what he sees in terms of timing and the pace of cuts ahead here's a look at our score card with 60 minutes to go in regulation we're green across the board all three trading higher by more than