come back to you before we're out. >> williams, they handle 30% of the average daily natural gas volume, i'm keeping the theme 5%. >> joe. >> visa. >> okay. did you have a name? >> stop. >> what would it be? >> how about joshy snap down. >> how about red lobster >> i hope i'll see you in overtime "the exchange" is now. thank you, scott, hi, everybody. here's what's coming up on "the exchange." stocks are definitely in wait and see mode today as we dive into this critical week for the market, big tech on deck with earnings, big data ahead on the economy and of course the big fed decision on interest rates we'll walk through what to expect, what's priced in, and how to position. plus, can you hear me now? one of our guests brings three dividend paying stocks, and one of them is verizon he makes his case why now is the right time to buy. and it's not just big tech reporting, we're going to look at the semis, the homebuilders,

even the restaurant trade with nxp, pulte and mcdonald's all getting ready to report in the next 24 hours. that's coming up in "the exchange." we begin with today's markets and dominic chu. >> that wait and see mode that you talked about at the top of the show right now is pretty much exactly what you're getting right now. it's a mixed market. i use that a little tongue in cheek because we are up and down fractionally and have been pretty much all day, not to any dramatic degree. the reason why there's drama around that is because this could just be that positioning ahead of what should be the busiest week of earnings season and potentially filled with a lot of catalysts that drive the most important stocks in the market the dow industrial is up 1/4 of 1% the s&p is still below 4,000 right now. 39.70, but it's up nine points, a modest 1/4 gain there. the nasdaq trade is underperforming, just fractionally to the downside to the tune of 0.25% down

one key part of the market that has been a focus for a lot of traders out there, no matter what asset class has been interest rates the ten-year treasury note yield is ticking higher today, but it's 2.82% now, remember at the peak over here on an intraday basis, we got to just around 3.48%, and we are sitting at 2.81 right now. that was mid-june, and you see the decline here would you be surprised if i told you that during that same span between mid-june and now, the nasdaq 100 etf is up 10% as interest rates have fallen, tech valuations have gotten a little bit higher. we'll see if that dynamic plays out this week with a lot of big tech reports coming out. and speaking of these five stocks are the ones that could have a massive amount of influence on that market story, kelly. microsoft, amazon, apple, alphabet, meta platforms, these stocks here are all reporting results at some point this week, they're all down between a half to 1.5% right now. this is important, kelly, because we reemphasized this a

lot during the course of the last several years these five stocks in particular make up 21% of the s&p 500 and 40% of the nasdaq 100. so these stocks go, kelly, this week with earnings, so goes that market perhaps >> dom, everyone seems to be nervous right now. don't you get that sense i see stuff about we think the market's going to have a bad week and the vix and apple's going to miss, and it just -- it's a very clear sense of nervousness, i think, right now. >> and not just that, that nervousness is playing outin the options market right now we'll have more on this in "power lunch." right now the options market is for these five stocks pricing in a little more volatility to the tune of maybe a little bit more than we would expect over the last eight quarters. we'll touch on that in the 2:00 hour, kelly. >> good tease. thanks. big tech earnings, big economic reports and a big fed decision let's dive in now with steve liesman and economist michelle inju gerard, and paul meeks is here with what he expects from big

tech steve, let's start with you, a reminder of everything that we're going to be learning this week. >> it is a big week, it's going to provide critical data, kelly, for the debate over a feared recession on one hand and an economic slowdown on the other the fed's going to weigh in with policy and maybe some guidance that could ultimately tip the balance either way tuesday we get new home sales. this has been pretty much on a downward track 664 664,000 expected a 4.6% decline. durable goods estimate down as well we'll be looking for the business investment side of that thing. then there's the fed decision, more on that in just a second. thursday there's the gdp number, up a scant 0.3% with the question of whether or not it actually comes in negative for the second quarter, jobless claims will stick around in that 250 range, and then the fed's preferred inflation indicator and consumer spending, we'll see if it's a positive inflation adjusted consumer spending number or a negative one with personal income of 0.5%. moving along here, the markets

are heavily priced for a 75 basis point hike this week, about a 12% chance of 100. the outlook for fed futures show markets think the fed has more work to do raising rates to a peak of 340, 339 call it by january, and then quickly reversing itself, bringing it back down to 285 by year end that shape has been in there for a long time. and how much, kelly that, would change fed policy. zblc >> you read mind that's the question i'm going to pick up on the markets are already jumping ahead to what could happen next year specifically, now starting to price in the chance of rate cuts my next guest is not onboard yet though saying even if the economy slows or slips into recession, the fed won't be able to cut rates michelle, i see you shaking your

head already michelle girard. so why are you -- you think because of inflation they won't be able to do it is. >> that's exactly right. i mean, the market is expecting that the economy is going to slow and that will solve of all of the inflation problems or at least get the fed into position where they will shift their focus from inflation more to growth i just don't think inflation numbers are going to help the fed out here we ourselves have the inflation forecast at the end of 2023 still at 3% if you exclude food and energy that's too high, i think it's going to make it very difficult for the fed to be able to shift the focus i think that will be a real surprise for markets that are looking for a rate cut i don't think the fed is in it position to do that. the. >> and you're saying this acknowledge being the slowdown, acknowledging even a possible recession. >> recession doesn't mean you're not going to have inflation. of course, that's the worst mix for the fed.

but it's one we've seen historically it's going to put the ned a very difficult position of course the fed can talk about the fact that looking forward they think slower growth will help to bring inflation down but fed credibility right now is not high in terms of their own inflation forecast and the fed them veflz really started to look to facing policy and, again, if the -- actual inflation numbers have not come down as much as the fed needs to see, they're not going to able to reverse course that quickly the priority is going to be getting inflation down even if it means causing economic pain >> yeah, so you look at the markets. you say okay again, maybe you read everything that i read this weekend but it is like everywhere i turn efrp is everyone is talking about recession. fine there is this thing where there is expectation that is the final verdict. that changes everything. and i just wonder where you think -- i know this is your per view per se, but you know, let's

talk rates, for instance, or the stock market f they're not talking about a macro event that gives the space to cut rates, how much might that change the way markets are currently pricing this >> well, that's exactly as steve pointed out. markets are looking for rate cuts by the end of next year and part of the rally that we've seen in the last few days on the today yields are up the last friday on weak economic data, we saw ten year yields fall sharply. and that is on the expectation that weakness in economic activity will really slow the fed's ability to keep raising interest rates or even precipitate a rate cut it would be a big surprise for the markets if, you know, you get weaker data. but inflation doesn't come down. it will be -- it will cause a rethink. i think upward clearly upward pressure on market rates if it that whole thing, premise about fed rate cuts is, you know, goes away >> do you think it serves -- final question as we look to that language from powell on wednesday which will, look, he

knows the markets. they understand the state of affairs. do you think he wants to push back against this pricing in of cuts because they would rather see higher long term rates i mean, i'm just curious for the second or third order of thinking here. >> i have to say, kelly, i hope the fed gets out of the rate guidance business a bit. >> yeah. >> the fed tried to be transparent. it tried to signal to the markets and guide it to where it wants the markets to be priced but that has come back to bite them and so i suspect that they will will not try to be too prescriptive about where rates are headed again, just keep markets focused on the fact that the fed is going to respond as the economi data and inflation data warns. i think they're going to really work -- i think they're going to try, at least we hope they will, to actually not try to do as much in terms of guiding rates but that is just not worked in their favor obviously in the last several meetings. >> fascinating michelle, thank you for us this point of view now.

let's turn to big tech earnings. paul meeks is portfolio manager at independent wealth solutions management paul, good to see you. kind of in keeping with what i was bantering with dom about a moment ago, you're bearish on the whole group. why? >> well, i'm not long term bearish. but i still think it's too early to go in and bottom fish because here's the deal. yes, we've seen these stocks come down significantly. but so far really through a compression valuation multiples. and we haven't seen the numbers at least until last couple of weeks where the early reporters acknowledge a recession that we may be in or we will be in one soon i need to see the companies come out, assume that we're in a recession, lower their numbers in line with that and then we have lower valuation multiple,

lower forecast [ inaudible >> always like to give them a beat to see if he'll come back i take moihis point. this has been a valuation reset instead of earnings and fundamentals paul would like to see the ceos kitchen sink it. paul, wauyou want to try one moe time. >> sure. >> i think that the company should take the opportunity to lower their numbers and when they do that, they have a free pass nobody is going to blame them. fw we're in a recessionary number we can take lower multiples with lower forecasts. get the stocks down to trough levels i don't want to buy cheap stocks when there are further estimates cut to come. if we don't get it out of the way this quarter, let's rip off

the band-aid >> as someone who is long term bullish, you're not saying the businesses is over and april sl not worth $150 a share thanks for your time today thanks for your time today let's turn to breaking news out of the energy complex. nat gas prices are near session highs. the gas plans to cut europe's gas flow to just 20% via that crucial pipeline brian sullivan has a clear sense of what this is all going to mean. >> it's not good news. we had better news to report on a monday the good news was last week. but now that news you just reported that gas promise thing is going to cut the flows by 50% starting on wednesday. remember, restarted it 40% of total capacity gas say because of a turbine issue. it's going to bring those down to 20%

a 50% reduction from already reduced levels that's what they're using. if you talk to northstream and if you talk to many people at the siemens that understand this there is always a backup turbine available. this turbine availability and maintenance issue, kelly, maybe thinking technical bunk. either way, you can see that gas prices both the united states and in europe are on the rise again. as of wednesday, gas problem is going to take down the gas flows into germany that's going to damage their ability to get up before winter and lead to gas rationing as we talked about >> right this time forced this he said 15% would get us through the winter basically if, you don't do it, we'll have to force you. but this hasn't been agreed, to has it i thought that was maybe this week that they wanted all of the ec members to agree on kind of this joint move on energy.

germany, you chose this energy policy you got us into this mess. we don't want to do it spain is basically saying, this is your problem, deal with it. we're not going to ration gas or our economy because of problems that you made. this is what's going to be interesting. we're seeing sort of the far right in france start to rustle around and make noise about germany's problem as well. if they get -- even if they pass this proposal for these volu voluntary cuts, will they do it? the steel mill that we were at, the guy that runs it said are they going go business by business and say, yes, no, yes, no what if they kill one of our suppliers? they let us stay open. but our supply chain or trucking company are shut down then we're shut down. nobody knows how the mechanism may actually work.

they're also going for a potential mandatory mechanism, kelly. if we get to that point, i want to make this point crystal clear. if you say i'm rationing energy, you are saying we are rationing the economy. in many ways the economy is simply just turning energy into productivity you can't ration gas and not effectively say we're going to a a hammer to the knee of the german or eu economy >> say that again. it's turning energy into productivity i love the way you put that. >> yeah, the economy many ways is turning energy into productivity you use energy to make stuff, drive stuff, travel stuff, whatever it is energy is the -- you can't take 15% of energy off line and expect to have a similar economy. the question is how much of an economic hit might that be >> right how much will this impact german gdp? is that a steep and deep recession? >> right we saw estimates of okay, we're going to trim growth by half a

point to a point i hope that's it because what we're potentially looking at would be a much larger hit than that brian, we'll leave it there. thank you, brian sullivan. >> coming up, volatile and directionless. that is how my weekend felt. but that's how my next guest is describing this market environment. he still sees opportunities in stocks and we will get his picks next mcdonald's and we'll report the numbers. and as we head to break, let's get a quick check on stocks where where he see the dow now at 100 points. building on a stronger gain. small caps up .6%. nasdaq down .25% nasdaq down .25% we're back in a moment bubbles. bubbles

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sanguine on the market what are you bracing for >> that advice about being defensive is kind of permanent advice, right? we always sort of lean in to higher quality but we do have a longer term perspective there. but we always like the types of companies that we're talking about that are dividend growers, good free cash flow generators, better balance sheets which means they can kind of withstand longer periods of difficulty and, frankly, are the types of things that for the most part have done a lot better this year >> you like verizon. and i know some people who hate that stock after last week now >> well that's why i like it because of the people you know who hate it. it is a pure contrarian play here 8 1/2 times earnings 5.5% dividend yield that is not compromised and not in jeopardy.

they could stay in a struggle point for a while. they have a way out of the tough periods that have the cash, have the balance sheet, have the strategy to go forward but are just out of favor as you say, people that hate it right now but that is priced in. that is what an 8 1/2 time multiple tells you we think investors will get paid if they patiently wait through this and get those dividends along the way. >> i think if i were to put it sort of more cosmically, they're mad at verizon because they say i was in this for the dividend and now in one week you wiped out all of my returns and why i did bother and what is the point? and can i trust these names? can i trust voluerizon can i trust it in the longer run or the dividend yielders here. some say that verizon would have what you would say to the investors who feel a little

rudderless. >> yeah, the idea about the stock price, wiping await dividend misses the point of being a dividend investor. people got the dividend. or they got more shares at lower prices that compounding effect is actually very valuable and the fact of the matter is that unless they're needing to selt stock have to sell the stock because they have to buy a boat or pay bills, by holding the stock, the dividend itself htells you the long term direction. we want to look at it as a company k companies have up and down periods of time the dividend is the management respecting the shareholder along the way through difficulty but i have to say, i agree that people are looking at this saying the secular challenges. why trust a company like verizon versus an at&t at&t levered themselves up bein a of most countries. the time warner merger was a

debacle. m & a doesn't know what to do. verizon resisted the temptation to go into the celebrity content game so they have been more faithful. they're in a tough business. it's very capex sensitive. but they have not been untrustworthy the way at&t is and at&t ultimately cut that dividend verizon's dividend sustainability is why people should trust it. >> that was a great -- that was a stirring defense i'd like you to be my defense lawyer some day. what are other names or areas or final pieces of advice that you would leave people with if they listen to that and say, okay, i'm onboard. what i do do now >> well, okay. so another company that people really didn't trust for a long time was blackstone. it's an asset manager. they are really involved in private equity, hedge funds, real estate, and that stock was around $30 for a long time but

pag paying around 8% they really executed great people on wall street finally saw what this company was about. it's back down to 96 right now they are kind of guiding lower i believe it's a fee based business that has $170 billion of investor money in cash to go out and invest if we do have a recession. i think the company at blackstone earned people's trust. >> over 5% 5.3% fascinating. david, thank you so much for all your time today. we appreciate it >> thanks, kelly >> still ahead, the solar companies are also set to report earnings this week and the stocks held up pretty well this month. are they a buy ahead of results or not plus we talk a lot about the future of work post pandemic what about the future of vacation we're going to look at how executives are managing time off and what it means for the bottom line the exchange is back in a couple

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welcome whback we're up 79. nasdaq still down .3%. the housing stocks are underperforming today. that's all weighing on the hebtf. some of the names are up big in july william sonoma up 22%, having the best month since last august floor & decore up 18%. let's get to our cnbc news update >> kelly, thank you. here's what's happening at this hour police in dallas now say an airplane terminal at love field is secure after a 37-year-old woman took out a gun and started

shooting at the seali ceiling flights at the airport have been halted. >> pope francis was at an indian rez dntial school. he is apologizing. the canadian government admitted that physical and sexual abuse was widespread at the schools which operated from the 1800s to the 1970s. west virginia democratic senator joe manchin is isolating after testing positive for covid. he tweeted that he has mild symptoms and is fully vaccinated and boosted and will continue to work remotely. his absence may complicate his efforts to pass bills in the evenly divided senate before it starts the summer recess and in the last few minutes, alaska republican senator lisa murkowski's official twitter account said she, too, has

tested positive. tonight, why more people are planning to take shorter vacations. that's at 7:00 p.m. eastern. kelly, back to you >> we'll have more on that in a moment thank you. still ahead, supply chain, labor pain and rising interest rates just many some of the challenges these three companies have to navigate we'll get you set up for these three companies next in "earnings exchange." (dad) we have to tell everyone that we just switched to verizon's new welcome unlimited plan, for just $30. (daughter) i've already told everyone! (cool guy) $30...that's awesome. (mom) it's their best unlimited price ever. (woman) for $30 a line, i'm switching now. (vo) the network you want. the price you love. only from verizon. another busy day? of course - you're a cio in 2022. but you're ready. 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.

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welcome back to "the exchange." we have a third of the s&p 50, 40% reporting. we have the action, the story and trade on three companies that kick off this critical week all reporting in the next 24 hours. after the bell today, the first up nxp semiconductors. the shares are down 24% this year but they're up 17% in july it's the second best performer in the smh half of the revenues come from automotive the street also looking for numbers and guidance on mobile demand we bring you the story today

good to see you. welcome to you both. kristina, big one after some mixed signals from the other parts of the semispace lately. >> i'd say mixed signals across the board. we're expecting, you know, supply chains to ease and then as well muted demand so across the board you're starting to see that repricing you're starting to see some expectations lowered but for nxp, you mentioned a key point. 50% of the revenues come from the auto sector. sounds like good news, especially as maybe some of the supply chain problems are easing even volvo ceo said that they have all of the semiconductors in order there is the issue the strength is expected to come from evs nxp underexposed in evs. you have the china lockdown that's are still in play and then the second problem is whether there is going to be an inventory correction you know, inventory have been

relatively bloated and double ordering as well so what does this mean for nxp's guidance going forward stock is expected to hit $3.35 eps earnings per share on revenue up $3.26 billion having the best month right now since june 2020. >> and it's been a sleepy mover the last four quarters 1% moves options are saying maybe 7%. what would you do with the stock here >> hi, kelly this would be a hold for me. one thing that is deep near the sector out to the consumer, we're seeing cracks in demand, right? they're starting to pop-up that is going to be an issue for them they have the large part of their revenue share towards automotive we still have supply chain issues and in that environment that is hampering a lot of growth stocks. the rumor about the stats and dealing with something that helped them rebound a little bit over the past month or so. so i think there still growth issues there near term i would be holding on. i think you'll get through that

in 2023, 2024. >> all right we move along then thank you. to pulte group, down 20% this year mortgage rates double. but shares are up 13% in july alone. a similar trading story as nxpi. builders continue to report strong demand and slowly clearing backlog we have the story for us >> as you obviously know because we talk about it all the time, june is the real turn around that, big u-turn red hothousing market i'm looking less at the top and bottom line numbers. they're likely to be very strong i want to see the cancellation rate we saw d.r. horton report jumped up. i'm looking at any guidance that might change going forward anything on pricing as well. mortgage rates did pop-up significantly in june after rising steadily from january again twice what they were in january. an also we saw builders sentment plunge historically in july. that's what we're looking for

going forward. for the builders, it's all going to be about that outlook ahead especially when we look at potential supply chain easing. the we're starting to hear rumors does that mean they're able to build the homes faster and have much bigger backlog if they're not able to sell them now? we get sales tomorrow as well. so that will play into that. for pulte, it's what the look is ahead. >> i've been drooling over the home builders pes. carter this morning who was bullish as a pair trade on the builders for the past couple several weeks is saying take your money and run what do you say? >> >> yeah. i would agree with carter. the values are strong. low pes. i think it's before reason the big picture is getting less, less rosey if you go out we mentioned the rates going up about 3% that is people that are potentially using cash flow, using cash flow option as well so if you look at it in the near term, a couple things pop out.

affordability is going the wrong direction for everyone out there. there is more cracks in the housing market you take a negative turn on housing starts looking at the cancellation rate is really important. the peak already happened. i think we're going the opposite direction. i think the market priced a lot of that in for good reason >> all right diana, thank you let's move along to mcdonald's now. the dow component down 6% this year as they navigate the labor issues all the franchisees unhappy last week kate rogers has the story. not a lot of positive headlines from mcdonald's, kate. >> we'll see what happens tomorrow morning but so fair they're expecting $2.40 of revenue on same-store sales. 2.8% in the u.s. the u.s. number is always key. we're watching to see how consumers are reacting to gas prices and inflation in general.

and if they pulled back at all last quarter mcdonald's executives did mention some customers looking to lower price point items. but they said they were still ordering delivery which is much more expensive than going through the drive through and store. grocery inflation, remember, continues to outpace restaurant inflation which is beneficial to companies like mcdonald's in a recession. fx headwinds already in focus. the company warned there will be a drag of about 8 to 10 cents on eps. they're projecting that could be higher the russian business has been sold off so update on that will be key as well and as you mentioned finally, any mention of franchisee tensions over changes to lease terms and the restaurant grading systems that we've been reporting on will be of note on that analyst call. >> all right you've been neutral on nxp, bearish on pulte or builders but on mcdonald's, you're a little more bullish. >> definitely one we hold and a hold or buy for people looking for opportunities in a stock that's been, you know, you can't really get close to recession but you're getting close to the

recessionproof there as just mentioned. we were talking about predictable revenues a lot of the business is in the franchising model. cash flow is great in the margin and cash flow generation that is obviously an ability for them to, one, buy back stock and also increase the dividend payout ratio of course as well so i think for investors, if you look at the five, ten year chart outside of covid, it's been a steady up trend for investors to get capital appreciation and to get dividend cash flow i think this is a great stock for people to be in they're looking for that predictable revenues and strong appreciation >> i'm going to leave it there going to do a straw poll here. are you overall nervous into this week, this earnings season this marked like everybody else? >> i would say yes if with you don't get solid numbers on the back of, you know, one, you know, easier projection, then we're going to potentially be in for another down trend

we saw decent numbers last week from the banks i think thathelped pull us forward to the market. it's shaky ground. >> all right thank you for your time today. kate rogers for giving us a preview of mcdonald's as well. still ahead, summer is in full swing. new research shows time out of the office is good for employees, for executives, why americans need to get out of the office is next dolly varden silver is advancing their high-grade undeveloped asset in bc's prolific golden triangle. the property includes two past producing mines, and over 135 million ounces of silver equivalent. dolly varden.

unplugging and taking time-out can prevent burnout a new survey find that the majority of american professionals plan to take less or shorter vacations this year sharon epperson talked to executives about how they manage their own vacation time and their employees' time off. sharon >> well, kelly, sometimes vacation isn't all that restful. that's when the e-mails and messages keep coming in. a few companies though are

offering a new perk to fight burnout and give employees a real break from work company wide holidays when everyone is off at the same time she is back from a company wide week long holiday at bumble. like many professionals, she didn't completely disconnect >> i also very tactically think about doing a few things when i'm on vacation to kind of help me unplug and also kind of stay plugged in at the same time. >> a vice president for the dating app platform, she spent that time off with her husband and new baby >> when i'm away, i feel like not only am i, you know, refilling my glass, right, i kind of am able to get reenergied and just feel ready to tackle whatever problem, question, challenge we may be facing that week >> the idea of a company wide vacation is slowly starting to catch on tim ryan leads pwc's 60,000 u.s.

employees. the consulting firm has two company wide week-long breaks each year. do you see as a leader a difference in the productivity of your staff when they come back >> it's hard for me to measure and say we've got increase in productivity since we come back. the energy in the place is just incredible the energy and the enthusiasm is amazing. that translates to my productivity and happier clients at the end of the day. >> companies are trying new strategies because their employees are stressed out and burned out and they're taking less time off. they found 63% of professionals say they will be taking a shorter vacation this year 58% say being away from the office stresses them out more now than in the past disabling notifications and checking in while she's off helps her manage her stress. >> for five or ten minutes in the morning every day, when my daughter is napping, for example, i'll just do a quick scan of my e-mail.

i think it's important for me from a kind of recharge and restorative standpoint to just know what's going on in the background >> many companies understand the importance of time away. but not everyone gets a break. according to the center for economic policy research, workers in countries in the european union are guaranteed at least 20 paid vacation days a year yet nearly a quarter of american workers don't get any paid vacation time at all, kelly. >> there's an insight here when one person is gone and we still check because you don't want to come back to the office and have to spend an entire day answering e-mails and dealing with that. so if the whole company is shut down, there is less to worry about at the -- in the background do they charge you for, like, taking your vacation days or does that not count against them >> you bring up a really good point. he said he's doing this and what exactly is he going to do on vacation set the tone let people know i'm taking the time off if it's from the top and he's

taking time off, then i should be able to take time off and then it really gives people more of a comfort level. you have to have the skeleton crew but it gives people the idea that they can take a break which a lot of times a lot of us don't feel like we can >> doing it nationwide a lot of people shut down the week after christmas now with juneteenth and july 4th, you're noticing that becoming a mega holiday >> there are for people doing it especially fit doesn't cut into your already planned, already alotted paid vacation time. >> sure, thank you really thank you. sharon epperson coming up. bonds have had a difficult year. but with rates sagging lower now, is the worst over we will discuss after this quick break.

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welcome back to "the exchange." the muni market is supposed to be a sleepy place. but instead it had a terrible start to the year. the mub-etf sliding about 8% through the end of june. the first quarter saw the worst quarterly returns in 40 years prompting $75 billion of outflows but the next guest says the

worst might be over. joining us now is nisha patel. it's good to see you again what are clients doing >> yeah. so, look, i think the bad news is in the painful part for investors is obviously the huge in yields and the negative returnsa you mentioned for many fixed income markets and in particular for munis and because munis are primarily owned by individuals and when you do see a significant upward move in yields where munis have underperformed, say other asset classes even when rates have stabilized so what that creates is an incredible opportunity for investors to now invest at high tax-free yields, right the short end of the curve, an incredible amount of tax-free yield that clients are able to capture and this is something that we haven't seen since 2009 and 2010 the good news is so far this

month the bloomberg index is posting positive returns of almost 2% and that's telling of some of those outflows certainly abating and more interests coming in as invests on are seeing value here. >> it is weird to have muni bonds trading in parity or in line with treasury bonds, right? because you think, okay. if they're both going to offer the same yield i'll take the one with the better tax advantage. it seems like that moment told us, okay, maybe now this asset class has gotten too cheap i don't know >> yes that's exactly right, and the main thing here also to point out. unlike other sell-off periods you could not have a credit story from a fundamental stand point. so this was not by any means credit related and it had to do with the significant rate move that fixed next markets have seen and credit fundamentals have extremely strong that municipalities went into the 2008 timeframe

if we do see weaker growth and recessionary downturn here, we think credit fundamentals are very strong. and so today, valuations again in the ten to 20-year part of the curve are optimal and because rising rates were a worry for quite some time and retail investors have shied away trt longer end so when you take a look at valuations today on a tax-equivalent yield basis investors can lock in 6% in the 16 to 20-year part of the curve. so certainly a great opportunity we think to leg in this market >> so we look at the fundamentals being strong. obviously, a lot of states are dealing with excess stimulus funds and things like that right now, but what do you think if we're heading into a bigger economic slowdown? >> so when you look at particularly investment-grade munis, as well, you will see that repercussion of a slowdown and weaker growth period for it

to start to show there and even in the high-yield space it is still very low and credit fundamentals still in the higher space are fairly strong, we don't see the default rate taking up significantly and for again, municipal credits especially across states and cities almost their 2 trillion of aid have gone out to municipalities over the past two years as a federal stimulus plans. so state revenues have come in far higher than expected many cities and states are sitting on surpluses, so i think they're much better positioned today than they have before now. that's not to say credit monitoring isn't going to be important. >> right i think professional management and bond portfolios is very important and one last thing to add, our clients you had asked earlier what are they taking advantage of at parametric and our municipal portfolios, we're harvesting and making lemonade out of lemons, if you will and that's been an

incredible opportunity that we're able to do throughout the year to take on -- that's a great point nisha, thank you appreciate the update. >> nisha patel with parametric >> is that a good harbinger into earnings or a sign expectations are too high it's next "e chgeonthexan." ♪ ♪

♪ ♪ ♪ welcome back one more thing before we go. it's about earnings, of course, and this time it's about the solar stocks which have had a pretty good run over the past three months with a 14% gain with the tan etf and that was our tease into the break major players like enphase and first solar and pippa is here with what's top of mind for investors and the street >> hey, kelly. solar stocks have gotten a boost

in the last few months and still in the red for 2022 and many are sharply below their recent highs and there are a couple of key things to watch and number one is inflationary pressures. this has been a key concern for the group amid a spike in raw material costs recently we've seen copper, steel and aluminum pull back which is good for the industry, however, poly silicon which is critical for panels remains elevated pricing power, since costs are rising across the board, the company's ability to pass those along to customers without sacrificing volume is important. so, in other words, our companies are maintaining their margins and finally, commentary around the broader energy complex. europe is trying to reconfigure its energy system while in the u.s. we're surfering from record temperatures and spiking energy costs. this, in theory, helps clean energy so on a stock-specific level, goldman favors enphase and

solaredge which can raise and beat the quarter the firm also likes sunrun meantime, piper sandler downgraded sunrun and sun nova to neutral so differing opinions here, kelly. >> pippa, we know ev sales have gotten a boost from the high cost of gas. i had a friend over this weekend who was bragging about her and it was a month's long wait just to get it. what do we know about the extent to which high prices have caused, if they have, a boom in solar installations? >> we have seen record demand and the cliff side is can supply keep up? the longer utility rates remain high pg&e out in california they're raising prices by 20% this year, so that has real, real consequences for customers across the board and it makes the longer term case for solar more attract of and they saw more than 1,000% increase in

searches over the past month around whether or not if you have solar and storage how you can survive a power can outage, and it doesn't mean as one data point as well as spiking utility rates. as i've said before, we looked into it and felt like it wasn't ready for prime time, but with every passing year maybe we're getting closer pippa, thank you very much, our pippa stephens how one company is using clean energy to provide disaster relief coming up on "power lunch. >> and welcome, everybody, to "power lunch." happy monday i'm tyler matheson president biden with the chips act and set to move ahead in congress and it could move subsidies for the semiconductor business and dividends on pace to set a record this year, but there are a fe