platform >> thank you for that. r r rob. >> faang lowest since 2018 >> okay. jimmy. >> i liked what i heard pete saying about vegas wynn resort is my play there >> there you go. i knew you were out there recently, too. have a great weekend, everybody. see you on the other side. "the exchange" starts now. thank you very much, scott hi, everybody. i'm kelly evans, here is what is ahead this hour. jobs, the economy adding only 194,000 jobs in september, enhanced unemployment benefits ended, most kids are back to school, there are millions of jobs openings. why aren't more roles being filled what does it mean for stocks, bonds and the taper we'll ask. we're talking tesla with an analyst bullish on the stock for what he calls the company's apple-esque brand.

we begin with the market reaction to the jobs report. interesting picture over here, mr. chu. >> scratching their heads, what a lot of traders are doing because they're trying to figure on what happened that's a very disappointing jobs number as kelly pointed out. why isn't the market reacting more markedly? maybe because it is a holding pattern with regard to whether or not it is a game changer for the fed, for interest rates, for washington policymakers, everybody out there. regardless, the markets are telltively stable given the number we saw. up only three points we will call it unchanged for the dow industrials. the s&p 500, similar move there. the nasdaq composite underperforming, down by about one-third of 1%. to give you an idea how tight it has been, at the highs of the session up roughly 45 points and down 62 points for the nasdaq overall at the low so tilting to the negative side but a tight trading range. it is a friday let's recap what happened from a

sector perspective the two biggest gainers in the s&p 500 over the one-week span have been energy stocks and financial stocks those two particular sectors, the real outperformers, the so-called value cyclical trade a lot of experts have been talking about. meanwhile, no surprise here. the under performer, health care, biotech taking a hit over the course of the week watch that trade speaking of the energy trade, the names that have kind of dominated the one-week performance list on the s&p 500 have been those energy-type names. phillips 66, the best performing stock in the s&p on a one-week basis as this moment marathon oil up as well, up 11%. apa corporation up 10% again, energy, value cyclical. we will see if it lasts. back to you. dom chu, thank you very much we appreciate it the jobs report this morning certainly a puzzling one the headline numbers were weak, well, at least the payroll side. the detail numbers were jumbles. labor participation is falling

but the job numbers open across the country sitting at record highs. so many questions out of the report we decided to do a special economic edition of rapid fire to kick things off to make sense of everything, michelle myers, bank of america. steve bodland, ceo of the conference board a very specific issue to discuss with you, steve. rich bernstein is the richard bernstein adviser's ceo. we are thrilled to have you on board. let's start with everything we learned this morning, the big numbers. nonfarm payrolls rose by 194,000, the weakest since last december of 2020 also a huge miss from around the 500,000 expected, but the private sector print was only about 36,000 less than expected. the unemployment rate dropped to 4.8% that's the lowest since last march and the third straight monthly decline. all sounds good. big gains in leisure and hospitality balanced by tremendous losses in the government sector. labor force participation overall shows some recovery but

well below pre-pandemic levels the labor force participation among 25 to 45, key demo, was also a little weak what is the takeaway within these numbers, michelle? let's kick off with you. >> sure. so, kelly, hu a great summary there, which is the headline that 194,000, kind of, you know, doesn't capture what we actually saw in the report, which was, you know, better data. without a doubt there's a lot of demand for workers, whether you look at the job opening survey or you look at other measures of small business sentiment, for example. there's just a lot of employers that are looking to hire so the real challenge, and i think this was emphasized in today's report, is that there's supply side issues the labor force is constrained, and, in fact, in the most recent data the labor force contracted. now it is one of the reasons the unemployment rate was set to fall i think the friction in the economy, highlighted by the jobs

report, is one of the major challenges we have right now i think as we look forward we should get some relief you know, all of these factors you mentioned before in terms of child care, declining covid cases, expiration of ui, it starts to kick in for the next jobs report but it wasn't quite in play for this one >> so, michelle, when you break things down, is this a strong economy held back by what it wants to do or a slowing economy on the cusp of recession >> certainly not the latter. i think it is an economy that has strong fundamentals and has plenty of capacity to expand in terms of the demand side, right. there's a lot of money out there that can be put to work. there's a lot of companies that are looking to hire. there are a lot of companies that are looking to invest in capital. >> okay. >> the challenge is more on the supply side, but that could be a real damping in factor >> so this sets us up for mr. oddland. steve, we have sort of this argument on the one hand on theother hand we can talk about the scary data like the

atlanta gdp now figure slowing precipitously. this paper by blanche flower, and rarely do we see an academic paper talking about how we're in recession. those usually come five years after the fact, not in the moment, ahead of things. they're basically talking about the conference board confidence readings, expectation readings and saying usually when they drop by at least ten points a recession follows, like more often than not we're in a similar position now. the real question, they say, is whether we've had so much stimulus it basically offsets or absorbs all of that. i have heard people call it a growth recession and others a paradoxical terms. it seems to perfectly sum up the times we're living in. >> yes, we area not in a recession. the conference board doesn't see us going into recession at this point. look, if you look at the uptick in the revisions for last month, it really made a very strong month. so the juxtaposition of this month versus last month is all

delta, and so you -- you have a breakthrough people who are even double vaccinated are getting sick, and so everybody is putting the brakes on. they're not going out and so forth. even though the numbers were strong in hospitality and leisure, they were way down from the job creation that was expected and where we were before so this is all -- this is all of the hiccup with the delta. the question is how long it is going to last. you have people staying at home because of delta at the same time you have the administration putting vaccine mandates on and so you are seeing large-scale terminations because, you know, the administration says it should be a condition of employment. so people are acting on that i think we all need to take a collective breath here, get through this thing i think it will rebound. the demand side is there the question is whether we can get the goods in the stores for the holiday season >> sure. >> and that's a big if because you have all of the container ships sitting offshore without people to unload it and without the drivers to drive it across the country. i think you will see a huge

ecommerce ecommerce lift, but i think we will have a good season and the economy is not in recession. >> rich, i will give you your reaction on this how do you feel now? >> kelly, i think the story is really all about cyclicals i think you have people kind of clinging on to the story of tech innovation disruption and kind of ignoring the reality of what is going on in the economy that we're trying to talk about here today. so i think the way to think about this and summarize this is to say the investors have for a long time thought about real growth i think going forward you are going to hear more talk about nominal growth because pricing power is a very big issue, whether it is pricing power for goods, pricing power for labor, which means wages, anything like that that's going to be reflected in nominal growth, not in real growth so the key to portfolios over the next 6 to 12 to 18 to even

24 months is how sensitive is your portfolio to nominal growth, not to real growth >> and what would that mean? so if i thought, you know, we were going to have -- then, you know, we are hearing a lot about energy, we are hearing a lot about financials we see the ten-year, rich, kind of taking it above 1.6%. what is that point to you? >> kelly, you hit on an interesting point. with the yield curve steepening and interest rates going up, that's pricing power for the financial sector what we had for a very long time was basically a flat yield curve that didn't offer any margin to lending, right the only way to increase your lending was to use leverage which the banks can't do anymore. now that the curve is steepening, that argues you are getting pricing power for the financial sector which is one of the reasons we think they're so attractive but, again, the theme in portfolios i think has to be pricing power. i think it is the biggest story out there right now. >> sure. on that note let's turn to the fed and the taper timeline in his testimony on capitol hill

last week fed chair jay powell was almost prescient on today's jobs reports listen >> right now we are far away, we think, away from full employment, so that gives us incentive to keep accommodative policy strong, to keep accommodative policy in place. inflation is well above target and, you know, we have an expectation that that high inflation will abate because we think the factors that are causing it are temporary and tied to the pandemic and the reopening of the economy and what we say is we just have to balance the two >> so this is the last jobs report before the next fed meeting. i think it begins on the wednesday before the next jobs report comes out the fed was already split on whether or not to taper, michelle, but it seems like all evidence is pointing towards the announcement coming next month, the taper beginning in december. does anything change that? >> i think we're very much on track. i mean it was, in my view, a high hurdle to stop the fed from

going ahead with tapering in november they see the criteria being met on price stability i think today's job report was perfectly sufficient in fact, it actually probably made them more concerned about inflationary pressures into the end of the year given restrictions on the supply side and increase in wages and these kind of cost pressures building. so i think the fed is on track to announce a taper in the next meeting, and then really focus the attention on when and how they're going to set up for interest rate hikes. >> steve, is it going to be strange to have them tapering at a time when we -- no matter what the gdp number looks like, it is slowing. this goes to the nominal thing rich was talking about a lot of people don't feel better off by how the economy has been doing because prices are up so much on things like food and fuel. i think they're going to press ahead with that anyway >> well, you know, there's tapering and then there's tapering what does it mean? they're not going the raise interest rates but they're going to cut back on the quantity that

they're buying and, you know, because they're trying to ease off the inflation level a little bit here i think inflation has some components that are longer term and then some components that are shorter term and you have to look at the used car market to understand that. that's having a huge impact just on the total inflation number, and we have to get through the chip shortage. so, you know, how long is that going to last? i think the bigger issue here is in jobs. you still have 5 million people sitting on the sidelines from pre-pandemic levels, and, you know, the majority of those are women. the question is whether those women are going to be able to come back now that those child care issues and elder care issues and all of that, but at what point do they just say, forget it, i'm staying home. you also have a third of them that are boomers that are retiring and they're just hanging it up. i think you are going to have labor supply issues going forward. wages are up 6% in the last six months the question is whether that's going to be carried over in inflation as well. >> so, rich, you know i think also a lot of people out there

sense maybe the fed is part of the problem in the sense that if they look at the price hikes, they go, well, they are tracing it back to government stimulus and to fed stimulus and saying perhaps that maybe the response has been too large and it is creating some of these distortions now. so is there a case for the fed to actually move eyealong more quickly? >> you know, kelly, i think no one should argue that the fed's actions haven't distorted the economy and haven't distorted the financial markets. i mean i would argue that's kind of silly you have to look at what is going on and the misallocation of capital in the financial markets, and it is pretty obvious they distorted things. i think from an investment point of view as opposed to an economic point of view, the investor has to realize the fed is a lagging indicator janet yellen used to talk about how they're going to be data dependent and i thought it was an interesting term because, number one, what would they be for if they were suddenly data dependent, were they winging it.

the other side was they're going to get the data, analyze the data and, most importantly, react to the data. i think rather than being a setter of the financial markets as many people think, they're actually the lagging entity, and the markets will sniff out what is going on. i think that's exactly what has has been going on already. the markets aren't waiting for the taper, the ten-year is already selling off. one has to remember the fed will be at the back of the line, not the front of the line. that may be the right thing to do, by the way i'm not arguing from a socially responsible point of view they may have to do it, but from an investment point of view i think it is important to realize that. >> let me kind of rattle off the final topic and come back into the takeaways from all of this on the wage front we had september wages up about .6 of a percent last month, more than expected average earnings around 6% over an annualized pace over the last six months that's huge. compare it for year-on-year average of just 3% over the past

decade you said look for companies with pricing power, you think bond yields are going up and the rest of it, but i guess the question is what would you specifically have in your basket? what do you think will be the market trend into the end of the year, maybe even into the first quarter of next year what should people be thinking about in terms of where the strongest performance will be? >> so, kelly, we've been positioned on the cyclical side. you know, we have been overweight energy, materials, industrial, small-cap value, all of the things that are very sensitive to, as i said, the nominal economy. i think one think people aren't thinking enough about are the opportunities outside the united states one of my favorite lines is that france isn't exactly the hotbed of innovation and disruption, yet france is outperforming nasdaq so far this year. >> wow >> i think there's lots of opportunities outside the united states as well that people are just ignoring, but, again, the key is pricing nominal growth, not long-term secular growth, which doesn't perform well as interest rates go up

>> michelle, it is interesting rich mentioned france which is a country i have heard people like jeremy grantham speak of positively they've delivered and they're way ahead of the u.s. and we have looked at it as a sign of an inefficient economy, but maybe that's where the u.s. needs to go. how much higher do you think wages could go here if this is a real kind of secular reset >> yeah, i think you are touching on something important, which is that when you look at where the wage growth has been, it is the lower income, lower skilled cohort seeing the most dramatic increase in wages one can argue that that's a long time coming, that the wage growth for that population was quite stagnant, especially relative to inflation. so real wages were contracting for many folks now that we have this extraordinary demand for those workers with restricted supply, you are naturally seeing this level set higher in wages. do i anticipate we will see wage growth of this magnitude

continue going forward no i think this is more of a level-set and then we will probably see more moderate gains in wages into the future but one other really important note when you think about this for the broader economy, you have to think about wage growth relative to productivity growth, and we're seeing both right now. so for companies it is quite positive >> that's a great sign steve, i will give you the last word then. what would you say then about how much higher wages need to go in order to fill all of the open jobs, make sure there's not a shortage of truckers and the whole supply side of the economy isn't putting the brakes on things >> i think michelle made some great points it is in the service sector where the wage growth is the highest, blue collar jobs, truck drivers, where there are the shortages. these are the jobs that require you to be on site in person. if you look at the mandates and policy matters, if you look at the mandates they are you must be vaccinated to be employed that's probably not the right way to do it they can fix it by simply saying

to be on site and leave the people that want to work remotely and the employers willing to have remote workers, leave them alone if you did that, you would give the flexibility to the economy to balance that out with on-site, in-person and remote work if you did that, then i think you would see wages sort of normalize over the course of 2022 so it is public policy-related as well as delta variant related. >> that's a great point, especially in this kind of -- you know, everything about this has been unusual, and the sort of necessary cures at this point still are unusual relative to the recent past. we will leave it there guys, thank you all so much. michelle myers, steve oddland and rich bernstein digging through the jobs report and coming away with takeaways tesla getting a big price hike from analysts in saying it is taking a page in developing its ecosystem. we will see why they see the stock rallying 20% from here plus, a reluctant downgrade on home depot and lowe's, with both names at 5% behind all-time

highs. as we head to break, here is a look at the sector heat map. energies and financials in the green today, the only two sectors right now. real estate and materials are the biggest laggards we're back in a moment this is "the exchange" on cnbc

♪ ♪ welcome back, everybody. tesla shares are lower today after their annual shareholder

meeting. investors keying on elon musk's admission the supply chain remains under pressure and its delays to cyber truck, despite coming off a record corridor for vehicle deliveries it announced relocating headquarters from silicon a very to texas our next guest remains bullish, saying tesla's brand and ecosystem are apple-esque. let's welcome in phil lebeau welcome to you both. so many places i could start here jed, i will begin with you why after last night did you up your price target? >> yeah, so, you know, a few things if you look at our upgrade, which goes back a little while here, we talk about the brand and being able to bring it into other parts of the energy ecosystem, which so far tesla has not been all that successful in do in that's the apple-esque part of

things that's kind of our, you know, positive stance. so we got that from last night we also got a positive mix shift which we think will lead to healthier margins. i i think you have a little buy on rumor, sell on news today. as we go into the report, we are expecting better-than-street expectations which carries the stock higher, i think. >> into earnings phil, i think it is interesting to look at delivery numbers. >> right >> the sort of tantalizing prospects of the new giga factories and what they could deliver, but they're still bringing them fully online i'm curious how they can produce more cars than ever at a time when their market share might be under pressure with more competition than ever as it seems the general interest with the big announcements from gm, ford and the rest, i wonder if the tide is turning to the average person thinking about

evs, not least because gas is so expensive right now. >> look, tesla's market share is going to come down you're not going to stay at 63% forever. the question is how much does it come down. if you are looking at tesla bull you are looking at prospects of them entering new markets and having greater success than they could imagine at this moment cyber truck is a good example. are they going to take over the pickup truck market? no, it is a lifestyle pick youup truck, and they make up 20% to 25% of the pick yum market they have not yet entered into that they believe the model y could ultimately become the best-selling vehicle in the world. for a point of reference, the best-selling vehicle in the world on an annual basis is the toyota corolla they believe they can get there. if that happens, boy, there's a lot of profitable sales in their future remember, the berlin giga factory coming online, that should help them immensely in europe >> yes jed, let's talk about how much

of your price target, again it is 940, is predicated on higher vehicle sales and how much is predicated on this apple ecosystem, which to fully explain to everybody what you are talking about is kind of this all-in-one energy ecosystem where they have solar panels on your roof that generate energy that can then power your ev and the rest of it what is the relative importance of those two systems to tesla's valuation? >> sure. so just to take a step back, you know, and let me clarify the apple-esque, what i mean by that is my first apple product was an ipod . today my family owns 20-plus devices from apple so they hooked me with that ipod , and they were able to sell me -- really, what locked it in was itunes that then allowed an easier, a better experience, if you will, that allowed me to buy more of those devices.

if we look at tesla in the early adoption, they have about 20% market share on the ev side of things globally, if you will i agree, their market share is likely to come down. the question is around timing. will they be able to use that market share to pull in that brand, that understanding of people saying, hey, tesla is about quality, they understand this electric -- you know, the energy shift better than anybody. so i want to put their solar panel on my house, and i would remind people that there is an aggressive marketing campaign going on by tesla right now on that nonev side of things. it is still relatively low and from a low base. we are about 2x the street as we look out a couple of years in terms of what is in our model. >> got it. >> we think that is going to eventually segue to these other areas. i generally agree with the other gentlemen on many of those points >> well, again, it is probably

why they were quick to backtrack on raising the cost of solar roofs that people had signed contracts for if it is an important part of growth to them phil, i want to quickly mention midnight tonight is kind of an important moment for tesla because, you know, if you have got a perfect 100 score, i think this is when you start -- does this mean that we're going to have cars full self-driving out there in the public? >> well, it is the beta version. it is the latest beta version of the full self-driving technology, the software it will be downloaded. they think about 1,000 people will get this software, which they say allows you to do -- now, they're very careful about this they do not come out and say it is level four autonomous vehicle driving. there's no vehicles out on the road that have that capability right now, let's be clear about that they do believe it is the next level of hands-free driving and autonomous driving, and that this is one more step towards level four autonomous vehicles out on the road. so we'll see what it is like

look, the full self-driving story is one where if you are a tesla bull, and i have friends who own tesla who are like, can't wait for full self-driving when i brick up ng up to them, you seen it yet? no, but it is coming you have to take it with a grain of salt. >> it is only the best, most safest drivers will be the ones with the technology to start >> right >> interesting to see what happens. phil lebeau, jed dorsheimer, thank you for being here to talk to us. >> thank you coming up, this automaker is having the best week since january. it is not tesla but we will tell you what is behind the gains yet. it is not just covid you should worry about this winter why pes exrtare warning about a twindemic. that's ahead on "the exchange. or it could be the day there's a cyberthreat. only comcast business' secure network solutions give you the power of sd-wan

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♪ ♪ welcome back, everybody. as we head into the afternoon, stocks are moving lower. we are still off the lows of the session when we were down 92 the dow is down 45 points at the moment the nasdaq is down half a percent. let's take a moment to check on the sectors for the week as well it has been a big one with energy up more than 4%, the financials up 2% those really are the strongest health care, meanwhile, down about a third of a percent that's a laggard a big move for general motors. we were teasing into the break investors continue to be bullish following investor day earlier this week where they said revenue will double in the next nine years they are around 58 today, adding 3% the cable stocks meanwhile are under pressure after wells fargo turned bearish on the sector charter is lower after a double downgrade from overweight to

underweight. charter down 4.5%. the analyst cut the price target for comcast, our parent company. comcast is down 4% over to seema mody for an update good afternoon treasury secretary janet yellen is calling the agreement a once in a generation accomplishment for economic diplomacy nearly 140 countries agreed to 15% minimum corporate tax on big multi-national corporations. president biden is looking for the bright side in today's september jobs report, and comments within the last hour he did not dwell on disappointing payrolls again but focused on another measure. >> today's report has the unemployment rate down to 4.8%, a significant improvement from when i took office and a sign our recovery is moving forward even in the face of a covid pandemic a house panel is accusing

donald trump of grossly exaggerating the financial health of his washington hotel it says trump reported it brought in $150 million in revenue while he was in the white house, but trump did not publicly reveal the bottom line, a loss of more than $70 million, despite almost $4 million coming in from foreign government bookings tonight on the news, how feeding sea weed to cows can help fight global warming. it has something to do with green house gases, as i'm sure you can imagine, kelly >> i sort of don't want to think about it you are all over sea weed, aren't you >> all over it, in my sushi, in green house gases. it tastes good, is good snack. >> seema mody, thank you very much with wti crude briefly crossing the double figure mark for first time in 70 years before we head to break, show and tell. nat gas on pace for seventh straight week of gains, the longest winning streak since 2013 here is eqt ceo toby rice this

morning on the prediction of how long the prices could last >> so i think it is going to be very difficult to see a situation with -- in europe and asia where they can actually stock up i think they will be stocking up regardless of whether it is a warm winter or cold winter i think it is going to take a period of time for them to stock up so, you know, i believe at this pricing increase for l & g is going to persist for well past the winter what if you could have the perspective to see more?

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♪ ♪ welcome back to "the exchange", everybody stocks are trying to post a fourth straight day of gains on this wild week the dow is up about 1,000 points since monday's sell-off lows and s&p's best midweek since august. what changes from the jobs report this morning if anything? let's welcome in the chief investment officer at tengler investments. we want a playbook, nancy, for the next couple of months, incorporating the taper, whatever is going on with the economy here what would you tell us >> i mean i think the economy is in decent shape. we had the atlanta fed come in

and lower gdp, all the while the week before wall street strategists upgrading estimates to 2022 earnings, a bit of a disconnect then we got the jobs report and it was disappointing on the headline, but when you dig in and look at revisions, you know, june, july and august were revised up pretty significantly. maybe the job picture isn't as bad as we thought, particularly given the fact a lot of it was in government and education. so we think that the fed probably stays on track for the november taper who knows? we think they're a little bit behind we will be watching earnings calls, how much discussion is centered around higher inflation, input cost, supply chain disruptions because we are at peak earnings and peak margins and that's a dangerous place to be. >> let's circle back in a moment to some of your specific picks here gina, anything you would differ on in terms of that description of the environment that we're in, kind of generally strong but with risks around profit margins

in particular? >> i completely agree with nancy there. in fact, if anything a lot of the fear of profit margins gave corporations a path to actually pass pricing increases through to customers in ways we haven't seen that kind of corporate pricing power in some time so we've actually seen corporate profit margins expanding, except now we're going to start to experience the real inflation in the form of wage inflation, and that's really -- when nancy says we are looking at peak profit margins, i think she is right. i think that's the phase we are going into now, which is where pricing matters for investors. >> who do you want to own, gina? does it have to be just, as we often hear, the stocks with pricing power, you know, any sector or is it that you want to avoid entire areas like consumer staples or maybe it is the place to be? i mean where would you be in this environment >> well, look, i think today is a perfect example of who gets

hit. the nasdaq is taking it more on the chin than the s&p, and we've seen that actually throughout kind of the volatility we've seen that is just because those higher growth margins have also -- are relatively more expensive, and there are better places that are value to be purchased elsewhere in the market, and value actually reared its ugly head during this volatility i think that probably is going to be a place to be until we get through tapering, until we get through the debt ceiling, which has just been put off, not finalized. so there are lots of sources will volatility where you probably want to be in less expensive stock. >> okay. nancy, i know for you -- and you guys have been trimming cyber stocks, nancy, names that have been outperforming but you still like square, you have service now and chipotle they're not cheap either >> no, they're not, but we are focused on pricing power, so chipotle demonstrated they have

tremendous pricing power they pivoted well during covid it is up three-fold from where we bought it but we think you want to own this stock in coming years. a name like square with the recent partnership with tiktok, it is a company that is disrupting at an accelerating pace we like that name a lot, and we would say to investors be patient, don't chase it. you will get pullbacks and you will have an opportunity to get in there, but it is a stock you put away for the next ten years i think. so we're barbelled between value, sort of some of the cyclical value names we added to materials and industrials and energy during the summer when these things got hammered, and we had been adding to technology in the spring when those stocks were being punished we have a barbell really with an overweight in technology and then the previous sectors i mentioned. >> again, some sort of specific ways to maybe look to navigate the next couple of months. thank you, nancy tengler and gina sanchez we appreciate it up next, venture capitalists

are pouring billions into latin america startups we will dig in to what has investors so enticed next when we come right back i need indeed. indeed you do. indeed instant match instantly delivers quality candidates matching your job description. visit indeed.com/hire paola needs a parachute. so, salesforce customer 360 unites your marketing, sales, commerce, service, and it teams around her. so they can deliver a great experience from anywhere. ♪ (whistle) ♪

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♪ ♪ welcome back startups in latin america are getting flooded with vc money from the likes of soft bank and sequoia kate rooney is here with the eye-popping numbers and what is driving it kate. >> reporter: hey, kelly. venture capitalists see opportunities in latin america, especially in fintech and ecommerce. so far this year the region brought in just under $15 billion in vc funding, up three-fold a year ago according to cb insights fintech in particular is booming, in third quarter alone more than 50 latin america fintech deals, in total topping $3 billion according to pitch book investors i talked to point to a young mobile population with some of the highest internet penetration and engaging rates in the world, but ecommerce has

lagged historically until the pandemic forced a lot of the world to start using on-demand delivery and moving their financial lives online vc investigators point to a lack of existing infrastructure as well and a large unbanked and under banked population there. it makes it especially ripe for some of the digital challenger banks. there have been a couple of new laws in mexico and brazil that make it a bit easier for the new challengers to come on the scene. argentina, chile and peru are expected to follow take a look, kelly brazilian fintech new bank is now one of the most valuable private companies in the world at $30 billion berkshire hathaway is now one of the big backers after the most recent funding round kelly. >> i wonder about crypto, obviously with what is going on in el salvador we sometimes here hints from other countries in the southern hemisphere as well has return to capital rewarded

investors or do they think it is different? >> you mentioned crypto. a few blockchain companies, the thesis for bitcoin and the idea of inflation is even bigger in south america countries in particular in argentina the use of bitcoin seems to make more sense in some of those countries big challenge i am hearing now is competition you have the likes of soft bank moving in with a massive latin america fund there's a lot of dollars chasing some of the same deals i think in terms of the competition it has definitely heated up, and the return on capital may just be harder to find reasonable valuations one of the other things sequoia in particular pointed out, they said ten years ago they saw the same reasons to get into latin america, but they didn't see the founder ecosystem or entrepreneurs. but they're seeing now a lot of entrepreneurs leaving big tech companies to start their own they're looking at the success of the ecosystem and saying,

instead of joining a google or silicon valley tech company, i want to go back to a place like colombia you are seeing more entrepreneurs going back and start their own companies and get their vc funding >> thank, kate rooney. let's check on how the names dubbed neobanks have done so far this year. affirm is the big winner, up 185% since the january debay, and tripling off recent lows it is up 18% this week after targets it is offering with installment loans with afarm as well square and paypal up 12% they both acquired smaller buy now, pay later startups. paypal last month bought japan's payday for just under $3 billion. still ahead, lowe's and hoe depot getting redluctant downgrade today. our own jim claimie said he

met with the ceo last week and business seems good. you can sign up for exclusive content at cnbc.com/investingcl, pntuboroi your camera at the qr code and it will take you to the sign-up page back in a moment 's special needs... hey, graduation selfie! well done! and voya stays by our side, keeping us on track for retirement... ...giving us confidence in our future... ...and in kevin's. you ready for your first day on the job? i was born ready. go get 'em, kev. well planned. well invested. well protected. voya. be confident to and through retirement.

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to a hold due in part to difficult explain risks. they are cutting from 370 to 25. the stock is down 3% so is lowe's but -- is this a valuation call or is this more about the business fundamentals? >> it's more about the business fundamentals and the business fundamentals looking forward so we raised our rating on these stocks about 18 months ago they have essentially doubled since then i have got to think about from today what's likely to happen. even though demand seems strong we see real issues with instock positions in stores. we are concerned that inflation,

including on supply chain issues will continue. >> does it man a macro slowdown that manifests in home depot and lowe's or more that the companies are going to face a lack of inventory constraint because of supply chain issues >> both concerns right now with home prices skyrocketing, demand seems strong but i am concerned about their ability to meet the demand this week we couldn't even get someone to talk about inflation until a month out. we are seeing out of stocks in key categories like tools. there are lots of interesting things happening with seasonal i am worried about their performance this quarter, the october quarter, and then the macro concerns come into play next year i think. >> let's talk about this quarter for a moment and why you cut

your price target on home depot. this one you are concerned they are setting their source for christmas after lowe's why does that jump out to you? >> because i think the supply chain issues have been widely reported and people will be in the market for the seasonal goods sooner than they normally would. once you buy the artificial free and the yard art, you are done if lowe's is stocked now i think they might be able to recapture demand that never gets around to home depot i heard from supply chain techs that perhaps lowe's's set its entire holiday assortment already. if they can't continue to get product in, that creates problems right now, lowe's looks better than home depot stores to news do you think home depot is waiting for a reason or simply because they don't have the supply >> if there is a concern you get ear initial trucks and you can't send new trucks to stores every couple of weeks the way they

normally do, maybe they are doing it for that reason home depot does everything on purpose and they are pretty much in control of their own fate but that might be different this year given issues at every side of the supply chain. >> now on my drive home today i want to look and see, check out what's going on there. laura, thank you for joining us to explain this call we appreciate it >> thanks for having me. >> laura champagne is with luke capital. with the weather cooling off and peopling indoors experts are warning about an impending twindemic. it is not a pandemic of twins. that's details next. ♪ ♪ ♪ ♪

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masking and social distancing last winter didn't just help stop the spread of covid. it also dramatically decreased cases of the flu, but things could be very different this year meg tirrell is here to explain

why. meg? >> hey, kelly. we were warned last year with a twin democrat, covid and flu at the same time. as you said, it did not materialize. but now we are meeting more in person we are taking off our masks. and schools are back in session. health officials are warnings it could be really different. check out how much covid dwarfed the flu last year. the numbers of deaths that were reported last week were unlike anything we ever see from flu. and flu, the white there, essentially disappeared last year which in one sense is great news but experts warning it could come back. also because we didn't have flu last year our immunity isn't there. it could be worse this year. now is the time for folks to get their flu shots. the cdc are shipping a record number to the u.s. this year, 200 million doses. about half of adults rue to anally get vaccinated, about 60%

of kids. they are hoping it goes up this year the effectiveness for the flu vaccine is about 60% in the best seasons. but that's just against any flu. against hospitalizations and death, it provides a lot better protection folks are saying go out and get your flu shot before halloween. >> i am going to go on my way home is there any talk about shortages of the vaccine what would you say to people who have to get it before or after the booster? can they do it at the same time? no one wants kind the side effects -- although i don't know if the flu shot typically has them what's the thinking on the sequence of all of this? >> experts say you can get them at the same time most likely you get one in one arm and one in the other >> hmm. >> we have been hearing about folks who have been talking about the side effects they feel if a flu shot being stronger than usual but what health experts are saying is maybe they are noticing it more because they are attuned to it because of the

side effects from the covid vaccine a sore arm and things like that. you can get them at the same time. >> in 20 seconds, meg, are we going to have another spike in covid once the east goes inside for the winter >> i hope not. scott gottlieb says even if we see a spike right now, theat it might be the last one. that does it for "the exchange," everybody "power lunch" begins right now >> kelly, thank you very much. see you in just a minute well, everybody, to "power lunch" for a friday. here is what's ahead do not believe the bad news. the jobs report for september was ugly, but the big miss isn't as bads it looks we will tell what you the experts say and what it means for your investments bitcoin's breakout prices hitting key levels. is bitcoin the new inflation hedge? we will lo