big catalyst >> and i'm focusing on industrial automation with the reshoring vend trend >> and hershey >> and cvs, easy to own health care stock >> thank you very much and i'll see you you everyone i overtime stocks trying to avoid a fourth day of losses but on track for a losing month could we see the market retest the june lows? lee three names to buy. and the key employment report continues and so does the series on the state of jobs across sectors. today we're drilling down on education. ceo of pearson will say what is

crucial in attracting talent in his field. and what you need to know and how to position on pure storage. and that is add in earnings exchange and we begin with the market dom chu here with the numbers. >> yeah, choppy but stable relatively speaking. check this out, we'll end the month with fractional moves at least for right now. on the high side and low side, we haven't seen more than fractional gains and losses. but right now the dow industrial is down about 70 points. that is about a quarter of a percent drop just about flats just slightly negative for the nasdaq comp composite, 11,875. and each of the three is now for the month down roughly 3.5% to 4% so pretty broad based and even with regard to the market losses

in the month of august if youine. the struggling retailer is down 23% right now off its session lows and it comes out with an update for its restructuring plan it solidified some financingne lines of credit, some loans

taken out, and it will share a lot more shares. but they will close stores they will layoff staff on one side of things, some people feel restructuring is a good thing, but for bed bath & beyond, maybe the effect of selling more shares is outweighing any kind of positivitity we'll watch those shares >> yeah, you said it, what a story. down 20%, wow. and stocks continue to struggle to snap the three day losing streak next guest says the recent went too far too fast but there is still some good out th there. let's bring in christian thanks for being with us you were never in the camp that the fed would pause or even reverse course you are watching inflation data very quickly what are you looking for to tell you whether to get back in or not? >> well, nice to be with you,

deidre we're really watching the short rates. we've seen in the recent bear market that the stock directions are really paired off the direction of the short rates and voirs that is a calling on the fed. you know, if they are going to be going to 4%, we'll have to see higher short rates but we don't think that they may have to get there. we're just watching the inflation data to give us a died as to which direction we'll go >> so how much of the trend going softer do you have to see? powell says that there will be more pain ahead. >> yeah, and we're watching the components of inflation very carefully. certainly gasoline prices are an important component and it is going in the right direction you know, bit by bit i think that we'll chip away at that big number and get down to a more

manageable number very soon. we don't know just how much the fed will actually need to see in order to start taking the pedal off the gas. >> what is the risk that they don't take the pedal off the gas and they overextend and put the economy into a deeper recession than perhaps they could have >> there is always that risk and that is why investing in stocks is not easy. about we still think that there is good value here and if the long end of the curve, ten year yield, sticks around the 3% where it has been for a while, we can regain the 20367 pe and f course companies have managed it well with earnings still increasing so we anticipate that there is a good story for stocks over the next 12 to 24 months >> and i want to get to some of your picks you like broad com, you call it a great tech value play. >> yes indeed. broad com is the 800 pound

gorilla in a niche within semiconductors, they sell software as well their products are mainly interconnect and they bring storage to the commputing land scale. not at sexy as amd, but a free cash flow machine. it is producing twice as much free cash flow and trades at half the valuation which is attractive and of course pays a nice 3.5% dividend >> and we talk about hawk ten a lot on tech check. is he going to be able to pull off vmware, can they keep the margins where it is at >> he has been very successful growing the company for decades through acquisition. and organic growth so we anticipate that he will be successful >> christian, thank you so much for being with us. and you noted therapeutics and

jacob solutions. we'll get to them next time. and russia stops flows to germany through its nord stream pipeline, and there is more to the story than just that and brian sullivan is here with us and you have the whole story. >> i don't know if i do this time, but you know why, we've done it before and i guess we're doing it again russia shutting off the nord stream one pipeline once again unlike in july when we were over there in germany, that was ten days this pipeline expected to be off for three days once again gas problems, russia, russia's calling it a problem. either way, it was at 20% and right now flowing at 5%. three days time, that is when it is expected. so overnight september2 into

september 3 is when it should turn back on and if it does, it should be only again at 20%. you are looking at natural gas futures and it has been a long time since i've said this, but european natural gas futures are actually down today and down fairly considerably over the last couple of sessions. how come it is because there is optimism that they will hit the gas storage total. remember just because the storage tanks make it almost all the way filled does not mean the problem is solved. normally storage gets drawn all the way down even with gas flows continuing now gas flow, they are off we'll see what happens and spot natural gas prices in europe are up 740% even with today's climb in one year. >> remarkable. >> and that is not all also threateningto cut off

engie. so clearly energy is being used as an economic and really political and humanitarian weapon >> brooian, thanks. and i want to get to new england's electric grid. comments that could be potentially very worrying out of there saying that they are at risk of turning into germany

[ inaudible [. and coming up, coverage of a

number of defense stocks we'll have the names he expects to beat the market in the near and long term. and results with the numbers and narratives that you need to know exchange is back right after this ♪ ♪ wow, we're crunching tons of polygons here!

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welcome back atf is do you wn 10%, did you pa different for some of the defense names. general dynamic up 11%.id you pa different for some of the defense names. general dynamic up 11%.d you ps different for some of the defense names. general dynamic up 11%. you ps a different for some of the defense names. general dynamic up 11%.you ps a different for some of the defense names. general dynamic up 11%.ou ps a different for some of the defense names. general dynamic up 11%.u ps a different for some of the defense names. general dynamic up 11%. ps a dit for some of the defense names. general dynamic up 11%.ps a dif for some of the defense names. general dynamic up 11%.a differr some of the defense names. general dynamic up 11% and my next guest has an outperform rating on his top picks but he says there are short and long term catalysts. tim herbert is our aerospace and defense analyst. thanks for being with us in your note, the defense sectors trading at 5 percent premium to the market compared to the 11% discount with -- so

these are relatively expensive why buy them now >> yeah, good afternoon. that is a great question but i do think that we are looking at a new reality here and i've highlighted a number of reasons. one, just very tacticallynear term, if you are concerned about broader economic pressures, you can getti access to a sector tht generates phenomenal cash flow and a sector that i think will benefit from fundamentals that are strengthening and not fully reflected in sentiment so i think that it is a sector that has had a great run i do think that there is more up side to come >> lawmakers have their eye on food prices and defense prices does the defense budget gut cut? where does it rate among

priorities >> i would argue that it rates relatively high. i think that the defense spending is a good way to put money back into the economy. and i would area that if you look at where the budget is today, you've got very broad based political support for elevated defense spending. both across democrats and republicans. i think that we're entering a period of modernization specifically around some of the legacy nuclear programs that should drive some up side. and so you certainly have supply chain risks. i believe inflation is critical. there are limits to how much that they can pass on. an incremental headwinds. and so i think we're looking at low to middle single growth in defense spinding >> and plus capital returns and rising rate environment.

who shoul how should investors balance it? >> i think that there is limited con al days. i think the biden administration has been clear that we shouldn't expect more of that. they should be able to right the valuations for the stock and i expect continued consolidation, but i don't expect m&a to be a big use of capital and i expect a lot to be returned to shareholders >> and you also said that china will support persistent risks. is that short term taiwan is vowing to counterattack forces the areas around the island.

could it be a shorter term catalyst too >> it is possible. the situation in eastern europe is more problematic than we all expected and so i think that that likely continues to ride the near term catalyst i think what you have seen initially, a lot of the aid efforts and shipments by the united states have come out of the existing inventory so that is probably more of a 23/24 story. the situation with china when you think about the competition, whether it be in space, cyber, certainly around taiwan and in the sea, i think that that won't go away. i think that persists. hopefully it doesn't get worse for obvious reasons. but i think that it will continue to be in the background to some extent and continue to drive focus on funding and national defense which again elevates the defense budget >> good view of the sector thanks for being with us today

>> thank you very much and still ahead, paypal is on pace to post back to back monthly games since early last year and we're continuing our state of job series with a look dedication sector. we'll speak to the ceo about what he is seeing as students head back to schoo l. ♪ ♪ i was having relationship issues with my old bank. it was just take, take, take. so i moved to sofi checking and savings. get 2.00% interest, and earn up to $300 when you set up direct deposit. sofi. get your money right.

check out the markets. they are at session lows but still in negative territory. dow was up as much as 175 and downs as much as 120 all three indexes on pace for loss this is month and we want to get to some of the biggest movers as well

shares popping nearly 8% snap that is on the restructuring memo, the company plans to cut 20% of job, pull back on spending on products and kept. and this is as two top executives leave for netflix so is this enough of a turnaround julia boorstin thas the story. a lot of volatility in this name first down on the news and now up and it seems like the markets are saying that the worst is behind it. can we be that confident >> well, investors seem relieved to see snap making these changes in order to really focus in on key priorities and there aare three. growing user base, revenue and improving augmented reality tools. snap is creating a new role of chief operating officer promoting jerry hunter, he was

previously in engineering, and he will be in this new role and he will oversee product and sales. what is really moving the stock today though is snap's revenue growth so far this quarter, it is 8%. and that is a big jump from the plaid revenue that the company reported in the first three weeks of the quarter when they reported earnings on july 21st revenue growth though is down still though from the 13% growth reported in q2 evan spiegel saying as they focus on their priority, they will discontinue investments in snaps originals, minis and games and pixie. this all comes after yesterday's snap chief business officer and vp of americas announced that they are leaving is that for net mix. bchl b of a saying that it could d disrun dd disruptive for sales

but today saying that management looks correct in right sizing the business both for operating focus and to withstand a challenging market and we're also seeing meta shares get a lift today perhaps on snap's uptick in inad growth. so maybe there was a lull but things are picking up again. >> and so investors are happy that snap is taking some tough cost cutting measure, but does it really change the fundamentals for the business? their ad model you could argue is most vulnerable to the macro. they even said themselves that direct response advertising is easier for advertisers to switch on or take out all together. how do you recover especially when we're seeing those ad dollars go to places like google or amazon even >> they did layout some of the challenges that they are facing. that is the challenge of the other platform changes that are making it harder to measure the

impact of the ads. there is the macro environment which is tough and then of course increasing competition from the likes of tiktok what they are trying to do is cut down costs especially in the marketing. they think that they can improve profitability and they will keep their employee base when it comes to things like the safety of the platform, but when it comes to marketing, that is where they think that they can make cuts and where they can improve profit ability but i think that this is a company that went there having a ton of experiments, things that might yield returns a deck kad dow decade down the line but now they say that they have the strength in augment the reality so we'll focus here and not have all the other things that might be too costly. >> those experimentation, those products, whether it be original content or hardware, i mean, that has helped keep their user base loyal and its user base is growing at

a better rate than others in the space. so why is it lagging behind in revenues is this a monetization problem, and how do they improve that >> i think what is interesting, i feel like the hardware business that snap has had, though it has been fun and i've had fun playing around with their snap spectacles, i don't think that it is meaningful to the bottom line or to their core year base who opened up the snap app every day to message with their friends. so i think what they are trying to figure out, what are things that are nonessential and hardware is nonessential especially the flying pikxie drone. and the reason why the augmented reality business is so essential, they have always been ahead when it comes to arp and they are able as to use augmented realty to drive things. and they are able as to use augmented realty to drive

things so they are leaning into it. obviously they are much smaller than a meta, but in comparison to atwitter, they are grower faster and tyler mathison has a news update. >> new york state is restricting guns in what it calls sensitive places it is part of a new law passed after the decision in june that expanded gun rights. the new york law also requires deeper background checks and training requirements for gun per perm permits. faibda saying that the new shots can help people stay ahead of new surges in covid cases they expect to authorize undated vaccines for younger ages with an a month or two. and tonight using steam to

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welcome back we're nearing the end of earnings season but there are still a few key names on deck. today we're getting the trade on data deals and diamonds. we start with pure storage shares lower into the print, but it has been a relatively bright spot in the beaten down tech

sector up nearly 25% from its low and danielle steele has the trades i was looking at it, year to date performance only down 11% which is kind of a win in this market for tech. >> absolutely a win here and so let's start off with some of the estimates that we'll be looking for. traders will look at expectations for earnings per share of 22 cents. revenue expected to be around $634 million its products let companies manage their cloud computing platforms and they have been in heavy demand given the shift to complete and hybrid work as a result of the paenld a pandemic. and it has seen strong growth in revenue moments especially in that key subscription related category of annual recurring

revenue. and with a more traditional data storage maker, companies that seagate deals with are getting more conservative. and so does that same thing play out with a cloud storage company like pure storage? as for how the stock could trade, options traders are expecting it to trade up or down by over 11% after earnings so some fireworks. but believe it or not that is less volatiles that traded post earnings in the last four years. and in each of those last four reports that stock has surged. so we'll have to watch to see whether the expectations game plays out. >> dom, thank you very much. danielle, we spoke to the ceo of hpe this morning and they had pretty good results. they make equipment and data centers. what are you expecting tonight >> i really like pure storage. i think that it is an incredible relative strength winner i love the way that the stock has reacted the last five

quarters over earnings i mean, even last quarter when we were in a pretty volatile situation and tech is weak right now, and this is a relative strength winner. so if you look at the chart, you can see that it is up above key support pretty close to the previous highs i like the target of $35 a share. and if we can make that target, i'll continue targeting upwards to $40 a share so i like this one i think that if it does happen to have a vole tilltal quarter,y it on a dip. >> next up let's get to five below.tal quarter, i'd buy it on a dip. >> next up let's get to five below.al quarter, i'd buy it on a dip >> next up let's get to five below.l quarter, i'd buy it on a dip >> next up let's get to five below. quarter, i'd buy it on a dip >> next up let's get to five below.quarter, i'd buy it on a dip. >> next up let's get to five below. shares have fallen, underperforming the s&p retail sector and we talk big lots earlier, so what are we expecting for five

below? >> so five below is a little different. it is not a closeout and not a dollar store it is somewhere in between sort of low priced goods often aimed at kids or party favors. and they are still expanding its foot foot footprint. but we know a lot of goals were stated well before we saw inflation hit 40 year peak levels and so the analyst community wants to know are those still the targets, is is that still the target date when you are looking at expanding this name and it will be reporting the send quarter but of course it is always about guidance and looking ahead and looking at q3, usually a lighter quarter for sales for this particular retailer and so that is what we'll be expecting from the results today. and then the other question of course, as gas prices have fallen a little bit, has it

driven more traffic and sales to this name. last point i'd make is that there is not a real opportunity for trade down within five below. meaning that the prices are relatively tightly priced and the average basket size is usually about $15. and so i think that the analysts want to know has the average basket price gotten smaller as opposed to the opportunity to trading down to a private label which doesn't exist in the same way at five below as it does with others. >> and so this is not a stock, danielle, that you like. you expect it to test 2022 lows. >> yeah, i think that the stock has relative weakness in the space. i know it is slightly different than dollar general or dollar tree, but look at those companies how well they are performing compared to five below. we have a variety of economic issues which courtney discussed currently, but honestly, looking at the chart is what i think is the most important if you look at the weekly chart, you can see that it is in an

overall down trend and there is quite a bit of overhead resistance as well about a $10 expected move on earning bus yet you have overhead resistance at 140 and 1350 so even if they get manage to get slightly better numbers, it will rally into key cris resist. >> and finally, want to get to si signet the stock is upnearly 24% but lower this year. they have beaten estimates the past three years but the outlook is lowered after sales softened last month what are we looking for here, court any? >> yeah, so because the company pre-announced earlier this month,any? >> yeah, so because the company pre-announced earlier this month, we don't expect a lot of

surprises. it is the owner of brands like kay jewelers so a lot of them are mall based. and we continue to be concerned with what is going on with the foot traffic in maufl m malls and so the amount of trips that shoppers are making to malls, is that impacting and also they sell a lot of products that are very discre discretionary. if you are going to cut back on something, i feel like a diamond bracelet is the first thing that you had cut back on. on not sure that we're expecting a lot of surprises here and i think that the spend concern is pretty key >> yeah, i'm troubled to think of something more discretionary an a signet. where could the surprise be? >> i agree that it makes sense that consumers would cut back on diamond, but at the same time i can't believe the way that it recovered off of the lows.

i think the technical chart has improved we're up above support and there is a couple different backers that i'm looking at as well for example the last two quarters on earnings despite the bear market and economic issues, the stock was able to trade higher post earnings and because they are not expecting a massive down side surprise so i think that if it can remain stable both earnings, we can continue following the short term uptrend and trade it up into about $75, $80 before we hit key resistance >> and if the economy is set to soften further, the long term trend for this company seems pretty clear, right? or what are some of the factors that investors need to look at >> absolutely. so for this one, i'm really looking at more of a short term trade especially because it does have high short interest and a lot of the time when you are nearing those resistance levels, you can see a chart trade higher due to short covering.

so in the short term i like it hire, but longer term i think that it will all be about earnings because the main reason why i do like this stock is because they have done well the past two quarters in the current environment. if that changes and what we see from this company is that they start missing numbers and they are changing guide guidance, i' into the long int tt tterm down. >> look at that chart. thank you both and bank of america is bullish in paypal. and there could be more buying opportunities ahead. we'll tell you why and a quick check on the markets, the dow nearing -- it is down about 180s and we'll be right bac

♪ ♪ ♪ ♪ ♪ ♪

. shares of pay pal opal are e today. potential crisp by cost cutting and share buy backs. and elliott disclosed $2 million stake and thanks to a new rule, there could be a whole lot more activism ahead leslie picker is joining me now to break down the details. >> yeah, we could see a lot more activism in the months ahead somewhat technical rule change in the way that investors can vote set to take effect tomorrow and this involves something called the universal proxy card and botattles over the board, investors can vote on any mix of their preferred candidates previously investors selected

either the management slate or the dissident slate. in other words with that political analogy, they would havevoted for a one party ticket but the corporate defense practice says that it is a boon to activists who are popping champagne when the rule change was first passed by the s.e.c. >> activists believe that the rule change will give them more leverage they will believe that they win one or two seats in a proxy fight anyway and so that means that they will ask for more during settlement discussions and it will make it harder to parties to achieve limited settlement and resolution outside the proxy fight. >> and the s.e.c. says that the rule change puts proxy voters on equal fighting with a small minority of investors who attend meetings in person where they can and have previously been able to vote if their preferred mix of candidates.

gary gensler says that this is an important aspect of shareholder democracy. >> and i know you've been talking throughout the day how one director can make a difference if you have someone who is loud and pushes for a lot of change like a nelson powell but what about all the other ones that you don't hear about, do you think this will encourage some to be more in-aggressive? >> i think that one thing that we could see is given so much of the voting will be of the merits,n-aggressive? >> i think that one thing that we could see is given so much of the voting will be of the merits,-aggressive >> i think that one thing that we could see is given so much of the voting will be of the merits, aggressive >> i think that one thing that we could see is given so much of the voting will be of the merits, experts say that we'll be looking at personal attack ors personal vulnerabilities. and so maybe it could push activists to have say one or two higher quality candidates that they put forth as a result of this than they have previously because those candidates have a higher chance of getting on the board, therefore -- depends how

you define quality, but they may be more in the board >> all right leslie, thank you. and cnbc is delivering alpha returns in purpose on september 28th the world's top investors will discuss risk, opportunity and navigating the new market dynamic. you can scan the qr code right there on your screen coming up, back to school season is upon us, but still hundreds of thousand of open teaching jobs. we'll dig into what one executive calls the shifinhet t education industry and what can be done to attract workers this thing, it's making me get an ice bath again.

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welcome back to "the exchange." the crucial july jobs report is just two days away we've been looking at the employment picture in different areas of the economy and today we're focusing on education. as jill biden meets with cabinet members and executives at the white house to discuss the nationwide teacher shortage, according to the bureau of labor statistics, there are currently more than 200,000 educational job openings

joining me now is the ceo of the online education platform. andy, thank you for being with us what are the challenges? you provide products and services and so you have a broad view >> yes, thank you for inviting me on the thank you, deirdre f inviting me on the show. it's a pleasure to be here i think the pandemic has activated an accelerant across the education sector in the whole was one of the last sectors to truly be transformed through a digital revolution, and whether we were at school or at a college or at a university we rarely saw that hit hard and join the pandemic where teachers, schools, establishments had to really transform the way that they talked, remote learning and i think that's had a knock-on effect both good and bad in sectors as a whole >> so how are you viewing hiring at pearson you're serving the sector and

are you looking to hire more people this year or scale down >> no, no, no. we're hiring more people and we're hiring with different skills i think one of the trends that you'll see across sectors in the education sector is this transformation into digital learning and into lifelong learning so we're employing a lot more people in which skills in i.t. and technology we launched a product for u.s. college called pearson plus which is an online learning platform that delivers your learning materials and study materials and we're focused on bringing in new skills into the company as we adapt ourselves. >> so you are actually competing with tech companies that often offer great incentives and higher pay how are you finding that competition. especially we talk about it all of the time and tech companies are either freezing or they're doing layoffs? >> i think at the heart of what

pearson does is we add life to a lifetime of learning and that purpose, the mission that we're on to help every individual on the planet improve their lives whether you're learning a language, whether you're at school or university or increasingly at work it's a very, very powerful message. we want to create an all-inclusive culture within the company and make sure that we give challenging and exciting and rewarding tasks to the employees who work for us. >> andy, finally because we have you, i want to ask for your view on what we heard out of the white house on student loan forgiveness. do you think this is adresses t the problem? is it enough do we need more reform here? >> i think it is a great step forward. the issue of student debt in the united states is a real, real issue. you have individuals who are spending up to four years of

their life and many tens of thousands of dollarses of debt as they go through a college and university education, and increasingly now there's an alternative route and that's to learn while you earn at work, and so, i think, formal institutional education is so, so important for the future of this country so the stats that president biden announced a few days ago are well. >> does it get to the root of the issuewhich is rising tuition costs and who you do you think that plays into the sector >> i think you're seeing a much more hybrid approach and the more forward-leaning institutions are looking at this more hybrid, on campus digital and a lot more online learning and more skill-spaced learning and in that way you can create a more modular education for higher education construct and hopefully that makes it more affordable to individual

learners. >> you're doing that in your own business, as well. you're embracing hybrid and remote work. your employees are responding well to that or potential hires? >> i think hybrid working is here to stay and from very early on there were a couple of dints that were very important we didn't lay off any of our employees and there was no furlough furlough and we introduced working. creating community and creating connectivity, and embracing that culture and gave, you know responsibility to an individual employee to decide when and where and how they want to work. we've seen our productivity increase >> andy, thanks so much for being with us. andy bird pearson ceo. fall brings cooler weather and lower travel prices. we'll tell you next.

>> welcome back to "the exchange." we want to get to the unofficial end of summer and that could be good news for travelers. seema mody has the story, and i've been waiting for something like this and it's just as cool a start and demand will be coming down. >> the surge in travel that we saw over the summer is starting to ease and that will bring prices down with it this fall. hotel rates across the nation have been down, we peaked in late july at th$159 a night andw are now at $149. a 10% decline in prices that can bring profits down for hotel owners 15% to 20%. ful that hot spots, maui or florida keys are not seeing softness in prices sfp travelers are gravitating toward big cities this fall the most popular destinations

this fall new york, las vegas and orlando. data from priceline also shows car rental prices have started to eases well. we're down 11% from the six-week average. vacation rental rates are expected to drop at a faster pace than hotels projecting a 2023 rate cut to half of next year to 3.4% as travelers transition from expensive vacation destinations to smaller that tend to be a bit cheaper and i think that will be a big trend for names like expedia that i cover any air b and b. >> i know airbnb in particular move the out to rural places, national parks during the pandemic and this is the real test have they brought up their city supply. >> same withe verbo, and now as travels are go back to cities

does that give hotels an edge? that's going to be something we watch this fall. >> one place that you missed out where i'm certain prices are still higher is disneyland i've been canceling my trip because they're too high >> spending is back to 2019 levels according to them. >> to my dismay. seema, thank you so much that does it for "the exchange." "power lunch" starts right now welcome to "power lunch. i'm contessa brewer in for kelly, vans today and here's what's ahead, two power players. bottlenecks are starting to ease and what that means for inflation as we head into september. second, the ceo of redfin. he's warning of a rapidly slowing housing market with deals being canceled at the highest rate since the start of the pandemic are we in a housing recession and how long will that last. first to tyler and a check on the markets. >> contessa, thank you to