responded poorly to earnings but is regaining footing like gm next week. my final trade. >> joe t.? >> reestablished a long position in abbott labs health care still carried it in overweight. >> thanks for sharing that with us i'll see you all in "overtime. now to "the exchange." >> thanks. i am in for kelly evans. here's what's ahead on "the exchange." banks tend to out perform in a rising rate environment and this time around the community banks are the big winners. we'll talk to the ceo of texas based bank about that and why he believes inflation has peaked. plus we are more than half way through earnings season but there are still big names on deck from pool rides to pinning to planes. we'll get the story on trade, uber, pinterest, and jetblue home prices are cooling off while inventories build. will it be enough to solve the affordability crisis

why it could still take more than a year for the housing market to normalize. we begin with today's market action that means don chu is here with the numbers. >> we've seen both positive and negative movements in the markets so far today right now it's been at least a marginal move. fractional on either side of things as things stand right now 31 points for the dow 32,876 about 0.1 of 1% gain. the s&p 500 still above 4100 but 4,128 just about flat so far on the session. up and down fractionally again the nasdaq composite index a fractional gain up about 0.25% 12,414 the last trade there. one place you are seeing much more profound movement in the market is in oil and gas, specifically those prices tied to the commodities wti u.s. benchmark crude $93.81 about 5% down side world benchmark, ice brent futures almost a hundred dollars down around 4% energy sector spdr down 3%

exxon mobile halliburton some of the under performers so far on the session. energy been a very volatile trade so we'll see whether that plays out. right now the worst performing sector in the s&p by a wide margin and then one other stock to keep an eye on today is an s&p 500 chip component it is not one of the more known ones we talk about, not nvidia but it is on semiconductor those shares off 4.5% right now on the heels of better than expected earnings and revenues and current quarter guidance pretty much better than most analysts' expectations on a consensus basis so that set up again going into the report was pretty solid going up in there that is why you're seeing the pullback by about 4% still the semiconductors a key component of the trade and technology and certainly one of those perhaps leading indicators of the overall health of the market especially technology we'll keep an eye on it. i'll send things back over to you. >> another indication from amd in a couple days, dom. thanks

the markets kicking off a new trading month with big shoes to fill following the best month for the s&p since november, 2020 will the momentum continue or have recession fears tempered expectations for the second half joining me now is hugh johnson chairman, cio, and chief economist of hugh johnson economics. hugh, so which is it i mean, has inflation peaked are we heading for a soft landing? what do you think? >> well, i do think inflation has peaked we'll still have elevated inflation numbers and you'll certainly see that in the july number that is coming out on august 10th. you'll see a pretty high number. it is not going to be too bad, not as bad as the last month but the numbers on a year over year basis remain a little bit on the elevated side but in the process of coming down so when you get to the fourth quarter, i think we'll be looking at 6% to 7% inflation and when we get into 2023 i think they'll come

down to about 3.5% things are headed in the right direction. you saw the numbers from the purchasing managers this morning. you saw the number being a real decline in prices paid that is a leading indicator of inflation and that is the kind of thing we are seeing and it is telling me inflation is coming down i think inflation is coming down and of course the economy is very soft and the only question now which the markets are asking, investors are asking, is when will the fed take a hard look at these numbers and maybe pause or take their foot off the brake? >> you're betting it's when, december as opposed to later than that? do you foresee the fed actually cutting next year as the bond market seems to? >> yeah. i do see that, john. what you're likely to see is first of all i brought my numbers down to what i ek petke from the federal reserve, a little bit, not much 50 basis points in september maybe 25 in november 25 in december that will be it. i think about that time they'll

be seeing or looking at really soft economic numbers and of course a decline in leading indicators of inflation. i think by the time we get to second third quarter 2023 we'll reverse all of this. in other words the federal reserve will be reducing interest rates not raising interest rates or even thinking about raising interest rates so i think we're headed in the right direction. that is the message of the markets. the markets are telling you that in time the federal reserve is going to, say, become a little bit less aggressive and that is why the markets are performing as well as they are. what we really need -- >> here is what i don't get though a few months ago talking about how hard, next to impossible it would be for the fed to pull off a soft landing people are like oh, the fed doesn't know what they're doing. they'll mess this up now we seem to be talking about a scenario, well, where, soft landing. yet the fed is going to be cutting next year as soon as next year. are we talking about the wrong

thing with peak inflation? should we be talking about the health of the consumer overall, quickly declining savings rate and the idea perhaps couldn't sumer taps out before we get through q4 >> you're saying there's a lot of questions about the economy and we don't know the soft landing scenario quite frankly i don't know if what we're in right now is a hard landing or recession. two quarters of gdp says a recession but if you look carefully at the numbers you would say a soft landing i don't know if you call it a soft landing or a hard landing the real issue to me is it doesn't matter what you call it. the fact is the economy is slowing and the question is, when the economy is slowing and we start to get better numbers on the inflation side of things, will the federal reserve respond to that by becoming less aggressive that is what the markets are counting on. i think that by the time we get to december that will be fairly clear and the federal reserve will be in time taking their

foot off the break and we'll see better numbers really the only question then is once they start to do that when will we see numbers that make you feel better about a recovery in the economy, things like consumer confidence? that's coming in 2023 we'll have to wait and be patient till we see those numbers. those are really important numbers. >> indeed they are the fed is easing off because things are looking really bad, if the fed is easing off because things are looking really bad that is a different issue. thank you. we've been following how regional banks benefited from rate hikes the etf out performing the broader market and s&p bank etf year to date. a regional bank in texas is out performing both since the fed's first 75 basis point hike in mid june and the stock is up more than 12% the bank beat earnings estimates in the latest quarter and hiked its dividend by 16%. joining me now is the chairman and ceo.

phil, let's talk about the impact of this environment and what you are seeing from your customers. i am particularly curious about the savings rate you say the balances are relatively strong but given the inflationary environment how quickly might that strength erode and how much confidence does that give you >> first, thanks for having me i think it is going to be interesting to see we were talking recently with our retail team about what are we seeing in balances and the word used is solid solid balances, still higher than they were prepandemic though some of the lower socio economic sectors you could see more stress there because of inflation, etcetera really the balances continue to be strong on the consumer side we've seen good interchange activity not because of so much increased numbers of transactions but because the average level, average price and

size of the transactions is higher that is related at least some for inflation. what we are seeing from the consumers is good so far we'll see how it goes as it continues on >> i wonder about a bifurcation you have a sense of this than i would during this particular economic turbulence where because inflation is driving it so much, the working class, maybe lower middle class, consumer, is struggling a lot more than others in the market place. now, how might that -- am i right about that first of all? and how might that play out in consumer activity the rest of the year >> i think it makes sense what you are saying people with less resources will be impacted more by this inflationary cycle and that is something we need to be concerned about. one of the things we've done is helped with recently what we call an over draft grace

product. for a hundred dollars and under you can get a free over draft in our company. we've had 60,000 families that have taken advantage of that and are using that as they need to pay these higher prices. you have to make sure your product set is responsive to all porings of the market which includes the lower segment what you are saying that makes sense is there will be more pressure there on the commercial side of the business what we are really hearing is the economy in texas where we operate is solid. in fact i'd say it is really strong we don't hear conversation about recession. we don't hear that much about inflation. what we really hear from main street is what is going on with labor, where do i get a next person to hire, how much do i have to i have to pay them and what is the supply chain bump going to be next >> let me ask you sort of in between, i guess a little more

consumer but having to do with mortgages and the impact of interest rates and potentially softening in real estate values. do you see people tapping into equity as much as eagerly and how do you expect that to shift if current trends continue through the rest of 2022 >> interesting we are seeing more activity around home equity lending, line of credit, also home improvement. people are tapping into equity, using it to improve their homes because with home prices it is harder to get homes and with interest rates going up makes it more difficult we've seen a tremendous increase in our growth and consumer related to home equity you're right about housing one segment that is slowing some i think our home building customers in north texas were telling me recently that we want

to see some slowdown because they need time to catch up, time to build a house in texas going from 120 days to 210 you'll see some slowness in the activity around housing and we're beginning to see that today. >> what indications would you have if the labor picture is getting healthier. i don't want to say better if you are a worker you like the higher wages you want to be in high demand but as an employer your commercial folks are saying how long do i have to pay top dollar for labor what are you seeing locally that gives you an indication which way that is trending >> what we are seeing individually as a company and hearing others talk about is the price of labor what are we saying are increases in miracles, our increases in may were the highest ever historically in our company, raised minimum wage from $15 to $20 at the beginning of the year, a 33% increase

i don't think we've touched bottom yet one thing we have seen recently is we have numbers of applications increasing so that is a little bit of an optimistic sign. >> phil green of colin frost bankers with that local insight. thank you. very helpful. >> thanks. to hear from more executives and entrepreneurs join us virtually on wednesday for cnbc's small business playbook we'll have insights and advice from experts on how businesses can address inflation, supply chain disruptions, labor challenges, and more to register go to cnbc events.com/small business. coming up, pinterest, caterpillar, and jetblue are set to report earnings within the next 24 hours. i'll tell you what the street is watching, get the traders' take on each one, but first hone in on uber with one analyst still bullish on the stock who sees it doublingfrom here. can tomorrow morning's results snap it out of the slump that is next as we head to break let's get a

quick check on the markets just about flat line let's call it for dow s&p 500 in nasdaq all about even only up 10 points which is virtually nothing these days nasdaq these days just about even the exchange is back right after this lily! welcome to our third bark-ery.

oh, i can tell business is going through the “woof”. but seriously we need a reliable way to help keep everyone connected from wherever we go. well at at&t we'll help you find the right wireless plan for you. so, you can stay connected to all your drivers and stores on america's most reliable 5g network. that sounds just paw-fect. terrier-iffic i labra-dore you round of a-paws at&t 5g is fast, reliable and secure for your business.

welcome back to "the exchange." uber results hit the tape before the bell tomorrow the street expecting a loss per share of 26 cents a share. and revenues of $7.4 billion shares are down nearly 44% this year but our next guest sees the stock doubling from here on the heels of a summer travel boom in europe joining me now is equity analyst at jeffries, brent, welcome. here is my issue sort of maybe you can address this about uber. it seems to me they're driver constrained a bit because they're not offering the subsidies they used to gas is expensive which isn't too exciting for a lot of drivers. and then for the riders it seems like the value proposition is a little different because the rides are more expensive than they used to be. i find myself driving more often than i would have in the past like i don't want to pay that much for an uber for a short

trip maybe not. why can they grow in this environment? >> hey, john i think all of those are very valid on top of regulatory, on top of the food business slowing. there is a huge wall of worry. this is the sing the worst sentiment of all internet. the stock trades at 1.7 times revenue. it is no doubt one of the worst overall sub groups lyft, stock is down even more. so overall excitement for this category is way down i think what is starting to turn is we are starting to go back to normal, back to work more in using uber work. obviously europe was booming i was in europe with my family and it was really hard to find ubers. we used the bikes more than cars and that is in partnership with uber which helped with mobility. overall you have a rebound in overall vacations, rebound in normal back-to-work, and we think the sentiment is completely washed out.

this is, make no mistake, not our favorite name. this is one of the names i think just totally washed out. and should be able to clear a 32% bookings comp for the quarter based on the demand trends we see so far for me it is a short term trade. i think ultimately there's better stories in our tech coverage than this story >> so it sounds like people should be really careful beneath that i wonder what are the conditions that drive profitable growth for uber in the beginning it was just kind of expansion on the map right? and they had lots of cash from investors that were helping them to fund that just top line growth then the pandemic actually helped them with eats but those are also unusual conditions. so from here how do they grow profitably at high quality with the quality experience for both drivers and riders and eaters? >> i think as we say in tech

platforms win and point solutions die. and they have become a platform. they're doing multiple things for the consumer that they're able to leverage when you think about what's happening with food, with delivery, with transporting us from point a to point b. there is a scale i think they've gotten much more conscious about spending like the rest of tech. they've been a lot more careful where they are spening money, pulling out of markets that don't make sense and going harder at markets that do make sense. there aren't a lot of markets. i got off the flight and it said ubers and i thought wow it seems like a small market for uber why don't they let the small local taxies take over there but i think they are making harder decisions i think that's good. you know, i think making the right call and pulling the right initiatives in. >> if point solutions die what does that say about say lyft and door dash which also have earnings coming up lyft, one could argue, is uber

without the international play and without the food but dash is really trying to diversify within delivery outside of just restaurant delivery i mean, are they point solutions? are they different >> lyft is lyft is u.s. only nothing else you nailed it. that's the challenge we have on lyft we don't have a buy on lyft. in our view they need something strategic to figure out how to diversify their business because there is no diversification. if you open up the uber app it is almost too confusing there are so many things you can do now on the uber app. i think to your point lyft is a point solution uber is a platform and then when we look at door dash i don't formally cover it but i am completely addicted to the service and i think many have been addicted during the pandemic that it is the way they go about getting food delivered. so door dash is a formidible threat to uber, no question.

i think it is very well run and they have in my opinion still the number one app for food. >> brent thill with good perspective as we await earnings on uber and others thank you. and don't miss uber ceo dara khosrowshahi discussing those results in a first on cnbc interview tomorrow on "squawk on the street" 9:00 a.m. eastern. coming up democrats on capitol hill have a new corporate tax plan to pay for their health care and climate change programs. corporate america is pushing back we'll tell you why and whose bills could be getting bigger. plus new data shows mortgage rates are hitting the 6% mark in june a big impact on housing demand that's taken a huge toll on pricing. the details are ahead. and you get this... you could end up with this... unexpected out-of-pocket costs. so if you're on medicare, or soon to be, consider this. an aarp medicare supplement insurance plan

from unitedhealthcare. medicare alone doesn't pay for everything. and what it doesn't pay for, like deductibles and copays, could add up to thousands of dollars. medicare supplement plans help by paying some of what medicare doesn't... and making your out-of-pocket costs a lot more predictable. call unitedhealthcare now and ask for your free decision guide. medicare supplement plans also let you see any doctor. any specialist. anywhere in the u.s. who accepts medicare patients. take charge of your health care today. consider adding this. call unitedhealthcare today about an aarp medicare supplement plan.

[zoom call] ...pivot... work bye. vacation hi! book with priceline. 'cause when you save more, you can “no way!” more. no wayyyy. no waaayyy! no way! [phone ringing] hm. no way! no way! priceline. every trip is a big deal.

welcome back to "the exchange." markets are treading water the dow and nasdaq about flat the s&p down fractionally about 0.3% here are some of the movers this hour perkinelmer the best performer on the s&p today the disease diagnosis company announcing an agreement to sell part of the business for $2.45 billion in cash to a private equity firm new mountain capital the move comes as the company looks to pivot into a high growth life sciences and diagnostics company. royal caribbean the worst performer on the s&p today the company saying it'll offer $900 million in convertible bonds due in 2025 that it will use to refinance existing debt celsius holdings shooting higher after announcing a long-term distribution agreement with pepsi which will also make a $550 million cash investment in the company.

and draft kings getting a nice bump after massachusetts passed an online sports betting bill earlier today. that bill expected to be signed into law by the governor this week up next pinterest has missed on revenues only once over the past three years the street is focused on 4x when it comes to caterpillar results. will jetblue's bid for spirit actually take flight we'll get the action, the story, and the trade on all three coming up in earnings exchange we'll be right back.

welcome back to "the exchange 30% of the s&p 500 reporting this week. we have the action, the story, and the trade on three key names. let's start with pinterest shares are down 70% from the 52-week high analysts will be watching for insight into advertising revenue, daily active user trends, and also the company's first report after announcing a ceo change julia boorstin has the story on pinterest and the head of technical analysis at oppenheimer has the trade. julia, you first >> well look i think the key question here is how much is pinterest hurt by the overall decline in advertising that we heard a lot about from both meta as well as

snap and twitter the question is, how bad does is that ad pullback for pinterest the fact that it is one of the smaller platforms mean it is an even worse position to navigate the challenges the other question is engagement this stock really benefited during the pandemic from massive growth in users but it has seen a decline engagement in recent quarters last quarter they saw monthly active users decrease 9% year over year. the question for this quarter, is the user number flat or down slightly from last quarter and then the final question is what are we going to hear from the new ceo? he is well versed in the world of e-commerce. and a lot of investors think this is a great opportunity for pinterest to lean more into its relationship with these brands, the fact people are pinning items because they want to buy them and transitioning this from being an advertising focused platform to one that really gets people to buy and transact on

pinterest itself >> attribution a big deal. that is why amazon's ad business seems so strong. that is my concern when i look at pinterest it dropped like a lot of ad dependent companies on snaps results but unlike snap bounced back has it bounced too much? >> we think there's some additional upside here i think pinterest really stands to benefit as a rotation idea as market conditions firm we are of the market recovery camp we reentsly published a study showing the initial stages of a market are typically driven by the prior bear cycle's biggest lag erds that includes pinterest. here is a stock that retraced most of its 2020 run up and against a still negative news cycle has generally stopped going down since may it's been building a base. so i think the trade here is as long as the stock is above $17

support, that is the recent lows it's been holding, we see additional counter trend upside in the mid to upper $20 range. >> interesting julia, which company is this more like? is it more like snap with the auction based exposure and the performance ad exposure or is it more like google's search business and amazon's advertising business which is much more attributable to intent >> look, the benefit that google has is not just the fact that search is so much about intent but google has such a massive established business i think pinterest would like to be more like google but has a long way to go before it could have that measurable intent and certainly nowhere like google when it comes to scale i think, though, that the opportunity for the new ceo in terms of driving it to be more about that intent and driving purchase activity on or through the platform but for now it is a smaller player, more similar to a snap

>> we'll see which one it looks more like after hours. thank you, julia next up caterpillar. shares are down only 5% this year as traders wait for updates on any foreign exchange and supply chain head winds. the street will also be looking for any construction industry outlook from this industrial giant. we'll have the story on caterpillar. >> reporter: hey, john as you know this is widely seen as a name that is sort of an economic bellwether. with the data sort of all over the place caterpillar's numbers and orders related to big machinery and equipment will be in high focus. we heard from exxon mobile last week talking about increasing capital expenditures so caterpillar sales of oil production equipment tied to drilling, pipelines, could provide good foresight as to whether production is in fact picking up and in which markets. we are looking at the stock up about 10% in the past 1 month, the best month in four but the stronger dollar as you say will be a key head wind. ubs points out caterpillar

generates about 57% of its revenue outside the u.s. the other big topic will be china. the picture out of china is less clear. you had apple last week say iphone sales came in better than expected despite the lockdowns there but then adidas in the retail apparel space cut its outlook because of weakness in china. what caterpillar says about its growth in that market, it makes 5% to 10% of its sales there i think will be key and give us an better picture of what is happening on the ground. >> thanks. what would a surprisingly good quarter look like from caterpillar and how likely is that to happen >> well, looking how the stock has traded i think it exhausted a lot of the down side into the july low our issue here is we're just unsure about the upside. here is why. we're expecting a growth led recovery in the market but we're not necessarily expecting one to be driven by reflationary themes

like caterpillar our take is macro trends resemble 2019 very closely we think back to that bull market and caterpillar participated but was a much bumpier path to those gains with some knee jerk reactions along the way. if i'm a trader here i am considering about lightning up on caterpillar on strength there is a gap at $212 that i think is going to act with some resistance and i'd be selling it >> seema, quickly, how much are interest rates seen as impacting caterpillar? i don't know from the analysts' notes, what have you, given that you don't buy this equipment for cheap. >> no, you certainly don't many customers take out loans to fund the projects, their real estate projects, housing projects and all of the different equipment they need to buy from caterpillar including excavators absolutely a stock and sector industrials in general that are sensitive to rising interest rates. but this is also a company that

works on longer term projects. so five to ten years out that could make it a little bit less prone to rising rates. we'll have to see tomorrow, john. >> especially if you think the fed is going to be cutting next year thank you. and a quick programming note the caterpillar ceo will join "squawk on the street" tomorrow morning after those results at 9:00 a.m. eastern time you won't want to miss that. now finally jetblue. shares are down 40% this year as investors seem skeptical of the spirit take over bid winning regulatory approval. investors also listening for any insight into consumer travel trends heading into the fall phil lebeau has the story on jetblue. >> reporter: hey, a few things people will be looking at. the obvious question that is going to come up during the conference call with analysts where do things stand in terms of progression toward talking with regulators getting the spirit merger approved by spirit share holders, etcetera. we know those calls are coming up but the business itself in terms of the airline, profitability

level, where is it relative to other airlines they had a really bumpy may and june for jetblue so that is going to get a fair amount of attention. what type of growth are they seeing in their strongest markets talking about the routes down to florida, the trans continental which has been growing, and obviously they've added service over the last couple years to the uk those will all be in focus during this earnings report and the conference call, yes plenty of questions not only about the spirit merger but also the northeast alliance with american airlines. remember the trial with the doj trying to unwind that alliance between american and jetblue, that starts in september it is right around the corner. lots to be discussed during the conference call. >> okay. well, the negative take on jetblue spirit was that really what jetblue wanted to do was keep frontier from getting it, right? they didn't really want spirit to begin with. so where jetblue is priced right now, does it particularly need

spirit or has it already gotten the benefit of this situation by frontier not having it is there down side regulatory or what >> this is a beta trade. if we are right about the market recovery scenario here airlines will be able to move a lot in a very short amount of time including jetblue, which is near its cycle lows and quite extended below the 200 day average. but this is a rental you need a tight stop. you have to sell it as well. i think there is a ceiling out there. what gives us concern in our work for the long term is that the stock recently fell below its july of 2008 relative low versus the market, the s&p 500 that indicates to us that this is still, that long term under performance is still intact. but it could move a lot in a short amount of time it is trying to build $8 you might be able to squeeze out

a trade into 10 from a very near term basis. >> phil, relative to other airlines, how healthy is jetblue operationally when you're looking at pilot relations and how much they reduced a lot of the airlines, their staff, and then tried to increase volume and have run into trouble. are they better, worse positioned, or about, you know, middle ground? >> i'd say they are about the same, john, in the same boat as every other airline out there. now look not all airlines are the same. some are better run than others. when you talk with analysts they have a pecking order in terms of who they think are the most efficient of the airlines versus the least efficient. but jetblue in terms of operational challenges, whether it is staffing, adding too many routes and not being able to meet that demand that was out there in june, they're about where everybody else in the industry is at >> okay. well, investors know what they need to know now or at least more to get ready for those reports. thank you.

now coming up the democrats' new health care and climate package could come at a big cost to corporate america how big? some estimate it could be up to $300 billion we'll look at why and which sectors could get hit the hardest. speaking of costs the starbucks union is asking the company to extend wage hikes and benefits to unionized stores. what the company says is it's not that simple. the latest on this breaking dra,exam nt. bubbles bubbles bubbles there are bubbles everywhere! as an expedia member you earn points on top of your airline miles. so you can go see even more of all the world's bubbles.

at fidelity, your dedicated advisor will work with you on a comprehensive wealth plan across your full financial picture. a plan with tax-smart investing strategies designed to help you keep more of what you earn. this is the planning effect. (dad) we have to tell everyone that we just switched to verizon's newp more of what you earn. 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.

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. welcome back to "the exchange." the deal reached by senators manchin and schumer last week on health care and claim the, well, the deal needs somebody to pay for it and democrats are banking on corporations to foot the bill to the tune of $300 billion. >> reporter: about 150 to 200 of the biggest companies in america

would be affected boo i this new tax. it applies to those with a billion dollars in profits or more and they would be required to pay a minimum rate of 15% government data shows the measure would raise $313 billion over a decade and half of the companies affected are in the manufacturing sector that is because they're more likely to have large capital expenditures that currently can be used to bring down tax liability. the national association of manufacturers forecast creating the new 15% minimum rate could cost the economy 218,000 jobs and reduce wages by $17 billion. but democratic senator joe manchin defended the measure today as putting fairness back in the system. he accused big companies of failing to reinvest when their taxes went down. >> they have had massive profits and the least amount of capital reinvestment in the last two years. don't use that excuse on me when you've got nothing at all to show for it.

>> the other swing democrat senator kyrsten sinema has supported this in the past unclear if she backs it now. without her blessing the whole package could still fall apart back over to you. >> which i guess is why it is unclear whether she backs it because she has gotten enormous leverage when i saw this last week i was like, this is like a trick play or a two-point conversion. i don't know when the last time was in politics with so much money on the line i saw something like this happen there's been all this talk about how manchin and sinema didn't sound like democrats anymore in that clip he sounded like a democrat what happened? >> yeah. i think one thing they were able to do is use the funds that are coming from this tax increase or closing of the loop hole as democrats call it as well as closing the capital gains loop hole and drug pricing negotiation. it would use all that money and they want to put a substantial portion toward reducing the

deficit. that has been a big priority for manchin all along. he got some assurance even if it doesn't necessarily reduce inflation it won't accelerate it that made him more comfortable with signing on to this agreement. you and me both were surprised, all of washington was surprised that they finally were able to seal this deal we'll see if sinema is on board as well. >> and the chips act funding that was like running back the kick and then doing an on sidekick anyway enough of the football analogies. thank you. let's get to another brewing corporate fight. cnbc obtaining a letter from the starbucks union to the ceo alleging the company is illegally withholding certain perks from unionized stores. >> starbucks workers united says it is waiving its right to bargain with the coffee giant over enhanced benefits kicking in at stores across the country today. the union sent a letter to the ceo that says it has no objections to the benefits and

that the coffee giant is legally required to offer them to stores that have unionized if there is no objection it says, quote, workers united refuses to stand by while starbucks cynically promises new benefits only to nonunionized workers and withholds them from our members. it is from lynn fox president of workers united adding that this does not remove the company's obligation to bargain over other items under federal law. starbucks announced enhanced benefits in may, pay increases for managers, more to come later this year including store upgrades and credit card tipping. it has maintained it cannot legally extend these to stores that have organized without formally bargaining over them. shultz has promised to invest more in workers and suspended the company's buy back on the first day to put the money toward improving conditions. smaller pay raises announced last october will still be available to union stores just not the enhanced benefits that the union is seeking for the 200 plus stores that voted yes on

the union. back over to you >> kate, it seems to me like if you're starbucks you like this you don't want more stores to unionize so you're going to give the benefits to the stores that haven't unionized and wait out as long as possible on the unionized stores hey, the bargaining is one thing when it looks like it is going to work for you. here is a different kind of situation. i don't know if you've been talking to legal experts in this but who has the more defensible position starbucks? the union? are they going to have to give them enhanced benefits eventually >> we've been hearing the gray area here. the union has already filed unfair labor practices against starbucks tied to these benefits and the lawyer says they are exploring further options and labor lawyers have said this is a gray area. typically new benefits have to be bargained over but given the union said it does not object the benefits could potentially be extended so we'll see where it goes from here. they've also added what is the

context under which starbucks is extending these benefits is it because it is a tight labor market and they want to keep workers happy or being done to chill unionizing as you said? that would be something up to the nlrb to decide it is kind of a tough call and could wind up escalated and end up there >> wow there's benefit i can see on one side at least to drawing this out a bit. kate rogers, thank you. >> thank you. up next mortgage rates sitting at just over 5% and higher rates are cooling home price growth but with affordability at record lows already has a new floor been put into the market? we will discuss after this quick break. "the exchange" is back itwn o. in any business, you ride the line between numbers and people. what's right for the business and what's best for everyone who depends on it. solving today's challenges while creating future opportunities. it takes balance.

cla - cpas, consultants, and wealth advisors. we'll get you there.

welcome back to "the exchange." yet another sign of a cooling housing market according to housing analytics firm black knight, sliding 2% from the previous month to 17.3% and to put that into perspective, during the 2006 downturn, the biggest single-month decline in appreciation was just above 1% joining me with more is vice president of enterprise research at black knight, in a way it

sounds impossible and it's just 1% of the slowdown in growth back in 2006 what's different about what we're seeing here? >> everything, right there's a lot different with what's going on right now and certainly we were at much higher rates of growth heading in and to be expected, right, with rates rising as quickly as they could or as they have. you'll see a slowdown in prices and certainly seeing the markets slam on the brakes very, very quickly in the summer months what happens to people who bought at the peak >> really, when you look at it, about one in ten mortgage properties have been bought in the last year and the dynamics are going to be very, very different depending on where you buy. we're seeing some areas of the country slow and pull back in some areas of the country remain extremely hot. you are also seeing larger down payments and lower ltvs than you traditionally do, right? i think it will vary significantly depending on where you bought at what time you

bought and how big of a down payment you put on your home among other factors. >> how does this change the behavior of existing homeowners, right? we were talking earlier in the program with the local bank texas saying people are taking more home equity loans and doing work on their existing home because it doesn't look great to buy something else is that what tends to happen more broadly >> it does and if the dynamics around equity are interesting and we'll see a shift from the cashout market that you have seen very, very heavy last year to more equity lines of credit and you're also seeing equity pullbacks and signs of that in q2 and we saw four of the five most equity rich markets lose equity in the second quarter so i think you'll see a lot of movement going on from the equity standpoint and borrowers that locked in to refinance their home and maybe other areas of the country will pull back as prices pull off peak levels. is this the fed, you think we haven't seen this kind of a slowdown in growth for a long time, but we haven't seen this

case of rate hikes, 275 basis point hikes some time in a row either. >> absolutely it is. this is the intended effect of the fed. they had an eye specifically on the housing market and it is the result of rising interest rates and the other thing that is a factor, the fed's policies during the pandemic that pushed it down to record low levels where we saw the home price growth and we saw a reversing because of how strong price growth has been in recent years and the secondary effect of rising interest rates and those together are pushing this to the lowest level of affordability we've seen in 40 years >> all right you pumped the brakes and the car slows down andy walton, thank you. >> thank you. coming up, cryptocurrency soared more than 60% what's driving gains and why this climb could continue, next. your shipping manager left to “find themself.” leaving you lost. you need to hire.

i need indeed. indeed you do. indeed instant match instantly delivers quality candidates matching your job description. visit indeed.com/hire

(woman vo) sailing a great river past extraordinary landscapes into the heart of iconic cities is a journey for the curious traveler, one that many have yet to discover. exploring with viking brings you closer to the world, to the history, the culture, the flavors, a serene river voyage on an elegant viking longship. learn more at viking.com

♪ >>back the the price of ether is lower, and climbing 60% since july. kate roone we what's driving crypto higher. >> the world's second largest cryptocurrency had an even bigger month you mentioned that rally with ether and it was up 60% and 70% for july and a 30% jump for bitcoin and both are struggling to get to the november highs the optimism around ether is specific to that cryptocurrency. there's the coin tied to the ethereum network which is used to build things like nfts and it's in the process of the software upgrade and the way it's run and validated as people called it and it's supposed to be faster in the way crypto is becoming more energy efficient and crypto's carbon footprint has been one of the biggest criticisms and that date for what people are calling the

merge, and the date has been pushed back before so there's still a little bit of skepticism either way, crypto investors are pouring into this day ahead of that date. number of addresses and spot volume jumped in july and seeing the bullishness and the funds strat shows a parabolic increase and it's getting close to the high we saw back in november the majority of those are call options and the option to buy the december and aseptember rate that have a sustained ethereum back to you. >> may into june, ethereum to bitcoin, right had its biggest drop in a long time so the value of ethereum versus bitcoin. so and now it's popping back up and still not where it was in early may.

so it sounds like maybe people should be careful? >> absolutely. it's seen as one of the more speculative coins. bitcoin, within cryptocurrency emerged as a little bit of a safe haven and it seems to be more stable and people are more comfortable taking on more risk and consumer sentiment is increasing -- the smaller cryptocurrencies and those rally often means more risk taking. >> thanks, kate. that will do it for the exchange "power lunch" starts right now ♪ ♪ welcome to "power lunch. i'm contessa brewer along with tyler matheson here's what's ahead. how's the economy doing? that depends on who you ask. w we're looking at it from three distinct points of view. could big tech about to go on a big buying vee we'll tell you what is on the shopping list for microsoft,