that's less than 50% if you look nationwide, the city with the highest office rate right now is austin, texas, at 61%. the worst is san jose. still under 40%. guys >> robert, thank you very much robert frank reporting thank you for watching "power lunch" today >> "closing bell" begins right now. stocks are falling hard here as yields are rising again the fed meeting is getting under way. the most important hour of trading starts now welcome, everyone, to "closing bell." i'm sara eisen take a look at where we stand in the market down across the board. the s&p 500 down 1.3%. every sector is lower right now. interestingly with this rise in yield, the two-year, ten-year note yield the ten-year, almost at 3.6. technology is faring a little better than some of the other sectors right now. you have sectors like real estate, materials, consumer discretionary and technology under pressure still tech is getting hit. the nasdaq is down 1%.

there's strength in apple, for instance, tesla remains higher, even though names like amazon, microsoft and google are under a lot of pressure. check out ford here's the stock story of the day. it's at the very bottom of the s&p 500 getting crushed as the automaker joins a core russ of other firms warning about earnings we'll talk about that. on that note, coming up this hour, gm ceo mary barra will join us along with the ceo of hertz to talk about a new deal for electric vehicles. plus, washington comes to wall street. national economic council director brian deese will join us live at post 9 to talk about the diverging signals we are getting from corporate america first up, though, today's market, mike santoli, we're giving off yesterday's gains and then some. >> yes, we are markets are struggling in the continued march higher of yields, apprehensive ahead of tomorrow's fed meeting bracing for hawkish, although

trying to find its footing, the s&p is at the lower end, four to five-month range that's just over 3800. i say that because if you draw a line right back this way, four months ago today, may 20th, the intraday low was 3810. we bounced on of that a few times. the low each day this week has been -- or two days this week has been under 3840. it's right in that zone. you see that overshoot down to the june lows. that's the thing that looms out there. it's a few percent down from here as you can see, still kind of a struggle and a churn side ways at best at these levels. take a look at one of the big overshadowing drivers here, which is the move in global yields, the selloff in global bonds. this is the basically global government bond etf. basically the value of those bonds declining. yields globally going up central banks trying to chase higher it's really been pretty closely tethereded to global stocks.

that's the acwi. it's not the om thing going on clearly there are economics slowing, earnings are in question this to me has been the big mover and the fact you're losing on both stocks and bonds is sort of telling you that you have a hard time playing offense when that's the case if you're an investor >> you were going to global yields, i thought you were going to mention the risk bank. >> swedish central bank, 100 basis points a big surprise and yet the dollar continues to strengthsen indicating the fed is leading the charge. >> without a doubt dollar is essentially -- dollar essentially at new highs relative to other central banks, the fed is ahead in this process and it's been more persuasive in had saying it's going to go as hard as it can to restrain inflation. >> thank you we'll see you later on the market zone. mark santoli let's bring in tony dwyer, chief market strategist. you said, your big call was we

would get relief in the summer we did and the fall would be bumpy. and it is feeling that way is that -- is that what's unfolding? >> right, we called it the fall fall last time i was on, you said, so you're not buying it the answer is, you know, it's oversold as we got -- was overbought as we got in the summer rally where we retraced 50% of the decline and 90% of the s&p got above 50-day moving average. all those tactical indicators kicked off where we got into this fight between don't fight the fed and don't fight the tape the thing that has held us off and where we expected the fall fall is i can't find a major low. a major bear market low that turns while yields are going up. typically as i look back over the s&p 500, i look for times where down 18 to 20% and the two-year -- when the market bottoms, the two-year has typically already turned that's not the case here as mike -- so as mike

appropriately points out, it's about the global yields, as you well >> the two-year yield hitting 4% today. you're saying as long as we see this march higher in yields, the selloff in treasury stocks are going to be under pressure >> agree it's hard to get a rally going when the fed is uber hawkish our plan this year was to -- as you outlined it, i still don't want to feed into washes a wash is when you get less than 10% in stocks in the s&p 500 above their ten-day moving averages it's down to single digits today. another 88% downside buying day so far by my last look again, i'm very hesitant to come on tv and say, hey, everybody run for the hills when, you know, you are beginning to discount a recession which wasn't the case at the august peak there was this magical soft

landing hope despite the fed raising rates in an historic way into a generationally levered system with rising inventories and slacking demand. fedex, ford, nucore, we're starting to get that vibe that the recession is finally being priced in, it beginning to get priced in. >> right so, the question then is when do bond yields turn could that be a buying opportunity for the equity market there's a lot of tightening priced in at this point. >> there is. this week what we wrote about was the narrative is going to change listen, the idea that you're going to take a pendulum from one extreme where good news is bad news, obviously the inflation news, the pendulum swung to perfect spot for the summer rally the yield -- the idea the fed was going to be able to stop raising rates and we would have a soft landing, eventually you

have to swing to the other side of the pendulum which is bad news is bad news we're getting to that point. again, i don't -- i don't -- we're in the fall fall i don't think you have to go buy the next tick but i think a lot of us are kind of looking at it saying, let's watch for the equal weighted market to act better than the s&p. for the last couple of days, that's not true. >> what comes after the fall fall >> i think we're going to ramp into year-end. sara, we've been doing this a long time. you and i have been doing interviews for a long time follow the money. >> you're always bullish at the end of the year. >> most of us are, right the reason that you get the year-end rallies, our call may be a little jaded is the narrative will change from the fed meeting to fight inflation to what happens in an election year when inflation has already peaked for the life of me, i cannot understand why the fed keeps letting the cpi beat the narrative. they've said so many times in my career, it's about the core pce,

which peaked in february what if you get decline in nondurable goods, inflation is coming down, employment is ripping, you know, picking up and all of a sudden you're in an election period, that could set that stage again for a turn. so many people want to buy bonds because the yields are attractive the bond yields come down into an oversold tape with such a degree of pessimism. that's what can turn it. we've been cautious throughout the year now we're looking on another -- as we retest that low to take advantage of it. >> i don't know. i think it's going to be the fed's resolve and how satisfied they are with inflation coming down they to want see it go all the way down. >> they want to see it come down -- >> it's feeling more like a volcker. >> you have to be careful you get what you wish for. everyone wants to channel inner volcker.

we're in a generational high at the gdp. the idea you could shut down a levered system with high inventories and slackening demand does not make any sense to me. it's amazing how the markets always force the fed to make a shift. and that's the -- that's the call that nobody's making. we see the inflation hell, i see the downside i came out with a 220 estimate for next year in the s&p 500 it's not about the inflation it's about the bad news becoming bad news so, if we're right on the fall fall, that's when you want to start thinking about what's next and whether it's at the very end of this year or into early next year, sara therein will be the opportunity. >> we'll hold you to it. no doubt we'll talk to you before then. tony dwyer, thank you. appreciate it. check out the renaissance ipo etf, gettingcaught up in the selloff again. the tech ipo market is in the midst of an itselfic drought no listing worth more than $50 million in the last 230 plus day

period. up next, been lerer weighs in on the dry spell and why his firm is raising new money right now. you're watching "closing bell" on cnbc. down 440 on the day. low of the day was down 458. we'll be right back.

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at your local xfinity store today. chamath palihapitiya is shutting down two spacs after failing to find companies to invest the ipo etf is down 47%

year-to-date lerer hippo announced they closed on $250 million in two funds. joining us is lerer hippo managing director, ben lerer, joining again. >> thank you for having me. >> it's a tough environment to raise one fund alone how about two? why now and what did you find? >> i mean, for us, we've been at this for a while this is -- we actually just raised our fourth growth fund. this is more of the same, more of what we've been doing for the better part of the last decade i think the advantage that we have relative to the not so great late stage market right now is that we're typically first institutional check in any company we're investing in by the time the companies we're investing in right now are thinking about exiting, the market will probably have gone from horrible to great to terrible to great several times. so, we really take a very long

term-view, founder focused and feel like investing into a recession at the upstart stage is an incredible opportunity. >> how is it impacting deal flow now? >> early stage deal flow has continued to be strong it was a little slower over the summer as people were sort of getting used to this new normal. we've continued to see incredible opportunity there are people that have spent the last part of a decade at companies that came out, ipo'd, had incredible runs in the market and maybe experienced a little bit of -- over the last several quarters there's actually lots of talent leaving, traditional tech. those are starting new companies and i think that's going to benefit the early stage market the reality is in the later stage right now, pre-ipo rounds, cde rounds, those are largely

shut down. i think late stage investors are trying to figure out where pricing -- relative to public markets. >> that's what i was going to ask you about pricing and valuations we got this deal last week, adobe buying figurea, 50 times revenue valued at double what it was valued in 2021, which makes you wonder what's happening with private valuations and whether they have catching up to do with the private market >> look, i think figurema is an example of an extraordinary company built in the private markets that i think probably could have gone public if it wanted to but had a bunch of strategic reasons to partner up with adobe the delta between public and private markets, those multiples have fluctuated a ton. last year i think we saw all-time highs in both the

private and public markets obviously with the public market drawdowns, the private market has felt multiple compression. that's happened at the later stage than early stage we've seen prices come down from the highs of last year but not close to the way you've seen public market valuations change. i think that's because it's proven itself to be clear over the last decade that early stage venture capital is a great asset class. >> what about -- speaking of exits, you mentioned how ipos have dried up. what about spacs, 21 spacs have liquidated to far this year. cha malt palihapitiya the latest two wind down two today. is this the death of spacs >> i don't think it's the death of spacs but i think you'll see the spac market rebound -- probably look like it looked prior to 2021 and maybe the late 2020 boom. there's a place in the market in

special situations where spacs make sense but every financial institution in the country probably shouldn't have a spac and i think you'll see a lot more blood clear its way through the system and then we'll be back to the way spacs were used traditional from the start. >> i want to ask you about your focus and your expertise you're back here with lerer hippeau after doing the deal with vox 9 and your digital media company. i'm curious, what's ahead for that group with the lack of m&a, lack of exits and now worries about advertising spend hitting the big companies like a meta or google what will it mean for some of these digital media properties >> yeah, you know, i'm on the board of vox after the deal. i think vox is uniquely positioned i think they have one of the very few truly premium

portfolios from both a brand perspective, from a huge digital audience perspective as well as a diversified base of revenue. advertising is the largest source of revenue in that company but it's not -- but they have a truly diversified suite from subscription to commerce and everything in between. i feel really bullish about vox, but digital media, generally speaking, i think is a tough bet for venture. there's been incredible amount of consolidation, traditional media, and i think there's going to be more and more consolidation happening in digital media. one of our portfolio companies in hippeau, axios sold to cox, had a great outcome. there will still be good deals for good companies that get done if you're not one of the true few leading companies in digital media, i think you're going to have a tough go of it and get

gobbled up or go away in the next 12 to 24 months. >> that's quite a prediction ben, thank you for joining us. >> thank you so much for having me. >> appreciate it. >> on the big news today, ben lerer. down 400 now on the dow. 1.25% on the s&p 500 about 1% on the nasdaq watching the treasury market very carefully the two-year note yield after hitting 4% earlier today is bumping up against that number we're looking at multi-year highs across the yield curve after the break, national economic council director brian deese joins us here at post 9. we'll ask what the white house makes of some of the earnings warnings weave seen from the likes of fedex and ford. later, hertz just inking a major deal to buy 175,000 electric vehicles from gm. we'll talk to the ceos of both of those companies about the big beth on evs when "closing bell" comes ck comes ck down 359 now on the dow.replace

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when it comes to the economy, well, it's complicated. ford warning last night that supply chain issues and inflation are pushing costs higher than expected after the fedex ceo says he thinks we're in a global recession. ceos from home depot, intuit think the consumer is still strong joining us is brian deese, live at post 9. good to see you. almost didn't recognize you not being in flont of the white house lawn welcome to new york. >> thank you >> what do you make of some of these warnings from corporate america, especially ford right now, which is getting shellacked on an extra $1 billion of cost due to the supply chain, which we thought was improving. >> these are affected by individual circumstances so we look closely at them but try to take a broader perspective what we're seeing and hearing

today and elsewhere from business leaders that we continue to see a surprising degree of resilience in the economy. resilience on the consumer side. there's certainly changes in the composition of spending but there's real resilience there. resilience on the business side as well. and capital investment continues to move forward. there's no doubt we're in a transition and that transition is catching some companies and creating opportunities for others so no doubt we're in a transition and there are uncertainties. i also think we're hearing a lot about companies being able to have some certainty now to invest for the longer term in areas like clean energy and areas like semiconductors because of the policy certainty that we've helped to create. and so i think that that will be helpful over the median term even as we navigate through the real uncertainty that is here. >> we were hearing a lot about resiliency, too, and that's why some of this news was so shocking, like fedex coming out, lowering its guidance. the ceo saying we're going in a

global recession and the u.s. consumer is starting to feel the pain as well in other words, it does make you -- fedex is as broad as it gets it's not industry-specific they touch shipping around the world and real-time data it makes you wonder if we're going into a recession or downturn even faster than the market was expecting and you're expecting. >> let me take that in a couple of pieces. number one, there is uncertainty and we should be -- we should be humble about that. number two, where we sit today in the macro economy, starting in the u.s. economy, we continue to have a very historically strong job market. consumers do continue to spend again, the compositional elements do affect different companies differently. number three, the global environment is very challenging right now. certainly europe is facing challenges china is facing challenging. i think what that reinforces, what we're seeing and hearing, is how uniquely well positioned the united states is to navigate through this challenging

short-term period. the last thing i'll say is, look, individual companies are -- have made decisions over the course of the last several months to navigate through this transition in several ways one thing i am hearing consistently is that now if you look beyond the near-term period, the incentive, the opportunity to invest in the united states, to build in the united states, to take advantage of the resilience that comes from a more resilient supply chain, to build on the manufacturing progress that we've seen in the united states, is -- looks more promising than it has in years. >> that has to take years, though ship manufacturing in this country, when is that going to happen realistically >> the good news the way we -- they pull forward private investment certainly, it will take some time to build fully out of fab to full operating capacity the kind of forward investment will start immediately we've seen that in a number of company announcements.

we see that in other sectors like electric vehicle charging infrastructure manufacturing that's happening in the united states because of requirements those are made here in the united states that happens immediately even as public funding is going out across time because now companies finally have the certainty to know the united states is in this for ten years or longer. >> in the meantime, the short-term is the worrisome outlook, tomorrow we're expecting another fed decision 0.75% baked in that's baked in for november as well and 50 basis points it's a lot of tightening happening in a short amount of time in a period where the tightening usually hits with a lag. what is that going to do to our economy? >> look, the fed is making decisions on monetary policy they have charted a course and we're going to leave them to make those independent judgments. as we look - >> you make forecasts, right, on the economy? >> sure. >> as we look forward, we continue to see a lot of reasons to believe that this resilience can continue and that we can actually achieve

that goal of bringing prices down without having to give up all of the economic gains we've made we see that resilience as i said, we should not underestimate the underlying strength of the labor market and, obviously, we anticipate and we expect some cooling from 500, 600,000 jobs a month on average. as we see that cooling, the increased increase in labor participation. those are things that can help in this transition and like i said, policy is going to contribute and be a tailwind. that's an important point here because of the legislation we have passed, policy is going to be a tailwind over the course of the next several months encouraging long-term investment in high productivity areas, bringing down health care costs, bringing down energy costs >> policy, though, was a headwind when it comes to inflation. do you -- does the administration take any responsibility for what we're seeing in an overheat economy? >> i think where we are reflects

the unique nature of the pandemic crisis and the unique nation of the pandemic recovery. i think we're in a better position than almost any other country in the world that's due, in no small part, to choices that have been made, resilient business sector, strong consumer. those are all strengths we have here in the united states uniquely as we look globally to navigate through this transition that's our focus again, our focus now is on implementing these historic policy measures whether it be about semiconductors or clean energy manufacturing to make sure we get the most out of this for the economy and for workers. >> brian deese, thank you for coming by post 9 for an update we appreciate it. >> great to be here. >> here for the u.n. general assembly. up next, the ceos of gm and the ceo of hertz on their new electric vehicle deal and ford's warning about higher supplier costs. the dow is down 350. low of the day was about 550

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gm and hertz announcing a deal with gm will sell 175,000 electric vehicles to hertz over the next five years, after hertz made similar agreements with tesla and others gm ceo mary barra and hertz ceo

stephen scherr join us exclusively with phil lebeau. >> thank you mary, you heard the outline of the deal you guys have made, 175,000 vehicles over the next five years how much will this help general motors reach its goal of selling 1 million evs annually by 2025 >> well, i think this is very important. i have valued the partnership with hertz we've had it for a long time the look they're doing and commitment to evs, doing a long-term agreement, i think is going to help us achieve that goal what we learned is when a customer experiences an ev, they're twice as likely to purchase this is going to be a wonderful opportunity to showcase gmevs through all the brands, even brightdrop. >> let's talk about that customer service stephen scherr, ceo of hertz joining us you're on the phone line with

us what's your perspective in terms of you've got tesla, polestars, electric vehicles people are renting. when are you finding people say, i want an electric vehicle are they booking that in advance? or is this a case where they get to an airport or location, there's an ev, i want to drive that instead and i'll upgrade to that >> thanks for the question our customers are making an affirmative statement up front that they want to ride in an electric vehicle i think this deal really gives us the opportunity to expand the choice they have through and across general motors' product as well as polestar and tesla. we're seeing this, by the way, across all segments of our business we're seeing it in the leisure traveler who wants to get into the car, we're seeing it in and among corporate travelers where companies are looking to fulfill their own, you know, carbon footprint objective. importantly, we're seeing it in ridesharing where we're renting

electric vehicles to uber and tesla. this is a very affirmative demonstration of interest on the part of our customers. >> mary, it's sara eisen in new york i would think your stock would be up today on this deal it's not perhaps that's because ford is getting crushed today. your competitive warning of $1 billion hit because of parts shortages, inflation and a washing on the third quarter i was wondering if you were experiencing the same kind of issues still, just when we thought things were turning in the supply chain >> as we announced previously, we did have some units we built shy in q2 and we said between q3 and q4, we would be completing those vehicles we are on track to do that we are seeing an improved situation. as it relates to suppliers, challenges and issues with suppliers is not new we've been dealing with this ever since the beginning of the pandemic and certainly with the semiconductor shortage and all the other challenges we have a great relationship

with our suppliers we keep solving issues, looking for efficiencies as a normal course and we're going to continue to do that. >> what about on the demand side, is there any shift in demand as we've seen economic conditions and financial conditions tighten >> you know, we still are in a supply-constrained market. from general motors' perspective, we have a strong product portfolio. we just had an upgrade to the silverado and sierra we're seeing strong demand and strong demand for trucks and full-size suvs it's something we're watching carefully but right now demand is still very strong. >> speaking of demand, i want to ask stephen what you're seeing, stephen, in terms of the consumer out there and the corporate traveler it's so critical to hertz's bottom line. i know that in the past you have said, look, we're seeing corporate travel increase. what's the outlook right now that you're seeing in terms of

how many people are out on the road for business? >> phil, the question is timely. as you know, leisure travel has bounced back almost to at or above where we were in '19 corporate travel as of late has been accelerating and improving quite noticeably i say that withed my and corporate clients. we're back to 80% to 90% of where pre-pandemic demand was and we continue to see that grow now, we're mindful of all of the issues that have been spoken about on the show in terms of risk of recession and the like we mind ourselves in terms of all of that. but if i was just to look through the lens of where demand sits, demand is improving and growing in the corporate space it's been there on the leisure side so, near as we see, consumer demand and corporate demand remains quite strong and is growing. >> stephen, one last question with regard to it the ev deal

with general motors and evs in general being offered by hertz as someone who does a lot of travel himself, i can tell you the last thing i'm thinking about when i'm heading to the airport is i've got to stop -- with gas, i obviously have to refuel, but i'm not going to want to stop and recharge. are you concerned about the lack of public charging stations and infrastructure that it might slow down demand for ev rentals? >> for now we're making it quite easy for our customers we're asking you to come back with a minimum of 10% charge that will relieve the near-term anxiety people may feel. you will see us announce over time and including an announcement later this week is we are engaging with multiple parties that are building and developing charging networks around the country, such that a hertz customer can be indifferent as to the network they use we willing a ga gate those networks in an app

we leave it to the customer to be a choice. they'll be available all across the country. then we'll bill the customer at that cost when they bill out the rental we're focused on it, engaged to develop a relationship we obviously know where cars are going. we're a big buyer and we'll be a big consumer of charging networks we're looking to make it much easier for our customers to overcome any, i think, unfounded ang sfwlit they may have >> all right we'll leave it there phil lebeau, thank you mary barra, stephen scherr, it's great to have you here on that big announcement appreciate it. we've had a little recovery here the dow is down 245, only 245. again, low of the day was down 553 points about an hour ago. we've come back a bit. the s&p 500 is now down a little less than 1% we're still seeing every sector weaker information technology is faring the best it's only down 02%, thanks to

apple, holding up well tesla is one of the gainers. barclays is downgrading nike we'll talk to the analyst on the call in the market zone. don't forget to register for cnbc's delivering alpha. this is our big conference featuring top investing picks from some of the biggest names on wall street eronhecrigan the qr code rht the t seen to register now. we'll be right back.

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sales and profits. they still are looking for a ceo. of course, this comes right after last week's big drama at gap when kanye west decided to terminate his contract with the brand to partner on yeezy products he joined us to discuss that unclear if the layoffs are related to that. we learned from gap subsequently they are, in fact, ending that partnership. the stock has been under pressure all year long. investors applauding apple's move to raise prices in countries. that stock is up 2%. that story plus downgrades for nike and paypal when we take you dehe market zone mini recovery, down 241 on the dow.

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we are now in the "closing bell" market zone. cnbc's mike santoli here to break down crucial moments of the trading down, steve kovacs we'll start with the broader market because we're coming back a little bit dow down 264 it's been a pattern, where things improve, which is different from earlier in the year when we were in the throes of the bear market and the final hour was ugly, ugly, ugly. any reason for it or are we just tracking treasuries? >> largely tracking treasuries we've been going down for the better part of five weeks in terms of that decline off the mid-august low really in the last week it's been almost straight down. yeah, getting a little traction as we get close to the fed meeting around this 3800-plus level on the s&p 500 i don't know if the headlines

saying that vladimir putin is not going to make a speech today seemed to coincide when the market firmed up nobody wants to be leaning too heavily in any one direction ahead of the fed meeting the bond market seems to have done a pretty good job of pricing in a rather hawkish market it remains to be seen. i think it's sloppy but you're getting, once again, some of those oversold conditions build up to a degree that would create some buy power if there were any relief tomorrow. >> 11 and 15-year highs for treasury yields. apple is one of the bright spots for the dow after announcing it will increase app store purchase prices in the eu and some countries in asia in order to offset inflation and the strong dollar steve kovac joins us investors seemed to really like the news i guess they think apple has the pricing power. >> this is something we expected to see from apple. i was talking with the cfo a couple months ago when they reported earnings, i asked him, what are you doing to combat

inflation and the strong dollar? he said in not so many years, we consider raising prices in the countries where the dollar is the strongest. for this decision here, it's going to be throughout the eu, some countries in asia like south korea and vietnam and some countries in south america let's just use the eu as an example. right now priced in euros, the base price for an app is 99 cents. that's the cheapest a developer is allowed to charge for an app. that's going up to 1.19 euro, and apple takes 30% -- up to 30% cut of each transaction. this is going to help protect their margins in the services business and in addition to just the apps, they also, remember, two weeks ago raised the prices of the iphone in many of these same countries for many of the same reasons so, yes, their pricing power is working. remember, sara, i was with you last friday standing in front of the apple store, people still lined up for the iphone. pricing power does work for

apple. they're not alone in raising prices sony raised prices internationally for the playstation 5 and meta did it in the u.s. and elsewhere for virtual reality headsets this is something you don't see very often in tech where older devices and current devices get a price increase as they age weird environment here but it's working out for apple oday. >> it's an inflationary environment. it just shows that it's strong the price increases are still coming, even though the fed is trying to fight it thank you. apple winner today nike is falling and dragging on the dow after barclays downgraded the stock to equal weight volatility in china. some worries about inventory we have the analyst hyped the call, adrian yee joins us. you're downgrading to equal weight $110 price target nike is trading at $102. it does feel like a catch-up or catch-down kind of call. >> yeah, you know, the price

target we have is at the end of next year, so it's kind of -- we roll out more like a 15-month price target i think there's a lot of volatility during that 12 to 15 months i think the near term is probably the next couple of quarters are going to be very tough. they have excess inventory to work through in the north american market. the recovery, if there is going to be a recovery in stock price margin and eps, it's going to be in the back half of the calendar next year. >> nike reports earnings next week on thursday you're expecting -- it's been a few tough quarters here. year expecting more pain >> five consecutive tough quarters remember, this all started in march of 2021 with the pr issue they had and then it's been a rolling kind of one thing after another. they had the factory shutdowns with the massive exposure to the vietnam market, the back half of last year, supply chain issues they finally caught up with that inventory. all that inventory they bought excess weeks of supply, it all

showed up in may of this year. just at a point in time this last quarter through the july reports we've seen for retailers has been abysmal it's been one day after another of demand destruction in the north american market, in the u.s. market. and so that's really where we see the risk if you look at their inventory, they actually extracted by region there's a lot of inventory inventory in the north american markets is growing 40% faster than sales >> so, the problem, the flip side to your argument and why so many of your colleagues stick with nike and are so bullish, because if you talk to the company and listen to the company, they still got really strong brand heat. they're not having a problem with demand. and they're outperforming with adidas and underarmour on sneaker sales and apparel. they still have the style and resonating with the consumer everything you're talking about is related to macro, covid and

some other external pressures. as long as they can continue to maintain brand heat, then that ultimately should benefit. that's the flip side argument you hear from a lot of the analysts. >> i would wholeheartedly agree with that over a multi-year horizon. investors have end of year targets. i think that the next, you know, the rest of this calendar year going into next year, and even into 2024, emember, the way wholesalers make their business, and although nike is trying to move to dtc as quickly as possible, they still generate 55% of their business from wholesale. wholesale is the next shoe to drop front line retail is having its toughest demand destroying year this year from the consumer. they buy from their vendors about six months out so, you know, just in general the weakness we would see, it would not be showing up today. it would show up in spring of 2023 that's what we're worried about. >> yeah. it's a bearish view there on top

of a 40% plunge in nike stom stock this year. thank you for joining us to discuss it look at paypal, that's under pressure as well today the stock also getting a downgrade from susquehanna analysts moving from neutral to positive the reason, a subsidiary of paypal with lower margins is encroaching on paypal's core business and susquehanna expects the trend to continue. paypal down 3.5% already pretty low valuations, mike what are the expectations around paypal at this point there were some excitement that things would start to turn with an activist in there. >> it is an interesting rationale. braintree is the acquisition that paypal made if you read between the lines, it says paypal's business is evolving more towards a basic kind of wholesale transaction processing business. which is kind of what they're supposed to be maturing into just lower margin than a lot of the consumer-facing stuff they've gotten used to, venmo,

whatever else. i think that's sort of a sign of the stage of this company. still $100 billion plus market cap. mastercard and visa. valuation of paypal doesn't look bad relative to those, just that the estimates have been coming down pretty hard the street is is it still clinging to it i think mostly buy ratings on the stock. as bad as it's done, people haven't given it up. it's kind of a core transaction processing payments play, it's just not that exciting on a growth rate basis at this moment. >> we have two minutes to go we have stronger dollar, bonds are selling off, oil prices are weaker and stocks are down but off the lows about 1% declines across the board. what do you see on the internals? >> the breadth is running 1.89 on the downside. you mentioned earlier the dollar really does encapsulate a lot of the story here in terms of global yields, the inflation

outlook, central banks it did tick earlier above that prior high from august it's 110, that's a good looking chart if it was a stock, you'd say, hey, i wouldn't fight that trend. take a look at the volatility index. it's elevated a little bit we have the fed meeting, a known catalyst tomorrow. it's still chopping around the high 20s range that consider it a nonsignal at this level, neither bearish nor bullish given where the index has been mostly in the range for a few months. >> mike, as we go into the close, ahead of the big fed decision out tomorrow, again, we'll get dots projections of future interest rates and economic projection from the fed tomorrow we have the market under pressure the dow is down 332 points only two gainers right now on the dow, apple and boeing. everyone everybody else is weaker home depot is the biggest drag s&p also down a little more than 1% technology and energy faring better today materials and consumer

discretionary are worse today. amazon is a part of that that is under a lot of pressure. the nasdaq comps down 1% so, we've erased the gains from yesterday and then some. down about 0.4% for the week that's it for me on "closing bell." i'll see you tomorrow on fed day. now over to "overtime" with scott wapner >> sara, thank you very much welcome to "overtime." i'm scott wapner we're just getting started from post 9 at the new york stock exchange i'll speak to ed yardeni who says the fed will be more aggressive than you think in the meetings ahead but that stocks can still stay away from the june lows. is that really possible? you know we're going to ask him and we'll debate it. we'll begin with our talk of the tape that fed decision, less than 24 hours away now the market's not waiting around to find out what happens either. the question is, is today selloff a precursor to a