guidance and they just announced a really big deal with hertz for electric vehicle production >> i only half because stephanie link called it a value trap if one of the breaks earlier and we didn't have time to argue it out. >> steph >> it's all good josh >> rates are higher, the bankses are outperform the overall market and i think that will continue >> good stuff. i'll see you in the o.t. the exchange is now. >> welcome to "the exchange," everybody. we are about 24 hours away from the federate decision with, and rates, they're rocking 11-year high for the 10-year yield. 15 years since we ever been this high on the two-years. and that's a huge hidden tax on tens of millions of you. we'll tell you why and fedex earning of a serious economic pullback. but many other companies are saying, things don't look quite so bad so who's right we'll call it fedex versus

everybody. and beyond meat has been beyond bad. shares wiping out 85% of investor value and adding insult to injury, the company's coo involved in a beef at a college football game. the exec apparently taking a page out of mike tyson's playbook that bizarre story is ahead. we'll get to it. we begin with anotherdown day for the markets, dom chu has the nightm numbers for us >> a down day triggered by higher interest rates. even inflation-adjusted yields, so-called real yields over ten years ago since they've been this high. that inflation picture is ticking higher so is the rate picture in response to it the dow industrial is down 350 points, over 1% declines here. similar for the s&p 500, which since was at 38.56 we're down 34 points at the highs of the session, we were down 23 points, down 56 or so at the lows of the session. so tilting towards the lower end of things, down 1% and believe it or not, the nasdaq composite at 11,455, down, i say this tongue in cheek

a little bit, only 80 points as the outperformer on the day, down about two-thirds of 1%. what's interesting about that is if rates are rising, why are tech stocks not getting hit as hard check out what's happening with some of megacap names in this market there is downside. no doubt about it. alphabet down 1 2/3 percent there are some science of life in that beaten up technology sector if rates are rising and we're seeing a tiny bit of bounce in some tech stocks, what does that signal about investor sentiment? and the stock of the day worst performer on the s&p 500, ford motor about 10.75% right now, $13.33 this is a stock that got crushed after it warned investors that its costs would be around $1 billion more than they had anticipated, because of supply chain issues and what not and inflation air pressures.

all of that weighing on the stock. ford did reiterate its full-year forecast many of those will be delivered, anticipated by the end of the fourth quarter so keep an eye on ford shares, down 10.5% in trading. back to you, brian >> a lot of people want that electric f-150 lightning you can want it, but getting it is a totally different story dom, thank you let's get now to the big story that is moving your money right now. and that is higher interest rates, better known as borrowing costs. a ten-year yield hitting a decade high. we're now hovering at 3.6% compare that to the pandemic low of 0.3% in 2020. i hope you refi'ed that is a stunning surge off the lows rick santelli is here to put it all in perspective the move, monster. >> yeah, it is so monster move if you look at a two-week chart

of tens, you can see the buildup to what occurred yesterday, which was technically significant. that was, open a chart up to june 1st, we closed above that spike in mid-june, which was just a bit below 3.5%. and that really did open the floodgates to some extent. and if you open the chart up to early march of 2020, you can see what brian is talking about. whether it was early march, when you had a low-yield close of 0.54%, or the all-time low-yield close, it was on august 4th of 2020, at 0.51% so half of 1%. it has been a big move and what makes it even more intense is the notion of rate of change many have said, well, interest rates in the 70s and 80s were much higher. but, it's the rate of change, how quickly they've moved higher, and of course, discounting future earnings at a much higher short overnight rate

is taking a lot of zing out of the stock market it's not only here, but all across the globe for a variety of reasons, inflation and inflation rising for a variety of reasons in europe, mostly energy related, but look at boon yields they also yesterday closed above their mid-june high, which was 1.77%. boons indeed did that as well as uk yields, which closed at a fresh 11-year high and get this, folks. brian, buckle up you know what august year over year ppi was in germany, 45.8% yes, 45.8% and that's august. in july, it was 37.2 in june, it was 32.6 energy, energy, energy, and it isn't even that cold out yet >> you know i know, rick, because i was in germany a month ago for cnbc talking about this. i was in the uk a year ago, well

before the invasion. factories are starting to shut down they're going to curtail production it's impossible to think how europe does not go into a long, steep depression i still do my rbi random on worldwide exchange and today i talked about the national debt. we don't talk about the national debt anymore, okay $30 trillion the reason i brought it up, rick, is that not only is the debt going, up, but with rates going up, it's not inconceivable that the u.s. government wirks e, all the taxpayers, are going to be spending a trillion dollars a year, just on interest costs in, say, maybe a decade or even less. that is insane >> it is insane, and right now it's probably in the neighborhood of 500 plus billion and moving hire to $600 billion. you're right it's eventually going to get to $1 trillion.

and think about that in deference to some other big bills like social security and medicare it's going to start to dwarf those and make such a big hole in our budgets that we really ought to not only think about how much damage tas hat is doint our accounting in general, but it's putting significant saddlebags on the u.s. economy the more debt we pile on and the more programs we have, the rougher it is for the economy to get those 2.5 and 3% gdp levels. >> $500 billion now going up, that's money not going to schools, not going to health care, not going to head start, not going to roads, not going to the military, not going to bridges. and by the way, both parties are equally dplt at spending like drunken sailors. drunken sailors on the same ship >> so viewers needs to understand, we're still collecting record amounts of tax revenues from april. record amounts so really, the issue here in my

opinion isn't how much we collect in taxes, it's about spending, spending, spending, and of course, all of those roads lead to debt >> talk to any personal finance person, it's not what you make, it's what you spend. that's true with families and governments. rick, thank you. we are 24 hours away from the highly anticipated decision on interest rates the market hiked 74 basis points, aka, 3/4 of 1% but should the fed go even bigger, and what will say say about the rate road ahead? joining us is randall crossner, currently a professor of economics at the university of chicago. i have two friends' kids that have you as a professor. their name will go unnoticed i will not mention their names they're terrified, perhaps, of this interview professor, welcome back to cnbc. >> i hope not. >> i think -- do we care if it's 75 or 100 basis points tomorrow?

zpr i think we do. if the fed surprises the markets and goes 100 basis points, that suggests that they're much more worried than we think they are and i think that would cause a lot of tumult. but i think, it's pretty clear that they'll go 75 i don't really see why they would need to move 100 basis points i don't think they were that surprised at the core inflation numbers that were not coming down, because rents are such an important driver of that and rents are lagging. i think they'll start to grow at a lower pace, but not yet. >> and what do you them to say you know what i mean, as a former fed governor, you had to break out your thesaurus every time you wrote a statement how is the market going to interrupt this word versus that word what do you want them to say versus what will they say? >> if you look at the transcripts that are public for the five-year lag, you may be surprised to find that most of the discussion is about what to

say whether it's 75 basis points or 100 basis points. there's usually pretty clear consensus on that, but what to say is a lot of discussion about that so we're going to be getting some forecasts out, undoubtedly, they are going to be forecasting -- or at least, i believe they're going to be forecasted to have a forehandle on interest rates by the end of this year. and forecast to probably be between 4 to 5% for most of 2023 so i think that they're going to be trying to talk through that to make sure that they are maintaining their credibility, they're in inflation-fighting b bona fides, which i think they have inflation expectations didn't get out of the last month. so they weren't too far gone, and now i think they've really bought a lot of credibility. >> you know, we talk about rates all the time on this network as it pertains to our viewers' investments. and we should. we care. we care about their investments. we're the worldwide leader in business news. but i worry more, randall,

spending a lot of time in the midwest, what these rates are going to mean for the average m american household given the rate of revolving debt, credit card debts at record levels. many other debt levels -- debt service, i get it, is manageable, now. can the american economy withstand 5% interest rates, 6% interest rates >> so it -- certainly, these are rates that in the old days, those would have been good rates. these days, we think of them as being particularly high. obviously, the increase in rates is having a very big impact on mortgages. and then the consequence of that is impact on housing prices. so people who have 30-year fixed rate mortgages, they're okay in terms of the debt service, but it's going to affect the value of their house if they come to sell it. and we're sort of seeing some of that downturn in many markets now. so i think that has an important impact on your average household.

and as you said, other borrowing costs will be going up now, potentially, hopefully, on the positive side, eventually, we'll start to see some checking accounts and savings accounts pay a little bit more than they have in the past, but they've been slow to raise those rates >> isn't that funny how that happens? if your interest costs go up $250 a month, hopefully your wages go up $250 or a month. and that's been what's happening. do you think the pace of wage increases can continue, as well? >> so, they have been -- they have been much faster than they have been in the past, but of course, inflation is four times what it's been in the recent past so, they haven't quite been -- wages haven't quite been keeping up with overall inflation. and that's, of course, what's making people very upset it's not just about having a job. it's very important to have a job. but the reason that you have a job is not to have a job for itself, because you want to have a good standard of living for

your family. if you're working hard, but prices for food and prices for gasoline are going through the roof, you're no really better off. you're worse off and so that's a thing that i think people will be focusing on the key will be, can they bring inflation down enough without bringing -- without crunching wages, so that people's income can be maintained and we can have a softish landing rather than a hard landing. >> this question may sound insane, and you've got to have a quick answer, i'm sorry. when do we start talking about rate cuts? >> i think it's going to be pretty late in 2023. >> but, a year and a half off. not five years off >> well, i mean, a year or so. >> randall crossner, university of chicago's booth school of business, randall, thank you appreciate it. all right, 20-year bonds, speaking of interest rates just up for auction a few moments ago. let's get the grade with professor santelli at the cme.

>> yes, brian, when we were on the air, maybe viewers noticed, rates started to slip down a bit. and that's because the $12 billion of 20-year bonds hit the street and it was a terrific auction. i gave it an a-minus very quickly, the yield was 3.82 the one issue market was hovering around 3.83 lower yield, higher price than the metrics that really caught my eye, indirect bidders at 75.3, super strong that represents foreigners we want them buying in, and dealers only took 8.1% of the auction, instead of a ten-aux average of 13% no matter how you sliced it, they definitely wanted those 20-year, in front of a big rate increase that speaks volumes about where investors think rates may ultimately be going. back to you. >> as the fed prepares for another rate hike, you might have heard about it, and the

two-year yield hovers about 4%, investors are increasingly worried. will these rate hikes ultimately send the american economy into a recession? nouriel roubini thinks so. he said today that he thinks stocks could fall from 40% more from here and the u.s. economy may enter a long, painful downturn let's talk about it and opportunity, by the way, amid the uncertainty. and ask mark smith, senior vp and portfolio manager at wlg wells fargo advisers do you see a prolonged recession and a 40% haircut to stocks from here like nouriel roubini does >> i don't see it going that bad, because all of my clients are talking about, where's the value right now in the market? where are we seeing opportunity? as long as you have investors looking long-term, i don't think that's going to happen but i do feel that -- i remember hearing something two years ago, we were in the middle of a pandemic, don't fight the fed, don't fight the fed. if you were going to say that then, you better say that now.

and the fed is going to continue to raise rates, month over month inflation is up, just a number, right? last month, it was -- it went up 0.1% if that's the case, the fed has to act or are going to continue to act, unlike your previous guest, crossner, i can't say next year rates will start to go down, because the numbers don't dictate that if you're saying that, you're really just guessing >> mark, to be fair, i don't want to speak for him, maybe he can jump back on the phone, i don't think he's saying the rates are going to go down, he said, that's went we start talking about rates going down it's like talking about the jets winning the super bowl you can talk about it. it doesn't mean it's ever going to happen. >> i greed i think they're just going to be talking about it for a while from what i understand when i talk to my clients, they're still selling their real estate at all-time highs, at least in the northeast, they are. rents, i haven't heard one of my clients say they're going to lower rates because they're a nice guy or a young lady

rents are still going up, they're ticking up maybe in some parts of the midwest, that could be different. but in these major urban areas, rents are still at all-time highs and that's a big driver of inflation, fed has to act to address that >> you're making a great point, because rents, to your point, most people lock into like a year lease, right? that lease goes up they're locked into those higher prices for at least a year home payments, home sales, that's a big deal. this is sticky inflation, mark >> and that's what the fed has to deal with so i don't know if this is a soft landing is happening right now, if you look at where inflation is right now compared to last month and is it going in the right direction? i think the fed may have to act aggressively to combat it to your point >> so what are you advising all of those clients to do down. roubini says we're going to lose

another 20%. scott meyer says 20% what do you advise people to do besides breathe into a bag, relax, think long-term >> most of my clients are long-term investors. the other thing i would say is, look historically at what sectors have done well when rates are higher and one sector that's undervalued and continues to show, i think, a lot of strength is the financials. since '08, '09, and dodd frank got passed, these banks have had to be lean and mean and only take on good-quality debt. that's a big statement and many of these other firms, because of the regulations that happened in '08 and '09 to prevent that from happening are really, really poised to benefit this rising rate environment, because they're going to paycheck make more money, because of net interest margins,

mortgages, credit card debt. they're going to make a lot of money in an environment where the spreads are higher i would buy the financials, specifically looking at a broad swath of the financial and that's a sector that's continued to do well >> you might have heard, randall crosby talking about how banks are going to give you a little less than they're taking in. maybe that net interest spread will grow. appreciate it. we'll see you soon thank you. all right, so much left to do coming up, fedex versus everything else. why they are saying something others are not about the state of the american economy. and despite raising rates and the federal recession, one firm says now is the time to invest in energy stocks and we'll name names, as the exchange rolls on after this

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welcome back to the exchange ceos have been sounding off on the economy, some sounding the alarm like fedex some keeping a little bit more calm let's start with fedex do you remember this big market-moving comment to jim

cramer >> the u.s. consumer is definitely spending less, but the u.s. has been somewhat insulated because the u.s. dollars is the currency of choice for the world and there's some insulation there. but i do see the u.s. as slowing down, too. >> that's some pretty scary stuff and it moved the entire market but keep in mind, there's been a very different tone from others. home depot, marriott, ralph lauren, seemingly managing macro headwinds just fine. it's not stopping home depot from selling a ton of stuff or impacting forwarding bookings at marriott, at least not yet, and ralph lauren is well positioned going into the holidays. let's bring in a man who has a front-row seat to the c-sweet. so, steve, you talk to ceos all the time across every industry what are they saying >> brian, ceos are very pessimistic right now. in the latest ceo confidence voi, over 90% of them say that the u.s. is going into a

recession. and they say this is primarily caused by the actions of the fed. and you know, they're not criticizing the fed, but they're saying, look, the fed's goal is to get inflation down to 2% and they're willing to take some collateral damage, meaning that the gdp will go down and jobs will go down, as well so they are very pessimistic now, juxtapose that to the consumer confidence, which actually went up last month, which was a surprise after two months of declines and consumer confidence is a little higher and spending stays up because gas prices have come down for eight consecutive weeks. even though food prices are up double digit and you've got core inflation going up, you know, the gas price was a great reprieve and they're feeling a little bit better. so you've got these mixed data going on the fact of the matter is that we are forecasting at the conference board a brief and shallow recession, based on the activities of the fed, both in quantitative tight sening and t increase in the discount rate to near 4%, which we think is

what's going to happen over the coming year. >> the debate, steve, as you know is, what's fedex seeing they're a great company. one of the best-run companies in the world. they see the world they've got a unique fingerprint, a unique viewpoint. and it's kind of like, whoa, is fedex doing their own thing? like, what's in the punch? >> fedex, they can see the pipeline and what's coming down. we are forecasting a u.s. recession. conference board is also forecasting a european recession. the conference board is also saying that russia and ukraine are already in a recession we're not forecasting a recession for some of the major asian economy and we're not forecasting global gdp in aggregate will decline. but if you're in china, brian, and your gdp growth rate goes from 4 or 5% down to 2%, that's painful. that's a big change and okay,

it's technically not a recession, but that has material impact so some of this is just a, you know, a little bit of lingo. the fact of the matter is gdp is receding and there is main coming around the world. >> looking at that research report, there is some good news. feels like there's a lot of bad news lately. i want to have some good news. u.s. companies are now budgeting for the largest annual salary increases in more than 20 years. that sounds like good news, right? >> it depends on which side you sit on, right? >> if i'm getting paid, i'm happy. >> a year ago, the budgets were at 3.6% increase the actuals came in for 2022 at 4.1. so another half a percentage point. this 4.3% budgeted growth rate in salaries for next year is the highest inover 20 years. part of that is good, but then the kquestion is, is that going

to keep up with inflation. we go back to the previous conversation what's inflation going to be and we are forecasting it to be near 6% this year, close to 3% next year before it gets under control in 2020. >> 3% sounds good. like the new zero percent. >> isn't it great? that's all impacted by a labor shortage a low labor participation rate and so forth typically, when you go into a recession, you're looking at the increase in the discount rate, the increase in borrowing rates, all of that which slows down inflation. but there's usually collateral damage in the labor market in this case, there is still 11 million job openings so, that's a lot of open positions that ceos will eliminate before they start eliminating jobs that should be a different experience than in the past. >> i don't want know where the workers are coming from. i don't know where they went, to be honest with you

i've spoke to hundreds of businesses -- i had a plumber at my house this morning, he said, any get 80 people to try to start, 1 may stick around, the other 79 bail. that was in my kitchen this morning. >> yeah, you may have to fix your own leaks, brian. but -- >> no way! >> -- i think the issue is, you have a lot of people, a lot of baby boomers who stepped out during the pandemic and haven't gone back. you have a lot of women on the sidelines who are dealing with elder care and child care issues you know, so -- and then you've got the whole issue around immigration, which is, our system is broken, we're not going to get into that, but we do have a labor shortage, we have 11 million job openings this is a really different kind of recession than we've ever experienced before >> they've got to do something about child care i have friend -- they quit -- maybe the husband, maybe the wife -- because they can't get child care or it's so damned expensive -- sorry, darn expensive -- bertha, i apologize for that language -- it just doesn't make sense

after taxes, commute costs, whatever, you're left with so little, you might as well stay home if the child care is going to be $2,500, $3,000 a month, taxes, "x," food, "x," oh, by the way, time away from home -- it doesn't -- fixing child care seems like a big deal for fixing the job market steve, we've got to go, conference board, we'll talk more about it. thank you, steve >> thank you speaking of corporate america, hispanic representation in board rooms is starting to rise bertha coombs is here now with the numbers to know and why investors should care. i'm sorry for the language i got a little fired up, bertha. >> well, here's a bit of good news, as well. you know, the latino corporate directors' association says they saw double the demand last year for help with board searches louis marconi was one of the candidates that they recommended and he landed a seat on american outdoor brands in june after 25 years at hormel. the outdoor firm has seen its customer base become increasingly diverse and so they sought out the avid

fisherman and diver in part because of his expertise growing brands in the latino and south american markets >> this is where you draw from the experience of being exposed to business cases in different geographies or in different cultures, that will trigger some ideas that perhaps your competitors are not seeing >> the push for more representation on boards has resulted in nearly one in four directors on s&p 500 boards being of racial or ethnic -- of racial or ethnically diverse group. hispanics now make up 5% of s&p 500 board members. that's a new high. that representation is disproportionately lower compared to its population size. >> all diversity gains are important and significant and we need more of it. but latinos from all of the perspectives have still been the least tapped when you look at, who are the new directors being

appointed? >> luis marconi's seat on american outdoor brands board actually stands out, brian, because when you look at the russell 3000, only about 1 in 3 actually has an hispanic board member, so there is a lot of room to grow there >> any great team, any great company, any great organization needs a palesipeline. you can have some great stars, but if you don't have a good, young bench, you'll end up like the red sox this year, bertha. sorry. >> that is -- and that is the issue. >> what is this board pipeline we do see a lot of the same people in the same jobs. >> exactly so, for louis, for example, he was vice president at hormel he didn't have a team to be able to go serve on a corporate board at that time, because his job was all-consuming. now he's retired, he can do that you're looking at the latino corporate directors association, the hispanic association of corporate responsibility, they are trying to help these up and coming executives to help them

climb the ladder, to get to those senior positions, and then to be more in a position to be tapped to be on a board. because at the moment, you only have 3 to 4% hispanic ceos in the c-suite. >> hispanics are like 20% of the population, so the proportions are a bit off. >> it's about helping to develop this next generation >> there you go. bertha coombs, important story bertha, thank you very much. all right, now let's go to tyler mathisen for a cnbc news update >> brian, thank you very much. >> here's what's happening at this hour, folks an explosion destroyed the top floor of an apartment building on chicago's west side eight people injured, have been rushed to local hospitals. at least one car was crushed by flying debris. the cause of the explosion has not yet been determined. in connecticut,conspiracy theorist alex jones has made his first appearance outside a defamation trial to determine how much he should pay for saying the sandy hook school mass shooting was a hoax

jones calls it a show trial. it's unclear when he will be called to testify. on the news with shep smith tonight, sifting through the damage from hurricane fiona in puerto rico, and the fight to resupply fresh drinking water on the island that is tonight at 7:00 eastern time and a little bit of normal now returning to kyiv. mcdonald's has reopened three of its restaurants in the ukrainian capital, this nearly seven months after closing all of its ukrainian locations following russia's invasion. for now, only delivery service being offered. mc mcdonald's continues to pay more than 10,000 employees in the country. brian, back you. >> that's small, but good news small steps start as putin hopefully gets his butt kicked >> yep >> thank you, sir. still ahead, energy by far the best-performing sector so far this year, but my next guest says there's still room to run particularly in some stocks and one subsector in the space is

initiating several names, including this one, with a 30% upside seen. what's the mystery chart we'll bring it out for you and do not forget, cnbc's delivering alpha is back in person. whoo-hoo september 28th we'll get the best ideas from the world's top investors. you can scan the qr code on your screen or go to cnbcevents.com to register. we hope to see you there we're back after this short break with the dow losing steam. down a couple hundred points this thing, it's making me get an ice bath again.

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all right. the market's getting jumpy ahead of the federal reserve, because we are selling off and the selling has really accelerated in just the last 10 to 20 minutes. the dow is now down 474 points the nasdaq off 156, on a percentage basis, they're all about the same we'll call it 1.5% inside the dow, there are two stocks that are higher they are apple and boeing. and at this rate, if we see this continue, there won't be any stocks that are higher real estate, materials, and consumer discretionary, they are the worst performers they're the ones, by the way, their likely to get hit just as much by higher rates, at least on the consumer side, maybe not on the stock valuation side.

inside the dow, nike, travelers, and caterpillar are your biggest laggard. they're down -- nike is down nearly 5%. so a lot of consumer stocks are starting to get hit. remember, higher rates, folks, are basically just a giant tax on any resolving debt you've got. in other words, not a fixed rate interest rate. all right. the energy crisis continues to be front of mind and on that note, there were three significant events that just occurred in the past 24 hours, you might not have heard of, but you should number one, a nuclear reactor went offline in scotland now, we reached out to the company that operates at frances edp, and they told us the power plant will likely be offline for about a week no distinct reason for the outage was given second, a separate nuclear reactor in germany is likely to go down for maintenance because of a reported leak german authorities say it's thankfully not a risk to the surrounding community, though the timing is obviously less than ideal and finally, this is amazing, video shows a massive fire at an

oil refinery in venezuela. oil officials blame the fire on a lightning strike and claim that it should not impact operations, although given the magnitude and size of the fire, it seems a little bit hard to believe. you can go look and there's other better videos in emergency rooms the of the view, but it was a big one. well, these disruptions are just some of the reasons why the energy market could remain offoff balance for some time and could keep the energy rally stock going. key bank today initiating coverage on the enp sector saying, there is still plenty of opportunity out there. let's welcome in timr risband with capital equity markets. great to have you back on cnbc where do you see the most opportunity in enp we like to lump them together, because etfss, but they're not they're very different companies. >> we think there's a real sweet spot for them to deliver the growth that we believe the u.s.

sorely needs, when you look at inventories of refined products and crude oil down sharply and you've seen real cartel-like behavior from the large caps, who are really focused on excessive or aggressive cash return to shareholders, this is that goldilocks set-up that we talked about in our notes for well capitalized mid-caps to grow and be a rue true growth a income story >> looking at some of the names, diamondback. we talked about it -- by the way, stephanie link talked about it with scott in the halftime report they're just kicking off money they're doing their buyback, raising it by something like 18%. free cash flow continues to be up travis styson and his team there doing a great job. you like him, yet stocks down today. the oil stocks really haven't done anything for a couple of -- had a red-hot start to the year, but then it just cooled off. how come >> i think the risk-off trade from recession fears and then there's a china lockdown de jure that's weighing on sentiment

and i think if you look at some of the other agencies out there that are putting forecasts for u.s. oil production growth, they've been really aggressive and in our view, extremely wrong, we think u.s. oil production will continue to come in below kind of numbers that have been thrown out there by the big think tanks. there's just no really will or incentive aside from chevron and exxon, who we don't cover. they are growing like gangbusters in the permian but other than that, we simply don't see the growth that's there. that's the disconnect that we see. and it's just this recession risk off that's really weighed on these stocks that ignored the fundamentals in both oil and natural gas that we think are very favorable >> and a lot of these companies have merged. or they've changed names, one of these fancy names like verizon, like, well, what was that? civitas, silverbow, who are they >> civitas is anning ini aggre

six smaller advertisers. you had one come in and they spearheaded aggregation and consolidation in the play. and they are driving -- this is the model of what they're trying to put forward as a new normal for enps, unlike the large caps, they're trying to push this model into the midcap space of very low growth and robust capital returns. so this is a midcap, essentially mimicking what's been the theme de jure of the large caps. and lastly, silverbow, they were a company that came out of restructuring in 2017, was very excited about them they are a pure play bet on the dry gas area of eagleford shale. we know that play and have known it for a decade. there's some really high-quality pockets of 100% natural gas that these very profitable wells. eog have been talking about it quite a bit. and silversbou the pure play way to play that

>> tim rerezavan, thank you to e you on it's not just shares of beyond meat that's hitting an all-time low, one of its ceos arrested over the weekend for third degree battery we'll dig into this bizarre tale that you've got to hear. all of that after the break, as the dow down nearly 500 points

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mcdonald's, and yum brands to be fair, it has had tests with kfc of it plant-basedcdonaf the plant burger, but those tests have ended the ceo seemed to imply that sales of the plant burger was soft he mentioned that items that don't sell as well don't stay on the menu broadly speaking and ended with this. take a listen. >> if you want mcplant, i would tell you, buy mcplant. >> now, last quarter, ceo ethan brown said progress for the company was taking longer than expected they'd cut workforce with layoffs and cut their guidance inflation has been weighing on it with customers going to private label plant-based meat or traditional meat due to prices, even though the company is continuing to work towards price parody, brian. >> all right kate, while you are here, we want to get to the other beyond meat headline. this is certainly not one every day. i know people have been having fun with it, but the reality is,

is that somebody got hurt. so it's -- you don't want to make too light of it the coo of beyond meat 30-year tyson food executive, apparently got into an altercation driving home from a college football game. i guess there was not only punches thrown, but apparently, he bit the guy's nose? >> that's right, brian coo of beyond meat, doug ramsey, was arrest ofed over the week fr allegedly biting a man's nose after an altercation following a college football game in arkansas he was charged with terrific threatening and third-degree battery. the washington county arkansas information page says that he was booked saturday night and released sunday. beyond meat did not respond to multiple requests for comment from cnbc, nor has ramsey. he did join the plant-based meat company in december, coming there from three decades at tyson food he oversee poultry and its mcdonald businesses. ethan brown touted his experiences with those brands as

they were set to lean farther into chicken as well as its planet partnership with pepsi. the stock, as we said, is down over 70% this year and about the same amount since ramsey came on board in december. quite a story there. we'll wait to hear any response from the company >> and you've got to remember, somebody got hurt. somebody got bit and punched, apparently kate rogers, thank you >> thank you coming up, more on t markets here dow is down 471. we're back after this.

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welcome back well, like most of the market, most things, muni bond returns on track for their worst return in decades fed data showed last week that outstanding muni bond debt is sitting at its lowest level since 2014 so with another rate hike tomorrow and very likely maybe one or two more before the year end, what does it mean for the muni market and borrowing costs? let's bring in cooper howard, director and fixed income strategist at the schwab center for financial research so it appears, cooper, that not even towns and cities and states are immune from this rate hike >> you know, thanks for having me on this afternoon, brian. we do expect the fed to hike rates tomorrow our view is that it's going to be 75 basis points

and that should bring up view of longer-term interest rates if you look at where longer-term interest rates could go, we think there's a little bit of upside from here, and even though the fed is going to be hiking rates tomorrow what i'm going to more closely watch is the summary of economic projections and also the dots plot this is the first time we're going to get the 2025 dots and we'll be watching what the path of future rate hikes is going to be. because if you look at the treasury market, in the treasury market it tends to be that the ten-year treasury peaks at about the same level at which the fund rate peeks out for each cycle. right now the market's betting that the peak fed funds rate's going to be above 4% that shows there might abe little more upside in ten-year treasury rates from here and it could be that munis would follow suit and move higher as well >> you just gave me a good idea for my random and interesting segment i'll talk about how the fed's dot plots last year showed

no rate hikes. funny how that changes i had talked about how there's some hidden tax increases in higher rates and it was because of this segment. if my town needs to borrow $20 million to build a new water line, they're going to do it at a higher cost, correct >> given that we have seen interest rates move up, then that does add to their borrowing costs. but in aggregate, if you look historically, those borrowing costs tend to still be very low. so that's not necessarily a concern we have right now, of higher borrowing costs for credit actually, i would flip it around on the other side and say that higher rates are a benefit for investors because they can begin to have earned more income on their yield overall. >> 100%. if you buy a 4 1/2 -- i think we saw a 5% muni bond in illinois, like today or yesterday for the first time in a long time. if you can afford to buy these instruments, you're going to get a little bit of return how many of these are truly tax-free cooper >> you know, the broad majority

of the municipal bond market is tax-exempt so they pay interest that's exempt from federal and state income taxes now,there is a small portion that is subject to federal income taxes we actually think that that part of the market could be an area of opportunity for clients when we're talking to our clients out there in the market, we think that comparing taxable municipal bonds to longer-term corporate bonds, that makes sense. if you look at the municipal bond market including the taxable municipal bond market, 2/3 of that market's the highest credit quality so that compares favorably to the corporate market where corporate bonds are usually about 50% triple b, the lowest rung of invest grade so you're getting higher credit quality and you could also potentially be getting higher yields even though both are considered taxable >> cooper howard, schwab, good stuff. cooper, thank you very much. all right. still ahead, hertz upping its bet on electric vehicles less than a year after it struck a deal with tesla it is now

tapping gm to expand that ev fleet. by the way, as we head to break the dow now down more than 500 points the nasdaq off 1 1/2%. and bitcoin is now back below 19,000 bitcoin at 18,845. everything in the red. we're back after this. go. go green. go wind turbines. go gorgeous reliable grid. go emerson software.

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welcome back a rather electrifying deal in the auto space sorry about that hertz teaming up with general motors to expand its ev fleet. phil lebeau joining us now with what each company hopes to gain from the partnership a lot, i would imagine phil >> yeah, brian, they look at this as a win-win, and it will play out over the next five years. here's the deal between hertz and general motors it calls for 175,000 gm electric vehicles to be sold to hertz they're going to have these

across all brands and all scope of vehicles. it is the largest ev fleet buy ever for hertz and for hertz initially they're going to be targeting los angeles, miami, and orlando. makes sense. those are high destination markets. but they plan to have these evs nationwide eventually. as for general motors, this is part of their goal of hitting 1 million in annual ev sales by 2025 how important is this deal for both companies that's just a taste of what we're going to be talking about coming up a little bit later on on "closing bell." you do not want to miss this exclusive with mary barra, the chair of general motors, as well as stephen scherr, ceo of hertz. we'll talk about the deal and really a lot of other things going on in the market today, guys, given everything that's happened in questions about the strength of the consumer, et cetera so lots to discuss during "the closing bell." >> do i have to return the car with a full charge >> minimum 10% >> oh, there is a minimum. >> that's a lot better than saying you have to fully charge

it somewhere >> that's true i was kind of joking makes sense. that way they can move the car around the airport wherever it is phil lebeau, looking forward to that big interview 4:30 3:30 eastern. closing bell i was speaking halifax time. phil, thank you. that does it for us. see you tomorrow "power lunch" starts right now and welcome, everybody, to "power lunch." glad to have you with us i'm tyler mathisen along with seema mody here's what's ahead. historic high. nomura senior economist calls for the fed to raise rates by a full percentage point. he will make the case for that as the divide grows over what the fed should do tomorrow and then we're going to hear from, yes, power player jay leno he is with us live from his garage he met up with none other than elon musk, someone he calls the greatest innovator of all time he'll tell us what the