one of the primary beneficiaries of this. >> mr. wonderful >> nvidia went on sale they missed on gaming but what they make is going to be in demand in all 11 sectors of the economy. either data centers or semis i think that's a trend that's going to stick for years to come >> joe t., last word >> still long uber >> and there we go actually made it on time that does it for "halftime." "the exchange," it begins right now. >> thank you, frank. hi, everybody. i'm kelly evans. still pregnant and here's what's ahead this hour stocks have now turned lower although we're fighting now between positive and negative territory after this morning's big gains. even after the s&p hit a key technical level. is it nvidia's fault the chipmaker's shares down 8% after they suddenly preannounce second quarter revenue this morning that was far short of estimates. we will have all the latest. and should the fed just sit back and let the job market rip or should they hike more aggressively we'll talk about which response is right following friday's hot

report with former fed governor randy crossner and the democrats are close to a historic win on climate and tax hikes with the inflation reduction act. the industry's most impacted and will it propel dems to a victory in the mid-snermz what would the political fallout from that be but first to today's markets dom chu has the numbers. >> kelly, the numbers here as you point out are near the session lows i'll just give you some context right now. as kelly pointed out we did see some pretty decent gains earlier on in fact, for the s&p 500 we were up at the highs north of 40 points to the up side. we're just slightly in negative territory now, down by about two. 4143 the last trade for the s&p. the dow industrials up about 28 points, relatively flat on the session right now. but again, session lows, 32,833. the nasdaq composite index flat for the day, 12,658. again, a lot of momentum has come out of this marketplace technology may be a big part of that story but one place that we saw a lot of activity early on but that

has also seen fading momentum is in some of those alternative energy electric vehicle type stocks on the heels of that inflation reduction act passage in the senate. why it could be good for some of these alternative energy type comp companies. and for that reason we saw tesla posting some deevt size gains, holding on to some of those. charge point holdings one of the charging plays in there. but check out enphase energy down 4 1/2%. solar edge also higher at one point, down 2 1/2% and constellation energy's been hoilding on to some decent gains. even traditional energy companies with exposure to wind and solar energy, some of those alternative types doing pretty well in today's session. so we'll see whether or not this was a kind of buy the rumor and sell the news type situation and then one of the stocks out there that's getting a lot of attention and an earnings miss is palantir technologies down about 12 1/2% right now this is one of those companies that's maybe been a little emblematic of the interest rates

hitting momentum stocks, hitting growth-oriented stocks, changing valuation concerns but palantir's results did nothing to allay investor fears about whether or not growth stocks could be a place to invest right now we'll watch palantir shares, kelly, right now down 12 1/2%. not an s&p 500 company but still maybe a telltale sign of that growth trade i'll send things back to you >> single digits below ten bucks. dom, thank you very much meantime, nvidia is on pace for its worst day since may after warning second quarter revenue is more than a billion and a half dollars below estimates the chipmaker blaming the shortfall on weaker than expected gaming revenue. said it's also adjusting pricing and inventory to battle, quote, challenging market conditions that are expected to persist into the third quarter now, this is dashing some hopes that the semi stocks can resume leadership after their woeful start to the year. the semi etf, the smh you see there, down about 22% since january. but at the same time it looked a lot worse before that sharp rally since the start of july that has seen the sector surge

about 20% off the recent lows. so is that run now over? for more let's welcome in chris roland senior semi analyst at susquehanna group. chris, it's great to see you you must have been surprised by that this morning. what did you think >> kelly, we were not that surprised. i don't think the street was that surprised so we track retail gpu prices. we've seen them crashing over the past two quarters here and retail inventories building up i would say maybe the one surprise is the magnitude of this miss on gaming. the other side of this is data center data center was indeed a bit worse on supply chain issues but i think the smart money knew that something was coming. it was just about the magnitude. >> it's the stock drop, chris, though 8% tells you this wasn't priced in >> this reminds us of 2018 when

the stock dropped 50% on the crypto hangover. so there are three things going on today we have that crypto hangover as ethereum's moving to proof of stake. we have the reopeningar or the work from home hangover. and then we have a new card line-up, the 4000 coming at the end of the year. and all of this has created massive inventories out there. this had to be unwound it's being unwound now it's a big move. 8% down isn't that bad compared to that 50% move that we had in 2018 >> so then this move since early july, you think it's solid and intact and if so what propels it? >> i do think we're clearing the decks here, which is great news. i don't think we're through the thick of it yet. we wrote in our earnings preview that consumer, mobile and pc were going to have their third quarter confessions this season, and i think we've seen that. and then auto, industrial and

broad-based will come next quarter. so we think we're maybe a third to halfway through all of this by nvidia. as we look to a.i., as we look to the opportunities over the next five to ten years, they are bound for nvidia >> and leave us with a sense of where nvidia falls in your coverage space most favorite, middle of the pack, what do you make of everybody right now? given that a lot of how you're positioned seems to depend on which end markets and which products are going to have the most strength going forward. >> yeah, we like the parato principle. nvidia would end up in the top 20% of our coverage right now. really around this ai opportunity and the fact that their language cuda is the de facto software for ai development. so we're very bullish. >> pareto, cuda, throwing all the terms around chris, thank you very much we appreciate it

chris rolland. speaking of supply chains, the inflation reduction act that just passed the senate includes a big bet on ev battery minerals that are mined here in the u.s the only problem, are there going to be enough of them pippa stevens is here with those details. pippa? >> hey, kelly, this is the largest climate funding package in u.s. history, and its aim is to increase renewable energy production while also building out domestic supply chains but this green future depends heavily on raw materials with some warning we simply won't have enough. here's what barrick ceo mark bristo said this morning on "squawk box. >> we don't have enough copper and again, you've seen the copper price come off because it's always short term and what we as miners have to do is look long term and we just don't have the copper to ensure that we can support the vision of being a greener planet into the future >> and it's not just copper. a host of metals are required. and biden has called domestic supply chains a matter of

national security. electric vehicles depend on lithium. the u.s. currently only has one lithium mine in operation and just 2.1% of lithium is refined in the u.s. according to benchmark mineral intelligence now, lithium stocks are on the move today albemarle is the biggest lithium america and piedmont >> you think this act changes that >> the main issue is permitting. i actually spoke to albemarle's ceo ken masters. he said okay, great, the initiatives are great, but what we really need help with is permitting and they're hoping to get thei facility up in north carolina running. and their target is 2027 >> wow >> so that is far into the future and that is an optimistic target >> is permitting a state and local issue or is it something the federal government can streamline because it would be strange for them to incentivize something that they didn't also pave the way for. >> so it's great to have that federal support at the top but it really comes down to state and local.

the facility out in the west has been under litigation for more than a decade just because they do face a lot of opposition from local groups for albemarle's new north carolina plant, that is a brown field mine, meaning it was previously in production so they're hoping that that speeds along the process but you know, these are resource-intensive industries. so a lot of people around the new mine can really come out against them >> that's fascinating. that's a big problem for everyone to think about. pippa, thanks very much. we appreciate it pippa stevens. coming up, friday's strong jobs report defying talk of a slowing labor market and yet key yield curves are inverted and consumer expectations are dropping back down up next former fed governor randy crossner does he think the fed should get more or less grefsaggressive rit now? plus from the buyback tax to prescription drugs there's a lot to unpack from the senate's inflax reduction act we'll look where the real fallout will lie and as we head to break let's get a quick check on the markets, which are fighting to stay positive. the dow, the s&p-s the nasdaq, the russells only the s&p in the red right

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exchange." the market reacted to friday's strong jobs report by raising the odds of more fed tightening. but what if the fed let the labor market run hot instead steve liesman is here now with more steve? >> yeah, crazy idea here, kelly. the market reaction to the surprise the half million jobs that were created in july swift and negative more jobs meant more fed according to most in the market. probability of 75 basis point hike in september hovering around 70% from 40%. terminal or peak rate surging from 342 above 360 as the market said you know what more job creation means more inflation, which means more rate hikes. but it's a bit of a quandary for the fed. what if more jobs means more supply of goods and services, which are in short supply now, and less inflation then putting workers back to work would be part of the solution, not the problem. take a look here the u.s. economy in july only just recovered the 22 million jobs lost in the pandemic. that's pretty good, sxept for one thing.

the economy is now larger or call it $730 billion after you take out inflation that helps explain the tight labor market businesses across the economy scrambling to find workers so because of growth in their industries that's a hot economy but some are just playing catch-up with where they were before the pandemic. the result, an economy operating with too few workers, reducing supply and giving pricing power to those businesses that have them the problem for the fed, reducing demand is one solution to the inflation problem but so is increased supply of goods, kelly, and labor >> and the big news this morning, steve, was that the new york fed survey, their consumer expectations, some big inflationary drops >> yeah, came down in a big way. still too high take a look. we have a chart for you. 6.2% now is the one-year head. if it stays that high a year from now we still have a big problem. but it did come down the most in the history of the survey, which goes back to 2013, by .6 of a percentage point and then the three-year went down getting down

and then the five-year, that's i think the encouraging thing for the fed. it's down to 2.3%. the public on average thinks inflation is going back down toward the fed's target. i think that has to make them feel relatively comfortable that inflation is not out of control. the other message they'll get from that is how tied inflation expectations are to gas prices, which raises a fundamental question how much should the fed really be following inflation expectations if they're so tied to gas prices? >> and it seems until now gas prices kind of rose with the general price level and now seem to be moderating somewhat. but you're right what if that divide persists for a couple more months we can only hope because the worst case would be that gas prices go back up. >> right exactly. and we have to wait to see what happens with ukraine-russia energy and oil in the wintertime in europe especially >> steve liesman so if the consumer is pivoting in their views toward inflation, yield curves are flattening or

invested, which fed approach is the right one here joining me now is former federal reserve governor randy kroszner. he's now deputy dean at the university of chicago booth school of business and we sort of call this the devil's advocate layout, randy we gave you all the possible reasons to come on and say yeah, the fed should back off here and yet what do you really think they should be doing right now >> they should not back off here the reason they've had the successes that they've had is because they've been on a very clear path to try to rebuild their credibility after saying oh, all this is transitory, it's not going to be with us that long well, you know, a year later we're getting inflation, super high inflation, 8% or 9% that's a little more than just transitory and i think the reason that people think that at least in the longer run that expectations are not going to -- or inflation's not going to rise too much is the fed's taking strong action. if they pivot now, i think all that's lost and it will be like the late '70s when they pivoted and then inflation, inflation expectations exploded and they

had to bring interest rates to double-digit levels. >> it seems, though, there's still a communication problem because you, me, others might say as long as they win this battle with inflation whether or not, you know, a recession happens is beside the point, whereas the credibility you're talking about with the public may rest on the fed avoiding a recession. do they need to address that >> they certainly have to be concerned about that and i think one of the things that people used to think about the fed is they would take the punchbowl away when the party really got going that was what the fed did for eight years. for the last 25 years, you know, what does the fed do like a good neighbor, the fed is there if there's a downturn. so people have to realize that the fed's mission is to make sure that inflation doesn't get out of control and that's really devastating if it does look at countries like argentina. they're not going to say oh, gee, the fed should pivot, they have economic devastation because they have high inf

inflation. >> sure. and i think for those who go no, those extreme cases are just scare-mongering, it's hard to understand why even 4% or 5% inflation might be so pernicious over time. why nominal gdp, so much higher than what we can actually handle is such a problem. i mean, how do you demonstrate that and the way that could affect the economy negatively? >> yeah, sure. you don't want to go just to the extremes but it reminds us that things can get out of control and i think it's really clear what happened in the late 1970s, early 1980s in the u.s. when the fed lost credibility, then they had to bring interest rates up so high to bring rates down because if the fed loses credibility and inflation is at 5% or 6% then it goes to 8%, 9%, 10%. and as the fed tries to bring the inflation rate down that's really painful because workers are still demanding 6%, 7%, 8% inflation's only 4%. and that means that it's very expensive to hire workers. demand goes down and it's only a

sharp recession that can bring things together. so i think it's really that alternative. what the fed is trying to do is sort of-s as they say, ahave a softish landing. hopefully bring down demand a bit. >> going back to july it was the university of michigan's inflation expectations on that friday before their sort of upsized 75 basis point rate hike that really pushed them toward taking that almost emergency type action. the unwinding of that now, is that going to affect their psyche in the opposite direction and lead toward a pause or a smaller than expected cut? >> well, i don't think they're going to pause i think they're still in a pretty -- i think all the fed speakers have made it pretty clear they're on a path to continue to raise rates through the end of the year. you have to remember that the unemployment rate is at near record lows of 3 1/2%. so they're in a very good position to continue to try to maintain their credibility, bring it down as much as possible while the labor market is still strong. it's going to be much tougher

next year when i think the labor market is not going to be nearly as strong to be as tough so that's why moving now in some sense they get the best of both worlds they don't get as much pushback. and they're more likely to not have to raise rates quite as much because they maintain their credibility. >> right which goes back to maybe what should have happened last year what is the implication of if it passes the inflation reduction act, the political piece of this going to be? is it going to help or hinder what the fed's trying to do here >> so i don't think -- even though it's called the inflation reduction act i don't see a lot in it that's going to reduce inflation anytime soon maybe over a very long five to ten-year horizon but providing subsidies for different groups and clean energy it's not really clear that that's going to do much to reduce demand or reduce inflation. and in some sense the fed will be fighting that because to the extent that it's fiscally expansionary they're going to be trying to reduce demand. so i don't think it has -- i don't think it's helping the fed

very much. >> fair enough and then i guess the last piece of this puzzle is gasoline prices, which as steve pointed out we see consumer expectations on inflation basically tracking them up and down is that going to be a persistent way to help keep those expectations permanently down? none of us know where gas prices are headed from here >> oh, for sure. and there's so much that's completely outside of the fed's control. geopolitical tensions, war, other disruptions that could come in. those are the key things that will probably be driving energy prices obviously, there's going to be a lot of challenges in europe. and so i think what the fed does is look more towards the longer term, those five to ten-year out expectations and then move down a little bit they move a little bit with gasoline prices but they're not quite as volatile as the short ones they will take some comfort from that but they're not going to say all clear. they're going to say we need to keep on this because we don't want a 19 -- late 1970s style thing where the fed pivots too quickly, and goes back up and

they've got to get much, much higher to bring it back down and avoid a really tough situation >> yeah, and i guess final question is what do you make of the signals from financial markets? even ignoring the yield curve, even ignoring the three-month, ten-year before i left last year it was almost inverted. i don't flow if we're there now. yes there's a long lead time, maybe a year or so between that inversion and the recession coming but again, how important should that development be for a fed that's trying to figure out whether the stance of policy is now appropriate? >> so there are pluses and minuses about where things are the good thing is the markets realize the fed's going to be moving things in the short run with the longer rate down that has two ways of interpreting it. the positive way is that ah, people believe that the fed is going to be successful in bringing inflation down, so we don't have to have a really high inflation premium in the long run rate the less positive view is the fed's going to tank the economy and so there's not going to be

any demand for investment and demand for borrowing and so that's why the longer rate is low. i think it's probably a little bit of combination of the two but more that the fed has inflation under control and the economy will turn down but not turn down too much i think most wall street expectations are if there is going to be recession it will be relatively mild. but obviously a lot of that is going to depend on not the fed but people in the ukraine, in russia and in china. >> yeah. we've got to go. but it sounds like you think that with this aggressive tightening a soft landing is still possible >> it's still possible is it the most likely outcome? probably not but is it possible for sure >> 40%, we'll call it. randy, thank you so much for your time today. great to see you randy kroszner with the university of chicago's booth school of business still ahead, the small caps are coming off their first three-week win streak of the year coincidence or not we'll ask one money manager. plus, a tale of two chinas

many companies are blaming beijing's lockdown for weakness in their earnings there. but one tech giant is bucking the trend. we'll reveal the name ahead. and as we go to break here's a look at the dow heat map with disney and dow inc. lead k the way while mcdonald's and visa way while mcdonald's and visa are today' ♪ ♪ this... looking at your full financial picture. this is what it's like to have a comprehensive wealth plan with tax-smart investing strategies prettyf what you e eve and set aside more for things like healthcare, or whatever comes down the road. this is "the planning effect" from fidelity.

"the exchange" is back after this

currently only at 47 after briefly turning negative similar story for the s&p and nasdaq tyson foods is among the worst performers in the s&p after the company missed earnings estimates, saying their prepared food business still can't

fulfill all orders due to supply constraints. their shares are on pace for their worst day since the pandemic march 2020. they're down 7%. barrick gold higher after the miner beat expectations in part thanks to higher copper output the ceo still bullish on gold, admitting you'd expect gold prices to be hurt by higher interest rates but noting we haven't even gotten to real positive interest rates yet. barrick gold up about 5% today and the meme stocks are on the move amc, gamestop, bed bath all higher triple by is reportedly the most searched named on reddit's wall street bets today. that explains why we're seeing a 38% pop in the shares. only $3, though. 11 bucks and gamestop the only one of these stocks that is still higher since january as you can see. let's get to bertha coombs now for a cnbc news update bertha >> hey there, kelly. president biden and the first lady are seeing firsthand some of the extensive flooding damage in eastern kentucky. after this stop the president

participated in a disaster briefing and within the last half hour the pentagon announced another $1 billion worth of military assistance is going to ukraine. it's the largest single package of u.s. arms and equipment that has been sent to help ukraine defend against russia's invasion and david mccullough, the author who popularized american history for millions of readers, has died at the age of 89. he was awarded two pulitzer prizes for his biographies of president harry truman and john adams. the ceo of his publishing firm says mccullough was a national treasure who dramatically illustrated the most ennobling parts of the american character. >> so sorry to hear it god bless his soul i mean, his books -- you've read -- they're amazing. the brooklyn bridge one. john adams we could go on such an asset.

just an incredible talent. everyone should just pick one that sounds interesting and read it he's an incredible writer. bertha, thank you very much. our bertha coombs. coming up, alternative energy, retail, private equity tech. we're breaking down the winners and losers of the inflation reduction act. this sector could be one of the losers losers down 16% so far this in any business, you ride the line between numbers and people. what's right for the business an year.'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. why? doors will suddenly swing wide open. 250 couples will need to make room for a nursery. (laughing)

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welcome back to "the exchange." as we've been reporting, the inflation reduction act is on its way to the house after the senate passed it yesterday but will it actually reduce inflation? let's bring in ylan muui with what exactly is in the bill and what it means for wall street. ylan >> democrats are already taking a victory lap after passing that signature health and climate package through the senate of course the house still needs to clear the bill when it comes back into session on friday. but the heavy lifting is done. and today president biden indicated he's ready to sign it. >> a whole range of things that are really game changers for ordinary folks now, some of it's not going to kick in for a little bit but it's all good. it's really going to lower the

daily -- when you sit down at that kitchen table at the end of the month you'll be able to pay a hell of a lot more bills because you're paying less medical bills. >> it will cap the cost of insulin for seniors at $35 a month starting next year total out-of-pocket spending on prescription drugs will be limited to $2,000 a year starting in 2025 and medicare would begin negotiating certain drug prices in 2026. democrats are also calling this package the largest investment in clean energy in history, with the goal of reducing greenhouse gases by 40% by 2030 then of course there are the tax changes. a new corporate minimum tax of 15% with exemptions for accelerated depreciation and a carveout for businesses owned by private equity a new 1% excise tax on stock buybacks and $80 billion for the irs. democrats acknowledge this isn't everything that the president laid out when he took office but kelly, this could be the last major piece of legislation they get to pass for years back over to you >> we'll talk more about that in a second, ylan

but i'm curious, not that you're what do we call it, a bio expert, but if they're capping the cost of prescription drugs, does that mean that the government would pay the rest of the bill or that simply means they can't charge anymore? you know, often when you institute a cap on anything you can end up with shortages. i'm just curious how that would work out >> yeah, so the way that i understand it, kelly, is essentially that the government would no longer reimburse drug companies for prices over a certain level once they start to negotiate those prices with medicare as far as capping the out-of-pocket costs i think it's sort of the same thing the government simply would not pay any more for those drugs even if the drug companies were to charge more to either the government or to try to pass that on to consumers >> very fascinating to see how it works in real life. ylan, thank you very much. we appreciate it ylan mui given all these new details, which companies stand to benefit? which names are poised to lose and what does it all mean for

the midterms let's bring in libby cantrell. she's head of public policy at pimco. libby, it's good to have you what are the big picture takeaways here >> yeah, well, kelly, there's the sxhikeconomic takeaway and n the political takeaway from the economic perspective you're seeing various snats about this bill's impact on the economy. from the inflation perspective does it do much on inflation maybe it moves the needle very marginally in terms of reducing inflation both in terms of decreasing the prices of pharmaceutical drugs, increasing the supply of clean energy but not -- those things are not necessarily going to take place in the short term before the midterms but then politically, and this i think is where democrats are seeing them trying to take a victory lap. politically this likely does help not only have these pharmaceutical drug -- being able to negotiate drug prices has been a huge priority for democrats for honestly more than

20 years but i think really importantly for president biden and the administration he's been able to get through these big, you know, climate, green energy climate investments. this is something he ran on in 2020, obviously. and he's able now to sort of honor that promise so i think they're hoping -- maybe if not economically but at least politically that this is going to be a big tailwind going into november. >> what are the odds or the polling saying at this point about the outcome of that midterm election >> yeah, so i mean, look, if you look at sort of history since world war ii in the house, usually the house is viewed as sort of a national election, the party in power typically does not do very well on average the party in power loses 25 seats in the house since world war ii so again, if past is prologue democrats have an uphill challenge in the house the senate, though, is really i

think a tossup the republicans actually have a more unfavorable map they have more seats up for re-election this election cycle. and some of the candidates on the republican side are a little bit unconventional, particularly in some of the battleground states like pennsylvania, georgia and ohio and what have you. i think the conventional wisdom right now is the democrats will likely lose the house. that probably is right but the margins matter how many seats do they actually lose and then i think the senate very much is a tossup and if anything, both this climate bill but the chips act and some of the other successes the biden administration have have basically made i think the senate even more of a tossup probably even the picture even better for democrats than it was just a few weeks ago >> ylan mentioned this could be the last major piece of legislation for the party for years depending on that outcome. do you think that's right, and if so are we at the kind of gridlock that investors can

typically ignore for a while i know jim kramer was saying this morning he thinks the inflation reduction act marginally negative for stocks because of the buyback tax, although it is pretty small. so does it seem like it's going to be kind of no news on the policy front now for quite some time >> yeah. i think that's absolutely right. particularly on the taxation front. i mean, if we were going to see major tax changes they would have happened in this bill and as you point out the 1% buyback share excise tax, the 15% minimum book income tax, those are not for nothing, but probably in the grand scheme of things have more sort of micro sector implications than they do more broadly for the economy but outside of that, this is really the last vehicle for us to see those big tax changes probably until 2025. so i think that is right again, if the conventional wisdom is right that at least one chamber of congress is lost, for democrats probably the house, we should expect biden's legislative agenda to basically

be sort of frozen. i think importantly, though, the markets will cheer that. one thing folks are not necessarily paying attention to is if we do go into recession in 2023 we should not necessarily expect congress to sort of save the day in terms of providing fiscal support of course we've gotten kind of used to the fact that not only has monetary policy been very positive for the economy but so has fiscal policy. and i think that assumption kind of goes away honestly if republicans take back at least one chamber of commerce. >> real quickly just before i let you go, do you think this will be watered down further to pass the house what do you think if anything will change between now and its signing into law >> no, i think just as the previous reporter was saying, the heavy lifting has been done. the unanimity among the 50 democrats in the senate, that was really the big litmus test we don't expect any changes from here on out. i think the house will likely pass this bill, this particular bill that was passed yesterday in the senate, and the president will sign this into law.

i think what we have now is what we should expect to actually become law >> all right libby cantrill, thank you for all your time today. we appreciate it >> thanks so much, kelly >> joining me from pimco still ahead, chinese stocks are down about 11% this year as the country grapples with its zero covid policies and the economic fallout. u.s. companies with operations there also feeling the pain from those shutdowns and disruptions, or at least most of them are the companies warning about china and the one exception,

next on "the exchange.

welcome back companies from caterpillar to marriott citing china as a wild card in earnings this season not everyone is negative, though seema mody is here to break it all down for us. >> so far the takeaway from this earnings season is companies are really struggling on the ground in china for starbucks, for example, china was the only international region that did not grow revenues by double digits in the

third quarter. on western digital's conference call the ceo said expectations for smartphone units have come down in recent months, led primarily by the reduced demand in that country. and the challenge is not knowing when the economy will rebound. caterpillar's ceo said it's too early for us to predict what's going to happen on the ground there. tesla's ceo, elon musk, said the reason we sold a bunch of our bitcoin holdings was we were uncertain as to when the covid lockdowns in china would alleviate, so it was important for us to maximize our cash position there were some outliers here. apple was much more positive it did see iphone sales surge. ubs estimating a 25% year-over-year growth in iphone shipments in china in the second quarter. its supplier, skyworks, also betting on a rebound it said that china is still a market where you can get some very, very strong activity, tempered a bit by the lockdowns, which we think are going to abate rather quickly gene munster at loop ventures says apple's success there is due to its product the iphone, which remains in high emand, and its relationship with the

government, a key focus for ceo tim cook, when we know he's really prioritized that relationship over the last couple of years. >> absolutely. now of course you've got the whole taiwan thing as well but the thing about apple still doing well, they also did very well here during the lockdowns i do wonder sort of if that speaks to the fundamental weakness that we've seen with the chinese economy. we know people are worried about what's going on in the property space. it's kind of amazing the stock market's only down 11% there this year. >> it is i think even though the economy's experienced much more hardship over the last couple of months, clearly certain products are going to stay very much in high demand. luxury sector hasn't held up as well property as you mentioned not so much but i think the provocations around china -- around taiwan are being watched very closely so far the actions have been largely confined to in and around taiwan, the export ban, the military drills and exercises. and so far they haven't taken aim at u.s. companies in china and gene munster was saying if that changes that could really

make it hard for a company like apple to navigate that relationship going forward >> absolutely. it remains kind of the biggest -- the elephant in the room let's call it seema, thank you seema mody breaking news on boeing now. let's turn to phil lebeau. phil, what's happening >> kelly, take a look at shares of boeing. i'm not sure we're going to see a ton of movement on this because we reported it last week, as did others, that the faa was expected to officially sign of o'on the inspection protocols that the company has put in place for the 787 dreamliner today the faa just a few minutes ago officially said yep, we like what we see from what boeing has put together, we are clearing these aircraft for deliveries. now, each individual aircraft will have to be still inspected by an authorized agent for the faa, but this still clears the way for the resumption of 787 dreamline deliveries and that's going to happen in the next couple of days american airlines gets the first one. so this is important, kelly, because this is a catalyst for them finally getting the

dreamliners delivered again and you're going to see a big improvement over time, not initially but over time in their cash flow as they once again get the revenue coming in from deliveries of these aircraft >> great point the shares up 1.4% phil, thank you. that's helping the dow climb now about 50 points this afternoon coming up, small cap stocks handily outperforming the s&p over the past three months and there could be more gains and there could be more gains ahead according to at cdw, we get that your world is always changing and you need to adapt to support your digital transformation. we can help you achieve your business goals by streamlining your data across cloud environments with netapp cloud services orchestrated by cdw. with greater accessibility and control, you'll be ab one to , bring the flexibility of the cloud to your environment, and reduce your infrastructure footprint to contain costs

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welcome back, everybody. dow's up 57 points, helped by that boeing news just now. s&p down one 4143 nasdaq down three. let's look at from the mid-june lows, though the nasdaq up 14%. s&p up 9%. dow up 7%. russell small caps up 12%. my next guest sees more gains ahead, especially for those snaul cap stocks let's bring in sbrooin smolich, hood river capital management's principal. brian, it's good to see you again. >> good to see you too >> why the big conviction for the small? >> well, the space has been bad for the last year and a half credit spreads have tightened somewhat valuations are really attractive

on next year, and a lot of that is around the recession fears that built up over the last six months that's mostly baked in here. and then really it comes down to how bad the cpi is and has the fed finally caught up. it seems like the leading indicators on commodities are a lot better you can take almost any commodity and they've come in 20% to in 20% to 30% which is good we're still concerned about wages. that's a high percentage of cost, but we still think we're probably in an inflation era that will be better and couple that with valuations and the fact that you can really stock in an efficient space that will lead to relevant outperformance. >> you're not the only one who is constructive. >> carter worth likes the setup from a technical position. do you think the index broadly or would you tell people be careful of buying the broad

basket and stick with individual names here >> well, in small cap, i think it's better to go with individual names just because it's inefficient but that being said, i do think the broader small cap space does look attractive just because it's pricing in asymmetrically a bad scenario for next year and there's obviously a probability where it could be okay and even better than that and you have a lot of upside if that plays out. >> so let's talk about some of them celsius, but not that one, but yes, the one you heard about in the news recently. zoom info which was not the other zoom, but go through some of the names that do jump out to you. >> so we did play some offense during the drawdown in the space and in tech. zoominfo is on 35 times free cash flow so it's great growth and great value.

they had a great earnings report and plowed through what you see in the economy and it's a sales force optimization tool and they're latching onto it celsius is an energy drink company and it's growing at over 150% we think they'll do well whether there's a recession or not given the market opportunities and the market is at 7%, 7.5% market share given the quality of the product and we also like -- >> oh, sorry. >> we also like tinsale and it's growing at 20% premium growths next year and it should outpace whatever inflation is. we also like chart industries which is an energy infrastructure supplier and obviously there's lot of investment happening all over the world given what's happening with scarcity and the need for independence there >> that's exactly what i was going to say

aside from the situational plays you have the themes that have been working whether it's energy or insurance and a couple of names. as we go, anything you'd sort of caution people away from >> well, consumers are obviously tough so you can have some bad earnings revisions there, but that's really the only area that i see from the top-down level being bad and the meme stocks that are speculative in nature i would stay away from those >> it's a good reminder when the consumer is the weak spot and the most visible one that can be confusing when you see the headlines and draw too much of a conclusion for it. >> brian zmolek from hood river. it's down 48%, but there could be a bottom forming and that's a be a bottom forming and that's a clue for you for

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welcome back to "the exchange." before we go the proshares etf was the mystery chart we just showed you it's down 50% so far this year is the bottom finally in for crypto j.p. morgan says yes kate rooney joins us now with a look hi, kate >> yes, that is the big question after july and august so far bringing relief for bitcoin bulls after almost nine months of downward pressure j.p. morgan among those who think the bottom is in, and in a note to clients earlier today, major cryptocurrency, terra and luna there is also a lot of enthusiasm lately over another cryptocurrency, ethereum and while prices and trading volumes are still depressed, analysts say it appears that the crypto markets have found a floor they've reclaimed two point

levels, first above the weekly average and the price where most investors got in and it's $24,000 according to gladstone volume is down and gladstone says current network activity remains little influx of new demand it coincides with what we've seen in terms of equity investors and there's been a risk appetite and a rally in tech stocks and ethereum has been the big winner up more than 40% compared to a 10% rally in bitcoin. crypto-related stocks, and coinbase has been on a tear after announcing a partnership with blackrock and seeing a short squeeze and a microstrategy and robinhood getting a block and some of the mining names are the biggest winners and riot block chain up more than 50% for the month still plenty of headwinds for those that are really a bottom and there are high-profile hacks

that have weighed on investors sentiment and crypto investors are very much watching that cpi number coming on wednesday to see if this bullish narrative continues. kelly? >> it has been fascinating to watch the coinbase saga play out, kate because on the one hand you have more concern than ever to have custodianship and all of these hacks on different wallets and what's the most appropriate, safe place to hold your crypto and is coinbase and all of the rest of it and "the wall street journal" with a big piece about some of the problems they've had. what did the shares do last week double it was incredible. >> it was quite the rally last week along with a ton of short interest so you have the blackrock partnership which lit a spark there and then it was one of the heavily shorted stocks and that likely sparked a short squeeze and accounted for that, and it was up 40% last week and you saw what it was doing for the month

and there's that dichotomy because the journal had the piece in the biggest issues on the eyes of wall street and the down side and the worst-case scenario end up being unregistered security and they're the only real publicly listed exchange and the sec in some ways some would say making an example out of coinbase saying, hey, guy, these cryptocurrencies are unregistered. >> if you want to be the amazon of crypto then you now have a problem if you list literally all of it. thank you very much. our kate rooney. >> shares of palantir getting crushed on weak earnings is it down enough to buy we'll have answers on three stock lunch on "power lunch" which begins right now ♪ ♪ good afternoon, everybody, and welcome to "power lunch. i'm tyle