growth ahead i mentioned it earlier at the top of the show. i think this still continues to be an opportunity. i like it. >> all right congrats on this event by the way. what's your final trade? >> i think the most viable dips there are in this market is energy ieo is u.s. producers. that's where you want to be this year thanks again thank you, everybody again, i'll have some sound from jeffrey gundlach in overtime that does it for us. the exchange begins right now. and we have a big sell-off in stocks, as inflation remains red hot. welcome exchange," everybody. you've got a dow that is down almost 900 points one of the biggest moves we have seen in months, and here's why inflation showing no signs of slowing down in fact, many of the prices that you pay continue to rise from housing to hotels to food, costs

are going up for american families the cpi, still at more than 8%, year over year all throughout hour, we'll take a look at how inflation is hitting every area of the economy. what it means for the fed, momore importantly, what you should be doing with your investments. we've got to get to the big story. that is the big move in stocks >> underperforming a lot of different parts of the market. that global equity kind of gauge is really getting hit hard i will focus on the nasdaq composite, specifically. right now at 11,775, we're near the lows of the session. just to give you some idea, we are 490 points for the composite. at the lows, down roughly 510. it's been a down day predominantly so far, tilting towards the low end. the s&p 500 now below that 4,000 marks. down 3%. the dow industrials down nearly 900 points, 2.35% declines

there. valuations are a problem right now, but also is the fed response to inflation. will they raise interest rates to a point that really, not just taps the break on the economy, but maybe slams on them a little bit. and for that reason, many of the commodities out there are taking a hit. oil is down 2.25%, although that's better than what the stock market is doing right now. copper prices down 1.5%. even gold prices, which have typically been associated with inflation are down on today's session. and the real estate sector spider that looks at some of these real estate investments trusts in the s&p 500 is down 2.35%. so a lot of these are going down i know that our next market guests will have more to talk about with that front. and one place to watch, the mega-cap trade, the stocks that rgably, mathematically have the most influence the alphabet shares and nvidia shares, three to focus on right

now. because over the course of the last couple of days, we've seen moves now down towards their lows of the year and the reason why it's important is because these megacap names do carry a lot of weight and by the way, there are just a handful of stocks, including these three, brian, in the megacap world that are now within 5% of their yearly lows and that carries a lot of weight and by the way, if you're curious what the other names are, go over to my twitter feed at the domino. the rest are posted up there to see. very important names >> every one of those stocks is one of the top five holdings in probably 200 majorly owned etfs, dom. great stuff. stocks are dropping. the two-year yield, you don't talk about it enough, hitting its highest level since back of november of 2007 rick santelli at the cme with more i mean, yields gone wild, rick >> yes, yields gone wild,

primarily, because inflation is still wild it was a pretty easy job to connect the dots this morning. every aspect of this morning, whether it was headline cpi up 110, core up 6/10, the year over year numbers up 8.3, core up 6.3. they were all hotter than expected look at intraday of twos we were down six basis points before the number hit. and then it skyrocketed. it's now up 18 basis points, open the chart up, as dom and everybody has been saying, watch those two-years, haven't been at this level since basically october. so roughly around what, halloween 2007 look at tens this gets interesting. i brought out the numbers this morning. i want to make sure i point it out. that we probably are going to continue to see some higher inflation data, and the short maturities like two-year, three year will definitely show us that along with fed fund futures. but the further down the curve you go, look at intradays of tens as much as they're up, they

still haven't taken out their post-covid high-yield close, just a whisker under 3.5 from mid-june that is a huge level to continue to pay attention to and it underscores all the curve movement the yield curve is basically inverted, 10s to 2s, another 13 basis points today alone >> okay, hold on, rick i want to talk more about these two-years. we like to talk about the ten-years, because it influences mortgage rates even people who don't care about the bond market may care about the mortgage market. the two-year is a bit more obtuse if we can bring up a one or two-year chart of the two-years, i would appreciate it. the two-year yield one year ago was 0.21%. not 2.1%, 0.21%. it's at 3.5% today i don't think i've ever seen a raise and a rise that quickly. what does it mean? what is that telling us?

>> well, it tells us two things. first of all, it tells us that we were at zero for a long time. in order to really make 3.75% to hit home, we need to press home the fact that we kept overnight rates at zero due to the effects of covid it's a big rate of inflation but if you look at where t-bills were, they were all much lower that's why 2s to 10s, that yield curve is so much different-looking than three months to 10s, brian because the t-bill side of this continues to get real every monday and tuesday when we auction it they continue to go up, along with two-year, three-year, short maturities close to the fed. they're basically shadow boxing where rates are going to go as we move higher >> i know thuz morning quarterbacking is an easy thing to do.

and i know when covid hit, we didn't know what the hell was going to happen. we had no idea everything got shut down but about a year into it, we started to realize a few things. we talked about it on this network, that people were spending more money in certain parts of the economy than they were before. they were fixing up their homes, they were buying cars, they were buying homes the federal reserve seems to be the only nine or whatever people on the planet who did not know how much money that we were spending and kept rates low, even as the american consumer got hundreds of billions of dollars extra and spend it i mean, i'm just telling you, blind. now we're paying the price with this red-hot inflation >> and not only are we paying the price, brian, but the entire globe is paying the price. and not for necessarily the same reasons. the united states spent way more than other countries and economies to try to combat covid. but the other economies, especially europe, germany in

familiar, the uk, they have had energy policy that blew up in their face on february 25th when the ukraine was invaded by putin. so everybody seems to be in this inflation mode, maybe for different reasons. but at the end of the day, what you're describing is not only tough with respect to all of those trying to make enough money to overtake the hump of inflation and all the costs and daily lives, but there are places especially in europe and in the u.s., you know, you're our energy guy we'll continue to see higher prices, as everybody prepares for the winter believe me, putin is not going to do the globe any favors his whole strategy is to make life difficult and weaponize energy >> he has already and somebody needs to fix that. that's a different issue when we did our election road trip in 2020, and dave growingen, we drove across the midwest and back every restaurant was packed. the hotel was crowded. i'm thinking, my god not everybody is living like we're living on the east coast

it was shocking. and you realize that the people were spending money, even during covid. >> absolutely. a lot of the country kept going, as normal. >> and i was part of that. >> not saying it's right, but i'm just saying -- >> the midwest -- the midwest was way different than the far west coast and the east coast. >> that's it the middle of the country kept going. all right, rick, thank you very much all right, so inflation still running hot, dashing hopes that the federal reserve will start easing on rate hikes sectors that were expected to cool in august did not take a look at the numbers housing costs soaring, up nearly 1% food also up big right now, it's a hundred bucks a bag at the grocery store let's be honest. and despite years or even decades of promises from washington, both parties, by the way, to bring down health care costs, they just continue to go up now, thankfully, wages also continue to rise the median household income in america now over $70,000 you can absorb some of this with your pay but where does it all play out joining us now is michael

schumacher, head of microstrategy at wells fargo securities no doubt you heard that fiery discussion with rick and i'm not knocking the fed in 2020 we had no idea what was going to happen for about a year. but after about a year, we realized that certain things were happening in certain states, not a health judgment there, but it was the reality of what was on the ground how late or maybe not at all, was the federal reserve's policy response how responsible are they for what we're seeing right now? >> yeah, the fed was pretty late to the party, brian. i think you can look at the fed's policies starting -- call it middle part of last year, maybe out to september, latest case, and the fed should have been cutting back. at a minimum, it should have stopped increasing its portfolio size and it didn't probably should have increased the fed funds rate a good three to six months before it did, but it's pretty far behind at this point and it's going to play catch-up pretty aggressively over the next three to six

months >> and the market reacting so strongly so what is going to be potentially a three quarters of a percent or even 1% increase at the september meeting next week. why is this additional 25 basis points, whatever it may ultimately be, michael, why is that sending the dow down 900? >> it's kind of funny, brian we think about it and talk about it and say 75 is sort of a given. think about that, for a second 75 basis point hike people are taking for granted this is incredible a few months ago, this would have been completely off the radar screen, now it's almost commonplace. it's this notion that the fed doesn't really know how much it needs to do. i think that's what spooks the market is it so much about 25 extra, eight days from now? not really, what do we expect six months out, nine months out, a year out is it 430, something like 5% we're just not all that year

and more importantly, the fed doesn't seem all that sure i think it's what's scaring people >> yeah, and you wonder, does it also stretch out -- and this is going to sound ridiculous today, michael, forgive me, rate cuts at some point, we're going to be talking about rate cuts, because the economy will slow down and the federal reserve will tell us, they've got to crash or slow the economy to get inflation down that's the only way they can do it does this also push out this concept of when the fed might start to re-ease and i know how silly that may sound right now? >> it does sound a little bit strange, brian but it's sort of interesting, when you consider the market pricing or some easing priced towards the latter half of next year my colleagues and i at wells think this is frankly a bit crazy. but when you look at the fed, you would say, if the fed does push too far and the economy completely craters, could it possibly cut late next year? maybe, but a lot of things would have to line up. i think the market's gotten ahead of itself. i think it's a case of wishful thinking dominating the factors

on the ground and the market will push back that rate cut toward at least the last part of next year, maybe to '24. >> michael, i appreciate it. strange, but interesting i have been called those exact three words, so i certainly appreciate it. michael schumacher, thank you very much. >> thanks, brian we have some breaking news right now out of the twitter shareholder meeting and some court case stuff going on julia boorstin has more. >> twitter shareholders have voted in favor of elon musk's $44 billion deal to acquire the company. this just happened at a special shareholder meeting. it was very brief. they announced the results that was it, there were no questions. and if you want to know why they approved it, it's as if you just take a look at the stock right now, it's $41.78, which is of course much less than the $54.20 that elon musk said he would pay to buy the company whether or not he does indeed buy the company happens at what happens between the trial between elon musk and twitter, which is set to start on october 17th and of course, brian, i would be

remiss if i didn't mention that the twitter whistleblower just testified before the senate committee this morning and i would note that one reason why twitter shares are probably up, brian, is because he didn't say anything about bots, which is central to elon musk's defense of why he should have to buy the company. >> good stuff. heard a lot of it in "tech check," as always. excellent, as always julia boorstin, thank you. back to rick santelli. 30-year bonds are up for auction. let's get the grade from rick. rick >> yes, brian, the demand was very strong, unlike yesterday's super week ten-year, this one gets an "a" for apple. the yield, it was 3.511, that was 18b 30-year bonds. and as you look at that chart, it was such aggressive buying, yields are falling to the tune of 3.49% we settled yet at 3.51 so right now 30-years and 20-years are down in yield and up in price in the session when you consider cpi, that's a

big event and it speaks to the topic, what we're discussing, the yield curve. back to you. >> rick, thank you very much well, if today is any indication, investors seem to think that higher inflation and higher rates will put a big dent in the markets it's happening today but is that really the case? or is this one of these one-day kn knee-jerk overreactions. let's bring in the head of the firm's global investment committee. we were in a four-day win streak coming into yesterday. suddenly the dow is down 900 points all on this cpi number, which really wasn't far off of what wall street expected. color me a little bit perplexed. >> i think the markets are down today for three reasons. and that's worries over recession, valuation, and q3 earnings first of all, with the fed tightening even more than expected, perhaps 100 basis points coming up, what does that mean for the future depth of a recession, which we do think

we'll hit? the other issue is market valuations often when you see the fed tightening this much, you can see market returns being positive the next year, but valuations in those periods have been much lower than they are today. so market valuations are too high, and that leads us to q3 earnings we're already seeing estimates drop by a little over 5% the question is, is that enough. it's been led by tech stocks but earnings probably still need to be the next shoe to drop. whether we see that in q3 or later on is in question. all of those is why the market is revaluing downwards today >> i don't like talking about currencies, don't know much about them i know it's the most biggest and liquid market in the world how much of any of this is in the rise in the u.s. dollar? >> that's another headwind for the markets. it's a headwind for multi-nationals. we think the u.s. dollar remains strong even with all of this going on around the world, the u.s. has been a safe haven. our economy and its resiliency is good for the dollar and that's also what's giving the fed the leeway to keep raising rates. they have been clear, they will

continue to battle inflation we see it remains hot. and that could happen at the expense of the economy and with employment staying strong, it gives them the ability to keep raising rates in order to finally squash that inflation. >> we'll talk more about it with diana olick coming up, housing, sarah. and i'm not saying you're some sort of real estate expert, but a cio, you probably follow ever. liz ann saunders of schwab tweeted to out earlier today, but that owner equivalent rents was at the highest level since 1990 but at the same time, you've got mortgage rates at 6%, the housing market seems to be on really shaky ground. housing market is probably a lot more important to the macro american economy than the stock market it is an important component, if you look at cpi today. it was shelter, food, health care costs that were some of the biggest drivers of inflation those shelter costs have been an issue for quite a while now. if you look at the housing market, one would say that with rates going up, shouldn't that cause the markets to roll over

it really hasn't completely rolled over yet, because supply is so tight right now, that you have this issue, same with the employment market, that even if demand starts to soften, supply has been so tight that both of those areas are remaining strong and it's wages and shelter that are the two biggest components that we're worried about when it comes to inflation they remain very sticky, and the fed will have to either raise rates enough to weaken the employment market and the housing market in order to bring those down and that would be the recipe for a recession. >> but sarah, when they raise these rates, to that point, they're not going to say it directly, because the fed never says anything directly, but are they telling us that they have to put the economy into, if not a recession, a major slowdown? >> i think what they're saying that if that is the outcome necessary to squash inflation, then that is the outcome that is acceptable you know, i think that given where inflation is, they are trying to lower it by decreasing demand, by increasing interest rates. and you will eventually see that

in areas such employment, housing, and with earnings being at risk. so i think that is basically what they're saying. >> sarah malik, thank you so much really good stuff. >> thanks for having me. let's stay with the markets, what else, and even what are considered some of the most stable of stocks are getting whacked. stocks you probably own. apple, google, cisco, walmart, so if they get sold in this environment, what happens to some of the more niche areas things that we're ready to see outflows, like esg bob pisani is with the ceo of activist investing firm engine number one in a very rare interview live out in huntington beach, california. bob, take it away. >> reporter: and brian, i am here at huntington beach, california, here for this futureproof conference an all outdoor conference that's making an attempt to attract a younger crowd to an outdoor conference joining me is jennifer granholm, the ceo of engine number one last year, they wanted or exploited a successful etf

seeking to promote companies the market is down today on concerns of an economic slowdown if we enter a recession, is it going to affect the willingness of firms to engage with you on socially responsible investing are they going to say, we can't afford to do this now! we're in a recession >> we built into number one as a performance-oriented investment firm we think a lot of people are looking too short-term and a lot of the portfolio is very long-term. so we may well be in a recession and if you think about inflation, we should make sure that people are actually holding some of these companies that are going to benefit as we go through this transition. >> this interest in environmental social and governance has invoked a very interesting backlash texas has accused firms like blackrock of boycotting oil. you've engaged in negotiations with exxon are you boy kcotting oil. is that what you're doing? >> as a society, we need energy and we're going through an epic energy transition. as informerses, we have to hold the energy companies and work with them. that's what we did on exxon.

we did a proxy campaign that was about governance and about economic outcome on the back of that the value of the company has gone up, but also, the company has made different choices on capitol allocation so we need energy. >> it doesn't seem like you're really anti-anything you're trying to nudge them in the right direction. you have a transform climate etf. companies that are addressing climate change the highest holdings, biggest holdings -- general motors is almost 10% of the fund deere is 9%. ford 1is 7%. how is general motors on the top of your pick or ownership for addressing climate change? >> we think that a lot of people have defaulted to indexes. if you do the index, you have a lot of the names that we're hearing about today, things like google and amazon, but these other companies that you might think of as a slow value stock, as general motors figures out how to pivot, that's going to have a huge reduction of emissions, but they're also great cars, and they work at scale. they're going to be a big

winner >> you're saying these companies are making efforts to address climate change and you're talking to them and you own them you're not excluding they can. >> we don't believe in divesting. we work very deeply with these companies, and as these companies drive through change, they'll have a higher business model and multiples. and that's good if you're only a financial investor zblen number one, you guys got a lot of attention a little while ago when you won three sets on the board of exxonmobil, in june that was june 2021, to push the company to diversify beyond oil tell us what it's like >> exxon has made a lot of progress from a governance perspective with the new individuals on the board the individuals that are on the board and we voted for them, we led this campaign, but a lot of other investors came with us have driven real discipline on the capitol allocation side, managing projects to be successful in energy transition, and reducing the number of products that are long-dated fossil and may not be awarded. and exxon is also making very

good progress on green business. >> and you have an etf to do this the transform 500 etf. the symbol is vote, v-o-t-e. you take a stake in companies, try to get them to consider socially responsible investing through proxy voting what do you feel -- how do you feel about this backlash against that people saying, oh, these companies have way too much influence. companies like blackrock and vanguard and they want to change that how do you feel about that >> to some exetent, that's why w created vote an ex products, the big three managers control about 22% of all votes in all public companies. and so maybe that's too big. and vote is an option with transparency so we work with all of these companies and tell you how we voted. it's just an alternative to be active, even if you're passive or indexed >> jennifer gransio, thank you very much for joining us brian, i know this is very much in your wheelhouse and the esg community is a little bit up in arms about accusations that they're boycotting anything, as you can see, they're simply

trying to engage people and in many cases, they're actually fairly large shareholders themselves >> they've got to fix it, though, bob i talked to an oil and gas ceo who said i can plant 100 more trees at our suburban headquarters i mean, that's -- >> maybe -- that's a pretty low standard there, brian. >> and do nothing else i don't know how serious he was being, but he seemed serious great stuff. important interview, bob and cool glasses, by the way. on deck, the impact on your back deck. housing as rates rise, housing getting hit. with how high mortgage rates may go and what today's inflation numbers are telling you about the state of the american economy. as we head to break, take a look at the one stock in the nasdaq 100 that's in the green. 99 down, 1 up, and that's netease, ntes. if you own that stock, take the family to siler zztonight, because you're winning we're back after this.

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and deliver ultra-capacity 5g coverage that's years ahead of the competition. t-mobile for business has 5g that's ready right now. all right. welcome back to "the exchange," everybody. hope you're having a good tuesday. despite the fact that technology is getting rocked as inflation shocks investors, and fears are even higher interest rates are hitting your investments the nasdaq is down just over 4%. but, hey, you want to buy low, right? so what are the best tech names to own now let's bring in managing director at rosenblatt securities you like a few names, but there's one barton that stands out above the rest, and that is alphabet/google. w why? and are they a somewhat recession-proof business

>> it's not recession-proof, but when i think about tech, i think about long-term investing, beyond the cycle and what i see with alphabet is a company where you have high confidence that the growth story is going to continue high confidence that we're not going to get head faked by all of the pandemic kind of things that are whipsawing, i think, so much of tech right now so you know, search, they'll be a leader in search for as long as i'm alive we know youtube is going to be a leader in video -- user-generated video, short-form video. they're very well positioned to be a player there. cloud, they're a contender everyone should have confidence that they'll be a player long-term. and they've got a great equity portfolio for exposure to other things like self-driving auto and waymo. so with this company trading at a reasonable multiple of sub-20 pe, you know, it's a stock that you have to look at when you get these opportunities if you're thinking long-term at all. >> but you wonder, if there is

an economy that as low as down, a consumer-led recession, whatever it may be, whatever you want to call it, barton, that's -- i've got to imagine that's going to hit the ad market, it's going to hit the ad words market and for all the cool stuff that google does, that's kind of their everything >> well, to be clear, that's everything if all you're thinking about is the next couple of months you know, when i look at, you know, the way i think about managing my ratings is i try to look at a company over a longer period of time and i think you'll have better success as an investor if you do that and so you look at opportunities to pick up a company that's very well exposed over a longer period of time, beyond the cycle. and we may already be at a point where investors will be very quickly willing to look beyond this recession risk. because stocks have pulled back meaningfully, not terribly inconsistent with what we've seen in past recessions. it may already be in the equity. and if you're willing to look long-term, you don't have to worry about that too much at this point >> we'll call it the aaa trade

we've got amazon, apple, and alphabet of those three, alphabet would be your clear preference, it sounds like, but you're not knocking on apple either, are you? >> i'm not recommending apple. i have a neutral rating on apple, which is like tugging on superman's cape, which is a wonderful company. but if you look at the pandemic risk, that was in evidence in the june quarter most of their hardware, other than iphone, was down, partly supply chain, partly some pull forward, partly some macro sensitivity. and i think the risk is that maybe we start to see that as we go forward in the iphone the introductions to the 14, the new watches were great but there's a lot of, you know, things that were pulled forward from the pandemic and a lot of pressure that's coming to consumers in buying these types of high-priced devices if there's any signs of weakness there, you're wobbling and if that one leg comes undone, that stock is going to face some pressure and it's more expensive than alphabet with amazon, you have a great

company, but a retail store that drives the bulk of their revenues, that is resetting to normal growth patterns, not substantially outgrowing the rest of retail and that's a mental reset for people thinking about the equity you have a high multiple, which if there's any slowdown in cloud, there's risks that that multiple resets. and they're plowing a bunch of money into some new costs around media. so they're going on thursday night football, they've just done the lord of the rings they could potentially do the sunday nfl ticket, into an ad slowdown, which could create some margin kind of volatility so, you know, again, a great company, but for my money, i would rather buy the good money, great story at alphabet today. >> apple losing $75 billion in market cap today barton crockett of rosenblatt, thank you very much. let's go to tyler mathisen for a cnbc news update tyler? >> brian, thank you very much. the national basketball association has suspended phoenix suns and mercury owner robert sarver for one year and

fined him $10 million, this after an investigation found that he engaged in, quote, workplace misconduct the investigation was started a year ago in response to allegations that sarver had a history of racist and misogynistic incidents a key indicator of how many americans live in poverty has fallen now to a record low the supplemental poverty rate dropped below 8% last year the supplemental rate takes into account government aid such as food assistance and stimulus checks meanwhile, the official u.s. poverty rate, little changed last year at 11.6% overall pope francis has started his three-day trip to kazakhstan, at an event with the kazak president, they called for an end to the senseless war tonight, how washington, d.c. is seeking to deal with a surge of migrants, many bused there by the state of texas that's tonight at 7:00 eastern time brian, back to you >> tyler, thank you very much. all right, up next, every

single home-building stock is down today whether today's inflation data means more pain ahead for housing and what the jump in interest rates may mean for your next mortgage, especially if you are still in the market to buy a house. diana olick is up with that. we're back in two with the dow jones industrial arverage down over 3%. we're back after this. ld adage

economy, well, you know the rest i won't say it and with those red-hot inflation numbers today, some key components that should have started to see some declines didn't that is bringing up questions about whether or not this economy can handle prolonged inflation around this level or dare we say, even higher inflation once all the electricity price hikes that have been announced kick in in the fall let's find out where we're going, joining us now with chief u.s. economist at oxford economics. i want to have a little positivity here. it's tough -- the inflation numbers are hot, kathy the market's down, but let's be a little optimistic. why not? we got some good news that the median household income is more

than $70,000 you heard tyler mathisen say that poverty levels have remained stable. but american families overall are getting wealthier, the middle class is shrinking, because more people are moving out of it, up out of it. let's be optimistic. can we handle inflation at this level? can the economy and families handle it, because they have a little more money? >> well, happy to be with you, brian. so, the households have been handling it, up until this point, but, we do think these headwinds are starting to rise quite significantly. you have a combination of higher inflation or inflation that's not decelerating very much and higher interest rates and the uncertainty of the business climate. we're concerned that we'll see businesses pull back on hiring and hiring has really been leading to higher income and allowing households, especially in nominal terms to deal with

these higher prices. if you start to see that barrack down, unfortunately, we're headed for a slowdown and our view now, we just chapnged it this week, we now see a mild recession in the first half of next year. the bright news or the good news there is that it's mild, our view and it's just enough to sort of let the air out of the inflation bubble that we have, but not to be a deep or prolonged downturn. as you said, household balance sheets overall are very strong and so are our corporate balance sheets >> i think about schoolyard fights i might have been a few in my day. i've never had a bully say, i'm going to hit you, but it's going to be mild i'll mildly punch you in the nose define mild recession. it still sounds bad! >> it sounds -- listen, it's not optimal, obviously the federal reserve is hoping to

have a soft landing, among we skirt by recession but, it can also be restored and they don't last forever. they're a little painful at the time, but in terms of the magnitude, we think the unemployment rate rises 1 percentage points. that takes us from 3.7 to 4.7. that's not terrible. it's obviously not the direction we wanted to be, but not terrible and helps to take some of the pressure off of wage growth. eventually, that's good news what we really want is to see inflation get back to 2% we want medium to long-term growth that has to be the goal, right? and that's what's really most at stake here in terms of the downturn, gdp growth, less than a percent from the peak to trough to put that in perspective, many typical relations, you see 2% or more so rather mild >> federal reserve, what are you lag for next week, not the interest rate move, we know that what do you want them to say

>> yeah, that's what's most important. and i think on the back of these data, the inflation data, and also the labor market still being strong, i think they're going to have to raise the possibility of going another 75 basis points in november and it may be that they're going to start to talk about interest rates being, you know, over 4%, instead of just getting to a 4% restrictive level for 4.25%, 4.5%, perhaps. unless inflation really starts to grind lower, you know, in the months ahead >> all right kathy, we had a little positivity at the top there. we needed that today, don't we >> yes, absolutely we need that >> we do need that, why not? the sun will rise tomorrow, unless it explodes, which i hope doesn't happen but then we won't have to worry about energy still ahead, intel, just a hair above its 52-week low. we'll dig into the chip crunch

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at&t 5g is fast, reliable and secure for your business. all right. welcome back let's talk about a market that is not only bigger to the american economy than the stock market, but arguably a lot more important to you and your family because it's where you live. and that, of course, is housing. because the home building stocks, they're getting whacked along with the rest of the market today mortgage rates are on the rise we get some of the weekly and daily data out now i know mortgage rates don't move ever minute to minute. they're not the currency markets, but they sure are moving quick for mortgages >> absolutely, brian and we did get the rate for today. the average rate on the 30-year fixed just matched the 14-year high we hit on one day in june because bond yields are jumping on that cpi number from this morning.

6.82%, the current read on the 30-year fixed. take a look at where rates have gone over the summer it shot over 6 in june, and that turned the red-hot housing market on its feels. they pulled back through july and august, but after the fed chairman's recent remarks, saying that he would continue to be aggressive on inflation, rates moved higher again, over 6% last week, just under it yesterday, now again hitting that 14-year high on a hotter-than-expected inflation and when rates go high, home builder stocks go low. pretty clear in this chart of the home builder etf itb versus the 30-year stocks of some of the biggest names down about 5%. even toll brothers, which is a luxury builder, housing starts and new home sales have fallen sharply, even though supply is still very low and there is demand out there and a note on that, supply was kbr improving a little bit, but sellers are really pulling back now because of this higher mortgage rate effect

an owner who currently has a rate under 3% is not likely to want to trade up to 6% to move to a different home unless they absolutely, positively have to >> and mobility has been down. outside of covid, people fled the cities because they wanted a yard for their kids, but overall, mobility has been down for a couple of decades. >> and recent, we haven't seen much you talk to any real estate agent right now, they're not seeing buyers nor sellers. they're not seeing the lines outside those open houses right now, so it seems like everyone is staying put >> you can't overstate the mental input of positive equity. so if you feel housing rich, you feel wealthy it's a big deal. diana olick, thank you very much all right, still ahead, stocks, you can see, bottom of your screen, staging a major sell-off after that red-hot cpi print skffdeto park your money if the ri-o tra is going to stick around for a while we're back glad you're sticking around. entk has a tremendous impact on my business

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all right. welcome back to "the exchange. technology stocks getting rocked as inflation shocks investors and fears of even higher rates are hurting your investments the nasdaq falling 4%. one of the biggest moves we've seen this year lets get over to kristina

partsinevelos with some of the biggest movers there are today >> let's talk about the fed having to get more aggressive with raising rates, and that is bad news for tech stocks, especially semiconductors. the smhs and stocks are down over 2% in the last three months or so. every constituent of the smh down today roughly by 5%, and that's for the past month. but i can't say the same for the soxx, and that's because of one company carrying the pack. that's wolfspeed evercorps analysts said today that that chip maker is one of the greatest ways to invest in the electric vehicle transition. speaking of ev transition, wolfspeed said they'll be building a chip manufacturing hub in north carolina just two days ago and we stick with that same time frame, intel is the one really hurting, down over 20% and possibly on a roll to hit a fresh new 52-week low. i want to switch to micron, negative on the quarter. if it finishes q3 lower, it would be the longest quarterly

losing streak, that's three quarters in a row since 2016 and demand, unfortunately, has been slowing recent semiconductor industry association data for july shows huge drops in memory demand. and not only does the sector have to deal with the demand slowdown and marooning inventory levels, but also of potential restrictions to chinese customers an overhang for amd, nvidia and equipment makers. nasdaq down over 3%. back to you. >> over 3. not on the lows? >> no. correct. >> trying to find some optimistic. >> around this time we start to see that movement in the 3:00 hour >> we like this hour don't jump the gun. >> i want everybody to keep watching you never know what will happen. >> 1:50 on the east coast. 12:30 in phoenix. >> good math. >> a next guest says that on

semiconductors a favorite name and deploying capital on the pullbacks. bringing in quint with art who's chief market strategist. i'll get to quint in a second. you know how they talk to me in my ear and tell me what to say or yell at me. they said art believes the lows are in for the year. true >> true. we will have the market gyrations. if you look at the three weeks coming into last week sold off because the economic data is too good lo and behold a positive four-day run and the cpi modestly hotter than expectations what does that change? will the fed do anything differently next week? not likely raising by 75 basis points does that matter to us or where

they stop? where they stop is the question. we thought 4%. i think we have a tendency to overreact and take markets back to where they were last wednesday and looking at markets in the second half we are better on the quarter up on a one month basis. the sky's not always falling we thaulgtd the fed gets to 4% maybe 4.25 i don't think that makes a huge difference. >> or back to the 3600 level. >> it feels like on sports on monday talking about the sunday night football. dallas cowboys will never win another game today is bad no doubt but to art's point back to the levels of a week ago. >> you are right art brings up good points. the difficulty is the volatility

is nauseating. yes, it is a game. like you mention looking at a football game but a game where dallas is projected to win by 42 and lose by 50 it is all over the map so these data points come in and swinging us wildly and it is incredibly nauseating. >> good for hedge funds probably for the average investor and the viewer it is a nauseating and annoying and may drive people out of the markets an i no question we have conversations with the clients every day encouraging them to take a step back not to look and micromanaging the positions. this is an opportunity i would say when marks are as inefficient at moments to swing up and down and you have to know what you own and be able to venture in during days like

today and possibly pick up the bargains. >> the lows are in where are bargains if i knew i would be in that aisle. >> right the stock market is a place when things go on sale people rush out of the store we are going to likely be in a 3900, 4300 range for s&p 500 for a couple months. we have a fed meeting next week. i think that if you were waiting to get into the growth names that are very defensive like apple, microsoft and alpha bet you see the market prices there, a defensivible part of a barbell strategy looking for ideas i would think that's what's going to help you maintain over 12 to 18 months. >> everybody seems to like energy they rocketed at thebeginning

of year and leveled off. thank you very much. i'll do quint as the opening wo wordle term and see where that takes me. what's old is new again coming to energy we'll tell you what's been red hot. the dirtiest of dirty fuel and hitting report high prices in amera d e rlicanthwod. stick around

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right? wrong. rather unbelievably coal use in america is going strong. biggest season is 2007 while use has fallen since then consumption for electric consumption is back to the levels of 1979 coal used to power the home and the electric car still running hot. look at this 15% of electric generation this morning around this area done using coal. as you might expect that's more in the midwest where today is about 35% coal this high demand reduced mining has not surprisingly because economics sent the price soaring. prices around the world at record highs think about that for a second. 2022 not 1922 coal prices are at records even inflation adjusted. this sent shares of the public coal companies booming with the

stocks best performer of any sector energy transitions are hard and take a long time especially if everybody wants a big home to crank the ac wish the markets were hot. ice cold "power lunch" will pick up the coverage that's next we'll see you tomorrow thank you very much. we have a sell-off on wall street probably aware already welcome to "power lunch. we have got inflation proving persistent treasury yields spiking. investors betting the latest consumer price report keeps the fed on the aggressive rate hiking path. we will break down the inflation report what it means for the sectors of the market and why inflation is no longer just about energy prices. >> certainly are important as brian ran through.