what's riding on these earnings reports. >> i think apple has to hold 150. post earnings. or leading into earnings we'll see what happens i think microsoft is equally important, 275 >> i'll see you in a few hours everybody have a great weekend i'll see you in "overtime" "the exchange" is now thank you, scott hi, everybody. i'm kelly evans. we have a sharp selloff on this friday the powell selloff continues a day after the fed chair said he's open to bigger rate hikes the dow down about 600 the nasdaq languishing 20% off the highs as the two-year yield has jumped more than 30 basis points this week we have the latest not everything is down the airlines have been a key outperformer the last several weeks. and one analyst says there's still more up side he says a 50% rally ahead for one name in particular he's here to make his case with stocks under pressure, big tech on deck with earnings next

week we'll look at three names to buy and one name in the group to bail on. first, let's get to dom with the numbers. >> it is roughly the session lows right now at one point today the nasdaq was outperforming as an overall index. as you can see here right now, this is now the session lows the nasdaq is down 228 points. one and three quarter percent declines similar for the dow industrials and s&p 500. 4314 the last trade for the s&p. earlier this morning, again, it was the nasdaq that was still down, but outperforming the dow and now all three major indexes are moving similarly to the downside if you look at the sector heat map behind me, maybe no surprise the media companies are the laggards on the day so far today. as for how the week has played out, look at the real estate and consumer staples sectors at the last time i checked, they were the only two sectors in the s&p that were positive on a one-week basis and no surprise communication services due in

large part to netflix's. if you want to check out a stock, it reflects a little bit of the theme element happening with certain parts of the retail-oriented part of the markets. that is gap stores y. the parent company of the name sake clothing company, also old navy, banana republic as well. gap down 19% they come out and say the old navy president is leaving the company. also they're cutting their sales forecast because of among other things, a more promotional environment, more competition. that's weighing on the shares. big moves happening. we'll have to keep a close eye on the technology and communication services trade as you point out. i'll send things back over to you. >> a tough environment for gap short yields in particular have soared this week. the two-year is up 30 basis points the five and seven-year treasury yields up. all this as mary daily mentioned the possibility of several half point rate hikes and incoming

data underscores the point look at the inflationary pressures and the philly prices paid index it jumped to 84% 6 that was the highest reading since june of 1979 it came as overall activity for the philly fed slowed. the worry is the fed doesn't slow inflation now while the economy is strong, they'll miss their window of opportunity. when i talk about strong, weekly jobless claims at 184,000 reflecting a very tight labor market and american express, beat today on earnings and revenue thanks to a surge in spending from millennials and jen x. it's obviously not just a gap issue with the consumer that they might try to pin that retail story on. and the fed might even get help in slowing inflation from the surging u.s. dollar. it's rebounded to about a two-year high. and it's booking its third straight weekly gain this is the sleeper story to

watch. might be a head wind for some of corporate america. but in terms of fighting inflation, this is going to be a help add it up and where do rates go from here? let's ask jay bryson, the chief economist at wells fargo jay, it's great to see you this is the central question for the markets' mind, isn't it? >> it is i mean, it was -- the central question coming into this week, and then chairman powell, the other day, threw more fuel on the fire, and other fed speakers as well. so i think everyone has to brace for specific higher rates as we go forward >> you say significantly higher. let's just call the ten-year at 3% are you talking 4? >> you know, i don't know if we're talking 4 here there is a significant amount of tightening that's priced into the curve already. if you look at this year, the market right now is priced for 250 basis points between now and the end of the year. and then another 50 basis points

next year. so it would have to ramp up even more for you to get up to a 4% sort of handle now, that said, i think the key things to watch going forward will be the inflation numbers. if inflation continues to come in hot here, then those expectations of what the fed is going to be doing this year and next year may ramp up even further. so that's clearly going to be the key as we go forward >> you know what's tricky to figure out people who say okay, we've now got the markets pricing in so much from the fed that it's unclear to me whether rates are going to -- this upward move will stop as we stop getting more hawkish, if we do, or if rates keep going as the normalization continues. you know, as actual, for instance, qe, is -- as runs off and the fed starts to shrink the balance sheet. how much that kind of continues to unpin the long end. how much whatever is going on with the japanese currency, and some of the global buyers as

well, how much that might effect the direction of long-term rates from here. >> yeah. so there's a lot of tightening that's coming at us. not only the short-term tightening, but also some of the tightening that you were talking about. the fed is going to be shrinking the balance sheet. they're going to announce that the next fomc meeting that's going to happen. the credit spreads are moving out any further, but corporate borrowing costs are going up stock market is selling off. there's a fair amount of tightening in -- that's occurring right now in financial markets. so as we go through the months here, it's going to be key to see how the data is reacting to that and you very well would get to a point where all the sudden the economy is slowing a lot, and then a lot of that tightening then starts to get repriced out of the market. >> what do you make of the housing market how high do you think mortgage rates could go from here, and do you expect activity to drop or more or less just plateau?

>> so knowing what i know right now, i would say i don't think mortgage rates are going significantly higher from here it's going to depend upon that ten-year i think we very well make a run at three and a quarter that was the high back in 2018 but that's -- that's a quarter of a percentage point from here. so i don't know how much further mortgage rates go, but we're already seeing signs if the housing market is slowing and we're looking for housing starts to be one sixth, one 7 million this year. next year looking for 1.5 million. we're looking for slowing in the housing market as we go forward. >> it's not like it's going to be '06 with a boom followed by a tremendous crash that's why i keep thinking about the word plateau this is still organic demand for housing. there's a lot of room for it to keep going sideways. where does it leave you on the

economy? do you think the fed needs to push the pedal to the medal to take the mary daily case where she said maybe we need to front load tightening where others have made the opposite argument? >> i agree that's what's in our forecast as well we think what's pretty much a short at this point would be 15 basis points obviously in may and another 50 basis points in june after that it becomes a little bit more data dependent. i believe the fed needs to get rates up pretty quickly at first and let the data depend on how things play out going forward. but how does that go with our forecast we're looking for some pretty big deceleration late this year, early next year in terms of the overall economy. we think we'll be beloi trend. trend rate of growth is somewhere around 2 % we think we'll grow 1.5% this year and later to next year. >> to put a point on that, goldman has a similar forecast, but their concern is it's not

going to slow enough to bring the inflation rate down to where it needs to be >> yeah. there's a long lag here. and so the fed is going to be obviously reacting to incoming data they also need to be forward looking as well. if they just keep raising and raising and raising, sooner or later something in the economy is going to break and then they have the other thing to worry about, the unemployment rate coming up significantly. so the fed is in a little bit of a pickle there's a little bit of a box, and it's going to be nimble for them over the next few quarters to get this right. >> yeah. absolutely jay, we'll leave it there. appreciate your time >> thank you very much we turn now to the markets where stocks are sliding in what's been typically a strong month. the s&p and nasdaq pacing for a third straight down week the dow on track for its fourth straight decline my next guest is looking to one key underexploited area of the market for some potential leadership here. it's not health care it's not even energy or financials

so what is it? let's bring in nancy, co-ceo and senior portfolio manager at essex portfolio management before i get to the big reveal this has been a challenging market, and the economy and the fed policy does remain a huge question mark. what's your top level advice for investors? >> absolutely. and this has been a very challenging market the market is in the process of discounting a myriad of worries including of course inflation. of course interest rates and the risk of something worse than a soft landing, markets generally discount recessions about a year ahead, so that would coincide with what we've been talking about, slower growth in the back end of the year and a somewhat challenging 2023 as we think about this environment, though, we need to remember that even in a difficult market, there are opportunities of underexploited areas and inexpensive stocks with good growth potential we're encouraged that the early

earnings data is still showing very solid positive earnings surprises. i believe the number on the s&p is about 78% that's down modestly from 80%, but well above long-term threat. so companies have been able to pass on the cost increases and price pressures showing improving margins and good, solid revenue growth, and we think that's where investors need to look for opportunities, but again, we would look on the road less traveled, as it were, areas that are not overowned or overexploited. >> one of the areas, correct me if i'm wrong, is industrials for you. is that right? and how does that sort of overlap with the areas of the market you typically want to be exposed to at this point in a tightening cycle >> right so we think it's a little bit counter to what you might think of in a normal tightening cycle because of the economic dependence what's different this time, or where we think the opportunity is, particularly look out past

this period of digesting all of these interest rate and inflationary pressures, is the reshoring of manufacturing, the rebuilding of american infrastructure when you look at industrials as part of any of the bench marks, whether it's the s&p 500, the growth benchmarks or the broad russell benchmarks, they are relatively low as a percentage of the benchmarks in the in the s&p industrials are less than 7 %. in the russell 1,000 growth and 3,000 growth that's a similar kind of number we think that is way under exposed given the growth prospects we see and would expect that number to come up over time. where will that come out of? probably the traditional growth areas of health care and technology where we've seen a lot of investor enthusiasm over the last 15 years. i remind investors we saw something similar after the great financial crisis with tech where it was about -- it was low double digits as a percent of

benchmark. it's now depending on the benchmark in the 20 to 30% range. >> you think the move has been overextended many do. as we head into tech names, we get names reporting and they seem like the new staples. apple and microsoft and places you feel like you can hide what would your advice be to investors about tech would you stay away from all of it right now or does it depend on the size? >> it depends on both the size, obviously it depends on the earnings, and it depends on the multiple that you need to pay. we would not avoid tech overall. tech is a building block of the new economy. it's a building block for disruntive commerce, for disruptive internet, et cetera and so you need to have some exposure to those areas. at this point, we would look for inexpensive software companies in areas that are not overly competitive. we'd look for companies that can earn money today and not just

spend for the promise of future growth, and we would look at selective areas in semi conductors but not those that are as -- dependent today on the auto cycle or cell phone cycle we think consumers have spent a lot over the last couple years and were unlikely to get strong comparisons. >> i've heard warnings about the housing cycle. warnings about the auto cycle but not warnings about the iphone cycle that's interesting before we go, can you name names? do you want to give people any specifics on the way out >> i'm going to pick one name that's a little bit off the beaten track which is clean harbors. it's in the industrial sector. it is an environmental remediation play we like environmental remediation as a way to play sustainability and the esg cycle. they are actually a beneficiary of the high oil prices we have now a big part of their business is in rerefining of oil.

they have some green oil and other sustainability numbers are coming up. stock is reasonably valued, and it's not very well known >> all right maybe clean harbor can be a safe harbor still ahead, the airlines have led the rally since the mid march lows the jets etf jumping nearly 30 %. but jpmorgan upgrading shares of american and united and telling investors they haven't missed the recovery the analyst behind that call joins us next. we're capping off a wild earnings week with three buys and a bail about a third of the s&p in nearly half the dow are set to report next week we have some names to buy and maybe one or two to avoid. and as we head to break, here's a check on markets near session lows right now the dow down 593 consistent declines across the board of about 1.7%. we're back after this.

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welcome back to "the exchange." the airlines have had a tough time with shares lagging where they were before covid hit since mid march, airline stocks are finally starting to play catchup. that rally bolstered this week by a raft of bullish remarks from the airlines during their earnings reports take a listen.

>> demand is phenomenal. we've never seen in our economy's history demand for our product and services at the level we are the month of march we had the highest sales in terms of bookings in our history. >> the demand, i've never seen in my career, a hockey stick increase in demand leisure and also -- >> business is coming back i anticipate the same thing for international and international business, too. >> it's been extraordinary demand we saw it starting in march. 13 % higher online sales than any month in our history >> our next guest says it's not too late to jump on the rebound. joining me is jamie baker, senior airlines analyst at jpmorgan welcome. >> thank you >> one of the questions i have is why the airlines have been such a tough investment over the past couple years.

we've seen the tsa numbers recover. and we hear the commentary from the ceos, and you think maybe we should be all the way back to the prepandemic highs, but we're not, are we? >> we're not we think we can get there. you know, i think one of the impediments here to fore has been the uncertainty around corporate demand recovery and the extent to which that would be impaired longer term because of covid thankfully those concerns are increasingly being put to rest there was also a period where a lot of investors thought that passengers weren't going to be comfortable getting back into cramped quarters with strangers, and what we've seen, you have the sound bites from the ceos who i know, and look, i've never seen demand diverge from my own forecasts by this much, exempt for on the way down. the onset of covid clearly this is better and equally as torrid. >> has there earnings power been

diluted by debt they've had to take onto get through the pandemic >> yeah. look, without question you know, balance sheets have come under varying degrees of strain during the downturn with notable exception of alaska and delta. shareholders were diluted elsewhere. it's going to take some time to dig out of that. but all the signs at this point, you know, particularly the tightness of supply, this chronic pilot shortage that the industry is facing, we think that this redeleveraging process, you know, is going to occur faster, certainly, an that we were thinking 12, even six months ago >> absolutely. so you have united in particular you think has quite a bit of up side, maybe 50% up side from here why does this name jump out to you? >> well, look, we have to go -- we let our models lead the way i never wake up thinking today would be a good day for an upgrade or downgrade or our

models predicate what we do. and when we extrapolate the demand strength that united is guiding to in the second quarter, you know, we take that to the out quarters, it raised my estimates by a significant degree what i would note is that maybe i've learned nothing you know because united still says they're going to make a profit this year. i can't get there with my model. they think they're going to do a 9% pretax margin next year i'm at about 5.5 but that's just justified. that still gets me to a level of earnings that justifies j overweight we don't need united management to crush it. mediocrity will sur face >> on the earnings piece, there's major head winds jet fuel prices, labor costs they have raised fares and sort of your point here is that that impressively has not created any

demand destruction yet what is that point and are we anywhere close to it? >> we don't think we're near it at all you know, quite honestly, it's the economy that determines the overall demand for commercial air travel and as others opined on the programs, you know, typically your airline industry revenue is about 95 basis points of nominal gdp there's no reasonable reason that long-term relationship has been impaired by covid, and what it suggests is that the industry is some 45 to 50 million -- billion, excuse me, $55 billion short of where it otherwise should be in this level of economic output. so that gives us confidence that we're nowhere near the point of demand what i'd monitor for for leisure demand if you see people rent smaller cars, dine at less

expense i restaurants, that could portend spending strain, but we won't see it first with the airlines >> that's an interesting stat. final question, i believe you have spirit rated as neutral what is the potential consolidation battle there going to portend for the whole industry >> that's a tough one. we really don't know who spirit will wind up with, if anybody. there's merit to the jet blue spirit merger that we've identified there's merit to the frontier spirit merger that we identified it's really up to the justice department at this point we don't need spirit to merge with anybody to achieve the sort of earnings forecast that i have right now. so it certainly interests me but it doesn't greatly influence the sort of investment narrative that we have right now >> maybe reading between the lines, if that merger did take place, it would mean up side for the industry as a whole.

>> look, i think that's fair we've identified spirit as a rogue nation, sort of the north korea, if you will, so the removal of that regime, you know, to keep the analogy going, could potentially benefit the industry, but it's not something that we're relying on heavily at this point i mean, nice if it happens we'll see what the justice department has to say. >> as a first geo political airline industry analogy i think i've heard jamie, thank you for your time we appreciate it >> any time. take care. >> jamie baker with jpmorgan shares of disney down 40 % from the highs and they're back to october of 2020 levels. now a slowdown in streaming is being added to the list of worryings including being stripped of the special tax status in florida. as we head to break, a look at the dow

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welcome back to exchain. dow is down 618. at the lows we were down 656 about 1.8 % declines across the board. third straight week of losses for the s&p and nasdaq every sector in the red with health care the worst performer. hca is the biggest laggard in the s&p today. second one from the top after an earnings miss and disappointing guidance universal health down more than 11 % we'll have more on this whole selloff in the health care space next hour on power lunch

some of the names hitting new 2 52-week lows it includes salesforce, charter, etsy, paypal and charter paypal at $86. this was a $300 stock at the recent highs it's down more than 70% from the levels this is trading at march 2020 lows in other words, as if the pandemic had just broken out now, as for what's working today, how about the chinese internet names j.d j.d.com. match.com has now turned lower yesterday it closed at an all-time low it was trying to rally it's almost 60% off the recent highs. now to tyler for a cnbc news update >> thank you very much here's your cnbc news update near flag staff, arizona 30 homes destroyed by wildfires strong winds eased on thursday, but are expected to return today and continue through the weekend. on the news with shep smith tonight, it's not just wind.

see why wildfire warnings are stretching from arizona all the way to the southernrockies >> in france campaigning is wrapping up ahead of the country's presidential election on sunday. it could be close. president macron says his current lead in the polls is not a guarantee of winning the far right challenger le pen, says macron is driving up national debt, and she repeated her call to smooth relations between russia and nato after the war in ukraine ends. meanwhile, the head of the united nations is headed to moscow on tuesday. secretary general is set to meet with the russian president putin about bringing peace to ukraine. back to you, kelly >> thank you, we'll see you soon as we mentioned, gap at the top of the show, the stock down almost 20% and it is dragging down the retail sector. courtney reagan has the latest for us

>> kelly, retail stocks well underperforming the broader market the xrt down more than 3%. and as you point out, it was gap's revenue warning that really sent ripples throughout specialty retail especially. shares of gap are down about 19%. but american eagle outfitters down around 8 %. urban outfitters down 7. and department stores, of course, big apparel sellers like dill lards, nordstroms, down between 4 % and 6% online players, also particularly weak today. really in all sectors. wayfair down thread up down about 7 % chewy.com, warby parker, down. stitch fix down almost 3% >> it is that kind of day. thanks, courtney ahead, the tech stocks are feeling heavy pressure with big names in the group on deck with earnings next week including this one down more than 60% this year

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it's a huge week next week for the mega cap tech earnings with the sector under pressure from rising rates, where are the buys and where should we stay away from? we have a guest with us, a cnbc contributor. it's good to see you again, delano let's start with apple, i believe, your first buy. pulled back after hitting the $3 trillion market cap at the beginning of the year. what's the catalyst for apple next week? we heard a word of caution from our guest a couple segments ago worried that the iphone cycle peaked and might be a source of pressure >> yeah. i think there's a couple different ways you can look at it for me, we have less capital appreciation i want to hold onto my strong names that can still provide the capital appreciation in a long-term, which i think apple will continue to do once we get the rate cycle downturn. but you have $100 billion in cash they are using it to invest. the apple tv plus is one of the

big areas of investment. there's reportedly a bid for nfl tv, sunday ticket, which i think is big for subscribers and we're seeing that what's streaming is doing to netflix on the other side also you get a small dividend. apple is using the cash to pay pack investors with dividends and buybacks last quarter they had 123 billion record revenue amid supply chain shortages i do think apple is a strong case, and i'm buying and holding. >> all right same for microsoft this is one that obviously has done well, big pandemic winner faltered this year shares down 16 % why do you like it what are you watching for next week >> yeah. shares have underperformed, especially this year, especially among the big tech peers i think the two areas i'm focusing on is cloud cloud is a big area where they're looking to make that push they're second behind amazon if you're making a push and seeing the growth consistently, that's a reason why investors should be staying in the stock

and obviously, look at the large investment they made in gaming that's an area that i'm highly focussed on. i think you're seeing the metaverse play, but the atvi acquisition announcement is huge in the sense of how are they going to use it in publishing their different games. i still like microsoft as well >> and we've kind of buried the lead you've alluded to it twice you are a buyer of netflix is that right? >> yes that is right. and so i'm sticking to my guns i like netflix for a few reasons. when you dig deeper into their earnings, they were highly penetrated in the u.s. and canada and giving away products for free the product isn't bad. the total share of u.s. tv time is increasing but they slowed down they lost subscribers this year. that's not great news, but if you look at i think the worst of the news is out already. and i still think what they do, we can look at what they do to crack down on password sharing, that could been a bump in

revenue. they look at a tiered ad supported potentially as well. i think that's also a big bump the worst of the news is out, and i'm still holding and would be buying at this point. >> and i'm kind of going to throw this in there. but you're bailing on roku why buy netflix but dump roku? >> 100%. that's a great question. with the roku, it's a different situation. the original content is not great. they made a bid and bought a small studio it was a push to the original contest place, but roku is losing out to the internet enabled smart tvs. if they're not ramping up the original content, netflix has great original content and will continue to add subscribers? >> my smart tv, i might have to go buy a roku. i'm going to throw my tv out the window 30 is a company that you are a

little wary of with this whole elon musk thing right now. why is that? >> exactly that's the thing financing seems to be secure, but if that falls through, what shareholders are holding is a great product and platform that's not doing that great when it comes to hissing growth and revenue. it hinges on what happens with elon musk. i think right now you have a great product. but it's failing to grow consistently, and that's the reason why i wouldn't read buying >> all the companies have earnings coming up thanks for getting us ready. we appreciate it >> appreciate it up next, this name is up about 13% year to date it's the only thing that both pays the dividend and is higher for the year dom will reveal it next. what if you were a gigantic snack food maker? and you had to wrestle a massively complex supply chain to satisfy cravings from tokyo to toledo?

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financialing down about 2% taking another leg lower dom ran a sector screen to find the dig dividend payers in the financials whose shares are also higher for the year. that list is pretty small. what did you find? >> it is first, it's the fourth biggest sector in the s&p 500. the financial sector dominated by banks for the most part you can see over the course of the year today period they've outperformed even though they're down on the year interest rates are a big part of that story, of course, when it comes to bank stocks the financial sector overall if you look at the way interest rates have played out there, it's put a huge focus on some of the bank stocks which may sometimes move higher as interest rates move higher when it comes to that dividend screen, what we took was the s&p 500 financial sector there's 66 stocks there. we took a look at all of those ones that have positive year to date performance, and positive one-year performance as well and then had a dividend yield above 1.7%

that's roughly what you get invesing in a financial sector believe it or not, that 66 stock list goes down to 11, and these are the top five dividend pairs that match all the criteria. number one is going to be prudential up by about 4 .1 % dividend yield principal financial, 3.5%. met life 2 .7% all state 2 .5%. as you pointed out earlier, the onlyback stock in the entire s&p 500 financial sector that makes it into that list is m and t bank, not one of the majors. for the most part the top 11 that made the list are insurance related. an interesting move there, and if you're curious about the other names, head over to my twitter feed at the domino i put a graphic up there showing you all the screen components on there. back to you. >> thanks to twitter's nonsequential feefd, i didn't see it

a pleasant surprise. dom, thank you coming up, the governor's signature is next in the effort to strip disney of the -- shares of disney near a 17-month low. we're going to look at the shareholder impact when companies take a political stance, and a quick check on the markets with stocks at session lows down 650 points on the dow. 'sw.% for the s&p no it hanging onto 4300 by eight points we're back in a moment

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lawmakers and public companies multiple companies including the likes of yelp, lyft, box and bumble signed a letter coca-cola and delta squared off with georgia over its voting rights bill. in 2017 lion's gate pulled projects in north carolina over the path room bill are these political stances starting to impact shareholders? if you look at disney's stock, it's a 17 -month low, but also competition in the streaming world is intensifying. here to help us answer the question, dan clifton, head of washington research. dan, welcome we've seen companies reaching a fever pitch of political speech. is that tide starting to turn now or not >> yeah. first, thank you for having me on today i would argue that the shipping political dynamics in the united states where more and more republican voters are thinking big business is bad for the country, that's a big shift

that's been going on over the last couple years. coupled with the increasing need of younger employees to pressure companies to take issues on social -- stands on social issues, is creating this clash that's leading to many of these fights that you just outlined in the intro to this segment. i think we're at the beginning stages and the reason is for a couple years companies could come out and threaten we won't hold our events in your state if you do x, y, and z. and what we're seeing from florida is really the political response back. the ncaa said we're going to withdraw gains from florida and florida said okay, great you can do that. we'll make sure no taxpayer money can be used to contribute to the ncaa. disney now just escalated that and disney is saying okay, we're going to come out against your bill well, then you shouldn't have those special rights is what the legislator is saying so this is a one-up gamesmanship i think other states are going

to follow this model now that ron desantis put this down and companies are going to have to learn to navigate this our big thesis is that there's four political parties now so just knowing the leader in the republican or democratic party isn't going to do it you have to know how the progressives think or the populist republicans that's going to require that requires more. >> is there a shareholder impact i think of nike as a prominent example. in the latest piper sandler research survey they found they have a highest brand admiration amongst teens. i have to imagine the goal is to be highly respected by teens and i don't think it's viewed as politics but the cool factor has to do with that. >> absolutely. i would argue on nike less of a legislative issue. less of a battle with elected officials. it was over a cultural issue and it had no damage to the

business i would easily argue trump doing the tweets and lockheed martin stock go down and had no long run impact on shareholders what you are seeing today a direct economic impact to a very large company because of the issues that are being debated and probably going to be more prevalent as we begin to think about this companies could avoid this and figure out what the political terrain is we have a proprietary score assigned to every company and disney is 251st out of 500 companies in the s&p 500 so they can obviously do more work here to navigate this to minimize the economic impact but the republican governors say there's an economic consequence if you do that that's a new development in this twist. i do think the biggest takeaway

is the republican relationship with big business is basically over at this point and a harder terrain for companies hit by the pop list democrats and republicans. >> an implication is that it raises the cost of the lobbying spend because they have to curry favor with both parties. >> exactly right so you got to make the investments. the only way that you can overcome that as a company is to be able to have an effective long term government affairs program in place to navigate the changing tides i believe in free markets. i wish this wasn't the case but this is the most political, volatile period in the united states since the civil war the smart companies will figure that out and where they can be helpful to the parties and

disney has to do work on that. you can't import california policies in florida. >> what i'm hearing you say is it's more effective for companies fighting a big social battle as opposed to the policies of a state. that is a fine line to try to walk. >> absolutely. when you look at it the companies that do this really well are companies that know how to navigate in both types environments the cultural issues are a reflective of slow economic growth and now companies have to realize that there are going to be cultural sides and if you look at desantis he is seeing a cultural base aligned with what his position is on this and an economic base today that wants equalization amongst companies so he's actually unifying the republican party which is

divided. that is a very unique political coalition to build and i don't think disney understood that. >> final point will the tide recede if we go in this direction will we wind up with red and blue companies in states in america >> this is a trend that's in place for a couple years if we start getting economic growth back we'll worry about other things we are in slow growth. high inflation why there is a earnings benefit from lobbying companies need to navigate because it will be with us for 2000s. >> thank you appreciate it. >> thank you. as markets head toward session lows the dow down almost

700 points about 695 why9. musk now has the means to take twitter private. what it could mean for tesla shares which just turned negative on this week. back in a moment ed to hire. i need indeed. indeed you do. indeed instant match instantly delivers quality candidates matching your job description. visit indeed.com/hire ♪ ♪ ♪ ♪ with a bit more thought

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welcome back, everybody. should have been a quiet friday in april but not the case for the stock market where the dow is down 702 at the moment. the s&p down 91. nasdaq down 272. shares of twitter are climbing today. they were at last check. up 8% this week. elon musk revealed he has the funding secured to take the company private. robert >> kelly, this time for certain

elon musk secured $46.5 billion in funding to take twitter private. $13 billion in loans from banks. effectively collateralized against twitter as a company and then $12.5 billion against a tesla shares and pledge $65 billion worth of shares for that loan he's also going to put in $21 billion of own equity, cash from selling tesla shares or some equity stake in spacex worth over $50 billion why two third of the financing from musk's own pocket. with shares he's pledged more than three quarters of his tesla shares pledged he does have the cushion received another $15 billion of options as part of the compensation plan and can't sell

them for five years but can pledge them. putting the chips on the table for this one. >> that is perfectly well said he is if it's going this way that is a huge stake that he is committing thank you. everybody, that does it for "the exchange. "power lunch" picks things up right now. thank you. we'll see you in a couple seconds. i'm tyler. welcome to a sell-off friday this hour, fed chair powell puts a 50-point cut on the table. not cut. what am i saying rise and the markets fall offer a cliff. dow down 1300 points since 10:00 a.m. yesterday is the fed getting too hawkish plus the restaurant rout