cathie woods but i'm on the negative side. puts at the 71.50 strike in october. >> wow, buying puts in that. that's interesting joe, quick with a name and then weiss. >> netflix, staying long >> volkswagen, staying long. great opportunity here >> good stuff. thanks, everybody. "the exchange" starts now. ♪ ♪ thank you very much, scott hi, everybody. i'm kelley evans here is what is ahead on "the exchange." stocks can't seem to string together a rally here. energy concerns and slowing growth signs sending the dow lower. energy is leading the declines bit coin is bouncing, up to 55k. we will look at why all of this is taking place. vladimir putin swoops in to say he will save europe from the energy crisis. that has nat gas plummeting 8% after a huge spike earlier on, why energy is now underperforming but is the worst

open in rapid fire we will cover everything from airlines, retail, restaurants and tech, the names to buy and avoid dom chu is here with the numbers. >> i miss rapid fire so much but i get the pleasure of joining today so i will see you later on for that as well that market story kelly just laid out, the energy story is interesting because not only is it the nat gas drop here, crude oil also dropping today, worse than expected supply numbers i should say bigger than expected supplies in the u.s. bringing the prices a little more under pressure. that's causing some under performance here in the dow overall, off about three-quarters of 1%, 250 points to the downside, well off the session lows the s&p 500, 43.16 the last trade there, off about two-thirds of 1% the outperformer down by 1%. 14,366 the last trade there. where we have seen some action, buying the dip so to speak in parts of the social media complex. first, let's talk about the emerging markets here because

we've talked a lot about this notion that certain key parts of the u.s. market are under pressure look at this etf that tracks the emerging markets ticker eem, off 1.25% today. right now at one point at the lowest levels in a couple of months here. if we go lower than that today, it will be back to november of last year. that emerging markets trade coming in under pressure for a number of reasons, not least of which is continuing strengthening u.s. dollar relative to other currencies around the world i mentioned the social media stocks as well we are seeing a bit of a return to some of the names twitter up 2%. snap up about one-third of 1%. same with pintrest facebook loss down about half a percent. facebook's loss is perceived to be the relative gain for folks like twitter, snap and pintrest. the social stocks have been volatile in trading around facebook's headlines back to you. >> see you seen.

our dom chu. yesterday 'rally seems like a short burst of positive sentiments as market take a leg lower today with rising yields and inflation concerns weighing. my next guest says there are opportunities in the two sectors, tech and homebuilders, falling on rising rate and his value funds performance is trouncing the s&p 500. bill smead is joining us tell me about tech, where you see opportunities. >> well, in tech we were looking for opportunities to avoid stock market failure >> got it. >> you've got a setup here, kelly, where the money is crammed in to tech in three different forms. it used to be one form, it was tech stocks. now it is technology, communication services, et cetera people are like lambs being led to slaughter in these high

price-to-sales ratio stocks. we're haenot recommending anyth in tech currently other than ebay, and we like ebay because it is the roger dangerfield of tech, it never gets any respect. >> that makes more sense when i saw second i'm thinking to myself, that's not the bill smead i know to be clear you still think there's a lot of room for downside how much downside and can markets continue to rotate away from tech and into the parts that you like without a bigger overall disturbance? >> that's a wonderful question john locke, the great philosopher, had the law of fashion. i don't think investors really understand how important the law of fashion is to the way they invest, right. people like to be reinforced by knowing the people around them agree with them, and so just as a general rule if you want to make a lot of money in the stock market over a long period of time, the best way to do it is in businesses no matter how well they do people never get very

excited about them now facebook is working their way that direction they might become the new philip morris philip morris was vilified, the original esg was taking cigarette commercials off the broadcast networks in the late '60s, and then philip morris got vilified and they were the best performing stocks in the next 40 years. they're on the way to getting there, but most are not close to being vilified at some point elizabeth warren will have occupy palo alto going. >> right this is why you think antitrust becomes a bigger headwind here we know you are staying away from them. we know you still like the homebuilders let me talk to you about oil stocks because there's two ways to look at this right now and i think exxon is a perfect example. we have oil prices back to 2014 levels back then exxon was one of the biggest companies in the world today its market cap is a third of teslas. i know you will take issue with the market cap of tesla, but point being tesla is only worth

$250 billion, the size of a chip maker these days you think the stocks will catch up to the oil price. others think there will be secular decline in oil demand starting in a very few years and that's why theoil companies will never be the size they once were where do you come down on that >> boy, you have hit the nail on the head, kelly, as usual. so if you -- buffet says the people that think we will make a quick transition away from carbon-based fuels and the people who think we are never going to make a transition are both crazy, right. so the point is there are only eight ways to make electricity in the united states three of them, the ways that dominated the last 50 years, were hydro electric, coal-fired and nuclear. "saturday night live" doomed nuclear back in 1979 on the three-mile island spill. so the way they make it now is geothermal/theme solar, wind, natural gas and

combustion, right, using gasoline >> bill, one second. i just have to interrupt you for a moment here. actually, president biden is in the middle of meeting with business leaders about the debt ceiling. i think we can listen in >> and for joining me today to talk about the need to raise the debt limit we haven't failed to do that since our inception as a country. we need to act these leaders know the need to act. the united states pays its bills. it is who we are it is who we have been, it is who we are going to continue to be, god willing. that's what is called the full faith and credit of the united states let me be clear. raising the debt limit is paying our old debts. it has nothing to do with new spending or what may be coming this year or other years it has nothing to do with my plans on infrastructure or building back better, both of which are paid for but they're not even in the queue right now. it is about paying for what we owe and preventing a

catastrophic event occurring in our economy. i'm glad these leaders are here to talk about the real-world impact it is going to have on people and on our position in the world. today's discussion won't be partisan, it shouldn't be. raising the debt limit is usually bipartisan let me speak for myself here i want to be clear for the american people to understand what is going on there's a senate vote today to raise the debt limit traditionally it needs only 50 votes. we were informed by our republican friends that they had to be all democrat votes, they weren't going to help. said, okay, we will provide 50 votes. the definition in the democrats, we have the votes. the democrats are willing to step up and stop this economic catastrophe if senate republicans will just get out of the way, but our senate republican friends are planning to block the vote to raise the

debt limit by using the procedural power called the filibuster to say that in plain english it means you have to have 60 votes when there's a filibuster, 60 votes, a super majority instead of 50 to get anything done it is not right and it is dangerous. the reason that we have to raise the debt limit in part is because of the policy of previous administrations which incurred nearly $8 trillion in bills in four years, some of which democrats voted for. more than a quarter of all the debt now outstanding, we had to raise the debt limit three times when donald trump was president and the republicans moved to raise it each time and each time the democrats supported the effort to raise the debt but now republicans won't raise the debt limit despite being responsible for what the debt limit, why it has to be raised for the bills that are outstanding. they won't raise it enough

through -- if not done we will be defaulting on a debt that would lead to self-inflicted wounds that risk the market tanking and wiping out retirement savings and costing jobs defaulting on the debt, which secretary yellen said could happen at any day after october the 18th -- that's when we run out of money -- means that social benefits will stop, salaries to service members will stop, benefits to veterans will stop, and much more. the failure to raise the debt limit will undermine the safety of the united states treasury securities, threaten reserve status of the dollar as the world currency and that the world relies on, downgrade america's credit rating and result in a rise in interest rates for families -- talking about mortgages, auto loans, credit cards my friends, and there are many of my friends. the senate republican's position

i find to be not only hypocrite cal, but dangerous and a bit disgraceful, especially when we are crawling our way out of a pandemic that cost america 700,000 lives thus far and we are still battling it. our markets are rattled. america's savings are on the line the american people, your savings, your pocketbook are directly impacted by this stunt. it doesn't have to be this way my republican friends need to stop playing russian roulette with the u.s. economy. if they don't want to do the job, just get out of the way we will take the heat, we will do it. we will do it. let us do it let the democrats vote to raise the debt limit without obstruction or any further delays house democrats have already passed the bill that would do that, raise the debt limit and keep the government functioning. it is sitting in the united states senate right now where democrats, with no help from republicans, have the votes today to pass the debt limit

the path republicans offer would take us right to the brink and cause irreparable economic damage in my view. so let's vote and end this mess today. that's the only way to eliminate the uncertainty and risk that will remain for american families and our economy if we don't. over more than 200 years america's built this hard-earned reputation of the strongest, safest, the most secure investment in theworld that's why the united states is a financial rock the world looks to and trusts. now, in one cynical destructive partisan employ, just for politics, our republican friends are teetering on that brink here they're threatening to boot that all away now, it is a meteor headed to crash into our economy we should all want to stop it. stop it immediately. this shouldn't be partisan i am thankful for the leaders who shared the urgency on why we

need to act and we need to act now. many of them are here with me. not next week, now look forward to hearing from their perspectives and we'll now get -- get this meeting started with my colleagues' permission i would like to start off, if i may, with a question for -- frasier, ceo of citi by the way, congratulations on your award you run one of the largest banks in america, and what impacts are you seeing or do you think you will see from this obstruction what does it mean for the small businesses and everyday people if we renege on the debt here. >> thank you, mr. president, for inviting us all to talk about this critical issue. as the head of the bank i don't have insight on what the right legislative solution is, but i can tell you that from an economic perspective we need to

resolve this issue very quickly. every day of delay right now comes at an increasing price as we've begun to see in the markets already starting last friday america simply cannot default on the debt because the u.s. treasury market is the bed rock of our financial system domestically and globally, and defaulting is going to cause lasting damage to the credibility of the united states with investors and in financial markets around the world as you say, the ramifications are not limited to the markets it is already beginning to cause some damage in the economy it will hurt consumers it will hurt small businesses, and it is not an exaggeration to say that even small distortions in the treasury market can cost taxpayers tens of billions of dollars over many years. consumers can be burdened with higher borrowing costs very

quickly, whether they're putting something on a credit card or they're getting a mortgage, and for the small businesses trying to recover from the pandemic this comes at a very critical time so we just can't wait until the last minute to resolve this. we are, simply put, playing with fire right now, and our country has suffered so greatly over the last two years, the human and in the economic cost of the pandemic has been wrenching. we don't need a catastrophe of our own making to undermine the progress that is underway. so we really urge the administration and congress to do what is necessary to resolve the situation for the good of our economy, for the good of our country. thank you, mr. president >> thank you you make a very good point that we are, god willing, i think we are just about to begin to turn the corner again on the pandemic an awful lot of small

businesses, tens of thousands of them have acquired significant debt we provided significant relief as well, but it is just an incredibly complicated feature i would like now, with her permission, i would like to ask adina friedman, the ceo of nasdaq, whether she would be willing to give us your thoughts thank you for taking the time, ms. friedman, to talk to us. >> well, mr. president, thank you very much for the opportunity to address the current situation. we are starting to experience elevated volatility in the markets, which can be partially attributed to the uncertainty that's been introduced by the delay approving the extension of debt limit we would expect that a continued delay in extending the debt limit would further destabilize the markets, and when we consider the broader economic costs of the uncertainty and certainly of possible default, we would, as jay mentioned, see higher borrowing costs for

consumers and small businesses as well as delays in much-needed payments to major social programs such as social security and medicare so when we look at this, these delays and certainly a default would mean that hard-working americans will ultimately bear the burden as you mentioned, extending the debt limit simply allows the payment of obligations that have already been made by the u.s. government therefore voting to extend the debt limit is an important bipartisan action to reinforce the full faith and credit of the united states, and we urge action as quickly as possible. so thank you >> let me ask you the defcon ten question, if we default even for a day or two, what do you think the impact on the market will be >> i think that we would expect that -- investors really just don't handle uncertainty well, and i think that investors and certainly, as we know, there are hundreds of millions of

investors that are involved in the markets today that have put their hardworking -- hard-earned savings into the markets we would expect that the markets will react very, very negatively if we actually get to a point of a defcon ten type of situation with a default >> what does that do to people's retirement accounts? >> yeah, i think we have to realize that well over half of the adult americans have money in the stock market, either directly or indirectly so those savings accounts, those retirement accounts, the pensions, they will all experience a significant sharp drop in their values, which, of course, makes them feel less certain about their ability to manage their lives and their savings and plan for retirement. >> well, thank you i don't mean thank you for the result, but thank you for explaining to people who are watching us how consequential this is. you know, i see my old buddy

jamie dimon up there of jpmorgan jamie -- excuse me for calling you jamie. mr. ceo, it is good to see you why from your perspective do we need to raise the debt limit immediately before october 18th? >> mr. president, thank you. you can call me jamie, that's fine appreciate you having us all here mr. president, anyway, there are five quick points i want to make number one is really a virality point. we all teach our children we are supposed to meet our obligations. i don't think the nation should be any different number two, we should never even get this close there are huge economic costs already being born by companies and lawyers trying to figure out what this means if something like this ever happens it is already affecting the stock market, et cetera, as you heard from some of the folks here number three, we should get rid of the debt ceiling. we don't need to have this kind of brinkmanship every couple of

years. number four, an actual default, an actual default would be unprecedented. the things we know that are it would do are very bad, and it could be potentially far worse the effects would be cascading, so day one would be bad but the cascading effects in the ensuing weeks could go anywhere from a recession to a complete catastrophe for the global economy. i don't know why anyone would take a chance like that. number five, america's role in the world is essential we are the bed rock. the american treasury is the bed rock our credibility, we're being watched right now by allies and, unfortunately, our enemies our credibility is absolutely essential. trust in america and the u.s. dollar and the financial system is critical to the world economy and eventually actually world peace. this is a time i think we should show american competence, not american incompetence. >> well, i'm glad you raised that last point because when i got back from the g7 and

subsequently with a number of virtual meetings with my colleagues and heads of state, i know brian menouoynihan knows a this as well, we are not only being measured in terms of our strength and our reliability based upon the size of our military and/or the physical strength that we possess, but it is on whether or not we can function there's a great debate going on, and i'm not exaggerating this. all of you deal internationally. there's a great debate going on whether or not in the 21st century, in the second quarter of the 21st century, can democracies function with things moving so rapidly. i can tell you a couple of the folks i have spent a lot of time with of late, mr. putin and mr. xi jinping, they really believe that autocracies are the only way forward because they can act quickly and decisively

it is not a joke we are seeing the effects of this around the world. i don't know it is understandable why the average american wouldn't understand what the consequences of this will be for american security and the willingness of other countries to follow our lead we have always led the world, not just by the example of our power but the power of our example, and that's going to be called into severe question. i mean for real. for real and it has consequences that are real what does -- you know, janet, what does further delay mean for a company like yours and the family you serve even if we just go on right up to the brink >> we start on monday, we're going to start reviewing all of our contracts, repo, cloud requirements there will be huge demand of people selling treasuries, wanting financing of treasuries. interest rates will start going up

it will get worse as we get closer to the brink. as you said, it will hurt not big companies, and we don't worry about that we do worry about it hurts the average american and we don't want that. >> well, i thank you we will get to everybody, but i will yield to the director of the -- public engagement, former chairman of the black caucus in congress, cedric richmond. cedric >> thank you, mr. president. i will just quickly yield to who -- your great treasury secretary, who is an expert on this for comments on what she thinks the ramifications are and where we're headed so with that, secretary yellen >> thank you, cedric thank you, mr. president let me thank the business and community leaders who have joined us here today i wish we could be meeting to discuss another topic, finding solutions to climate change or how to better invest in the future of our economy. but the urgency of the debt

limit situation demands immediate attention, and i want to be clear about my position. first, this is an urgent matter. it must be resolved immediately. treasury will exhaust its extraordinary measures if congress has not acted to raise or suspend the debt limit by october 18th after that point we expect treasury would be left with very limited cash it would be depleted quickly as we've seen quickly in the past, as this group knows, even delaying action can cause harm to business and consumer confidence, raise borrowing costs, disrupt financial markets and cause a downgrade of the u.s. credit rating second, let me be clear, this would be a catastrophic outcome and this catastrophe would occur on two dimensions. the first links to the financial system and macro economy

if congress does not take action to raise the debt limit, treasury's cash balance will reach an insufficient level to pay the nation's bill and america would default for the first time in history, and default will call into question the full faith and credit of the united states. our country would likely face a financial crisis, causing interest rates to rise quickly and restricting access to credit our fragile recovery would be thrown into reverse. we would likely experience a recession. millions of jobs would be lost and the pain we would endure will pass the resolution of the crisis the second catastrophe would be born by all of the americans who directly receive any sort of payment from the federal government every social security beneficiary, every family receiving a child tax credit, every military family waiting

for a paycheck or small business owners receiving a federal loan, they're all at risk. millions are without sufficient savings to forego an expected check, and for these households and businesses the impact would be devastating to take one heartbreaking example, millions of seniors who depend on social security for their support would have to make awful choices such as deciding whether to pay rent or buy groceries, and the same goes for parents of young kids expecting a child tax payment. hopefully it goes without saying this is not only bad for people, it is equally devastating for american companies for decades our country has earned a reputation for being a welcoming and a reliable place to do business we respect the rule of law we honor our debts

this reputation has benefitted us in many ways, including the ability to keep interest rates low and for the dollar to serve as the world's reserve currency. ultimately, these benefits have helped us lead in the world economy and become a more prosperous nation, and yet today we are staring into a catastrophe in which we surrender this hard-earned reputation and force the american people and american industry to accept all the pain, the turmoil and the hardship that comes with default. it is unnecessary and it must be avoided at all costs congress must address the debt limit immediately. thanks i look forward to continued conversation >> thank you, secretary yellen mr. president, as we heard earlier from jane, about half of adults have money in the stock

market, either directly or indirectly we know that 50 million people rely on their social security checks to make ends meet so i would now like to turn it over to joanne jenkins all right, that's president biden and treasury secretary janet yellen, of course, speaking with key business leaders about the impact a default on the debt would have if we failed to raise the debt ceiling by the october 18th deadline goldman sachs putting out a note saying they could probably make payments to bondholders for a couple of days but would start delaying payments to households, businesses and others. we appear to have headlines from senator mcconnell. let's bring in our kayla tauchie f tauschie for news on everything we have heard. >> kelly, the white house is trying to ramp up this coordinated pressure campaign and communicate better the consequences for everyday americans if lawmakers did not broker a compromise or do not

broker a compromise as soon as possible among some of those consequences you heard them talk about the stock market possibly falling, borrowing costs going up, small businesses not being able to get loans, social security payments not going out and troops not getting paid you heard the secretary of defense earlier today warn of these catastrophic consequences, and those concerns echoed by six former secretaries of defense as well so clearly the white house is trying to engage with these business leaders to communicate some of these consequences, but it is unclear whether it will do anything to move the needle over on capitol hill. i'm told by sources that the white house feels it has about four republican votes to raise the debt limit, but that is less than half of what it needs to actually get it done with bipartisan support, but there is hope that with some of these warning calls from business leaders, with a potential drop in the stock market, once source noting in 2011 the market fell

17% before a compromise was reached back then a decade ago, that there could be some sort of resonance with lawmakers but as we've heard from leader mcconnell, senator mcconnell, there's just not really any desire or appetite to be budging. the white house has also considered, as you heard from the president yesterday, removing the filibuster that would allow democrats to do this on a stand-alone basis, but not even all democrats are on board with that. west virginia democrat joe manchin again today reiterated he would not support a move like that, so really the white house feels that it has just a few days left to get republicans on board. i am told, kelly, they are trying to chart a course forward by the end of this week and figure out what their options are. kelly. >> as we see the market moving off session lows, you know, this is, again, a report that senate leader mcconnell told a closed meeting of republicans that he would offer a short-term dent limit extension, possibly

expedited budget process this is just early reporting based on what happened in this meeting. so is this a different path forward than we would have expected just this morning >> reporter: well, it is going to be important to see the details of exactly what he is saying if he is talking about a shortened time frame, i.e. raising the debt limit until the december date that the government is funded until, yes, that would mean that the debt ceiling would not be breached and we would not encounter a default in the month of october, but it would only create a more nuclear or toxic situation in december when government funding and the debt limit are, again, relinked toward the end of this year around the holiday season on the budget process, you know, that is something that mcconnell has said that he would be willing to get out of the way and expedite the process if democrats put one of these reconciliation packages together that simply dealt with the debt limit. so far the white house and democratic leadership have not been willing to do that.

that is sort of a last resort, but it is something that they may have to consider if that appears to be the only path in the next couple of days. kelly. >> i'm glad you can follow all of this, i really am, because it is complicated and convoluted and we're trying to make sense of it moment by moment the dow is off the low, down about 100 points off these developments we will take a quick break coming up we will talk a quick break with crane shares adding two new carbon etf on top of the flagship this fund has doubled since inception last year. we will speak with crane shares about what is driving demand and how high carbon prices might go. as we go to break here is a look at the sector heat map it is changing there we have one group positive, utilities by about five basis points we are back in a moment.

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points away from turning positive we still see energy the biggest laggard. we had a whipsaw effect with energy, with natural gas surging before reversing into a decline. oil prices down as well after yesterday hitting over $79 a barrel again, we will keep an eye on the major movers for you as the market climbs 300 points off the lows here are some of the stocks even as that happens still around their 52-week lows brown forman, colgate, mccormick, fidelity and newmont, giving you a sense of where the underperformance is today. the price of carbon has risen dramatically, especially in europe where prices hit a records high last month. that means big gains for the crane share global carbon etf which in 14 months has nearly a billion dollars under management and doubled in price since its launch holdings consist of carbon offset futures in north america

and europe they have now convinced crane shares to open two carbon etfs this week. luke oliver joins me now, managing director and head of strategy at crane shares welcome. >> hello thanks for having me on. >> i think the main question i have for you today is actually about the interplay between the carbon price and the energy crunch we are seeing worldwide how would you sort of explain that dynamic >> yeah, it has been a very interesting dynamic. carbon traditionally has had very low correlations to almost every asset class. that said, we have been in this transitionary period where as the price of carbon increases we have seen fuel switches away from coal, which is worst carbon footprint to natural gas which is half of the emissions of coal, and that's what it is supposed to do, move power generation and industry away from the higher intensity carbon to greener fuels we start to see a correlation between natural gas and carbon

that said what happened over the last few weeks is detachld from that we have seen increased demand for fuel, liquid natural gas in china and india, a lack of supply on the pipeline from russia into europe we have seen a real crunch on the supply of natural gas and therefore demand for other fuels such as coal, oil and so on that pushed up prices the interplay is actually broken down the rise in energy prices is actually detached from what has been happening in carbon prices. if anything carbon has under performed despite the 118% return since inception, it has underperformed the energy market >> yeah, it sort of peaked first if you want to look at it that way. it is important to note the carbon price in europe is dramatically higher than in u.s. markets, both in california and the northeast where it is a different story. with the big meetings coming up, cop 26 and all of the rest of it, you have to wonder if the u.s. is looking to emulate the carbon price in europe the problem is we are starting to get a sense of the cost when it is more expensive to produce carbon that means prices

go up for the end user or fewer people are producing it. i wonder what policy response that might engender and in the long run is it going to hurt demand for carbon? >> no, i think there's two things here. one, the increase in price in energy, as i mentioned, is way beyond the effect that carbon is having on energy prices. so there's definitely some political risk that people will look towards carbon as a source for that, but it really is -- i think the eu put out there's only 20% of the energy increase, price increase comes from increasing carbon prices as you mentioned european carbon is about $70 a ton california is only trading about $27 a ton, and the northeast of the u.s. is only about $11 a ton. at this point the u.s. market is undervalued, it is not trading at its efficient price, which is significantly higher or should be significantly higher than where it is. so i think we're not seeing any of those effects in the u.s. yet. what is going to drive the price aside from every other factor is

the design of these programs to reduce supply. as you saw in europe, they're tightening the program it has gone from 2.2% reduction each year of supply to 4.2% and they're continuing to buy in the free market, in the market's reserve. we are seeing europe and california going from a surplus in the market to a deficit so that could definitely drive prices higher. in the u.s. -- >> i was going to point out the difference with other commodities. this one you can't really measure. it is basically a way of -- that's why i joke it is more like bitcoin we said, okay, the supply of carbon will be capped at whatever it is, 600 giga tons left for the world to produce. so, you know, whatever it costs somebody now to have one of those remaining pieces is whatever they have to pay for it i guess the question is who wants -- other than people, luke, who look at this and go, hey, great, i want to participate in the carbon price upside, but who are the main people driving demand for the core product and tell me about the two new products you are launching.

>> yeah, yeah. just to try something back, in the u.s., because i don't think we have hit the true price discovery, i think it is somewhat detached from fundamentals if you go to europe the price of carbon is exactly correlated to whatever the cheapest next alternative to reduce emissions is we call it the marginal abatement cost curve the price will move along that curve. there is tangible pricing alongside these, and the u.s. market will move towards that curve as the markets pick up but as for who is buying this, we are seeing people look at this as the place to add alpha to their portfolio we are looking at the correlations being significantly low correlations to equities, below .4, low .4 to commodities. we don't even see moderations to clean energy stocks. we have seen people add this as an alternative, as a diversifier in a portfolio last of all we are seeing people think, to your point, as prices go up you could argue everything

has been too cheap forever because carbon hasn't been priced as carbon is priced in things could rise and carbon is actually your hedge against inflation. it is your hedge against the drag it could cause on equities as well. so we see this having a lot of uses >> i'm curious this is just me kind of spitting out ideas here, but tell me why every sort of state pension fund or, you know, why shouldn't they have a hedge here where they can pay out to consumers the same kinds of cash flows that are driving up their bills or something to that effect i'm curious to see how this matures and plays out. >> that's exactly it this is -- this is one of the -- not only is it the most powerful policy tool to reduce emissions and improve climate change, it is also a direct cost that will go into the market, that needs to go into the market and is regulated to go into the market. these programs are expanding, china, new zealand, south korea, the uk probably will be added in the near future. this has to happen and therefore it should be in portfolios

to your question on the vehicles themselves, krbn is this global basket that will continue to add markets and become diverse global price of carbon simplifies for investors the most liquid, most price efficient market is europe, and we have a stand alone for that market ccca is for u.s. investors who favor an overweight for that california at $17 a ton is really poised potential for its shift into price discovery >> right, to break -- absolutely to sort of catch up to the european price now, you did a great job of explaining all of this it is great to have you on today. luke oliver with krane shares in charge of their etfs now leslie picker for an update. here is what is happening this hour. west of dallas four people have been injured in a school shooting police say it happened in a fight between students after one pulled a gun police are looking for an

18-year-old suspect who fled the school and is considered armed and dangerous. three victims have been hospitalized, the school is being evacuated and students are being reunited with their parents. on the news tonight at 7:00 eastern, the latest on the shooting the world food program afghanistan director says the humanitarian crisis there has escalated at an incredible pace over the past few weeks. the canadian government is requiring proof of vaccination on all domestic plane flights and train trips. canadian federal workers will also have to be fully vaccinated or placed on unpaid leave. both measures go into effect at the end of the month back to you, kelly >> leslie, thank you very much leslie picker. still ahead, a tarmactive on wall street on the future of entertainmenanonfit d e rm says to pileup on pizza it is all in rapid fire right after this

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welcome back, everybody. let's catch you up on a few other stories that should be on your radar right now it is time for rapid fire and on deck we have airlines, retail and tech, too. to break everything down we have our dominic chu as he teased at the top of the hour. marian mon tain and ceo fast money trader steve grasso himself. let's begin with the battle in the skies. wolf research downgrading delta to pure perform saying shares topped out at current levels they're bearish on hawaiian and allegiant. american was downgraded to sell. on monday barclays upgraded southwest and turned positive on the industry who has it right, dom? >> it is hard to say, only because there's unevenness with regard to the travel and lieshure second tour as of late. since the pandemic lows it has been firing on all cylinders we are trying to get back to normal tsa screening levels.

what it comes down to is whether or not a lot of the demand for travel has been drawn forward. a lot of the folks have taken the plans, taken that time to kind of really get away and used up that vacation, used up the time and resources ahead of time now, here is the interesting part i have been looking at flights for lights on this year, early next they are really, really cheap, kelly. i mean you should look at, you know, after work today, just check it out there are some itineraries down right bargain basements. i wonder if that kind of pricing pressure is what is leading to some of the downgrades i'm inclined from lay person's perspective, just seeing the anecdotal to believe that, yes, the pricing environment will not be all that great outside of holiday weeks. >> mary ann, you are bullish on southwest airlines, you have been adding there. what about the rest of them? >> not so much southwest stands out because of the domestic consumer-type of travel, leisure travel if you have been to nashville on a weekend recently you would say, people are traveling, and

you would also find that southwest doesn't depend upon international travelers and international relations to get people moving around such as a delta would. so when we saw today's higher oil inventories we -- eia, that made us more positive on this one. we have a target price in, say, the mid 80s to low 90s >> from a $54 price today. steve, a final word on the airlines who would you add, who would you avoid? >> yes, so just all of those points if you want to get -- if you are worried about international travel coming back and covid protocols, then you want to go with the domestic-facing obviously southwest as was just mentioned, but jet blue, spirit airlines once corporate travel does come back you want to be a buyer of delta, kelly let's remember, before we went into the pandemic they are the only ones with an investable grade balance sheet as well. >> like you said, when that comes back so you're definitely not saying

it is there yet. let's talk about cotton and sort of the laundry list of the everything shortage. cotton prices are climbing to the highest level in over a decade thanks to surging demand in china they're up 20% in the past 12 trading sessions, for prices for clothing, other materials could be headed higher as well it could be headed highe as well. it could be a problem for retailers already in trouble stitch fix and others taking a beating. i am sure there are some companies more exposed than others how would you play retail? >> dollar tree announced they are going to go above the $1 price point. it is because of general supply chains they have very, very little exposure to cotton in their offerings. here's a company that is also buying back $2.5 billion worth of shares. if you look at the chart, you will see that it has made a

double bottom recently and looks like it is breaking out. we have 25 to 30% upside in dollar tree. >> dom, what would you add >> i am wearing a cotton shirt, cotton socks but when i think of cotton, i immediately think of denim i'm thinking about companies likely vie straws, ambercrombie, those companies that are exposed to the denim kind of things. apparently the denim style is back in different ways. >> maybe that's what's driving this >> people aren't going for the skinny tight pants anymore, some of the baggier jeans are in play if you are trying to stay up with the styles it might be that cotton price also play into your cotton inflation this time around. what's going on with amazon? already a major streaming player when the ceo saying video games could soon be as large as the entertainment business their online fantasy game new

world is on the rise ironically, am's twitch gaming platform which is used by millions around the globe was reportedly hacked today exposin vital source code data the stock is losing steam this year what would you do with the video game category? >> it's quite shocking to me that awful these video game categories, as you mention, are negative for the year. act vision is down 16%, take two is down 20%, electronic arts is down 6%. all year to date what did we hear from netflix the other day, too, kelly, that they were going to add the gaming angle that's been in rumors or talks or mentioned for the last year or so. i would think that apple is big in the arcade space. netflix is going to be there amazon is going to be there.

i would be a buyer of all three, frankly. >> we have seen netflix strongly performing after adding video games. marianne, bullish on amazon but modest, 20% upside >> 20% is still a good amount. the reason that we like this company is because their web services are the largest part of the company, and the fastest growing. they have the highest mirge mar and they have a superior 40% share globally in web services the fact they are going to have games as their largest portion of the entertainment business isn't a surprise also, looking near term, my understanding from talking to manufacturers is that their priorities are the online platforms as opposed to brick and mortar that's why you are seeing empty shelves but you can get your things on line, and amazon stands to benefit. >> the big players will always get it -- be in the front of the line dom final word. >> when it comes the video games

there are sentiment concern given the crackdown we saw in china you wonder if take two or ea are going to benefit not because of the shift away from those types of areas to focus on u.s. consumer but also in general because that content still remains very paramount it is a huge industry. if you look at the pandemic lows until now. video gaming had been seen as a beneficiary there. it might be one of those trends that sticks around for the longer term. >> we are out of team for pizza. so we'll leave it with the domino buy, guys, marianne, steve grossa, and dominic chu. folks who bet on the big apple surviving seem to be right, at least in terms of office space christina has the story. >> the real estate market is eager to welcome back a burst of leasing activity it is the best quarter since 2019 here in new york. so what better way to show you,

from 91 floors above manhattan, a the 1 vanderbilt i am at the summit which is only open to the public until october 21st if we are going to breakdown the numbers. leasing volume increased 51% compared to last year at this time sounds good. occupancy rate in this particular building is well above 90%. but that may not be a barometer for the rest of the manhattan. listen in. >> on peak days we are at about 35% occupancy in our portfolio so one third of the building space is now being occupied that obviously has a long way to go we need to get back to prepandemic levels where 85, 90% was utilized on a daily basis. >> with that, you are seeing several of the real estate reits climbing over the last while but in new york city they are still down over the past six months back to. >> that floor isv super cool look

it is a beautiful view. break news out of washington -- more, i should say. ylan mui with the latest >> kelly, two sources have now confirmed to me that republicans are planning to offer democrats an exit ramp to the debt ceiling standoff now, details are still emerging. but i am told that resolution could include a short-term debt limit extension that would allow democrats the time to raise the debt ceiling through the reconciliation process punch bowl is reporting that that short-term extension to last through the month of november, making the deadline coincide with the government funding deadline that would give republicans and democrats that fiscal cliff in order to urge them into action later on in the year of course we will see if democrats accept any potential deal the republicans offer, but it does seem like an exit ramp is in sight. >> thank you very much key details there w dow down only 121 points ask. nasdaq a motiona ago was briefly

positive. should we talk about the worker shortary hitting the tech industry as the skills gap makes it difficult to find qualified workers. multiverse is hoping to change that by partnering with names like microsoft to train candidates joining us, an agent of multiuniverse. what is mulls verse? it sounds fun. >> we're building an outstanding alternative to college focussed on tech digital and professional services careers we place those choosing not to go into chemg into apprenticeships with companies like google, facebook, and in placements of data analytics, management, and software jeering. >> how big is the employment problem? >> the notion of talent availability in tech is acute.

make no mistake. microsoft and every other company in the industry is impacted by that however, i think if you were to think back four or five years ago, there was a notion that said every company would become a tech company therefore, every company would have to build the right talent pool in order to take advantage of what tech can do to move those companies along. that's only been exacerbated by the last 12 or 24 months, for sure i think a related problem is the growing cost of, frankly, getting a graduate or an undergraduate degree >> uh-huh. >> the whole notion of debt being created for college degrees is exponentially beyond what it was when i went to college 50 years ago it is a huge, huge problem having something like multiple verse that allows companies to invest in talent and them not have to worry about whether or not they are debt constrained when they are done with that that's a huge process problem

that should improve the outcome for all companies around the world. >> this is open to people 18 to 26 years old with a high school diploma who do not have a bachelor's degree. you get to fill out a profile of your skills and interests, get matched with an apprenticeship over a 15 month period you work 9:00 to 5:00, you get paid for it it's free. you earn the salary -- what is the catch? you hand me -- is this like one of those buzz feed quizzes. >> there is no catch. >> there is no catch. >> how do you make money >> we charge employers it's right that employers pay for this, because they need access to those skills but also, they need access to different types of talent. there is no more pressing issue for corporate america right now than creating a work force that reflects the diversity of the country. you cannot address that shortfall through college. dropouts are high, it is hugely expensive. and degree requirements are screening out two thirds of black americans, and 79% of

hispanic americans >> yeah. >> we have got a real issue if we don't address this. >> i know it is not open to people with a bachelor's degree but i think there is a segment there that could benefit from something like this. gentlemen, thanks for your time. i am glad we could get this in multiple versz. that does it for "the exchange," everybody thanks for tuning in on a very busy afternoon "power lunch" picks things up right now. welcome, everybody, to "power lunch." welcome back the our old home in studio a stocks are off their lowers after mitch mcconnell said he will offer a short term debt ceiling extension to democrats, as ylan mui put it, an yomp ramp to this crisis, a manufactured crisis we will all have the details plus, doubling down, gm expanding its plant. an ambitious goal. an