shop there but puts them in ab attractive position details on what holiday spending could look like in 2021. that does it for "the exchange." stay right there punch starts right now -- "power lunch" starts right now. >> welcome, everybody, to "power lunch. here's what's ahead this hour. the dow hitting an intraday record are bonds playing a big role in the stock market's rise. we will explore that and the best ways to invest with equities today in rally mode energized inflation. will higher energy prices speed up rate hikes. a bank of america analyst is with us. and disrupting the disrupters. shares of macy's and coles are outperforming stitch fix and porsche mark is the industry being redefined again? what does it mean for investors. let's check the markets.

record-making day. >> dow hitting a fresh high having its best month since march. s&p is up about 12 points. the nasdaq down by 25. it is sitting this one out we talked about higher rates that of course always puts downward pressure there. the upward pressure is on bitcoin. above 66$,000 today, nearly a 4% gain opinion tress shares are soaring to an report that paypal is exploring a purchase of that company. pinterest is up 13%. according to reuter's, the deal would go out at around $70 we are still seeing a discount relative to those reports. we will have the story in a few minutes. paypal shares are down nearly 6% what is driving stocks toward record highs and what are the new risks emerging bob pisani at the stock exchange. >> 4535 was the old closing

high, september 3rd. we are a few points below that but we were above that, 4540, about an hour ago when we fell out of bed the tech stocks sold off in the last hour. communication services rest of the market held up well. you see the dip in the middle of the day. it has been a great month for cyclicals. the economic expansion the market still believes it's happening. look at the transports one monday, 10%, energy, materials, home builders, autos. consumer cyclical names a. great month overall for the cycle cycles what worries me, earnings estimates aren't going up nip. it is not third quarter that you want to look at. the market is pricing on the fourth quarter today we are expecting 2% increase in fourth quarter estimates. just a few weeks ago it was 21%. that's really kind of flattish at this point. prices going up when earnings estimates are sort of flattish you want to avoid that because it means the multiples expansion is expanding on the market and you probably want to avoid that.

keep an eye on that. the other thing i am concerned about, we are priced for perfection if you look at what the market is assuming, supply chain disruptions, they are assuming it will go away in three, six months maybe. maybe not. inflation? we know about the labor situation. that's not transitory. and earnings, i mentioned the upside surprise. we have got to keep earnings estimates going up flattish is not going to do it i will tell you the comments on inflation are worrisome. if you see the brinker ceo's comments today, the covid surge starting in august exacerbated the industry-wide labor and commodity challenge and impacted our margins and bottom line more than we anticipated. that's worrisome what they are saying here is prices are getting -- costs are get getting away from them and they are worried about margin contr contraction. the stock market will go down. we are talking about 13% margins for the s&p. that's a significant record right now. you don't want that eroding.

restaurants are down 2% to 3%. >> i was talking with an investor last night, bob b 2022 earnings you just cited fourth quarter of 2021 and that earnings growth projections are slowing down a little bit they are not rising as quickly as you might like. yet, they are still above 20%. as you look ahead to 2022, is 20% earnings growth a likely star scenario or not? >> no, no, these are peak numbers. you don't see 20% earnings growth historical increase in earnings roughly parallels the increases in the stock market. they should. you will normally see 5%, 6%, 7% earnings growth in a decent year we will be good if we see that next year. no remember, with 2020 we saw the bottom fall out of the second and third quarter. >> bob pisani thank you. how should you invest with stocks at or near record levels

and earnings at a peak david trainer, ceo of training construct as research firm, glad to have you with us. you said you are seeing red flags for a correction what are those red flags that have you concerned. >> the biggest thing is inflation, as bob was saying before on top of that, we are seeing more and more companies overstating their core earnings. in other words, sneaking in little gains on sale or unexpected profits in the short-term that unstatement the underlying profitability of the business we are seeing that moving towards historic levels over the last quarter or so that just means that these earnings growth numbers that we are all so excited about aren't really as solid as they seem eventually, those numbers will settle bag down reality. >> who are these guys who are sneaking in little items are they concentrated in any particular groups or any particular names

where do you see -- you have got to get deep in your research where do you find these nuggets of overstatement >> that's a great question we find it in a place that nobody looks anymore they are called footnotes n the filings, in the ks and the qs. we've recently developed a technology that scans those and pulls out these unusual items with an unparalleled level of accuracy we see these names in the s&p 500. we recently published a couple of reports where we say, you know, where the street is wrong because it is too high or because it's too low we also see companies that understate earnings on a regular basis. in a world where everybody is chasing the next biggest fad nobody wants to do the tedious work of going through the filings and looking at what's really going on. >> david, if you could hold there for a moment, the fed's beige book just came out we want to get to steve liesman for the headlines. >> most districts reporting

significantly elevated prices. and many firms are raising their selling prices, able to pass those along to consumers expectations for future price growth remained high overall economic activity growing at modest to moderate rate an often repeated phrase in the beige book skpli disruptions and labor uncertainty as well as covid were behind slow dows. consumer spending did however grow in a majority of districts. that's good news auto sales declined, due to low inventory and rising prices. manufacturing was the one bright spot it grew modestly to robustly in most of the districts. the near term remains positive but there is increasing uncertainty especially when it comes to covid on employment labor was dampened because there was a lack of supply of workers. something we have been talking a

lot about here there was a high turnover rate, workers left for other jobs or retired tolly. child care and vaccine mandates did contribute to labor problems on the wage issue, wage growth is reported in a majority of districts. >> steve, why don't you hang around while we bring david trainer into the conversation. >> sure. >> one of the things we have been focused on over the past weeks and maybe mondays is the idea of scarcity labor is scarce. some supplies are scarce as we go into the winter season, there may be some scarcity i terms of natural gas that could cause prices to go up and cause a shock both in the united states but maybe more particularly in europe what do you think lies ahead >> i think there is -- it is important to make a distinction between two stipes of scarcity, scarcity that can be fixed with a big fat check, because there is sort of excess demand or supply there ready to sort of fill that scarcity when it comes to natural gas,

where we have sort of been underinvesting in the traditional fossil fuel infrastructure for a couple years now, no amount of money is going to sort of fill that gap of a lack of natural gas that is going to be needed to heat homes if we have a hold winter and that's the kind of liquidity crunch that i think could really hurt the market because no matter, again, how big a check that the white house or congress or the fed writes, you can't fix that and people are going to have to figure out a way to spend on other things or take money from other places to find a way to get warm because they can't do it the less expensive or historical way with natural gas. that i think is a looming threat sort of represents the long-term consequences of some of the rational markets in last five, ten, 15 years, where price doesn't matter

meme stokes specifically, price doesn't seem to matter stocks like tesla, price doesn't seem to matter capital can chase the bad investments, but eventually it comes back to get you when you are not investing in the infrastructure that you need to run your day-to-day life. >> steve you began our report on the beige book talking about the fed's assessment of inflation in the various districts. it sounded like -- i don't mean to say the language was alarming but it sounded like inflation has gotten their attention what can we infer from that language about what the fed may do when it meets next month or what it may do as we look and turn to 2022, which could be under a new chairman. >> you are an old word smith, ty tyler, you picked up on the language and the extent of it. when you read the beige book, and it says most districts reported significantly elevated prices, i mean, that's very

serious and strident writing right there. you start to hear it more and more in the commentary of folks like governor waller yesterday eve, randy quarrels this afternoon picked up on some of it you hear the fed speech or rhetoric changing to express more and more concern about inflation. and that some of the things that david was just talking about, well, they are going to hang around it's not clear to me, tyler, when you talk about the retirees who left the work force, between 1 million or 2 million, if they are come back. our reporting -- we are lacking over 1 million legal immigrants to the country to take jobs out there. i am going to look at the october jobs report carefully to see if some of those 2 million women after the schools appear to be open if they come back perhaps they are making lifestyle choices and other choices not to come back if those folks don't come back, we have a very changed labor force. that's going to mean a termently changed pricing structure.

>> steve liesman, thank you. and david trainer, thanks. we will see you again soon. coming up, brick and mortar retail stocks flecking their muscle some are easily outperforming the new digital disruptors we make sense of the retail divide in just a moment. plus, u.s.-listed chinese stocks are bouncing back in october. safe to get in our trading nation team is on the case. tesla's quarterly results are due out after the bell the stock is up sharply over the next three months. will a new safety regulator create new problems for the company? lots more "power lunch" straight ahead.

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welcome back to "power lunch. i'm kate rooney. paypal is in talks to buy pinterest. this is according to a source familiar with the deal and those discussions, the source telling me the talks are in the late stages i'm also told this is stemming from competitive pressure, especially from the likes of shopify, which has blended fintech and e-commerce both companies, paypal and opinion trees declining to comment. shares of pinterest surged as much as 12% after bloomberg first reported this dole was this the works details in that report about the value of the deal, being around $45 million. paypal shares heading in the other direction. they have been down more than 6%, down about 5% right now on that news. and reuter's adding that paypal hopes to announce this deal by

the time it reports quarterly results. that's coming up in a couple weeks here on november 8th paypal has been moving into the e-commerce space and shopping space lately it bought honey a couple of years ago. if you remember that deal. and it has been competing with square, which bought after pay recently pinterest has been in the process of adding shopping services lately and expanding from just that social network. look at shares of etsy that stock getting a boost on the back of this news looking like a potential m & a target. >> truist says they see zero ro rationale of this deal. >> they are getting to the tail end of that e-bay spinout. analysts are talking about this looks like an expensive deal it might make sense. $45 million as is being reported is a lot of money. we will see if it ends up making

sense for paypal although the shopping/fintech convergence is something we are real seeing happening. to keep up with shopify, it may be a competitive pressure. but we are seeing overlap with e-commerce and fintech companies. >> kate, thank you very much pinterest shares up 13%. there is a retail divide that's new shares of poshmark and stitch fix have been significantly underperforming the brick and mortar rivals this year. have the disruptors been disrupted or is something else going none this back to the future retail. jan, are we customary picking these two companies or is there a real shift going on here >> there is a real shift going on there i am convinced that was never really the dichotomy we were

talking about. those businesses were always going to be sort of a sideshow to the real business of retail it doesn't mean it is not an interesting niche and doesn't mean resell and things like clubs can't succeed. they can, but that's not really where the consumers is for most of their purchasing. if any of us really thought that was going to be where people went because it was going to save the environment think about it would she in exist if the under 30-year-old customer really cared about the environment? no they are care being what is cool, novel, interesting and what's fun at the moment those things are not as much fun as we that you would they would be. >> macy's and coal's they have had tough 2020s, they are up this year but they are significantly, certainly in macy's case, below all-time highs are we making too much of their comeback >> i don't think so. i think traditional retail has come back very strong primarily because the customer is flush with money they know what they want to buy.

and those companies have stayed in business. they have been able to improve their business during the pandemic they have done a lot of things for the customer better from the point of view of pickup curbside, pickup in store, ship to your house ask. they are getting to the point of doing about half of their business on line so they are a different company than they were in 2019 even, but certainly different than they were say in 2015 or 2016 and they are operating better. the customer likes them better, they think they are getting better customer service and they are not resistant to price right now. so if you are willing to pay for it, new goods, interesting goods, that's where the customer is >> shopping is in some way as social experience. people like to go out and be among other people and touch and feel merchandise and see it, see it work and so on and so forth but a question to me, jan, is whether these chains have gotten their store counts in order or not. where are they on that evolution of trimming locations that may not be profitable?

>> macy's has trimmed a lot. as you know. they are down into the 600-store range. i remember when they were way up at 850 on the other hand, kohl's hasn't trimmed. they are still up over 1,100 stores i think we will continue to see store trim asking down sizing. everybody has too many stores and too much square footage. in some cases you can put other stuff inside your store and fill your store with other things kohl's just put sephora in there. they are learning thousand do that it also makes the scores more interesting to the consumer. that's another thing they have done right in terms of macy's and kohl's. >> people are scratching their head about mays audio's potential spinout of e-commerce

business do you think it makes strategic sense? >> no. but sometimes it is a good financial decision i didn't think it was a good idea to spin out sak's on line business do i think it is good for the fundamental business no because i think the on line business and the in store businesses support each other. macy's in particular have been very good at getting the surrounding store, the places around the store to support the on line business by being able to go back to the store, being able to puck up at the store, return to the store, all the things that the customer wants to do. we know that around the store location, the on line business is always better i do think not having them working well together would be a problem. if they can spin it out and get the value and somehow keep the synergy of the two being one kind of business, that would be great. but, boy, that's really going to be hard to do, to maintain that

wheel going in the same direction at the same time if you have spun a piece of it out. >> mays audio's and kohl's higher for the year. the others we mentioned, stitch fix and the other lower or lagging, poshmark and stitch fix down what are your favorite stocks in this area, in all of retail? >> gosh, when i look at all of retail, my favorite stocks are the brands i like, i like ravel lauren, capri, i like anything that's a branded first-party seller direct to assumer as well as selling through the stores kind of brand. i think strong brands win, third party sellers of brands don't win. macy's and kohl's are going to could back because they are going to see strength through the holidays if you are looking longer term, i think strong brands are where the consumer is going to be. i think strong brands are going to win. >> interesting. >> jan, thank you for your thoughts on all of this today.

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i'm kristina partsinevelos here is your cnbc news update at this hour. the only michigan official fired in the flint water disaster was likely a public escape goat who lost her job because of politics that's the finding of an arbitrator who is also ordering she be paid nearly $192,000 in back pay and other compensation. no comment yet on the ruling from the michigan environmental agency where she worked. the white house dealing a serious blow to a proposed copper and nickel mine in northeast earn minnesota the biden administration has ordered a study that could lead to a 20-year ban on mining in the area the obama white house ordered a similar study the trump administration canceled it a shelter in place has been lifted at a maryland naval base that received a bomb threat. the site was locked down more than four hours.

patients taking to the streets to call for the liberation of the 17 members of a u.s. based missionary group kidnapped by a gang. some of the people carrying signs saying free the americans, and no to kidnapping >> that's something. christina, thank you very much. let's get a check on markets. a lot of headlines today dow trading at record highs. s&p near that level. nasdaq down 15 that could be a big rate story we were near 1.7% on the ten-year earlier there has been a ton of talk today with inflation that is being reflected in both the relative value, let's call it of the stock market and in bond yields. rick santelli is out in chicago with the latest today. rick >> yes, no matter where you look it seems like there is an inflation story or notions of passing costs onto consumers but we did have a 20-year bond auction today. it wasn't terrific if you look at an up tre day of 20-year yields you could see at 1:00 eastern rates popped up if you stick with the longer

maturities, whose yields are higher today 30-year bonds are trying to catch up this goes back to mid june the reason i am showing it we still haven't taken out that october 8th high ten-year note yields have. if you go back to march 2020 this shows you what ground we have covered not only have we taken out that october high we are virtually sitting at five-month high yields between then and now we have hit a low of minus 50 basis points, a high of 1 and three quarters finally, the dollar index. the fifth down day in the last six sessions primarily because of some of the strength in the euro currency. but it did touch a one-year high in september and has been drifting lower ever since. back to you. >> thank you very much rick santelli ahead on "power lunch," fuelling inflation fears. will growing energy prices push central banks to hike rates sooner than expected plus solar flares. amid these rising prices

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welcome back, everybody. oil market closing for the day pippa stevens is at the commodity desk. >> oil staged a mid-morning turnaround that pushed pti before $84 for the first time since 2014 if you look at a 24-hour chart you can see the leg higher came as the weekly inventory report hit. crude stockpiles unexpectedly declined last week gasoline stocks dropped by more than 5 million barrels inventory at the delivery hub is now at its lowest level in three years. wti finishing the day at $84.25 for a gain of 1.5% the contract does roll today thin trading volume. the more actively traded december contract is at $83.42 brent crude gaining .9% at $85.82 analysts are getting bullish here morgan stanley listed its q12022

brent forecast to $84. they said tyler, that global supply looks set to peak earlier than demand. back to you. >> pippa, thank you very much. our next guest says surging energy prices could mean higher inflation is here to stay and the central banks could raise interest rates in a hurry to help tamp down those prices. what does it mean for invest oorts and consumers alocate? the head of global commodities and derivatives research at bank of america joins us now. i think i know based on that introduction the answer to the question, but how much of the inflation story is an energy story? >> well, let's say it this way it was a smaller part of it about six to 12 months ago and is becoming a bigger and bigger portion. if you look at the four components, goods inflation is starting to roll back a little bit.

but the other three components, which are essentially services, food, and energy, are all growing. and our view is that energy is going to continue to become a bigger part of the story and the reason is, again -- i am talking about u.s. inflation here but the reason is energy prices all around the world are going up very, very quickly, led by european gas -- gas prices and also thermal coal prices so it's an unusual story, but kind of like covid early yes, we had the energies that are used in industrial activity leading the market higher. and the transportation fuels lightening i think that's going to change in the next six months. >> why are prices, particularly those industrial fuel prices -- why are those prices going up as fast as you say they are, number one? what do prices look like this winter domestically in terms of the fuels we use >> so the prices are going up

because, remember, we completed the largest ever fiscal and monetary stimulus in the history of mankind we printed 3.5 times more money from an m 2 perspective. and handed over in terms of fiscal spending 4.5 times larger right than we did during the financial crisis that's created enormous demand for goods, which has translated into surging exports exports globally are up 30% roughly to precovid levels china and all the producing and manufacturing companies have been trying to meet that demand. that's what created the surge in coal, power, natural gas now, in terms of the mix in the u.s., the u.s. is lucky inthe way to have all of this domestic energy production, so it is somewhat insulated from what is happening from abroad. from an energy mix perspective, natural gas prices in the u.s. are unlikely to get higher than

the current levels. >> unlikely to get much higher than current levels? i did hear you correctly >> yeah. >> okay. >> that's right. ku yeah. i think that's going to temper electricity prices in the u.s., help temper winter heating bills. whereas the rest of the world is going to have to pay an arm and a leg to stay warm this winter i tell you that. >> francisco, meanwhile, we have more kind of rhetoric, if you want to call it that, out of washington on a carbon tax it seems we are getting a carbon tax because of what is happening in europe without the robert that's supposed to help consumer cope with that, with higher energy prices and all the ree rest of it deloitte's survey said low income shoppers are going to spend less this year for christmas. obviously they are feeling the squeeze. what is your thought on if the carbon tax were to rear its head again? >> again, the carbon tax, if it

simply ends in the u.s. is going to take a while. it is not going to be this year or next year in europe, the effects of the carbon tax are very dismal if you look at manufacturers, refiners, chemical companies, steel companies, they are getting really squeezed in europe we already have an industrial recession building across the european union sure a lot of it is natural gas. but in many cases, 25, 30, 40% of it is actually the carbon tax. i think the politicians are washington are going to look at that and think, is this what we want to have here? again, it is not going to have an immediate effect. longer term, carbon tax will -- with inflation it could be between 1 and 3% inflation pressure over a medium term building from this carbon tax idea, the fact that we need $5 trillion a year to decarbonize. we have got to find the money somewhere. >> you said earlier, elsewhere,

not so much in the u.s. where we have a buffer based on our domestic ability to produce natural gas but in other parts of the world people are going to be paying an arm and a leg, your words, to heat their homes this winter right. >> how is that going to translate through the economies of europe, maybe even the economy of china, where they are shutting factories because of power short ans? how is that going to ripple through? >> well, so i think there is two elements here. one is how much pain can politicians take. >> right. >> before they start taking measures to cap prices or as we saw in china, to ramp up coal-fire generation. >> right >> remember, it's the same china that committed to decarbonization by 2060 a few months ago the same china that's nolonger seeing its leader xi jinping show up in glasgow, according to reports in a couple of weeks for the climate summit

i think china is kind of relaxing -- to me is relaxing some of its targets at least in the short run. then europe -- europe i think is more split idea logically. but ultimately, the pain is going to come. we know the yellow jackets in france were a big driver of sentiment change back when oil prices surged. it is complicated. i don't think it's an easy solution here. one thing i know is that given the very low prices in the u.s. we are going the see all this world production of stuff, this energy intensive rotate back to america. we have already started. look at bitcoin. 70% of bitcoin was mined in china six months go. now the leading region in terms of bitcoin mining, north america f. there is an energy commodity that's easy to move, that is bitcoin, we are seeing night we are all going to move to wyoming. francisco, thank you good as always to see you. francisco blanch of b of a. >> tough winters.

>> but beautiful. is the worst over for u.s.-listed chinese stocks they took a hit during china's crackdown. all of a sudden they are having a good run this month. our trading nation team will diuss etscwhher this bounce can be trusted stay with us

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welcome back, everybody. time for power movers. let's start with the restaurant names, red behind me brinker under the most pressure, down nearly 9% after reporting labor chall he cans and higher food costings, on pace for their fourth straight monthly decline. canadian national railway up 5.8% on news the ceo will retire at the end of january. investors were calling for his removal after the railroad's failed bid for kansas city southern. novavax also in the red today. i shouldn't say also i joins the restaurant groups. it is down 15 ores on reports its having trouble meeting fda quality standards for its covid-19 vaccine learn more at james kram ir's

investing club go to the website or point your phone at the qr code. >> it is time for -- yes, the animation rolls, the music sounds trading nation chinese stocks making a surprise comeback this month. billy billy, alibaba -- i want there to be a chart with about about and o'reilly auto parts. you got it, about about o'reilly an obscure who reference anded by you soring in october this as the chinese economy slows. at its weakest pace in a year. should the bounce be believed. we asked our trading nation team ava, can i trust the bounce in chinese stocks is it time to lag a little money in >> we would say no we would advocate no more than a small risk speculative position when it comes to china

we are tracking 170 entrepreneurial chinese companies of which our holdings appreciated 11% year to date much of it is because of the overreaction we saw early in september. the regulatory risk is real. it is unpredictable. it's here to stay. many companies that we are tracking are grappling to meet the regulatory demands >> so you are worried about regulatory risk. in other words you would rather put your money to work in a place where the rule of law is more consistent, it is not sort of up to one man or one person to decide. am i understanding you right >> that's exactly right. there are two key factors when it comes to investing in an emerging market. the foreseeable future growth and perceived risk in the case of china, you have a big craze in the foreseeable

growth, the evergrande spillover. when it comes to the risk, we lost $2 trillion in chinese adrs we have conflicts with neighboring countries of china and the u.s. >> right. >> so the risk is much higher. and the return, the foreseeable growth is lower. >> all right, matt maley, agree? or disagree? >> i totally agree with ava. the thing right now, we have gone through a decade or a lot more of china encouraging risk, encouraging leverage. in the last year they completely reversed it, reversed it to a significant degree even though they ease off from time to time they are not going to ease off in a big way it is going to create problems and as you mentioned, one person could shut things down overnight. that's too much risk you might be able to trade it on a storm base i don't have the chart you want, but alibaba, it is already

getting overbought on a short-term basis its rsi, relative strength index is getting to a level that has been followed by pullbacks in the past i want to stay away. the risk/reward is not very good. >> we will get that chart of about about and o'reilly up there very son i mispronounced your name, ava, i'm sorry. matt, i got your nameright for more, folks, heading to the trading nation.com website at cnbc.com or follow us on twitter @trading nation. tesla reporting a ever the bell profit is key for the electric vehicle maker. did the chip shortage and rising shipping costs hurt profit margins? we will delve into that next

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welcome back, everybody.

tesla reports q3 reports after the bell it's now up 22% this year. our next guest is expecting tesla to beat earnings, but says there are a number of things the bulls are looking. he has a neutral rating on tesla and a $150 price target. craig, how important is the quarter to the stock maybe that's a stupid question >> the quarter's always important. it's really what they say on the conference call. it's the execution in the quarter. and what we learn about the longer-term positioning. quarter is always important. this was a fantastic quarter that's part of the reason that we've seen stock behave very well in the last couple weeks. >> so we know the delivery numbers already obviously. when we look at profit margins, it's always this discussion about how much of that comes from kind of nonauto factors, how much comes from auto factors. tell me what you're expecting there, and, again, how material that's going to be to the tesla

narrative for maybe the couple of quarters to come. >> so, the bull thesis has relied on 30% gross margins for a while. and i wouldn't be surprised if we made some material progress towards that this quarter. 241,000 was a very, very nice deliveries number. and they're only producing two cars adjusted auto margins should be north of 26%, maybe even 26.5% this is going to be a fantastic quarter, but it does not mean that tesla's going to be the only one telling evs out there for the future and it does not mean the competition should not be taken very seriously >> did i see that your price target on this stock is 150 a share, is that correct >> yes >> so let me just -- that's not. that would not be an unprecedented fall i remember blackberry when it lost 80, 85% of its value or

maybe even more. this would be that again why will that happen why could it happen? >> so, that's the reason i have the neutral rating because i don't have visibility on those catalysts. the one mega catalyst that i have that i think would spook a lot of people that are bullish on tesla is apple. i firmly believe that there is an apple car coming. i think it's a 2024 event. aside from that, there is no individual catalyst that i have that would, i believe, pull the blush off the rose i think tesla's executing to perfection it is a great company and really deserves a lot of credit for bringing evs to the mainstream but it is not the only company that's going to be a successful contender here >> the pe's 130 so we're just showing that on the chart to reiterate kind of the valuation that we're talking about but is a risk, craig, that this new nhtsa adviser or the regulation more broadly moves against autopilot?

musk himself just today i think was talking about what a significant upside catalyst it will be when full self-driving is broadly available could regulators come in and really crack down on that? >> so, it's interesting that the regulators have gone out to all of tesla's competition and that they've come in a couple times with some fairly significant requests for detail, and pointed out to tesla that over-the-air updates that they've done are in violation of nhtsa guidelines. now, guidelines aren't laws. so i'm not making any assertion here i think, if anything, we're likely to see tesla maybe a little bit more conservative about the rollout of new features for fsd in the fourth quarter. that means there's roughly a billion dollars of margin from deferred revenue that would drop in the fourth quarter that probably does not happen but, you know, i don't think this is central to whether or not people should be cautious

about the long-term story. i think the fact that, you know, tesla will have produced maybe 900,000 cars by the end of the year versus an industry that's going to produce more than 75 million. and tesla's valued at more than the rest of the industry combined that for me is the big issue and the fact that i think many of those other companies wind up being very successful in evs >> craig irwin, thank you very much up next, despite being lower today, solar stocks on a tear this month and face up more than 20%. so what's driving those gains? we'll be back in two if you missed cnbc special documentary "generation gamble," examining how sports betting and stock trading apps are affecting younger generations, it is now streaming on peacock go find it there ♪

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her business by rolling out a new product. get the card built for business. by american express. well, the sun has been shining on solar stocks so far this month the tan etf up 12% in october but lower today. kristina partsinevelos looking at those stocks for us kristina >> well, big-picture month today. gains are still very, very impressive all up double digits the driver higher energy prices are pushing up the price or demand, i should say, for solar and solar tan in particular on pace for the best week since mid-january. but today we are seeing a little bit of a different story with

most of these solar stocks in the dark the sector most likely falling in trend with guggenheim partners on array technology, down almost 8% you got solar edge also getting downgraded 3.5%. all of these four firms make solar panels or systems for solar energy to work on. so they've been downgraded from buy to neutral why? higher input costs like steel, aluminum, even silver in there you can see just across the board silver up 10%. and that is used in a lot of these solar panels and of course labor. the note said unless input prices fall rapidly soon, the current environment is going to start impacting 2022 forecasts the note has stocks across the sector lower with some power as well as enphase down around above 3% both of these names still up double digits so far in october. so we're thinking big picture.

enphase on track for its best month since june >> you have a report on chinese solar? >> by 2023 china can provide solar power at a cheaper rate than coal. >> by 2023 >> yeah. they can't put it forward, like they're not going to actually do that but it's a possibility. >> wow >> and thanks to everybody for watching "power lunch. "closing bell" starts right now. hello, and welcome to "closing bell. i'm sara eisen here at the new york stock exchange. mostly positive session again today as the dow hits a record the s&p aims for six winning days in a row. but the nasdaq is lagging as we head into this final hour of trade. >> and i'm wilfred frost let's have a look at what is driving the action today earnings remain in the spotlight as investors digest results from netflix, united airlines and verizon with more big names coming after the bell. bitcoin bouncing to a record high, its first in more than six months as crypto bulls cheer the launch and surprise