to >> i'm nervous i'm not like insanely invisible to the risks that are out there. i see them >> i know. >> i think the positives have been underemphasized i feel modestly okay about the weeks ahead. >> maybe we're making a turn we shall see thank you. i'll see you all in three hours in "ot." "the exchange" is now. thank you, scott hi, everybody. here's what's ahead. a rough day for europe as the continent grapples with energy cuts,collapsing governments, and the first interest rate hike in 11 years. spurred, of course, by soaring inflation. how much worse will it get, and what does it mean for investors here plus, airlines under pressure. the ceo of alaska air joins us with a warning on why you should book your holiday plane tickets now. and earnings from snap, amex, verizon on deck especially after the mess at&t today. the stock down 7%. the key data points for each of

these ahead in earnings exchange but first the breaking story of the day, the white house announcing president biden has tested positive for covid. let's go to kayla tausche with the latest >> reporter: president biden is isolating in the white house residence right now after testing positive this morning on both an antigen and pcr test his official twitter account releasing this photo of him sitting at the desk at the office in the residence tweeting, folks, i'm doing just great. thanks for your concern. just called senator casey, congressman cartwright and my scranton cousins to send my regrets for missing our event today. keeping busy the president had been scheduled to travel to wilkes-barre, pennsylvania, to talk efforts by the administration to reduce gun crime. instead he is isolating, today day zero of the five-day isolation that is expected to end on tuesday if his symptoms and tests all align with cdc guidance you are looking here at president biden yesterday in

massachusetts where he traveled to talk about some climate initiatives that the white house has under way. he was shaking hands with many state officials. he traveled on air force one with top state lawmakers as well as some senior white house officials, and the white house says that it is going to be notifying close contacts of the president throughout the day today. the first lady is one of those close contacts she is traveling, talking about education in michigan and georgia, and the white house says she will be going to the family's home in wilmington, delaware, where she will remain after that travel. next hour the white house will be holding a briefing with the press secretary and the white house's covid coordinator ashish jha. >> any policy or scheduling implications, kayla? the president just came back from that key mideast visit. what's next for him? >> reporter: well, certainly the white house had hoped the president would be hitting the ground running campaigning and talking about everything that the administration has been doing to try to drum up support

for democratic candidates in this runup into the mid term elections. democrats have been suffering from some absenteeism from its own members who have tested positive themselves. senator tina smith testing positive for covid this morning. bringing the democrats' vote count down to 48 so over on the hill, kelly, there could be implications whether democrats have votes to pass a party line package on health care they've been negotiating for weeks at this point. of course we await to hear whether the virus has impacted senators markey and warren who were with the president yesterday. if they test positive for covid, that vote count would lower even further. >> wow 48 that's a great point about the health care bill kayla, we'll check back in soon. thank you for now, our kayla tausche. we'll keep following the story and will be hearing from the president's doctors next hour. we'll bring that to you live let's head overseas to where europe is facing its own trials. brian sullivan is in germany with the latest on a continent

on the brink brian? >> reporter: yeah, kelly, hi welcome from frankfurt, germany this is a continent that maybe is not quite as much on the brink as it was just 24 hours ago. we were facing what they call the gas cliff. with that nord stream 1 pipeline turn back on won't it everyone was on edge because if it didn't turn on it was almost immediate energy rationing for sure talking about going into a deep recession almost immediately the collective european economy, remember, is gigantic. it is not quite the size of the united states but is not far off it germany the fourth biggest in the world. we got a bit of a reprieve, a step back from the gas cliff a little bit today the problems are not resolved. if you missed the news, maybe if you're waking up in hawaii, here you go the nord stream 1 this morning did start pumping gas from russia to germany. that is the good news. the problem is it's not at 100%. it just went back to that 40% level it was at prior to when it

went down ten days for maintenance. keep in mind the nord stream is one of three pipelines coming into germany the other two and are shut off because of the ukraine war and a dispute with poland. this is not 40% of gas coming into germany this is just 40% of that one pipeline, so here is the bottom line, the german energy crisis may have backed off but is by no means over. putin making comments maybe this other turbine has problems or has issues going into next week there is that big question about whether or not this pipeline will continue to flow to your point, kelly, on a macro level, nord stream, energy, encompasses everything there are so many problems not just energy facing this continent. you have the italian president mario draghi saying he is going to quit. boris johnson stepped down a couple weeks ago the uk, by the way, facing its own crippling power issues power costs not at new records but getting close.

a new report today that one in three uk households could face energy poverty when rates reset this october you have all of this going on. oh, and by the way, layer that on with some sovereign debt issues you have credit default swaps in italy and greece and other countries. they're not soaring but they are rising feeling a little 2009-ish layered with an energy crisis that is far from resolved on top. i know people think why do i care about europe? if you're ge, if you're boeing, if you're intel, if you're nike, you sell a lot of goods, billions, in product to europe if this economy goes down, it seems logical to think that we could see sales drop for american companies lower those multiples and maybe lower some stock prices and companies that are heavily exposed to europe. >> so i wonder if the reports are true that spain and greece and portugal are reducing cuts

you have this fragmentation from some of the energy issues. now maybe as well from interest rate hikes that could reexacerbate the sovereign debt spreads you were talking about >> reporter: we talk about fights between states in the united states, kelly this state does that that state does this whatever the there are some real fractures beginning to show in the european union i will reference what you talked about. the spanish energy minister, i will summarize, those are germany's problems they basically overused their power. they did things wrong. we are not them. when the european union is talking about this 15% voluntary, and i'm doing air quotes, voluntary cut which, by the way, could be mandatory, spain effectively today saying, why should we cut, right these are germany's problems you're seeing rumblings in france france had problems because of drought. but france, well, these are not our problems as well you do wonder if that energy

wedge is going to start to maybe make many of these european nations kind of go back to their respective corners, you've traveled extensively you lived in the uk for a while. you know this. any of our viewers that have traveled know this they're part of the eu but greece and italy and spain and germany and france, they are very different countries they are very different economies. they have very different histories and you wonder how this will play out if the pain europe is forced to suffer because germany has these power problems and they're trying to share the pain, that is the question maybe fred can answer. that is ultimately the question that will have to be answered and will be answered but not tomorrow it may take a year or two. this is the beginning of the story not the end. >> they never really solved those underlying tensions. it's not fully better realized like the u.s. is and mario draghi solved it for a time,

brian. we'll see what happens if it flares up again. brian, thanks so much. our brian sullivan reporting as europe does hurdle into an energy crisis that's causing fragmentation and infighting already, what's next and what are the implications for u.s. investors? let's welcome in contributor fred kemp, president and ceo of the atlantic council do you want to pick up where brian left off where we are seeing now resentment breaking out across the continent >> first of all, amen to everything brian said from germany. he's on the frontline. people think ukraine is the frontline but there's a second front to putin's war, and that's the natural gas front. and one shouldn't celebrate too much nord stream coming back on line it gives putin a chance to play more he can turn it down, it can turn it off, can turn it off. as "the wall street journal" wrote, if he uses that bullet he's got none left he's not going to do that.

the argument that it was a turbine and repair most people think that turbine is a red herring. and he will use maintenance issues if he wants to put pressure on europe he is counting on democratic fatigue. he has a war of attrition going and his war has been going better it's been a grind. one has to see the two territories as totally aligned what the european union is doing, the suggested and voluntary 15% cut over the next eight months of natural gas, that is ursula von der leyen she is setting a goal not so high, 15% reduction, and she is saying we should do this across all countries to remain unified.

it's a political argument. >> there were memorable historic bets ten years ago, those who thought that spreads in europe would collapse back towards parity and those who thought they would blow out and further widen. so if people wanted they could make a similar bet now perhaps we have more companies with big europe exposure and should investors be thinking of pairing that back or leaning into if we think this is all going to blow over >> if you're looking at the economics of investing right now you have to bet on a european recession and inflation is at a high and energy prices are high. you have to take a look at $210 billion the eu will spend between now and 2027 to diversify energy sources and get out of the business altogether if you're a longer term investor you look at where is that money

going to go? where are the people going to build up let's take a look at semiconductors some real building up of that capacity and chips capacity in germany and elsewhere. i think one has to watch, also, europe is not just leary of russia, it's increasingly leary of being too dependent on china. they're not going to give up the chinese market but you have to look at more efforts to have home grown technology and then also the building of the grid, strengthening of the grid, and this will sound a little bit counter intuitive, kelly, look for nuclear companies, too the french are 70% in favor of nuclear. the germans are 70% against. you heard the german economic mincer today saying maybe we're going to have to find a way to keep our nuclear power going that would be a big political shift. so perhaps also not just in renewables but also in nuclear energy >> i think there's a big

question mark as well about inflation where the eurozone has 8.6% inflation and did a rate hike by half a point to basically half a percent that's not fighting inflation. >> no. and then you're going to find some real difficulty in how does the ecb manage the problem it had with greece and could you have a situation where you have the debt crisis in italy and then again other parts have to decide how much they're going to get behind that and does the ecb have the means to manage that. i think the political tensions that brian is alluding to are going to grow not just in the energy front but perhaps also in the debt and the interest rate front where germany has aligned with southern europe when it comes to the inflation at the moment, europe has been more united. we haven't seen europe this united for a very long time after the february 24th invasion there are going to be new and

greater strains. putin is counting on europe reverting to its old ways which is being disyunited and fatigue in standing up to putin. >> we'll leave it there in a very difficult situation the continent. fred, thank you very much. >> thank you still ahead, alaska airlines selling off despite a record quarter. can they keep navigating high fuel costs and capacity constraints? we have the ceo exclusively next plus, snap, amex, verizon set to report in the next 24 hours. the numbers you need to know ahead of their results as we head to break a check on the markets. the dow erasing a 340-point loss to turn positive by 12 today the s&p up half a percent. the nasdaq back over 12,000 even with the ten-year back on the rise "the exchange" is back after this

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phil, kick things off. >> reporter: thank you, kelly. ben, i'll put that question straight to you. you had a great quarter. june, record monthly revenue in june topping a billion dollars, and yet you are dealing with a lot of challenges including jet fuel up almost 180% for the quarter. let me start there how much of that increase in jet fuel are you able to offset with higher airfares? >> we're able to do a lot of that with our second quarter, as you can see. i'm so grateful to our 23,000 employees at alaska. who did such a great job 14% pretax margins that will be at or near the top of the industry. all the credit goes to our employees and, fortunately, with that revenue performance we can offset most of the fuel prices we spoke about it before we have good fuel hedges in place. they will dampen the cost of fuel by $200 million this year that's good news for us.

>> reporter: ben, you had a rough stretch late march, early april with a number of cancellations. you talked with me back then, we're going to bring down our capacity, our schedule to make sure we have a smoother operation. but your capacity will be limited in the third quarter and the rest of the year how long does that continue? when do you think you'll get back to prepandemic capacity levels >> phil, three big points on that number one, our focus is a safe and reliable operation and making sure we have our staffing matching the capacity, that's job number one we have the rough spot at the start of the second quarter. we got that under control. we will execute well on that we're doing a massive transition in the fourth quarter moving to an all-boeing fleet. we are retiring 38 320s over the course of 2023 so the 320s are going this year. 321s at the end of '23

that is a big fleet transition that will impact our capacity plans. the third thing is the delivery of airplanes we have to make sure the delivery of airplanes and all the supply chain constraints meets our capacity we want to be a little conservative we don't want to be too aggressive so we can meet the customer expectation in terms of the schedule we are producing. >> kelly here. delta announced its first major order with boeing, 100 planes earlier this week. you just said you were going to an all-boeing fleet. is that right? and why are you making that move >> you know, kelly, it's a great question we have an order for 145 boeing max airplanes we put in during the pandemic the reason to go for a single fleet, it lowers costs, allows us to be more productive you look at the head winds, this is one of the things we're trying to do to weather and dampen some of that impact

single fleet on both the main line side with all 37 fleet and even on the regional side we made a decision to go single fleet we'll retire the bombardier and go to 175 fleet. single fleet on the main line and regional will bring our cost structure down, will get productivity up and help us weather any head winds that we see coming with the economy. >> ben, with the tighter schedule and higher airfares do you expect people to book earlier for the holidays there are fewer seats available. whoops, i'm not sure -- >> hey, at least it froze on a nice smile he looks upbeat. phil, thank you very much. by the way, phil, after alaska, we've heard from, who is it,

united as well who is next on top earnings wise >> reporter: next week southwest airlines the last of the big four to report and i think we're going to see a similar story here where you're going to see record revenue in the second quarter, operational challenges and capacity, as much as they would want to bring back even more flights, there are limitations there whether it's on the staffing side with the airline or with the airports, air traffic control. the system is just not up to full capacity at this point. >> and i notice he said book now for your holiday travel which is amazing. phil, thank you for now. we'll leave it there thanks for bringing it to us our phil lebeau reporting. still ahead semiconductors on pace for the three-week winning streak believe it or not, their longest stretch in eight months but after micron's dire warning last month are investors still waiting for the next shoe to drop we'll explore that markets may be on recession watch but one money manager sees three areas of opportunity the cio has her picks coming up. we gotta take off.

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37% for coin base which is on pace for its best week ever but only its second positive month in the past nine elsewhere tesla is leading the s&p after they beat earnings and gave a better than expected forecast shares are up 9% today to 8.12 they added about a billion dollars in cash to the balance sheet. carnival is leading the cruise stocks lower after a discount to yesterday's close. the stock is back under $10 a share today putting pressure across the space carnival has now diluted its stock by 86% since the start of the pandemic that's what happens when you have a lot of debt to service. to bertha coombs for a cnbc news update president biden's twitter account has posted a photo of him along with the message, folks, i'm doing great thanks for your concern, keeping busy the white house is scheduled to brief reporters about a half hour from now on the president's

positive covid test and you'll see it here on cnbc. former minneapolis officer thomas layne sentenced to serve 2 1/2 years in prison after his conviction on federal civil rights charges for his role in the death of george floyd. floyd's brother calls the sentence insulting citing concerns the supreme court could go beyond its abortion ruling house democrats passed the bill today that guarantees a right to use contraceptives republicans accused the chamber's majority of manufacturing a crisis saying there's no serious effort to prohibit them. and tonight on "the news" the house's january 6 committee holds a prime time hearing on what then president trump did and didn't do as the capitol was being attacked a very busy day for the folks on the shep show. >> bertha, thank you still ahead, snap, amex and verizon on deck with results from ad spending to consumer

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welcome back to "the exchange," everybody a busy time for earnings we have the action, the story and trades on key three names on deck let's start with snap whose shares are down 65% this year in part thanks to the big dip in late may after the ceo warn the company would miss estimates blaming the faster than expected do deterioration. snap shares are up this week julia boorstin has the story danielle shay has the trades welcome to both of you julia, what are the key numbers to watch >> well, kelly, first i have to go to that warning that ceo evan spiegel gave at the end of may he said that due to a deterioration of the market they did not expect to hit the lower end of their guidance range. we see the stock rebounding this week because maybe there's this hope that maybe he was being a little conservative. so i think we have to remember that he gave that warning in may. he's been incredibly transparent about all the ad trends they've

seen we're watching that. one is this macroeconomic question, are we seeing an advertising pullback and then there's a second question of that are the factors specific to snap and, two, this question of engagement, another number to watch here, kelly, 12 million, how many daily active users the company is expected to add in the quarter. and of course outlook. the expectations for the second half of the year will be in the spotlight. >> all right danielle what are you watching, and what would you do with the stock here >> kelly, you know what is really interesting about this stock and this earnings season in general is because sentiment is so negative what we're seeing is companies like this rallying ferociously after earnings so i want to be clear in the fact i don't think snapchat is any kind of an amazing company, but i do think because the sentiment is so weak they have

space to run when you look at how they performed on earnings over the last eight quarters, the majority of the time they beat and have had massive moves post earnings multiple times. so when i look at the technical pattern here you can see we're breaking to a new recent high. there's a big gap build around the $20 to $21 price point with the high implied volatility in this name, i think it makes sense to come in and sell puts because i think if the news is anywhere better than expected it's most likely going to continue to break through 16 and trade up to $20. i think it's worth a trade >> maybe it's obvious and maybe it's not, that it will reach that $80 price point julia, anything you would add to that and what is the bigger macro signal we're looking for here can a company like snap tell us the state of the ad market at this point >> well, look, it's been

fascinating to listen to spiegel talk about the deterioration of the ad market, and this is a company that went from very fast revenue growth up through february 24 of this year and saw increasing challenges starting with the russia invasion of ukraine and they really saw that impact accelerate over the course of the year there is this hope for the rest of the companies that are ad supported we might get insight into the macro trends but despite the macro questions snap is unique in a lot of ways we'll see if they can use that uniqueness to their advantage and build on some of their relationships such as the media companies, et cetera, with the premium content they're putting ads on or whether they get dragged down into the other issues such as the ad targeting head winds >> we'll watch those daily active users stay right there as we move from snap to verizon, new tech, high valuations, old tech, low valuation. verizon shares are down about 9% this year. but falling 3% today in sympathy

with at&t after at&t lowered free cash flow guidanceance its shares were down 7%. julia now what for verizon >> look, this is an incredibly competitive space. these are two rivals if at&t would issue such warnings the question is whether verizon issues similar results and similar warnings a couple interesting things to note from at&t we should be watching for verizon, this particular kind of lucrative mobile subscriber post paid phone subscribers in the first quarter verizon lost 36,000 while rivals at&t and t-mobile added hundreds of thousands. investors are looking for growth there. and then small and medium businesses that's a sector that's under pressure it's typically a very positive sector during the pandemic

we'll see what they give us in terms of those numbers but also in terms of any ability to raise prices any price elasticity there one thing i wanted to mention at&t said some subscribers are taking more time to pay their bills and that's impacting cash flow we'll see how much verizon sees that same issue. >> a major headline, julia danielle, you think them might have done them a favor, at&t, why? >> i do think they might have done them a favor. what we've seen through at&t they've announced the issues this particular industry group are facing and so it's highly likely verizon is having the same issues they're probably going to announce something similar because the stock has already fallen today, i just think a lot of that move is going to be priced in unless they have something to say that's completely shocking, i would expect the earnings move to be more of a nonevent

right now we're sitting down on the 44 price point you have about a $2 expected move on earnings i think that as long as they can hold $43, $44, a key area of support. this isn't a high growth stock earnings are relatively stable the dividend is stable i don't see any reason to sell it, but i don't seep any reason to buy more shares either. if you're a shareholder, i would stick to the course. >> stable seems to be the watchword. the p/e is below nine. for a dividend pair and the uncertainty and the macro verizon may have a leg to stand on here. let's move along then and hit amex the dow component is up 8% in the past week as they contend with that consumer that seems to be spending but for how much longer kate consumer spending and this will be the first of the credit card names out for earnings, a bellwether for the rest of the payment space, visa and mastercard next week

cross quarter payment is a big thing. cross quarter transactions it tends to be a higher margin, participate of the business for the card companies and really has been the bull case, people traveling, spending in europe and consumer spending in general. anything amex says will have huge implications for others in the space and the other credit card numbers any of this discretionary spending and any signs of a recession the credit card companies have said we're not seeing it yet. will that change this quarter and the second quarter and we'll get a read in the high-end consumer in particular, morgan stanley downgraded a couple weeks ago and blamed lower expectations for spending for that high-end consumer they talked inflation and that's starting to hit wealthier consumers not to mention the stock market right now they are more invested in the market it hasn't been a great year for equities it's weighing on their pocketbooks, what's happening at the high-end consumer.

we'll find out more tomorrow >> kate, you're in the building. you started talking, i hear her. she's right over there >> i hear an echo. i'm right across the room. >> very exciting danielle, that down grade was a biggie did that help lower expectations for the quarter? >> i think it did. i think a lot of the news has come out the past three or four weeks has really hemmed lower expectations going into earnings and when you look at the overall pattern on this chart obviously it's down. it's trading lower the daily trend is not looking very positive. i think the stock is falling along with the rest of the market if you look at the longer term trend i would say it's quite positive and the fact they've actually increased their dividend two quarters ago. when you look at the point way visa and mastercard reported, the last two quarters, american express as well. all three of them have done well i think in this environment we have to consider consumer spending, if that's going to wane

these credit card companies, i mean, what we are seeing right now is consumers are being forced to put more purchases on credit cards at higher interest rates due to inflation and the current economic circumstances i actually think that all three of these companies particularly american express being my favorite, are really good long-term winners. and if this stock could break out above 150 that's where it would reverse the trend and head back on to the upside. >> it's at 148 danielle, if we're starting to see better stock action at the time we see worse headline flow from the earnings reports, does that tell you we're bottoming? >> you know, i'm not looking for the bottom bottom, but i do think over the course of the next week or so we are continuing to head higher particularly because sentiment has been so negative and what we're seeing is that we're seeing buyers come in when the expectations are already priced in i am on a short-term basis

starting to do more purchases, trade more to the upside i don't think that the bottom for the year is in, but at the very minimum a lot of these earnings reports are providing a lot of trading opportunity and shorter term opportunities especially to the upside >> all right we will leave it there thank you both danielle shay, kate rooney, i'm going to come chase you down one of the largest ports remains shut down as there is a protest. the latest in the supply chain fallout and who else is watching this battle very closely ♪ ♪ how's he still playin'? aspercreme arthritis. full prescription-strength. reduces inflammation. don't touch my piano. kick pain in the aspercreme.

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employees instead of independent contractors and a two-year legal stay that protected truckers was lifted after the supreme court decided not to hear the case >> thanks, kelly an estimated 70,000 truckers would be impacted by the law as two-thirds are independently owned and operated at the port of oakland alone more than 2,100 trucks go through the terminals each day and the conflict has led the oakland shoreman union to not enter the terminal citing safety concerns because of going through the crowds and this labor shortage is the reason why the ports are chessed because there's no labor the impact of the shutdown is also showing up on the u.s. supply chain heat map by cnbc which tracks data companies. it's a sea of red, kelly, and the time the containers are sitting at the ports is huge check it out because every day the port is closed it takes at least two

days for the congestion to clear up now, also, check out this chart from project 44. this shows the amount of time an import container is waiting to get picked up. right now it's over 16 1/2 days. last week it was over 15 days. marine traffic has identified vessels diverting away from oakland to other ports such as long beach but it's not just the oakland port there was a protest in l.a. and long beach, and there could be another one soon as sources tell me they are frustrated with the response from the governor's office the impact of last week's were not as severe thanks to the size of the ports remember, any trucker disruption would slow things down and add to the existing congestion and, remember, the ports are still plagued with the rail issues where containers there are waiting at least 11 days >> you bring up governor newsom who is eyeing the white house at some point this will be a major test ground

for him. you mentioned moving to some of the east coast ports what's the status? >> we continue to see the vessels moving over to the east coast and we're seeing them increase now let's take another look at that heat map. back where we're seeing savannah, they're seeing a backup of 36 vessels waiting over at the port anchored. that's 1.2 million dollars in trade floating out at sea right now, and that's half of the month's volume of what savannah normally handles marine traffic tells me rerouting ships to other ports like charleston may not solve the problem but rather create a ping-pong congestion effect. and what we need to look for next then are the ocean carriers are going to start canceling port arrivals because of the congestion >> is this just a u.s. problem what about europe? how are things over there looking? >> as you know we've been following europe for quite some time and the labor strife has been the big story now it's the hot weather and that hot weather has

decreased levels in the inland water ways and sources are telling me this is impacting the movement of grain like wheat, fertilizer, coal and animal product. grain prices increased as a result of the war on ukraine this will not help the barge operators have had to cut down on max capacity of pay loads so vessels don't get stuck in the water the labor strikes have crippled german ports, as you can ee. they're still facing a two and a half month backup in containers and there could be another strike as early as august 24 >> a good reminder we saw downgrades this morning on consumer products companies citing the ongoing freight costs and challenges and this is exactly where this is stemming from lori ann, thanks keep us posted coming up, recession worries are looming from wall street to main street, but my next guest has three areas of opportunity she'll reveal them right after this

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♪ ♪ >> welcome back,everybody. investors keep debating if wall street's july comeback is marking the bottom or just a bear market rally.

our income guest sees this regardless joining us is head of the tomorrow's global investment committee. sarah, good to have you. we don't also want to play the prediction game. it's better to say given the possible range of outcomes what's your best advice to investors here >> we're looking for areas where you can get paid to take risk because there's a lot of uncertainty out there. the three areas that we like are u.s. growth stocks with fixed income we're looking at taxable and municipal bonds and farmland which are a strong inflation, and with fixed income, fundamentals remain strong for municipals and you can generate 7% + in those areas and they're less leveraged to economic growth and the manufacturing and unemployment data tells us the economy will slow so we want to own those companies. >> a couple of follow-ups there. if you can talk about what's going on in the credit space

from all accounts it looks like the mood is improving in the last couple of weeks so what is that telling us and where are the best opportunities? >> a lot of the pain has been priced into fixed income that's why we're seeing those areas of the market react a little more strongly these aggressive up-front fed rate hikes and the returns of some of these areas are higher than we've ever been and for example, high yield fixed income and they have very strong balance sheets and municipal bonds while they've been unduly hit hard because the municipalities have strong backing and a couple of areas in fixed income that we think look attractive and start to take baby steps back toward duration in this environment where a lot of the bad news has been priced into these segments. >> i think the same question i would ask about with the high-yield range would apply to the growth stocks which a lot of investors may not have the stomach for? what about those companies

whether it's credit or equity side, where they've gone through a valuation reset that needed to happen they were trading way too tight or way too frothy 18 months ago and we don't expect them to go back to those levels ever. >> we need to focus on the fundamentals when it comes to these growth stocks. there is a segment of the market unprofitable technology, speculative growth stocks. these companies will have a hard time coming back we're talking about leaders, like salesforce in the software space with the cloud business that remains strong, even amazon which now has so much control over logistics and supply chain it should continue to grow even post-pandemic and these kind of companies that are interesting ask we're staying away from those companies with weak balance sheets, high debt and the inability to generate profits in these kinds of environments >> and you feel comfortable in financials here? >> the financials are more neutral. we're worried about the consumer and the credit cycle for the consumer and with the big banks and the capital markets is an

issue and trading has been their upside and the question is whether that's sustainable we actually like fifth third and they reported today. it's a regional bank and strong momentum banking driving their businesses and they tend to pay higher than average industry wages so they're protected from inflation and they have leveraged interest rates without the risk of the capital market business and we like the small financials and big financials can continue to struggle for the long term. >> saira, always bringing us that counterintuitive perspective. thank you very much for your time today. >> thank you >> saira malik with nuveen the stocks are up more than 6% this week and while chipmakers have been growing revenue for more than a year and a half. one company has guided lower, whether it is or isn't the at'sexthco me.in th nt. in any business,

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welcome back, before we go check out the semis. they have a strong week so far the etf which we're showing here is up more than 7% week to date and that means since monday. it's thursday, right the veestreet is keeping a keene out and kristina partsinevelos is here with more. kristina >> i want to piggyback on what you just said. you have the sox and smh with the nasdaq 100 over the past few days, but don't be fooled by the run-up as earnings season may be overshadowed by weaker company outlooks and lower guidance. first, let's look at total semiconductor revenue that's been climbing 20%. semiconductors are considered cyclical as you can see on your screen, the similarities between revenue for semiconductors and gdp growth want a slowdown in the economy

occurs semiconductor revenue follows and yet micron is the only company to lower its capex budget when beg question, when are other companies going to have their big micron moment? taiwan semiconductor indicating the 2021 capex will come at the lower end of its range and although asml has had a stellar quarter, it cut its revenue growth guidance for the rest of this year and analysts are finally taking notice. goldman sachs chip analyst recently slashed their 2023 earnings forecast by an average of 20% for chip and chip equipmentmakers. deutsche bank and key bank made similar moves and then citibank today wrote a note that they believe not one semiconductor company will be spared in the second half of this year and they do believe an earnings pop is coming in the near-term placing bets on nxp and semi nxp will be out with earnings on monday so there is no doubt,

semiconductor demand will remain robust with the transition to auto, a.i. and data centers and the street is warning that the upcoming rally may be a rally in risk. >> kristina, thank you very much kristina partsinevelos that does it for "the exchange," everybody. a very busy hour of "power lunch qwe lunch," begins right now >> indeed it does. welcome, everybody, with "power lunch. i'm tyler matheson we begin with big news from the white house. president biden's doctors to hold a briefing on his condition after he tests positive for covid. that briefing should start in 15 minutes and we will take you there. meantime, though, let's take you straight away to shep smith with what we know and what to expect. >> the white house has told us to expect this briefing on the president's condition, his treatment, how this will impact -- keep going, how this will impact his schedule and day