have to start looking at the stock again. look at what the company's got in term its of the pipeline. i think there's more tloom room to the upside for pfizer >> we're likely closer to the peek in treasury yields than credit spreads sob, i would say buy ief and sell whatever high yield proxy you want >> thank you all thank you all for tuning into "halftime. "the exchange" begins now. ♪ thank you, brian hi, everybody. welcome to "the exchange." i'm kelly evans. you hear it everywhere after the data this week -u.s. is already in recession but not so past. we have strongb ins on the labor market what does this mean for your investment we have answers. and the state of the union ap

apple, amazon, starbucks and plus we'll get you ready for the second half of the year with three buys and a bail for the second half of 2022. follow me as i carefully make my way over here. the dow is down 91 points. the nasdaq down 67 modest declines we saw in the first half of the year big story of the day 10-year note 2.9 on the money unbelievable drop we've seen this week. we were over 315 this week lower market inflation expectations lower core pcr readings factoring into the lower price pressures this morning now, because of this, the home builders are having a great day, despite an unexpected drop in spending remember, strong housing data in

april came as mortgage rates moderated the first time around and maybe we could get moderation again micron down grade from bae to neutral. that's not for helping shares down more than 5% their coun kbrad is on weak pc and smart pone demand and uncomfortable levels, as a they de describe it, of inventory. first of all kohl's, we've heard this before with the likes of target and terminating talks to sell its business to kss. shares plunging 19%. today. se, let's look at the data that has everyone screaming recession. we learned a lot and while it definitely show as slowing economy, wasn't all bad. starting monday when pending home sales went to the upside. and temporarily playing into that

now, tuesday, consumer confidence fell to a 16-month low. real gdp shrank at a 1.6% annualized rate in the quarter got worse yesterday when the atlanta fed's tracker fell in megativive territory does that mean we're in a recession some not necessarily and jobless rates remain at a real calm level. today the ism manufacturing gauge, also a leading indicator. it did drop three points into expansion territory new orders fell into contraction. the bond market already taking this as a sign the fed will be a lot less aggressive in the months to come but is the market getting ahead of itself? joining me is the chief economist and chief macro strategist no one else i'd rather talk to

going into the long weekend especially as you see this, is the u.s. economy slowing dangerously? are we in erecession how soon is the fed go tag need tapivot, do you think? >> a pretty confusing picture. i do think we're slowing but that's a good thing if we were growing too fast and the primary concern was high and elevated sustained inflation so, we need to slow. slowing is a good thing, not a bad thing. it is kicking up some fears of recession. i think we need to be clear about what a recession is. it's simply not two down quarters of gdp. technically a recession is defined by the national bureau of economic research that defines business cycles for the u.s., as a period of falling production, sales and employment that usually lasts more than a few months if you want a singular indicator

to define a resession for the u.s., it shouldn't be gdp. probably should be the unemployment rate. if you look back at every recession since the end of world war ii, the unemployment rate has risen from prerecession trough to post-recession peek. and where are we right now 3.6% i just brought up the it data. we're essentially at the cycle lows that might change in the future but that is a prediction, not something that's occurred. >> and the first half, the weakness is really because of inflation, not because demand is slowing. for it's because demand was too hot. it all went into inflation it didn't leave us anything left over we pointed this it out, as the week progressed, a lot of people say fine on the labor market but it's a lagging indicator what would you say in response there are lading ways to look at

the labor market i mentioned jobless claims, hiring and notices, that sort of thing. the mood is that we'll abruptly shift intait a sharp downturn and i suppose jump in the unemployment rate. >> you can't eliminate that as a risk factor. the change, the 12-month change is about a perfect coincidence indicator. perfectly coincidence. if people are focussed on gdp, you can focus on the unemployment rate if you're look athyear over year changes. you mentioned jobless claims they're still incredibly historic low levels and going side wairz so, we ecan continue to watch that we have good news on the front edge of the inflation trade that's rolled over quite hard. at the five-year horizon are

down more than a full percentage point from the late march levels that means the fed is regaining credibility. they're getting traction with their rate hikes and initial movements in the balance sheet, which have effectively just started. if the fed doesn't have to do that much and it can get inflation to come down, that's a good story, not a negative story. go ahead >> i want to hear the rest of your thought and maybe you could end it by saying what the imp lkdss are for the market because you were concerned earlier this year, rightly so. we had a massive valuation and are you bullish for the back half >> i think the market's attractive here. we came in where the market was stretched on valuations, relative to earnings and interest rates and relative to liquidity. we've had a big liquidity slowdown but the market has

dropped more than 20% year to date this is not the time to get negative on equities the time for caution was when everyone was bullish not now. consider this. your average recession bear market is over 30% if we're more than two-thirds of the way there, why get negative now? it doesn't make any sense. if we avoid a recession, there's probably a lot of upside the bulk of the bear market is behind us anyway we'll see what the macro data does i fear a lot of retail investors are just waking up to the fact the market is down a lot and they'll sell at low, which tends to happen over and over. >> even if we're going into recession this calendar year, we should start to know by now. and yes, the ism survey dropped. but you mentioned the four factors we need to see in broad decline.

is it even possible that we could be in recession in the back half or does this have to be a 2023 call >> honestly, i don't see a recession this year. i guess that's becoming a minority view but watch the labor market data pretty clesly. we'll watch pay roll figures, unemployment rate. typically you get tea bill yields up well above bond yields and even though the 10-year yield is coming down, the gap is well with over 100 basis points. and that's not a laging indicator. i don't see the resession story coming true for 2022 we can talk about risks down the line but for this year, i think it's simply growth is slow and that's a good thing it's creatinging a reception we're falling into a recession because inflation has been high in some sectors. but services spending is still quite strong

that's two-thirds of overall spending four-fifths of job and income growth they're getting too pessimistic on the business cycle. >> thank you so much for your time great to check in with you joi let's dig deeper into these themes my next guest says what malters is theant the negative gdp issue but rather the inflation trajectory and she's starting to add risk to her portfolio, slowly joining me is chief investment officer. great to see you, nancy. wha what's your mood in a nutshell >> that's a great interview with michael. we don't think we're in a recession either and if we get one, we'll get it in 20 twi. we're clearly slowing and i

thought manufacturing numbers were encouraging because we're seeing slowing down in new orders and then delivery times came down inventory is starting to clear out. wore noting many of the manufacturers are not ordering as rapidly as they were in second half of last year all of that is good news for what the fed is trying to achieve. i've been critical of the fed but they've been clever to encourage the bond market and stock market to do the heavy lifting. >> it does seem like they're finally believing powell -- and he repeated it again that inflation is the number one issue and we'll take whatever happens to the economy to make sure we conquer it >> it's late but welcome nonetheless. we're focussed on what's the earnings pick ture going to look

like in the second half of this year not that we anticipated russia invading ukraine and adding to that, but we knew we were slowing. so, we got more defensive at the end of last year and in the summer of last year. and now we're starting to add back in risks. and sniffing around in the bond market i guess about a month ago, we started building bond letards for our clientd. we took them out of the market when the treasury yield got to gift basis points. >> what are names or sector? because there have been plenty where it feels like we had a one-time surge all of the arc names for lack of a better characterization. the business models may be repriced for good. it's going to take them a long time to win the street back over what are the parts of the mark wrt you would becomfortable adding risk? >> of course, we do like the

cloud names. i talked about those for a long 250i78 time it seems like the previous decade, i was talking about health care all the time and now it's the cloud and cyber security names we think are long runway, total addressable market with a secular tail wind behind them we would look at a service now and add in small increments. there's no rush. that's a name that has a deflationary impact and improving impact on corporate earnings we expect to continue to see movement towards their product line but it's not just technology we recently added lulu lemon into our portfolio and spotify a defensive, reliable growing in this environment doesn't have all the problems netflix has, where you have to be home to use the product but it has been painted with the

same brush we want to take advantage of those discounts. those are the kiennds of names we've been picking away at >> it's specifically reads with a 80 times forward pe. is there any read through, as you mentioned, into the cloud or cyber names, that you like here? >> i don't think so. it's an interesting and provocative short. i think he may be wrong on this one but he's been around a long time and a lot smarter than i am we own equinex >> that does seem high >> well, yes, eke wunex is not but people were looking for

places to findexposure that wasn't housing related and we own public storage. we like the digitization story and the steady earnings growth but there's a lot of chasing, i think, looking for safety in this risky, safe environment >> dog is about 185 if this is right. thanks for joining me. everything from data centers to lulu to the broader market appreciate it. have a great fourth. >> you too, kelly. appreciate it. coming up facebook parent has lost more than half its value. but one says facebook and instagram are poised to dethrone tiktok he'll join me next to make his take plus the state of the union. how they're organizing at apple,

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welcome back to "the exchange." you think tiktok it's estimated the social company will have 755 million

monthly global users this year and social networking topping 20%. but our next guest says don't count meta out just yet. joining us now is managing director at truis. we can't see tiktok's valuation but meta's has been clobbered. >> thanks, kelly, for having me again. our contengsz is obviously, since 2016, when the parents over the chinese version of tiktok started to today generated something like $20 billion with roughly 20% of that outside of china the others, honestly, were asleep at the switch they were caught flat footed but starting in 2020 we started to see really aggressive moves

by facebook or meta in particular first, initially with instagram and last year with facebook, the blue app we've seen youtube with their shorts, starting to aggressively pursue this opportunity the last year we've seen also snap with their version. so, the take away here is after only a short one-to-two-years of the american social players starting to catch up, we're seeing real traction in first-user engagement. so, boy the end of this year, facebook is going to be close to a billion users and over time, ie, starting this year, monitorization is starting to catch up so, by 2023, we think -- we estimate tiktok will see the end. >> wow let's just call it instagram you think instagram's going to

dethrone tiktok next year? >> between instagram and the blue app, if you add them both we think instagram is going to count for two-thirds if you add both, and basically aggregate reels, volume reels revenues, we believe in the next 18 months and by the end of 2023, meta may be the number one player outside of china. >> and listen, any pressure. the whole issue of whether it's actually storing data on the oracle servers or not and if it truly clamps down on usage and everyone sells the same you do about its potential to dethrone tiktok >> it's a hard kwequestion to answer because there are a number of pressure points. you have the macro issues. user privacy issues.

you have meta verse investments. and those are real issues metta struggles with if you put that aside and focus on the others, the stock is trading around six, seven times. 12 or 13 times our price target is literally doubling right now [ inaudible ] 50% jump in the stock over the next 12 to 18 months versus today. >> this is fascinating because this would be stories all over again.

it would help or hurt with regulators it seems like both can't be true at the same time >> look, you can't hide the fact that facebook or meta has 70% market share of social spent but google have 95% market share. so, they're not necessarily discriminated against competitors or making it it harder for slower players to compete. p it's hard for regulators to come after it and until now, tiktok has seen very little regulatory pressures. under trump, we saw the beginning of that and it went away if it can comes back, i think regulators are going to be all over tiktok because there is

even less visibility into the tiktok and what tiktok is doing with the data, etc so, relative to the two, deor you want a facebook or google to keep doing better. >> it's fascinating. if anything ever did happen to shut down tiktok, the careers and fortunes at stake, they would have to migrate quickly at meta >> it's a theoretical exercise we've seen it happen in india and pakistan and a half dozen countries where tiktok has been removed from the google play store and the apple app store. it's not just theoretical. it happened. >> thank you really appreciate your time. thank you. provocative call coming up, 2022 has turned back the clock on clean energy. renewables get hammered.

get the second half be a reversal of fortune? and this time as a key piece of legislation getsel hd up, a look at what it means for bajing on an intel manufacturing plant coming up on "the exchange."

welcome back to "the exchange." we're in the middle of the range of markets that have been higher and lower. we're down 33. the s&p down seven energy was the worst sector in june and oil snapped a six-month win streak with its 6% drop.

and notched the longest streak going back thoinception in 1983. we're still coming off strong gains. elsewhere, copper is on pace for its fourth straight negative week this is part of the commodity reset we were talking about earlier. bitcoin bouncing back after its june swoon down 40% in the past month and 60% since january. above 19,000 or so today we'll have full coverage on "crypto night in america." now, to a cnbc news update an arraignment today for the 49-year-old kentucky man accused of opening fire on law enforcement officers attempting to serve a warrant last night, killing two and wounding several others cash bond set at $10 million a national police union says shootings of officers are up 19% from this time last year and

last year's total was the highest since it started tracking attacks in 2017 in wisconsin a 3-year-old is dead after shooting himself with a gun. a 28-year-old is arrested in connection with the incident they're urging gun owners to keep their guns locked and away from children. and an advocate for reducing gun violence will be one of the people receiving a presidential medal of freedom today, president biden will honor gabby gifford, who survived a gun attack when she was a member of congress we'll look at efforts to save water by recycling it. over to you. still ahead, as labor movements are across the country i where do thinks stand for the biggest companies in the world a look at the latestnd a implications for investors next. . some bonds inspire confidence, and some you grow to rely on.

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welcome back to "the exchange." today marks the end of a contract that covers work withers. the negotiations are ongoing

labor secretary said they're going well as unionization efforts seemingly sweep at some some of the largest companies today. steve covac has the latest on all things apple and following the fight at amazon and kate rogers is looking at the efforts percolating at starbucks >> let me give you a run down where we're at with apple. a few weeks agethe first apple store to unionize was in maryland they kind of gave this standard antiunion messaging, such as we might not be able to give you vacation time or as flexible with hours as we could bewithout a union. at the same time, apple is not appealing. they're going to work directly with the union in maryland to negotiate a contract this is a sign of how it will handle future unionization efforts. apple got ahead of this by

raising pay before it was 20 bucks an hour. and some of the unions in new york and other big cities are asking as much as $30 to start because of the cost of living. what we hear from other organizersb maybe it's angst and anger. when i speak to the apple employee organizing, they love apple. one woman told me, who's organizing an atlanta store, she's like i love engaging with my community it's not necessarily they're angry at apple they just want a seat at the table. >> let's turn to amazon where warehouse workers in new york voted to organize for the first time this past spring. and with amazon has been particularly contentious >> i was going to say what steve described could not be more

opposite to what you're seeing at amazon. and instead of working with unions, amazon has been fighting the efforts. amazon is the second largest employer so, as e commerce surged, so did the work force they're more about wages and working conditions at stake are amazon's efficiency and massive logistics network. and ceo closing out on his first year on the job, faced challenges on a number of other fronts they may not be the only issues. and said the company could run out of people to hire by 2024. due to its exceptionally high turnover rate. it could turn through the available labor pool by then and that could give more ammunition to union advocates and this after one group scored a major win in staten island and

as they look to begin their own union push >> let's get to state on starbucks, which kicked off earlier this year. kate rodgers has the latest on what's brewing >> this started last summer in august when the first workers said they were petitioning to organize and since then some 180 stores stlat voted yes on unionizing over 200 held votes with no signs of slowing down so far while these numbers are a win for the union, there are 9,000 starbucks locations around the country. they represent a small fraction of those so, this is far from reaching critical mass, despite the amount of votes held weekly. and howard schultz is back at the helm of ceo and repeatedly said the company does not want a third party with its employees or partners. the company's facing 212 open

unfair labor practices charges from the nlrb. regional offices have sided so far with the union and many wait hearings before administrative law judges f the regional offices do seem to be siding with the employees, which could be important when we're talking about apple and amazon as all these fights move forward. >> not that amazon isn't but it's a different retail issue. have we seen any of the other ones grappling with these issues >> yeah, microsoft they actually came out earlier this spring saying we're open to working with unions. and this is in part because they're going through this $69 billion acquisition and they really want to get the deal done the chair and her colleagues have signalled they're go to take into account culture and

labor issues whether they approve the deal and microsoft is really desperate to maybe this happen you can see this as a siinal saying we're open to look at labor. and a small group a few weeks ago voted to form a successful union and microsoft is take the same tone we heard from apple. if you want to organize, we're not go to appeal and we'll be partners instead of working against you. very different from amazon and starbucks. >> and on that note, it's interest interest because tech is the same place we've seen a lot of the layoffs come from. anything crypto related. but there's this push and pull where never has labor had more power, i guess and at the same time, is the power already start to weaken? >> a lot of the tech companies

use equity to start compensatin the workers. and it raises a lot of questions as to how employees are feeling at those companies how they get compensated when they see their options come down by so much and they'll have to spend more cash it's a huge conversation here happening in the valley and companies continue to contend with it. not just tech companies. but you asked what other big tech companies it's in a different way than amazon but engineers at google have actually formed a union as well. >> engineers at google okay we know it's not just starbucks on the restaurant side but they do seem the most prominent target >> chipotle workers in maine

petitioned for a union vote. no set date for them to actually vote chipotle has a smaller footprint of stores, might be easier to control worker expectations and work with them early on. starbucks has many more stores so, this spiralled and picked up sometime quickly chipotle says it respects their employees rights and will be committed to insuring a fair, just work environment. they look like they're going to work with their workers if they go down this path in unionizing. starbucks baristas, they say they love their job too. and even if they're not around to see this come to fruition, the change they're fighting for. trrls they want it to be better for their fellow baristas in the future one other name i'd mention is mcdonald's we know they've been fighting for years. it's mostly franchise.

more than 95% are franchise and starbucks is mostly company owned. >> easier to fight big corporate in that sense. the 2022 state of the union. thank you very much. still ahead, it was supposed to help transform the rust belt. but over the fight in funding in congress, it's delaying plans to build a chip plant in ohio live on the ground in ohio with more scott. >> reporter: intel has plans for a massive semiconductor manufacturing facility in central ohio but first they want money, big money from congress. and if they don't get it, they may take some of the business to rope are they serious or bluffing special report coming up on "the exchange." know all you need for recovery. and you are?

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welcome back intel shares down 7% the company had big plans in ohio, hoping to use money to build a new plant there. thencame the tweet from mcconnell. flrls will be no bipartisan usica that includes money for the chips industry, as long as democrats are pursuing a partisan reconciliation bill so, with funding it laid so too is the groundbreaking of the plant. trachlked to ohio for more on the potential fallout. >> ohio governor mike dewine speaking with us exclusively has big plans for intel. >> i truly believe this is the midwest time i believe it's ohio's time. >> so too is ohio state university >> we're creating a network,

midwest semiconductor network. >> they call it sillicon heartland, transforming what used to be the rust belt but now it's on hold intel ceo on cnbc this week. the idea of delaying a ceremonial announcement. this sucks >> including 50 billion in aid to the u.s. semiconductor industry intel plans to pick up 2 billion in incentives for ohio >> is it fright a company to make 20 billion in profits to hold people hostage over insentives >> i don't think they are. when we won, they told us we're coming they said if the chip act passes, we will accelerate extremely pass >> reporter: intel says it's still committed to the site in ohio but the chips act is the

difference between a 20 billion investment over several years and 100 billion much faster. >> i don't think they want to be a in a position to say we're breaking ground and congress still hasn't passed the chip act. >> reporter: dewine told me intel is doing job fairs they've met with home owners in the area around the plant. and a spokesperson said the company has begun construction. for it's apparently not something intel wants us to see. they wouldn't let us on the site today. as they try to pressure congress to move forward on a piece of legislation that ceo gelsinger calls perfect. 12 days away from the big reveal where will i be july 15th? tune in and see. >> just to be clear, $20 billion

plant without the chip act >> ohio has to plan either way and that involves a lot of infrastructure about 700 million nin frustructure and the governor told me they would be no matter what and they could over bill significantly. >> so fascinating. i can't imagine having to plan for this thank you very much our scott cone dow's up 78 points nasdaq still down 6. three buys and a bail for the back of 2022 we've got the trades next. [music playing] ♪ imagine something of your very own. ♪

♪ something you can have and hold. ♪ ♪ i'd build a road in gold just to have some dreaming, ♪ ♪ dreaming is free. ♪ accenture, let there be change.

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still thinking about your walgreens bill after the week that they've had your first buy is deere. the stock has had a rough first half down 14% and they had solid profit this quarter and supply chain challenges and they raised the dividend, why deere at a time when all these ag prices seem to be pausing, shall we say? >> well, we don't think that the food supply issues are going away, and we think that the pressure continues to put pressure on farmers. this is also a company that has continued -- i mean, the earnings have been stellar so they have definitely proved themselves out and the valuation for those earnings is quite good, and we think going into the second half of the year investors will be looking for -- investors are going to be looking for -- [ no audio ] >> we think investors are going to be looking for valuation as well as demand, and we think that demand is going to go up because farmers have to get -- have to get into the ag tech

play and deere is that play. >> that was extremely impressive continuation of the theme of thought while silencing the phone. your bold case on deere. >> let's move on to lithium, which is counterintuitive and lit is the etf and had a rough first half down 15% and only five of the stocks were higher and most of them were the chinese names. why does this one jump out to you? >> so this one jumped out to us because we actually think this is actually tied to the same pressure that we see that's pushing up deere some of this is coming, quite frankly, from the war in ukraine. as we start to look at the potential for a froze know war which is just a terrible situation, we think that the call that lithium prices are coming down, we think that that's probably not the right call we think that there's still going to be pressing demand for supply we think that exposure to lithium and lithium batteries is still going to be an interesting

play and so we actually added the etf to your portfolio. >> and your third buy, less controversial and you do like microsoft, yes >>we love microsoft. >> look, full stop, but there's reasons, right microsoft has obviously a very enduring play. we think the crowd play doesn't go away and we know that these are challenging times and despite that valuation it has a solid balance sheet and that balance sheet will look very good as we continue to see rates rising we also see it continues to pay a dividend and continues to grow its dividend and that's also attractive going into the back half and we think that this stock has just flipped into a value stock. we think that there is huge growth that just is no longer priced right and we'll keep holding it >> all right let's move on to discover

financial and it's up 17% on par with competitors like mastercard, visa and amex. they all still pay a 2.5% dividend >> they do they do, and this has been a great stock for us we've owned this, mastercard and visa, but quite frankly, we've been on the back half of the recovery going into this, you know, crazy first half of theyear and the likelihood that as the economy softens and as we go into what might be a mild recession, these are the stocks that are probably going to have a hard time. so although we've -- we've enjoyed the run, we're stepping away from this story >> all right leaving it undiscovered for the next one to discover gina, thank you so much for your time today good to have you >> thank you, kelly. >> gina sanchez, three buys into bail >> gasoline prices, and we'll look at the energy stocks and the impact on the consumer and will the lingering sticker shock

be a buy for evs and other green stocks in the second half? ats xtth ine

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♪ ♪ before we go as we embark on the second half of the year, they saw the growing divergence between traditional and clean energy in the returns. the traditional names up 30% the clean ones down ten and high oil prices may help close and reverse this gap pippa stephens has the story >> kelly, it's a tale of two energy sector, that's oil, gas and coal on one side and nenergy like wind and solar on the other. the divergence has widened this year oil has pulled back, but surged 29% so far in 2022 on the back of higher commodity prices renewable stocks are down 37%. rising rates and rotation out of growth and policy uncertainty

has sent shares tumbling let's run through some of the numbers. o occidental, the big outperformer in 2022 has valero, exxon and halliburton all up 40%, but clean energy names like sun run, sunnova and lithium and plug power all sharply lower and thanks to tight fundamentals and j.p. morgan saying today that oil and gas stocks are the most attractive group in the market especially after the recent weakness higher commodity prices could actually boost renewables, too, since it makes them cheaper in comparison meantime, supportive policies like the extension of the investment tax credit can lift the group. we've heard the narrative for a while now about near-term weakness and long term opportunity which begs the question if and when will it shift? >> right if not now when? >> exactly, pippa, thank you very much. pippa stephens high energy prices have one big

headache for the transports. now we'll have another westport port strikes and we'll dig into the implications on "power lunch" which begins right now. ♪ ♪ and welcome to "power lunch. i'm eamon javers in today for tyler matheson an inflation battle. strategists say stocks won't rally until inflation shows signs of rolling over. it's a key question for the market we'll debate the answer and what it means for your investments. plus, how much would you pay for a new car? according to edmunds, a record share of new car buyers are shelling out a thousand bucks a month. the ceo of group one automotive talks sky-high car prices and whether they're here to stay kelly over to you. >> let's check in on the markets where stocks were negative last hour and now they're back into positive territory and the s&p up 10 points and t