>> okay. >> lily, their alzheimer's drug is great too i think you can continue to own it >> weiss >> eqt don't know why it's moving today, but i think they'll come back >> northrop grumman. >> i'll see you in overtime. "the exchange" is now. >> here's what's coming up on this fascinating friday. stocks are mixed, the dow is down, but green for the s&p 500 and nasdaq maybe a little good news, september is over. mercifully the dow ending its worst month since worst september in 20 years. given we had more inflation data and stocks are mostly higher, is that a good sign moving forward. we'll look at the company and

the stock. and jay powell said there would be pain as the fed raises rates and he would be right. all of that's ahead in the next 59 minutes let's begin with dom chu and the market numbers >> we're now down two measly points on the whole day so far, 3683 but at the highs of the session, we were up 31 points and at the lows of the session, down 26 almost equal just right in the middle of that right now so this trading range hasn't been particularly volatile, but if you are bullish, you might say, maybe this is a good sign. stability at an otherwise very dismal month for the overall market the dow industrials down 135 points one-half of 1% to the downside

the nasdaq composite, outperforming up about 1.25%, 24 points 10,761 another place that's trying to find some sense of stability right now, amidst a massive downtrend over the course of the last several months, and maybe even year at this point, is the semiconductor index. we've pointed out yesterday on this program, and in "power lunch," that the semiconductor etf hit a new 52-week low in yesterday's trade. we are at least for now, just about flat on the session. we are now losing momentum in that semiconductor trade, although we did see some outperformance in names like nvidia, advanced micro, and others keep an eye on semiconductors. some traders look at this area as an indicator for sentiment in the overall market particularly in tech for sure. and the biggest drag are down.

$8 $84.07 this is on the heels of an earnings report that was generally positive, but many investors and shareholders are keying in on the inventory build. it surged 44% on its balance sheet over the course of thispa quarter. i means that nike says they'll have to discount many of their goods heading into the holiday season the all-important one there, all of that weighing on that nike could be on pace for its worst year on record as a public company. back over to you >> nobody could get anything now they overordered now they have too much and have to discount. >> now let's get a little more macro globally the minute i wrote that, i knew the markets were going to turn south. the nasdaq will be negative in about two minutes. new data indicating that inflation accelerated even more than expected last month the fed's preferred inflation

gauge called the personal consumption expenditures, better known to you and i as the pce, it increased 0.6% in august after being flat in july if you think things are bad here with inflation, you know it is much worse overseas. prices in the uk, the eu, they are soaring above even our levels a number of central banks around the world are hiking interest rates in a global battle to try to tame inflation. and your next guest says, despite that, what's going on may have disastrous consequences and the u.s. is not immune to these global waves of uncertainty. let's bring in now greg daco, chief economist i like to keep fridays on the optimistic side. nobody wants to go into the weekend feeling like the grim reaper that said, and i've sort of been talking about this for months or more than a year now what's happening in europe

cannot be understated. and there is a technology risk from europe to us. >> absolutely. i think we should not think of the u.s. economy as being an island that's isolated from the rest of the world. as you said, what happens in the rest of the world ends up washing on our shores. we're in this very unique environment where what we're seeing is a globally synchronized, but coordinated policy of tightening around the world. this tightening that's happening at a very rapid pace will likely have consequences that we don't know yet of. and i think there is a real risk that there is, could be, more significant and more pronounced tightening of financial conditions, which has more dire effects on economic activity >> we -- well, we, i, have been tough on jay powell, tough on janet yellen, not as human beings, but just in their job. it appears they're not good at that job in europe, it's still many of the same, christine lagarde. like the same names for the last

five or ten years. do you think that the market has confidence in these people does the market -- should the market have confidence in these people, who were there when things went awry >> i think we're right to be looking at what central banks are doing with a lot of attention, because what they will be doing will be key in determining the global outlook and the pace of the slowdown even if it adds pain in the form of slower economic activity. that's really the goal of most central bankers today, is to curb demand. as we know, they have very little power in terms of reestablishing supply. they're weigh on demand. the question is, how capable of

they of managing a soft landing in this environment. >> i want to go outside of that. you know what happened with the pipelines this week. norway is flying fighter jets of some of its oil platforms in the north sea today. jpmorgan chase came out with a note i'm going to summarize it, read one line from it the destruction of the nordstream pipelines this week is an event that significantly increases tail risk and makes it difficult to de-escalate many believe the current situation is similar to the cuban missile crisis back in the early '60s. is that overstating it, greg >> i think we're certainly living in a world where political tensions remain extremely evaluated. where you're seeing evaluated fragmentation in terms of global powers around the world. and one in which navigating this uncertainty will be increasingly difficult from a business perspective. and i think that as we look into the winter, we're likely to see pretty significant disruptions in terms of energy flows, in terms of output coming from europe we know that in asia, there are

also weights on economic activity because of the disruption to activity in china. we are in the midst of a highly uncertain and highly susceptible global environment, which will have effects on economic activity in the u.s. so those developments that you just talked about are key and central to developments in the u.s., even if there aren't apparent direct ties between the two. >> well, there's about 10% of s&p 500 company revenues do come from europe. some of those revenues are at risk we appreciate your views thank you very much. >> thank you >> i've got a news alert out of washington for you maybe some good news the government will not shut down the stopgap funding bill to avoid a partial shutdown now has enough votes in the house to pass we've got the green light in the senate yesterday afternoon, so the government continues to roll on we'll call that good news. all right. now back to stocks markets getting ready to say good riddance to a brutal september. take a look at some of the ugly

numbers. the dow and the s&p 500 falling 7% this month. and the nasdaq is down 8%. it is the worst september for the dow since 2002 yeah, believe it or not, the dow had a worse month than september of 2008, right when the financial crisis was really just starting to kick off all three indices, they're on track for a third straight quarterly loss, something we have not seen in years let's get a little more optimistic we had some bad inflation data again today, and stocks, they're not selling off in a big way dow is down 100 point. joining us is joanne feeney, partner and portfolio manager at dwirdss capital management and matt maile matt, good to have you back on i had this whole thing planned where i was going to be like, oh, the markets are up nicely, even with the bad inflation data is that a good sign? but now the markets are turning on me and turning on everybody, by the way but you get my point if we can even stay sort of flattish with hot inflation

data, is that maybe a near-term sign that we're just way oversold >> well, it certainly could be one of the things that the market is getting oversold and the one thing, the sentiment is getting ridiculously bearish those are the types of things you do tend to see at a bottom one thing i am concerned about, if we have a blow-up, the second lelg of bear markets are when enron shows up or bernie may dove shows up. and although september is usually the worst day of the year, when septembers are really, really tough, the bottom usually comes at some point in october, october end up being a better month, but that tends to come then. at some point, even if we see a short-term bounce soon wing we'll probably see lower lows before too long. >> lower lows, yikes yo ann, let's try to be a little bit more optimistic on this friday, shall away i know something about inventories. my wife works in consumer

products and retailish we talked about it with nike when a company has too much of anything, they try to sell it off. a big beneficiary of that tends to be a company like a t.j. maxx, does it not? they get to buy all of that excess inventory on the cheap. you buy it for less than retail. you feel good, they feel good. is that a stock you like >> yeah, hey, brian. t.j. maxx is a pretty good place to buy at this point in time when you have recession threats, you do see consumers shifting down to other opportunities. and t.j. maxx not only has that inventory they can dip into and get at relatively low cost, but they'll also see more sustained demand than some of the higher-end retailers out there a good place to hide, it has good opportunity here, it's been outperforming, you know, and i think that investors have to decide right now whether they're in it for the long haul, which they ought to be pb and how perhaps to talk advantage of some of the opportunities that have come along in this market >> and what about a mcdonald's, as well?

>> yeah, mcdonald's is another good sort of recession-resilient play people shift down from those midmarkets, you know, casual food restaurants down to a mcdonald's you know, they're taking advantage of that and they're an extremely well-run company and the loyalty program has been going very well. so again, another company with a good dividend. you know, one of the things to do in this kind of market is to make sure that your dividend income is not just going to sustain some of your cash flow, but those dividends are going to be raised, you know, over time and mccdonald's has been very good at that >> time is our friend, is it not? if we look at a company like a google/alphabet, whatever you want to call them. i know this, when markets have crumbled during recessions in 2000, 2008, whatever, five years down the road, the average is a double if you love google in ten years, maybe dollar cost average entitle now. >> i totally agree, brian. one of the things is we look at the -- i hate to say it, but a

stock like apple on an historical basis is still somewhat expensive, even though it's come down a lot recently. google is now trading on 18 times earnings it deserves that so if you buy it, cities a stock -- you don't want to back up the truck you buy a little each month over the next six, nine, twelve months, your average price over that time will look real good three years from now, five years from now, ten years from now and you say that the market could overall double, but the really good companies, they're going triple, quadruple, et cetera, off those lows >> got to have some powder dry, maybe have a dramamine and a thick stomach, because it could be wild the next few months. joanne feeney and matt maile, thank you both have a great weekend >> let's take a look at oil and the oil markets. it is friday, 1:00 the baker hughes rig count numbers come out and u.s. oil drillers cut oil rigs in september for the first month since july of 2020

baker hughes rig count, basically call it a flattish number, because you look at two things look at oil rigs across america, and then you look at oil rigs in the permian basin of texas by itself, because that's where the growth is spoede to be coming from, although the latest data there shows not. so u.s. total rig count, up one from the previous week there we go. gas rigs, down one so we'll call that flat. all right, coming up, the fed showing no signs of backing off its fight against inflation. so what stocks can handle the sharp rise in rates? we've got a fed pain edition of three buys and a bail. but first, sheryl sandberg stepping down as coo of meta today. and your next guest thinks that mark zuckerberg should follow her out the door we'll tell you why, coming up.

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welcome back it really is the end of an era longtime ceo sheryl sandberg, who is officially stepping down from the company today this comes as the stock has been getting crushed this year. investors have lost nearly 60% of their money as they've held on and bought near the top the company recently announced a hiring freeze in its latest earnings, disappointed on both the top and the bottom lines,

what happens next? mark zuckerberg really handle this change. and what about the stock joining us now is jason healthstein, managing director of internet equity research at oppenheimer, and bill george, former ceo of medtronic, also the author of a new book called "true north," the emerging leader edition and he's also a cnbc contributor. bill, we'll kick it off with you. grachess on the book appreciate that. facebook grew wildly for -- since its inception, but it grew mostly because people talked about it you own facebook what's that? i like it. then they got on it. we always thought that mark zuckerberg was this sort of magician now they're undergoing what i call the new coke moment they're trying to change their entire company can he handle it >> i don't know. i think it's time for major changes, brian mark signaled back in march that he in some ways realized that facebook's time of growth was over and he was going to focus

on metaverse, and that's where all of his excitement, all of his energy is going into that. it's costing about $10 billion a year running rate. i think it's time for mark to give up the ceo title. he can focus on the metaverse and be the creative genius he is and really bring in a ceo who can run what we used to know as facebook facebook, instagram, whatsapp. and really run the social media. and i think it's time for a whole new business model that a new ceo could bring in >> i know -- bill, we know that yeah yeahs, you guys, make a lot of money. there's a lot of criticism about the ceo pay. mark founded the company one of the richest people on the planet his grandchildren's grandchildren's grandchildren will never have to work if they don't want to. talk to us about being a ceo i understand you make a lot of coin no one will feel sorry for you bs the a 24/7 job, right it ultimately just beats you up.

mark's getting older it's got to wear on him. >> he's been ceo, brian, for 19 years. that's a very long time. okay, he's only 38 years old, but i think that's why i think it's time. he needs a partner he had a partner in sheryl sandberg and after the cambridge analytica scandal broke in '18, he kind of pushed her aside. so now with her retirement, he's all alone at the top her board is not like a real board, it's more of an advisory board. he needs a much stronger board he needs to listen to some former ceos that will come on this board, as well. so i think, yeah, it's a very tough job. and mark said, i think on joe rogen's show every morning, i don't like to turn on my computer, it feels like getting punched in the gut that doesn't sound like a happy guy to me. so he would be a lot happier if he had a partner who he really delegated authority to i don't mean just somebody else the title of ceo, i mean a real ceo who is really strong willed. >> maybe move permanently to

hawaii, get people off his back. he's getting hassled in san francisco. whatever it may be bill george, appreciate you coming on. thank you for the book or congratulations on the book. and thanks, maybe you can send me a acacopy >> thank you i'll send you one. >> very cool now let's talk about the stock, meta. it is down 61% off its 52-week high it is trading below the pandemic low. it is one of the worst performers on the s&p 500 this year so if you own it, what do you do, if you're poking around, what do you do let's bring in jason healthstein. at some point, jason, this stock is -- again, we said it yesterday with a different company, it's got to stop going down doesn't mean it will go up i mean, how long can this bleeding last? it does feel like a new coke moment >> yeah, you know, i think you highlighted how much the stock is down. i mean, it's down well below kind of other large tech growth

stocks, because of the headwinds they face. so -- and let's start out, right, apple really did this company a significant disservice with the changes they made around privacy and the implications on ad targeting really, you know, if i look at numbers, meta underperformed its peers by 27 percentage points in revenue growth in the second quarter of '21 and it's still underperforming, but in the most recent quarter, underperformed by eight percentage points. so it's getting less bad at some point, market will realize that and i actually think that there is kind of a product coming that apple is relaunching that would allow meta to get back some of the lost signal, which would help them recapture lost ad dollars. >> let's talk about it i want to know what that product is and if our viewers are maybe a little confused about what you're talking about, if you

download a new app on your phone, and you have that button which popped up about a year ago, ask app not to track. that's part of what you're talking about, right that small change turned into a conflagration for facebook >> so facebook has said, effectively, that change cost them about 10% of their revenue, right. if you throw a multiple on that and you're thinking about, well, the stock is underperformed its peers by like 30 points, you could kind of start to go. there are other factors, when we think about tiktok as well in a second the product that apple is effectively updating is called fkn network. it is code that publishers can use to understand how effective app ads are. so the new version is going to add back a lot of functionality

that apple took away why is apple doing this? there's a number of opinions out there. some people think that apple went too far in restricting privacy and it could have triggered government action or oversight, or maybe the fact that apple realizes they want to build an add business, and they can't have tons of data on the consumer and everybody else has none, right? because that wouldn't be fair. so apple announced this on developer day. there's been a lot discussed about this, written about it but we don't know when it's relaunching. but once it does, we think meta will be the biggest beneficiary. and when i add that to all of the other headwinds, which i'm hae happy to talk about, should position them in a better place for next year. >> we'll leave it there for now, but we will get you back on to talk about those things. we know the headwinds -- would be nice to talk about some tailwinds once in a while. jason, appreciate it have a great weekend

little changes can mean big things in technology all right, still ahead, california's energy woes showing no signs of easing up, while many of us are seeing gas prices down since the summer. guess what they're paying in california nearly 7 bucks a gallon in certain parts of l.a jane wells is on the scene and on the story and she'll explain why. as we head to break, here's a look at the dow heat mike. nike, we told you about it, the worst performer, headed for its worst year ever as a public company. we're back right after this.

let's get a market alert we are down on the dow and s&p slightly higher on the nasdaq. i want to find a bright spot, i guess, the dow is off its low for the day. it was down 230 or something at one point. nasdaq is slightly in the green. let's check the sectors this week the rate-sensitive sectors, the ones sensitive to interest rate moves. utilities and real estate. they really took it on the chin. and so much for playing defense. consumer staples or elected defensive names, the third worst group this week. look at the megacap's september swoons apple's worst month in two years. you might have heard about some of these companies down around 9% this month. tesla the outperformer it is some down 2 and actually up 20% this quarter. so tesla standing out. but it's not all bad i feel like the grim reaper up here it's a september to remember for some ays netflix, twitter, and posh mark. they have gains this month in fact, posh mark posting its best month ever, biotech

booming, as well, because of biogen it's on pace for its best month since 2000, after that promising data on its alzheimer's drug not the only one, though regeneron up 20% ely lilly up 8%. it just hit an all-time high two days ago every single one of these stocks are up 10 to 20% since january even in the worst markets, like jim says, there are bull markets somewhere. let's get a cnbc news update with tyler mathisen. >> brian, thank you very much. here's what's happening at this hour fresh video of the tragic damage in ft. myers beach severe damage to many homes, cars flipped over in parking lots governor desantis says that rescue crews have gone door-to-door to more than 3,000 homes in the hardest-hit areas in san diego, a sailor has been found not guilty of setting a fire, that destroyed a $1 billion navy warship brian maze was charged with arson that led to the massive blaze aboard the are shard g-7 foreign ministers are posing

steeper costs on russia for annexing parts of ukraine. the nations also say that they will never recognize russia's claim to those ukrainian regions. on the news with shep smith tonight, first cuba, then florida. now south carolina team coverage of hurricane ian's continuing and historic damage and the first steps towards recovery that's tonight at 7:00 brian, back to you >> tyler, thank you very much. all right, getting back to the markets, because you know the fed is determined to break the back of inflation. surely means more rate hikes more volatility for the market, but our trader coming up with some names, including one stock that is already trading near all-time highs we just touched on a name, can you guess it that's coming up with three buys and a bail, next

all right. welcome back the federal reserve clearly not backing down from inflation anytime soon vice chair brainerd saying this morning, quote, monetary policy will need to be restricted for some time to come, to have confidence that inflation is moving back to target. these reasons, we are committed to avoiding pulling back

prematurely, end quote that spells higher rates she just spelled it out. and likely lower returns, as the markets toil in purgatory. so where can you hide out to avoid more fed-induced pain. welcome back gena sanchez, chief market strategist at lito advisers she has one named bail on here and gena, welcome. good to see you again. one thing we just talked about going into the break was eli lilly. here's the sad part. when covid hit, we locked down -- half the country locked down we literally told people, do not go outside that's exactly the wrong thing to do. and millions of -- tens of millions of americans gained a significant amount of weight eli lilly has some promising new drugs to tackle what is no doubt a crisis, an obesity crisis. one reason you like that stock >> it's a big reason we like that stock we're talking this morning about their alzheimer's drug, but i think the obesity drug is even bigger this is a drug that's coming on

the back of a couple of drugs that have come out, but their drug monjora is basically promising to top even the best results that have come out in terms of clinical trials it's been approved for diabetes and is on the docket to be approved for obesity and the drug is not only effective, but it also reverses, you know, things like diabetes it reduces heart risk and all sorts of other things that are eventually expensive down the road this is a big market for them. this is a huge win and eli lilly is quite frankly a company and in a sector that people really need to continue they're not going to stop buying their drugs because we're in a recession. >> all right moving on, walmart, your next three buys the stock has been hit, like everything else. but again, you kind of wonder, is this countercyclical? things get tough, people trade down, some people trade down to walmart. >> absolutely. you know, this is stuff that's affordable you know, if -- the one thing

that i don't believe that the fed is going to be able to do is effectively bring down inflation. so many components of inflation are way out of the fed's hands you look at what's happening with oil, what's happened -- you know, what we heard about with the nordstream, you know, that news is nothing that interest rates will make a difference on. so we could actually be in an inflationary environment, even when we're in pain otherwise and people are going to want to trade down, they're going to want to buy cheaper. walmart is able to do that but walmart also has an incredible ability to manage their inventories, they have an amazing ability to manage their costs, to manage their logistics, i mean, this company doesn't have to do $559 billion in annual revenues, because they do things wrong. they do things right and this is a company that can still do well >> that is not an unsmall amount of revenue and stock number three is a name that you have brought to this network, you have brought to this segment before.

it hasn't responded yet, but honestly, looking five years out, microsoft is not going away i wish xcel would, but microsoft has not. >> microsoft is not going away here's the other thing when times get tough, the digital imperative gets even greater. companies have to do more with less, and that's what technology is about also, strangely, microsoft can compete on price this is a company that is so diversified in what it is offering, it has also bought so many components on things that we might have paid for separately teams displaces zoom, they have their own crm, displaces salesforce so they are able to compete and compete on price, ecosystem, and wait this out. so this is a long-term play for us yeah, it hasn't responded yet, but we think it's still a long-term play this is one i own personally and i love this stock. >> okay, own personally, love the stock. i don't know if you remember, your bail, the gap, you remember years ago, their tag line was ♪ fall into the gap

♪, well, investors have the stock was 35 bucks a couple of minutes ago it's eight and change now. disaster >> yeah. it is a disaster and i mean, the characteristics of the gap, you know, so if you're looking for things you want to stay away from, this is a company that is highly indebted, had very little cash on hand, cash and cash equivalence, didn't have much free cash flow, very little interest coverage, and it's not even that cheap. now it is, but really, given where it is on its balance sheet, it doesn't have a whole lot and it's not the sort of thing -- you don't need another gap sweater when you're in a recession. so that's the problem the gap has. they just aren't really -- they don't have enough extra cash they don't have enough of anything and a lot of debt this is a tough time to have debt and no cash >> certainly gena sanchez, three buys and a bail gena, thank you. have a good time in chicago, by the way. >> thank you, brian. >> check out mesa urbana in lincoln park fantastic.

the family watches cnbc as well. thanks, gena after a long, slow decline, gas prices -- or incline, gas prices are declining in the united states. well, not everywhere in the united states. california jane wells lives in california she fills up her car every day and jane, gas prices haven't gone down there at all >> no, brian i want you to look real quick behind this green porsche. these guys are off-loading liquid hydrogen fool, which is free for most people in california with subsidies. you drive my car, though gas is 71 cents a gallon higher my round-trip cost to this live shoot is $20 can i expense that the story when we come back. 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. nationally, the price of gasoline has come well down from its highs of the summer. the average american paying $3.80 a gallon according to aaa. yes, it's still above a year ago, but it's a little better.

except in california in the golden state, you might need a bar of gold to afford gasoline right now it is well above 6 bucks a gallon, maybe nearing or even over 7 in certain areas. and someone who has to deal with this personally is our friend, jane wells she's going to join us now people kill the media, like, you just found the most expensive gas off the freeway. oh, no, you didn't >> reporter: no, no, this is typical. and at this chevron station, gas can be as much as $7 i feel like i'm in europe without the charm. now, aaa is saying today in california, the average is u $6.29, it's the speed of these price hikes, which are dizzies, $6.29 is 11 cents more than yesterday. it is 71 cents more than a week ago. more than a buck higher than a month ago, and a $1.89 more than

a year ago >> i'm changing my mind now. >> you're not going to buy now >> no, i'm going to go to -- i didn't see the price here. >> reporter: what do you think about gas prices ridiculous but it's all over the world. >> you're buying hydrogen? >> yes >> is it more or less expensive? >> no, because you have a special program on here and it's economical >> yep, a lot of people here fueling up on hydrogen now, refinery maintenance is blamed for a lot of this california refines all of its gasoline, because we have all kinds of special rules, especially during the warmer months there are reports that some refineries delayed maintenance earlier this summer because of price hikes then so it's all maybe happening now. and california is also unique in that imimports most of its oil and it's cheaper to ship oil from south america than to pipe it from texas. one other thing we deal with and one last thing, if you look at that again, $6.29 an average in california, although it is less than -- less than $6 in some counties.

compared to $3.80 nationally a lot of the reason for that difference is taxes and fees and according to analysis by stillwater last year, in california, state and federal taxes and fees add over $1.80 per gallon, brian. >> now, i do know, i do know that there are seasonal factors -- my dad owned a gas station in california when i was a child. a little -- nobody cares anyway, there are some seasonal factors here, when might it get better >> we do have a different blend for the winter, which is cheaper. and so prices will come down once all the refineries are working full force, prices will come down. but, you know, this state is trying to get rid of gas engines by 2035. they want us all to be on hydrogen or evs, but they are asking people with evs when it's hot to charge their cars at off-peak hours to protect california's grid. brian? >> and they're now saying, don't do it at night, stanford said,

because the grid is not supported to charge at night i just don't know when you're supposed to do it, then. i don't know >> reporter: it's not happening in any other state, i'll just say that >> hey, at least you're not full-serve only. in new jersey, we've still got full-serve only. nobody can find work until you sit there for ten minutes. there's one poor guy running around to 20 cars. jane wells, good luck. >> reporter: i'm still trying to get over la habra. >> corner of, what is it, whittier and i think beach, near don knot's chevrolet it's now a housing development, of course. and the sierra vista elementary, put me to work there 9 years old. i don't think he paid me jane wells, thanks very much all right. love jane. all right, lots of economic problems to talk about today we do it all the time. but there's something that we're not talking about and we should. that's coming up aking me get an ice bath again. 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.

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all right. welcome back putin's war in ukraine, the european energy crisis, global bond marks going haywire and a wall street has clearly lost all confidence in the federal reserve and janet yellen a lot going on right now but according to famed short

several jim chainos, there's one other big potential demon hanging over the real estate market or chinese real estate. >> if what is going on in the world whether it relates to ukraine, whether it's central banks losing control, whatever it might be with respect happening right now, i think what would be happening in the chinese real estate market would be front and center for investors. i've long said that chinese apartment prices are the most, probably, after treasury bonds, the most important asset class in the world, and they are declining. >> let's bring in mcneil, managing director and senior policy analyst at long view global thanks for joining us. there's a company -- there's been some companies in china which have had problems pre-covid. they've moved the market when those stocks went down, they crushed the market. we've suddenly kind of forgotten about china. is jim correct >> thanks, i was actually sitting in the audience when jim

said that, nodding my head, very aggressively, yes, he is right when this first started, it was kind of a story. we've got focused around a couple of companies in the property sector. this is a system-wide problem. and we should be paying more attention to it. this is not just an evergrande story. the good news on this, brian, is that china knows there's a problem. china's mortgage holders and future homeowners know this is a problem and we're starting to see some policy announcements that is looking to address some of these issues, not all of them for example, last week, brian, we learned china construction banking corporation announced they would set up a $4.2 billion fund to buy out some of these existing assets to turn into rental properties. that's an interesting idea we learned last night that the pboc is allowing for some cities to either reduce or completely eliminate the minimum rate they

charge first-time home buyers. they're trying to get the sector moving again i'm not sure if that addresses all of the challenges in the sector we still have a credit crunch. we still have existing mortgage hoerldz waiting for their developments to be built out you know, they started to protest and not pay their mortgages. there's a lot of risk still left in the sector here. >> oh, yeah. we'll get to more of it in one second sit tight. we have breaking news. we'll come back to you breaking news on twitter with david faber phoning in. >> i'm live on tv. >> on camera, hi. >> hi, brian happy friday afternoon i didn't think i would be back on tv, but interesting story hit about half an hour or so ago from bloomberg it involved the possibility of settlement talks and twitter obviously, many people who have been following the situation closely, myself included, have w wondered whether the two parties would come together and forge a

settlement prior to going to trial in delaware on october 17th i want to give some people background and sense as to what this story really is about bloomberg reporting that ariel trying to put durbin and elon musk together to try to figure something out. mr. manual is no stranger to litigation and feels two parties are much better off avoiding a courtroom if you can they were both attendees at his wedding a number of months ago my understanding is that mr. emanuel then followed up the two of them being together at the wedding with a call to mr. durbin saying, you should try to get it a shot as a member of twitter's board of directors to figure out a settlement with elon musk. my understanding is, based on

speaking to sources, that was the extent of mr. emanuel's involvement in said settlement talks. mr. durban did report into the board, the transaction committee of the board of directors of twitter about the outreach from mr. emanuel. it is far from clear that ari emanuel reached out to egon durban on behalf of elon musk saying, i want to get a settlement, can you reach out, as much as being a friend to both men durban, first investor and they've been close friends for quite some period of time, as well as elon musk. people might remember pictures of ari emanuel and mr. musk on the back of a boat in the mediterranean. so, as a friend to both, and keeps trying to bring them both together to avoid the inside of a courtroom, brian but at this point, what many market participants have been waiting for, the serious

settlement talks that many still believe could possibly take place, my understanding, and again here it becomes a bit more hard to fully grasp because you never know when lawyers are talking to each other but serious settlement talks are not under way between mr. musk and twitter. interesting attempt by mr. emanuel, simply as a good friend to both of these gentlemen, one on the board of twitter and one who is supposed to buy twitter but doesn't want to, mr. musk saying, hey, you should try to figure something out. mr. durban reporting to the board. much of this reported by bloomberg. the markets are taking it as a sign of serious efforts towards a settlement that would involve mr. board members, lawyers, mr. musk's law team as well. that does not appear to be the case, at least from what i'm hearing from various people close to the situation >> and the stock -- thank you, david. the stock is moving.

i love the best part about that story is on the back of a yacht in the mediterranean, as one does that's where all things happen david faber, appreciate that we'll go back to you we were talking about chinese real estate and the risk here. is this like a communist party bailout? the communist party -- i guess you call it an election. they basically decide president xi will be king xi the rest of his life that's coming up in a few weeks. do things flip after that or do things deteriorate >> i think we'll see, perhaps, some new policy approaches to try and really juice the economy again. it's unsure what those policies will be. this sector, brian, has to find some priorities on the list of things the real estate sector, the property development sector is such an important part of china's economy. it also has political and other social implications as well.

you cannot get your demographic problem together if new homeowners can't buy homes, move out of mom and pop's house and start their own families so, there's a lot of reasons to focus on the sector. the question is, are these gradual sector enough for offshore investors, but i don't know that it the gradual approach will do it. >> i think it's a critical story we have not talked a lot about we're glad you came on we cut you short have a good friday have a good weekend. >> thank you, brian. we know stocks, most of them r down inflation is high. yet the dollarle is stronger than it's been in years. maybe that's why those things are happening. so americans on the hunt for yield are giving up maybe investing here and deciding they might find a cool two-bedroom, eight-bedroom flat in nottinghill, hope to spot hugh grant at the bookstore, run into

julia roberts. robert frank, london real estate looking cheap again? >> there is an upside to the british currency problem an apartment in nottinghill cost $1.3 million today it's $1.1 million. due to the weaker pound. you add in the decline in home prices in the uk, you now have discounts of 20% or more steve schwartzman of blackstone bought a 2500-acre estate in west london for $80 million. the number of u.s. buyers now looking in the uk is up over 20%. they're looking at everything from 400,000 in london to big estates. the combined price in currency drops give you discounts of over 50% in neighborhoods like

knight's bridge and nottinghill. this georgian town house has 11 bedrooms, nine baths, an indoor pool price tag $28 million, that's $5 million less because of the currency swings. this 1900-acre estate adlington hall can be yours for $33 million. it's been in the same family for 700 years. six farms, 27 homes, and it was once owned by king henry iii brian, you save over $6 million just on the currency >> 700 years in the same -- i was happy to find a car that had one owner. 700 years goes back to hen vii why don't you buy it. >> henry iii

it was owned by the crown in the 1200s. for $30 million, 1900 acres, compared to what you get around new york, that's a good deal >> i mean, they chased off the h hobbits. >> probably need some work, though. >> chased off smog the dragon, hobbits there. robert frank, appreciate it. so, before we go, let's try -- it's been a lot of bad news, right? let's try to end things on a hopeful note for stocks and maybe i'll start a new segment here today called sully's side up why not? after this month, one of the worst months store stocks, according to carson investment group, this year there have been seven septembers with the s&p 500 fallen more than 8%. 1974, '86, '01, '02, '08 and

'11. five of those times the index roared back a bit with a median return of 7% only in 2008 financial crisis to the s&p continued to fall. got a 16% pop in 1974. does it mean it will happen this year no five out of six, not bad history. wanted to leave with a little good news to feel positive we'll see you next week. "power lunch" starts now all right, thank you, sully, we appreciate it welcome to "power lunch," everybody. along with contessa brewer, i'm tyler mathisen nike says the greenback strength is one of the reasons why margins are under pressure there. so, will big tech be next? we'll talk to an analyst who is slashing estimates and cutting price targets. and too cheap to ignore, just like me. a veteran investor says the bear market is growing tired and he's