>> i think jenny owes josh a burger you should go there. >> it's on him i have tried it's on him. >> short tlt >> all right jim? >> autos and semis come together >> 2:00 p.m. madison square park >> done. >> "the exchange" is now thank you, scott hi, everybody. welcome to "the exchange." i'm kelly evans and we're having another risk off kind of day the base case is still only 75 basis points for this month's rate hike, that helped calm things down earlier but now we're sliding back to the session lows those results from the banks this morning aren't helping. we'll look at the tough spot the fed and the markets are in plus, whether inflation has peaked as dan warns about the future of copper and a deepening global energy crisis what are commodities telling us?

and netflix picks microsoft to help it roll out ads how the deal went down and what it could mean for both companies. we will have all the details to dom chu with the worsening numbers. so the numbers are worsening, but because we haven't seen the kind of bounce we saw yesterday after the cpi numbers were released, so let's put things in perspective. it's a 450-point drop, down about 1.5% it's similar for the s&p 500 we use the broader s&p which is 3747 at the highs we were still down roughly 31 points. at the lows of the session down around 80, so you can see they're down 55 right in between the trading range so far today but, again, in just the last maybe half hour or so a little bit of a leg lower there the nasdaq composite down, off one quarter of a percent if you take a look at the worst performing sector in the s&p, maybe no surprise here, by a

pretty wide margin, it's energy today. wti, benchmark is at $94.62 off session lows, by the way i would point out at one point earlier in the session we traded for that august contract below its 200-day average price on a rolling basis. some traders look at that for an area of possible support we'll see if that hold the energy sector spdr is off 4% apa corp, eog resources, exxon mobil among some of your worst today. two big bank earnings reports, because it does kick off the large cap earnings season, jpmorgan chase shares, a component of the dow, by the way, off about 4.5%, a pretty decent drag on the dow after it comes out america's most valuable bank, by the way, with results on the profit and revenue side that were below estimates thanks in part due in large part to some provisions taken, reserving more money for

bad loans down the line, weaker results in their investment banking division and ceo jamie dimon points out in some commentary that he thinks inflation and things like worsening consumer sentiment could be a headwind for the global economy so that's kind of taken some of the shine out of the market now. morgan stanley is off 1.25 as well it also missed on the top and the bottom line and investment banking operations there weaker than expected although trading for equities and bonds doing better morgan stanley, jpmorgan, that financials trade is not kicking off solidly for this earnings season we'll see how the rest do. >> it's a great overview, dom. thank you very much. meantime, some key fed speak from christopher wahler this morning seeming to lean against a full point rate hike despite another hot inflation report this morning let's get to steve liesman >> reporter: it's nuance showing some doubt that the hike at the upcoming fed meeting saying this morning the market

might have jumped the gun at least somewhat >> they may have gotten ahead of themselves yesterday, they just assumed it would go to 100 after that report and we don't want to make snap policy decisions on knee jerk reaction to what happened in the cpi report >> reporter: at the same time waller didn't rule out 100-basis point hike he says he has to look at the data to make the call. he said he could support that bigger hike. either way his comments, i don't know, waller was firm in supporting 75 at the upcoming meeting and said he thinks the fed needs to move rates beyond the neutral zone of 2.5 to a restrictive level. now the peak is in february instead of january 3.60 instead of 3.70 the volatility reflects

uncertainty, deep uncertainty, over the economy and fed policy and moving right now with almost every fed utterance as you know. >> it feels dynamic because they are talking about some of the market's inflation expectations and those figures change a lot in real time the consumer piece of it more sticky it depends on gasoline prices, depends on the president's saudi trip so much depends on what we're learning day by day here >> i think that's right. there's another thing out there, kelly. chris has been critical of the federal reserve and lack of a framework. the market only moves in these kinds of bands and ranges because it believes it's within the possibility or the reaction function of the federal reserve. if powell were to step forward and put additional guidance on that the market may not be quite as volatile. the question is does powell have that framework given all of the uncertainties you laid out the market is moving within a range that it feels is plausible

given what the fed has told us >> that's interesting and maybe a final comment would be we know policy rates even as much as they've raised them are below neutral. waller said 2.25 maybe the fed could explain to us why not just get it to 2.25 from where we are. what are the decision points that go into why we shouldn't already be at that level >> reporter: it's funny, kelly, because to answer that question you've got to dig up the speech last week by esther george she laid out why not get there so quickly esther george is very worried about the ability of markets and the economy to adjust to these big rate hikes and i don't know if you noticed but some corporate bonds have blown out. a little bit of disruption there and so esther george, what she wants to do is make sure the fed reduces its balance sheet. she does not want to see another taper tantrum or a situation we

had in 2019. so she's the one who even as you remember one of the most hawkish members of the federal reserve, wants the fed to move in a more predictable manner to not create volatility that might disrupt the plans to reduce the balance sheet. >> she was the dissent last month, right, i think? >> absolutely, and she's sticking to their dissenting guns her speech really explained in greater detail why she did that and, honestly, esther george, plain spoken idwesterner, make a lot of sense to me i don't remember ever, kelly, and you know i have been doing this for a long time -- you have, too, but it doesn't show as much -- i don't remember this volatility going in two weeks before a fed meeting, could be 75, could be 100, you go in and think it's going to be 50, the fed surprises you with 75. this is why people like a former fed official, one of the most sober fed watchers i know, is writing with some consternation about the lack of a framework

from the federal reserve dealing with this inflation. >> for what it's worth, you don't age either if i had a before, you would look the same the entire time. steve liesman. let's turn back to stocks which were more off the lows of the day but the dow is still down 450 inflation absolutely remains the key driver and peak inflation debates are still raging bob pisani is at the new york stock exchange with more bob? >> reporter: this peak inflation narrative is not dead but is on the defensive. investors are start to go hear a barrage of cautious comments from corporate america about higher costs, rates and a slowing consumer a small but persistent group insists peak inflation is indeed here they cite, for example, oil, 27% off the highs. copper, 35% off. declining freight cost not necessarily in the data yet. here is the bear case which is still the dominant narrative labor and material costs are going to remain high for many

months companies will be forced to keep raising prices even in the face of weaker demand, inflation is indeed very high and will persist at these levels for many months forcing the fed to be even more aggressive companies will be forced to raise prices as a result earnings expectations will drop 10% to 20% and the multiples, the p/e, will contract from 16.5 to 14 to 15 all of these forces here will bring the market down at least another 10%. that's what the bears say. that's how you get to 3200 or 3300 the bulls don't want to price in this dire scenario they think the signs are there for a slowing but not a crashing economy. they readily admit growth will be subdued the u.s. may experience a mild recession. a third of the traders i talked to think we're already in one. they concede the fed will raise another 175 to 200 basis points. they believe that a fourth quarter rally is coming. they are now nibbling or trying

to nibble at growth sectors like tech they think commodities are a losing investment and defensive sectors like consumer staples are too expensive. i think what we're seeing now, kelly, all of this cautious commentary, like jamie dimon today, is now weighing on stocks it is happening but the bulls say the bottom will be august or september. buy for the fourth quarter back to you. >> bob, thank you. our bob pisani my next guest does think the worst inflation is behind us but warns investors still have to be cautious until the fed slows its rate hikes for more let's welcome in the president at potomac wealth advisers that's kind of what bob was just describing what would you like to see the fed do or say that would make you feel more bullish right now? >> good afternoon, exactly what bob was just finishing up with on the bull case it's a delayed bull market in my mind i don't want to be out there

today. i'm not diving in. i think investors need to be cautious until we have the july inflation and then the august inflation and the september fed meeting. i do think the bullish, the optimistic investors will be rewarded later in the year what's interesting is growth stocks have been outperforming those defensive names and those value names the past month and the difference is significant. i expect that to happen in a slowing growth economy i think people can start to look at growth names, tech names for long-term vision it's a solid consideration >> and we were having this debate yesterday they say they will continue to outperform why don't you think that will be the case >> they haven't outperformed in the last month and that tells me when people believe it's going to be risk on or we have a more benign fed and we have inflation tapering, that those are going to be the companies to invest

in we might look at some earnings pressure from a stronger dollar relative to the euro especially as a headwind for technology and growth names i think as we look out in a slow growth world that's where money goes when you want top line growth when the world is slowing that's where you invest, not in defenses >> okay. that said, talk to me about the financials which are one of the three general buckets you like here, but i know it's the insurers in particular you favor. what about the rest of the space especially after what we heard this morning >> we are not totally on one side of the growth boat and in value space we do have financial exposure the reason i like insurance companies despite today they're doing quite poorly i think on the jpmorgan news, is they're going to benefit in this higher interest rate world. they're still getting hit. their benefited portfolio is getting hit. their huge balance rates hasn't come through there has been a lag but

multiples in the mid single digits what we're seeing today, and we're not even hearing that asset value declines are going to hurt earnings in addition to the investment bank earnings declining, but the biggest factor impacting banks is always loan losses. it's been so long since we've had a recession, loan losses, investors forgot the pain of realizing losses is far greater than the higher interest rates and gross revenue and that's what's hurting jpmorgan today and that's what concerns me the most about direct investments in banks. >> interesting so hoping if you spread the money around the sector, it mitigates that impact. tech, health care, a quick comment on those you alluded to tech with some of the growth observations and health care has been a relative outperformer >> right and we expect a macro trend for health care. we can't forget them

it is an aging population. there was a suppressed demand during covid for two years so we do expect, and it's been surprisingly not bursting but those delayed procedures should help health care equipment manufacturers. we think the demand on health care is still going to grow as we age as a society and valuations look reasonable >> all right the delayed bull thanks for your time today we appreciate it joining me with potomac. wall street's newest biggest bear will join "fast money." savita subramanian slashing her price target to 3600, 4% lower from here. it all begins around 5:00 p.m. eastern. coming up here crude oil threatening to break below $90 a barrel, and at one point trading lower than it was before russia's war in ukraine. will president biden's trip to saudi arabia tomorrow have any

impact on oil prices and what about the looming threat of shortages elsewhere like in copper plus, we'll check in with commerce secretary gina rimando. down 40% from its highs. as we head to break a look at the stock market the worst performer of the major three. the small caps are down 2.25%. nurse mariyam sabo knows a moment this pure 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,

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welcome back to "the exc exchange." oil dropping to $95 a barrel my next guest has been looking across the commodities complex especially at copper as the world transitions or tries or maybe gives up on clean energy he says everything is pointing to a downturn. joining me is vice chair dan jurgen so many great world events happening. welcome. >> all at the same time. >> yeah. if i can, i wantto just start with this news that apparently mario draghi led the european central bank through its debt crisis, he's now just said he will resign as head of the

italian government what is at stake here in europe from their political void as they confront an energy crisis that as you say looks like it's set to deepen? >> i think from the european perspective they're focused less on oil but on natural gas and getting through this winter and maintaining unity and cooperation and basically vladimir putin has opened a second front in the war, not only the battlefield in ukraine but the energy markets in europe where he's using natural gas to try and create -- well, he is creating an economic crisis, hardship, and bring populists to power and lead and change the elites in europe i think -- so the europeans are saying it's a race, can we fill our gas reserves in time for the winter and putin is trying to make it very hard for them >> the italian stock market, futures are down 5% right now. we've seen widening spreads on

the periphery versus germany and germany itself is in a bit of a pickle here. what do you think will happen on july 22nd? will russia turn on the gas pipes that flows back into the continent? >> i think russia is going to manipulate the gas supplies for their political purposes they'll find other reasons to do it but i think putin laid out the strategy last month at the national economics forum and he's following through on it so they may start it up and find some other reason. i think we'll see more disruptions because for him, his strategy is break the coalition and that's to break the willpower in europe and by creating economic hardship there that leads to rebellion against government policies. he knows what he's doing and understands the energy markets very well. >> with apologies for such a simple question, how with we in the u.s. going to be affected by all this >> well, i think obviously on

gas, europe's economic problems if they deepen we'll feel them we'll feel if the coalition breaks the minister has gone so far to talk about a lehman 2008 type contagion if the economy really buckles. we'll feel it in the energy markets. obviously right now we're seeing a pivot in the energy markets, worried about not enough oil to -- it's not saudi arabia that has it now, it's over on constitution avenue at the federal reserve here in washington that's probably going to do more to determine the oil price. >> that's somewhat reassuring. hopefully the fed is a little bit less of a nemesis in some cases. i'm trying to figure out the right words to use here. we are somewhat insulated i hear you say but depends on the fate of our economy >> our fate of the economy, inflation is the number one issue, but the oil market notwithstanding the fact prices

remains very tight the next few months can be difficult. it's oil and natural gas together obviously whether it comes now or a month from now as a result of the president's visit to the middle east we'll see more oil coming from saudi arabia it helps opec plus deal with russia is coming to an end anyway so they can increase production i don't think they want to do it pivoting on a dime psychologically that can also affect the market. >> do you think the market will be tight do you think commodities in general will be tight? i know you're warning about copper and saying, listen, this is the key input for the entire energy transition, but were it basically two-year lows in prices right now >> i mean, if you go back to where they were in march or where they are today you've gone from one world to the other. copper is known as dr. copper because of all the commodities it has a reputation for this uncanny ability to predict

economic downturns and that is certainly what it's doing right now. but in our copper study what we came out with today, the future copper supply, if you look at the need for copper for electric cars, for solar, for transmission, you're going to see a need for copper demand literally will double between now and 2035 and we've heard a lot of governments, the u.s. government and others expressing great alarm about the availability of minerals and now they're just formed the mineral security partnership which tells you they're concerned. we tried to quantify it, yes, you're going to need a lot more copper than you think if you're going to achieve these climate goals. >> final question then if copper becomes the new key commodity as important as oil, maybe more so in some cases, how will that change the balance of power? >> it will change it, i think, in two ways. one, different countries will become more important. 38% of world copper comes from

two countries, chile and peru. china has a very strong role in the entire value chain including smelting and refining. i think you'll see the new supply chain issues. we've seen that on lithium batteries. there will be new geo politics of energy as part of the energy transition >> in which china remains a key player and latin america perhaps rises as well. dan, we'll leave it there. appreciate it. >> thank you. >> still ahead, netflix's next chapter naming microsoft as its partner to build an ad-supported plan why microsoft and why did shares jump on the announcement we'll speak with a top ad exec our trader is digging up three stocks she's calling diamonds in the rough. as we head to break a look

at the dow heat map with walmart and apple in the green and a very tough day down 380 points jpmorgan, goldman sachs and travelers the biggest agdrs. re. because you've got the next generation in global secure networking from comcast business. with fully integrated security solutions all in one place. so you're covered. on-premise and in the cloud. you can run things the way you want - your team, ours or a mix of both. with the nation's largest ip converged network. from the most innovative company. bring on today with comcast business. powering possibilities.

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how are we different? we exist only on your phone. which means you sign up, get help, and pay all right here. so you get a single-line unlimited plan for as low as $25/mo. switch today at visible dot com. welcome back the dow down 628 points at the session lows we're currently down 355, about a 1% drop for the dow and the s&p. costco is among the leaders, up 3% on an upgraded deutsche bank, the club business model should outperform in an uncertain economy. the analyst cites renewal rates. we just renewed ours, boosting

to $579 a share more on cnbc.com/pro conagra is the worst name in the s&p. it just had earnings, posted a mixed quarter, higher costs eating into their profit margins. those margins fell by three points year over year and the company says more price hikes are on the way as they forecast inflation in the low teens during their new fiscal year conagra down 8%. here are some of the names hitting 52 week lows today and they include under armour, caesars and royal caribbean down about 70% from their highs match group hitting an all time low and disney down 51% from its recent highs at its lowest levels, the month the pandemic hit. the past 3, 6 and 12 months, yikes. to kate rodgers now for an update kate a 38-year-old texas man was

driving the pickup truck that crossed into an oncoming lane crashing into a van carrying a new mexico college golf team, not his 13-year-old son as investigators thought. the ntsb said the man had methamphetamine in his system. the man, his son and seven people on the van were killed in the crash. in virginia authorities now say they have located all of the 44 people who had been unaccounted for after severe flooding they say many of them were reported missing because power failures made it hard for family members to check on them mario draghi is resigning as italy's prime minister after one of the parties in his ruling coalition withdrew its support in a dispute over economic policy and former president trump tells new york magazine that in his own mind he has decided he will run again in 2024 now he says his big decision is whether to launch his bid before or after the midterm elections tonight on "the news" a poll

that shows president biden's economic approval rating has fallen to a new low. back to you, kelly still ahead, taiwan semi recording record profit but the stock up about 2%. it's not all sunshine and roses for the world's largest chip maker. the ceo warned of greater challenges in the supply chain and said some spending will be pushed out into next year. will congress step in next commerce secretary gina ramimono joins with us that and the latest on the chips act. 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,

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welcome back to "the exchange." check out the chip stocks, barely in the green right now. amd, intel and nvidia a mixed bag. ylan mui with the very latest on that effort. >> reporter: kelly, we are just learning from a source familiar that senator schumer has started telling his caucus to prepare for a floor vote as early as tuesday to start moving a very limited competition bill that

includes the $52 billion in funding for chips as well as a separate investment tax credit and here to talk about all of it is secretary gina raimondo thank you for taking the time out. i know you're busy knee deep in negotiations on capitol hill i was hoping you could lay out the state of play for us is this sort of chips only bill the path forward is this going to be the final solution >> it seems like we're moving in that direction you have said schumer has said that earlier today, you saw republican leadership, senator cornyn, senator blount coming out saying they would be supportive of a slimmed down version of the bill. it seems like republicans and democrats are coming to grips with the urgency of this situation. if this doesn't happen next week, china wins, the united states loses it really is that simple and so i'm starting to feel the urgency and coalescing around a

slimmed down version with focus on the chips funding >> reporter: what changed, though this is something you have been working on for over a year why do you need to act now in order to make this happen when we're already hearing companies say they're making investments in texas and ohio and arizona? >> well, a couple things have changed. first of all, ukraine, i think, has highlighted the fact there's 200-plus chips in every javelin launching system and our national defense contractors are working furiously with ukrainian replenishment, and i think there's a real acknowledgement this is a core national security issue. the united states of america makes no leading edge semiconductors on our shores we buy them all from taiwan. all of the new legacy chip capacity that's come online is from china and so i think that the focus on the national security element of this bill

which has been brought into focus obviously due to the war in europe has had senators and congress people really come to grips with the reality, but the other thing, which is why it has to happen next week, is earlier global foundries was in france announcing an expansion there, not in the united states, because france provided an incentive. you see global saying it will be texas or south korea depending on whether it passes this summer the point of it is the u.s. is going to lose out quite literally this summer to europe or asia if congress doesn't move >> reporter: but there are lawmakers on both sides of the aisle from bernie sanders to rick scott who say, you know, this $52 billion is basically just a corporate handout what do you say to them? >> i would say this is a national security imperative period, full stop. it is an untenable, dangerous

situation that the united states is in where we are utterly dependent on taiwan, overly dependent on china for supply of the most critical product for our military and for our economy, truthfully, for our entire economy for innovation so we just have to do it and, by the way, other countries are passing us by. and so it's just time to act >> reporter: you say this investment is needed now, but these are going to be long-term investments, they're not going to pay off for years to come, but yet at the same time we're facing raging inflation here at home we have reports intel is going to be raising prices of some of its chips by as much as 20%. how does that help solve the problem now? >> yes, candidly it does take years, a couple years for the new facilities to be up and running and it doesn't provide much relief today. you saw today toyota is shutting

down an operation in texas because of lack of chips, car companies have furloughed so many workers so we have to get through the immediate crisis however, we also have to start now because if congress leaves for august and this isn't passed and these companies go build in japan, singapore, taiwan, europe, we lose out and we lose out forever. they only make one megafab $20 million investment once. we're playing for the long game here we're playing for america's long-term national security but you have to move now if we're going to have the window to make this a reality >> secretary raimondo, thank you for taking the time out. we'll see what happens over the next few weeks kelly, i'll send it back to you. >> the urgency we can hear there. thank you very much. netflix shares down 70% this

year as investors grapple with whether adding commercials can make up for losing customers will the new deal with microsoft add up to more gains for the stock. plus an interesting split. the best stock in the s&p is a casino stock, lvs, las vegas sands. one of the worst stocks in the s&p also a casino stock. caesars down more than 6% after getting a price target cut at wells fargo. lvs bouncing back after fears they usually trade in tandem but 'rdatoy. wee back after this. don't go anywhere.

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welcome back to "the exchange." after years of resistance netflix is taking the plunge it's adding commercials. they're teaming up with microsoft to help create an ad support on the platform giving customers the option for a low-cost plan.

netflix continues to struggle with subscriber growth they're expected to announce a loss of 2 million users next week the shares are down 71% for the year so will ads help turn the business around? let's bring in mark douglas, ceo of mountain. can i start with why microsoft >> i think, one, brad smith, the president of microsoft, is on the board of directors of netflix. in retrospect that is kind of obvious. relationships matter and that's a deep relationship. i think also microsoft brings deep pockets they have no competitive business with netflix. so on the people's side and the lack of conflicts which everyone else in the industry somewhat has with netflix, that's the starting point for a deal. >> forgive me for asking, i don't think of microsoft as a big ad platform. what am i missing? what have they been up to? >> one thing to remember they

own linkedin and they have a pretty sizable ad business they definitely don't have a television ad business so that's a real starting point for both companies and they're in it together now this is an advertising road trip, i guess you could call it. >> what is the mark douglas take on all of this i can see why people are saying, listen, you need to have a $5 a month offering because you're just getting too expensive and there are too many other options out there, but commercials -- i don't know what do you think about this move in general? >> well, there's a lot of risk in the sense of netflix has really no clue how many of their users are going to elect for an ad-supported plan and at a cheaper price point i think they have to be prepared to really invest in this and, again, having a partner like microsoft makes a lot of sense in terms of being able to

weather that i think also netflix accounts for a pretty significant percentage of television viewing, and so that inventory is entering the market and it's great for netflix. i think over time advertising can account for a pretty sizable percentage of their business and some people think it could be as big as their current business depending on how aggressively they go after it >> because it's netflix and with the microsoft angle do you expect them to bring some kind of fresh approach to how they do advertising or should they or should this look and feel pretty conventional >> netflix has no legacy ad business their ads don't have to be 30 seconds. usually when you bring new ad platforms to the market you bring new ad formats so this may not be your traditional tv ad or if you think of social platforms they have different sizes, different

lengths. so i think there's room for a lot of creativity here and i think advertisers will probably be very intrigued by that if that's what they do and potentially respond very well to >> would youtube be an example they've had to pioneer a lot of different ad formats >> they have but in the case of youtube it's short form video. you don't want to watch a 30-second ad for a 60-second video. netflix you are committed to watching the show. that kind of commitment keeps the consumer, the entertainment consumer, glued to the screen. the formats can be different i doubt there would be something like preroll i think it will be in the show but it, again, doesn't have to be your traditional 30-second tv ad >> does the whole thing make you feel more bullish or bearish on netflix? >> i think bullish in the sense that this can generate a lot of

revenue for netflix and microsoft. i think in the near term there's risk if you're thinking long term, it's a great opportunity if you're thinking very near term, you're probably a little ski skittish >> appreciate your insight thanks so much today >> thank you >> mark douglas with mountain. coming up, we'll get the traders' take on netflix and some names to buy in what could be a rough earnings season "the exchange" has more after this [sfx: street ambience] ♪ ["fly me to the moon"] ♪ ♪ ♪

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welcome back to "the exchange." we're kicking off earnings season on a weak neat with reports from the banks this morning and conagra down as well but my next guest has three diamonds in the rough that could outperform on their reports including one name in particular that could see a big short squeeze. the director of options, great to see you, danielle we will pick up where we left off with netflix i just heard about them wading into the ad business this one you think could be a candidate for a big short squeeze? >> yes, kelly, i do. the reason for that is just because the news has been so

weak is your rounding netflix. they had two awful reports in a row. i want to make it clear i am bearish on netflix, and i don't think their move with microsoft is going to help i think the last quarter in particular they haven't had a lot of new content i don't think "stranger things" is really to help their situation, but i think the problem is is that it looks so bad if their report is anything short of terrible and we see a break up above $2 hun a share. i think that's where we could see a potential short squeeze especially with the very high put/call ratio right now >> it's at 174, let's call it. so some room to go before it would hit that level, and a notable one to watch let's move on to other diamonds in the rough flat on the year in a down market and it's beaten estimates eight of the last eight quarters what do you say? >> i like unitedhealthcare here, you know i think the health care industry overall has done relatively well

considering the ongoing circumstances. i think that unitedhealthcare has been a relative winner in this space the way that they performed on earnings especially last quarter was very positive and so what i'm doing right now is i'm looking for companies that have been able to thrive in this current market environment i'm not looking at it and saying, hey, i think this earnings report is going to send it straight to the moon, i am looking for companies that are holding up well, that i can continue adding to my long term stock portfolio because once things improve in the economy these are the ones that are really going to take off >> and northrop grumman is another one that has done well and increasing its dividend and i don't think of that as usually the kind of name you want to jump into if things start to lift, you know what i mean if that's doing well in a bad market kind of tale. >> it is doing well in a bad market kind of tale, but it also has a lot to do with the macro conditions, you know right now, we have the continuing ukraine-russia

conflict going on. we've also got those very strange commercials in new york city about preparing for a nuclear attack when you look at this overall sector of the market, the fact that they just increased their dividend, they would not be doing that if things were not stable at the company and for this reason, i wouldn't buy the stock right here because it has been so strong, but i do like it for a trade and you can trade it to a new all-time high >> no. this is the kind of macro we don't like to hear, but like you said we have heard so much about. let's turn to tractor supply and this one is down on the year, down 17% and has consistently been on earnings and you think it's been unfairly punished. >> i do think it's been unfairly punished it fits with the consumer discretionary sector and i would argue it's more of a staple stock especially with the ongoing circumstances and the high ppi and the high cpi. i think consumers will more than likely head to stores like

tractor supply instead of the more expensive pet stores, gardening and that kind of thing. middle america, they can't just stop running their ranch because of everything that's going on. i like the way that they've continued to do well on earnings i like the way that they've continued to increase their dividend, and i think that this is another great stock to bet on in the long run because i think it's a very stable company >> if anything, you're betting more on the ranch these days the way it feels danielle, quick final question and netflix comments made me think about it and are you turning more on the market setup this earnings season, it's been a train rec and you've been very clear about that, what now >> no, kelly, i'm not turning more bullish on the market i think that this earnings season is going to shine a very big light on all of the different underlying issues that we have on the economy right now. i do think that, yes, the market has stopped completely careening lower which is a positive sign,

but i think as netflix earnings comes out next week and we start getting into big tech earnings, i think with each report we'll see more bad news and it will continue to weigh heavier on the market >> all of the more reason to find those diamonds in the rough. danielle, thanks so much for your time today. >> thank you >> danielle shay markets are lower right now and not quite as bad as they looked at the open and not bad either we're down 38, and the dow is down 360 coming up, manhattan who said it was dead wait until you hear how mu ach new york apartment is renting for. that eye-popping number is next.

bubbles bubbles bubbles bubbles there are bubbles everywhere! as an expedia member you earn points on top of your airline miles. so you can go see even more of all the world's bubbles. ♪ ♪ welcome back, everybody. stocks lower across the board today. investors fearing the fed will have to be more aggress testify fight inflation. people are saying well, the prices have started to come down in energy and materials, but one

area where prices are as high as ever rents. robert frank has the numbers on just how expensive manhattan apartments have now become, robert >> kelly, rents are a big part of the cpi and manhattan is by far the biggest rental market in the country and right now this market showing no signs of slowing. the average price in manhattan topped $5,000 in june. that's the first time in history that has ever happened prices were up 29% over last year the average for a two-bedroom and even higher at $5700 a month. brokers say more people are deciding to rent rather than buy. that adds to the rental pool many families that left manhattan during the pandemic, they are returning and younger renters and that's millennials and gen-zers they want to be in the city for the culture and the nightlife even if they don't have to be in the office every day. the occupancy rate right now in manhattan is still under 40%

so this has created two almost opposite markets you have the rents and the sales market bidding wars are common for rentals and sales listing, they're having trouble attracting any bids at all right now. there are long lines for rental open houses, but sales open houses virtually empty july and august are historically the strongest rental months in manhattan and based on what they're seeing right now, kelly, july is going to be even stronger than june >> so at what point do they start converting, you know, ownership buildings or even offices into them? >> they're doing both of those things now, but just not fast enough investors are buying these multi-family and large apartment buildings like crazy, but they're not selling direct, residential listings the office buildings that are empty, they're converting those, and the supply and the inventory is still under 2% in manhattan

that is still near an all-time record wow. it's fascinating with so many macro implications, but who would have thought it a cup you will of years ago in the depths of the pandemic. thank you very much, our robert frank. that does it for cote the exchange," everybody "power lunch" begins right now welcome to "power lunch. i am courtney reagan in today for tyler matheson inflation fears, recession calls, bank profits squeezed our market pro this hour says there are reasons to be bullish and has a list of stocks that could be winners in this uncertain market plus, a power call who has the leverage in the twitter-musk legal battle? a top analyst is putting his money on twitter calling it a short-term buy we'll speak to him in just a few minutes. hi, kelly. >> hi, courtney. welcome. thank you. hi, everybody. the dow down 629 points at the lows we've about chopped that in half right now. still a 1% drop for th