yield flow, so lennar with a free cash yield flow of 11%. >> farmer jim? >> oracle. 3% from an all-time high. >> stef, last word. >> seagate, all of dell's strong earnings report. >> very quick. we have a little time left. thank you very much for watching "halftime." hope you have a great weekend. that does it for us. "the exchange" with deidre bosa starts right now. >> thank you very much, frank. happy friday. welcome to "the exchange." i'm deidre bosa in for kelly evans. here is what is ahead. the inflation gauge coming in as expected. the soft landing narrative is getting stronger. so it is smooth sailing for investors from here? our market guest says there is one thing that scares her. she'll tell us what that is and where she's seeing opportunity. plus, leveraging ai. we'll check in with one company that is keeping the lights on, literally. the ceo joins us.

and this stock, getting some love from wall street today, and it's having a comeback with one demographic in particular. we have the name, the story, and the potential upside from here. but we begin with the markets and, by the way, happy birthday to one and only warren buffett. he's 94 years young today. we had to mention that. take a look at the markets on this last trading day of august. they are mixed on the back of fresh inflation data. the dow as you can see, is come off its record 25th, 25's the 25th record close of the year. up as much as 164 points earlier in the session, but we have bee. the semis etf is on pace for its first positive session in three. on pace to break a three-week winning streak. intel is one of the biggest gainers. the company in talks with bankers to assess options to fix

its flagging business. intel is down 30% in august. down more than 50% year-to-date. it is the biggest leader in the s&p 500 today. let's dive into the inflation gauge, pce jumping 0.2% last month. that number is up 2.5% from the same time last year, with core prices in the same amount in that time frame. while inflation fears may seem to be easing, the consumer is still feeling the pain, especially at the grocery store. staples like eggs, milk, yogurt, beef, and bread. those prices ticking upward from this time last year with some over $1 higher than july of 2022. let's talk more about the fed's fight against inflation and the health of the economy, the consumer, and the size of that first an sis pated rate cut in september. i'm joined now by mark zandi, moody's chief economist.

thanks for being with us today. i'm glad we showed that wall, because it puts it into perspective and tells us what the stakes are. everyone is expecting the first rate cut in september. mark, what is the risk first, i guess, of moving too quickly to cut rates? >> deidre, i don't think there's much risk of moving too quickly. the fed's been too slow to respond. rates have been too high for too long. they've hit their mandates, that is full employment, 4.3% unemployment rate is edging higher, and inflation with today's inflation reading, that's within spitting distance of the target. if you exclude the cost of home ownership, which i think you should when judging for inflation, the inflation rate is already well below target. so, you know, full employment, inflation at target, 5.5% rate

is too high. they should be cutting rates. >> how quickly should they cut rates? are you expecting 25 basis points in september? do you think there's room for a 50 basis point cut between now and the end of the year? >> well, i think they'll cut a quarter point in september, and probably again in december. a quarter count each quarter going forward until we get back to what i call the equalibrium rate. i think they would reserve a 50 basis point cut to environments where there's something that feels like it's going off the rails. if you go back to the market turmoil a couple weeks ago, if that continued, that would be the fodder for a 50 basis point cut. or if the job market started to weaken, that would be the fodder. but barring that, it may go slow and cautiously in cutting rates. >> so we're getting a jobs report next friday.

what would a bad report look like to sort of make the fed take pause, or just one data point? >> i think one data point. the august employment numbers are particularly problematic. in history, it comes in really week and it goes to the low response rates in august, as people are on vacation, and then you get these upward revisions to the data. so you have a negative number, you know, i'm not sure that would be enough to push them to go to 50 basis points. but i think it will be just one number in a slew of things they're looking buy. >> stand by, we have some news on rent and inflation. diana? >> that's right. rents in august fell nationally for the first time this year according to a new apartment list. they came down 0.1%. that may not sound like a lot, and part of it is seasonal, but they're falling more than usual, and also down from august of

last year. so that shows the effect of this huge amount of new units we have coming on the market. vacancies are high at 6.7% after being really tight just a few years ago due to the pandemic. of course, that's the national picture. there are big, local divergences. rents fell in 59% of large cities with detroit seeing the largest drop of 1% on an annual basis. they range from a high of 5.9% growth in cleveland to a drop of 7.5% in austin. rents are most competitive in the midwest and northeast, but coming down in the sun belt and southeast, and that's where we have seen the most new supply coming onto the market. even with rents easing, the national medium rent is still $200 a month more than it was just a few years ago, deidre. >> let's get perspective. how do these rent prices affect home purchases? >> well, look, if people can't

afford to buy a home, they're stuck renting, it's just a vicious circle. if the rent goes up, they have less of an ability to put money away for a down payment on a home they wanted to buy. so home prices are still very high. people may want to buy because remtss are going up. unless they can afford that down payment, even if the monthly payment on a home that they own is lower than their rent, it's saving for that down payment. >> diana, thank you for that. mark, back to you. so rent inflation coming down. what's your reaction to that? does that give more fodder to a rate cut, again, 50 basis points that's off the table in your opinion? >> it is. look, that is great. that is good data, and it shows that rents have gone nowhere for just about two years. they rose very strongly during the pandemic in the wake of the pandemic shutdown, because builders couldn't finish

multifamily units. they were bottled up because of supply chain issues and demand surged as people left the shutdown and started striking out on their own. so you had more demand, not must have supply. but since two years ago, it's gone nowhere, which is really good news. it goes back to the owners equivalent rent, because it is ultimately driven to buy these rents. the fact that rents are flat for two years means that's going to translate to lower inflation. people are clearly reasonably upset about the higher rents and food prices they're paying, but the good news is that food prices, rents, gasoline, they've gone nowhere for the past year or two. ultimately, with rising wages, people should feel better about things. >> mark, what about the incoming administration? we have sort of -- we're starting to find out more about the economic proposals of both candidates. does that worry at all in terms of inflation and the deficit?

>> it does. it depends on the policy. who wins in the policy? tariffs are a bad idea. that's directly going to raise prices and inflation. that's not a great thing. we should be focused on increasing supply. we're talking about housing. we need more homes. we need more affordable rental units, and we need more starter homes for people who want to strike out on their own and buy a home. so things that can help support that would be good policy. tariffs, that's problematic policy in terms of lots of things, particularly what it means for inflation. >> mark, always great to get your views. thanks for being with us. have a good weekend. my next guest, they're also watching the consumer closely. one is concerned -- more concerned than the other. i'm joined by jeff crumpleton and julie beale, a cnbc

contributor. welcome to both. jeff, let me start with you. you're -- august has been volatile, but you say that it was an aberration. easy inflation, soft landing narrative is in tact. where do stocks go for the rest of the year? >> well, i loved the last few minutes that i have watched, because it's almost the narrative that we have kind of see play out, which is things haven't been perfect, but the trend has gotten less worse on the inflation front significantly inflation peaked in june. today was just another confirmation that's underway. that's a really good thing. and the reason i say aberration, we got one employment number that wasn't as positive. and people started to freak out, and we got almost a 10% correction. and since then, we have gotten data from retail sales, the update on the q2 gdp report.

we've gotten, you know, just other information just today on the inflation front that, you know, we're not in the midst of a recession. so for us, if we look out over the next 12 months, we believe that the fundamentals of this market and earnings look solid. the guidance is solid. and that we can see a 6,000 handle on the s&p 500 by mid next year, but it ain't going to be in a straight line. so, we look at the individual stocks. we find the broadening market, and we find general health in terms of earnings growth and valuation. so we're optimistic and constructive. >> the market seems to be with you. they're look i ahead to maybe 225 basis points in rate cuts. julie, this makes you a little more cautious, or at least

concerned, right? these big expectations, they create some fragility in investor psyche. >> high valuations are an element of fragility for any stock, and if you think going back in history, the last time that we had double digit increase expectations for earnings and rate cuts was 1984. it's only happened once in modern history that we had both happening at the same time. so that is a big ask of the universe, basically, to be having an effect. my biggest concern is all of this is on the back of the u.s. consumer, which is great. our u.s. consumer's ability to spend is phenomenal. and employment remains strong. however, we're looking at $1 trillion of credit card debt, and we have a situation where delinquencies are clearly on the rise, and none of that includes the buy now, pay later, you

know, debt that's outstanding and shadowing in the corners. so i have some concerns. i agree that we can be constructive here, because we're not over ly -- i worry that we could have a bumpier road than people are forecasting. >> jeff, in august it was that jobs report, but it was also worried about this ai trade that has powered the market all year, longer than that, and worries that the wide return on investment suspect justifying these huge cap ex numbers. is it possible that could cause caution? we don't really have a resolution to that. >> well, i don't think the ai situation is going away. even if you look at that poster boy stock, nvidia, you still have tremendous growth and a pe that's a little over 30 times. so this isn't a 2000 where you have 150 pe on cisco, and you have ebb in growth.

but more important to that, we have performed quite well without being joverweight, thos mega eight, those magnificent seven names, because broadly we see growth in technology overall and other sectors of the market. and, you know, if you look at what's going on in the market today, after we have had this recovery in august, it's been financials, real estate, utilities, technology has still done well. but it's not a one-trick pony. this is a broad economy. so no, i'm not overly concerned if you get a little slowdown in that area, it will derail this market. as far as we see advanced decline outpace price. >> some of -- >> that's a really -- >> those of soez worries about nvidia in 2026, but for every nvidia, there's a software name

that has been hugely underperforming this trade this year. we just had results, julie, from salesforce. i'm still not convinced that, you know, it's going to not be disrupted by ai, that the middleman is not going to be cut out. what are you seeing in terms of these software names? what makes them beneficiaries of the ai trade? >> i think when you look at software, ai has been with us for a very, very long time. google maps is artificial intelligence. so companies that have been using artificial intelligence to create simulations, those are the types of businesses that are really well positioned to continue to immigrate ai in. i'm thinking of bentley systems, where a lot of those simulation work is already incorporating afx i, and now they can layer on some of the generative capabilities. so i do agree. i think there's the opportunity to broaden out the bai

narrative. i think my concern continues to be, right now, we're in the infrastructure layer of generative ai, dependant on only a handful of companies. customer concentration can be very painful if one board of directors says we want to pull back a little on our spin. it cascades through the entire infrastructure. >> it's all about expectations. julie, thank you very much. as well as jeff. have a great weekend. >> thank you. >> thank you. coming up, openai is valued at more than $100 billion. we'll bring you the latest headlines. plus, speaking of ai, faster developing centers, and the ceo of first energy says that's a major problem as demand outpaces capacity. "the exchange" is right back after this.

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it's been a huge week for artificial intelligence officials. openai is in talks to will bring valuation to over $150 billion. and some of the chips are going to our next guest whose company partnered with nvidia and get ai

products to companies from jetblue to others. joining me now is the vp of generative ai at databricks. thank you for joining us. >> thanks for having me. >> let's call it the power rankings of the gen ai leaders and it feels like openai has taken the lead between that new funding round that is looking to doubling its weekly active users, project strawberry. would you agree, and why does it matter who is in the lead and it changes all the time? >> well, i mean, they are definitely the main innovator when it came to chatgbt. they made the world aware of generative ai and its capabilities. that spurred just a ton of demand from the enterprise. that's where we're focused, how can we take that technology and make it work for the enterprise, not just consumer? things like being able to customize models and capabilities with customers' own

data? that's going to drive a ton of growth. why sit important to have a leader? they're continuing to innovate with us and other players in the space, but they're credited with opening the flood gates here. >> as they become more successful and sign on more corporate clients in the space, do they increasingly compete with one of their major backers, microsoft? >> sure. everyone is jockeying for position in emergent segments of the market. just like the internet or the mobile phone, when the first technology shows promise and shows that it can work, there's this formation of different kinds of markets and with different dynamics. so all of us who are in this space are going after those different things. there's going to be some overlap for a while until things sort out. >> maybe talk about the competition and sort of the customers that a snowflake has versus a databricks. i talked to a few people who are

switching from snowflake to databricks. what is databricks good at that maybe snowflake isn't, and where does that put you this that competition? >> there's an 11-year history of combining data with machine learning. ai is machine learning. this is not a new thing for us. many of our customers get value from the platform, being able to apply standard learning techniques to their data, building, forecasting. generative ai is the next thing, we call it data intelligence where customers can use it with their data and build new experiences or uncover new insights in their data. so there is a long history of this. it's the continuation of that. snowflake is an amazing product for data warehousing. of course, we overlap on that, but the combination of ai and machine learning with data is extremely powerful. and bringing together tools like

governance on top of this where it becomes much easier to manage the growing complexity to fulfilling these kind of solutions. >> there was just so many headlines in generative ai this week. you know, we were talking about salesforce earnings, and mark bennyhof had this line on his call to jim cramer where he said, companies are trying to do it yourself, a i, and they should. be doing this. they should be relying on companies like agent force. do you agree with that assessment? do you agree that companies should be doing it internally? i'm talking more about sales and markets and customer service, do they need to do it in house or outsourcing that? >> generally, i agree with that sentiment, they should be outsourcing it. there are experts who are building tools and observing the right patterns and building those into reliable solutions. we are doing a similar thing. it depends on the scale of the customer. a company like google is going

to own their own stack, because it's something that is very important to their business. but general businesses, general enterprises don't need to be investing the kind of money it takes to build a state of the art system. that's for us to be doing. >> don't these open models make it easier for them to do so? you don't need the same engineering talent, why not bring it in house? >> the model is one component of an entire system. so the model can generation in human language, it can do some interpretation of inputs, but really it's one component, and just deploying those models is a huge engineering task. there's a lot of work that goes into deploying it, making sure things are secure, fast, reliable. all of this gets a lot of engineering. trust experts who are building great tools and pick the one

best for you. >> thanks for that perspective. great to have you with us. >> great to be here. staying with gen ai, new startups in ai are giving office spaces in san francisco a new lease on life for a real estate scene that has been described as being in a doom loop. kate rooney, how many times have we heard "doom loop" in the last few years? >> hundreds, honestly. hundreds. but now we're in the boone loop, if you believe some of these ai startups. startups here and ai startups in particular have been this beacon of hope in san francisco, these buzzy, well-funded startups are looking for more office space to keep up with their growth. ai companies about a third of total office deals in san francisco lost year. it's expected to increase this

year. tech companies account for about half of tenants in san francisco offices. and in cases, ai startups are subleasing office space for d he's sort of the millennial of cohorts. and were ambitious on this. before the pandemic, anthropic, you have scale ai senting space from airbnb. and sierra is close to where we are now, home to apple. openai has 500,000 square feet. this land grab is a result of some of the rapid hiring. and tech, it's really been concentrated on market stress. elon musk making that clear this week, shutting down their headquarters. so ai is considered to be one of the cool parts of the town.

mission and mission bay have been the epicenter of ai depanldz. [ inaudible ] >> it's really hard to be down there, because maybe >> the city does still lead the nation in office vacancy, above 34%, but ai demand is expected to continue. it could at least improve some of those bleak statistics. >> kate, you did a good job earlier answering both questions, whether we are in the cool part of town. >> i would say yeah, kind of. we're technically on market street. >> exactly. the cool part of market street. it just doesn't feel like this is enough. it's a great trend, and a lot of

technology and founders are coming back to san francisco, but we're seeing smaller workforces in general. even when you look at the mega caps, from amazon to google to meta, they're either decreasing the size of their workforces or keeping them flat. so how much of it is helping here? >> i think that's a great point. some of the irony here is that the technologies here may be one of the reasons that these larger tech companies don't need to hire to the same extent as a decade ago. there is a sense of irony there. it's interesting, the replacement factor is big, where you have some of the older cohort i mentioned, uber, airbnb, they are subleasing. it's almost a replacement here. so ai companies moving into vacant office spaces. you're not seeing it show up this the bottom line for commercial real es tatd. it's going to take a lot more for that uptick in office

participation. people being in the office. >> i get what you're seeing. >> i will say, it's the culture of ai companies and startups -- it's very much an in-person culture. they want to be there. the ceos are setting the tone, saying we're not mandating it in the office, and they want to keep. >> thank you very much for that. coming up, we'll get a look phe hina's so-called ion city. "the exchange" is back after this. tober 11th.

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welcome back to "the exchange." i'm pippa stevens with your cnbc news update. new jersey state police released a mugshot of the drunk driving suspect accused of hitting and killing nhl star johnny gaudreau and his younger brother last night on a bike ride. the driver, whom police identified as shawn higgins, is charged of two deaths by auto and held without bail.

the brothers were in town for their sisters weekend. yemen houthi rebels setting explosives aboard a greig flagged tanker in the red sea last week. it had about 1 million barrels of water when it was attacked, and putting the red sea at risk of a major oil fill. in california, state lawmakers sent a bill to the governor for his signature that bans six artificial guides from public schools. it prohibits foods and beverages which have food and dye coloring. >> pippa, thank you very much. we are just ten days away from apple's iphone event on september 9th, but rising tensions between the u.s. and china is shining a spotlight for apple suppliers. eunice yoon reports. >> reporter: here in china, known as iphone city, people are gearing up for the launch of the

i phone 16. foxcomm has ramped up hiring. they pass out kits with all the daily essentials, including a blanket. but recruitment agents say there aren't as many jobs as there used to be. foxcon hit its peak. he remembers when they employed 400,000. in 2018, 216 million smart phones were shipped. today, less than half that. with that is trepidation about how long these jobs can last. foreign investors are souring on china, and face pressure to redraw supply chains amid heated geopolitical tensions. there are numerous reports foxcon is producing the iphone 16 in india. foxconcould not confirm that to cnbc. the government-run media report all is fine. arguing the next china isn't

india, but will still be china. yet here, people remain worried. the street food seller caters to foxconn workers. there are far fewer customers, she says, compared to four or five years ago, my revenue is down 50%. >> we would have to send our best workers to those countries to train them and teach our craftsmanship to foreigners. i don't like the sound of that. >> reporter: even though china is developing new industries like evs, traditional manufacturing is still a very important source of employment and income for millions of people here. that's why the chinese government is so worried, dei, about american companies diversifying their supply chains. >> i was reading about some of those other industries that foxconn is building a manufacturing hub for evs there, and what is it about that city that attracts so much of the

manufacturing? >> reporter: well, it's seen as a place that has a very competitive wage environment. in fact, when you look at china's wages versus say india's wages, the lowest paid foxconn worker in china is still paid about 50% more than in india. so wages are a big component there. but then when you look at the two countries, people have talked a lot to me about infrastructure from india's standpoint, infrastructure is still waybehind, by some estimates about ten years behind. so it's a very complicated calculation when it comes to these two countries. >> eunice, thanks to bringing that to us from beijing. still ahead, demand for data centers is outpacing the need. "the exchange" is back after this.

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the electricity needed to power ai is expected to be a big strain on the power grid. first energy is experiencing low growth in its service area,

driven in large part by energy intensive data centers. joining me now to discuss further is the ceo of first energy. brian, thank you for being with us today. i mean, you say that this is going to be something akin to what air conditioning did to the industry. how are we going to get all of that energy for data center needs? >> deidre, i think we're poised to see growth in the electric sector that we haven't seen in recent times in the postwar economy that we're facing. so we're preparing for it. we're a wires only company. we're preparing for it by having significant investment to enable the ai data center boom that we're facing. we have a $26 billion cap ex program over the next five years, and about half of that is dedicated to enhancing the transmission system to enable things like ai data centers and other growth we're experiencing. >> brian, i covered the mega cap companies for a long time.

the magic words is vertical integration. they love to do that as their power needs increase for gen ai, for data centers. they're finding their own solutions. you had amazon buy a nuclear powered data center. how worried are you that you're investing so much into this, but are you at risk of them cutting you out? >> no, i don't think so. i would be worried about that if i were a generator. i'm not worried about that as a director and transmitter of electricity. they're going to need to be connected to the grid, whether for backup or primary power, they need to be able to have a transmission hookup to off take and deliver energy to them. so i'm not worried about that at all, we are a key component of both ai even abled load growth and transition to the clean energy future, so having us ready with renewables and other

generations to enable that, the grid is key to that. >> thank you for clarifying that. so it sounds like it's an opportunity. i mentioned the amazon purchase of a nuclear powered data center. are you seeing more mega caps buy direct energy sources? >> i think that trend's going to be there. whether or not the data center folks vertically integrate or whether or not we build generation, it's going to need to be connected to that grid. you've seen them want to have renewables, which are going to need to be delivered to their data centers, and they're going to need distribution to be able to do that. >> you said your cap ex is rising more than $20 billion? how much of an increase is that year over year? >> yeah. so thank you. our last five-year plan we published, this one compared to that is 44% greater. so significant increase in our cap ex to enable both load

growth, electrification of data centers, industry, all those things need a robust grid, and we're investing to make that happen. >> i hear that the cost of developing generative ai models is going up. i also hear that it's going to go down. where do you stand and what does that mean for your business? >> we're going to need increased investment to make this happen. and regardless of what it is. clean carbon future for our electric grid, data centers, electrific electrification, i have an electric vehicle, all those things need to be connected to a resilient grid, and those investments are going to be no regrets going forward. >> brian, thank you for being with us today. >> thank you for having me. coming up, here's another look at today's mystery chart. this stock is having a rough week, but got an upgrade today. we're seeing a raian wenssceith one spending demographic in

particular. that story is next.

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welcome back to "the exchange." despite having a blowout quarter being estimates on wednesday, abercrombie and fitch is down 15% for the week after raising concerns about the economy and the retail market, but today citi group is from neutral to bg the story is not over for anf as it becomes a new favorite among one demographic and that is gen-z. joining me is the analyst behind the call, paul and casey lewis. paul, let's start with you. i went to an abercrombie the first time in 15 years yesterday and gen-z and millennial moms. i don't know if that's accurate. that's who i saw in the store. talk about why you think the story is not over, and how far can this reinvention go before it has to do it all over again? >> sure. this has been one of the best turnarounds, greatest

turnarounds in retail history. you can see it in their complimenting. sales have continued to outperform the entire apparel landscape and we think that momentum is going to continue. they're getting the fashion right. they're operating at mid teens ebit margins and the cash generation there over the next several years is attractive. with the selloff this week it presents a great buying opportunity. >> are there lessons for other retailers in the midst of their own turn wereyaernds attempt li gap? >> sure. it took a long time and wasn't easy, but ceo fran har woe wit as the cfo they really did an amazing job getting the fashion right, developing the supply chain where they can test and chase to be able to buy closer to need and really develop a consistency of putting the right fashion on the floor, and at the same time, they got out of a lot

of unproductive stores and closed a lot of big stores that were losing money and really created what is a best in class ebit margin company within the apparel landscape. you know, generating mid-teens margin. when you put those two things together that's what we get excited about. when we think about gap there are a lot of similarities. it's the one you mentioned, and i think it's a right one. gap was also at a very low ebit margin as a starting part. they had stores they closed through the pandemic period. and they are also now showing a nice pattern of increases on the sales line. >> i want to ask you and ask casey about this, but athleisure, we've seen lulu a favorite name, struggle this year, down 50%. we also saw another athleisure brand athleta softer sales. is athleisure dead?

>> i wouldn't say it's dead, but there's been a change in how consumers are spending their money. during the pandemic period we absolutely saw a grav sttation athleisure, comfort, lounge, casual and i think the closets are full basically with those items and we're seeing a shift towards more fashion items. there's some fashion trends out there, some changes that work in the benefit of a company like abercrombie and gap, and lulu has been on the other side of that. they haven't had as much newness. look what abercrombie and gap is doing, they're putting new product on the floor and the sales results show that. >> you see baggy clothes and sweat pants in abercrombie & fitch and gap and the same formula in lulu. great insights. now let's get to after school's casey lewis and what abercrombie

is doing right resonating with gen-z. you've heard my kind of take. it's not scientific or anything like that. as i walked in, of course, it looked absolutely nothing like the abercrombie & fitch i knew from many years ago. >> yeah. you know, abercrombie has come a long way, and i think they found a sweet spot almost like this older gen-z or corporate look, the pleated trousers one of their number one items. imagine buying a pair of pleated us toers from abercrombie when you were a teen. wouldn't have happened. one of the top items i've seen in back-to-school hauls, a tiktok trend where people are sharing what they're buying, the abercrombie camo hoodie. the hottest item of the year. >> i'll have to look out for that one for my kids. when my kids go back to school. what are some brands that aren't as successful and i wonder how a shein fits into this? a lot of things paul described and abercrombie is doing well

you could apply it to a low cost basic oriented shein? >> yeah. 100%. abercrombie no longer setting the trends the way we were when we were growing up. they are seeing what is happening on tiktok much in the same way shein is. i will say you're right about lululemon. we're seeing a shift towards baggy jeans and sweats. a huge look for back to school. teens are wearing baggy sweats and low rise and there's no room for leggens in the way there used to be. this is going to hurt the athleisure brands. >> abercrombie seeing good back to school spending but not indicative of the space overall. it's a little softer this year. >> that's true. i've seen them investing in hollister which they hope will be their teen win. they have a back-to-school campaign for the first time in years. that brand is not big on marketing. abercrombie largely isn't big on marketing. to see them investing in an

omnichannel back-to-school campaign says a lot about where they're focused. >> when the ceo has a cautious message around growth, what is she seeing? >> i think it's really hard for them to sustain the growth that they've been having. what goes up must go down. they are so fickle not just with this generation but tiktok and the social media platforms. it's really hard for these brands to keep up, and i think it was very smart of fran, not that we're on a first name basis, but to have caution with the message. >> last quick one for you, if the camo hoodie is the hot back-to-school item of clothing, what is the hot back-to-school shoe? >> so, oh, man, it's a tough one for nike. nike is really not looking good. it's all about adidas this year the samba their hit a couple years ago. the gazle. the campus is the new shoe. also uggs.

uggs are just -- they are, they just continue their stronghold on this generation. also birkin stock, a big fall for birkenstock. >> thank you so much for being with us. really appreciate it. good deal as a lot of kids go back to school next week. that does it for "the exchange." i will join jon fortt for "power lunch" on the other side of this break. a look at stocks. the s&p 500, the nasdaq, up, the dow just under water by about 83 points.

welcome to "power lunch." alongside deirdre bosa i am jon fortt and shares of intel jumping today more than 7% as the company looks at options to turn itself around. during this year's chip hoopla the stock lost more than half its value. we'll ask our trader if intel can regain the former glory. >> we've been going across the country talking to local agents asking whether the prospect of lower rates is unfreezing the market and look back at the million dollar homes we've seen along the way. first let's get a check on the markets. you can see the dow industrials is under water by a quarter of 1%. the s&p 500 on the flat line. the nasdaq the outperformer by a smidge. it is a slow ahead of a holiday weekend. >> yeah. while the dow might ee