2.3% dividend yield. should be safe no matter what cpi does >> okay. that means jpm is yours. ahead of earnings. >> yeah, listen. one of the cheapest multiples you could buy the stock at in the last ten years 3.5% dividend yield. i'll take it, i think it's going to work out. >> as i said, earnings comes in this week. that does it for us. "the exchange" is now. i'll see you in o.t. thank you, scott hi, everybody. i'm kelly evans and we are all over these major market moves today. the dollar close to parody with the euro, bond yield curves inverting or dropping sharply. oil collapsing again, weigh below $100 a barrel. all of this as we head into earnings season and await the big cpi report, as well. so what are these big moves telling us we have some theories and some answers. today is also amazon's prime day. doesn't seem to be as big a deal as in the past, and maybe that's by design. does amazon still want retail to be its loss leader

and bill ekman's spac couldn't make the deal. is the spac model flawed first the markets, where we're seeing a lot of green. >> we'll take it after yesterday's losses the dow industrials up about 150 points, one-half of 1% advances there. right now, 31,330. the s&p 500, up about one quarter of 1%. similar percentage advantages, up 32 points 11,408, the last trade again, positive. it's not gangbusters, but the bulls will maybe take it, given what we've seen over the last several days in terms of market action one place we are seeing a little bit more of that activity is in the gold side of things. kelly did mention that dollar string translating into 20-year lows for the euro. the dollar advancing advantages does have an impact on commodity prices like gold gold has been historically

viewed as an inflation hedge and if the 17% declines are indicative of anything, maybe it's that that inflation narrative could be peaking for the time being so watch those gold prices by the way, gold prices lowered to the tune of a nine-month low. you have to go back to the end of september of last year to see gold prices this year. and the gold miners, many of the bigger ones, lower on the session. on the commodity side of things, still, check out what's happening with oil prices right now. wti, benchmark crude prices, down about 7 to 8% hess, chevron among some of the worst decliners in the s&p 500 overall. i would also point out for wti crude, kelly, we are getting just a few dollars away from that 200-day moving average or longer-term trend lin for u.s. bench crude. if we go below that, right now, if we go below that, it would be the first time we've done so since before christmas of last

year this is a big deal we'll see if that crude trade goes any lower than we are right now, kell. >> just a stunningly quick reversal do mb twhanks. stocks, overall, are essentially flat over the past months as commodity prices have dropped. let's action joanne feeney she's partner and portfolio manager at advisers capital management joanne, it's good to see you you could read it as a pretty good sign that this reset has helped stocks maybe find a new footing, unless you think they're about to catch up with the trade, so to speak >> i think stocks had their first move down out of the gate, with the initial talk about the interest rates going higher in november then we had the war and recession fears and how much is the fed going to raise rates obviously, we've had a very big sell-off, which has made for some very attractive opportunities out there for the long-term investor but certainly not been a fun

ride here these last several months >> i guess that's why it's really great that we get earnings right now, because maybe that can help us tell us one way or another, not so much what they're going to say about last quarter, but are we going to see estimates revised up or coming down? >> you know, kelly, that is going to be the critical question this earnings season, i think, is going to help determine what the equity markets do for the rest of the year the two big questions that are out there that i think companies are going to shed some light on, number one, what is happening to consumer spending? we know customers are being pinched my inflation, particularly the energy and food, but we're also seeing consumer spending elsewhere hold up reasonably well it's really the tale two of consumers. middle class and upper class aren't going to change their spending patterns too much so you have to pick and choose which stocks you want to be exposed to in the consumer sector we'll learn about what happened last quarter and the guidance for this quarter will be critical for the rest of the year the second question is margins how much are firms able to pass on those higher cost increases, materials, labor, transportation, and the foreign

exchange effect, so we'll learn a lot about the outlook for the rest of the year with this earnings season. and i think the markets are prepared for that. earnings actually have come down a little bit outside of the energy sector, earnings have been cut >> are you overall pretty establish on the market or whhow would you describe it, hugh johnson was on yesterday and his view is that maybe we won't see major deterioration, so he's somewhat constructive. curious how your view would stack up with his? >> i think there's still a lot of uncertainty there are real risks out there clearly, some consumers aring hurt and that's going to hurt some companies. so earnings estimates will likely fall for a large swath of companies that are more sensitive to that part of the market but we're also seeing strength still in data center, although service now, obviously, created some concerns about the software side of that world and so, i'm not so sanguine about the outlook for earnings

and i think companies have a free pass to give very conservative guidance. i think a lot of our ninvestors are in higher dividend-yielding portfolios, so they've been able to ride out some of this volatility living off the income they've got has allowed them to say, i'm going to wait this out so for the long-term investor, this is an attractive time to make sure they have good exposure to equities >> so you do have some names, either valuation wise or secular growth names, insurance calls. williams sonoma, i'm surprised to see match group pop up for you, as one that you think is cheap hear why? >> yeah, obviously, match has the highliest valuation, but the highest growth of that group and match is serving a younger crowd. i merging from the pandemic, getting back to in-person events really does help their business, although a lot of it is online, it turns out they create a lot of events for folks to go to and so exiting the pandemic to some degree, although, obviously, we still have the

omicron ba.5 to worry about, but people are getting together more in person, and that helps their business model it's a relatively low-cost product, particularly for the younger crowd, where they really want to get back out and socialize, we think that's a good one williams sonoma is also a controversial call, being in the ho housing-related area we think the housing markets and stocks have been sold off too much there's a long-term tailwind to serve the millennials and younger crowd that need to get into houses, and once they get into a house, they buy stuff for the house. and it serves a higher income clientele, which is not going to be affected that much by inflation and food and energy prices >> to me, it makes a lot of sense. and you like amazon, worth a mention here because of prime day, microsoft, broadcom, you know, some -- the big defense names, as well you think if we kind of get into a pickle there, let's just say, we're already in one, we have to leave it there, joanne but i very much appreciate your time today we'll check back in soon joanne feeney on these markets now, in the meantime, we had

the ten-year note go up for auction at the top of the hour let's get out to rick santelli at the cme, how'd it go? >> when a tree falls in the forest, if there's nobody around to hear it, as it goes -- if you have an auction and nobody shows up -- because that's what seems to be what happened with the ten-year note auction. let's go to the beginning of the story, shall we? 33 billion tens. the market was trading around 293.5, so just under 2.94% it priced at 2.96% higher yield, lower price. it was messy on pricing, and pretty much, every aspect other than one was messy you had the lowest bid to cover since decent 2020 at 2.34. 61.3 on indirects, the lowest since april of 21. the dealers took a 20.7 chunk of this auction that's the biggest chunk of the buffet they had to take since april of '21 the only good category was direct bidders at 18%, a little

bit better than 10 auction average. you see the chart there, you see the way rates jumped after the auction, results hit the wires, and i guess the only question to ask is, who would be crazy enough to get aggressive in a ten-year note auction before tomorrow's cpi well, obviously, nobody. kelly, back to you >> so for everything that -- >> and the grade was d-minus, by the way. dog minus. >> better than the "f" it sounded like that's where we were headed for a moment so, rick, all this is happening when currency markets are an even bigger headline this morning. we did briefly hit euro parody, right? >> as a matter of fact, you can't make this stuff up, kelly, as you look at a 24-hour chart, the low today, the low is 100, right on the nose. computers have a big presence in computer trade now, here's another aspect the last time the euro actually closed below 100, below parody, was december 3rd, 2002

you know when the ten-year yield was on their boon on that session, it was 4.5% 4.5% and i think that really drives the point home, you know, around 113, 1.13% in a boon and the rates have been coming down rather dramatically from 1.77 intraday high, not that long ago, about four weeks ago. the point here is, you think our fed has a tough job, the ecb job's way worse. they have to deal with the southern economies, try to hold their interest rates in some type of zone that isn't horrible for their economies, while all that's going on, they need to supposedly quit buying they call this whole process fragmentation. and the market is not buying into it going very well. >> not to mention an energy crisis, full blast it's a horrible situation. >> and you know what's more horrible, though, kelly, is that -- and you said it, and i'm glad you did at the bottom of all of this is the energy crisis.

and that is like the coming attractions for a country near you. we need to pay closer attention to what's going on in europe to try to avoid some of the messiness. because many states in the u.s. seem to have the same philosophy on energy that germany did before all of the crisis hit >> it's a collision of so many different problems and possibilities. rick, for now, thank you our rick santelli. let's stick with energy. the white house today is reportedly out with a memo saying that gasoline prices are likely to account for the entire annual increase in tomorrow's cpi report they're also emphasizing that the gas prices are expected to keep falling in the weeks ahead. and sure enough, oil today is way back below $100 a barrel, down to about 96 and its lowest since april. pipta stevens is back with me now. p pappa, what is driving these renewed declined >> wti down almost 8%. it's a confluence of related factors behind the move.

we have demand concerns out of china amid a spike of covid cases, a stronger dollar makes oil more expensive for foreign buyers, recession fieears are sparking concerns about an overall slowdown in demand the dip below $100 has sparked interest from funds and finn liquidity. and with biden preparing to meet with saudi officials, there's limited appetite to buy the dip. wti is right around $96. the contract closed at $92.24 on february 23rd, the day before russia invaded less than two weeks later, it hit $130. it's been volatile ever since, bouncing both above and below that key $100 level, but it is approaching the 200-day moving average. it could call below that level for the first time of the year >> it's a bit paradoxical, because we're talking about an energy crisis sparked in part or reflecting higher prices and now

here we see them unwinding could this help kick the can down the road, at least? even though so much of this is about natural gas, even if oil prices are dropping, does this tell us that this isn't going to come to the head that it still might. it's hard to look at next six months and see anything but fear and dread for these european economies if they don't have the supplies that they need. and yet, we still have our trade, our oil trade today moving the other way >> yeah, fear and dread and also a huge threat for consumers in europe and you just wonder how people are going to pay these bill that are spiking. and i think the decline in oil is a good sign for consumers here, but how good of a sign is it really? we're still around that $96 level. and at the beginning of the year, oil was at $75 so we have to put all of these moves in perspective it is a big decline from that $130 level, but it remains evaluated. so gas prices are -- gasoline futures are down another 0.5%

today, but they are higher maybe a welcome sign, but longer term >> great point we were driving last night and saying, well, gas is only $4.50. >> right, we have a short memory, but it's still evaluated. >> pippa, with thank you we appreciate it value is beating growth so far this year, but which stocks should you target in a slowing economy? we've got three picks for your portfolio. but first, here's a live look at the amazon fulfillment center near trenton, new jersey, with prime day officially underway. we'll talk about how much that matters to amazon's bottom line and one shareholder who sees the stock doubling from here we're back after this.

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welcome back to "the exchange." shares of amazon are down more than 33% this year, and 41% from their highs, as the retailer kicks off a scaled down version of its annual prime day event. is amazon trying to downplay prime day? let's ask deirdre bosa deirdre? >> well, kelly, let's put it this way gone are the days of big starss the event or lady gaga debuting her beauty line. so in a sense, it is scaled down, but the deals are still

there. but the best ones are for the company's own devices. 21 out of 22 of the top deals are for amazon's own products or alexa-enabled devices. more broadly,prime day has become a more subdued event than we have seen in recent years, and that isn't necessarily a bad thing for investors. markets have been focused on how recession fears, high inflation, over capacity, how that is raising costs for the company and hitting the bottom line. so cutting back on promotional spend around prime day, clearing out inventory for its own products, that could help with profitability in the third quarter. and rather than use the event to pick up more prime members, of course, it is doing that, as well, but amazon may be focusing on harvesting those more than $170 million members it already has signed up. it may want to show off new prime perks, like grub hubplus, which users will now get for a year included in their membership as for trading action in amazon shares around the annual event, investors may not necessarily be looking for a deal

the stock doesn't do much around prime day. on the year, amazon shares are down some 30%. for some, that may represent a bargain. >> and they have it later this year, as well. it's proliferating, even as they don't care about it. i don't get it >> yeah, they've got another prime day, they've got beauty events so they're trying to boost sales. and you could argue that maybe it's diluting the impact of the event, but, you know, there is some data that shows that a good number of americans still actually wait for this prime day in the middle of summer to make some of their biggest purchases. i was just saying, i just bought a vacuum myself, and that was not an amazon vacuum >> like you said, it is basically all amazon stuff deirdre, send me the link. thank you very much. our deirdre bosa >> our next guest says that amazon doesn't need the headache of rhymprime day anymore and ths the stock could double from here joining us, james, do you want to weigh in on what you think is really going on here with prime day or days? >> sure. i think prime day is all about

just flexing the platform that they have. and if you look at the tech sector more broadly, i think what you're going to see is a bifurcation of evaluations between true platforms like the amazons, apple, with their play store, with their app store and google, obviously, with youtube, versus services like netflix so i think you'll see more valuation and support coming towards these platforms. but as it relates to prime day, look, it's the -- you're still talking about upwards of $4 billion on $120 billion base of revenue for the quarter, so that's three to four percentage points of growth lift for 2q that we should see so even though, you know, it is more subdued, then in recent past, it's not insignificant in terms of the actual contribution to the financial portfolio >> it's topline growth, but some of these markdowns on their own televisions and different hardware products are pretty deep so what's it going to do to profit margins

>>ic profit margins, it's not so much on the commerce side, you're talking about a single-margin for their retail business it comes down to how much contribution can they get from their growth assets, where they're investing, like amazon web services, they're spexpandi efforts into groceries, more logistics offerings with their delivery group as well as their media offerings. i think on a consolidated basis, as they rightsize the company, rightsize capacity and rightsize the employee base, things will start flow through the bottom line and if you assume that, they could have $2.5 earnings. i think the margin performance will come and start to materialize and crystallize, starting this quarter and into the next couple of quarters.

>> the analysts over at citi make a couple of points about the stock or the day they say amazon has been up there climbing or one of the top free apps available for download it's a good sign there's consumer demand. and 21 countries or something like that. it's global, not just about what's going on here in the u.s., but more fundamentally, how do you want these drivers to translate into your base case for amazon shares to double. what do they need to do to kind of get more of the investing public onboard with that trajectory >> first sure, amazon, remarkably, has become a show-me story they want -- investors want to see that they can actually grow again, versus the below-single digit growth numbers we saw on the commerce side and produce profit they've done both of those really well in the past. oftentimes, not at the same time but i think that you will start to see those two things come

together the mean reversion in the growth rates will push it back up to the teens by the end of this year and with prime day growth, you should be upwards of 20% growth by the end of this year and then you have on the margin side, like we talked about before, which is the right-sizing of capacity, the performance centers and what not and the fuel surcharges that they're charging, they should be able to control the expenses much better. and you're seeing the company much better at being able to scale up and scale down their expenses, as, the tandem with demand on a more realtime basis so those things coming together, and you'll start to see a much more handsome growth profile on the bottom line. and once you stoart to see that in tandem with the growth numbers coming back into the double digits, that will be what

is needed. you're buying it at 1.8 times forward sales. this is as cheap as you can get it and that's why we have no hesitation of maintaining it as our largest position in our book >> james chuck ma, thank you vey much for your time today we appreciate it >> thank you still ahead, this stock has lost half its value since january, tracking for its worst year ever and now it's shaking up the "c" suite again and bill ackman is returning $4 billion to shareholders after failing to find a target what is the acsp slowdown signaling? "the exchange" is back after this meet jessica moore. jessica was born to care. she always had your back... like the time she spotted the neighbor kid, an approaching car, a puddle, and knew there was going to be a situation. ♪

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welcome back to the

exchange the s&p and nasdaq have turpd negative again and airlines are actually leading the s&p today. american, up 10% that would be its best day many more than a year and a half. united, delta, southwest, alaska also higher. international travel demand apparently so high that london's heathrow airport is now limiting the number of passengers until september. its ceo says they've seen 40 years of passenger growth in just four months, incredible twitter shares also getting a bump today, after that in tumultuous few days of trading the stock is down 10% since elon said he was walking away on friday it's rebounding about 4% today and gap was the mystery chart we showed you before the break. the shares down about 3.5% after the retailer announced its ceo is stepping down effective immediately. and in fact, our courtney reagan is here with more. court, it's almost torture to hear about these chapters in gap. that's what makes it so fascinating. she was there for a couple of

years, old navy, some of the other assets have obviously struggled. how did we get here? >> there's been a lot of leadership turnover in gap over the last several years for sure. sonia single took over as gap ceo just days before the world shut down for the pandemic in march of 2020. so quite a tenure she's had leading the company. shares have shed 39% since she took over compared to a nearly 50% gain in the xrt retail etf during that same period. lowering margin guidance it's been a tough two years for gap inc., even with strong demand for apparel merchandise particularly at old navy was, quote, out of sync with consumers old navy leans into casual inventory. it amped that up, just as consumers pivoted, buying more occasion and workwear. supply chain snafus continue to add millions of dollars in additional costs and weeks in

delivery time. old navy has been without a ceo since april. to lead the division, which is responsible for the majority of the entire company's sales and single says she's thankful to have the board's support, ushering in a new opportunity for fresh perspective. she is saying that she is stepping down, rather than gap sending her out. she's been with the company for 18 years, but the last two at the helm have been really, really tough >> you've been trying to figure out the kohl's saga. i don't know if you can revive a company like gap and brands like old navy obviously,@ athleteta seems to e doing pretty well. and they were going to spin out old navy they ended up folding that and

since then, old navy's performance has ticked down. and that's a really big important brand for the entire company. at lita doing well, but it's the smallest brand at one point, they were looking at selling gap branded and banana republic branded clothes on amazon. it was sort of an idea that they threw out. sonia had the big partnership with the ten-year deal which which got a lot of because, but doesn't necessarily move the needle this is a very difficult story and has been for a while >> days before the pandemic. >> can you imagine starting as a apparel retailer ceo in the spring of 2020 >> here's our news at this hour. the house's january 6th committee began its hearing today about 30 minutes ago it intends to show how donald trump's call for protests led to

the attack on the capitol. the panel's chair says when trump lost the 2020 election, he should have peacefully challenged the results in court, if he thought there was fraud. >> he went the opposite way. he seized on the anger he had already stoked among his most loyal supporters and as they approached the line, he then waved urged them on. nasa is releasing new full-color images today of distant galaxies taken from the james webb space telescope, given scientists a lot to work with and some spectacular images the agency's administrator says every image is a new discovery, giving humanity a view of the universe that has never been seen before. and the hbo corporate drama "succession" leads today's emmy nominations with 25. it will be competing with "squid game" for best drama the first time a non-english

language series has been nominated in that category kelly? back to you. >> i loved "succession." >> i've been thinking about whether to start -- i need comedies, bertha >> oh, "hacks. that is my favorite. gene smart is superb >> we will give it a shot. thank you very much, our bertha coombs coming up, inflation or no inflation, no matter slowdown or recession, it doesn't matter either. earnings growth, earnings slowdown, we don't ware. why? we'll look at the sector one strategist says will outperform in a nearly all of these scenarios, after this quick break. it takes a village to support society and businesses have a responsibility to support that village. ♪ ♪ i am peter akwaboah, chief operating officer for technology, operations and firm resilience. when you think about diversity, the employee network group

is fundamental to any organization to provide a community and a belonging environment for the employees. they provide an avenue to support employees and ultimately it leads to retention of the best and brightest. the employee network represents the community at large, and it provides a good feedback loop to senior management to make the appropriate decisions, which ultimately contributes towards the bottom line. if you're thinking about growing your business, if you're thinking about driving the business forward, inclusion is a strong part of this. i am peter akwaboah and we are morgan stanley.

welcome back to "the exchange." two big inflation readings this week higher inflation typically seen as favoring value stocks, which have outperformed this year. but my next guest stit's time to rotate into quality growth which do best when the broader economic growth are all falling. let's bring in jeff mills, a cnbc contributor did i capture that correctly, jeff

>> yeah, i think that's about right, kelly look, generally speaking, i think like the rally is fading but if you have to be long like we do, you have to pick your poison i think the big thing going into the second half of the year is going to be this rotation from value into growth. and it's not growth all across the board. it's not the junk stuff, but it is more of the quality growth. like you said, whether it's amazon, whether it's google, it's these stocks that are priced well and have some semblance of earnings stability. when inflation is high and falling, that's when growth tends to do well when the economy is slowing down when earnings are coming down. investors are going to look for earnings growth where they can find it. and i think it will be in a lot of these quality growth names. whether it's the nasdaq, now failing at the downward slope 50-day whether it's the 210 spreads now starting to invert more than it's inverted the entire year, these are things that are telling me that earnings expectations need dom down and that's why i think you need

to favor companies that can continue to grow earnings. >> and you're the third person today to tell us you like amazon i'll just make note of that. google as well is another quality growth name that often comes up let's talk about danaher and jacobs engineering and united health, how do those fall into a quality growth bucket for you? >> i think when you think about names that are growth at a reasonable price, danaher is a really interesting name. just from a chart perspective, finding support around that $250 level, i think that's noteworthy obviously, 30% off its highs like a lot of these names. this is a company that makes equipment for drug development, disease testing. it's tied to biotech spending, which i think is a very good thing long-term. whether it's gene therapy, vaccines, you know, molecular medicine in general, but it's certainly a less-speculative play on biotech. and what the company has is a very large install base for their equipment. and then they're able to sell this high-margin consumables and that's wlhat really drives

their revenue. the key for that company is great management to navigate this environment and recurring revenues because of what i just described. >> and a word, quickly on -- i mean, when we talk megacap tech, does pretty much all of that fall into quality growth or no >> i think, most of it does. i think you're starting to see some shifts now. is apple value, is apple growth? what about netflix, what about facebook i think generally speaking, when we're talking about the old f.a.a.n.g. complex that we all think of, those are the companies that have high returns on invested capital, high free cash flow, solid margins generally speaking, those are the companies that you're going to want to favor in this environment. like you said, specifically, amazon, google these are stocks that have really attractive valuations, really high profitability, and have gotten beaten up to the point that if you can weather some near-term volatility, you're going to do really well >> you can see them chopping around here, trying to find that bottom jeff, thanks for your time today. we appreciate it jeff mills

up next, the world of business has changed a lot over the past year. which states are keeping up with the times? scott cohn is live in cnbc's top state for business for 2022. but we can't know what it is yet, scott >> that's right, kelly every governor wishes that their state could be the top state for business there we go. so we'll have another hint about where we are, which state is the top state for business and also, we'll talk about the category in our study that i get asked about the most that's coming up on "the chge exan."

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welcome back to "the exchange." cnbc is set to unveil our top state for business tomorrow. scott cohn is already live in the mystery state to explain the process and what's new this year scott, any clues in that fountain behind you? >> it's a state that has fountains. and a state that has trees

so, think about that a little bit. we will reveal the top state for business tomorrow morning on "squawk box," and you can read more about that online the category i get asked about the most is what we call life, health, and inclusion. it's something that we've measured every year since we started top states in 2007 we look at things like crime rates, air quality, health care, lately, we also have looked at inclusiveness. things like voting rights, things like discrimination protections. we do that not out of some political statement, but because that's what the states are talking about, and it's what companies are talking about. one thing that we will not measure this year, because it's too much influx is the issue of abortion rights. but it is something that governors and companies are talking about and talking about the economic case to be made one way or another listen to what a couple of governors have said about it governor mike dewine, republican

of ohio, where abortion in most cases is illegal and governor gretchen whitmer, where abortion is legal >> the biggest economic decision a woman will make in her lifetime is when and whether to have a child business knows, they want women to come back in the workforce after the shecession of the pandemic to get women back in the work workforce, you cannot start taking away their fundamental rights of making their own health care decisions. >> the abortion, people of good faith on both sides of the issue, is a very, very divisive issue. what i've emphasized in ohio is our need to, while we understand, we have people on both sides, our need to focus on what we can agree on, what we can agree on is, we need to help kids >> again, abortion is not part of our study this year, but it is something that we will keep looking at, as this debate plays out and as laws come into focus.

you can read more about our study at topstates.cnbc.com, and about our methodology in this key category of competitiveness. where i am here's another top state's diabolical hint. bragging rights. bragging rights. the state that is the top state does get bragging rights is there a hidden message there? well -- >> i've never been that good at -- >> we'll reveal it tomorrow morning on "squawk box". >> scott, this is the 15th year we've done who, can i ask, if i can set the scene here, who's won the most >> the state that has won the most is your home state of virginia it has won five times. there are seven different states that have been able to claim this title we'll see if we add an eighth one to the list or if it's another repeat tomorrow. oftentimes, it's some of the usual suspects, but we've had some interesting surprises over the year, as well. >> i look forward to it, very much, as you said, a reflection of the changes we've had in the

economy and in the culture scott, we'll see you soon! thank you so much. our scott cohn coming up, it's been an ugly year for spacs the cnbc spac post deal index, which tracks those that have made deals is down 66% over the past year. so maybe bill ackman investors are better off now that he's closing up and returning their money. and speaking of throwing in the towel, bitcoin's sharp decline has many casual investors giving up. will crypto itself be a fading fad? "the exchange" will be right back demands a lotion this pure. gold bond pure moisture lotion 24-hour hydration no parabens, dyes, or fragrances gold bond champion your skin ♪ in any business, you ride the line between numbers and people. what's right for the business and what's best for everyone who depends on it. solving today's challenges

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welcome back bill ackman is closing up his spac is returning $4 billion back to investors, saying he couldn't find a suitable deal. leslie picker joins us now with more nothing out there, leslie? >> this was a pretty big spac, kelly, so the actual supply of targets is pretty limited when you think about it, but as you mentioned, pershing square, taunting holdings, the spac owned by bill ackman is returning capital to shareholders the news not too surprising, given that variety of high-profile headwinds that have spaced the spac.

town tonight scrapped it because the s.e.c. was skeptical whether or not it met the requirements for a spack deal then there was a lawsuit, questioning whether the spac structure violates the investment company act of 1930s. taunting was the first spac targeted in a series of similar claims and then it's deadline was quickly approaching with taunting having initially raised $4 billion from investors in july of 2020 it had just two years ago to find a target. pershing square note that it launched the vehicle during the, quote, depths of the pandemic, but the rapid recovery of capital markets and our economy were good for america, but unfortunate for psth that's the ticker symbol there, as it made the conventional ipo market a strong competitor and preferred alternative for high-quality businesses seeking to go public perhaps the real legacy is a

microcosm of that frenzy and fizzle that befell the entire spac ecosystem as the largest ever it was really this pinnacle of excitement surrounding the spac model and now, with public investors shunning companies that have gone public this way, our post-spac index is down more than 50% this year it's becoming even more challenging for spacs to find and sign deals when you look at numbers like that. when you look at a chart like that that doesn't really make the bull case very strong for these types of companies. >> no, i imagine at some point those investors are just happy to get their money back. leslie, we appreciate it our leslie picker reporting. she said the cnbc post-spac index. this is the spacs that have completed a deal and its returns are pretty terrible, down more than 50% this year and coming off its worst month since inception. at least four spacs have liquidated this year, so far according to our data. compared with just one all of last year. is this the start of a much bigger wave? here to discuss is chris senik,

chief investment strategist at wolfe research chris, is it bursting for good >> hi, kelly, thanks for having me i think it's bursting in large part for good. it was a by-product of the year we've had with physical and monetary stimulus. and when you normalize to a new environment, the large spac issuance we've seen and large spac deals we've seen will be long gone. >> there are still 600 spacs searching for an acquisition target, is that right? and shouldn't this be now a ripe time for finding cheap, attractive targets we were just talking with courtney a little while ago about gap. i understand they have to be private, but there's plenty of distressed assets out there, aren't there >> there are small caps, as you know, have been decimated more so than the broader market, and i think there's just a valuation issue that kind of did ask were investors, do you think the valuation of the business is one

thing and the companies or the sellers think it's something elsewhere they use, you know, what it used to trade at perhaps 6, 12 months ago and them come to reality that the valuations are lower and will likely stay that way >> i also have to imagine if you are a company that was hoping for a traditional ipo or some kind of exit, maybe you've raised some funds. maybe you need to, you know, give a payout to your early employees and so forth wouldn't a spac still represent a good liquidation opportunity and not a good liquidity opportunity? >> yeah, well, it is, ask they're going to have their place. they are still, i think long-term just smaller deals, maybe more geared towards early stage biotech and the tech sector in general. the other issue, which has i think put a wet blanket on spacs has been the proposed s.e.c. rules on spacs which make them more in align with ipo disclosure requirements. you can't use those hockey stick forward projections in your numbers anymore. i think companies will sit there and say should we really do a

spac, or should we just do a traditional ipo, which may be a little bit simpler and easier kind of going forward. >> anything you'd say, so for investors who are always hunting for opportunity, some of the spacs that did complete are trading at a penalty because of that they've been tarred with this brand name, for instance should we go looking for opportunities in an asset class like that? or do you think it is a red flag across the board >> no, i think you can't paint all spacs with the same brush. there are some spacs that went public h they're good, real businesses, generating cash flow they're not trading on totally addressable market or revenue. as we see more and more vulnerability over the weeks and months, you can pick up good businesses at attractive prices. you have to be very careful, focus on profitability, low leverage, what is currently going on in the business, not what might happen in three to five years, and a good number of

businesses that went public that are decent. >> we will bring you back, maybe we'll do three buys and a bail spac edition just for that purpose. chris, thanks so much for your time >> thanks for having me. crypto winter is chasing out the bitcoin tourists as well up up next, what their dropoff means for coinbase stay with us on "the exchange. heat makes it last. so you'll never sit this one out. new icy hot pro with 2 max-strength pain relievers. this thing, it's making me get an ice bath again. what do you mean? these straps are mind-blowing! they collect hundreds of data points like hrv and rem sleep, so you know all you need for recovery. and you are? i'm an investor...in invesco qqq, a fund that gives me access to... nasdaq 100 innovations like... wearable training optimization tech. uh, how long are you... i'm done. i'm okay.

welcome back to "the exchange," bitcoin back below 20,000 today, down 57% this year it's turning off a lot of smaller crypto investors, which could be bad news for coinbase, a company that's already experienced a lot of bad news with the shares down nearly 80% this year. kate rooney looking at the demise of the bitcoin tourists kate >> hey, kelly, that's right, bitcoin tourists meeting those casual crypto traders. this cohort is leading the market at the fastest rate in four years one way to measure that is bitcoin's network activity

higher activity is seen typically as a sign of demand, low activity on the other hand usually means a lack of demand these activity levels are down about 13% from november. they're now at the same range as back in the deepest bear market phase of 2018. this is according to data from glass node analysts there say it signals a quote, near complete purge of market tourism and long-term holders are really now the last group standing this is not great news for exchanges, kelly those guys really rely on trading activity and those fees for revenue, exchanges bitcoin balances are draining at record levels coinbase continues to see outflows according to glass note, its global competitor, meanwhile, buy nance this exodus from exchanges may be due to some of the jitters we've seen around storing investor bitcoin we've seen other exchanges s struggle with liquidity and

freeze deposits that's pushing some to self-custody or holding their own crypto coinbase, robinhood and some of the privately held exchanges still make the majority of their revenue from those trading fees, some of the less casual traders leaving the market and less money on exchanges is seen as a major headwind, and it's a big roadblock for bitcoin prices, more demand and that higher network activity is typical of a bull market. kelly, it's not the case late lit. cryptocurrencies are coming off their worst month since 2011. >> it's not just that people have been burned, but even the ones who are still believers are looking at some of the funds that have been gated on other platforms and thinking maybe they want self-custody it's still difficult to do for the most part. >> that is one of the big takeaway, whether it's at the hedge funds, issues with counterparties the big takeaway is if you are a long-term holder, you're not looking to sell or trade actively, a lot of some of the bigger holders tend to move their money off of exchanges for

reasons like that, liquidity issues, potentially not having access to their money, and cybersecurity is another issue people worry about if it's not a trust the exchange, or even if it is, the thought is why not hold it offline where it's seen as safer it's not easy to do though, you're right >> it's certainly not, not your keys not your coin kate, thank you very much. speaking of assets with big declines, the metals are on their way down gold, silver, copper, platinum all falling. we'll look at what that means on "power lunch," which begins right now. welcome, everybody, to "power lunch," i'm tyler mathisen, glad to have you with us here on a summer tuesday. here's what's ahead. inflation in america, households are feeling it business owners haven't been this worried about it since about 1980, but is it at a tipping point? we've got a game plan for investors like you that includes looking for value in some unusual places plus, is china investable? th