us. >> yep boeing a little bit to tweak my friend, steve, but also because this was one heck of a week in terms of order announcements for boeing of course they have earnings coming up next week so steve may be able to throw a pie in my face in the middle of next week. we shall see >> all right talk long enough that now i can't give him a chance to respond. >> that's what he did with the comment. >> i'll see you in a few "the exchange" is now. thank you, scott hi everybody here's what's ahead this friday on "the exchange." we're back into growth scare mode weak flash pmi data this morning, snaps digital ad slowdown not helping is it a snap specific problem or industry wide sea change we'll get an insider's view how to position now. plus more hiring freezes, corporate lay-offs, warnings about the low end consumer what does it say about whether or not the fed's inflation site is working we'll debate three buys in one bail depending on what kind of slowdown we're

heading into we'll have picks and jim cramer likes them too we'll reveal the names ahead >> you've lost some steam, really lost some steam at the highs of the session the s&p 500 was up 14 points it's not a lot but is respectable. a solid, decent gain 14 handles on the s&p. that put us by the way above the 4,000 mark we are now down 37 points. this does represent the session lows as you can kind of see behind me. dow industrials down 119 points about one-third of 1%. the nasdaq composite index 11,837 down 222 points, nearly 2% declines there. that technology trade kelly mentioned very much a part of that under performance story in the nasdaq and the technology and com services sectors the sentiment change, the reason why. snap shares down 39%, hovering near the session lows after

disappointing quarterly results and user metrics that didn't come up to snuff for some investors and analysts that is dragging down many of the other larger social media names like alphabet and meta platforms, two of the ones that have the biggest online advertising presences out there are taking a hit on that communication services down overall down nearly 4% twitter is the lone stand joit but you can argue it doesn't trade on the fundamentals anymore. we're trying to find out if elon musk is going to buy the company or not a bit of an aberration but watch that trade if you're looking for a bright spot check out what is happening with american express shares they reported earnings better than expected for profits and sales. yes they did set aside a little more money to cover possibly bad loans down the line, but they said an interesting point about their kind of higher end consumer spending clientele. for the first time, they have seen spending among their card members back to prepandemic levels so it tells you a little

something. they also say they aren't seeing any material signs of weakness yet in their consumer base we'll see if that sticks otherwise amex up 2.5% i will point out that is all session highs with the rest of the market back over to you. >> thank you very much, our dom chu. are slowdown fears taking over from inflation concerns let's look back at the data this week before i put it to my next guest. on monday the terrible read from the home builders, nahb index dropping by the second most in a month ever wednesday june existing home sales falling a much wider than expected 5% versus less than 1% loss on thursday jobless claims rose by 7,000 to an eight-month high. leading indicators also slid for the fourth straight month. that is typically a harbinger of recession. the pmi dropped much more than expected by five points to a reading of just 47, well into contraction territory. what does it all mean for the economy? should the feds still hike by 75

basis points again next week let's ask ethan harris global head of economics research at bank of america securities it is great to see you, ethan. the bond market ironically is now acting like inflation will prove transitory >> yeah. i think the story is that it is going to take a very, very weak economy to cure the inflation problem. and so the fed really has to move ahead and continue to hike rates. they're still well below neutral. they need to get above neutral so the data this week, you know, it helps push things in the right direction from the fed perspective. but they still have a lot of work to do >> isn't your call the firm's call that we're going to be in recession this year? >> yeah, i'm actually puzzled to tell you the truth why more people aren't forecasting recession. if you look at the consensus people are expecting modest growth of 1% or so in the next four quarters. we're looking for minus 1% or so

in the next four quarters. the point i've been making is that we can't cure inflation in a painless manner. some of this inflation will come down naturally as commodity prices stabilize and as supply chains improve so that part of the inflation problem is fixable without a recession. the part that isn't fixable is the absolutely crazy, red hot labor market the fed has to see a major weakening of the labor market. otherwise we're going to get massive, ongoing cost pressures with rising wages. there is no way the fed can hit their 2% target for inflation in the next few years if they don't significantly cool off the labor market >> so most people think, well, if we're going into recession why do they need to keep hiking? >> well, i think it hasn't happened yet the data are weak. they are very uneven you're looking to, the data this week was kind of uniformly weak. remember the housing sector is kind of the point of the spear

on monetary policy when you hike rates that is the sector that gets hit hardest and fastest. and so we're seeing the effects of the fed already there what we are not seeing yet is significant weakening of the jobs market. now, as you pointed out, claims are inching up but by historic standards they are way below normal still they should be up well into the 300s for the fed to argue that they've gotten the labor market under control. so they need to kind of finish the job and keep hiking. if they were to back off now i think you would see -- the markets are pricing in those hikes. they're already embedded in the markets. it would be a remarkably surprising easing of financial conditions that's not at all warranted given the inflation outlook. >> so in other words you're saying in order to beat inflation kind of for good here we have to be in recession and that the concern is that maybe things don't slow enough is that right?

because again, as the data keep evolving with every additional data point you get this kind of sardonic reaction of this is the fed's fault. they're causing this now we're going from inflation to recession just from bad to worse and so forth obviously they'd like to achieve a soft landing and slow things down without recession it sounds like you are saying that is unrealistic and to make matters worse inflation could stay high even after a downturn. we saw that happen in the '70s. >> right you do want to go back to history. the mistake the fed made is not what they are doing now but a year ago they waited too long to start hiking interest rates and now they're playing catch up inflation readings this year have been even worse than expected they were already starting to happen last summer and fall. the fed described it as repeatedly as transitory when it became clear that most of it is transitory but a big chunk is

not. so they're fixing a mistake. unfortunately, they have to risk recession. there is no other way to get the genie back in the bottle i would go back to the '70s and give the following analogy what is going on right now with the fed is not paul volker killing inflation. paul volker stepped in after years of inadequate fed efforts to control inflation what we are seeing now is the fed at the beginning of the 1970s when they had a chance to nip it in the bud and tighten and kill a modest inflation problem and keep that 2% kind of level for inflation. so the mistake is to not fight the inflation early and wait until it's really out of control. so we are in 1969. we're not 1979 we need a tough fed but not a 1982 style collapse in the economy. we need a modest recession to get inflation under control.

>> final point on this because communicating it is a really important part of the story. the white house is calling this putin's price hikes. and, yes, they are referring to gasoline but that embodies the narrative and most people as a result think inflation is high because gas prices are high because of putin so why would the fed react to that? so i understand if the white house doesn't want to come clean and say this is the fed's fault. they should have tightened a year ago i understand the fed doesn't want to say this is our fault. we should have tightened a year ago. but by not being that explicit don't they risk confusing the message and angering americans >> well, i think the problem of course with the whole public debate over inflation is it is insanely political the biden administration didn't create high gasoline prices. that is partly a putin story and partly just a global demand outrunning supply. it is very little to do with the biden administration

it is a great talking point however because the american public pins the blame for whatever goes wrong in the economy on the incumbent administration what is important here and where you can put blame is the super easy fiscal policy combined with a fed that was way too slow to hit the brakes ( does explain some of this inflation not the gas price part but the parts, the broader inflation we're seeing across many goods and services they do deserve some blame for that they share some of the blame then there's some bad luck with it as well but the fed's got no choice here they -- the way they need to market this is it is better to take some medicine now than take even bigger medicine later. >> yeah. or to have what's been a two-year problem turn into a 10 or 15-year one. >> exactly. >> thanks. we appreciate it ethan harris, bank of america. >> thank you. let's get to today's

disaster stock dejur snap tumbling getting more than a dozen downgrades after the disappointing second quarter results. a slowdown in ad spending. is it a big flag for the rest of the social media peers or just about snap's weakness? what does it say about digital ad spending overall? let's bring in our guests. it's great to have you both here jason, just reaction at this point. is it snap specific or broader digital ad slowdown? >> we think it is mostly snap specific so there are categories pulling back but i think the other companies you are reporting next week namely meta and alphabet have a much deeper advertiser bench. and so they're just better able to deal if you do see some pullbacks. we think the bigger point is that snap hasn't developed as robust ad products for direct

response or performance advertisers and they are also seeing pressure from tiktok. >> would you agree with that i wasn't sure if it was just me not hearing him. hold your thought for a second we'll fix your sound jason, if you think it is a snap specific problem would you be a buyer of the other stocks selling off on the weakness? >> we have to acknowledge that we are probably going into a modest recession consumer spending which has been stable through the summer is probably going to slow down so advertising is probably going to slow down. if you are a longer term investor, 12 to 18 months, i do think buying particularly meta here, an interesting kind of opportunity, you know, that being said we do think there is risk to advertising broadly. just not nearly the down side we saw for example in snap or even twitter, which also reported

this morning. >> what were you saying? go ahead >> i can expand on that. actually on both points. when you look at the overall ad market you have to divide it in a brand and direct response. so brand takes, tends to take a cut when there are hard times. that's what happened at the start of the pandemic. but direct response actually tends to grow. and so i agree meta is likely to do well. google especially. and amazon's ad business will likely do well with snap they're facing so many pressures, competition from tiktok, slowing user growth in the u.s., which has been happening for years, and i think is finally starting to catch up with them. their ad business is not all direct response. they're going to get that brand advertising cut when there are hard times that's all -- it is like a perfect storm of problems for them but you don't see that with google at all. and so less extent with meta >> i was going to ask. google, facebook, or meta, those are big beneficiaries of direct

response spending. who else should we expect that piece of the ad pie to hold up? >> primarily amazon and obviously a part of amazon's overall business but amazon the last few years has built a huge direct response ad business and so they are likely to be a beneficiary also. so that is where you see it, tiktok, but tiktok is not a public company they are probably the fastest growing direct response business in the world i would expect would be tiktok. >> always feels like we're flying blind because we can't share theirs in comparison with the others jason, how long do you think the ad winter will last? >> again, some of it is macro but most people are thinking you'll start to see a meaningful or some kind of slowdown in the fourth quarter into the beginning of next year obviously very fed dependent and other factors. specifically for snap, one of the things we think they need to

fix is theattribution that belongs to apple the tool is called skn network which apple just updated calling it 4.0 it's quite complicated and our concern is that it will take them longer than the other companies to integrate that into their process. and so does it take them until the third quarter of next year to kind of right their house at the same time there is pressure on them to reduce head count and spending it is going to be tricky to keep rowing forward while at the same point, you know, kind of kicking people out of the boat. >> finally, mark, if this does last through the third quarter of next year as jason is indicating do you have any advice for snap or other investors who are kind of looking around and saying, okay. if brands are going to be pulling back for quite sometime, are there any opportunities here >> well, it is just the theme of this conversation, which is direct response pretty much always does well if you go back to 2000, that is

when google grew people first became aware of them, this huge direct response business they had already started to grow. so it is essentially doubled down on these big performance advertising companies, google, meta, and others, you know, just kind of hold back on brand and you'll tend to do well in this kind of climate. >> very interesting. appreciate the thoughts there. guys, thank you both mark douglas and jason helfstein on snap down 38% a news alert for you baker hughes reporting moments ago u.s. oil and gas rig counts rose for the third straight week as often an early indicator of future output it rose the highest level since march 2020 the wti price relatively unbothered down about 25%. we're at 96 for wti crude going negative on that news. coming up if the fed is about to hike again should you bet on the bank? my next guest has some names she is scooping up ahead of next week's big meeting

tle plus whether you are expecting a mild, moderate, severe recession or no recession at all we have picks for every scenario in a special edition of three buys and a bail. here is a quick check on the markets. the dow is down 0.5% the s&p down 1% the nasdaq down 2% the russell 2000 is splitting the difference and the 10-year yield 277. back after this.

welcome back to "the exchange." ahead of next week's fed meeting and despite dropping yields and recession worries our next guest says the financial sector is the place to be. it's had a rough year the xle down about 16% the regional bank etf down 13% so where is the opportunity? joining us now the portfolio manager at angel capital advisers the names that you like here have had very different years. signature down 47% outh stayed almost positive. >> that's right. i think when we think about the opportunities, especially looking forward post what has been a better than expected earnings season across the board for the banks where we see particular value are names poised to benefit from higher rates, looking for the fed to raise fairly aggressively next week as well

and that the difference between the loan yield and the deposit costs just continues to widen out for these banks driving up their profitability. we would really have a preference on the smaller end of the scale. regionals but even more the community banks. the sort of the south states, the pinnacles that tend to beat on earnings, have very strong deposit franchises, and a lot of leverage to rising rates. >> pinnacle is still down 18% this year as i mentioned, south state just fractionally. so why do you think they aren't being rewarded for the execution that you see and think is coming >> i do think there's been probably more concern in the regional space that is, you know, a little more well covered, more trafficked by southside analysts for example and more in the forefront. but a lot of the concern that we've seen probably on someone like a signature and even pinnacle sort of relates to consumer exposure and signature specifically sort of that, their

crypto endeavors i think a lot of that has been well put into the price at this point and the upside and what's really going to move the needle is how they deliver on expansion, loan growth, and managing expenses. a lot of what we've seen in terms of similarities between again sort of a south and pinnacle is successful acquisition history as well and as expenses have become a larger part of the narrative here, i think m & a is going to ramp back up and banks that have done well and have a good track record of successfully acquiring sort of geographically adjacent companies i think adds an additional upside to our estimates. a name like signature i think, you know, consistently beats on earnings, strong deposit franchise, and actually what we really like there is the amount of noninterest bearing deposits,

which are zero cost to fund for them so the expansion is likely to be larger. >> it is interesting to hear the case for signature that is sort of ex-crypto for so long it was either because of crypto people liked it or wanted to avoid it for those in the audience who are listening saying it sounds like all of this makes sense and the banks have a lot of opportunity but i'm worried about the economy, do you think they priced in a recession already or not if not, could you wait six months >> i think a lot of the banks today in general are pricing in the recession environment. we look at valuations relative to even prior down cycles and the financial crisis for example. a lot of the down side feels baked into us at current multiples. and in fact what we saw coming out of earnings is the bias is upwards in terms of earnings expectations so we should see at least some stability as we get comfortable with the macro

backdrop on somewhat higher earnings so i think the opportunity set is really coming up in the near term here. >> all right, cheryl we'll leave it there thanks for your time and thoughts today >> thank you. >> cheryl pate with angel oak. for more on the markets tune in tonight at 6:00 p.m. eastern for a cnbc special politics and profit exploring issues at the intersection of money and government that is where everything intersects from inflation in the fed to the debate we were having with ethan harris a short time ago, that funding for the chips act and all the ways the midterms could impact your portfolio, 6:00 p.m. eastern tonight. still ahead here the pro shares online retail etf 20% off its recent lows and more than half these stocks are at least 10% this month are fundamentals improving or is this another fad plus the $10 trillion tipping point. if this is the end of affordable energy what does it mean for companies and investors? take a look a the dow erasing a 182-point gain to turn negative by a 2-1 ratio

amex still on top after the earnings beat and record card spending verizon having its worst day since 2008 the worst stock on the dow after cutting its full-year forecast saying higher prices are hurting phone subscriber growth. the shares after yesterday's decline down another 7%. (ted) after talking and texting for years, we got married... for the family plan. (jane) and then we really expanded our family... for the wireless savings. (ted) it seemed like the responsible thing to do. (jane) and then, just yesterday, my sister told me about visible. (sister) yeah, get unlimited data for as low as $25 a month. no family needed. (vo) family plan savings without the family. get visible. single-line wireless with

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we are still around 1700 an ounce. today's top energy stock after they beat estimates on the top and bottom line, raising revenue guidance for the year, the second quarter was an inflection point shares up 4% on what's been strong year-to-date performance. crypto climbing again today as they cap off a big week. bitcoin and ether both higher. bitcoin to almost back at 23,000 ether 1572 still down 6%, base, to around $59 a share. now to bertha coombs for a cnbc news update >> thanks very much. in florida jurors are hearing evidence on whether parkland school shooter nikolas cruz should be sentenced to death or life in prison without a chance of parole for killing 17 people four years ago today they heard from one of the first police officers on the scene.

a 17-year-old accused of fatally shooting four students at a high school in michigan last november participated in a video hearing today where the judge decided he should remain in a county jail rather than a juvenile detention center as he awaits his january trial. and the jury in steve bannon's contempt of congress trial began its deliberations about two hours ago after hearing closing arguments this morning. tonight on the news, a czech prince trying to save the royal family's art collection by selling nfts that is at 7:00 p.m. eastern time sounds like a really intriguing story of a monarchy, something old and something very new. >> absolutely. constantly reinventing bertha, thank you very much. bertha coombs. still ahead my next guest says netflix' pain has been this stock's gain it happens to be her top pick for a mild recession what if there isn't a recession or what if it is severe? she has picks for that too a special edition of "3 buys and

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welcome back to the exchange recession fears continue to swell as inflation soars

cracks in the labor market no consensus on the size or scope of a potential downturn. how should investors plan ahead? joining us now is our cnbc contributor, chief market strategist with today's three buys and a bail. welcome. >> thank you. >> let's start with the deep recession scenario and get this one out of the way your pick for that constellation down just 3% this year, better than expected earnings last month and people think booze is kind of recession proof. you like it? >> i do. actually i like it even more than some of the pure, single brand plays because they are a little more diversified and we've seen already the stress test on the books. they can defend in a downturn. we have also seen them increasing profitability the big concern with a lot of these brands is what do you do, how do you deal with rising prices they have managed to do that they've branched into seltzers, now into recreational marijuana.

we have all sorts of choices for a deep recession/depression kind of scenario that involves booze and pot. >> oh, goody to be clear is this one of those where we know if there is a deep recession, i don't think that is priced in at this point, you think all of these, you know, stocks go down but you're looking for relative out performers is that the idea >> yeah. that is the idea we're looking for companies that can deal with -- because we have a recession with inflation we have not had that in most of our investing histories unless you're, you know, up there so at the end of the day we need companies that can manage their costs, whose brand is durable, and who will continue to sell products so that you can survive the tumult >> your next pick is a mild recession. you actually picked disney which feels like is in a mild recession of its own. >> disney has taken its lumps through the pandemic

closing down the parks was an enormous hit to disney everything to do with sports hit espn+. they really took it on all sides. closing down all of the studios as well. so there was just not a lot going on you know, really trial by fire for the new ceo at disney as well however, we now have the parks open they just reopened shanghai disney the parks are already kind of starting to normalize in terms of numbers and growing like gang busters again. obviously that will normalize. the point is these are probably some of the most incredibly profitable components of disney and they've upped their pricing with absolutely no response in terms of demand which is to say disney has incredible pricing power. on top of that, disney plus is still growing subscribers while netflix is losing subscribers. and they have espn+, hulu bundle which right now nobody has that was sort of the cable

story. >> i hear some buzz about it that is your mild recession pick, disney if you don't expect a recession, if you are in that camp, gina, you say the pick is jb hunt. tell us why. >> we have jb hunt transport owned in several of our portfolios this is one where jb hunt transport is a company that benefits when people are buying goods, demanding goods, and need to transport those goods obviously a big part of the story lately has been what happens in the supply chain. jb hunt has managed to increase their profitability, demand is off the charts you're like, wow is there really a recession coming even in a recession they've done incredibly well this year. on a relative basis. nobody did well this year. on a relative basis they performed. from our perspective from evaluation perspective we think this is a way to invest in a good company that can control its costs but also might participate in the upside if

we're all wrong. >> all right in the stock to bail on which brings us to, drum roll please, which you don't seem to like that much regardless of what kind of slowdown we're heading into, general electric tell us why. >> general electric got really cheap for a while and it was attractive when it was at a really low valuation but that valuation gap really went away as everybody was buying anything that looked like value and general electric looked like value, smells like value but it doesn't necessarily perform well in a recession because the industrials are really going to get hit. they're in aviation, maybe the health care part of what they're doing might be somewhat resilient, but most of the ge brand is going to be hit in a recessionary scenario. this is a company that already is going through a lot of figuring itself out strategically. we think we stay away from that if we actually go into a deeper

recess recession than expected. >> we'll leave it there but take a quick victory lap on snap. i almost associate you single handedly with bailing on snap and pretty much every edition of this that we've done. >> yes, i definitely took a few victory laps on that one, kelly. >> not to dance on any graves here. >> for my victory. >> got to give credit where due. thank you very much and have a great weekend, gina. >> thank you you, too. coming up check out this mystery chart up nearly 4% this week and there could be a sectorwide up trend emerging the name and whether now is the time to jump in, next.

welcome back everybody want to mention with all the slowdown fears taking hold that high yield bond funds climbed this week as stocks largely were rallying what is behind the outside moves? >> we have stocks rebounding,

bonds rallying as well the 10-year yield went from 3% to 2.8%. that is certainly significant and is all coinciding with this risk on tone in the broader market plus credit spreads are narrowing, pointing out that the spread between high yield debt and treasuries was 530 basis points last friday now it is down to 485 basis points so what we're seeing is a compression in spreads bank of america economist this morning calling it an incredible turn-around and after months of selling off high yield junk bond etf is now on track for a three-week winning streak. the first time we've seen this type of out performance since june of 2021 as yields fall check out the emerging market debt etf now up about 3% in the past four days as a dollar comes off its high and the dollar index, down 5 in the past six sessions. >> true. i hadn't thought about that as input. is this durable? where are we kind of by

historical standards in term of where spreads are and what good macro we need to keep this going. >> it depends on the macro, what the fed does next week we talked to the founder of bond block and she talked about how the rally in treasuries is providing confidence to the market and also pointed out high yield investors continue to have out sized cash positions she says that is a hopeful sign. but the macro position will be certainly top of mind. if high yield, crypto, and equities rally at the same time that would bode well and certainly improve market sentiment. to your point the economy mixed data we've pointed out, pmi data this morning 26-month low. >> and yes the market is turning today but it is funny all three of those things you mentioned have all been happening as the data has gotten worse. we'll watch for those signs. maybe it's been priced in. maybe. thank you very much. up next direct to consumer names mixed bag today but a monster run. is there a bubble in bird?

whether to buy into the positive momentum after this quick break. let's look at the major averages with session lows across the board now. the nasdaq leading the declines down 2.25% lucid, meta, data dog, and align some of the biggest under performers

welcome back to "the exchange." check out some of this performance, direct to consumer stocks having a monster month. the pro shares online retail etf up 7%. figs up about 46%. now to explain what is driving the action, what do you think is going on >> hi there. it is unlikely these stocks are on fire because consumers are buying en masse on these sites the latest retail sales report did show strong growth in the nonstore, the online category and the consumer certainly has cracked under the macro economic pressures at least not yet -- certainly has not cracked, at least not yet. these names are among those that fell harder faster on those big down days that we've seen recently so when sentiment turns even slightly positive, this is

the group that tends to bounce back higher and faster look at etsy up 35% still off 68% from the 52-week highs though allbirds chewy and the high end apparel e-commerce site up about 26% chewy is worth about half of what it was a year ago and my teresa 60% below its year ago value. stitch fix up 23% in july. king of the online jungle amazon up more than 15% month to date this is the head of result but 35% off the 52-week highs. the online companies might be a good trade if you time it right but be aware the moves aren't necessarily in connection to major fundamental shifts that pushed them to the levels we see today. >> exactly what i was going to ask. some of these names got so small we weren't even able to talk about them >> exactly

names that i think we all know well potentially as consumers and were big ipos but really well below the $500 million market cap now because they sold off so substantially we couldn't even talk about them maybe they'll swing back as the momentum starts to move and they'll get sort of back into this trading space where it feels appropriate for us to discuss them but the moves here kelly and some of the direct to consumer online names, names that really many people in america know have just been so incredibly dramatic it is almost really hard to understand why they move the way they move but it is our job at least to point it out when it happens >> absolutely. thank you very much for that although online retail has roared back this month most of the names are still way down year to date and our next guest warns investors to proceed with caution. let's bring in the ceo of jay rogers worldwide do you have any idea if there is a fundamental turn here or is it just one of these kind of trading guessing games >> you know, i look at the rest

of the 38 stocks in the online etf. they're all up this month 15% to 25%. they're all down 55% to 85% for the year so what does that tell you it's the group i have this thesis that it was the return trade that everybody went oh, my gosh, covid is back. we aren't going to get the return to work, return to play, return to do things trade. and so these stocks traded off when i looked at all of the rest of them i said, no a lot of these guys aren't in that category and their stock charts look very much the same the one that rebounded the most, however, are part of the return to doing things trade. i think some of that therefore is probably over reaction on the covid side after all, the consumer is now looking at covid and going oh, that scary monster that used to be out there is now more like an annoying part of my yard

i am not going to pet it but won't stay in the house because of it. so things like the real reel or etsy or any of those that work with that consumer and that consumer is younger and more affluent than the average consumer so so they'll buy stuff and do things as long as they can. do i think -- i don't want to call it the dead-cat bounce. >> i'm already down 85% bounce, right? and so -- any reaction at all that's positive and goldman came out when they gave a positive rating to rent the runway and people watched that and they said well, the guys that run them look like they're going to be playing the game, so maybe i should, too, but boy, i remember the crash of 2000. i remember when amazon was $8 a share, and there's a simple rule and that's when interest rates are low and the narratives rule. the company with the best story wins when interest rates are rising

and growth is slowing, value wins i have to show what they're worth by generating profits and free cash flow and that is not this group and it wasn't that group in 2000 either >> sure. do i think it's different this time yeah, probably not money is expensive funding is trying up and valuations are greater and it's the same game we were playing in those days. >> let me ask you a broader question because we have heard two different things from the big companies reporting earnings on the consumer. on the one hand, they're saying consumers are starting to have trouble paying their bills especially the low-income households on the other hand we hear them say spending is up pretty well or it's up 30% year on year. what do you think is the state of the u.s. consumer this summer >> i think if you're in the top 60% you're doing fine and that's why people can say things like the consumer is fine and then that's one of the ones that are

balanced here. however, the bottom two quintiles, the bottom 40% don't look so good so when you're talking to the off-price guys and you're talking to the dollar stores and talking to walmart, they'll say we're seeing resistance for that consumer price and the inability to spend and talk to the banks, they'll tell you, they're seeing problems with credit, but not the kind of problems we've seen in the past with credit. so, yes, we're seeing breaks in the system and the consumer seems very, very healthy and right now they still all have a job and they're still out there spending because i'm telling you, they've decided i'm going to do stuff and i'll buy stuff when i'm going places. >> last question, because we know the labor market is still very strong and wage income, especially non-supervisory

income, 6% to 7% who would you bet on in the back half of the year stay away from low income and high income, but what if momentum proves stronger than expected >> well, if the wage approves stronger and we won't even have a technical recession and we're not going to get any increases that 3.6% will not go to 4% unemployment or we used to be able to go to 3.2% unemployment, remember and we thought we'd have 7% growth in wages. so depending on what happens there, you will be right or wrong, but i'm getting on luxury stocks and i think near-luxury stocks like tapestry and levi, and those kind of people will do well, and i think lvmh are going to do really well. so i'm betting on the upper 60% and not the bottom group certainly, i wouldn't bet against target and they're dealing with a fairly affluent consumer and their consumer will be there

i'm a big walmart fan and their consumer is struggling a little bit and they execute better than anybody else when you look at that it's not these companies that you're talking about, it's the big players that have been strong and re-invested in the business and the costcos of the world and you'll have pretty good numbers unless something really happens to the consumer that i don't see so far >> good to check in with you jay rogers niffin worldwide. gamestop sliding today after the 4 for 1 stock split. it opened today around 38 after the split. it's down to around 36 right now. the shares are up 15% this month and on pace to snap a three-month losing streak. still ahead, oil and gas have spiked this year and those high prices could be here to stay why decades-long run of affordable energy is coming to annd at nt. lily! welcome to our third bark-ery. oh, i can tell business is going through the “woof”.

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welcome back one little thing to mention before we go the end of affordable energy as we know it nat gas futures have spiked another 18% this week up to $8.30 per million btus and imagine what the price is over in europe. it's far from the only driver of high prices, though. pippa stephens is here now with the story. pippa? >> that's right, kelly it's not just nat gas. oil and coal prices are surging as well which is a major driver of the decades-high inflation we're seeing around the world. the war has pushed up prices, but they were already rising prior to the invasions years of underinvestment means not enough was spent to either meet fossil fuel demand or to move the world to renewables barclays summarized all of this by saying, quote, decades of uninterrupted affordable energy have come to an end. consumers worldwide set to spend a record their 10 trillion this year on energy consumption that's according to the iea and an equivalent of 10% of gdp.

looking forward, we're hearing more about an all of the above approach to energy policy as countries look to shore up their supplies transforming the system will take decades and cost 150 trillion according to barclays, and in the meantime, clean energy spending on track for a record year, as well in the u.s. some of the largest players are clearway energy, aes and nextera, and that includes honeywell and johnson controls because the bills are high for consumers and businesses alike. >> are we talking thermostats and that kind of thing or something much grander >> exactly building management systems that help you be aware of your heating and cooling. think about an office building that has the lights on at 2:00 a.m. you don't need that. these companies can help the companies understand their energy usage to opportunity miesz. >> that is a great angle in this market

pippa, thank you very much our pippa stephens if you thought energy was expensive, try buying a home we'll go to austin, texas, and a snapshot of the market there and our latest installment speaking of which, "power lunch" begins right now kelly, thank you very much welcome to a friday "power lunch. welcome, i'm tyler matheson. excuse me, i have to clear my throat a little bit. snap's stock tumbling 35% today. excuse me. weakest sales ever painting a grim picture ahead of meta and alphabet a big rally ahead and our market pros this hour say all of the bears are making him bullish. he'll tell us which stocks are higher. >> bless y