gas related. i think the energy sector will keep going particularly nat gas for the reasons josh said earlier. one last check of the markets before we get out of here all the indices off their highs of the day we're seeing the dow and the s&p in the red the nasdaq fractionally higher, basically flat that will do it for "halftime. "the exchange" with kelly evans begins right now thank you, frank hi, everybody. i'm kelly evans, and here is what's ahead this hour has the rally run out of steam the answer may be yes based on what we're seeing in the options market we'll look at what's going on there and where the opportunities are right now. and apple's ad ambitions, what's the plan who are the winners and losers, and how will it affect all iphone users we'll tackle it. the earnings parade continues with deere applied materials and footlocker, whether it's a business cycle barometer, the pulse of the consumer, all

coming up in earnings exchange first dom chu. semis, cedes and shoes is like sally sells sea shells by the sea shore. the markets are very neutral and when i say that it's not to say they're up or down, although they're fractionally, marge inay so to give you context of the range, the s&p 500 which sits at 4270 down three whole points, flat on the session. was at the highs of the day up 14 points. at the lows of the day we were down 13 points so, again, tilting to the lower side of things but not by that much. the dow industrials down 115 points one-third of a percent decline the composite for the nasdaq just about flat on the session, 12,938 the last trade there. if you're looking for the real outperformer of the day look no further than energy.

it is the big outperformer by a lot. it is up right now the energy sector spider up 2% about six times the gains of the next closest competitor sector which is technology which is up rough by a third of a percent. wti crude prices up 2.5%, back above $90. apa corp, halliburton, devon in the top ten right now. keep an eye on the energy trade. we know it's been down side volatile for a while this bounce is big in the grander scheme of things maybe not so much. the stock of the day, the biggest contributor to the dow jones industrial average so far today, which is down on the session again, is cisco systems up roughly half a percent, adding almost 20 points to the dow just by itself this is after the world's biggest maker of computer networking equipment and the things that run the internet comes out with better than expected results for profits and results. it says some of the supply chain

issues around chips are easing let's make more stuff, sell more to customers cisco systems a big bellwether for technology to watch. back over to you >> dom, thank you very much. now the sharp market rebound we've seen the past two months came seemingly out of the blue so will it fade back into obl oblivion for clues on that we turn to the options market and seema mody has the details. kelly, what's so interesting equity and options strategists are divided on whether this market bounce can last equity strategist at jpmorgan just put out a bullish note pointing to the recent decline in market volatility as supportive for stocks along an increase in buybacks his target, 4800 on the s&p 500. some are looking at options activity to help them navigate the market typically a shrinking put call ratio is a bullish sign but interactive brokers chairman sees it as a contrarian

indicator. >> -- 0.7 is usually telling us that traders are bullish and they are usually wrong, so it usually forecasts a low ratio in the bear market. >> he is calling for a bear market another concerning data point call option volume has risen in the last few weeks breaking a one-year down trend. this surge in volume is coming at a time of year where more caution is normally wanted and such speculation is certainly not something the fed wishes to see at this point, a key data point to keep an eye on. >> seema, thank you. our next guest knows how to read the market leaves chris murphy co-head of derivatives technology at susquehanna. let's pick up there, chris how are you looking at things? >> well, one thing i want to

point out when we're talking all about this put call ratio and the increase in call volumes, we have seen a bit of a resurgence in the message board-style meme stock trading. let's just point out one option, apple. we've all heard of it. we looked yesterday, a million calls traded that's a big number that will decrease put call ratio, input volume, but if you look to the next day, how many new positions were established, new open interests, 100,000 900,000 of that call volume was opened and closed the same day that will show up in the call volume numbers you just mentioned. it will impact put call ratio. but it actually doesn't have quite as much of an impact if you think about it open and closed over the course of the day will not have a lasting impact. >> what does have a more lasting impact >> in terms of the rally running out of steam, positioning is more evened out now, sentiment is more back towards neutral a lot of the shorts have

covered. if you're looking at technicals, we did run into some resistance at the 200 day those will all be larger factors than call volume that's opened and closed in the same day and is typically chasing the momentum as opposed to causing it >> so does that leave you feeling like, okay, we've kind of come back and we're even stevens now? and what does that typically tell us about the next phase of the market move? >> well, i would point out that the vix has come in a lot since the june lows from around 35 down to around 20. but it's kind of found a level around $20 that could be a sign that investors are looking to start to put some protection back in here as we finish out the summer and head into september. for me, i think it's going to be a little bit more range bound. the easy money, the positioning, the sentiment evening out, that's already happened. i think the next kind of move to the upside will be a lot harder. i would be looking at

overwriting and even pairing some of these positions. at the same time as long as inflation has rolled over and stays subdued i think the down side as well a range bound end to the year from what we're seeing in the options. >> are there any individual stocks, sectors -- you mentioned types of trades -- that you would be more inclined to put on right now? >> i would look at some of the big mega caps. let's just talk about apple, for example. i don't necessarily have one but it benefits so many things almost a flight to safety when the equity market is having issues you're not going to get in trouble for buying apple the down side tail is so much supported by that same factor. you look at one of the big mega cap stocks but at overriding it a bit if you do think the upside is kind of the extreme upside is out of the market. that's kind of the type of trade. i don't usually pick stocks, but that's the type of trading strategy long a stock you are

really confident in but selling some upside because you think it will be more choppy. the easy money made. >> it has been a bellwether lately what about energy where we see people feeling more bullish, more constructive, could even be a spoil sport if it really surges and we run into a lot of problems for the consumer? i'm wondering if you would be making any mofves on that front. >> that's a good point if you look at your entire portfolio and the one thing that could really derail the market right now is a rebound in inflation. let's say oil prices start to move higher. we know the energy issues in europe, things like that i think it makes sense to have a greater percentage of your portfolio in the energy sector compared to what percentage energy is in the s&p 500 just because you want to protect yourself from that adverse scenario it's like a hedge in some ways >> absolutely. chris, we'll leave it there. thanks for your time today chris murphy with susquehanna. coming up, kohl's slashing

its full-year forecast for exactly the reason he was just talking about. inflation squeezing its core shoppers cowan slashing from 60 to 35 what will it take to turn the ceo around we will ask the ceo next tech, tractors and tims. we'll bring you the action, the story and the trade for all three names coming up ahead on three names coming up ahead on "the exchange. welcome back to earth. thanks, it was pretty life changing. dude it was eight and a half minutes. i didn't even get to furrito.

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welcome back, everybody. let's take your attention to shares of qualcomm hitting session highs in the last few minutes as the company reportedly plans to return to the server market with a new chip bloomberg is reporting that amazon is considering buying the new chip we've reached out to the company. we'll let you know when we have more that's a 2% pop in shares of qcom kohl's is slashing forecast, expecting revenues to fall year on year instead of growing slightly they are cutting earnings

guidance by more than half shares are down 6% where does the retailer go from here the ceo, michelle gass of kohl's, joins us with our own courtney reagan. welcome and kick things off. >> thank you for joining us today on "the exchange." i guess we'll start with the consumer you serve so many questions as to the health of the american consumer and we know not every consumer is the same. the high income would not be as affected by inflation as middle income consumer. what's going on here >> well, courtney, you are absolutely right where we are seeing the biggest pressure in our business is that middle income customer and we saw that come on very suddenly towards the end of may, june by far our toughest month and as you mentioned interestingly enough we're seeing our upper income customers be fine. in fact, we're seeing more customers and they're spending more we're feeling the pressure

if you think about it especially in june, you hit 40-year high inflation, they're spending it on food and on gas what's left are those discretionary categories which largely we plan. and so that came on quickly. i will tell you the team responded with a lot of agility. the customer is looking for value. we put more value in, more promotions, so that did help rebound some of our sales in july but we're also being very prudent for the balance of the year expecting this pressure will persist all of that being said, courtney, we do see this as a moment in time we've navigated these kind of head winds before and we remain with great conviction on our long-term strategy and where we're seeing that in the doors we're remodeling and transforming those are working. there are just not enough of those right now. >> margins understandably compressed when you have to promote more than potentially planned. other retailers, though, had to do somewhat similar strategies to move those more discretionary

categories understanding you may not have the same product makeup as some competitors. even, still, far more compressed than others. how do you fix that? how do you turn that around the balance of the year? the consumer remains strained from external factors. >> first off, courtney, as you mentioned we are contemplating that in our guide. we are expecting the back half of the year to be more promotional as the customer is looking for that value we're facing inflationary pressures in things like freight. how long will this go on not sure we're doing lots of things around our business to make sure we can navigate this period of time we're managing through inventory, promoting, clearing the goods that are more perishable like the spring goods. we did cut back on our receipts because we had originally planned for a stronger back half of the year. that being said plenty of new product for the ever-important holiday season and we're tightening the belt on

things like expenses you've just got to buckle down during this time recognizing that we'll get through it. we continue to be a very healthy and stable company and, importantly, we remain committed to our long-term strategy. while this is going on we're continuing to invest to build out those remodeled stores which have beautiful sephora shops front and center. >> is cash going to be an issue for you? inventory is up, 47% some purposeful build in the number your cash balance is rrelatively low. >> if you look at kohl's over time we have always had strong free cash flow what we're navigating right now, two things one, we're continuing to invest in our stores. both remodels and putting sephora in that's a short-term impact and, as we sit here today and

look at the valuation of the company, we see an opportunity around buying back some of our shares we are doing a share repurples of $500 million. this is a short-term thing look forward, our cash flow will be fine over time. we have a strong history of that >> michelle, it's kelly here i totally understand your point about this being short term, a lot of analysts will say being in the middle is kind of a tough place to be. would you ever think of trying to go more specifically up market for the longer run? >> when you think of kohl's we serve 65 million customers across the country and online. we have a lot of customers in that middle unincome for me it's about relevance. at a time like this where it's

about value, showing up with sharp price points, but on the flip side our premium brands are doing well, tommy hilfiger and calvin klein as we think about sephora, an elevated, prestigious beauty experience our customers are shopping across price points. relative to the success of the partnership we already had plans to do 850 shops. we're working with sephora on perhaps a smaller concept to go in our smaller stores. >> michelle, before we let you go, i don't know if we've had the opportunity to talk to you on around since the deal or potential deal to go private ended up falling apart for market reasons or whatever obviously there was an offer at one point to buy the company for $64 a share. you are sitting at below $32 do you feel like you failed your fiduciary duties as a board to sell the company at that high

price? >> what i would say, first off, the board it tremendous diligence around this process. navigating since the beginning of the year with multiple bidders, the reality is there was never an actionable bid over $60. as the work was done and things came to a conclusion based on the financial markets and the retail market there wasn't an actionable bid the process concluded. and i think everybody on both sides did their homework but at the end of the day there really wasn't a bid for us to react to we're now fully focused on driving our business forward and serving our customers. >> you have a big half of the year to go certainly with the balance of back to school and holiday. michelle gass, thank you very much for joining us here today >> thank you, courtney >> michelle and courtney, our thanks to you both still ahead, apple is on pace for its longest weekly winning streak in over a year now with that 30% pop from its

lows two months ago. can its advertising ambitions ghw propel it to new all-time his? we have that story on "the we have that story on "the exincluded.xes and fees plus we have a new plan with 5g ultra wideband. switch today at visible dot com. ♪ ♪ wow, we're crunching tons of polygons here! what's going on? where's regina?

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welcome back to "the exchange," everybody the dow had been down 136. we are off session lows, but it is the only one in the red the s&p up two points and the nasdaq up 23 a mixed bag here let's check on shares of bed, bath and beyond which are now plunging 20% after chewy founder and gamestop chairman cohen says he plans to share his entire stake of nearly 10 million shares the stock is still up 260 points this month

his actions are coming under criticism. he filed a complaint with the s.e.c. to tyler mathison for a cnbc news update. the same man involved in two meme stocks, there you go. here is your cnbc news update. lawyers for media companies are asking a federal judge in florida unseal the affidavit used in the search warrant for president trump's home at mar-a-lago they argue the release is in the public interest, but the justice department says it could compromise its ongoing investigation. in ohio, two former fraternity members were sentenced to jail after a march 21 hazing death at bowling green state. both men were acquitted of more serious charges back in may and will only serve six weeks in jail six other members of the fraternity have pleaded guilty to various charges, though none will serve more than a month in jail the big ten conference has announced a $7 billion media rights deal with three television networks -- fox, nbc

and cbs -- will begin airing big ten sports in 2023 the california schools ucla and usc will join the conference in 2024, and they will be able to share in the biggest sports media deal in college sports ever tonight on "the news" former trump organization cfo allen weaisselberg has pleaded guilty to tax fraud charges what does that mean for the former president and his business that's the business tonight on "the news" at 7:00 p.m. eastern. kelly, back to you >> i'll see you soon, tyler. thank you very much. t you see the results there. only one is a long-term winner according to our next guest. the name and how to position for the name and how to position for awireless network.essive how are we different? we exist only on your phone.

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welcome back, everybody. it's time for "earnings exchange." today we have the action, the story and the trade on applied materials, deere and foot locker a key read on the semis, the industrial cycle and the

consumer let's start with the chip maker. after the bell today 34% off the highs despite a 17% pop over the past month and those rivals like micron and nvidia have warned of slowing demand this one could be singing the same tune as china accounts for about 30% of revenues. dominic chu is here with the story. the founder and president of jewel financial is here. dom, kicks things off. >> the semiconductor trade is so key for so many traders and investors out there, kelly, because many traders treat the semiconductors as a leading indicator for technology and then by extension technology a leading indicator for the overall market why? because technology is the biggest sector in the s&p 500. so applied materials could be an interesting leading indicator because in the semiconductor industry, right, this is a company that makes the equipment that makes computer chips. so if you're looking for the leading, leading, leading indicator applied materials

could be it. if you look at what traders will be watching besides the top line results, they will be looking at any kind of forecast signal that applied materials has. and certainly any commentary about the supply change shortages, the chip crunches we've seen we've heard cisco say they are seeing some signs of an easing of that chip supply chain issue helping them sell more product applied materials could add to that narrative overall as for what traders are expecting, not a terribly volatile report. the options market is implying what could be a 4% move up or down and, by the way, kelly, i say not as much fireworks there because 4% up or down is roughly what applied materials has traded in the past four quarters on earnings days i will point out each of the last four quarters of earnings days, kelly, it has been down after the report back over to you >>quinn, are you a buyer of this leading, leading indicator? >> i am. dom did a phenomenal job

outlining what this company does if you use your noggin, a company that has seen a significant slowdown because we had a terrible chips shortage. basically we had seen a shutdown in manufacturing in semiconductors for, what, almost two years. now we are going to start to see a huge ramp-up in the manufacturing of those chips and semiconductors and ultimately who does that benefit? as dom so eloquently pointed out, it benefits applied materials. now the report itself, we're not looking for fireworks just as the options market ensues, but any sort of weakness on present numbers, because, look, not going to be all that great or stellar, we think it's a buying opportunity. ultimately i think this company is going to get a better than anticipated projection going forward and ultimately i think this is a long-term winner it's relatively cheap trading 13

times forward earnings, even with the earnings estimate at 12%, very little debt. it's a buy in our book >> all right maybe a good sign then that you're feeling that way. let's turn our attention to deere which reports before the bell tomorrow. it's been on a tear, up 7% the industrials are down about the same amount. but its shares have dropped on three of the last four reports and they're still around 12% short interest seema mody with the story. what will you be watching, seema? the persistent rise in food prices, wall street wants to know if that's resulting in higher demand for its ag equipment. typically when prices rise, you start to see production increase, not just here in the u.s. but key markets like brazil and europe, and that results in farmers buying more tractors and other agriculture equipment. is that what the ceo john may is seeing this time around? now expectations are really high going into this report about 65% of analysts are bullish on the stock. it's risen about 22% in the past four weeks the inflation reduction act, there are incentives there,

kelly. it could benefit john deere and its rollout of the electric tractor that would run on batteries in 2026. can they speed up the time line with the new credits that is what analysts will look for clarity on from ceo john may when he speaks to shareholders on the call. lastly, supply chain we've had a divergent view amongst the industrials on how the supply chain picture is sort of forecast for 2023 caterpillar really can provide the guidance whereas the engine space said, no, things are getting better where does john deere stand and their 2023 order book will be key. >> very interesting. quint, i know you're concerned about the debt levels. what do you think overall about the trade here >> the trade for me is a sell. it continues to be and i've been wrong on this one in the past as noted. it keeps going higher though it's well off highs right now. it's been a very nice trending stock. what keeps us away from this company is basically the high debt levels.

now to a degree that's their business model financing very large pieces of equipment but ultimately it's also not a cheap stock it's trading basically 14 times forward earnings and those earnings are set to grow at 10%. we could hear a rosie picture. long term this is a company i just steer clear of because of debt levels. >> all right running away from the deere. let's get to our final name which is foot locker reporting before the bell tomorrow and shares plunged nearly 30% back in february when they warned they will be selling fewer nike products going forward, once their biggest supplier they posted a surprise earnings beat in q-1 guided higher for q-2 and shares up 25% in the past month courtney reagan is back with more on this one for us. court? kelly, the share price reaction can be volatile in

either direction for sure on a number of different headlines. we'll see what happens tomorrow. you had a good point about last quarter the company posting a surprise beat for both revenues and profit they have a pretty good forecast coming into the second quarter but we know things markedly changed for the consumer in some pretty big ways in may, june and july when it comes to the impact of inflation and having to pay more for things like gas and food and housing will that impact what they spend on sneakers especially if they want nike and foot locker has much less of it now. that is an issue analysts are trying to figure out how foot locker will work through at one point they had 70% of their assortment or sales was nike and it will get down to about 55% as nike calls back some of its own inventory. what's been filling in the difference and is it selling as well? i think there's a lot of questions here we know there is some early back-to-school buying, but that's typically more for supplies and less for things like sneakers and athletic gear which tends to come later in the back-to-school cycle again, if you have the

discretionary income to do it. there's a lot of question marks here as the company continues to work through some supply chain challenges we know other companies have been able to work through that at different speeds and with different success. and this happened to be a company that really struggled with supply chain disruptions. >> good point. it's trading eight times forward p/e, quint little to no debt. does that make you like it >> this is a tough one for me because ultimately it has the numbers that would really interest me from a fundamental perspective, as you mentioned, little to no debt. i think the management decision to shift away from the focus on nike was really a positive ultimately we're still faced with what looks to be a 9% to 10% decline in revenues on top line and then ultimately what will be a 60% decline year over year in eps, that's if they hit their numbers. even though they have decent fundamentals, you have a stock that's in decline. i think, again, management's decision to shift away was a good one from nike but we want to see them right the ship and see an uptick in revenues and

earnings and with the inflationary pressure, with the job, with the demand -- with the difficulty of employment, i just think this is too many head winds for this company it's a sell in our book. >> courtney, thanks. quint, our thanks to you as well for all the trades two voting fed members speaking right now and making some strong headlines about the direction of rates let's get to steve liesman with the details. steve? >> reporter: kelly, thanks very much st. louis fed president jim bullard saying he is leaning toward a 75-basis point rate hike at the september meeting. this flies in the face of some of the dovish takes that have been out there both on the minutes yesterday and in response to the pivot that was perceived from the chairman at the press conference last week so the issue is this this is not dramatically different from where bullard has been all along he still seems to be -- by the way this is a "wall street journal" interview that was done he still seems to be in line

with the idea of 3.75 to 4% by the end of the year. this is close to where the market is. if you look at the fed rate outlook, kelly, the market is at 3.50 bullard is at 3.75 to 4% you still have, what, another 100 or so to go in the next two meetings that could be 250 he's more aggressive than the overall committee but not necessarily more aggressive where the market is. there's been this 50, 75 it's interesting, kelly. i do not see much of a change in the probabilities. we were at 60% probability of a 50 this morning and we're still at 57. so just down a little bit really a little bit more leaning towards the 75 but not the odds-on favorite right now esther george saying she was encouraged by the july inflation report but no time for a victory lap. she still sees a significant difference between the supply

and demand in this economy so she is also onboard what's happening, kelly, i think you may understand, the market is perceiving this pivot, perceiving these rate cuts next year and the fed is leaning against it am bullard is saying again as he told us, it's premature for the market to be counting on rate cuts next year. >> it's fascinating and 2.88 for the ten year steve, thanks for bringing that to us. our steve liesman. coming up, $54 billion that's how much federal aid airlines received during the pandemic to help offset their losses now the pmajor carriers are making money and unions have a making money and unions have a specific request

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received billions in federal aid to keep paying workers but with the aid came stipulations one of those was that the money could not be used for stock buybacks that restriction expires at the end of september and now multiple airline worker unions are campaigning against the return of buybacks urging the likes of delta and united to invest in operations and employees instead. let's get to phil lebeau to discuss and share these details. this is really pitching them directly against management, phil >> reporter: it is, kelly. i want to be clear about something. before the break you said, hey, they received $54 billion in aid from the federal government. that was not money that went into the coffers of the airlines that was passed through the airlines direct lily to the employees. the whole point was congress wanted to make sure that if the pandemic was over in a matter of months and we saw a return to travel, that there would not be disruptions that we later on saw, at that we saw later on,

because so many people left the industry like in other industries as well so with that as a backdrop, keep in mind the airlines have not been buying back stock since the original agreement to pass through that aid to their employees. now they can after september 30th, but when i've talked with exec tutives at different airlines, that's not in the offing sarah nelson, president of the flight attendants union, out with a strongly worded statement today, not necessarily a warning as much as her saying, look, you'd better spend the money on employees before you spend money on a share buyback saying we can't allow executives to spend one dime or send one dime to wall street before they fix operational issues and conclude contract negotiations that will ensure pay and benefits and keep and attract people to aviation jobs the interesting thing here is, kelly, as you take a look at the airline stocks going back before the pandemic, and you saw the big sell-off in february, early march of 2020, the interesting

thing here, kelly, is that no other industry do you hear people saying companies should not be allowed to buy back their stock. and there are other companies that are short staffed who cannot find enough help who are buying back their stock. so the question becomes, why should the airlines not be allowed to do that as well no indication they're planning on doing that, but why should the airlines not be allowed to buy back their stock when other industries are >> that was my quick question, phil are any buybacks currently planned to your knowledge? >> reporter: no. no none are currently planned remember, they just swung to profitability. their big focus right now, generally speaking, and when you talk with the managements of the different airlines, finding the staffing that is first and foremost on their priority list. and keep in mind the airline unions, whether it's the flight attendants or pilots, they're in contract negotiations. so to a certain extent they have the bully pulpit, if you will, and they're saying, hey, no spending money on buybacks where you have to get us straightened out with our contracts first

we will likely hear more of this in the weeks and months to come. >> very interesting. phil lebeau, thank you very much we appreciate it coming up after a majority of users opted out of allowing third-party apps on their iphones to track them for advertising purposes, apple is now poised to place ads in its apps on those same phones. we have the details next

welcome back, everybody. apple has had a monster comeback the past couple of months up 18% just the past month alone and back within 5% reach of its all-time highs despite that ad recession some are complaining about and to some extent apple has caused, the tech giant is ramping up their own ads and giving them prime real estate. julia boorstin has the fallout across the tech and media landscape. laura martin, internet analyst, joins us with the fallout for stocks welcome, everybody steve, let's kick it off with you. how will this affect my user experience >> let me explain this because it has been all over the news. here is what's really happening. the ios privacy policy is hurting companies like meta's

ability to target ads since last year you have apple, which has been beaching up its own app store ad business, some of the growth comes at the expense of companies like meta. you are not going to open up your phone and all of a sudden see ads stuffed in all of your apps in the near term apple is focused on expanding app store ads, the adsyou see when you search for something like spotify and get an ad for something like sound cloud the next move is showing ads for those apps to install on the home page of the app store, prime real estate. the reason app-installed ads are lucrative and a great return on investment to help offset the growing growth in apple services due to foreign exchange head winds and the fact people are getting out more instead of buying from the app store. app install ads are attractive for apple. take a look at this projected to hit $118 billion in spend this year and growing year over year. what isn't happening now, kelly, at least not right away, apple is not going to stuff ads on

every surface possible there are more opportunities for apple to do it like apple tv plus, which is already showing mlb games for free with ads this season and podcasts, kelly >> i'm trying not to laugh, just showing ads when you're trying to download an app is that lucrative, but i totally take your word for it incredible steve, let's turn to what the changes do tell us about the rest of the tech landscape from meta and google down to snap and pinterest. julia boorstin with that angle julia? >> well, kelly, apple is tapping into massive value in the ads that will respond directly to consumer intent, get consumers to click for immediate return on investment and they are also in an environment where consumers are already looking to buy they're looking to spend money there. we've seen strength in this space at alphabet. google search ads grew a faster than expected nearly 14% from the year ago period. we saw it at amazon. its ad revenue grew 18% in the quarter and also at walmart, its

ad business grew 30% this all stands in sharp contrast to meta its users don't come to the platform to either instagram or facebook to shop it declined 1% in the quarter. this potential to sell things to people who are already shopping is a shopping is a key part of the interest in pinterest and though apple isn't rushing to launch ads in other areas it does have very valuable ad spaces, first, ads in maps. it seeks to offer ads from local businesses targeted to where consumers are and google's maps are a very valuable spot for its local search ads another key area to watch audio ads with podcast ad revenue on track to double in the next two years. it's worth noting that spt phi grew its ad revenue which is of course, coming from both podcasts and music and 31% in

the quarter and spotify is working to launch audio books which may have an ad component u so when apple is ready it will have valuable ad opportunities julia, thanks. >> apple surging just shy of their all-time highs and my next guest says the ad business would be a big catalyst for the start. let's turn to laura martin at least we can say it's sort of priced in, right what do you think? >> yep, i think you've got more to go. i think these faangs have seen slowing growth and any fans not in the ad business is getting into the ad business which is $600 million globally and apple no exception and netflix getting into this business also. >> i struggle with this whole concept. it does feel a little unfair to me that all of the apps that made their phone a success, they sort of kick them in the back and say forget it, we're going to not let you guys do this tracking and at some point it

sounds like eventually they'll do it themselves >> yes so i think one of the unintended consequences of more government regulation is that it help his the incumbents so there's a huge eu push right now about privacy and about letting consumers decide whether they want to be tracked off of websites to other websites so guess who has the most benefit from that? anybody with first-party data. apple, for example, has a billion unique users with a billion eight screens and guess what that's all first-party data so they're all privacy protected and anything on the facebook or youtube or google search websites, that's all first-party data they all benefit from 2 billion users a month. apple's average customer uses their service five hours a day. >> right >> will they be at risk if we all become a little bitmore savvy about that i'm not saying that we'd stop using the iphones or we or

regulators starts going, okay, maybe others can't track you the way that they once did, but why should apple have that privilege? >> no. first-party data says the difference is -- the regulators care about consumer choice so when you buy an iphone you basically give them permission to use your data in all ways, right? and then they also ask you would you like us to use your health data and you can say no, but they're going to ask you can we serve you ads and you will say yes upon setup of your iphone. >> do you think people would say no would that be a viable option? >> i don't think so because i think exactly what we've heard on this program is apple is going to say, instead of downloading spotify, would you prefer to download soundcloud for $3 and the consumers can say yes or no, and apple will get a cut if you say yes they get a cut if you say no, too, because they get a cut of everything on their platform >> this resolves the issue in

what sense of the rest of the companies you cover? the ones that don't have the first-party data access. what are their options now >> so basically, it just means that you have to command consumer attention which is great for the incumbents because first-party data will be protected and you'll be able to ask consumers if you want to use my website, do we have permission to serve you ads and you will say yes where it will be less helpful is they can't track you once you leave their site snap and facebook are really good at tracking you off-site without you knowing and when you don't give them permission to do that their revenue falls. >> it has been eye-opening, hasn't it, for everyone. you wrote about this in early august saying you believe they're in the business of building a mobile advertising platform and here we are >> thanks for your time today. >> nice to see you

>> laura martin with needham this logistics name is one of the worst performing transport and there could be more pain aheaofd its busy season aheaofd its busy season the details ar this thing, it's making me get an ice bath again.e nee exchange."u need for recovery. and you are? i'm an investor...in invesco qqq, a fund that gives me access to... nasdaq 100 innovations like... i'm okay.

♪ ♪ welcome back to "the exchange." one more thing before we go, fedex was of the mystery chart we showed you. it was one of the worst performing transports this month and just as the company and its competitors are ramping up for the busy season, freight can be facing a big labor dispute frank holland has the details. frank? >> hi there. half a million workers have expiring contracts just flat-out say they need more compensation. that includes the white house getting involved in the negotiations for the 120,000 u.s. rail workers, long shoremen at the port of l.a. and west coast ports are currently working on an expired contract and there are teamsters that want higher wages.

their contract expires in july of 2023. fedex ground is operated entirely by outside contractors. that's 6,000 small businesses. the largest of which is spencer patten he's also the organizer of the annual meeting of contractors that kicks off in vegas tomorrow he says without financial relief he would have to shut down his business by black friday and he says many other contractors are in the same situation. >> our fuel prices have doubled, that has been unprecedented in our business's history and have severely impacted profit margins. >> fed sex helping contractors fine financially and they say in part, we adapted to the tremendous growth of e-commerce, and the average annual revenue for service provider business has more than doubled to $2.3 million i also spoke to several other

contractors that say they're profitable and satisfied i talked to bernstein with all these negotiations and they forecast trucking rates that are 13% lower today and will continue to decline along with air and ocean freight. kelly, over to you. >> frank, thank you very much. speaking of the supply chain, why china's heat wave can bring even more disruptions. we'll delve into that on "power lunch" which begins righ ♪ ♪ indeed it does, kelly. thank you very much, and welcome, everybody to "power lunch. i'm tyler matheson kelly will rejoin us in just a few seconds. another bad housing number this morning, bad money existing home sales down 20% from last year we're going to hear from the man, robert schuler, k. schuler, that's the guy on how bad the housing slowdown will get. plus natural gas