morgan brennan. >> hi. >> nice to have you here i know you've been back on your main show, but first time here in a while welcome. >> thank you the minutes are about out in about 12 minutes they'll look for hints on when the central bank might pause the rate hiking campaign. >> and just a quick check on shocks, flirting with the flatline, but let's guess right to steve liesman. >> minutes of the federal reserve's september meeting showing that many participants stressed the niece for the fed to keep tightening even as the labor market slowed. they said the cost of taking too many action outweighed the cost of doing too much when it came to flighting inflation once a restrictive level was reached, there was general agreement it would be appropriate to maintain that level for some time.

a sizable portion of the economy have yet to show response to tightening even while some sectors had shod weakening labor market is very tight inflation was declining more slowly than had been anticipated. maybe a few nods to the dovish side, but very subtle and it would be appropriate at some point to slow the pace of increasing, but not necessarily telling us what that level would be when the federal reserve would stop a few others, inflation pressures we're sees gradually in coming years, certainly high in the economy, or the economic outlook, but risks to the up side when it came to inflation they want wide wage/price spiral had yet to develop, but it is seen as a possible risk. the european recession, china

slowdown, as well as the russia/ukraine war, one other note the fed staff said liquids conditions in the treasury and mortgage markets remain low. we talked a lot about that, so pretty much a hawkish fed reflecting the statement or reflecting the press conference of the fed chair with additional concerns tyler? >> steve, stick around let's bring in bank of america senior economist as well as rick santelli is there anything that surprised you? it certainly sounds like fly, hawks, fly. >> the fed is focused on bringing inflation back down to target i would talk it one step further. it's not a matter of tightening. it is a matter of tightening

precisely to slow the labor market down. they need to keep going until they brake the labor market. that's what it's going to take to bring wage inflation down and that's what it takes to brings services and inflation back under control, because services are very labor intensive i'm going to ask rick this question, and then back to you, and steve as well. there's concerns about a hot wage market and wage price cycle. is that the principal cause of the infelix we are experiencing right now? i realize it's one of them, but it seems like we have forgotten -- forgotten that an influx of liquidity took place in the years immediately before this inflation we had incredible fiscal stimulus we had tax cuts, a huge amount of spending, and we had a fed that is gassing it by buying

securities and sending cash into the marketplace. is this liquid driven or is it wage driven more what do you say? >> i think it's more liquidity, but there's a wage component the issue, tyler is the fed will always seem to side with the wage argument in my pin, but they need to be careful. if we look at the last report, month over month, average hourly earnings were up 0.3, and year over year up 5.2 why do i bring that up 5.2 is definitely making a fall from the march extreme of 5.6, and just in july, we were up 0.5 on the month over month. i see some of the wage pressures mitigating to some extent, but you're right there's two areas that will be super sticky i think wages ultimately, but food and energy as well.

i think the latter -- listen, i'm not going to get into a political debate let's say we get on track somehow and we'll build refine rinse and bring enough to the marketplace, but that isn't going to solve what's going on in europe or what's going on with asia. you'll see a global fungibility factor to keep those prices much higher i think global slowness will call many entities, whether it's the u.n. or other central heads of state to point to the glaring issue -- the dollar. that's playing havoc with outside economies. >> adiche, let me get you to react to what rick just said, bring in the dollar, bring in the idea that, is it -- are we really suffering the pains of wage inflation

or are we suffering the pains of something of that plus something else, namely a vast influx of liquidity? >> i don't think the two are mutually independent fiscal stimulus injected into the economy and that are the spoked demand and supported the labor market recovery. now we have a red-hot labor market fuel by the strength in the demand, and that created price inflation. i don't think we need to think about the two independently. they have both driven wage inflation and price inflation. in terms of the dollar, that's probably a bit of a headwind for inflation, obviously, because it lowers imported price inflation. >> steve, i want -- to get your take on this as well specifically going back to the conversation we were having in terms of what was going to be key to watch from these minutes, which are backward-looking, and from which so much has happened

in the market since then, including fed-speak. the idea of calibrating the pace of tightening. is there an expectation, and i think about violation chair brainard's comments, maybe even evans', is there starting to be a splinters on how quickly to go from here and how data dependent to be in the process >> i don't think we have a splintering at this point. i think we have some people that are a bit more concerned about the overall effects of this than others i wouldn't say we have a splintering until we have people calling for either lower rates or outright for the fed to stop. >> reporter:, ehave been, who is being put in the dove camp, he was to go to 4.5, 4.75 do the math from here, 150-plus basis points from here i would hardly call that a dove. unclear where brainard stands on that, but i don't see brainard breaking off from the committee.

i do want to say one thing about the wage story one idea is because of the rate of wage inflation has lagged the rate of price increases, some people point to that that's not driving inflation overall. i think it's simplistic. i think it does drive a portion of inflation as employers try to rerupe some of the expenses they have lost. i think the important part of the wage story is that the fed is prospectively worried about it, there will be something that will end up dripping inflation in the future. ted in the minutes that a wage/price spiral has not yesterday developed, but there's a risk of one. i think the fed is pretty serious watching that. >> i want your thoughts on some of the data you're watching closely. obviously we have the ppi numbers today, and the core reading, perhaps in line with street expectations, but it does speak to the stickiness,

particularly in services obviously everyone is looking to cpi tomorrow high-fourth quarter sit data, what is it telling you about the inflation picture. is it something from your vantage point that maybe the fed should be paying closer attention to. >> i think it's exactly what we've been discussion, that inflation is sticky high, we could get relief on core of goods, but at the end of the day services make up a bigger share, and it's still very elevated in particular, shelter inflation, which has a big irwould this but it might continue at the 0.7% pace, which, of course, is very, very strong that's, you know, growing at a 9% annualized. that's likely to continue for a few more months. >> just finally, quickly, rick, the reaction we're seeing in the bond market, walk me through that, the fact that yields are

actually ticking slower here the numbers aren't big enough for me to say wow, look at this, but they are drifting a bit. if you look at the minutes to the july meeting, which came out in august, they were worried they might tighten too much, they might go too far. i don't sense that same issue in these minutes, so if anybody is looking to buy equities, purely from the standpoint of the fed at some point in the near future, standing down, i just don't see it. >> okay. that is the last word there. thank you, all so how do you invest, given the fed and economic

uncertainty? mark, great to have you on i pay attention to these names mark, i want your reaction to the fed minutes to what we're seeing in equities right now do tick higher on this news, another keep in mind, still well off the highs of the session >> i think i agree with what rick kind of concluded, which is to say, no surprise. there wasn't certainly anything in there, given the fed-speak that's been suggested to suggest there's any diviaition to this ward inflation at almost all costs, and so for investors, we continue to urge near-term caution until we get a couple more inflation prints that provide any evidence

there are leading indicators that suggest perhaps disinflation may be in the pipeline, the question is when it will evolved to influence the prints that come out or the core pce that enables invest aros to take some comfort in the fact that the fed may pause or at least conduct a dovish high -- but that's not anytime soon. >> so what does that look lie putting money to work? >> to you it means investors not taken an abundant of risks in addition, it means owning energy, but one that has the own idiosyncratic supports

healthcare is another sector we like. given the fact welcome plumb lower levels, particularly if by chance we see the -- evolved. >> what cheery thoughts we are having here. the other is thermofisher medical device measurement-taking devices, so on and so forth. this one is down 25% year to date what is going to turn thermofisher and the other defensive healthcare plays, what will turn them around?

>> i think, a really spans the biotech universe in terms of the medical tools, that sells across, and obviously the the likelihood that we continue to see some levels of merger and -- that need to defend against that will either develop, or acquire it, that kind of grown that need to pers. or on the other hand if we get regulatory relief in another month or so, perhaps opening up enormous amounts the cash they're sitting on. >> thank you, mark >> thank you pepsi's god pricing forecast and hiked its forecast

what other companies can say the same from steel to copper to lumber, input costs are falling, in some cases falling fast this is a good sign for the sector's margins and we'll look at norwegian cruise lines on an upgrade by ubs. ubs says the stock could rally 30%. more "power lunch" straight ahead.

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welcome back pepsi shares have an upbeat forecast the cfo on "squawk box" earlier said price hikes are critical to managing higher costs. >> it's a combination of, look, we invested in our brands. we're seeing good consumer response, despite the fact we've had to increase prices and we have a cost structure under control very well. so we delivered a superior result. >> so which other consumer staples still have pricing power. let's bring in chris kerry talk to me a bit about the pepsi report today it sounds like they're just doing fine, they're selling well, and they do have pricing power. people are willing to spend a few extra pennies on doritos,

chips and drinks pepsi results will probably stand out, organic sales are very robust. volume is down just 1%, and earnings up 10%. you know,despite a commodity environment which cut their operating profit by roughly 40% before pricing actions it's a significant commodity hit, yet it's still growing. so it's certainly impressive >> who else has what pepsi has >> part of that is because everybody is pricing when everybody is pricing, there is a lack of alternatives, and we're seeing that, but certainly relative to the inflation that pepsi has been seeing, the

pricing relative to how much value, seeing it's fairly minute pal, very impressive, part of the scale of the business, part of the dominance of the categories we're seeing high-level, and a bit less so outside of that space, but pepsi will just be at the high end up end of that the high end of -- -- 20-year average,ist 50% premium. staples will outperform, right it always does that so you suspect relative to the overall market, pepsi could be an outperformer, but we have a name

where valuation is actually at the high end, and earnings probably won't go up that much more, so what you need to call here is multiple expansion nothing wrong with pitchesi, it's just getting to the point on valuation in general, q3 earnings already a challenge. so despite that earnings will be okay, we're going into a season where they're going to be more relatively under pressure. >> put some names on the basis that you just said, which is that some of these other companies will not have the kind of quarter that pepsi had. and then conversely, which ones -- you have a neutral on pepsi, aroundly because of its valuation, i take it

>> well, look at eestee lauder, there's a company that's dealing still with china headwinds they could play on the in the upcoming quarter, but you have a same time that's trading, and trying to materially underearning, potential we have currency factored in i put that into one of those pans, so currency has to be factored in, and all of a sudden you have a stock that fits multiple compression those are the types of stories that probably don't become so obvious on q3 earns, because the need to go through the currency pressure first, but coming out of it, they scream more of a recovery play versus pepsi that's deliver fantastic results

all year have i interesting, chris. i enjoyed it thank you. after the break. merck agreeing to jointly develop a personalized cancer vaccine with moderna, which could deliver data by the end of the year plus the wheels on the bus go round and round, all through the grid we'll be right back. hi, my name is tony cooper, and i'm going to tell you about exciting medicare advantage plans that can provide broad coverage and still may save you money on monthly premiums and

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that don't ride the stock market rollercoaster. - [narrator] yieldstreet: private market investing. welcome back to "power lunch. with rights to the melanoma treatment. they're expecting results from a trials with key trudeau by the end of the year. merck is down slightly today let's get to bertha coombs. >> hay, morgan

thanks federal regulators will issue new cybersecurity requirements for some and i have ways systems after several airport web sites were attacked this week. they're also lettering to designate a cybersecurity coordinator and report cyberattacks. former president trump will have to answer questions until oath next week in a defamation lawsuit brought by a writer who said he raped her in the mid '90s a federal judge scheduled the deposition for next wednesday. trump has denied the rape. one of his lawyer says the case is entirely without merit. this year's genius grants have been announce they include a lath the fellows will accepted 800,000 over five years, which

comes with no strings attacked how to do the economy in space, morgan. >> oh, now we're talking that is an economy yet to be tacked inflation hitting nearly every industry, but it could be cooling for the industry set plus financial stocks across the board hitting, also asset managers we'll have our trader dig strough the names to find the be guys in today ace "three stock lunch. ind-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.

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90 minutes left in the trading day. we want to get you caught up on the markets. stocks, bonds, modities, also the declines we have seen in prices for key materials specifically, but let's begin with bob pisani with the equity reaction to the fed minutes. hi, bob. 3 to 2 advancing to declining stocks volume is on the light side. not an awful lot for the bulls to hang their hat on on the fed minutes, no relending on the

hawkishness, the ppi didn't help, either, we're expecting about 8.1 if we get a seven handle, that will certainly by a big help remember my general rule is 35 is a panic level it's unusual to see it remain that high. i think the key is this is an evidence of how skittish the market is you know it's an unusual day when cruise lines are the leader norwegian did an upgrade they were talking about significant improvements but they things have been ping-pong balls. here you see a really nice move up, all three of the big krein lines. i want to remind everyone, even though it's an up day, there's a lot of big lows out there. we're going to start with

jpmorgan on the earnings, many of the big money centering groups, 52-week lows, keycorps microsoft new low, kl a-10 corps, and the office reits, and, of course, the apartment reits, 52-week lows. where are we 3585 was the september 30th low on the s&p 500, and we have been bouncing midday, so we're off of those lows, approaches that september 30th low, but right now we are several points above that, about, oh, 15 or so points above that right now we'll see if we stay over 3600 morgan, back to you. now to the bond market where yields are moving lower. rick santelli is tracking the action rick, welcome back >> yes when we were talking about the minutes, you asked a great

question, how much are we moving lower in yields? well, we can in and out get a pretty clear picture we moved three basis points in 2s the minutes, listen, i didn't see anything super new, but certainly didn't see anything dove itch. a two-week chart of tens tens have taken off going into these numbers, but it's certainly leveling off now, especially with consumer price index tomorrow, many traders even up with the market. here's a chart of the ten-year uk used it closed today, which

means it's up 150% in yields -- i don't like to use pinches, but un -- unreal how it's moved. the bank of england has issues, assist it's a tug of war between tightening and easing. think don't seem continue to do either if you're outside the country, you are feeling the sting of a stronger dollar. morgan, tyler, back to you >> rick santelli, thank you. it's pretty incredible the charge falling for a third straight session. pippa stevens has the details for us opec said the world economy has entered, and ricin challenges. they cut their demand growth by

500,000 barrels per day. now forecast u.s. demand by just 460,000 barrels a day this year. brent crew at 92.92 for a lots of 1.8 percent down more than 14%, the canadian company partnered to buy newclear company westinghouse electric for 7.9 billion bank of america says the deal is strategically found and it's complementary to the existing business it as is negative reaction is expected to the stock dilution and a significant capital outlay >> pippa stevens, thank you. we're going to stick with commodities. seema mody is joining us know with that story.

hi >> we've seen a significant drop today's producer price index -- if we zoom in on industrial metal prices, they're fall out of a cliff down 5%. while comer is up 28%. shipping rates, 'we discussed, have traded down recently. which analyst says -- even speed up their deliveriessees. it will take a few quarters but they'll start to go the benefit in q3 the big question is, will

they lower reduction, or take advantage of lower commodity prices that, of course, will be a big part of the story. i feel like industrials, it's been a negative year, month for stocks, but it's outpurchases so far. >> yeah, of course a strong dollar is weighing on many of these commodities, but you did see aluminum spike earlier today. so the role that sanctioning could potential play here, as we have this conversation, i mean, you have names like alcoa that are trading higher, speaking to this industrial manufacturers story, actually trading lower, because, of course they're an end use of that aluminum >> well, morgan. president biden's national security strategy outlined today, if it's any indication of what's to come where president

biden specifically sells the god is for the u.s. to out-compete china and restrain russia, the idea of tariffs or bans on a key russian export perhaps shouldn't by unexpected. prices are looming, aluminum, alcoa. it reminds me of a conversation i had with the general electric ceo, not only are think trying to find short-term solutions, but also thinking about redesigning some of these parts long term, to if they can substitute it for another. >> all right seema mody, thank you. after the break, today's clean start. we look at a company creating backup power for local electric grids by using school buses. we'll explain. throughout hispanic heritage month, we celebrate our team members.

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you might have one of those portable backups for your phone but what happens when it's your local electricity grid when it needs extra juice? we have an answer with diana's continuing series. >> on some of the hottest days

last summer in beverly, massachusetts, the electrical grid was overstretched it needed help extra power, from of all things, electric school buses and a start-up that made it all happen >> so it helps or customers become good participants. >> it's called vehicle to grid charten, v2g a battery not in use can send it back to the grid, and can recharge itself overnight. it's the information software platform that makes it all happen that's what it did with highland school buses in massachusetts. >> we delivered 10 megawatt hours into the grid, and for the entire duration of the summer.

that's about charging when it's cheap, and selling centering back when it's most this is battery electric storage that already happens to be on wheels. >> reporter: a win-win for highland >> it helps local utilities immediate demand, but it also creates income for school districts. it makes electric cool buses more affordable. >> reporter: because the gus companies sell their tries back to the grid at a higher price than they pay for it during lower-stress hours. >> we're also to issue signals to the charger, less's take 100 kilowatt hours and push it back into the grid. >> investors are wire frame represent further, obvious ventures, congruent ventures, and tole funding so far, $10.1 million. and it's gaining ground quickly.

a partnership was just ace nounced when fort f-150 electric pickups can be used as backups >> so for public grids, you're talking about here, is it just school buses or can other vehicles be used to do this? >> reporter: you can use any vehicles, but it's best when you use fleets of vehicles they're also working with the postal vehicles. they're only used at certain times of days, so that can work. it works best when you have a lot of the vehicles to be able to charge the grid. >> sounds good dia diana, thank you. >> so fascinating. well, still to come, savings grace? financial stocks are struggling amid recession fears are there names worth buying on this dip it's the "three stock lunch" next y constructed. to go beyond ordinary etfs. and strengthen client confidence in you.

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welcome back time for "three stock lump lunch. they're all trading at knee 52-week lows, but there are some exceptions todd gordon, founder of new age

weft advisers, todd, great to see you. you're eyeing goldman sachs? >> yeah. i like the financials are expected to show a big but yet the sector in general is showing strength so specifically capital markets, goldman. three of the last four reports on average about 20% they're cheap. they're only trading eight times. expected to make about $37 total in 2023. a lot of volatility in the major asset classes obviously aside from equities, fixed income and comities and they're trying to restructure as a one stop shop there was a lot of fallout with this marcus robot investor they're trying to go after the consumer in terms of that wealth management

they have a private equity business, aco, which takes care of ceos of some 500 businesses kind of have an indebted wealth management to get into that if someone wants to go after that plus, it just continues to show relative strength. compared financials and relative to the broader market so i hold goldman personally >> let's move on to the asset managers you've got blackrock reporting tomorrow, but you're looking at ameriprise >> technically speaking, look at the stock, financials put in a low around july where the broader markets in june. it's 21% above that july high. so a ton of relative strength. the xlf, financials right at it, and the spys is right below it they have over a trillion in assets one of the largest branded advisers out there a lot of the revenues, 80%, come from wealth management, asset

management they're acquiring a lot of shops which helps their margins because just more assets with the same cost basis is good. they've done a ton of buybacks decreased the amount of shares outstanding by 50% in the last ten years. they're trading 11 times forward earnings their price to free cash flow is only 7.5 well below the industry average. blockrock, i think they're like 12 price to free cash flow and they have a very good, just financials are compelling and cheap valuation again. relative strength. >> final time. pnc hitting a new 52-week low in today's session. what do you think of the regionals? >> yeah, i don't see a big reason to own regionals compared to large cap banks there's not a lot of out performance where there traditionally is so i don't see the risk. the reason hold. pnc, i held this in my portfolio. cut it in may.

they're right at those lows that i mentioned. those july lows. so showing a lot of relative weakness it's got a 4% yield given so it's hard to argue against that. they're looking to make about 3.5 to 4 bucks a share there's concern about commercial industrial loans and the possibility of loan writeoffs. so loan defaults from private equity firms i've got to watch the report there. and they have a lot of consumer cash on deposit, which i think is going to leave possibly and look for a higher yield than what the banks are paying, which is not very much so there's risk there. watch that in the report >> such a key point. it's pretty incredible they're not paying more out to their consumers. todd gordon. thank you. >> up next, just because you're here, a space stock that one analyst says can fall back to earth. miteweluh"n o tw nus.

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...and charting a course to get there. sometimes the only thing standing between you and opportunity... ...is someone who can make the connection. at ice, we connect people to opportunity. - oh, the stock market is doing that fun thing again. news from the future: you're going to live through that about 10 more times! (laughs) no stress. i just discovered yieldstreet. they vet investments that don't ride the stock market rollercoaster. - [narrator] yieldstreet: private market investing. welcome back to "power lunch. it's time for a couple of stories that are catching our eye today. rocket lab shares falling after a bearish initiation by credit suisse rating stock underperform and giving it a $3 a share price target stock's down 3% now. firm saying space industry is highly competitive, even at $4 a share, it's expensive compared to its peers

>> i don't know this -- >> a very down beat 100 plus report >> i don't know this company, but i don't think of it as in the top three competitors in this world >> i would actually put it i would put it in the top group of competitors they are regularly launching satellites to orbit and they're building out a larger rocket now. they also have a growing and relatively robust, at least from a profitability standpoint, space systems business around satellites and making parts for satellites but again, we talk about speculative tech and rising interest rates, space stocks no exception. >> let's move on to shares of intel. they are in the green today, but earlier in the session, they hit a new 52-week low and really lowest level in more than five years this stock there you see it up 1% right now. reports came out today saying that intel may announce job cuts in the next couple of weeks

ahead of its earnings report on the 27th the company potentially looking to cut costs as demand for personal computers continues to decline. most directly amd. >> yes, amd, which has by the way, been taking market share in certain segments from intel. samsung was another one last week so inventory, a build up of inventory seems to be the name of the game. the question is going to be whether this is an early indicator of recession or global economic slowdown or whether this is kind of a reversion to the mean to pre pandemic levels with the pull forward we saw with some of these devices >> then you have the interesting phenomenon of a lot of these companies investing heavily. >> yes very capital intensive like space >> like this what we do here. and you've got a little bit of the tail wind of that $50

billion, the chips act we've got more than one hour left in the trading day. it's kind of the witching hour, i suppose. stocks have been trading in a range a little up, a rilittle down look at the difference s&p 500, just flat as you can get. nasdaq higher by nine points so a lot of action beneath the waves, but the waves right now sort of calm >> the waves are calm. energy is the best performing sector in the s&p. consumer staples are right behind it and pepsico, results there really fuelling the gain there. we get more earnings tomorrow. delta airlines i think is going to be one to keep an eye on given what we heard from united airlines today all those names are trading higher united, about expanding international routes then the upbeat pre announcement from american airlines yesterday. >> you would think the airlines would be doing really, really well because there is high demand for their product they have push through pricing

power. air fares are higher, man. >> for now at least. >> you've kind of got the pepsi phenomenon there thanks for watching "power lunch," everybody. "closing bell" starts right now. more uncertainty on wall street today as stocks search for direction ahead of tomorrow's big inflation report. this is a make or break hour for your money welcome, everyone, to "closing bell." i'm sarah eisen. take a look at where we stand now. up and down, up and down kind of day. there's the dow. the s&p 500 little changed doesn't tell the full picture because you have some groups doing really well today. staples up almost a percent, but then utilities, real estate and materials lagging on the day