berkshire's share of the company as well as a disagreement with walmart should put a lift to the shares. >> one final check on the markets right now again floating toward session highs right now as you can see there the dow industrials up 235 points, s&p up 9 nasdaq composite about one quarter of 1% to the down side "the exchange" begins right now. thank you, dom hi everybody inflation coming off the boil. the consumer holding up okay the market has been rallying all good news right? maybe not. we'll look at why and where to find value in case this isn't the start of a new bull market plus, china's challenges the country trying to revive its economy and jump-start population growth but neil ferguson warning growth at all costs may come at a big cost to china. he joins us live more cracks on our housing front. we'll tell you what they are and what it means for the economy in

the back half of the year. we begin with today's markets. bob pisani has more at the new york stock exchange. >> two big stories today, kelly. first retail relief and secondly another midday rally it keeps chugging along. let me show you the retail stocks today guess what is on the leaderboard on the s&p 500 walmart. number one home depot and target are also up there on the leaderboard. walmart earnings beat comp sales accelerated. they love seeing that. sequentially, highlighted very strong back-to-school season that is very good news home depot also beat they reiterated their full year guidance though we have a slowing market. the bottom line is some relief here that the consumer is still holding up you see target and tjx also on the upside for the overall markets another rally the middle of the day. happened yesterday s&p 500 breaking out to the highest levels really since the end of april and early may. look at the steady move up ever since we bottomed june 16th. why are we rallying so much?

because the apocalypse has not materialized three main issues that have prevented the apocalypse from happening. first inflation is high, too high, but appears to be moderating secondly the consumer has been hit by inflation concerns but is still relatively strong. earnings, well, we're not negative they're a little bit lower for 2022 and 2023 but still up and actually holding up fine right now. look how the sentiment has changed. remember in april, may, and june everyone was afraid we'd have an intense recession. there was a lot of fear out there. everyone de risked and lowered exposure level wait a minute. fast forward two months. now it is the opposite we have fear of missing out, fomo people want in not out they want more risk and they're short covering another component here, some panic buying as some of the hedge funds and other investors who had been in cash are forced back into the market suppose you were a hedge fund with 4% cash you went to 20% cash wait a minute. too much cash now. s&p up 13% this quarter.

maybe you're only up 10% you are under performing and have to be forced back into the market look how broad the rally has been a number of big names. arc innovations 50% off its lows in june. we've seen other companies like consumer discretionary sectors, technology, transports, small cap stocks more than 20% off their lows maybe not a bull market but certainly a very, very broad rally. for most of the big tech stocks, apple is only 5% for a new low microsoft only about 15% from a new low. as i said, broad rally for the overall markets. back to you. >> bob, thank you very much. our bob pisani e even if we aren't in a recession right now you still have to be careful in this market says my next guest who is looking at less well known names that can add value to your portfolio, manager at essex investment management. what stock makes you most upset right now when people talk about getting in or there is debate

raging and you just think this is kind of beside the point? >> well, there's quite a range of them. i think in general what we've seen not just on individual stocks but in the market at all is this level of extreme behavior either it's an apocalypse the end of the world going into a deep recession, or everything is great. i think we've seen that in a lot of stocks that bounced back more sharply and also now in energy where we had the worst one-month performance in energy year to date what we try to do is take a little more of a middle of the road approach. find companies whose business is fundamentally doing better than it had been doing where any economic growth is just an add to the tail winds they've been seeing or the cyclical growth opportunities right now. >> a lot of the companies you like are the kind of areas that make my eyes glaze over and i mean it as a compliment because we hear so much about them but it is hard to know who are the ones you can really trust especially when thinking am i

kbg to meet the management team? am i looking at these track records? there is so much competition for instance, big commerce bigc one of your picks. e-commerce b to b. b to c makes sense ever commerce digital across multiple industries but how do you know these are the best stewards of your capital and you shouldn't just stick with some of the flashier names? >> a couple things on that one is of course you never know. right? with any management team whether a small cap or large cap company as we've learned over the years you don't really know any more than you can discern by going through the balance sheet, income statement, making sure all the numbers really add up and that business is as good as it sounds. what we also know is that all of these big names that everybody knows in the market place whether amazon, apple, microsoft, google, they were all small companies once they were all small, untested companies with untested

management teams what we want to look for are business models that make sense. we want to look for metrics that support what the management team says we do want some external validation whether things like the gartner quadrants or peer reviews in the case of medical device companies to make it, help us understand how good the product is and then we let the evidence guide us and we don't want to pay too much for those growth rates. >> yeah. >> in the case of bit commerce and ever commerce they're selling into somewhat niche parts of their businesses where they have some protection against the big guys. >> and tmci, i chuckle because you're saying here they have a new system to correct bunions. sounds great innovation especially in the medical part of theeconomy you can see the attractiveness here. but i want to go back to ever commerce which came public with a rush of companies one year ago. are you finding if we give a second look to some of these names as we clear out some of the flashier, glitzier stuff that didn't work, and the whole group kind of gets tarred with a

bad rep, that you're able to find investments you think will be durable and successful in the long run >> absolutely. both big commerce and ever commerce fit that mold of companies that came public in a rush they came public in valuations that did not make sense, that were really extended but within that wreckage and we've seen this again not only in this cycle but previous cycles as well as in the '99-2000 cycle out of that wreckage you can find some gems that will re-emerge as superior growth companies we happen to think big commerce and ever commerce are two of them it is a great place to go fishing for companies with good business models, improving fundamentals, and valuations that today make sense. >> mrc global ticker mrc is one everyone will understand intuitively, more of an industrial name, energy transformation there you have it. my final big picture question for you is what do you think about the market here from evaluation perspective in terms of where inflation and rates are headed and all of this recession

talk you know, what is your sort of feeling about the kind of returns people should expect over the next six to nine months >> so i think on thebig cap indices, the returns could be more challenged for the next six to nine months the s&p is now selling 18 times earnings so it is not over valued it's fairly valued we do think inflation has peaked and is coming down and our bet is actually that inflation will come down more quickly than what people expect. having said that, we really don't know any more than anybody else what the fed will do. we think the risks are that although the fed will moderate, they will continue to raise rates. and so this very narrow landing path to a soft landing remains very narrow. our guess is the economy will slow somewhat, not go into a recession, but get to very low growth having said that, small cap stocks are still very inexpensive at 15 times earnings their earnings growth prospects are much stronger actually than

the larger cap counterparts. they are very well positioned in terms of their exposure to the industrial parts of the economy, which have the tail winds of government spending as well as the reshoring trend, which has gotten increasing mention by company management, particularly in the last quarter calls. and are an overlooked area of the marketplace. we think that those small cap stocks should out perform their large cap peers and hopefully will give us something on the order of high single digit returns. >> exactly great to check in with you as always we appreciate it >> thank you >> nancy prial with essex investment management. meep betime higher rates, higher construction costs, and slowing sales have led us officially into a housing recession according to the national association of home builders for the eighth month housing fell to their lowest level since 2021 where do we go from here

let's ask the chief economist at real.com great to see you this is the part of the cycle you can say recession, end of cycle. something like that. >> when you look at the single family side of things especially it is interesting we have a combination thing going on here. over all total starts were down quite a bit but if you look at the broad moderation we're seeing in single family it seems somewhat offset by increases in multi family construction. builders are pivoting to look for areas of opportunity which they are finding in the multi family sector at the same time they are trying to manage pipelines with a record number of homes under construction. even as permits and starts are moderating we'lla still see a fair amount of activity in wrapping up projects already under way. >> so we've talked a lot with our diana olick about this but the idea that the one big difference this time versus 2007 might be that prices don't collapse and i wonder if we can

get any kind of more insight on that because it is probably the biggest factor for current homeowners for people trying to figure out whether to wait to buy. is there going to be the shoe to drop or not? >> yeah. i think that is a really challenging question to answer in today's market. there are a lot of reasons to expect that prices will maintain at the end of the cycle unlike they did at the end of the previous cycle we don't have the same amount of leverage home owners are sitting on a record level of equity today so that is a very different -- we don't have a lot of underwriting problems we had in the last housing cycle also we have record low vacancy rates. if you look at the number of homes that are vacant and available, it is at a record low for home owners and also very close to a long term low in the rental side of the market. so housing supply is tight really no matter how you look at it. >> it is going to be a drag, housing activity, for a while broadly speaking what do you think the builders should be doing in this environment? >> so builders are looking

forward ahead and finding that there's less buyer demand as costs go up, mortgage rates are higher than they have been, and buyers are grappling with that and maybe a little bit less eager to get into the housing market so builders are taking that into account and slowing the rate of permits they're filing for, slowing the rate of housing starts they're beginning trying to wrap up projects that are under way and trying to be mindful on pricing, making sure they're in market segments and in areas where they can still find some profitability despite the slowing market and what is interesting is we're seeing a geographical shift where buyers are really active just saw a zip codes release today and instead of the sun belt the most competitive real estate markets now are concentrated in the northeast in particular in new england as buyers are looking for affordability and finding it outside of the markets that have been hot over the last years. >> how are we on that trend? i see two different stories

anecdotally forming and one is that there is still this strong, secular shift from people who have housing equity can move to lower cost parts of the country but the other is some of those lower cost areas that were doing very well are the first where we're kind of seeing trends normalize and drop substantially. which would you say is the right narrative? >> it really depends some of the smaller markets in the west that benefited a lot from migration from california those are markets where we're seeing more adjustment on the east coast we are still seeing a significant outward interest from metros like boston metro, new york city, washington, d.c., and so that is why the northeastern markets are generally doing quite well really just depends on where you are in the country, which of those trends you'll be following. >> all right it is regional they used to say. danielle, thanks for joining us today. danielle hale with realtor.com. coming up the latest economic data out of china suggests a changing of the guard could be on the horizon.

neil ferguson joins us with a key indicator he is watching and what it means for the future of the world's second largest economy. plus the retail earnings parade continues with target, lowe's, and tj max' parent company on deck. can they keep up the momentum? technology lets autonomous vacuums work continuously around the house, but when your team has to work seamlessly around the world... you need more than technology. you need cdw who can help transform your organization with built for performance lenovo thinkpads. pre-configured for management flexibility and equipped with the intel evo platform. responsive collaboration tools

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welcome back just yesterday we got news out of china that the central wabank is cutting rate to stimulate growth and there is a big push to grow its population and if that doesn't work any short term pickup in economic growth is now beside the point niall ferguson just wrote about it the senior fellow at stanford university's hoover institute. good to have you back. welcome. i think we should also point out it is a little bit of the pot calling the kettle black here. our demographic trends are pretty bad as well but china's are a lot worse. how quickly will this come home to roost

>> if you look at the population prospects, which is an annual attempt to forecast world population trends, for years they expected china's population to keep growing all the way through this decade to a peak in 2031 in the latest edition which just came out they are accepting what others have been arguing for sometime that actually the peak is here the u.n. thinks it is actually just two years out others in fact think it has already happened like the researcher who has been arguing it's actually declining since 2018 but the bottom line is that whichever projection you look at that the u.n. produces the population of china is going to fall dramatically from now until the end of the century

the median forecast which assumes a slight recovery in fertility of a decline of 46%, nearly half by the end of the century, in a worst case scenario where fertility flat lines at the current low rate the population of china falls by two-thirds almost like the clock gets turned back to 1950 this is far worse than the comparable figures for the united states. i was at an extremely interesting conference and much of the discussion was around falling fertility, higher mortality, and of course a reduction in immigration but when you line up the u.s. projections with the chinese ones the chinese are far worse >> i like the projection where ours beats expectations and if theirs is as bad as it could be our population could literally be bigger by the end of the century which is crazy to think about. let's bring this back to the policy choices now

yesterday we had steven roach on the program and he said in passing this demographic challenge is the much bigger one for them but it is outside of xi jinping's control. do you believe that is true? >> i do. they canceled the policy which came in back in -- they canceled that what, six years ago and replaced it with a two child policy too late people are not responding to that change in the law in fact, chinese fertility is currently well below the replacement rate which is just over two children on average per woman. i don't see any policy that is going to raise that fertility rate after all, we have many examples of countries around the world that ran into this problem way before china and all kinds of policy experiments have been tried of the sort the chinese are now trying, incentives, tax breaks, support for child care

and it doesn't work because once the population has got down to that low level, the population growth rate has gone down to that low level it is extremely hard to get it back. what is going on here? women choosing careers over motherhood, families deciding, well one child really is enough because of all the costs of bringing up kids those arguments are extremely hard for anyone, even the mighty government of the chinese communist party to overcome. >> and i do with interest follow countries like hungary trying to kind of target it and see if that has any success and you mentioned china's problems also worse because of their lopsided population. many more young males than females. so final question. this week they're unveiling another suite of measures to try to boost the economy some interest rate cuts. we know xi jinping faces his third term coming up and is trying to build a more common prosperity economy what are we really to read into the near term initiatives then what are the implications for geo political fallout like

taiwan >> he has prioritized for years now the power over economic growth he made that call and accepted there was likely to be a change in the real estate sector and even made that call when he clamped down on the very vibrant -- of the economy. finally of course the zero covid policy turned out to be disastrous if it weren't for the export channel this would really be a year of recession for china. i think for all these reasons, china is in a very bad equilibrium where the priorities

of the leadership translate to much lower growth than they thought was possible they were targeting 5.5% not going to happen. they had to scrap the target from a geo political point of view of course it means the united states can be a little less worried about being overtaken by china than perhaps it has been in recent years. as for showdowns over taiwan, i think the longer this takes, the longer xi jinping waits, the more difficult this actually is going to become for china. so i think the asian century just got canceled and maybe the united states has a slightly longer lease on the role of number one. >> the asian century just got canceled for anyone who struggled a little bit to follow your sound, niall i think that perfectly sums it up and i felt it was worth sticking with it thank you for your time today. great to have you on we appreciate it >> thanks, kelly. >> niall ferguson from stanford. plunging gasoline prices have given the consumer some relief will it last into the fall that is ahead.

first the taliban takeover of afghanistan last year forced thousands of refugees to evacuate here. how are they making ends meet? we'll look at some of the challenges they are still facing in this labor market "the exchange" is back after "the exchange" is back after this which means you sign up, get help, and pay all right here. so you get a single-line unlimited plan for as low as $25/mo. switch today at visible dot com. ♪ ♪ 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.

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what if you could change your surroundings with the touch of a finger? now you can. biometric id... inside the innovative, new c-class. . welcome back everybody markets are pretty much at session highs with the dow up almost 300 points. look at the disparity here where names like home depot and walmart are helping the blue chips with the almost 1% gain now. the s&p up one-third of 1% the nasdaq lower names like zoom and modernaa down 5% to the down side weighing on the broader markets. in terms of some of the movers we're watching, it's the same

story that it's been for the past week or so but just keeps getting more dramatic. bed, bath & jond now spiking 60% today to $25 a share and this is the heaviest trading volume day ever it's already traded more than 270 million shares that is 1.5 more than yesterday which was 165 million. that was the previous record it's also about nine times the 30-day average of around 28 million shares they're not only on pace for their best day ever they've quintupled since august 1st for their best month ever. 400% gain. gamestop meanwhile only up 10% today and 30% in august. carnival shares are spiking midday for a real reason the company said booking activity nearly doubled what it was this time in 2019 after they eased their covid protocols seeing a business benefit as a result snowflake is falling after ubs down graded the name to neutral saying cloud computing spending could slow

bigger implications of that of course you can read more about that call at cnbc.com/pro now let's get to tyler mathisen for a cnbc news update. >> a lot of towels, man. a lot of towels. let's talk about president biden heading back to the white house after spending several days on vacation in south carolina there to sign what democratic sponsors are calling the inflation reduction act of 2022. attorney general merrick garland carefully considered whether to seek a search warrant for mar-a-lago holding many meetings with senior justice department and fbi officials over a period of a few weeks that is according to a senior doj official who tells nbc news garland wasn't being indecisive but did want to carefully consider what is clearly a controversial move federal agents raided a miami area pharmacy today. a source tells reuters investigators believe it is the largest source of illegal oxycontin in the state of

florida. the nba's schedule for the upcoming season has been released with no games on election day in november it is intentional. with the league encouraging fans to get out and vote. >> how many people weren't voting because of an nba game? >> not very many i wouldn't think. you could probably squeeze both in. >> we're closer to a national holiday aren't we? >> i think truly voting should open on friday evenings and go through sunday evenings and all the polls -- >> stay away from the booze. >> just do it on the weekend gives everybody ample time >> it makes a lot of sense i'll see you soon. still ahead target, lowe's, tjx all on deck with results all three stocks having a great quarter. my next guest says one could dip post results and when it does, he is a buyer. the name and what to watch is next in earnings exchange.

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welcome back to "the exchange." three more big retailers report results tomorrow morning will they be able to carry the positive momentum from walmart and home depot's beats today

we have the action, the story, and the trade on target, lowe's, and tjx today. let's start with target last quarter. the stocks report went tumbling 25% after having its second worst day ever they've been warning about overstock and the slowdown in consumer spending for the past couple months. should we expect another dramatic after hours move or disclosure cnbc.com retail and consumer reporter melissa repko is back with the story on all three names today and we have our trades, managing director at bk asset management and cnbc contributor. welcome to both of you melissa, let's start with target and some pretty high expectations now >> yes investors will expect a proper support on target inventory kind of like we heard today from walmart. target cut its profit outlook, so investors want to hear is it selling through that with markdowns and will it be in a

better position back to school and the holiday season target toends have a slightly higher income consumer than walmart which may help inflate it on the other hand it sells a lot more discretionary merchandise like apparel and electronics that could make it more vulnerable as people spend more on groceries and essentials. >> what do you do, buy the stock here you like it? >> i think it is rallying into the earnings and could be ripe for a very minimum survey in line surprise. they've been warning consistently because i think they are really trying to manage their inventory. their weakness in many ways is their strength, the fact they are so strong in discretionary they are really outstanding, their shopping experience far superior to walmart. walmart, you saw its earnings really coming from all those areas. i don't think target is anywhere near there they are trying to struggle there with the inventory at this

point. it may be another quarter before they stabilize the shift to me stock rallying into the earnings, really have to go to the upside hard for the stock to go further we could have a sell-off that having been said, on a long-term basis great company and stocks so any sharp dip here could be a good opportunity to buy. >> that was our little tease you've answered it in terms of trading target to lowe's now a similar story, already up into the report why? because home depot posted a strong beat this morning but lowe's only gets about one-quarter of the business from the pro segment while it is about half for home depot. you think that will be a head wind >> that is definitely a different dynamic between the two companies. on the one hand we heard today from home depot that people are still willing to spend on home improvement projects which is something going strong quarter after quarter. but with lowe's it does rely much more heavily on the do it yourself consumer and that kind of customer may skip the landscaping project or repairing the sink as they are able to

travel again, dine out again and decide to relax as they enjoy the summer time. lowe's has been trying to grow its home professional business and will be interesting to hear if it is having success to make the business a little more stable if do it yourself customers decide to take a quarter or two off >> boris, i think it is all pros because no one else can navigate the store. you should see me. i go in there and i pull out my phone and look up the item and say here is where i am where in the store is it i try to follow, okay. aisle a-38 whatever it is. >> the trick is to always corral a sales person and have them walk you to it that is the only way but lowe's is actually supposed to miss both sequentially and in a year-to-year basis and that is probably right especially everybody of course talks about the pro versus dui that is true that only 25% is pro. if you look at the sub components like sherwin williams, miracle grow, all of the suppliers to lowe's they all

have it lower. that to me could be a sign that the stock is going to miss as far as expectationings go. to me, right now, relatively wary of the stock. kind of up now over enthusiasm over home depot and it could be misplaced. i would stay away at this point. >> what are your thoughts about home depot itself given some of the headwinds you mentioned? >> yeah. you know, housing clearly is starting to slow down. for the first time you are able to get a contractor to pay attention to you the big, cyclical winds are definitely having an impact. that having been said there is still a tremendous amount of consumer demand going forward. both of the companies are actually on a long term basis but the next couple quarters especially with so much housing supply coming on board and slowdown in projects could have a weighty impact

>> i will report back when we have a glut of people vying for that business. finally, let's turn our attention to tjx today the parent company of tj max and home goods down about 12% this year which makes it the relative out performer this group but will they guide down i guess that is one of the big questions. >> two of its categories, the home category and the apparel category have been showing some signs of softness and also a lot of markdowns at target and walmart and a lot of other places so is it able to keep the sales going even as demand shows signs of pulling back? on the other hand it could benefit from the excess inventory we're hearing about because it may have an abundance of high quality merchandise in the coming months and could also benefit from a more value mindedness of consumers as they go into back-to-school and the

holiday season which is when a lot of people are looking for gifts and perhaps looking for new outfits, too. >> boris, a perennial out performer last decade. more of a troubled stock lately. what do you do with it >> i think melissa is right that targets and walmart's woes are tjx's blessings in a way because they'll get interesting inventory going forward. there is also a big problem in terms of transportational labor costs going up so the margins are starting to get squeezed that is the big thing. no doubt consumers going down market at this point the question is how much consumer demand is going to overcome the cost factor going forward. and the other thing is, how much of consumer demand they see sustained through the christmas season that will be the big, open question on top of all that as you said the stock is very favorably valued some would say it is pretty much over valued at this point. there is a lot of risk here coming into these prices especially if they just guide to

expectation. for the stock to really perform well they have to beat expectation. that is a tall order going in. >> there you have it that's the layout of a fun morning to see how they do thank you. we appreciate it quick market alert take a look at oil and you might guess, down again. we're talking $86 a barrel now the lowest level since january yes, up about 15% on the year but a remarkably low move given high prices for nat gas, other commodities. the war between russia and ukraine that is still playing out and, again, a key barometer for consumer spending. the lower this goes. the more favorable the outlook up next, year after the taliban regained control of afghanistan, we'll get a look at the struggles refugees face here in the u.s. including finding jobs that match their skillet e change will be right back.

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welcome back it's been one year since the u.s. troop withdrawal from afghanistan. and for a lot of the refugees who have settled here in the states their lives look different a year on out. we have a look at how their jobs in particular have changed. >> they have to make ends meet some 81,000 afghan nationals left behind their savings, careers, and in some cases their families to start over here in the u.s. after three months of government support ran out most took what are called survival jobs just to pay the bills. upwardly global an organization that helps immigrant professionals find work says the result is many are under employed >> that means they're either not working or working as a ride share driver or cashier or truck vendor that is a challenge. >> is it enough to make ends meet for many of them? >> it is not but also a loss for our economy. if those individuals were employed at their skill level, they would be generating

$10 billion in tax revenue a year. >> one of those evacuees is a former afghan air force pilot whose last name we are withholding for security reasons. he trained with u.s. forces in texas and alabama and flew along side them in country now in scottsdale, arizona he is a flight line tech initial. >> it is just working on the ground and i want to be on the air. right now i am servicing aircrafts like if they need fuel or any other service we do it but i accept this job because it is still in the aviation community. >> his dream is to become a commercial pilot and he told me this would be far easier than flying a blackhawk helicopter in a war zone which is what he is used to >> i imagine how many refugees are we speaking broadly what are the chances someone like him, is it a matter of time and training or are hurdles much

greater? >> time, training, money of the 81,000 it is unclear how many are employed but shapur tells us there are several dozens of his friends from the afghan air force who came to the u.s. many between texas, california, virginia, most working for uber or lyft but for someone like them to become a commercial air pilot is an uphill battle. about $95,000 in fees for training two years to train they don't have their flight records with them. they left everything back in the country. it is a lot that they have to do and it is going to be difficult if not impossible according to upwardly global without a company to sponsor them. >> in this area, northeastern, pilot shortage just last night that was bringing things to a halt and you would think at some point wouldn't the airlines subsidize the cost of the training if the shortage is that bad? i also wonder for some of the refugees where this calamity befell them do they want to stay here for the long run? was it seen as a way in or a way to kind of do what they can until they can maybe some day

get back home? >> i asked that question to nearly everyone we interviewed whether it was in mesa, arizona where shapur is located, in the virginia area where we talked to several refugees as well or here in the new york city area. most said when they made the decision to leave it was permanent. they still have family left in afghanistan but the idea is if they're still in afghanistan they want to bring them here to the u.s. not go back the other direction. because the assumption is that the taliban will be in power for the long run and without some sort of change in power, down the road, it is just not going to be a good life for them especially for the women we interviewed. >> we were talking to niall ferguson a little while ago about immigration being part of the demographic challenge. here is a good example of the possibilities he is talking about. good to see you. coming up the national average gasoline price has dropped below $4 a gallon but could be short lived according to one analyst why he says pain at the pump could return and oil prices aren't exclusively to blame. that's next.

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[ cheers ] are we actually going? yes!! and once in a lifetime moments. two tickets to nascar! yes! find rewards like these and so many more in the xfinity app. welcome back everybody the national gasoline price sitting at $3.95 a gallon

falling below the $4 mark last week and despite crude now at $86 a barrel the lowest level since january, we could have gas prices tic up as early as next week according dehan, he's head of petroleum analysis at gas buddy he's sort of like the king of gas twitter. can i call you that? you keep us up to date. >> i try to keep us up to date things have been moving so much in the last couple of days, and actually kind of a surprising development, a little bit earlier than expected but last week we saw the wholesale price of gasoline in some regions jump $0.45 a gallon no surprise that -- started to see increases, indiana ask and ohio, and actually, that 61-day streak according to our data ended yesterday. the national average jumped a whopping penny, but we are kind of now seeing the bottom out now. oil prices yesterday and today are back down, so it's not impossible that it was just a

one-day blip i do think that maybe we'll start to go a little bit lower with oil prices now paving the way for a further drop. >> it's been remarkable to me how fast and furiously we've fallen i mean, it took us a couple of weeks to talk about why gas prices hadn't dropped, and then it feels like they've been on a plunge ever since. my understanding was there's still this refining bottleneck, and we should have had -- i'm just kecurious where we stand o couple of those challenges. >> well, you know, the spr is maybe not actively pushing prices down. i think it's calming to move it from one pool to another, from the spr to commercial inventories. we're exporting a good amount of those barrels as well, which helps alleviate global supply tightness. i don't know that it's doing a lot to actively drive prices down, maybe a little something i think a bigger change we've seen over the last nine weeks with prices declining is renewed concerns over the u.s. economy the federal reserve raising interest rates, a level of 75 basis points, a lot of consensus was that that would slow the

economy down, not according to the jobs market. i think that's where a lot of the drop in oil has come, not only that but russia continues to sell oil to china and indianapolis, and that was maybe unexpected in the early innings of those sanctions so that oil is flowing really supply has been modest i mean, it is quite a bit lower, but g prior to the blip gasoline supplies had been increasing in june and july. last week they declined by 5 million barrels, which is why i think we saw the big jump in wholesale gas prices in some areas of the country. >> yeah, where are we in terms of inventories for both gasoline and diesel we had heard earlier this summer that parts of the country in the northeast on the diesel front were close to running out. >> certainly the diesel tightness is persistent. that's a problem that will probably continue to last into the latter half of this year, especially as some of those northeastern heating oil tanks start to get filled up that's more tied to the economy.

i don't expect much improvement in diesel. that's just because we've also lost a lot of global refining capacity, especially in europe gasoline inventories on the other hand are looking fairly good so gasoline may be the priegt s bright spot, but diesel, heating hoyl oil are likely to be challenged. >> the risk is there if we get hurricanes or general forces that push up the oil or gasoline prices in the fall we'll have to wait and see how has demand been? maybe you could kind of compare with year ago levels or something like that, but we had a previous analyst i think earlier this week who said demand hadn't actually snapped back as quickly as he would have thought because of the lower prices, and how would you describe demand for gasoline and what it tells us about the consumer >> kelly, a lot of analysts look at eia, which measure how gasoline disappears, not how it's being sold. according to gas buddy data, which does look at retail gasoline demand via transactions

if our payments card, demand is below norms maybe 5 to 8% below normals from where we've been in the last five to ten years it's a little bit weaker than last year, but not as weak as the eia implied demand metrics pointed out. we did see those implied demand numbers jump up last week because suddenly there was a jump in wholesale prices which forced stations to fill up overall now, i think we are starting our seasonal decline for gasoline that's not rare this time of year, schools start going back into session, vacations are wrapping up. that seasonal decline will continue, but i think with prices now lower, the gap between this year and last year is going to start to narrow. >> very, very interesting. patrick, good to check in with you. thanks so much >> thanks, kelly. >> patrick dehan with gas buddy. still ahead, the s&p up about 13% from the june lows there's a warning sign starting to flash for stocks. llnepotential red flag for the ray xt

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welcome back want to get to one more thing before we go here. since the june lows, high yield bond funds have seen consistent inflows moving higher in step with stocks. let's get to seema mody with a look at what this is telling us about the broader market seema. >> kelly, some interesting moves, four weeks of inflows into high yield credit, about ten billion dollars according to bank of america, and that's also allowed credit spreads to tighten. >> the peak for equity investors is now you can actually start building on an argument to say, look, maybe there is a scenario for a soft landing >> reporter: however, fast money trader guy adami says you're starting to see some potential cracks in the credit market. the widely followed high yield ihgi etf in the last week has underperformed the broader stock market just yesterday stocks ended

higher while the hyg turned lower. >> on tas days when the market significantly like yesterday, the hyg was lower. we saw an interesting reversal late last week as well st it's something i'm watching i don't think the all clear sign is there despite the fact that the s&p 500 has rallied some 700 points or so off its low i still think we should be focused on credit and all things around credit. >> kelly, so far no signs of real distress in high yield, bank of america's credit stress indicator has declined in recent weeks, but remains towards the top end of the range that's why this is a corner of the market that investors are watching closely to see what it can tell us about this broader rebound in the stock market. >> and that companies can tap that window while it's open, right? >> $6.5 billion. i'm so glad you mentioned this, kelly, has been raised just in the last 48 hours.

there are a number of companies raising debt beyond royal caribbean which raised 1.5 billion. today goldman sachs went to the market as did ford motor there are a lot of companies that are starting to raise more debt and taking advantage of this favorable market condition because who knows how long it will last. >> right, and that's how the bull market keeps going for now thank you very much. and from red flags to green light, warren buffett's berkshire hathaway loading up on more shares of amazon. we'll tell you more on three stock lunch. welcome to plu"power lunch." i'm tyler mathisen market power players, apple and microsoft, guess what, they make up more than 13% of the total market value of the s&p 500. that's those two stocks alone. that's a r