200-day moving average and it's off to the races. >> jim, you've got the final word. >> i've got a two-fer because i almost did disney but brenda took that for me i'm going with citigroup at some point those buybacks will begin again. that does it for "halftime." "the exchange" with kelly evans begins right now. >> thank you, frank. hi, everybody, happy friday. as we close out another positive week, we are in fact on the first four-week win streak for the market since that peak back in september the nasdaq is now up 20% since the mid-june lows. new data out shows a more optimistic consumer. we'll dig into all the numbers to see if this rally can hold. and we'll get a trader's take on how to play the rally amid rising rates plus europe's energy crisis facing new challenges. a historic drought plaguing the

ka continent. the rivers are so low they can't get ships through with food and fuel we're going to get a live report the dow up 273 points, about0. of 1%. so the blue chips are somewhat lagging but the s&p is up a nice 1% and the nasdaq is up 1.3% as it continues its leadership since that recent low. the semi stocks are among the outperformers. all gaining 3% or more you can see an semi is up 8% energy the only sector moving lower with crude down 2% that's got chevron, diamondback, halliburton, coterra with modest declines take a look at the ev stocks seeing huge goes ev go at 15%, still just about a $12 stock. similar story in solar maxeon up 16%.

that's a $3 move now let's turn to the data which have been driving this market rally. while several circuancellation readings are softening, the market's reaction is triggering a rebound in oil, lumber and other commodity prices that could undo some of these recent improvements let's start with the new york fed. those inflation expectations on monday plunged biggest drop on record thanks to that recent drop in gasoline prices tuesday, however, a key reading came in surging 11%. cpi and ppi both dropped from their new record highs then today the university of michigan inflation expectations, they dropped for the coming year but for the next three years they rose back up to 3%. given the volatility of all these readings, tom barken warned about the fed changing course too quickly in their

fight against inflation. >> i think the lesson we learned from the '70s is you don't raise rates and lower rates, raise rates and lower rates, raise rates and lower rates every time the economy bounces around you try to get inflation down on a sustained basis and then you have the freedom to loosen them. >> all that said, my next guest thinks the central bank will hike rates a half point. let's bring in rod denton. i think fed member barkin's comments are wise, rob it's a lot to read into just a few weeks of, quote, unquote, better inflation data. >> yeah, kelly, thanks for having me on i would completely agree i think at this point we would probably encourage market participants to not miss the forest for the trees on the recent inflation data. yes, a number of indicators came in a little better than expected but i think there are a number

of structural factors that will be pushing out prices over the next six to 12 months. wage growth a big one. there's a lot of concern about inflation expectations and the 1970s period is weighing on the fed in terms of their thinking for the outlook. at that time they backed maybe a little too early, inflation was more entrerchged and they had to do more than originally planned. so i think that's quite relevant from where the fed finds themself today they may slow down in september but there's still a lot of work ahead for them, which probably means an additional series of increases holding them at a restrictive level even as activity continues to soften. >> what do you guys make of all the recession talk it's abated somewhat obviously lately, but the yield curves, three-month, 10-years getting pretty close to inverting. >> we still think we're heading for a recession as early as q4

of 2022 this year. i think if you look at a broad range of economic indicators across real consumer spending, the housing market, business confidence, business investment, all of those are continuing to weaken the past couple of months that's consistent with the slowdown that we're expecting as the fed continues to tighten policy to bring inflation under control. of course nfp last friday was stronger than expected that made the market a little more comfortable that maybe we can achieve a soft landing at this point we don't think nfp is the best indicator of where growth momentum is considering how much of a contribution health care and education are contributing at this point another really big problem facing the fed is financial conditions have actually eased since june i think they'll have to lean even more against that, which should mean an even more of a s slowdown the next couple of

months. >> you're saying that it's not that relevant and when you look at financial conditions easing, what are you looking at in particular, the drop in interest rates that we've seen? >> so i would say we still think the fed is effectively a single band-aid central bank focusing exclusively on inflation you've seen that come through in comments earlier this week after the july cpi report. you heard that from daly last night and barkin today we could go into a recession but the fed will keep raising rates until inflation comes down more meaningfully because the risk is that inflation becomes much more entrenched and the downturn could be deeper in that situation. our financial condition tracks a lot of different things. we look at credit spreads, the equity market and interest more broadly. it suggests we are boosting growth 3 full percentage points after being effectively neutral

in june. so there's still a lot of work to do for the fed in this regard. >> if i hear that, i think they should do another 75, maybe a full point hike. i don't know i don't know if that all sounds too crazy. >> i think the main message for the fed needs to be that we're not going to back down as activity softens there is really no dovish pivot at this point. we're going to continue raising rates and hold them higher for longer if we need to, to make sure inflation moderates from their point of view they have done a series of very, very large rate hikes those are going to affect the economy with a bit of a lag and so maybe they can slow down a little bit but i think the message needs to be rates are going to be high for a pretty long time that's something that's relevant when many speakers continue to point to the dot plot from the june meeting which shows continued rate increases in 2023, pushing back against this notion that the fed will quickly cut rates next year.

>> so one final question, rob, that gets to the heart of all of this and that lag that you were talking about, what does winning on inflation look like to the fed? the cpi data are going to show their moves with an extreme lag. you could call it up to 18 months, right, based on the pandemic response. so are we really to expect that in any of the coming months that they would either, you know, see cpi readings or ppi readings flatten out to a tenth or two, or i assume they'd want to see six months of those kind of readings to feel comfortable >> we think it will take multiple months of data. at least three to four months coming in at 2.5 to 3% annualized that's much closer to their target i think at that point if they see that, which we expect around the first quarter of next year, they can stop hiking rates at that point we think the last hike will be 25 basis points in february, and

lift the target range from 3.5 to 3.75% which is elevated by historical standards but it's going to come down actual inflation we think the month-over-month numbers are the most important at this point. we don't think the fed can operate on expectations or forecast of inflation because forecasting inflation has become incredibly difficult so it's really going to come down to realized data. >> rob, thanks so much we appreciate it a look at many of these different inputs can sometimes feel contradictory thanks for all your time today rob dent let's get a look at the market rally that he was referring to since june 16th, the dow has surged 12%, the s&p is up 15% and the nasdaq is up 21% every single s&p sector is higher, led by consumer discretionary, technology and even real estate rates have been lower. and shares of apple are up 32% from their june 16th low of $129 a share.

we are at $171 today this all took place in less than a two-month span joining me now is the chief investment officer at centerstone. abi, this has been a pretty rip-roaring rebound. >> it has been kind of on pace and as rip roaring as the decline was sudden and breath taking so kind of just the mirror image of that. >> and does that mean we keep going back to the highs? i think the dow is only 9% off the highs. >> it is i have some doubts about that. of course i don't know no one really knows. but the constraints in my view that we have this natural ebbing of the economy post stimulus, real incomes are negative, and the dollar is strong in the face of all of this potential weakening, the gfed is still on a path to raise interest rates and is going to be beyond where we were in 2018,

which is 2.5% enough to drive the economy close to a recession. so we're in this sort of gray area of potentially muddling through, that would be the best case outcome, in which case that the stock market having gone down 25% or whatever was enough. but it introduces the risk of a policy error when the economy is -- seems to be slowing down, you could see the revenue growth projections for every company from microsoft to google. and you have that being telegraphed to the marketplace you have consumers being told to slow their spending because of price increases. and with interest rates having gone up as much as they have, it's also kind of hitting the high ticket item areas as well so with all of that, you had the possibility of a muddle through

economy. if that risk, if all these conditions are a bigger, more diffusive weakness spreading through the economy, you don't have that catalyst yet if the fed continues to fight last year's war, the risk becomes if they do exaggerate what is a natural downturn into something much greater and i put all of those scenarios in front of me and it tells me i don't want to be betting on pr brand-new highs. i want to be cautious. >> sure. where do you think that people should be looking to pick up if not necessarily something that was an opportunity the past couple of months, they want to grab one of these big sell-off names, what do you think is a good investment right now? >> yeah. so this argument inflation, not inflation, recession, not recession, i like companies where i don't have to address that question.

so companies like ubi soft entertainment. they're a company that has been rumored to be on the block now for several -- a month or two at prices that are double the current stock prices, up to a hundred euros a share. it's at 43 or something euros right now. it's a situation where in the best case i can double our money. in the worst case it's still undervalued. the downside is upside, which is really unusual so as many companies that i can find that are outside of that debate that you and i were just talking about, that's where i want to focus my attention between that and there are companies that are still covid recovery type situations just a mean reversion gets them some offset from potential weakness going forward and so the portfolios at centerstone we have are chockful

of those type of names we don't play in the macro themed kind of universe. as value investors, we try to stick with companies and bet on management teams and balance sheets and business models. >> so final question then, in the tech world chip space with the mega caps, is there anything that looks interesting to you as well or is there any other name that you mentioned here that people should look at in addition to the one you already did? >> well, there has been some telegraphed weakness in the market chip sectors and i can't tell you which ones, but we're looking outside the united states at a couple that have fallen but ultimately these stocks have just given up nine months of gains and really haven't got to value territory yet so we're doing some initial work on it. maybe six months from now i can report to you what that was. >> slow and steady, the tortoise wins the race. isn't that what they say

>> so far so good. >> abhay, thanks for your time for more on this recent rally and other investment ideas, don't miss the cnbc special "return of the retail trader." that's at 6:00 p.m. eastern. quick market flash for you as well. there's another company announcing a round of job cuts it's best buy. they're going to lay off store jobs across the country as consumers shift how they spending hundreds of jobs were cut in stores in the past week. best buy cut its sales and profit estimate for the second quarter noting spending has slowed the stock has turned negative after that news. disney posting a strong quarter thanks to a 70% jump in revenue in its parks division. why are other theme parks seeing a very different story plus some of the worst names in the s&p this year are up big in the past three months time for three buys an a bail. and here's a quick look at

the markets, where we see the small caps leading the way the russell is up 1.5% and up 4% for the week all of these averages up 2, 2.5% for the week a four-week win streak as well we're back in a moment ♪ ♪ wow, we're crunching tons of polygons here! what's going on? where's regina? hi, i'm ladonna. i invest in invesco qqq, a fund that gives me access to the nasdaq-100 innovations, like real time cgi. okay... yeah... oh. don't worry i got it! become an agent of innovation with invesco qqq new projects means new project managers. you need to hire. i need indeed. indeed you do.

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welcome back to "the exchange." it's been, if you will, a roller coaster ride for the non-disney amusement parks this year. six flags, cedar fair, all lower since january. this was supposed to be the biggest travel and entertainment summer ever as part of the post-covid reopening but six flags reporting a dismal quarter which included a steep drop in attendance the ceo saying the company had become a cheap day care center for teenagers during breaks and the summers. did inflation steal the rebound the leisure secretary was expecting? let's welcome barton crockett. what gives, barton why didn't disney face the same problems >> i think a couple of things are going on one is that people are coming back to parks. six flags i think is an outlier. i think if you look at the industry overall, attendance is at 2019 levels or very close to it and spending per visitor is 30%

plus above 2019. so we're seeing really strong results in theme parks we're also seeing differentiation. i think that those parks that are more aaffluent, like disney, like universal, they're particularly well positioned for this macro environment those who skew a little more down market like a six flags, it's more difficult. i think six flags to their credit, they see that. they have a new ceo who has launched a strategy to premiumize, make this a more expensive park to get into, a better experience, less crowds they launched that this quarter but i think they bumbled the launch and that has put weight on the stock i think what you have is a good industry but some differentiation in performance. >> they got a downgrade this morning saying they were so frustrated this was the quarter you were supposed to show that you had

what it takes. is this something that we can dismiss as a challenge unique to them if so, what about the other amusement parks that are down year to date >> i think there is some separation in the parks. six flags, which we kept our buy rating on but were very disappointed in the quarter, our belief is the turn-around plan can gain some tracks from here i think it makes sense they have a ceo who has a history of making companies work well i think he'll pivot, learn, pivot, learn, and it will get better from what's a low water mark i think seaworld has already gone through this. they brought in a new shareholder and chairman who pivoted them to a premium pricing strategy like six flags, they have done it incrementally their stock has been tremendous pre-pandemic, tremendous right after the pandemic like some of the regional peers,

they eased a little bit through the early part of this year. they have gained some momentum of late. i think what a lot of people are trying to digest is how much of the strength is a temporary party after the pandemic and how much of it persists. you know, what i think we've seen before is the consumer is spending more on out of home leisure. that was a bigger part of their sp expenditures going into the pandemic i think coming out of it, i think if anything the more time we spend in front of commuters, telecommuting, teleworking makes it more interested in things we can do in person but you have to manage it well and i think we're seeing some differentiation there right now. >> you're sticking with a buy rating on disney you've got buy ratings on seaworld and still on six flags even though you're neutral on cedar fair why isn't six flags a downgrade for you at this point? >> to be clear there was a real moment of truth yesterday. part of it is this is a stock

that has been reset. expectations have been reset but this is not some fly-by-night technology, here today, gone tomorrow these are iconic parks in major urban markets with a ceo who has a history of great success at other companies and with a plan that i think makes sense once it's executed correctly. so i think our belief is they can improve from here. but these businesses are here today, here tomorrow, here for our children, our grandchildren, so it's the type of thing as a value investor these are the moments you look for. >> i'm so used to talking to you about internet media stocks, i didn't know these names were in your universe. >> certainly i'm probably the only analyst on the planet who covers cedar fair and amazon but it keeps me rooted in reality. everything in life is not just electronic, not just virtual but looking at real things that people do. a great call for disney and

finding places to do due diligence. >> given all these different touch points that you have, do you think the consumer is shaking off the recession inflation hit or not i can't quite tell what the takeaway is other than the squeeze on the middle income and lower income. >> look, i think there's clearly a squeeze on the lower income. the differentiation between disney and six to some degree speaks to that but i think that the consumer at the middle and upper income levels is very strong right now. they have jobs they want to have fun. they can afford to have fun and hopefully that persists for a while. >> barton, thanks for your time. we appreciate it. >> great, thank you. >> barton crockett. still ahead, it's not just a historic energy crunch half of europe is feeling the effects of a historic drought that has brought freight traffic to a halt on one of germany's major waterways. we're live in europe with a look at so far the economic ripple effects. and the industrial sector here defined recession talk lately we'll take a look at what

message it's sending, next. here's a look at the dow heat map disney, merck and apple are leading the way and chevron and j&j are the only two names in the red. the index up about 280 points. wee ckft ts.'rba aerhi t developer isn't easy. but, at upwork, we found her. she's in prague, between the perfect cup of coffee and her museum of personal computers. and you can find her, and millions of other talented pros, right now on upwork.com ♪ 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." we're pretty much at the session highs. the dow is up 278 points the nasdaq is up almost 1.5% as for the movers this hour, we're watching illumina which is the worst name in the s&p after it missed on the top and bottom line, gave disappointing guidance as well 8% drop in the shares as of this afternoon. meantime, toast is surging after

a narrower than expected net loss and raising its full year guidance the company seeing a record number of new locations are using its technology shares are down 70% from its ipo in september. elsewhere, the semi etf, the smh, is trying to eke out a small gain this week after a rough start. that would make it the sixth straight positive week and the smh is up 2.5% today global foundries is surging after b of a added the stock to its list of best investment ideas. shares are up 12% today and up 22% this week. also a big mover this week, lumber prices jumping more than 20%. 587 so well off the highs. prices are down 50% year to date let's get to tyler mathisen for our cnbc news update salman rushdie is being treated at a hospital for an apparent stab wound to his neck.

he was attacked by a man who rushed the stage where the author was about to make an appearance rushdie's satanic versus got death threats. governor hochul says he is alive and she praised the officer who intervened and arrested the suspect. >> i want to commend the state police it was a state police officer who stood up and saved his life, protected him. >> new york city's health commission says the discovery of polio in the city's wastewater is in her words alarming but not surprising the virus had already been detected in two counties north of the city. and scientists are investigating a climate change impact that threatens sea turtles as a result of rising water temperatures affecting developing turtle eggs many more females than males are

being born kelly, go figure >> i was going to say the women are taking over everywhere. >> they like the warm, i guess. >> that's true tyler, i'll see you soon thank you. still ahead, a defensive play, a dividend play, a comeback play and one name to cut loose. that's the one you're seeing right there. down 60% year to date. gina sanchez has a special three buys and a bail, next. - hiring is step one when it comes to our growth.

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welcome back, everyone inflation data slowing this week, but most agree the fed won't stop hiking rates any time soon rates have been back on the rise lately so how should investors position for rising rates and maybe a rising market. joining us now is gina sanchez, chief market strategist with lido advisers. she has three buys and one name to bail on the bail is very interesting to me, gina welcome. before we get there, let's start with visa, actually having a couple of down weeks but up 7% since july 1 they just posted strong earnings this is your defensive growth play >> yeah. one of the reasons that visa has

been able to post great earnings is because as interest rates have been rising, they have also been raising their own interest rates they charge their clients or their customers so at the end of the day you're somewhat insulated from that the other thing is everyone was concerned that everyone would stop spending but spending has continued and there is no evidence of a pullback, according to visa's cfo. and in fact the only thing that's changed is what they spend on, not their spending and so spending habits have maintained a good clip so visa is able to take higher and higher interest rates, as interest rates rise. i think this is an interesting play for people who want to continue to participate in growth, but also be a little bit insulated from both inflation and higher interest rates. >> all right so that's the first one you're snapping up. the next one is abvie. you like the dividend play, why? >> this is a company that has

continued to pay year after year, quarter after quarter. it's dividend payout ratio is high, but also it is continuing to -- it is continuing to grow through the pandemic we've seen that people still need drugs and so there is some litigation overhang on this stock and we think it's one of the reasons it's cheap right now, but we think it's way too cheap for what the threat really is and so we actually see more room for some comeback in the stock along with a nice dividend. >> and the litigation doesn't seem to have kept them from doing pretty well this year. >> no, it hasn't. >> let's move on to your final buy and it's disney. it's on pace to close out it's best since december of 2020. it has officially overtaken netflix as the global streaming subscriber leader, 221 million as of q3 it doesn't even turn three years old yet, gina. this is your comeback play. >> yeah. this is a stock that's really taken some licks during the pandemic you look at the park shutdown and that was a massive hit to

its profits. so with profitability -- with the parks open, profitability is up 50% and that's not that surprising and what's interesting is that the parks have continued to limit capacity, but they have upped pricing. and so customer satisfaction is actually growing, even despite the price hikes, which tells you just how strong disney's pricing power is that's always been an important element. you look at the value of their catalog, and disney plus is showing that they're just flexing into that and they are just getting started. >> and we had the hint of your bail in there, but as much as you like disney and you like its success, the flip side is netflix and that's the one you're bailing on today. why? >> granted, this is a bit of a ballsy bail. >> yes >> because it's up th30%. even with that 30% bounce, it's still down 60% you see analysts revising down expectations for earnings and

they're going to have a pretty, pretty dismal year after years of spending billions on content, and they made their place in the content space, now they're really, really trying to figure out how to grow subscribers and they're in the midst of reanalyzing and looking into the gaming space. when you have that kind of a reorientation of a company, it tends to take money and time that's something that the market may not give them. i think it's a bit of a risk. >> so would this be a high or a low conviction bail to you in other words, how much incoming data or what kind of incoming data might make you change your mind >> i tell you what would make me change my mindi is if they can execute that switch into gaming fast with existing -- basically taking existing resources and repurposing them as opposed to having to start from scratch i don't know where they are with that, but that's kind of a big component. right now it's really just a

conversation that's being had. but one thing i do know is this is a company that has reoriented itself before and has done so successfully, but it did it in a very, very benign market now it's trying to accomplish a reorientation in a market that may not give them the time, which means that they have to be successful very quickly. >> and in a landscape that's hypercompetitive quick final question, gina the broader market, the rally since the lows that we've seen, what are you feeling >> so it seems like the markets are looking past what was expected to be a recession and maybe we've had it and it was technical but not ever declared. you know, the reality is that as we push past sort of all of the conflict oriented inflation and we figure out how to deal with that and so we're dealing now with food inflation, whereas before we were dealing primarily with energy inflation, the markets are really just saying, okay, let's figure that out, let's look past this and look

beyond when the fed stops raising rates, which is expected to be sometime around january or february of 2023 and so once we get past that, then the markets will start to breathe a sigh of relief and so they're preempting that sigh of relief now saying, okay, it's not that bad. >> that's where we'll leave it, except maybe for netflix a, thanks so much, we appreciate it our gina sanchez. coming up, droughts taking hold across europe drying the rhine river, making it impossible for barges carrying oil, food and goods. we'll t gethe latest from a reporter on the ground, next

welcome back since tuesday, more than a thousand firefighters have been battling blazes across southern france as droughts take hold across europe, and those droughts could have dire consequences for many european

countries. nbc's matt bradley is in london with that story. then we've got the rivers in germany drying up for passage today, matt. i mean what else -- what's coming next? there's no -- there's natural gas prices soaring we all wonder where this is headed. >> reporter: yeah, it really is an environmental catastrophe but it's something europe and especially here in britain, they have gotten used to it this isn't so much of a sproiz bec surprise because three weeks ago we saw record-breaking temperatures here in london, going past 104 fahrenheit. that was really surprising but folks here, they're getting used to this, and they should because according to scientists and other climate experts, this is the new normal. you can see behind me there's lot of people out here now in greenwich, enjoying the warm weather, which is unseasonably hot. behind me as you can see, normally this is a lovely green. now it's just yellow and that's the situation that we're seeing across europe as we

see unseasonably hot temperatures we've been watching all this reporting from mar-a-lago in florida. i noted that actually the high temperature here in london today is the same high temperature that they're going to be seeing in mar-a-lago, florida that is a freakish weather event and one that this country and all of europe, this whole kaunt continent is not prepared for. that's why we're seeing problems on the rhine river a forest fire that was thought to have died out but resparked in the interim all of this coming together to show that this is the new normal for europe, for the uk, an people, the population here have to be prepared for extreme weather events like this kelly. >> i wonder what the political fallout will be, especially on the nat gas side of this as we head into winter if people feel like politicians didn't prepare them for what they were heading into. >> the natural gas issue, the energy issue, that's a bit separate we're talking about questions of

the russian invasion of ukraine, climate change is part of that but the real issue is these temperature shifts i'm not sure, and maybe you can tell me better, kelly, if the actual energy issue is having an effect on climate change or if it's vice versa. here in london, people are mostly concerned about the temperature and about whether or not the british government, which has determined that eight out of 14 regions of this country in england are now considered to be in a state of drought. that's something that will have direct effects on agricultural production as you were talking about in the w rhine, they're restricting boats. the waters are so low and they're not able to bring products to market, they're not able to move things around europe because the rhine river is so low. so this is an issue seeing effects throughout the economic platform here.

we're starting to see places far afield that are affected by this crisis of weather, not just here in the uk but all of europe. >> it's an unfortunate coincidence. some of the policies in response to it have caused some of the vulnerability on the energy piece of it. matt, we'll all be following with interest. thanks for keeping us up to date we appreciate it it's good to see you today matt bradley in london. still ahead, a growing divergence between chinese and u.s. internet stocks the kweb falling 11% and the spider climbs 13%. we'll talk to the ceo and see how he is mitigating the ongoing risks. 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 able to accelerate innovation, bring the flexibility of the cloud to your environment,

and reduce your infrastructure footprint to contain costs so you can be prepared for whatever is headed your way. it's a thirteen-hour flight, that's not a weekend trip. and reduce your infrastructure fifteen minutes until we board. oh yeah, we gotta take off. you downloaded the td ameritrade mobile app so you can quickly check the markets? yeah, actually i'm taking one last look at my dashboard before we board. excellent. and you have thinkorswim mobile- -so i can finish analyzing the risk on this position. you two are all set. have a great flight. thanks. we'll see ya.

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welcome back to "the exchange." five chinese state-owned companies announcing they will be delisting from the new york stock exchange amid tensions with the u.s. given certain regulations to verify financial odd it is. alibaba plans to give investors more access to its hong kong listing. what does it mean for investors who have been eyeing china as a possible investment? joining me is brendan ahern.

brendan, welcome again, this is something you've been working on for some time or is there a news element that comes as a surprise? >> we're not surprised for over a year, we've felt that in order to resolve, to find a solution in the holding foreign companies accountable act, the main sticking point would be the seven u.s. listed china adrs that are also state-owned enterprises. within that audit review, there's elements of potentially sensitive information, aspects about their ownership structure that the chinese government likely doesn't want to hand over to the u.s. regulation, so we think that of the more than 270 stocks, that you have five chinese soes delisting is a very strong positive to resolving hfcaa. >> what about alibaba? >> i don't see alibaba delisting from the united states yes, it is moving its primary listing to hong kong, but

remember, that allows alibaba to enter into the southbound stock connect, which means that investors in china -- alibaba has a billion users in china haven't been able to buy the stock. by going into the southbound stock connect program, alibaba would see upwards of $20 billio the shares outstanding 30 billion in market cap is held by investors they want that avenue. i definitely don't believe they want to see the usadr go away. >> why do you think this is less of an impact than previously expected what does that tell you about relations between the two countries? great to hear that president biden will meet president xi later on this year i think this is a very solable hfcaa, the pcob, these are global standards

the private companies have said numerous times they have nothing to hide. there is nothing in the audit review revealed user data or anything like that the only companies they don't want to show is the soes there are two soes we anticipate well delist and maybe that allows hfca to be the result, put to bed as it should be zblflt and then what the whole issue is resolved? i mean then what >> so these -- the companies they said many times they want to adhere to this global standard but they have nothing to hide from the pcob. so in order to adhere to the standard, they have to be able to inspect the big four u.s. accounting firms in china. there are aspects how they get

subcy duz or where the revenue comes from they don't want to allow the soes to delist that, is a very strong indication. that you might have a resolution >> do you think the frustration over taiwan has blown over there is a huge and furious reaction by the chinese and suspended relationships on a variety of bilateral issues. to your point, we have this news about president biden potentially meeting with xi later this year. and the moves that you say -- they call them behind the scenes but on a different level suggesting there is an obvious working relationship >> yeah. i think we spoke in the past if you're really worried about chinese-u.s. relations, you have to worry about great multinationals that are doing great business in china. obviously a company luke tesla,

25% of the revenue is coming from it china. just this week general motors, they're a subsidiary in china, joint partnership, outstanding sales in terms of the electric vehicle sales in china gh is going to do really well. there is a whole host of great u.s. companies that are doing business in china. hopeful lit politicians can take a page from business people and try to solve some of the issues. china is not going away. will the leadership keep the dynamic so that the stock investments are attractive especially given that tech is the hottest sector there we see major clamp downs what are the evolution of the policy under another term of xi's >> yeah. certainly getting the companies within many of the internet companies we hold within k-web

are almost monopolistic and we've seen the moets around the businesses go away it's way -- very, very heavily on the sentiment the last year and a half we think on the china internet regulation that issue is largely behind us and great to see this hfca issue gets put to bed we're not there yet. but within k-web, a pe of 15, that's less than half of u.s. internet names a lot of the names within kweb are value stocks now the top ten holdings and value so i do think some element of this growth come back u.s. tech come dak that left -- we lagged a bit there, but i certainly think a lot of the names we hold within kweb are great companies taking advantage of the domestic consumption story in china very, very cheap discounts >> all right brentian, thank you for your time today thank you for joining us up next, check out this chart. up more than 13% the past month.

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welcome back one more thing before we go. the spider industrials etf 14% over the past month. this is mystery chart we showed you before the break we'll get a crucial reading on the sector next week we have more now >> sema? >> kelly, the take away from the earnings season is a number of industrial ceos are throwing cold water on the prois inspect of a recession citing strong pricing tail winds, not rags and input cost the supply chain picture improving somewhat and the mid cap conference this week executives noting good visibility into 2023 strong pricing and lennox

international, provider of heating and manufacturing plant seem to be under control and then there is manufacturer carlisle said pipeline for roofing projects remains strong and that contractor back logs are at high levels the inflation reduction act seen as wayna win for a few of them. both ben futing from the tax credit around clean energy you'll see shares of couple minutes up 15% in the past month. general electric up 27% after that beat for the second quarter. there have been some outliars though in the industrial space caterpillar for one. it wasn't really automobile to articulate as to when those supply chain concerns would let up shares are down in the month of august of course, the stronger dollar still a major head wind for this sector, kelly. >> and deere, i guess that is an industrial.

>> they upgraded deere shares to buy. >> i'm feeling good. thank you very much. and from deere to discretionary, that is the best performer since the june lows. we trade the top three names in power lunch which starts right now. >> kelly, thank you very much. welcome, everybody, to "power lunch. here's what's ahead on a busy friday a big tech reversal. the sector rallying 20% since those june lows. apple up about 30% amazon 35. netflix 40%. this hour, the it tech names to own. plus, inflation in a bottle. the cost to make b