farmer jim, finally to you >> scott, if i can get my mind off of having a big mac for lunch, my final trade is boeing. i know where it's been, but you've got to respect the fact that it's up 15% over the last few weeks. ask yourself why there's a lot going on there >> harker, he was hawkish, stocks are now mixed i'll see you in the o.t., "the exchange" is now thank you very much, scott welcome to "the exchange," everyone i'm dominic chu in for kelly evans today. here's what's ahead. bond yields are rising, again. the ten-year back to 2008 levels, the markets not minding it so much right now, but can rates and stocks keep rising together and for the second time in two months, the uk is looking for a new prime minister this isn't just an overseas political story, though. it was the economy that cost liz truss her premiership and the policies of the next prime minister could have a big impact

on the u.s. and the rest of the world. plus, investors getting a lot of earnings reports to digest we'll get you ready for snap and verizon and csx. that's coming up in earnings exchange let's start with the markets they've lost a little bit of steam. as you can see right now, it's a mixed picture for the s&p 500, dow, and the nasdaq. the s&p is actually red, down by about seven points, two-tenths of 1%. at the highs of the session, we were up roughly 41 points. at the lows of the session, down 15 and you can kind of see we're tilting towards the lower end of things right now the dow industrials up about 0.2%, just 36 points and the nasdaq composite, just about flat on the session. we'll see whether or not there's any kind of momentum to be had here this is all following headlines from the federal reserve's patrick harker saying that he and the fed are trying to slow down the economy to curtail inflation. he also expects fed policy to

stay restrictive for a while also watch what's happening with tesla, in the red, but off its session lows profits coming in slightly above analyst expectations, but the company did cut its full-year growth forecast. tesla shares right now off the lows, but still down 6%, $208 and change right now the social media stocks, getting a boost today, ahead of that big earnings report after the bell from snapchat parent company snap ink right now those snap shares up about almost 1%, pinterest shares up about a 1%, and big gains, meta platforms, the company behind facebook and instagram. metals and mining stocks getting a nice bump following a strong beat by steel dynamics you can see there, alcoa, steel dynamics, freeport mcmoran, all surging on the back of those results. and then alaska airlines, falling, after surging fuel costs weigh on the company's bottom line. we will speak with alaska's ceo

coming up at 1:30 p.m. eastern time right here on this show phil lebeau, a great interview coming up there. be sure to stay tuned for that let's now turn to the fixed income markets yields across the curve sitting at multi-year highs and showing no real sign of slowing down the ten-year treasury note yield hitting at a 14-year high, climbing 150 basis points or 1.5%, from its august 1st low of 2.6% it's been a pretty big line higher, you can see there. 4.19% the last trade there while two-year note yields sit at 1.6%. they've seen a similar trajectory from their august 1 close of just under 3% and we're now just shy of 4.6% the two-year sits near a 15-year high but bond king jeffrey gundlach thinks the route may be over tweeting yesterday, he sees yields peaking, saying there might be signs of yield increase exhaustion so for more on that treasury market trade, let's bring in brian weinstein, he's the head

of global fixed income over at morgan stanley i wonder, though, 4% plus yields for not just the two-year, but the ten-year it sure seems attractive to somebody who remembers seeing 1.5 to 2% yields so can i just buy in right now and lock in those yields or is there still better yield to come >> by the way, not too long ago, right 2.5, on the chart you just showed yes, i think you can buy it. i think what you can't expect is to make money right away in other words, we're not going from 4.19 to 3.19 next week. the ability you're going to earn and to ease into yields is good for investors, but hard to call a bottom given that traditional buyers haven't shown up. >> what exactly would be the biggest concern that you have. we know that the economic data has been showing it might be backward looking we have upcomings for what rates are going to be. so if you were to look at the interest rate complex overall, what's the biggest worry that you have

why could rates still continue to go higher and bond prices cheaper? >> i think there's a couple of things to worry about. one is obviously the fed, right? they're on a mission, they want to fighten financial conditions. they don't want a big rally. you don't have any tail winds coming for you they may slow down the pace of tightening the other one is japanese rates. i know it sounds a bit odd, but japanese rates being pegged at 25 basis points, it's getting harder and harder to keep that peg. if that market were to break and volatility increase again, you could get a disorderly move higher on interest rates zplp the treasury side of things is getting focused on quite a bit here people have been -- investors have been seeking yield elsewhere besides the treasury market they've found it, for the better part of a last decade plus in things like investment grade corporate credit, right? so it's closely linked to treasury yield moves and again, yield hunting in places like high yield, which don't just factor in rates, but also factor in credit risk, as well so are those parts of the market

attractive right now >> listen, i think our long-term basis, yes, it's interesting that the higher quality things like investment grade, high-quality munis, treasuries, mortgages, have done worse than high yield as you say, it's a duration move so i think as you're building your income portfolio, you can look at high-yield leverage loans, but the cheaper parts of the curve, the cheaper parts of the market are investment grade, treasuries, mortgages, more traditional safe, higher duration assets. >> as the rate picture evolves, what are your expectations for how the fed plays things out, so to speak, over the next couple of quarters here we've heard a number of fed heads, fed regional presidents come out and predict where they think rates are going to stop, maybe where they end up going, where the terminal rate or the ending of this campaign for rate hikes could be in your mind, what do you think it is? >> so i think the fed has too concerns the first is terminal rate i think that gets to $4.75 or k $5 the market took a while to get

there. the second part is pace. going 75 basis points a meeting is too fast, it's too much they have caught up as much as they need to they're going to get close to that rate by the end of the year and they have to get the markets ready for a slower pace. they want to do that without convincing the markets they're going to ease or pivot, so they immediate to stay hawkish and slow down. i think the markets will overreact to that, but i do think it is one of the next big things to watch for. >> so if that's the case, and the pace is the concern, what exactly then would be the strategy that you would employ, if you were a fed policy maker on getting people ready for increased rate hikes, but that signaling at the same time, those increased rate hikes at a slower pace doesn't mean necessarily that you're going to stop anytime soon. >> right listen, they're going to have to be creative, right they'll have to use the fact that cpi is a lagging indicator. at some point, they'll have to go there not yet. they've already missed with a

transitory argument. but they'll tell you that m mathem mathematically, they can't go 75 forever. as they approach terminal, they'll give us some data points and it will give them a chance to calibrate rates keep raising them, slowly, but get away from this idea -- some people think they could go 00 basis points, this meeting they immediate to get the market away from them they don't want to overreact when they're this close to the terminal rate. >> thank you very much for the thoughts we appreciate it here. we've also, folks, by the way, got concerns about inflation and higher rates continuing to way on stocks and bonds overall. and while our next guest says though headwinds won't disappear overnight, he sees two tailwinds on the verizon, as well, and three names on his shopping list to whether those cross winds joining me now is kevin man, chief investment officer of management, it's hard. it's a scary market. nobody thinks we're at an absolute bottom yet, so what makes you feel so constructive

>> well, i do feel there are two specific tailwinds that may be lift stock prices higher by the end of the year. and just to piggy back off of your prior guest, i do believe that the fed may and will, actually, raise rates by only 50 basis points after their december meeting in other words, slow down the increments of which they're going to be raising interest rates. why is that important? well, signal to the market that perhaps we've now reacheded cautiousness, and by extension, peak inflation and going back to 1927, dom, history shows that stocks rise on average 11 1/2 percent per year in the year following peak inflation. i don't want you to misconstrue that that i believe that inflation is going away overnight. it's not i'm not suggesting that the fed will stop raising interest rates. they're not. i'm also not suggesting that the short-term boy scouts of volati are behind us, they're not

if the fed as low as down the increments of their interest rate hikes, that will signal that perhaps the worst is behind us with respect to the magnitude of these interest rate hikes and then, of course, there's the midterm election and that's the second potential failing that we see, dom >> why a tailwind? just a seasonal factor midterms are just generally good years, so we have this idea that valuations are already depressed in that you get a seasonal kind of tailwind in what's happening with the midterms? and that's why you feel so good about things >> yes and yes so, going back over the last 60 years, stocks have risen on average 16.5% per year in the 12 months following midterm elections. that outperformance is even more pronounced in the three and six months following midterm elections. we also know that generally, a divided government bodes well for the stock market and it appears right now, if the polls are correct, that we will have a divided government coming out of these midterm elections so, the outcomes of the midterms

and the fed turning slightly less aggressive with respect to the pace of their interest rate hikes are too tailwinds that could lift stocks higher >> and by the way, lifting stocks higher is a tough task now, because the sentiment seems to be downright negative and we just want to call your attention right now, viewers and listeners right now to the fact that the dow has just now drifted into negative territory, albeit, slightly so again, losing some momentum right now. if you take a look at the dow industrials, if you take a look at the s&p, the nasdaq has been the epicenter of the downside volatility where, exactly, then, do you position what kind of stocks do you want to own, given the sell-off that we've seen that could at least protect you from some more downside while still giving you the possibility of upside gains? >> great question, d oom we've been suggesting that our client considers a barbell strategy a barbell strategy that combines growth stocks and value stocks and incorporates a little bit of defensive positioning if, in fact, the fed goes too far and

remains too aggressive so one name in each of those three categories that we like and do hold ear at smarttrust, from the growth side, we like amazon amazon year 30% year-to-date it's hard to imagine that they'll stay down for much longer citi picked them as one of their top picks for both a soft and a hard landing on the value front, we like abbvie recently acquired aller gen, and we believe that their 3.9% yield makes them an attractive play in a sector we really like in economic slowdowns that being health care and the final one, also from the health care sector and that defensive positioning element is merck. merck, of course, as a yield of 2.9%, a p\e of just 14, and they have a lot of cash to spend and we would expect them to start d deploying that cash sometime soon >> so i get the barbell.

you've got the growth orientation on one side, the more value defensive side with the pharmaceuticals and biotech on the other i wonder, why you wouldn't want to at least, from your standpoint right now, kevin, wade into names like, say, hypothetically, meta platforms or netflix we saw a massive move higher there. could sentiment be shifting there? what about names like apple, microsoft, alphabet. the parent company of google those megacap tech names have been leadership out of big kind of down moves over the course of the past decade plus why do you not have as much faith in them now, given current market conditions? >> yeah, in fact we saw from ibm yesterday that some of these large-cap technology names may actually surprise, as ibm beat on both the top and bottom line in the third quarter earnings. two names that we actually hold in our portfolios here at smart trust. but we have to look through to the strength of these companies' balance sheet. do they paid a dividend? are they well positioned to withstand a period of economic slowdown that's going to lead up to and through perhaps a longer

recessionary period that a lot of us thought about a year ago and that's why we like those other three names that i spoke about earlier, as we believe that they have strong characteristics relative to their competition, strong balance sheets, and also, the ability to grow throughout this economic slowdown. >> kevin mono's calls. amazon, merck, and abbvie. thank you very much, sir we appreciate it >> my pleasure coming up on the show, alaska airlines moving lower as higher fuel costs hit the bottom line, but the company is highlighting one factor that makes it an outlier among the major carriers we'll tell you what it is and speak exclusively with the chief executive about his outlook heading into the peak holiday travel season. but first, a crisis of truss, if you will, in the uk, with the prime minister resigning only 44 days after she took office, becoming the shortest-serving leader in britain's history. who could be next in line and what does it mean for investors? we are digging into the

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we have all three major indexes now in negative territory. the dow industrials down marginally, about 16 points. the reason it's important, it's generally been positive pretty much all session it's now drifted into negative territory. the s&p 500 down 17 points, about half a percent to the downside the nasdaq composite down by about 1.25%, 10,658, the last trade there. here are some of the bigger movers this hour lam research is beating estimates on the top and bottom lines. that strength overshadowing the chip maker's warnings about restrictions on imports and exports out of china shares at one point were having their best day since april of 2020 on the flip side, all-state is the worst performer in the s&p, after pre-releasing some of its results, saying that it expects a net loss of about three quarters of a billion dollars in the third quarter, mainly due to the impacts of hurricane ian that stock is on pace for its

worst day since march of 2020. if you take a look at some of those notes on the s&p 500, the nasdaq and the dow, it will be about whether or not we can see any kind of upside momentum sustained for those, given the catalyst that we still have in terms of earnings season remember that we still have quite a few reports and a lot of commentary to parse through, we'll keep a close eye on those earnings by the way, stick around for earnings exchange later on this hour more on those key reports coming up later on. after just 44 days in office, liz truss resigned today as the prime minister of the united kingdom, makinging her the shortest-serving prime minister in british history and the third conservative leader pushed out of office in just the past three ye years. her brief tenure marked by turmoil in england's financial markets and best represented by the sharp sell-off in the country's currency the british pound. that last month, the pound fell to a 37-year low and gilt

yields, their version of treasuries, announced the wide u.s. cut in half a century which were widely criticized by the international monetary fund and members of the prime minister's own party. the drastic move in those gilt yields forcing the bank of england to intervene in the bond markets to prop things up. truss then fired the finance minister and largely ditched her economic plans before being pushed out of party herself by her own party. your next guest says the turmoil in the united kingdom is not yet over for more, let's bring in jilian tett, editor at large of the "financial times," the ft. jilian, this has been one of those things that we've watched play out like a train wreck in slow motion, but there's been a very visible judge, jury, and you could argue executioner in this, and that's the financial markets. >> the financial markets have

been very crucial in this story. in fact, you could even say that the bond vigilantes are back you know, the old james carville thing. i want to come back as a bond market that's true of the uk. and here's a really fascinating something. a year or two ago, what you've seen happen in the last few weeks, as this turmoil has erupted, is british spreads have blown out to be ow par with liquidity spreads for a while. and britain's reputation for being boring and echo nocr acc technocratic incompetence has gone out the window. you have political turmoil, financial risk, policy uncertainty. all the things that investors you'd to associate with italy, but sadly britain hasn't got the good food and wine and sunshine. >> so maybe the best way to look

at this is through the lens of those financial markets. we talk about the notion that they really gave the verdict those unfunded tax cuts putting stress on the ability's to pay thi things but wasn't it in your mind the pension plan issues, the possible stress in the uk that really precipitated a lot of the political pressure brought to pear on the truss government >> absolutely. almost nobody emerges from this story with a lot of credit and the reality is that the pension funds have developed a trading strategy in recent years, which is complex, but essentially was predicated on this idea that interest rate were going to stay low for a long time, and they could leverage up their bets on that it's worth stressing that point, because, of course, they're not the only institutions out there in the financial ecosystem who have also bet on rates staying low for a long time, and taking leveraged bets on that

but essentially, what happened was that when the interest rates started to gyrate, as investors digested this $45 billion hole that was going to come about as a result of the truss tax plans, the pension funds were hit by this incredible boomerang effect, it got worse and worse they had to sell gilts in a hurry, and you began to get the makings of a very nasty downward spoil. the bank of england is at fault for not seeing this coming the pension funds are definitely at fault for taking these ridiculous bets. but at the end of the day, no one should lose sight of the fact that the trigger for this whole problem was this very unwise tax package, which liz truss' government tried to announce, and now they have to do a complete u-turn on and rip up >> let's look forward. we have the current chancellor of the exchequer, jeremy hunt, who was seen by many as a

possible prime minister candidate at one point during the process over the last year or so. and then you have ritchie sunak, who is also part of this process, as being viewed as a possible next prime minister what exactly then plays out in your mind, in terms of the leadership debate and the leadership selection process and does this mean that we have bigger general elections sooner than we had thought, because of all of this political turmoil? >> well, perhaps the best way to frame what'sgoing on, which is very relevant to other markets, not just the uk, is that this is a struggle between the populists and what i call the technocrats. people who run in a more tech k knowic, boring, sober style. in essence, boris johnson was a populist, liz truss was a populist the package that came out from her government was very much a populist package what you're seeing right now, though, is the revenge of the technocrats. jeremy hunt is a very sober man

who can count and add up he's never going to win any prize as for charisma and glamour, but he does at least have the credibility of the markets. ritchie is definitely the market's favorite candidates, because he does command a lot of fiscal authority he was chancellor for a long time they're not the only candidates in the mix we have other people like penny mordant, so you could see the populists rear their heads again. and of course, the big drama of the last couple of hours is that boris johnson has said that he wants to throw his hat back in the ring again the problem with that, he faces some pretty embarrassing inquiries about the scandal that brought him down last time so manytories, who are the one who is will vote on this, don't want to have yet more scandal and drama in public. but as we go forward, this issue between populism and technocratic rule is really

important to watch because, of course, in many ways, this sounds a bit familiar to anyone sitting in america right now or other parts of europe >> all right political drama and high stakes for sure gi gilliette tett can csx's latest results help them turn things around we are back after this

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>> ben, thanks for joining us today from alaska's headquarters in seattle, washington let's talk first off, the third quarter great numbers as we've seen from all of the airlines. but the cost component, i think that's an interesting element. you guys looking into the fourth quarter and going forward with the new pilot contract, is your cost, is it at the high-water mark, or is there concern from investors that you think is, you know, maybe not warranted, that this is going to increase over the next couple of quarters? >> yeah, good morning, phil and dom, good morning from seattle yeah, it was a great third quarter and it was a great record revenue quarter for us. and a 15.6% pre-tax margin will definitely lead the industry what i'll say on the fourth quarter, yeah, i mean, with labor deals, we got five labor deals done in the past six months, which i'm really, really happy about. and we got this one-time transition cost with going to a single fleet 40 airbuses are going away and we're bringing in a bunch of new

boeing airplanes, transitioning 500 airbus components to the platform but to answer your question, we have a pickup in costs in the french quarter, which was in our guide. as we head into 2023, our unit costs are going to come down relative to 2022 >> and you've got a 23 -- what, a 23% raise for the pilots you've also locked in a labor piece. how important is that from your perspective, that you can say, okay, now we know where we are with our unions, and this is where, as we move forward in '23, where we're at. >> oh, you're spot-on, phil. this is a competitive advantage from our viewpoint getting a deal not only with our mainline pilots in alaska, our regional pilots, three other unions, you know, this was a deliberate strategy of ours, all through 2022 and we're really happy we got magnificent employees who are bringing up their wages to market and recognizing their contribution to our success and we'll have a terrific year

we'll have a profitable year with high single digit pre-tax margins and we want to make sure our employees get recognized for the success of our company through their contributions. >> and ben, it's dom here. i wonder, phil has been doing a lot of reporting with regards to the business plan changes, some airlines are making with regard to putting more capacity and higher-priced seats, premium economy, maybe business class. is that something where you think will be trend-like for the entire business or will certain carriers still kind of keep that low-end side of things and that tilt and what about your airlines, specifically >> well, we're seeing -- it's a great question we're definitely seeing an increase in our premium class bookings so, just to give you a reference point, from 2019 to this quarter, 28% increase in revenues in our premium cabin. so we have a first class premium, our premium cabin, and our main cabin and so, i think it's a carryover

from covid, to be honest, where people wanted more room, and i think once they experienced the premium cabins, they enjoyed it, and for the relative upgrades or the -- just the buyup for the premium seat, i think they're enjoying the extra seats and the amenities that go with it. i think that trend is going to continue >> ben, it's phil again. you've got several 737 maxes on joerd with boeing, including the max-10, which is not yet certified. it won't be certified before the end of the year. and as you know, there is the requirement that is currently on the books in washington. that you're going to have to maybe perhaps change the cockpit configuration, how the cockpit works with pilots, if there's not a waver that is granted. have you talked with any lawmakers in washington and said, look, this is essentially the 737 max. let's get this waver in place, so that we do not have to go through the a longer certification process, a change

in a certification process >> you know, phil, that's exactly the strategy and i'm with you i think from a safety perspective, you know, the platform, having similar cockpits is the way to go with the 737-10 from our perspective, you know, if the dash-10 doesn't get certified, we can all settle back to the dash 9 max, which is the platform we have right now, but the dash 10 airplane would be a terrific airplane for our fleet. we have a-321s that we're getting rid of the dash 10 max would have the same number of seats as a 321. it would be a one for one replacement and we would grow that dash 10 fleet it would be great for boeing and great for the u.s. economy >> what does your gut say? do you think washington makes the change >> you know, i think -- i'm optimistic they'll get there, phil i think the dash 10 will get certified. and i'm hoping that that's where we'll land at the end of the

day. >> ben, ceo of alaska airlines joining us from the company's headquarters in seattle, on a day, thank you, ben, for joining us dom, it's a day where they beat on the top and the bottom line, but look at a number of the airline stocks today, including alaska, they're trading lower. despite another impressive airlines earnings report for the third quarter, we're seeing some pressure on those airline stocks today. dom, back to you >> phil, ben, thank you very much for that. we appreciate it still ahead on the show, mortgage rates climbing yet again today. we'll get the latest numbers and what that means for the housing slowdown and the market overall. that's all coming up next. what if you were a global energy company? with operations in scotland, technologists in india, and customers all on different systems. you need to pull it together. so you call in ibm and red hat to create an open hybrid cloud platform. now data is available anywhere, securely. and your digital transformation is helping find new ways to unlock energy around the world.

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welcome back to "the exchange." americans feeling the pinch adds inflation sits at near 40-year highs, but rising costs may actually prove to be a benefit, yes, a benefit this tax season so robert frank joins us now with more on this story. please take us through how this will benefit my taxes. >> some rare good news from the irs. every year they adjust the tax brackets for inflation this year, those brackets increased an average of 7% that is the biggest increase since 1984

the top rate of 37%, that kicks in at $694,000 next year for joint filers all seven of those brackets will have higher thresholds and because wage growth is now at about 5% and lags inflation, some taxpayers will actually see a lower effective tax rate so take a taxpayer earning $750,000 this year they would owe about 212 in federal income taxes, not counting deductions and everything else. say they get a 5% raise next year, they earn $38 tho,000 morn pay $10,000 more in taxes. that is $5,000 less than they would have paid under today's bracket, so they get an effective tax cut of about $5,000 other parts of the tax code increase the standard deduction by $1800, but the high end, the estate tax exemption rising by almost $1 million to 12.9

million. >> leave it to to you to find the silver lining in this inflationary story and how it could benefit taxpayers right now. can you take us through the broad strokes of the methodology, at which they kind of arrived at this adjustment to tax brackets and rates how do they get to that number from the inflation number to where they are now >> so the interesting fact is, during the trump tax cuts, it used to be just regular cpi that the irs uses the trump tax cuts changed it to chain cpi, which is complicated, but results in a lower adjustment that helped pay for the corporate tax cuts, because, because it resulted in lower adjustments, ie, more revenue. the adjustment actually would have been higher than 7% had it not been for that change in 2017 it's only about a quarter of a percent. and 7% is still good, especially if your wages aren't keeping up,

but it would have been even higher had it not been for that -- >> let's put all of this together we learned that the social security cust of living adjustment or cola is going to be the highest that we've seen in decades we've got tax brackets basically increasing, so that you may not necessarily bump into some of those levels again what does that then say about the environment in which some of the middle-to-lower class americans are going approach their tax season versus the ones who are on the wealthier side of things >> on a dollar basis, the wealthier are getting more but on the lower end, $1800 additional in the standard deduction is real money. i mean, $1800 extra. i mean, now the bad news, why this is somewhat of a hollow victory for many taxpayers and consumers is they're still not keeping pace with inflation. it means that their wages, if you're getting a tax cut, it means your wages are still not keeping up with that 7%. and if they are, it means you're basically paying flat income tax. so, again, a bit of a pyrrhic

victory, but still better than the alternative. at least the irs does adjust it and at least it's a good number of 7%. >> robert frank with the latest on the tax code, thank you very much >> thank you still ahead on the show, at any time soaring today on the back of strong results will verizon follow suit we've got the story and the trade on that telecom giant coming up. and if you're looking to buy a home, it just got a lot more expensive to do so why, explained, we're back in two. a kohler home generator never misses a beat. it automatically powers your entire home in seconds. and keeps your family connected. with a heavy duty commercial grade engine and no refueling, even when the power goes out, life rocks on. right now get a free 10-year extended warranty and up to $750 off. wait, i don't do tai chi. i

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point today to what's happening with the market right now. the s&p is down 1.5% it's off about one third of 1% coming up, verizon, csx, and snap on deck for earnings. snap the first of the social media names to report. the question is, will it set the tone like last quarter as the slowdown in advertising pressures the entire industry. we'll have the action, the story, and the trade on all three stocks you see on your screen there in earnings exchange it's coming up next after the break. apple business essentials so you can easily manage your team's devices. on the network with more 5g coverage. only from t-mobile for business. fsd pharma is developing new treatments for neuro and inflammatory disorders. in a breakthrough discovery, fsd pharma recently demonstrated positive effects with their drug

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welcome back to "the exchange." earnings season in full swing and results so far have been stronger than expected can that trend continue for the likes of csx, snap and verizon we'll give you the action, the story, and the trade for all three in earnings exchange right now. first uh, csx reporting after the bell today shares are lower today and down about 26% this year. but the transportation giant has moved higher after three of its last four earnings reports frank holland has the story and

david katz, matrix assets adviser chief investment officer has the trades frank, we'll start with you. >> you mentioned that ccsx is down more than 20% year-to-date. that's basically since those rail strike fears were at least, you know, delays a final deal still pending, but it looks like it's on its way. revenues are supposed to go up 13 to 14% respectively but of the most important numbers operating ratio. it's an efficiency metric. the lower, the better. the estimates forecast a quarter-quarter increase something to watch this stock can trade lower on an operating ratio, that's higher than expected. after that, the container business is very important csx gets about 15% of its revenue from ship containers with more and more revenue going to east coast ports. this is expected to be a beneficiary. certainly something to watch csx has seen its overall volume increase in recent weeks and after that, we're looking on the commentary from the call

from ceo jill heinriches what he says, very important and forward guidance, last quarter, csx guided for double-digit revenue growth. revenue is already up 25% in the first two quarters so my in first two quarters lot of questions they may raise guidance or put out more clear guidance as far as revenue >> union pacific >> probably a pretty good for union pacific, good numbers but more cautious guidance so stock is down. we think they'll have an okay quarter. throw in hurricane ian and this has created some issues for them because they're the most exposed from the big u.s. railroads. we think the railroad group is poised to do better.

csx for the longer term is a good trade >> all right, next up, we got snap also reporting a of the bell today, shares are higher more than 08% below their highs and on pace for their worst year ever, julia has the story here now. julia. >> the big question for snap whether or not it's going to show accelerating growth it couldn't give guidance, analysts are expecting 6% revenue growth down from 13% in the prior quarter the question is, what kind of insights snap gives, insight as to what's happening so far in the quarter, if they've seen any indication that ad revenue is picking up again and then of course there's the question of user growth and whether snap has been hurt by the popularity of tiktok, something we expect to hear from m meta about the question is how those a.r. ads are helping boost their

advertising revenue. one reason we're watching these snap numbers so carefully it will give us a sense of what to expect from meta and others. >> what do we think about snap >> the company no longer is in bubble valuation territory because it's down 80%. however we do think it's the weak player in the group we do think it will give some insights into advertising in the group and meta and google. our preferred stock would be the meta or google, muchless speculative, good upside, much less downside, so we wouldn't get involved in the company before but we do like the group. >> finally up on the earnings exchange, verizon reporting before the bell tomorrow, it's higher today and on pace for its best week in july and at&t reported blowout earnings before

the bell today will verizon follow suit the at&t trade probably the big tail wind. >> at&t beat on those key subscribers numbers, the question is whether they'll turn things around and follow at&t's in foot steps or tell a different story. >> at&t or verizon >> well, comcast in a similar group but in terms of verizon we wouldn't reproof at&t. at&t gained subscribers. we're a little bit worried about this quarter as well, stock is really cheap, pays a good yield. >> of course comcast the parent company of this network here at cnbc thank you very much. we've got a news alert on mortgage rates the latest reading

diana? >> dom, taking a toll on the housing market, 15 basis points to 7.3% according to mortgage news daily, about a 22-year high, mortgage rates loosely follow the yield on the ten-year treasury, we started this year at 3% so if you're buying a $400,000 with 20% down your monthly payment now today is close to $900 it would have been just in january, that's why home sales are falling, september reads from realtors. dropped for eighth straight month close to 24% lower than this time last year. they are actually falling month to month more than usually do because of these higher mortgage rates. >> we'll talk more about that housing market next up in "power lunch," keep it right here still ahead on this show the dollar index up more than 17% this year and that's having a big impact on earnings, w hothe

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welcome back we want to get one more thing going before we go here today and that's the the rally in u.s. dollar, lower today but it's been on a tear as of late, let's get out to how they're adjusting. >> another fed official patrick harker is suggesting rates are heading even higher. on track for its best year since 1971 they're betting the u.s. currency goes even higher, citi writing, we find it hard to paint a bearish picture, the

dollar index is currently traded at 112 sets to remain aggressive in the midterm. your end target for the dollar, 115. now every time the greenback rises 10% it shaves off three points off of s&p 500 earnings and a 50-basis point drag on gdp. netflix earlier this week saying their appreciation in the dollar this week will negatively impact full year 2023 revenue by roughly $1 billion dom. >> now which big companies are expected to sif phone the negative. >> the technology sector which buy all accounts has the most exposure the most vulnerable to

a stronger currency, we have names like amazon, microsoft, meta, all set to report next week and they do have that global footprint, so expect these major companies to cite the dollar big question, are they hedging the dollar >> all right, thank you very much. that does it for us here on the exchange i'll be joining morgan brennan in just a few minutes for "power lunch" that starts right now sure does, dom here's "power lunch. a growing red wave, inflation is the top issue as the midterm inches closer. housing hurts, sales hit a ten-year low, mortgage demand falling to 25-year low we'll speak with a prominent economist who says there's more housing pain ahead and t