free cash flow this is number one in the industry, down 35% year-to-date. i like this year >> joe terra nova, how about you? >> on a day like today, they're looking for relative outperformance you can find that in netflix the stock is targeting the price cap between 250 and 325 from last april may was the low at 162 buy it >> good stuff. i'll see you in o.t. the exchange begins now. all right. welcome to "the exchange," everybody. i am brian sullivan. stocks bouncing back after falling to the lowest levels since late june 2020 maybe the u.s. looking more attractive compared to the market chaos in europe the bank of england making some surprising moves to try to rescue its bond market europe's energy crisis may be about to get even worse, as someone apparently blew up parts of russia's big nordstream pipeline the eu saying they were caused by, quote, sabotage. the question is, by whom

and we are thinking of all of our friends and viewers and family down in florida as ian makes landfall we'll speak with the ceo of generac about his company's efforts to keep the lights on in some of the hardest-hit areas. a very scary storm right now, we'll begin with your wednesday markets. looking a little bit better today than they have been for the last couple of days. that's for sure. the bear bouncing back the dow up 444 points. you get yields, something we've talked about in the halftime ten-year yields coming dramatically down. a flip, as yields have come down, we've seen stocks come up. the nasdaq, the s&p, and the dow industrials all above 1% right there. so we are coming off those bear market lows. by the way, the british pound also stabilizing i know that's england and not year, but it's got to be kind of helping macromarket sentiments today. the rally is really broad-based right now. energy, communication, health care, they're all leading,

technology, the only sector in the red, and apple a big part of that story shares hit on reports of iphone production cuts. home builders getting a nice boost, because rates are stabilizing. maybe some short-term money coming into d.r. horton and others and a huge win for biogen, and maybe some alzheimer's sufferers. very encouraging news about drug trials around an alzheimer's drug shares of biogen are up a 37.5% today. big win there and hopefully a bigger win for those patients. we're going to get more on stocks ahead, but we have to begin with the big market macro story of the day that is the bank of england intervening, trying to stabilize its debt market after they sold off massively and there were very real fears of some kind of contagion. british bonds are known as guilts the b.o.e. saying it will suspend the planned start of guilt selling and begin temporarily buying long-dated

bonds. in other words, a huge flip-flop. it's all part of an effort to try to calm the chaos that began when the government announced its budget plans let's try to make sense of all of this and bring in steve liesman by phone it's kind of a complicated story. i know we don't talk about british bonds very much here on cnbc, but this was a gigantic global market story. >> for sure, brian it's a dramatic move it's an about face they tend to resume or start their selling of the guilt again, october 31st. they were supposed to do it next week and what's happened is, a lot of pension funds had a problem, they had margin calls for their audiotape of the 30-year guilt this came from the announcement last week by the british government that they were going to embark on tax cuts and increase deficit spending. that caused the yields to rise and then there was a statement over the weekend, basically, there may be more to come. and i think that's one of the

things that freaked out the markets. i think we have to turn it, brian, as you and i always do, to the what's in it for me angle of the story, and i think what's happened is, there's some sense in all, if you look at what's happened to the outlook for the fed funds market, some sense that all of this may cause the fed to do somewhat less. i'm not sure that's well placed. on the one hand, you could argue that this does remind the fed that when you do stuff like dramatic rate increases, that stuff can break if financial markets, so maybe provide some more caution but i need to tell viewers that the atlantic fed president is on the tape today saying that his best baseline is a 75 basis point increase at the next meeting followed by 50 so he's a middle of the road guy. he's not edging off, at the same time, the market is thinking that perhaps this concern about something eventually breaking, which by the way, we do understand that u.s. markets are functioning well, and that fundamentally, what this was in

england, brian, was a liquidity issue. >> and it's a very different story than we have here. there's a lot of similarities, obviously, between our countries and our economies, but there's also a lot of differences, steve. last year, not tooting the horn, we were in london in november of last year, pre-war, pre-invasion, talking about energy inflation and the risk to come energy inflation is the one of the big causes of this, is it not? because they were borrowing money. they were selling government debt to buy energy on the open market so they really have, in part, i don't want to call it a financial crisis, maybe a financial freakout is a better term a lot of that was caused by inflation and energy-related inflation, was it not? >> that's 100% correct, brian. as you know, markets don't freak out about bad developments that are sort of known. i think the energy issue something that was known it was also pretty well known and being discussed in markets that not just the uk government,

but other governments in europe were going to step in to subsidize some of these energy prices, which, of course, as you note, is much worse in the uk than it is here. we do have higher energy prices, but not as bad also, their inflation problem is higher and getting worse you have a bank of england that's forecasting outright a recession. so, the issues, they are much more dire than they are here but it really was the unknown, it was the hit from the side, from the physical side, that i think what's interesting for our -- again, back to the what's in it for me department, is this is a warning shot to the biden administration and to the treasury department that the bond vigilantes are back and if you misstep, there is a price to be. and given this environment, there is a higher price to pay and what we're trying to do is any sense at all from the biden administration or from the treasury that they're getting this message because the bond vigilantes are back, brian. you know it's been 20 years

since they've been around. >> you know, the bank of england went from quantitative tightening to quantitative easing at least of a sort very quickly. and what did the political commentator, steve james carville famously say 20, 25 years ago, when i come back, i want to come back as the bond market because they're the ones in charge >> that's true and these guys have been at it for a lot of years what are those locusts that come out every 11 years or something like that? >> cicadas >> they have been dormant, and right now, they are putting down markers out there for the fiscal side and i've been saying for a long time that the fiscal side, normally, according to the textbook, needs to help the monetary side when it comes to inflation. i think the u.s. has been neutral to bad, but not terrible and the uk came forward and they're terrible and as i tweeted out, all it would take, brian, is a statement from the trust government, that we're going to back off or delay these plans. but right now we're hearing that's not going to happen and

that they're going to double down on all of this. >> steve liesman, big story. thank you very much. all right, well, all the central bank action across the globe, uk, here, europe, whatever, is playing itself out in bold and dramatic moves in both the bond and the currency markets. we are seeing multi-decade high yields here at home. rick santelli joining us now and these yields -- first off, rick, i want to get your take on that are we the uk in any way, number one. and two, talk to us about why high yields matter don't they directly eat gdp because of the higher interest costs of funding the u.s. government >> latter question first, yes. yes. it's eating into the budget, as, of course, we all know, or maybe not everybody knows, that if you look at the baseline spending pre-covid, we're way above that. way above that and yes, debt is not good. issuing lots of debt and spending it at a time where

fiscal issues, the sad part is, we're just waking up to this this has been a problem since '07, '08, '09. i remember central banks having the biggest brooms on the planet, and i think that the central bank in this country should have paid a whole lot more attention to potential global feedback loops, even though they say they're data dependent, they know where they want to go and where they want to go changes every day. that's what i find really fascinating. we all look at fed fund futures and say, here's the terminal rate well, what we really ought to point out is that the terminal rate is like a roller coaster that never shuts down. it goes up and down, up and down it's always on the move. and i think that the sad part here is that by the time the fed figures out that you don't really have a lot of inflation, when the globe is in a deep recession, but hopefully they'll figure it out before the roller coaster stops. >> and we're on that roller coaster now.

it hasn't stopped yet. i feel like a loop is coming rick santelli, thank you very much appreciate it. the bank of england's bond buying may be calming some global markets, including ours today, but it has not done anything since it comes to global recession risks or inflation worries, especially here in the united states. your next guest says the bond moves will impact growth stocks like tech, but in the long run, growth always wins on wall street, joining us now is kim forest, chief investment officer at boca capital partners kim, how long have we been doing this together? you and i? how long has it been we can't age ourselves 20 years >> it was almost another century. >> it feels like another century. soy so i ask you that, because i don't think this is 2007 or 2008 we don't have the clos, triple synthetic, double inverse, whatever they are. ninja loans. but this is the biggest bond move we have seen. it's one of the worst years in history for the equity markets how does this ultimately play

out? >> well, i think that we're going to all learn something i think, sad to say, the central bankers of the world are going to learn something, and that is that we are all connected at the hip. i think this is a long time coming i have big thoughts on the whole concept of fiat currency, which i'm not going to get into right now, but around the world, we have to be proportional in our government debt and proportional in our interest rates or currency markets go wild and that is what we are seeing right now. >> is the question -- there's two things, right, that matter it's not just the moves, is it not? it's the velocity. rick talked about a roller coaster. it's a roller coaster. how long does it take to go up how steep and violent is that scary drop down and the longer it lasts, the more scared you're going to be? is this a short-term phenomenon?

>> i don't know. we'll see. it really depends on the central bank's understanding that they have to be a little more reactive when things are -- when the markets are reacting to either actions or non-actions, right? so the -- the uk is adding more debt and we don't know how long that's going to go on. that is part of this problem is the proportionality of their debt and our debt and china's debt so that's why the bond markets are rolling along like the crazy roller coaster that they are nobody knows when it's over. nobody >> no, we don't. and i appreciate the honesty, because a lot of people may -- a lot of people after the fact will tell you, like subprime we all saw it coming i don't remember those people, but maybe they're still working. who knows. let's find some opportunity in this chaos, shall we the wreckage is where you find the best opportunity a name like coca-cola.

i mean, you know, sodas, right >> yeah. and i like them because of their brand. they have a great brand. that's not going to change people are going to want to go out and drink and eat. that's not going to change and they will spend up for an experience and believe it or not, dining out is that. so i think coca-cola is a beneficiary of that. and it's a long-term play. they've been able to change their product mix, reflecting the tastes of people's changing behaviors. i think that's great and plus, they're a company that knows how to use technology. so that shows up on their bottom line, which everybody should like as an investor. >> there you go. and i think it's fair to say, we asked you for a stock pick and coke is it you see what i did there you're welcome the jokes have never gotten better in 20 years on deck, our continuing state of debt series this week, today, we'll take a

look at uncle sam's big-time borrowing on the back of your taxes. rising rates spell trouble for america's balance sheet. first, the suspected sabotage of the twin nordstream pipelines, raising serious questions, who did it? u.s., ukraine, or could putin be insane enough to blow up his own pilis? 'lta aut it, next. ♪ ♪♪ ♪♪ be ready for any market with a liquid etf. get in and out with dia.

all right. welcome back to "the exchange. it's the global mystery that everybody wants answered who blew a hole in both nordstream pipelines european leaders were quick to respond, calling the pipeline damage quote, a deliberate act, but stopping short of identifying a culprit. the eu joining the chorus of lawmakers speaking of sabotage this morning, pledging to, quote, increase europe's resilience in energy security. but while most of the world has refrained from blaming the kremlin, a presidential adviser in ukraine took to twitter yesterday, saying, quote, this is nothing more than a terrorist attack planned by russia and an act of aggression toward the eu. the russian embassy in denmark responding, saying that such indications are, quote, unsubstantiated, and meantime, get this, a former polish defense minister, effectively implicated the american government, showing a picture of the leaks on twitter and writing above it, quote, thanks, usa

let's discuss with henny glowstein, the director of energy climate and resources at the oureurasia group, and nina khrushchev, it's a real honor to have you on. i'll start with you, anina who do you think did this? >> let's wait until they investigate. it just happened i hate to immediately jump to conclusions. it doesn't look like the russian fingerprint, i have to tell you because i would imagine maybe nordstream 1, the one that has already damaged and not under construction, but nordstream 2, i think putin still has hopes for it in fact, he talked to emanuel mckrohn just last week and he said, what are you complaining about. if you turn on nordstream 2, you just immediately have that but the british and the americans have been saying or the ukraines have been saying

that they have been trained by the british and the americans to sabotage russian infrastructure. so if i would go in the order it is received, i would go, ukraine first with american help and i wouldn't pass it by putin to do anything that may seem out of the realm of any rationaliratio. >> i wonder if rationality is involved in this the last year of the war, hitler was suffering from syphilis, he had severe mental illness, should have ended the war a year early or ended himself a year early. we don't know what putin's state of mind is here. some people speculated some sort of mental problem. we know that he's acting irrationally in many ways. do you think that russia could have done this to their own pipelines?

as some sort of false flag, blame someone else >> we're not in putin's head we don't really know who did this, and i expect we might not really find out. is this on putin probably not, because he has already effectively thrown gas gas used to make 80% of its export revenue from its sales from europe. they can't come back this winter and may not come back ever the damage to the pipelines might be so big that some experts in germany have said that there might be a rupture of several kilometers of pipelines. that's very hard to fix. this could be pretty terminal for future gas supplies from europe to russia, no matter what happens on the ground in ukraine. and we wouldn't entirely put it past putin, but it's a pretty radical act, because it closes a lot of doors >> is it possible that the u.s.

did it there's been a lot of -- you know, things going around, antinordstream 2 -- condoleezza rice years ago said this pipeline should basically never exist. i'm ummarizing >> a lot of people said that, former president trump said it, currently president biden said it the germans were warned for many, many years, not just by the americans, by the polish, by the french, by many people, not to build -- overbuild their reliance on russian gas imports and they did it. but -- >> i would say this, i would say this, they did it but gearhart schroeder did it gearhart schroeder is the one that almost single handedly tied that up mbilical cord, and i dot speak german, but i know all the cuss words now nina khrushcheva, do you think we'll ever figure out who did

this because if it is some sort of surreptitious sabotage, pretty deep, but could be divers. whatever it is, could it go unsolved >> could go unsolved and also, even if it is solved, any side will deny it, because at the time of war, it's very difficult to prove someone's guilt when there's so much kill going on i wouldn't respond to the united states are that irrational and that illegal to really go directly to themselves i'm actually kind of surprised by a diplomat. >> can i operate you i think you bring up an incredibly important point and for our viewers, i want to continue, but show our viewers what you're referring to and our listeners on the road, i don't know the man, but an incredibly bizarre and irresponsible tweet. i think we have a picture of it. the former defense minister of

poland put on twitter last night a picture of the leak with two words or three words thank you, usa i don't know if he was trying to be sardonic or sarcastic or whatever, that's a dangerous tweet, is it not >> i think so. i mean, that's what i mean, is that whatever he thinks, he used to be in the government. i understand he hates russia and thinks that putin is evil and the devil, which may be true but still, we are talking about a global problem we're really not trying to enflame it rather than before the investigation has happened so i'm quite -- i'm not entirely sure, but i do think in this time of war, everybody acts very responsibly with their words >> yeah. and hopefully some people out there on twitter can do the same thing, as well pep henning and nina, a really important discussion we'll get you back on soon, because this could be one of the most impactful global events of the year, if not of many years thank you both, very much.

scary and dangerous stuff out there, folks still ahead, sticking with energy, we'll speak with the ceo of generac about how they are preparing for the fallout of ian. scary stuff. we're back right after this. 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. from the most innovative company. bring on today with comcast business. powering possibilities.

all right. welcome back to "the exchange. and markets on hump day, getting over the hump, getting a little bear market bounce, whatever you want to call it. the dow is not on its high, it was up 545 at high, but up nearly 500 right now the s&p and nasdaq higher as well, 1.5% gains some of the movers this hour, vf

corp. among the worst performers in the s&p they slashed their guidance for the second quarter and the full year stock is now at its lowest level in nine years. it's on pace for its worst month since the start of the pandemic. but large-cap retail is mostly higher today names like amazon, walmart, costco, tjx and target, they are all in the green, and so is docusign, shares higher after outlining plans to cut 9% of its workforce as part of it new restructuring plans. you know it's wall street then they applaud layoffs never liked it, but it happens stock's up nearly 5% all right. let's get a cnbc news update now with seema mody. >> brian, good afternoon here's what's happening at this hour parts of florida are now experiencing hurricane force winds, even as hurricane ian has yet to make landfall those winds causing flooding in naples and knocking down electrical lines in coastal regions. more than a quarter million utility customers are already without power, according to tracking site poweroutage.u.s.

on the news, tracking hurricane ian and where it may go next that's tonight at 7:00 eastern in washington, president biden leading a conference aimed at end hunger in the u.s. by the end of the decade. the white house also announced $8 billion in pledges from the private sector to fight hunger the european union says that it is working on a new sanction on russia, falling sham referendums held in parts of ukraine. officials are targeting ing $7 billion worth of russian goods they're working to impose new sanctions aimed at choke points in the russian economy brian, back to you >> seema, thank you very much. still ahead, the senate has advanced a bill to keep the government funded ahead of the friday deadline. we'll get a check on the state of the government debt markets and why higher rates are effectively a great big tax on america. and all throughout hispanic heritage month, here is halftime

report's supervisoring adviser, patty martell. >> there's a saying in hostage, it literally translates to put in your batteries. and i wanted to fire up the next generation of latinos and latinas, so they continue to build on the work of so many that persevered before us. embrace your heritage and your latinidad. we are diverse, but bonded by a shared history we are bicultural. let's own it it's our superpower. (vo) the fully electric audi e-tron family is here. with models that fit any lifestyle. and innovative ways to make your e-tron your own. through elegant design and progressive technology. all the exhilaration, none of the compromise. the audi e-tron family. progress that moves you.

♪ ♪ ♪ ♪ ♪ ♪ at fidelity, your dedicated advisor will help you create a comprehensive wealth plan for your full financial picture. with the right balance of risk and reward. so you can enjoy more of...this.

this is the planning effect.

all right. it's time now for the third and final installment of this week's special series, state of debt. and today we've got our eye on government debt. the senate passing a stopgap measure tuesday as congress stares down yet another funding deadline friday at midnight. i know it's like clockwork in order to avoid a shutdown. it comes as the national debt climax to nearly $31 trillion. both parties have been spending like drunken sailors for the last 20 years. actually, let me correct myself. i'm sorry, that's an insult to drunken sailors, because at least the sailors are spending

their own money. here we are, record debt, inflation at global eyes, a likely looming recession here in america. is there an upside to this somewhere. joining us is steven pavlik, with renaissance macroresearch how did you like that intro, steve? good grief but when things look the worst, that's often the best time to invest bonds, bonds were -- not worthless, but not far off it for decades. is there finally some value in government debt? >> i think so. just comparatively speaking, the stock market is performing poorly right now and we have a fed committed to interest rate hikes. so i think moving forward, yeah. it used to be, there is no alternative. now there's an alternative in emerging care. >> where do we invest? if our viewers are scared, they're nervous, $31 trillion looming possible recession, stock market one of its worst years ever like, you know what, i'm going to put my money in government

debt or any other kind of debt and just ride it out, where should they do it? >> i'm thinking from a geopolitical standpoint, we have a lot of hot spots popping up around the world, so i think aerospace and defense is in terms of a sector, one of the safer places to invest and the dollar, that strengthening around the world, too. and i think people should be mindful of that looking at the currency situation >> i want to talk more about government debt. politicians, and by the way, both parties both parties like to spend, because when you spend, you tend to get votes and you can smile on camera and say, we're doing this what they don't tell you is that comes with a bill. the money is not free. and you ultimately have to pay tax on much of that debt, which means it's going to cost you far more than you initially talked about, unless you make subsequent cuts on the other side how severe of a gdp hit could we take if our servicing costs on national debt rise above where they are now, which i think is about $600 billion a year, just

on interest! >> right the question for a responsible federal budget just came out with a report earlier this month that suggested that number is going to climb to $700 billion the other thing to keep in mind, too, is was some of the tax estimates provided by democrats. they're sort of assuming that went to the activity that they're taxing isn't going to change i'm not sure that's a frair assumption which is going to make it harder to pay this off. >> how does this play out, steven that's the question. do rates stay high for years i actually literally just got a tweet or a text from a friend of mine saying, i want to buy a house. where are rates going qu i have no idea could they fall next year if we go into a recession or are they going to climb for years >> i think that's something that the fed might consider if we're going to have a divided congress, with republicans likely to take control of at least the house and possibly the senate, you're not going to have any fiscal stimulus to rely on

when we get to a recession now, if we were to maintain the status quo, that could be interesting. we think about what's going on in england right now, you could have a democratic congress looking to provide a fiscal stimulus what does this mean for the fed's efforts to provide interest rates moving forward? >> we appreciate your time today, an important discussion $31 trillion, i don't know about you, but in my book, $31 trillion is a lot of money it was $15 trillion like 20 years ago. still ahead, stocks on pace for another terrible month the nasdaq now down a stunning 30% this year, but like we just talked about, bad times are often where you find the most opportunity. so coming up, we're going to head to the delivering alpha conference and get the $2.5 trillion view from goldman sachs's julian salisbury about these markets, where they're headed and that is with tyler mathisen in a snazzy green tie, next.

if you have this... and you get this... you could end up with this... unexpected out-of-pocket costs. so if you're on medicare, or soon to be, consider this. an aarp medicare supplement insurance plan from unitedhealthcare. medicare alone doesn't pay for everything. and what it doesn't pay for, like deductibles and copays, could add up to thousands of dollars. medicare supplement plans help by paying some of what medicare doesn't... and making your out-of-pocket costs a lot more predictable. call unitedhealthcare now and ask

for your free decision guide. medicare supplement plans also let you see any doctor. any specialist. anywhere in the u.s. who accepts medicare patients. take charge of your health care today. consider adding this. call unitedhealthcare today about an aarp medicare supplement plan. lily! welcome to our third bark-ery. oh, i can tell business is going through the “woof”. but seriously we need a reliable way to help keep everyone connected from wherever we go. well at at&t we'll help you find the right wireless plan for you. so, you can stay connected to all your drivers and stores on america's most reliable 5g network. that sounds just paw-fect. terrier-iffic i labra-dore you round of a-paws at&t 5g is fast, reliable and secure for your business.

all right. welcome back stocks rallying today. the dow and s&p on pace to break a six-day losing streak. while it be the second up day in a row for the nasdaq, as investors of all stripes try to navigate all the ongoing volatility, it is a good time to listen to some of the heavyweights and what better way to do that than cnbc's delivering alpha summit tyler mathisen is there. he's the host and is joined by julian salisbury, overcease $2.5 trillion tyler, my man, take it away. >> julian salisbury, welcome good to have you on cnbc for the first time and welcome to delivering alpha zpr great to be here >> great to have you you'll sit on a panel later this afternoon called the next big thing. what are you going to say? what is the next big thing in investing? >> so from a private markets perspective, which is what we'll be talking about a lot on that panel, a lot of it is just continuing to invest in the areas, the long-term secular themes that we've liked for a number of years.

>> and they are? so, digitization, energy transition, enterprise software. these secular growing businesses that have stood the test of time so we like these things pre-covid, during covid, when you had to reunderwrite and look at the areas that we were investing in, it still made sense. and as you move into more inflationary environments, some of these long-term themes continue to make sense, irrespective of the environment. >> so digitization, energy transfer, and the third was enterprise software. >> enterprise software >> health care, there are a number of these long-term secular themes and you don't want to get distracted by the day-to-day match nations of the ten-year. these are long-term secular themes that we continue to invest in. >> you've just closed a nearly $10 billion fund how has the capitol raising environment changed this year? has it gotten harder

or what? >> so, yes, thank you for mentioning this. we just closed our private equity fund. this is one of a number of funds that we are raising, as part of a series of capital raising goals we set out two and a half years ago that we're tracking well ahead of. in terms of the capital raising environment, i think you have to break it down into the different sources of capital it's certainly gotten harder over the last six months and there are a couple of things driving that in the institutional investor base, they have an allocation towards alternatives it's a percentage of an overall portfolio, as both their public equities and fixed income has come down in price, they find themselves overweight or more overweight than perhaps they wanted to be in terms of alternatives so their propensity and desire to want to invest or reup or make new investments has certainly slowed the long-term secular theme is still there, but it's a bit of a pause after a period where they

have made significant allocations. >> so it's not a function, really, of whether people like the business or the businesses that you would be investing in, it's more a function of changes in other parts of their portfolios >> well, you have to look at an individual investor. they will typically have a strategic asset allocation model that says we want to be in a certain amount of public equity, a certain amount of private equity they may not be there immediately, but over a period of time, they will work to move their portfolio towards the allocation and with private equity, it's hard to make real, what's the word, vintage bets or timing bets you tend to want to leg into it at a consistent base over a period of time but what they're seeing right now as their public markets have come down, they've gone up in term of private markets positions. so their propensity to want to reup will be slower. insurance, on the other hand, i would have said up until a few days ago, still had a fairly keen interest in growing

alternatives allocations and then retail, i think, was still in the early innings of the growth and alternatives. >> david rubenstein earlier today who knows a little bit about private equity said, and remarking on the fact that private equity firms, stock prices have been hit very hard talked about how there's been a revaluation and the idea that, while maybe those deals that you bought in, that you've taken private, aren't going to fetch the same premiums when they -- when you try and monetize them what are you seeing in the private equity business? is it as, this is overat a timing it, as easy a layup as it seemed to be to a lot of us? >> clearly not you don't have that tailwind of extremely cheap money. it's clearly become harder and i would say what i would expect if you look at those revaluations over the private equity firms, they're typically valued on a multiple of a few related earnings, which is driven by how much capital can they raise, how much capital do

they currently have and how much can they raise in the coming years. and i would say the expectations around their ability to raise more and more capital has probably moderated so expectations around fewer related earnings have come down. and similarly, the pace of disposition of existing portfolio companies has likely been pushed out. and therefore, some of those performance fees could be a little bit lower and further out from a time perspective. our expectation is, look, in a private equity fund, i think we continue to see, we will see great opportunities. at the exact point in time, financing is such a problem that deployment will be quite limited for the next few months here but the long-term trends -- >> and forgive me, what you do is never a layup i don't mean to suggest that i'm going to take a big leap and assume that you're a uk guy. >> i'm a uk guy. >> what in the world is going on over there >> i sometimes wish i could hide my accent.

because of a number of things that the uk has done over the last few years i think genuinely putting your foot on the gas and the accelerator at the same time -- >> gas and the brake >> gas and the brake is really not a good thing to do so, it's caused some real disruption we've seen the rate markets see a violent view some of the insurers found themselves -- we're starting to get in a fairly dangerous position >> wrong-footed. >> until the government came in with their purchases this morning, or planned purchases this morning but i think there's been a real loss of confidence there >> julian, thank you we'll be looking very eagerly to the next big thing your segment later today here at delivering alpha. thank you, and we appreciate your coming on cnbc. >> appreciate it >> really nice to meet you >> julian salisbury, cheers to you as well. >> brian, back to you, i guess where is we're going >> i've met him and i still

screwed his name up. i said sainsbury which is a uk food store salisbury, not sainsbury >> he's probably been to sainsbury. >> salisbury and sainsbury >> all right, thank you. be sure to tune into "power lunch" next hour for two big reasons. number one, contessa brewer and i will be anchoring together for the first time ever, and number two, leslie picker's interview with orlando bravo we'll talk about the private equity world, why orlando is pulling back on his crypto investing that is at 2:15 eastern. dow is up, oil's up. we're back right after this.

we lost about everything trying to pay for prescriptions. we spent our whole pension but couldn't keep up. so my husband just stopped taking his medicine. and then he had a stroke. i can't get back what i lost, but thanks to aarp, a new law will protect seniors with a cap on their prescription costs.

that could have changed everything for us. i'm just grateful that no one will have to face the terrible choices that we did

welcome back hurricane ian is beginning to pummel florida heavy rain and catastrophic winds are expected to knock out power across the state in fact, more than 700,000 people are now without power already. well, the entire nation of cuba and multiple caribbean islands have already been left in the dark wisconsin-based generac has sent

a response team to the tampa area to try to keep critical backup generators running there, something throughout the storm, something they have done since hurricane katrina back in 2005 aaron, good to have you back on. i wish it was under better circumstances. generators you provide. many people will be without power, perhaps for a long time you need power to run water pumps, to keep gasoline running, so people can move around. what are you sending down there and how much help could it be? >> yeah, thanks, brian yeah we hope everybody is trying to stay safe. a pretty serious situation we have crews on the way down to that part of the country right now. they're kind of staging in georgia, getting ready to figure out where the direct impact of the storm will be. looks like probably somewhere north of fort myers, kind of the inglewood area we have a lot of products in that area backing up hospitals,

treatment centers, and then a lot of residential products. for people choosing to ride out the storm, we don't recommend, if you have circumstances you're unable to evacuate, our products are ready to go. as soon as we can get safely we'll be there to help people. those crews are there to help all brands not just generac but there to try to take care of any kind of situation where a product might not operate correctly. >> most of your residential products, many, all of them i believe run on natural gas what are the products, the temporary products, you are bringing down, are they diesel how long can they operate without their own power or fuel? >> yeah. so our standard products operate off natural gas or propane, the fuel of choice down in florida, or diesel, if they're in the commercial and industrial type applications those can generally run a few days on diesel fuel or they have

to be refueled on natural gas you can run uninterrupted as long as the gas line is there and you don't see interruptions from that. we're sending a lot of generators down to the area, hundreds of truck loads that run off of gas lien. gasoline is still widely available and can be used, these things can be used in an emergency to provide temporary water pumping services or refrigeration needs or air conditioning needs, critical medical devices. these products can be used in those types of applications. >> there's other things that you make that a lot of people may not realize. they think of you for generators, but you're getting into what you call the power cell, the big giant battery storage business for homes and, you know, people knock electric cars and say well, if the power is out you can't charge your car or drive to safety, not entirely true if you have one of your power cells a giant battery that hooks

into a wall, how long could they store electricity, maybe likely generated by solar power to make sure you can if you have an electric car you can get out of there? >> yeah. the power cell is a newer product for us as you said, residential energy storage, pairs with solar if you have a solar system on your rooftop you can store the power and get 12 to 18 hours of backup power off the battery and hopefully the sun comes up and you can recharge the battery at that point those are newer products the technology has come a long way over the last several years and going to have to come a long way to match what you can do with a generator a generator is a better device for a long duration outage like a hurricane or ice storm we saw what happened in texas in february of last year where people were out of water for f - power for four or five days. but those are newer products and we think that's the future. >> yeah.

and let's hope that's not the case of multiday power outages thank you for coming on. thank you for you and your team. you're going into the storm when a lot of people are going out. there to help. appreciate it. >> thanks, brian. coming up, reports circulating that apple will scrap its plans for production increases for the highest end iphones. the steps the companisakg.y tin . what do you mean? these straps are mind-blowing! they collect hundreds of data points like hrv and rem sleep, so you know all you need for recovery. and you are? i'm an investor...in invesco qqq, a fund that gives me access to... nasdaq 100 innovations like... wearable training optimization tech. uh, how long are you... i'm done. i'm okay. go. go smaller carbon footprint. go these footprints. go saving energy. emerson technology can help heat pumps replace

fossil fuel heating for a cleaner, low carbon future. go blue skies go. go boldly. emerson.

welcome back want to get one more thing before we go remember that's what apple used to say one more thing and this is apple. shares falling on reports the tech giant is ditching its plans to increase iphone production. steve covac joining us with the latest what's going on? >> let's run down what this report that's sending shares lower is saying and what it's not saying first of all, the report says apple is dropping plans to increase iphone 14 production.

that would be on top of its original demand expectations it's sounding like apple saw signs demand would be better than originally expected but the extra demand faltered in the first couple weeks after launch. the report backs up what we've heard the last few weeks the iphone pro models are actually selling better than expected, but it will boost iphone revenue. there's one more iphone yet to be launched. 14 plus, with the bigger screen goes on sale next week we'll not get a full picture for another couple weeks morgan stanley analysts trying to ease investor fears calling the report more bark than bite and noting that apple's original expectations are holding firm. they're expecting unit sales of iphones to be about flat year over year. meanwhile, citi analysts saying the strength in the pro line can offset any weakening demand for the regular iphone 14 and say a good healthy 76% of new iphone

14s sold so far are pros still something has changed in the last few weeks that made apple think there won't be a bonus surge in demand. jefferies analyst may have an answer saying this week iphone sales were down about 11% in china in the first three days of sales. now apple declined to comment on bloomberg's report, but we know how the market is reacting here, down about 3%. >> i saw, i think it was bank of america or barclays forgive me, a bank with the "b," said is this fake news this is not quite like a certainty hing investors are selling on speculation and some reports we don't know. >> that's right. we get this pretty much every fall as soon as the new iphone launches there are reports and speculation throughout the supply chain that makes its way into reports like this one saying hey, maybe demand isn't as good and then apple comes out and knocks out expectations. keep in mind they're also talking about unit sales being flat they're not talking about iphone

revenue, which is what apple reports now. they report the revenue, not how many devices they sell and that's where people are going to be looking for growth and if the pros are selling as well that boosts their revenue. >> stock had a tough year, down 17%. got used to apple going up appreciate it. thank you very much. thank you all for watching "the exchange. you're not done with me. i'm going to join contessa brewer for "power lunch" which begins right now. >> hello, brian, everybody, welcome to "power lunch. i'm contessa brewer. here's what's ahead. pay attention to the yield patty the new tina as the 10-year yield broke through 4% for the first time since 2008. is this the start of a new era investing? we're delivering alpha stanley druckenmiller sees a hard landing in 2023 j.p. morgan says inflation is here t