agriculture, i feel like this is a very safe place to be. >> the best in the space right now? >> among the best. i like it. it's my final pick, so, yes. >> let's touch the market here, too, before we go. dow is currently down by 140 we said we did have a new intraday low for the s&p a few moments ago. i'll see y'all in overtime "the exchange" begins now. welcome, everybody i am brian sullivan. here is what is ahead on "the exchange." stocks giving back their early gains. and how is this for a stat there have now been six months already this year for the s&p has fallen more than 3%. one more month like that, the next three, and it will be just like 1937. so what are you to do? one of my guests says, you get into the markets because dips driven by the fed are usually worth buying he'll tell us why and what he is buying now plus, the bs are as good as the

as obviously, we're not talking about school we're talking about corporate bonz with yield soaring, why aren't we seeing more demand? we'll get a check on the health of the bond market, coming up. and an earnings exchange today, we'll talk payroll, poultry, and parking. but we begin with today's numbers and dom chu, had a little optimism this morning it faded >> here's what it is it's not dramatic yet, but it does -- it definitely doesn't feel good right now, when you think you're going to get a bounce after a big sell-off like you saw over the last couple of days, and all of a sudden, you said to yourself, you know what happened to the marketplace. the s&p 500 is down 500 right now. it's only half a percent if you want to say only, but we were up 62 points at one point today we were down 29 at the low so tilting more towards the downside there 3637 is your last trade there. that's off roughly one-half of 1% similar percentage losses for the dow jones industrial average, now floating just above the 29,000 market. and the nasdaq composite, it's

been very volatile the nasdaq composite, 10,878 interest rates are a big part of that story earlier in the day, much like we saw in the noon hour, just yesterday, we saw a sharp move higher in interest rates this is the ten-year treasury note yield, now pushing 4% you can see just around the 9 a.m. hour or so, we saw a very pronounced move higher, just to about session highs, where we are right now. it's been kind of bumping around there since then, but still with ten-year note yields at cycle highs, will that way on the valuation story? when people can get guaranteed income backed by the full faith and credit of the u.s. taxpayer, will they pay more for stocks? that remains to be seen. also, if you're looking for a bright spot in today's trade, generac was positive, now negative investors took a bad story and

said, will that possibly boost demand for generators from generac. that is a key thing to keep an eye on and big story, because in tomorrow's show, i know that we'll have generac's ceo on in the 1:00 p.m. hour to talk a little bit about what's going to happen in florida, elsewhere, and the state of the entire generator business an interview you'll not want to miss >> they're not cheap, but if you have a whole-home generator and lose power for five or seven days, it is a game changer look forward to that interview dom, thank you very much right now, we have a news alert on the most important sector of the economy, the housing economy. diana olick joining us now >> the average rate on the 30-year fixed just crossed into the 7s, 7.08% precisely, this after rising sharper last week following the last fed meeting and chairman powell saying that he would continue to be aggressive in lowering inflation. to put this in perspective, that

rate was 3% at the start of this year and hung in the 5% range for most of the summer the fast jump in rates is now slowing home prices at a record pace the s&p case-shiller home price index out this morning said that while prices were up about 15% in july year over year, that was down from june >> diana, is this a doubling this year on mortgage rates? >> more than a doubling. >> more than a doubling. >> in nine months? i'm not going to ask you how long you've been doing this, but in your time doing this, have you seen a move like this? ever >> no. no no i mean, look, during the great recession, we saw a lot of big changes fast, but they didn't have quite this quickly, to see that go up over 6%, even in june, and then come back a little bit in july and august, but then up over 7% , i have not seen it and i won't say how long a couple of decades i've been here >> yeah, 7%. wow.

diana olick, thank you very much all of this comes bringing us right back to the conversation and the debate that is driving all the market moves. and that is the federal reserve. chicago fed president charles evans striking a cautiously optimistic tone on "squawk box" euro and reminding us that fed policy does take time to work its way through the system listen >> there are lags in monetary policy and we've moved, you know, exped expeditiously. we've done three 75-basis point increases in a row and there's talk of more to get to that 4.25 to 4.5 by the end of the year. you're not leaving much time to look at each monthly release again, i still believe that our consensus, the median forecast to get to the peak funds rate, assuming -- you know, by march, assuming that there are no further adverse shocks and if things get better, we could perhaps do less. but i think we're headed for, you know, that peak funds rate >> here now with his reaction

and what is next for the fed and maybe house market is dick kovacevich, former chairman and ceo of wells fargo thank you so much for having us on i want to get to the fed, but i want to ask you first about what you just heard from diana. when you ran wells fargo, you were one if not the leading mortgage lender. what is 7% mortgage rate going to do to the american housing market >> it's already slowing in an historic lull. and it will keep slowing however, if you're my age, you were that 6, 7, 8% mortgage rates were normal. >> yeah -- i do agree with that, but that's -- that's coming where everybody was paying the same thing, not having doubling in a year. that's my thing. we've gotten kind of i addicted to super-low rates >> we did. and that's the fault of the fed.

and we need to talk about that i think that's why we are where we are but you'll also see arms come around an arm now is probably more like in the 5% area and you can keep that rate for at least five years before it's re-done. so there will be ways to if you really have to have a mortgage, that you can get one but more andmore more, cash ise way that people are buying homes. >> i think something like 30% of all home transactions are cash that that will save that part of the market let's talk about the federal reserve. all due respect, all my friends in college, we've been debating on this network about the fed's rate-hiking strategy i think the fed's biggest mistake is not what they're doing now, it's to your point, which is the fact that they got us hooked on low rates i'm more angry with the fed about this urp-low policy rather than bringing us back to some sort of normalization. what is your view?

>> you're absolutely correct it's just review what happened in the fed i think the fed kept 0 interest rates in qe far too long then the administration put trillions of dollars into the economy, that were not required to revive the -- to get economic growth and what happened is that the money supply, m 2 raised or went up at a 40% annual rate. this hasn't happened since world war ii so because of that, anyone who's had any history in economics would say, you're going to have very, very high inflation. shockingly, and astonishingly to me, both the fed and the administration said, oh, no, this is just transitory. there's no issues here so they still didn't take

advantage of some more restrictive monetary policy. and now -- why -- everybody's going after powell i get it and he deserves -- and the rest of the fed, probably a lot of the blame for wherer today janet yellen seems to be bizarrely escaping any criticism at all the treasury played a big role in everything, in all the money that is driven all of this inflation. the treasury seems to be like, oh, yeah, you don't even hear from them. >> i agree with you. that's why i say the biden administration and the, of course, you look to the treasury secretary to be the person who should really realize. that there simply was no rationale for this comment, other than politics. and i think it was a big, big mistake. so finaledly, belatedly, the fed has realized they're far behind

the curb and raise rates higher and appears than any time since the 1980s. so we are at risk of maybe overdoing it because they were so far behind and they're trying to catch up. >> i know that jay powell has a term, you can call it a contract, whatever you want. jay powell worked for carlyle group. i don't know about yellin and how it works at the top of the treasury if either of these two were running a publicly traded company, they would have been fired by now >> i agree >> they would have been fired. but yet, do we need to see a change at the top to regain? clearly, the bond market has no confidence in what's going on. and by the way, it's not just here the uk did the same thing. 30-year yields in the uk are

soaring back to highs from 20 years ago. how do we fix this we know how we got here. how do we fix it >> i think the fed is finally on the right track. i think that the fed wants to see the fed funds rate get to somewhere between 4.5 to 5%, as quickly as possible. and then they may consider pausing at that time, or looking at the factors at that time, they may decide to go ahead or pause, but i think they know that they're behind a curve and they have to get this under control and there's only a few -- it will only take a few months, a few more raises to do that and then we'll see what happens. and i think that we'll get around that period of ime. and again, the economy is slowing. inflation is coming down we should be pretty close to where we need to be. >> dick kovakovacevich, former chairman and ceo of wells fargo, we appreciate the blunt

conversation it's important five-year notes up for action rick santelli is at the cme. >> today's $44 billion five-year notes, the grade for demand, d-minus, dog minus the yield, 4.228 on those $44 billion five-year notes. two-thirds of the way through our complete supply. tomorrow's seven-year kicks off and finishes $123 billion. it wasn't a great auction, no matter how you slice it. the bid to cover a 2.27 was well below the ten-auction average of 2.24 and it's the lightest since of july of 2019 indirect bidders, the important foreign demand side, the weakest since september of '21. i could go through it, but sit was just weak.

catching a knife at this point in time trading treasuries, it's better for investors to go to the secondary markets, which is what they choose to do in my respects but this gives you some type of an indication. if you look at the chart, you can clearly see rates are moving back up towards that 4.25% mark in the seven-year extending their run. >> sully, back to you. at the risk of aggressive rate hikes may be spooking investors. your next guest says recessions driven by central bank policy generally are mild and the dips caused by the fed may be worth buying joining us now is andy capren. good to have you on. an important time, as well what do you mean by this what history are you looking at that says that the fed shoves us into a recession, it's generally a little softer. >> when you look at the history of what the fed does to markets, when we have an inflationary problem, is they do exactly what they're doing today. this is a textbook response. it's something that we're not used to, because we haven't seen it in such a long time

but it happens all the time, if you look at history going back as recently as the 1990s the federal reserve detects an inflationary problem, hikes rates very quickly, sometimes at paces of 75 basis points, sometimes even higher than that, still. and does it basically enter a race with the economy. what the fed is trying to do is raise rates as quickly as they can, without causing the market to get too unsettled, we're certainly unsettled today, but we don't want it to get too unsettled and beat the economy into recession if they raise rates fast enough to contain inflation, then they can drop rates, do a little bit of stimulus, and we come out the other side of it with a healthy economy and a healthier 2% or so rate of inflation. this is what's happening and every time the fed has done that, go back to 1990, go back to 1980, what we see a lot of markets have a lot of du turbulence, and eventually a buying opportunity as things start to calm down now, i'm not going to be one to call a bottom.

this is a very turbulent market, it could well overshoot levels but if i'm looking at corporate america, i can see what looks like fortress balance sheets, what looks like a much more attractive entry point relative to what we started at the start of the year. >> that's well said. listen, i think everyone would agree that inflation is probably going to come down in the months and quarters ahead, because it's coming down off these insane highs, the economy will slow down, housing may go up, but energy costs at least for gas, electricity prices are up. we'll see. how would that benefit a company like a pepsi >> sure, so what benefits a company like pepsi just the sheer diversity of what they do. we we, of course, know the pepsi brand as a beverage brand, but it does snacks, it does quaker oat oatmeal. it's globally diverse and has been really successful as being able to test through the increased input costs into higher costs down at the grocery store. it's maintained its margin what we see in pepsi, a company with a very turbulent market has done a good job of maintaining

its value, continuing to pay its dividend, continuing to hike it. >> and then you've got, of course, a home depot we just talked about 7% mortgages. i guess thesis is, okay, we're not moving let's just put on a new deck, because we can't afford to buy a new home, so we'll throw on another room it's simplistic, do you buy into it >> of course i do. what i see in home depot is one of the best-managed big box stores, period it happens to be a big box store that focuses on home improvement. and in my opinion, that's a really good place to be for the near-term. for the next couple of years, we are likely to have mortgage rates that are prohibitive to buying a new home if you already have one if you're locked in a rate of 2.6 or 3% over the course of the past few years, it's going to be really hard for you to upgrade without really updwgrading your payment at the same time that's going to be more attractive to make the home you're already in nicer. it will create a cycle of home improvement that could really drive sales at a retailer like

home depot >> andy, we'll sit in our new home and drink some pepsi, or diet pepsi, or fanta, if that's your thing andy, thank you. all right, on deck our continuing state of debt series with a big look at corporate debt, where the opportunities are as to high-yield corporate bond falls to its lowest level since march of 2020, the start of the pandemic and three stocks going in very three different directions this year. calmain up 66%, you go, eggs paychex down 16%, and rv maker thor getting crushed, down 31% how much would an 8 or 10% loan or a $200,000 motor home cost and what would their next results bring? we've got the action, the story, and the trade all ahead on earnings exchange. stick around

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welcome back let's talk debt. look at that big sign. which way? that way the average yield on the lowest-rated yield of investment-grade triple b known as 5.75% that is the highest level since 2009 when rates go up, it means really two things. that wall street views the bond as more risky to own, or they

just have to pay you more to get you to want to buy those bonds or probably some combination of the two. our next guest says that companies entering this cycle are in the best financial position they have been compared to past periods. and demand for these bonds remains poor is that a bad omen for the overall health of corporate debt market let's find out here to discuss is scott kimmel with luke capital. scott, welcome as you know better than i do, certainly the market doesn't price what's happening now it prices what it thinks is going to happen and clearly parts of the bond market are scared >> you hit the nail on the head. there's lots of different information that's funneling into the bond market i had a strong reminder of bond so far this year, the first thing we had to tackle was this rising inflation the bond market hasn't had to tackle rising inflation in multi-decade periods there's been some pretty strong repricing.

look at the longer-maturity corporate bonds, high yield, you are seeing yields that are compensating inflation. but now we have to factor in volatility and theo outlook for the economy. and that's where we're seeing a lot of bifurcations in the morkt place. because when people think longer-dated debt, while that's correct, it can be a very strong opportunity when you look at long corporate bonds that are down 30% year-to-date, their worst start ever >> i'll call an audible on the graphics -- have to pull a little peyton manning. if we could throw up the jnk for the longest period we have, guys, i would appreciate it. that is another high-yield bond etf. i'm looking right now. the jnk is at 87.75. haas the same price it was in january of 2009 at the peak of

the financial crisis either we're going into a major bankruptcy and crisis-like situation, or something is wildly mispriced so the high-yield market, just to add a little fuel to the fire, i think you're pointing out, we have to think about the energy sector. that's a huge part of the high-yield debt market and right now it's on firm footing. back then, it was not. if we were to take away the recovery and the energy prices and look solely at where high-yield debt is pricing for your basic industrial company, it actually looks like it's pricing in some economic scenarios in some cases that are worse than 2009. and the reason for that is the problem we're seeing with housing. you saw some reports today that showed housing falling 6%. we look at that from an economic lens and that filters through very acutely and that's weighing on high yield. we saw a lot of household savings rates and things in very strong positions however, when we start talking

about housing, that's the connectivity, that's the common factor that really links all consumers and many consumers -- >> scott, i'm sorry to interrupt, has the sell-off been overdone >> our opinion is, yeah, to an extent, there's a lot of opportunities you're finding if you look at a very specific part of high yield high yield has issued a lot of seven and ten-year debt. with people reaching for interest rates, they're able to do it. that may not be the case now thatt being said, if you look a two, three, four, five year corporate debt, you're getting compensated for a softer landing. >> call it softish scott kimble of luke cap, thank you very much, scott all right, coming up, would you still buy an electric car if it wasn't cheaper to car versus filling up your car with gas that may be e esonthquti facing our friends across the bond. that story, next

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don't kill the messenger just another tough day for the stock market, in fact, the dow is down to 227 points, about 0.8% the loss is less than yesterday. nasdaq, down 0.75% here's a math stat from bespoke investment group, with the nasdaq 100 now down 32 or 33 president from its highs, you're going to need a 48% gain to get back to where you were that's called math and it's not good. now let's shift gears and talk about an electric cars, or rather, the cost to charge one because it is now nearly as expensive to fill up a

gas-powered car in england new data shows that electric car drivers in the uk that use a public rapid or ultra-rapid charger are paying 42% more than they were back in may and 70% more year over year. an auto group found that using a public pay as you go public charger cost about $35 to get an 80% charge in your car i paid about $80 when i went on that road trip it cost 18 british pence per mile versus just 19 pence per mile for gasoline, one pence more uk, of course, wants to ban the sale of gas and diesel-fired cars by 2030, but because many do not have a garage or place to charge at home, they have to use public chargers. as such, the auto group is calling for a tax cut on the electricity used in the public chargers to entice people to buy more electric cars now to tyler mathisen for a cnbc news update >> fascinating stuff, brian.

here's what's happening at this hour about 2.5 million people in florida are under some sort of evacuation order because of hurricane ian. clearwater near tampa bay is near up with of cities where they're getting boarded up in preparation for ian's arrival. across the state, nasa's artemis rocket is taking shelter from the storm inside the building where it was assembled ar artemis, the rocket, took 11 hours to complete the trip back from the launch pad. it goes about as slow as traffic from the stadium last night. its next attempt to circle the moon will not happen until late november on the news tonight, the biggest threats from hurricane heene we'll be life on the go in florida with the latest on the storm preparations there and european officials are rushing to investigation the cause of major leaks in the in or order nordstream gas pipeline.

they detected powerful sploefrs in the area around the breaks. secretary of state blinken says the cause of the leaks have not yet been confirmed, brian. >> this is an absolutely, tyler, bizarre story, because there's only two ways to look at it. either somebody attacked the russian pipeline to hurt the russians, or the russians attacked their own pipeline, which is even more bizarre >> exactly >> it's a scary story, by the way, and the video showing this weird thing in the ocean with the leaks coming up. coming up, triple "e." the action, the story, and trade coming up on cal mesne foods, paychex, and thor industries the measure of progress. it's where people meet people. where cultures and bonds are made between us. where we create things together. open each other's minds.

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as the snazzy graphic says, it is time now for earnings exchange and today we've got the action, the story, and the trade on callmine foods the egg came first c calmaine food. you know that egg prices are sky

high cal-maine beat on both the founder are and ceo of jewel foundation what is the story on cal-maine foods. >> it's a good time to focus on one of those rare stories. it's a relative term, about perspective. to your point, cal-maine's good story, in some ways has been a bad story for consumers. america's biggest producer of eggs, a key food for many in our country, and as grocery shoppers know, egg prices have shot up through the roof bad for shoppers, but it's done a lot to help the revenue growth picture over at cal-maine. it includes land o'lakes, farmhouse, you name them, they're all there. another thing to watch is product mix and how much influence so-called specialty eggs have on that business that's things likes enhanced eggs, cage-free eggs and commentary about the flocks,

because the industry, as we may be know is still recovering from that outbreak of bird flu that reduced egg splice overall so c cal-maine will be one of those rare stories >> is that a flock of chickens >> i don't know either i'm going to call it a flock >> i just love watching them run over the range of montana, free as a bird, it's unbelievable >> do you have a trade on cal-maine foods? 64% for eggs that's a big gain already. >> thankfully we own the stock, we would buy any weakness. after the last report, despite how good it was, top and bottom, the stock pulled back offering a nice entry point if that happens again tonight, the stock is a buy the reality is this stock is trading 18 times forward earnings, set to grow the epps by 50% the company has no debt. the reality is that what we viewed potentially as a headwind

with these feed prices, with the commodities, could actually be a tailwind now that saw some commodities are coming in. again, any weakness here in the post-market, you know, maybe an opportunity tomorrow to add shares >> okay, the egg segment is over easy next up is paychex shares of the payroll company being laid off by investors at 36% or 16% and while results did come in better than expected and guidance was in line last quarter, analysts obviously concerned about the impact on inflation and margins and whether client retention was sustainable. dom, i've got to imagine, it's pretty simple. if you think the job market will slow down, you sell shares of payroll companies. >> for paychex, it really is to your point about anything macro economic. anything about the macroeconomy we can glean at all from one of the biggest payroll processors in america the number of paychex customers can tell us a little bit more about the strength of the labor market overall, whether a possible soft landing for the

economy in the face of a fed interest rate tightening cycle is actually in or possible in the cards. it's also a good lens to look at the health of the small and medium-sized businesses, because payroll processes or human resources manages many of those types of companies one thing to watch for any of those metrics tied around how much money it makes off clients, per client, and whether that growth is on track. this has been up four out of the last five quarterly reports, but it was the most recent quarter again to your point. >> any kind of a counter trend trade here on paychex? >> none at all this is a tough one for me -- not that tough, but i love the company. i'm originally from rochester, new york i love the company, but i don't like the stock here. obviously, you alluded to it, common sense if we see jobs growth skploe unemployment pick up, this is not good for a payroll company,

but it's not cheap it's trading 25 times forward, set to grow those epps only 7% it's got a good balance sheet, a solid dividend, but not the trend play we want we're a seller of the name >> up there in rochester finally, thor industries they make great big rvs and camping trailers thor shares hammered, down 31% this year. rvs, of course, saw a pandemic boom everybody got on the road. but now you have sky-high borrowing costs. an 8% loan on a $300,000 rv is a lot of money >> it's like a mortgage. it pretty much is a mortgage for many americans out there but rv'ing has been a big thing over the past several years. demand for those recreational vehicles really into overdrive during the pandemic, to your point. all of that being said, that desire to travel outdoors without having to get on a plane, train, or boat, it drove many people towards those

campers and towables that demand is are rr there. can you replicate it these are the brand names, the ones that you know, air stream, j-co, heartland. the picture from a brand perspective is huge, but is the demand picture so still robust driving a motor home or towing a camper with your truck isn't the most fuel-efficient way to travel what was the effect of higher fuel costs going into the summer and now lower fuel costs since then and what's the outlook for fuel also by the way, other manufacturers like them are facing labor issues, as well, also parts availability so supply chain and labor a big factor here as well. >> absolutely. thor industries. this is the perfect pandemic-type trade, quinn, is it not pelotons and camping trailers. >> yeah, it did great during the pandemic and as you said, i mean, 30% this year, 50% off of the 2021 highs i'm going to take a variant view and say this one is a buy. it kind of checks all the value

boxes for us this thing is trading seven times forward. it's trading 0.24 times sales. it is not rich not even close it's got a solid balance sheet, which i was actually pretty surprised to see, considering the industry that it's in. and this is interesting. they recently made a pretty decent investment in a company called dragon fly that is involved in the lithium battery production for the rv space. so they're getting involved in sort of that ev model for rvs. they've got, again, as i alluded to, the healthy balance sheet, solid dividend i'll take the other side here and say this is a buy here >> 0.24 times sales. but a 38 battery-operated rv, what would that weigh? like 50,000 pounds >> a lot >> we'll see that's the answer. quinn tatro, dom chu, mr. air stream himself a very fine trailer. coming up, the s&p 500

hitting the lowest level since 2020 earlier today basically, we've given back all the pandemic gains nasdaq now down more than 38% from its highs and the stock market decline is taking a big chunk out of your wealth we'll dig out the numbers. "the exchange" is back in two. flexshares are carefully constructed. to go beyond ordinary etfs. and strengthen client confidence in you. before investing consider the fund's investment objectives, risks, charges and expenses. go to flexshares.com for a prospectus containing this information. read it carefully.

all right. welcome back to "the exchange. we have got to hit the markets again, because the markets can't get out of their open way. the dow jones industrial average down 265 points again. that is a nine/tenths of 1% drop the nasdaq, down 45 points like we just said, it's a stat from bespoke investment group and it has to do with math the nasdaq 100 now down 32 or

33% from its highs, it's going to take a 48% gain to get back to where it was, because, obviously, smaller numbers, you know, you need more to get back to where you were. is we're going to need nearly a 50% jump in big tech over the next couple of years, just to get back to where we were. all right, from government funding to personal finances, there is still a lot left on congress' plate in its last session, ahead of the midterms we'll get the details. the house bill that could impact the balance sheets of some of the most influential legislatures we'll dig into what they currently have in their 'sn tre eranit well. it aouagalt d 's ahead. another busy day? of course - you're a cio in 2022. but you're ready. because you've got the next generation in global secure networking from comcast business. with fully integrated security solutions all in one place. so you're covered. on-premise and in the cloud. you can run things the way you want - your team, ours or a mix of both. with the nation's largest ip converged network.

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all right, welcome back. the midterm elections, you might have heard about them. they're more a month away, we're closing in on that there's still a lot on the line, including lawmakers' own assets. ylan mui joining us back on set with the latest details in a house bill that could have a big impact on, i wouldn't call it insider trading, that's not fair to say, congressional trading. it's an issue that's ticked off a lot of voters.

>> there's been so much focus on which stocks congress is actually trading, but new rules could be on lawmakers and their families from even owning individual stocks as well as other assets so here at cnbc, we wanted to understand the extent of congress' financial holdings we focus on the leadership of both parties and tallied up the tradeable assets of the members, their spouse, and their children from their latest annual disclosures. here's what we found a little bit of kcrypto in the portfolio, an estimate $1.9 million is held in etfs. there's 12.8 worth of options. mutual funds are more popular with 13.7 million invested but the overwhelming majority of their money is in individual stocks $125.9 million the top sectors, for all the backlash against big tech, it's still their favorite place to invest $76.6 million. the second most popular sector is media and entertainment at 23.9 million then it's consumer discretionary, financials,

industrials. the caveat is that most of these investments are held by just a few people most notably, paul pelosi, husband of house speaker nancy pelosi, but also nancy wyden, gop senator john barrasso has an estimated $9 million in the market most of that is in broad, widely held funds, although he does own shares of beckershire hathaway but his office told me that he hasn't traded a stock in 15 years. so that's really the heart of the debate over whether just owning the stock is a potential conflict of interest >> i mean, it doesn't seem hard. i mean, we can't own stocks. i own one stock, comcast, and that's it. and my wife, the same way. we cannot own equities that is our rule here at cnbc. congress can trade options and then make legislation that would benefit the companies in the options they hold. it's insane! >> the answer so far from congress has been around disclosures, right at least let the public know what we're doing the reality, though,is

someone -- >> because the public has so much time to dig through congressional stock trading records. >> the reality is as someone who has spent time looking through those disclosures is they're a mess they're not standardized, hard to follow, hard to understand what exactly congress is doing in the rules that are being discussed, there's some updates to what the disclosures would look would look like, how often they're disclosed and what the penalties would be if you don't file properly and on time. >> everything in congress is rich enough. right? i mean, seriously. you become millionaires just by having a job that pays what, $200,000 a year. how they do it i have no idea. just ban it. let's bring in another voice okay want to bring in jimmy pethokoukis, economic policy analyst at the american enterprise institute a cnbc contributor jimmy, i saw you nodding and then you shook your head and then you gave me the middle finger i think i'm kidding. should we -- >> never >> should we ban any kind of congressional trading or at least impose a minimum holding period while they're in office >> yeah. to be clear, there's already a

law on the books from 2012 about members of congress trading on non-public information so we're talking about public information. and sort of the coldhearted economist in me says listen, congressional trades give the market information we have a more efficient market. is that such a bad thing i will say i would like more frequent and easier to follow disclosure hard to follow disclosure once a year doesn't really seem adequate but beyond that i'm not sure this is actually a huge problem. especially if a lot of that is just a few members, as ylan said >> i don't know if it's a big problem, jimmy it just stinks, though right? the problem is that the public needs that faith in congress and if they think that somebody's trading options in facebook or google or apple and then writing legislation that may benefit or harm those same companies, how are you supposed to have faith in that legislation? >> well, one, i wish the public

understood the ins and outs of trading options. maybe the cnbc audience does and facebook i'm not sure most americans know about that if congress wants respect, then do a good job. i think this is really -- it's certainly more of i think a perception issue than it is a corruption issue so i can understand them wanting to do that so let's -- for starters let's try the disclosure route on trades of public information and longer holding periods that doesn't sound like a bad idea but i'm not sure i necessarily want them not to be in the market hey. i want them to be just like us we're in the market. i don't mind them in the market in understanding the ups and downs of the market as well. >> the answer that we commonly hear from lawmakers and we ask about this, particularly if the assets are being held by their spouse or their children, is that they have no involvement in sort of the day-to-day movement of their money, right? these are handled by third parties. however, it's very unclear exact le what that means does it mean you know what assets are in your portfolio, you choose the ones that go in

there? do you set a strategy, you know, on a quarterly basis even if it's maybe not day to day? so some of the new rules that are being debated would sort of formalize what those parameters would be and what that distance that lawmakers need to have from their portfolios would have to be >> so basically they're just saying i'm hiding it from my spouse i mean, that's kind of what you just said. i don't talk about trading millions in options with my husband or wife. why would i? that's kind of what you -- i mean, right? >> depends on which side of the aisle you're on. >> or the kitchen table, as it were >> or the kitchen table. >> jay powell, jimmy let's pivot a little bit i don't know if you heard the beginning of this show i was asking the former ceo of wells fargo two things why isn't janet yellen getting any criticism here i don't get that it's like she's vanished should jay powell and/or janet yellen be be replaced? >> i'm very touchy about replacing -- >> i mean, they can't be -- i mean, powell's got a contract.

he's got a deal. >> listen, i still -- this may sound old-fashioned but i want the fed to be independent. and one of the great things -- >> i want a pony >> one of the great things we did in the '80s, even though when paul volcker was hiking and there were people furious, they knew who the fed chairman was and they were angry, and yet president reagan supported him we're going through a difficult period right now i think the fed chairman needs support, not calls for his dismissal. and whether we want to renominate him, find someone else, that's fine. but right now i think we just need to let the fed do its job independent as much as possible from political pressure. >> well, hey, and we've got to go, but ylan, i saw a tweet from elizabeth warren, senator warren, basically going after powell i think it was yesterday if they're apolitical that's not apolitical >> senator warren has long been critical of jay powell so that's not necessarily surprising that she's going after him. i have not heard anyone in congress say that janet yellen needs to go at this point. but i will say that the

republicans are -- blame the fed for not getting started soon enough in terms of hiking rates. so they sort of are where the market is now in terms of that perspective. and i would say that they also blame president biden for putting us in what they say is a recession now. we'll see if that plays out. >> yeah, i'm not a big believer in political parties but i will say electricity prices are soaring, mortgage rates are at 7% and the stock market's down 30%. stock-owning congresspeople might even get hit then they may do something ylan and jimmy, good conversation really appreciate it coming up, apparently hibernation is not just for bears anymore. we're going to get the popular group of stocks that retail investors are now leaving by the waid yse.wee back in two. soul ii soul ] what if you could change your surroundings with the touch of a finger?

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your shipping manager left to “find themself.” leaving you lost. you need to hire. i need indeed. indeed you do. indeed instant match instantly delivers quality candidates matching your job description. visit indeed.com/hire one last thing before we go. self-preservation is now the name for both institutional and retail investors kate rooney joining us now with a look at how day traders are positioning. and i guess by saying that there are still day traders.

>> they're still here, brian they're not going anywhere according to some new research but retail investors are changing up their strategies and cutting back on risk at this point. j & p's devon ryan put it, individual traders are getting more tactical and defensive rather than exiting the market altogether one sign of that is margin balances so those riskier positions where you borrow money to make a trade are down 35% over at robin hood and about 20% at schwab. vander research noting some similar trends individual investors have maintained the pace of daily buying even during the market's recent downturn inflows have been pretty stable and retail's also upping allocations to more passive investments. so think etfs, a lot less stock picking, and then money market funds as rates go up and they're not rushing into cash either. according to vanda retail investors have an average to low allocation to cash at this point. it's still well below the covid sell-off peak you can see here in this chart. one group that is pulling back,

though, brian, meme stock traders. that's the more speculative side of the market. as vanda put it, they have gone back into hibernation and are unlikely to make a comeback anytime soon they measure that through options and social media data. to put it into context, and just how many people we're talking about, in just two years of the pandemic jmp estimates 25 million new brokerage accounts were opened. sully, back to you >> we like to have them in the market kate, thank you. and thanks for watching "the exchange." "power lunch" begins six seconds ago. we'll send you the bill for those six seconds. welcome, everybody, to "power lunch. along with contessa brewer i'm tyler mathisen and here's what's ahead this hour the path to recession a long-time market watcher says a sharp economic downturn is going to get harder and harder to avoid. but he's finding some safety and opportunities in a few names we'll hear which and why plus, former treasury secretary larr