>> aos, stock came down with housing, but 70% of their business is replacement. it's wrong i think the stock's way too cheap. >> you own it? >> i hope all of you will join me in overtime in a few hours' time "the exchange" is now. >> yes, it is, scott welcome to "the exchange," everybody. i'm brian sullivan in for kelly once again here's what'd ahead, back on track. the rail strike averted, at least for now. a tentative deal reached after 20 hours of negotiating. oil and gas prices down as the risk premium comes out we'll get more on the energy impact plus, we are a week away from the next fed meeting and the markets seem to be split on what they want and what the economy needs. some are saying, we need a big 1% rate hike others say, the economy is already slowing on its own, leave it alone so who's right, who's going to win, and of course, what it all

means for your money and is cable tv the new cable tv streaming services fighting to get even bigger and offer you more choices we'll call it the re-bundling of television and what means for you. so much ahead over just the next 59 minutes we'll get to it. but, of course, the domino, dom chu. >> we're tilting towards the downside the momentum has come out a little bit just in the last couple of hours or so. the s&p 500 at 3928 at the highs of the session, call it up roughly 13 points we were down roughly 42 at the low. again, tilting more towards the downside, but just in the middle of that trading range, the dow industrials about flat on the session. the s&p 500 and the nasdaq composite now at 11648, down 65 points, one-half of 1% one place that has seen some market weakness is an area of concern for a lot of traders,

especially when it comes to technology that is nvidia, intel, and qorvo. for each of these, nvidia down 41%, 47% for intel, and corvel, 52%. each of these stocks today has hit a 52-week low. so three well-known semiconductor names, computer chip companies, that have now hit 52-week lows on the session, that may not at least indicate pretty well for the overall tech trade, so we're watching those and speaking of hitting a 52-week low, another one, but on the software side of things, is adobe. it came out with earnings results this morning they kind of preannounced, if you will they were supposed to report after the closing bell today they came out early, given the merger news they came out, making a big deal on acquisition. but they reported earnings and revenues that were better than expected but on net, given the cash and stock component of their $20 billion acquisition of a exerex competitor-type company, we are talking down 16% on the session.

adobe has lost half its value over the last year, and as we pointed out, a 52-week low, at least. i believe it goes back to 2020 watch adobe on the software side, watch those chip stocks. may not be a great story at least for right now for technology i'll send things back over to you. >> dom, really appreciate it thank you very much. let's kick off the show with some good news in the oil markets. crude oil is lower again today you can see that, it's trading at 8580. it's down about 5% this month. and while many are still talking about $100 or $125 barrel of oil ahead, why don't we flip the script come at it from a differenting an,. russian oil, still flowing, pretty much at the same rate it was before putin's war oh, and they're selling it at lower prices to countries like india and china. speaking of china, they continue their bizarre and failing covid zero policy and keep locking entire cities inside their homes, slamming economic oil demand and look at this the u.s. government continues to sell millions of barrels per week from our emergency oil

stockpiles the spr, as it is known, is now down to levels we have not seen since all the way back in 1984 thankfully, that rail strike seems to have been averted, which means critical oil supplies will keep flowing with all of that in mind, could we make a rational and realistic argument that oil shouldn't be much lower than it is? maybe in the 70 or even $60 range. joining us now is andy lippao, president of lippao oil associates everyone's arguing about the upside i want to flip it. could you sit down and make a rational argument for $65 a barrel oil >> well, we can, and the number one item on that would be a recession that triggers a significant amount of demand destruction. and that would start off in europe, who are being squeezed with high electricity and natural gas prices, and as a result, we're seeing industrial production slow down in the

fertilizer business, aluminum, zinc, steel, cement, and glass and as that spreads around the world and you get demand destruction, you could see prices plummet like they did in 2008 to 2009 to $35 a barrel or in 2014 to 2015, where we dropped to $45 a barrel. so, there is a case to be made for lower oil prices >> is it a good case i mean, do you buy the case you just made? >> well, i don't buy the case that it's going down to those levels and in fact, as world oil demand continues to grow, we see more difficulty on the supply side of the equation, which keeps these numbers relatively high. i think that wti, when i look at the forward strip, you really need $90 a barrel to encourage continued drilling around the world. the fact of the matter is, is that the spr releases are going to end in the middle of october.

we have yet to see the full impact of the eu phased in ban on russian supplies, which takes effect december 5th for crude oil and february 5th for refined products and we think about libya, their supplies can come and go on a week-to-week basis of up to 1 million barrels a day. it's the supply side that's the big issue. >> and i was reading a note from raymond james last night, very excellent note talking about the risks of retaliation, what it might mean, what russia may do also the talk about relationships between india and china and where this all plays out. price caps, will they work who knows? i mean, gosh, it was so much going on, andy, between now and december 5th i don't know if anybody really knows what's going to happen >> well, i think that's right, but certainly, india and china are benefitting from the discounted russian oil, which is selling at roughly $24 a barrel

below brent. so, of course, they don't really want to participate in the price cap, because they're already benefiting i think the biggest issue, as i see it going forward is, what happens to that russian diesel that was going into europe that's about 7 to 9,000 barrels a day. and the most likely outlet for that is argentina and brazil which are both seeking deeply discounted diesel fuel between mexico, argentina, brazil, and chile. they're buying about 700,000 barrels a day of diesel fuel from the golf. if they replace that with russian oil, our diesel fuel off the gulf coast is going to backfill into the european union, and that mitigated any supply disruption. >> how lucky have -- and i hate to even talk about it, because i'm going to do the broadcaster's jinx, like sports or something you know, that quarterback never gets hurt and then, boom, there goes the knee. we have not had a named major

storm in the gulf of mexico or the atlantic ocean this year it's the first major storm, the first time it's happened since '97, at least it was in august, it's one of the mildest hurricane seasons in 70 years. we have been blessed and lucky at the weather has cooperated, andy but accuweather still thinks it's a major season later. if we get a major supply disruption and the spr is sitting at 1984 lows, george orwell type stuff, what happens? >> we'll continue to draw inventories that we have around the country, there's still available oil in the strategic petroleum reserve. the biggest issue is, we could lose 1.7 million barrels a day of gulf of mexico production, as well as we've got 50% of the nation's refining capacity on the gulf coast, and if you lose that refining capacity, that translates into a shortfall of

gasoline and diesel fuel, and as a result, higher prices. if we remember back into hurricane harvey, our gasoline inventory got down to about 180 million barrels, we're about 30 million barrels higher than that right now. basically, we were on fumes, where we saw terminals running out across the nation. >> yeah, and we're very, very lucky so far, mother nature has decided to play very nice in the gulf of mexico and the atlantic this year. just got lucky on that unless we're controlling the weather somehow. andy lipow, thank you very much. appreciate it. >> thank you >> all right you're welcome now to the broader markets with all of the debate and the discussion around the fed and inflation, are we not thinking enough about what it all may mean because, remember, while inflation crushed stocks back in the '70s and even into the early '80s, the market then began one of its greatest bull runs ever, just a few years later in other words, if you bought back then when thing were just

awful and the fed was raising rates rapidly, you probably made a fortune later on let's talk more about it with andres garcia, ceo of zoe financial, and david cat, cio of matrix asset advisers. andres, i'm going to start with you. trying to make a point that inflation is bad, it's ugly, it's terrible. but 1980 and '81, inflation was out of control paul volcker crushed it, and 1982 became a space shuttle-like lift off for equities. >> yeah, no, i think that when we look at what happened tuesday and we take a longer-term view of even a year out, it doesn't matter if the fed hiked 75 basis points or 1%, right, we're 18 months out we look back and say, oh, my god, that changed everything probably not i think the big question is, if march and april of next year, are we seeing inflation year over year with a four handle or are we seeing inflation with a

six handle and that will dictate what the discount rate of the markets are and what valuation are so not to concern the short-term, just because of one print. i think the market kind of overreacted from that perspective. but, inflation clearly matters, and we'll just have to see what happens next >> it does matter, david and rate hikes matter. but i'll quote another historical period, when you were probably just getting started in the business in 1994 the federal reserve raised rates by 2.5%. what we would call 250 basis points super aggressive in 1995, the dow rose 33%. there are some historical analogies for -- is there, for this time? and where stocks may go? >> so, we think so we think that when inflation breaks from very high rates and go lower, stocks generally do quite well over the next 6 to 12 months we think that's going to be the case this time we definitely see inflation breaking it's not linear. this week's cpi numbers were

disappointing, but we think the general trend is lower it's going to be next month, the month after that we think the fed will be next hawkish next year, and the economy is actually in better shape than many think. a number of companies presented at conferences this week and the outlook was generally pretty favorable. logistics problemsare getting better the banks spoke and they said their business was good. consumers were good. businesses were doing well so we think there's a lot of good out there, not all bad. we've been buying this dip pretty aggressively. we do think 6 to 12 months >> that's okay i'll follow up you on that point. you made a pretty good bull case, right? consumer has been strong, earnings have looked good. then what the heck is the market doing? >> well, right now, the market is obsessed with the fed they're obsessed that inflation didn't break this week and they think the fed is out to destroy inflation, and if the economy gets destroyed along the way, so be it. we don't think that's the case we think the fed wants to control inflation. it's easier for them to talk

about controlling inflation and talk about raising rates than actually raising rates, all of next year. we do think inflation is breaking by the end of the year, we think they'll be a little bit less hawkish and the market's greatest fears probably won't come to fruition if you look at the stock market on a business-by-business basis, there are a lot of grease companies at 12 to 14 times earnings historically, that's been a very good time to make money, so, you know, we're feeling good and we've been buying stocks into this dip >> does a lot of it, andres, have to do with your time frame? >> absolutely. right, so if your time frame is six months, we kind of have to make a bet on, you know, what you guys were just mentioning. if you're looking five years out, you have to look at it from a perspective of expected returns, which is, do you even have an option are you going to sit right now, making 50 basis points, when inflation is at 8? or are you going to buy a bond, which is still yielding 2 to 3%. from that perspective, it really

does matter what your time frame is what we're -- you know, our big accommodation is rebalance know what your portfolio should look like and use this volatility to rebalance. >> rebalance from one into what? >> it depends on your particular situation? are you 65 and you need that money tomorrow or are you 30 years old and you need that money 30 years from now? it depends on your time horizon. if you have more than 5 to 10 years out, you have an 80/20 portfolio and the market now made it 70/30, maybe it's time to put it back to 80/20. >> david, leave us with a little bit of something to buy. an amgen, perhaps. maybe even a paypal, which has been run over by a train which is now rerighting. >> you want to look at the market, if you can buy really good businesses, less than 15 times earning, you're going to do well. amgen got hit, it pays you a 3% yield plus bookings had an update recently, very, very good outlook, yet the

stock is very attractive the ceo has bought millions of dollars worth of stocks. we think he's right and we know he knows better than we do and paypal gave an update yesterday, and they said the quarter looks a little bit better than expected they have turned the corner. they're doing a great job on cost cutting three companies that could easily be up 20 to 40% in the next 12 months >> amgen and paypal and booking. booking did lead our insider buying segment last week, i think it was your point is well taken david and andres, good discussion, guys have a great day >> you as well thanks coming up, are all of these big buy now, pay later companies just kind of like all of those sketchy credit card companies decades ago? regulators seem to think so and we'll talk about it, coming up plus, disney ceo bob chapek speaking candidly about their future in the streaming world. we'll round up all the headlines and a look at what could be ahead for the death of a la carte tv, aka, cable 2.0

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welcome back to "the exchange." let's talk about the buy now, pay later boom block, formally known as square, which owns afterpay surged during the pandemic.

affirm shares nearly doubled in their debut, and paypal launched buy now, pay later as well everybody was sitting at home buying stuff online, and many people, particularly younger people, were paying for that stuff with these new payment-type companies but all of these big bnpl players have lost investors about 70% in the past year and now they're about to get a lot more attention in dc kate rooney is here with the details. kate, what's going on? >> brian, that's right the consumer financial protection bureau wants some of those lenders you mentioned, affirm, coklarna, afterpay to be managed like credit cards. it highlights a lack of consistency across providers, late fees, as well, and it says lenders often don't give credit info to reporting agencies, meaning they might not have the full picture of someone's liabilities. finally, data harvesting, since many of these lenders tend to be more app driven, that is a big require that the cfpb calls out

as well. the director of that agency telling reporters that generally there's been separation between banking and commerce, but as big tech-style business practices are adopted in payments, that separation, as he put it, can go out the door the report shows the growth of the sector, as well. americans took out $24 billion worth of these types of loans last year, a ten-fold increase from 2019, and amid that boom, brian, it's getting a lot harder for these companies to make money, as well the cfbp points to margin pressure thanks to a drop in research from some of those merchant fees and increased credit losses. affirm and klarna responding saying that they give a lower-cost option to consumers and expand access to credit, which the report does acknowledge, as well back to you. >> thanks. so if the government is starting to take notice of some problems in the buy now, pay later industry, what does it mean for some of the biggest players in this space? joining us is chris brenler.

i'm not -- i probably can't ask you how old you are, but i went to college in the early '90s and there was a trend then, where on college campuses, probably not just mine, these credit card companies would hire these attractive 20-somethings and they would hang out just off the campus with their little tables and be like, hey, what are you doing? want to sign up for this credit card and then you sign up for ten and the next thing you know you're in trouble is the bnpl industry kind of like that? it feels a little bit like that? a little predatory >> i wouldn't go that far, brian, but i totally remember those tables, those t-shirts, and i think i took out too many credit cards myself, back then but it is a little bit different. there certainly is a marketing flare in the cfpb kind of highlighted some of the marketing tools, even called them infomercial type plans. nothing new here you're paying in easy installments to buy that toaster. but a lot more to bnpl than on

the surface. it's a better product for consumers. it allows you to make a purchase and i it off, unlike the reinvolving debt spiral you can get into with credit cards bnpl is better for consumers, we just need nor transparency on how many loans folks have. get the credit agencies onboard with reporting and make sure we don't get into a situation where folks are over their head. >> the reason i mention those days, you know, 12 cds for a penny! you know, take us under the hood are these transactions effectively akin to opening up a new credit card every time you make a transaction >> i mean, i think from an underwriting perspective, that's one of the things that we like about it affirm talks about the fact that every purchase is underwritten separately so you're getting a very current picture of the consumer's credit profile, unlike an open line on a credit card where you underwrite them once, and that's the best you can do.

you know, i don't think predatory is the right word. i think there is, you know, some pressure to potentially spend more with these programs, but, you know, i think the credit performance has actually been pretty good. 3% or so of loans end up in default. not nearly as high as it can be for products and consumers that use bnpl really like it a recent survey suggests that folks who have never used it don't like it and have a negative opinion of it, but people who do use it really like the product, and feel like it's a better solution if most cases. >> you've got a buy rating on affirm, paypal, and block, formally known as square what's the difference, chris, in these companies? they seem the same >> there's actually a very big difference when it comes to buy now, pay later affirm is much more focused on consumer-funded products, where the consumer is actually paying interest to affirm and the merchant is only paying a small fee. and those are typically longer terms like 3 to 12 months.

afterpay that was brought by square, block, is much more than 100% a short-term, buy now, pay later, where you do six weeks -- sorry, two weeks every payment, so four payments total, the whole thing is gone in six weeks and there's no interest. the merchant funds the revenue for the company. that's a very different, you know, sort of product from what affirm is offering and paypal is much more towards that short end, but paypal is different, because they have the checkout option. it's already on so many websites it's an easier integration for them for paypal, but unlikely to be on the product display page as much, where you see that little logo below the purchase price where it says, instead of paying for $100 for this suit, you can buy it in four payments of $25 when it's on the product display page, that's where you're adding a lot of value to the merchant paypal is ubiquitous, but not quite as up-front and center >> i think you can even do it with flights now, can't you? >> yeah, we're seeing a lot of explosion in the travel sector i think for this kind of purchase, it's a great way to

finance a vacation you know, don't put it on your credit card and have it sort of hanging out there for years. you have set payment terms, pay it all over 12 months. those longer-term loans is what affirm focuses on, it's front and center in travel once you get a purchase price over $500, it's hard to split it up into a six-week loan, so that's why affirm shines >> a good discussion and i'm glad somebody else remembers all of those tables? >> i forgot about the cds, though, so thanks. >> 12 cds -- by the way, that family lived in oklahoma, founded their home, the columbia house family, the biggest house in the neighborhood. they did something right the almighty greenback is living up to its name, but is a super strong dollar a big problem for big tech that's next. plus, speaking of flying, airline ceos are speaking right now, talking staff shortages, schedule cuts. phil lebeau is monitoring it all and we'll bring you their comments later on in the show. as we head to break, a quick check on your markets.

very kind of a sanguine day. dow is up 98, nasdaq is down a bit, about 0.4%. we've seen some selling heading l to closes. we'lsee if that continues, coming up. we're back right after this.

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we've got swin, the casino company moving higher. credit suisse upgrading wynn humana, also popping after raising its eps guidance, all ahead of today's investor day. company citing lower than expected medical cost trends in the medicare side of the business and evercorps giving netflix nervouses something to smile about. the firm upgrading netflix to outperform, saying that the street is not pricing in revenue opportunities from its ad-supported tier and password initiatives. and some banking and regional names are getting a bump jeffries, fifth third, and zions and regionals -- by the way -- regions financial -- those are some of the stocks we just talked about on this very fine show with gerard cassidy, by the way. if you listened to gerard two days ago, maybe you made a little money all right, now let's step out of the markets for a business and get a cnbc news update with tyler mathisen tyler? >> thank you very much two bus loads of mifgrants from

texas have been dropped off near the residence of vice president kamala harris. aide workers who were waiting for them at union station in washington had to scramble to help the new arrivals who were caught up in efforts by republican governors to shift immigration issues to democratic areas. florida governor ron desantis flew another group of migrants to the wealthy massachusetts island of martha's vineyard officials there are working to provide food and shelters for the new arrivals desantis' democratic challenger this fall calls the flights inhumane and wrong >> i didn't know he would stoop to this kind of level, and this kind of inhumanity, but here we are. and it's all the more reason that we need a change. i just -- you know, he's awful absolutely awful >> and kanye west now known as ye, is breaking ties with the gap. his yeezy brand is seeking to break the contract with the company, saying that gap had failed to live up to its end of

the deal the deal was announced just two years ago. brian, ye. >> that was a good graphic ye says nay. >> yeah. >> whoever -- genius >> really good >> tyler, you're genius. thank you very much. on deck, all of this market volatility is now affecting venture capital. we'll tell you how, coming up. and as we head to break, take a look at the dow heat map. you've got unh, jpmorgan, goldman sachs leading the way, but most stocks are in the red intel, can't get out of its own way, not just today, but like the last few years we're ba rhtft ts.ckig aerhi

let's talk about tv. i mean, we're in the media, and there's nothing that the media loves talking about more than media, right streaming wars were front and center at this week's gulf coast communocopia example, disney's ceo bob chapek confirming his desire to buy comcast and suggesting that hulu's general entertainment will be available on disney plus when the company takes full ownership. listen >> whether it's, you know, the

integration of hulu, which we would love to do tomorrow, if we could, obviously, takes a willing partner on the other side, at least before '24. but that's imminent, anyway. >> but brian roberts, chairman and ceo of our parent company, comcast saying, oh, not so fast. confirming his interest in the platform other big names are also looking to consolidate their content "the wall street journal" reporting that paramount is considering shutting down its showtime service and moving its content to paramount plus. enough to make your heads spin the days of a la carte consumption coming to an end are we essentially heading for cable 2.0? let's bring in janice minsk, and ed lee, "new york times" reporter and cnbc contributor. you know, i'll bet you, janice, that if a lot of our viewers and listeners right now go to their roku or appletv or whatever they're using, and they're going to realize they're probably double skriubscribed to a lot o

services maybe they subscribed to espn plus, but get espn plus on their hulu bundle or sports under peacock. it's getting nuts out there. >> this is the story of streaming wars in 2022 it is such a poor customer experience right now and not only is it hard to find what you want to watch when you want to watch it, but you're also seeing, in a new development, all of these deals flooding your inbox, peacock for $20 a year, you know, the bundle of disney plus plus hulu plus espn i mean, you really need to devote probably several hours to unwind what is now really your new cable bill for this era. >> and add it all up, ed but here's the thing, i'll defend the industry, because, "a," i'm in the industry and, "b," i like having a job, which is, it's been a race to the bottom everybody wants to spend billions on content, nobody wants to pay to watch it

i mean, so does everybody just go out of business and we sit around a campfire telling stories again? which is not so bad. it's not so bad. >> yeah, well, look, i think it will be a while before we get back to that point but you're painting sort of the correct picture, though, of what the situation is, which is, it's just, everything is getting more expensive. netflix has been raising its prices and the fact that paramount is considering bundling potentially showtime in with its service and disney wants to buy out hulu and bundle with its services, it just makes it harder for consumers to decide, i want this service for now and that service for later and they're switching on and off and being sophisticated about what they're paying for. it's going to be harder to do that it doesn't -- in some ways it's helpful for consumers, in a lot of ways, it's not. not when it comes to a cost issue. and if you make things too expensive, people will start fleeing in droves. and churn has been high for streaming services in the u.s. it's about 37%, according to one survey so, you know, they're just trying to retain consumers and that's what this bundling or

stacking is about. >> i'll follow up with you, ed i have a different angle i can see it both ways but to your point, ed, people are gaming the system, right they'll sign up for a subscription, maybe even free for seven days, watch the only show they want to watch, cancel it, and never pay one dime is there a case, would it work, to only have annual subscriptions. no more monthly? lock 'em in! >> so you're -- >> maybe drive 'em off >> yeah, that's -- that's the -- you know, disney plus, when they started, they sold an annual version first, chi actually bought into it, which was much cheaper. and of course, 12 months comes around and all of a sudden i got another bill for another 12 months so i think that's way it's been smart. i have a feeling other streaming services will go towards that route. they'll do that and stack services so you end up having fewer choices and all of a sudden you're back into a cable bundle like before, the title of

the segment. cable 2.0. so it makes complete sense that's the direction it's heading in it's really not disrupting cable, it's just replacing it with another version of it >> yeah, is it a better version, janice my appletv is starting to look like my phone and i don't mean that in a good way like red dots and too many apps i'm not using. >> it's all beginning to look a little bit like a grocery store flyer you get in the mail. but i think that we're seeing, one of the things with netflix earlier this year in their q1, q2 earnings calls was we hit the ceiling of the streaming market far faster than anyone was expecting. so we're seeing this crazy pullback now, where it's like, uh-oh! we don't have this infinite audience that we once thought we had. and so that's, going to the point you made about annual deals, that's why, you know, before game -- i think it was right before "game of thrones," the new one launched, "house of the dragon" on hbo max, they

were offering you a year-long, i think 40% off a year-long subscription they know they do not want you to churn out the second you're done streaming that show and unlike cable, where if any of us recall having cable, it took like 90 minutes on a phone call to cancel your bill, you can just cancel it with one touch. and that's -- >> it's a race to the bottom i worry for my industry. i mean, honestly, you have to -- i don't see where -- and by the way, we've talked about the biggies, right what about cnn plus. i've had dinners that lasted longer than cnn plus because they realized how much money they were losing and i mean that terribly, because a lot of good people lost their jobs. but at the same time, this seems like a train to nowhere. >> well, i want to -- i think it's worth talking about the emmys that just happened where you saw, what's basically been the man ifestation of the streaming wars over the last few

years which is this case for niche programming. buzzy shows. it turns out those buzzy shows are watched by people, a very small segment of the audience who live on the cost, who might -- who might read a lot of tv critics, but those aren't the big, popular, broad shows that were the foundation of broadcast television for all of those years. and yes, that model is broken. but everyone is -- i think everyone wants like home runs and we're saying, singles, maybe not even singles and so we're kind of collecting pennies off the floor. >> well, ed, i don't know if you've ever played baseball -- >> streaming is expensive. >> it is and when you add it all up -- >> it's an expensive business. >> you can win a lot of baseball games by hitting singles every three times at bat and you can strike out a lot going for that home run. i mean, who do you think, ed, in your mind is doing it the best right now? >> that's a good question. you know, look, i think netflix sort of set the model for how

you could become profitable. it took them a long time they didn't really get to that point, if you really look at their correct profit measure, which is, you know, their cash flow, really, until they hit 200 million subscribers, right and they're paying somewhere about $15 a month. disney, even though they're a closer approaching that number, they're -- they don't charge as much it's going to take them a lot longer you know, at this point, you know, netflix is still sort of the best one, at least in terms of as a business, but we've seen how challenged they are. so if netflix is sort of the future for like disney or hbo max, you're like, that's not necessarily a great future for them they have to figure out a better way to go at it. i think hbo has done a great job of focusing on fewer, better at least that's their idea and to your point, a lot more singles. maybe a home run on occasion maybe that's the way to kind of win that game. but it still remains to be seen. i don't know that there's a great deal model right now netflix is still the best one, but it's, i think, it's a

stand-alone. i don't think it's a model that others can or should -- >> there's great tv, like jack irish, which is a show i watched with, you know, on acorn's tv. you can do a lot of these lower-cost ones, janice, we've got to go. but to your "game of thrones" analogy, remember what happened in "game of thrones," too, almost everybody died. like six people out of 500 died. >> can i throw in the point that bob iger said this week, you know, where he said, he just said it flat-out, not all of these streaming services will survive. >> he said it. >> that's true >> he said it. like, casual, bearded, bob iger. where was he when he was running the company? janice min, ed lee, good discussion i hope i didn't spoil "game of thrones" for everybody, but it's like a five-year window. i'm out of it. everybody dies still ahead, it's no secret that tech has taken a beating as rates rise, but one asset manager is warning it's not just rates, that some stocks have to

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all right, higher rates. they have already weighed on the tech sector, probably a lot of stocks that you own, but the dollar could compound issues for megacaps, like apple and amazon. seema, i like to think that i'm a fairly smart guy and that's what i tell everybody, anyway. but i'll be honest i don't know anything about currencies they're weird to me, but man, they matter. >> the dollars at the center of financial markets. we worked with a data team to examine the balance sheets of some of the biggest tech companies, and here's what we found. we have broke out forex charges, it comes to about $10 billion. that's how much apple, amazon, microsoft and meta combined lost last quarter the question is, how much a future profits are at risk, like wilson at morgan stanley says every time the dollar rises 1%, shave half a point off eps

estimates. the tech sector is more vulnerable with nearly 60% of its revenue overseas but that's far more than the 29% for the overall s&p 500. it's one of the reasons forecasts for tech earnings are falling faster than the broader market just take a look at this in early july, analysts were anticipating 5.8% profit growth. here in september, earnings in the third quarter expected to fall over 3% advisers say the pace at which rates and the rates dollars rise could play into how aggressive tech companies are in their expansion outside the u.s. it could also change the structure that companies use when they're operating in different companies overseas brian, perhaps denominating the revenue and expenses in a country like japan, not in dollars, but in the yen, so they don't have the forex >> very quickly, they said no time for chat in my ear, but i'm going to -- projections are for the dollar to go much stronger, aren't they? >> yes, especially with the fed meeting next week. so that will play a huge role, right? >> it will

you'll tell us i don't know anything. seema, thank god you do. coming up, unicorns, dragons, sounds like "game of thrones." no matter what mythical creature you're talking about, we're talking abou -had enocapital.-no. (swords clt venture that could be good for angel investors. we'll tell you why stick around full prescription-strength? reduces inflammation? thank the gods. don't thank them too soon. kick pain in the aspercreme.

this volatile market, choppy market, rising rates, all having a big impact on venture captual. according to global data, funding fell 30% to $9 billion in august, hitting the lowest levels this yoor deal volume also went with it, down 3% from the previous month, but that may not be bad news for investors or some companies because start-up evaluations will soon start to fall, which might kick off a bunch of deals. buy when it's low. let's bring in adrian mendoza, which invests primary in start-ups led by immigrants and women, kicking off hispanic heritage month good to have you on the program. it's kind of weird you want things to go up, but you also want to buy them when they're low, so is this sort of slowdown a good thing?

>> you know, it's a massive opportunity. the reality, what we're seeing, is we're going to see, right now in vc, there are billions of dollars sitting on the sideline. and one of the things about vcs is we do love a good deal. so we're going to start seeing markdowns happening in the next three to five months, and really that is an opportunity for investors to come in, buy well known start-ups at a lower valuation. but in our view, we also see a hot m&a market happening where we're seeing like what we saw yesterday and the day before that, the market taking a hit. that's going to slow ipos. the m&a market is going to be incredible in the next three to five years >> why is that make the case for deal making? >> absolutely. and we validated this with corporate strategics where they're looking at a build versus buy when something was at $1 billion, way too high, it has to have the ipo

now the valuations drop, there's an opportunity from whether a corporate strategic bank, whether another tech company to roll up, buy a couple smaller start-ups, to buy revenue, market share, technology and that's really what we're going to see this very sort of lower middle market private equity type of view in the world where you can buy with little valuation enough small companies to create much larger fintechs, much larger a.i. companies, much larger cybersecurity companies. >> we keep hearing higher rates are bad because it makes money more expensive when money was flowing, it was cheap, basically free. just do a deal because no matter what the return is, it's more than you're getting on zero percent. are we going to have to be smarter now? >> absolutely. what we're seeing now is the conversation which we had always talked about, is not raising a lot of money, profitability. we're now seeing the vcs going

to the portfolio companies, you haveprofitable how do we get an acquisition, how do we get profitability faster than we have ever seen before >> adrian mendoza, appreciate you coming on. see where this vc market goes. have a great day >> thank you >> up next, with a little more than three months until the holidays, travel demand is sure to pick up after the summer staffing issues are the airlines ready for the surge? are you going to be sitting at newark airport for eight hours again? phil lebeau will be along to ta authacongp.lkbo tt mi u icy hot pro. ♪ ice works fast... to freeze your pain and your doubt. ♪ heat makes it last. so you'll never sit this one out. icy hot pro with 2 max-strength pain relievers.

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welcome back to the exchange christmas is just 100 days away. which means thanksgiving is 70 days away. kicking off the busiest time of the year for airlines. with ongoing staffing issues, will they be ready to handle the

uptick in travelers? phil lebeau joining us with what the ceos are saying. >> brian, a number of those ceos are meeting in washington today. they hold an annual aviation summit and we'll hear from united's ceo in just a bit take a look at the airline index. i get this question from a lot of people. they say, what's the problem with the airlines? are they not hiring people yes, they are hiring people. if you look at the data between january and july, they added 32,000 people. about 5% nationally in terms of staffing the september flights, they have brought down their schedules that has helped out things in terms of the on-time issues we saw this summer. there's still strong leisure demand corporate travel is improving. not back to where it was pre-pandemic, but it is improving. southwest noted that today as it released its guidance for the third quarter, updated guidance where they narrowed their projections for the quarterly revenue, actually raising the minimum in terms of what they're expecting, and in terms of

united airlines, ceo scott kirby talking a few minutes ago in washington, d.c., said look, we're 10%, united is 10% overstaffed relative to prepandemic. which then raises the question, we have heard about these staffing issues. the problem is, all of the other industries, whether it's at the airport, whether it's the caterers, whatever it might be, are not staffed to the same degree that the airlines are so that when you see a flight that is delayed, whether it's due to air travel control staffing or an airline, it makes people think, the airlines aren't staffed enough. he's saying at united and other airlines, the staffing is getting back or is already exceeding where they need to be. it's the other industries relative that are all around the airline industry that are not fully up to staffing i have to say, i have noticed that when you have been at airports, you'll see some of the staffing at various points where it is lacking. and that's not necessarily an airline issue. it's an airline industry issue

>> we have 20 seconds left of the show i wanted to ask about prices but we'll get you back on. you can get home, but how much are you paying to get home would be the question. $800 for coach, chicago to newark phil, thank you very much. >> all right, we'll get phil back on because the money matters. that does it for us. we'll see you tomorrow [ applause ] starts right now >> thank you very much along with contessa brewer, i'm tyler mathisen here's what's ahead on "power lunch. recession warning. will the fed's aggressive strategy to raise interest rates cause the economy to crack that's what starwood capital's chairman and ceo, barry sternlic, told cnbc this morning, and according to him, it could happen soon a look at why the fed's fight against inflation is growing more confusing >> plus, the end of work from home how far will employers g