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 the carnage will

continue into 2023. the morning gains have gone, the dow was up 399 points at its highs of the session right now the dow is down 48 points near the lows of the session the s&p is 3671. similar percentage boost for the nasdaq composite, 10619. utilities, industrials, financials are the worst performing s&p sectors and strong earnings from ib m&a t and t haven't been enough to support the broader market this afternoon overall as the focus remains on the treasury market and inflation, interest rates, the benchmark ten-year treasury note yield reaching levels not seen since 2008. the economy ranks as the top concern among voters as the midterm approach but a very big divide.

>> i want to show you three things from our survey, first, the top issues for americans second the division among americans on them and third who americans think is the best party to solve the problems. first of all you, cost of living, far and away 44% say it's the number one or two concern out there, followed by threats to democracy, hmm, which party thinks about this, followed by immigration, border security, crime, abortion, climate change, look at how far down jobs and unemployment is. followed by the war in ukraine has fallen way down. i want to show you these divisions because those numbers, really mask the divisions. take a look here these are top three issues for republicans, 51% of republicans say it's the top number one issue, but go back down for democrats, it's at 4% for independence it's at 22% top

issue for republicans. their second issue, cost of living, look at how much independents and republicans in agreement, democrats second. crime, much more important for republicans than it is for democrats. less so for ind pen dents as well top issues for democrats, you can see the differences here, threats to democracy, 46%, actually the number one issue, but for republicans, that number is 18% for ind pen dents a little closer to republicans on this followed by cost of living, abortion and climate change, not important to republicans at all. best party to address policy the gop has double-digit leads, bringing down inflation. dealing with taxes

r plus-11. federal deficit. this issue here, looking at out for the middle class to finally see where the democrats have an advantage but that plus-4 it was plus-18 back to 2018 so, let me come back and tell you that right now republican/democrat pollster, election only about the economy, they know it's not, it would be shellacking of the democrats >> there are other factors at play here and certainly people are going to turn out with midterms with these different socio-economic issues. >> note that jobs and unemployment are not a huge

issue. but republicans still enjoying a ten-point advantage even though the unemployment is 3.5%, whatever is going on, at least one thing is going right in this economy and that's the unemployment rate still not getting any credit to the biden administration, democrats for that. >> debate of what low interest rate policy does for the economy versus higher interest rates if you're a retiree those higher rates are good, they help you to fund your life without active retirement, on balance, are americans feeling better off because of higher rates or worst off because of higher rates? >> we have data on it. 47% say they're hurt by interest rates and 47 i want to say they're not hurt by it or have no impact, dom, to what extent t was that question that older americans have more fixed income their portfolios.

>> that's a good question. >> my dad, had a port polio that he reminded of a 24-year-old he had this crazy portfolio, he had good stocks, nike, he had no fixed income i'm wondering the extent to which people are on pensions don't have those portfolios anymore, you ask a good question, what you're talking about is return to that world where people are going to look more seriously at fixed income instruments s because there's return there, which can bring inflation down >> the simple reason, guys the simple fact is people are living longer they need more returns. >> but it would be -- i'm thinking the two-year note 4.5% right now. it doesn't seem that crazy unless it goes to 5.

but over a two-year period you can afford to take the loss if you have the time. i think portfolios are changing. some of the worst views about the stock market we've registered in the 14 years we've been doing this poll in terms of percentage now's a good time to invest, second lowest we've ever seen okay, steve, thank you all right, 4 states have senate elections and our next guest say the odds of republicans winning improves brian, want to get your thoughts of this idea of a red wave sweeping through both houses of congress, what are the data points you're looking at that suggest that and just as importantly if that were to happen what is that going to mean for the markets

>> so, polls similar to the cnbc poll that steve just described and analyzed, a poll last week people talking about their financial situation very negative, just the moves in the generic congressal ballots both realclearpolitics and fivethirtyweight they're in total agreement the momentum is in the republican direction. we heard over the summer that the democrats had a bounce, that was arrested right around labor day the cpi reports in mid-september of last week, inflation remains high, people are pessimistic in who they trust, which party they trust they're registering their views at least in polling data with republicans. i think there's this growing body of data and evidence that a republican wave is regaining

strength after it subsided a little bit over the summer. >> inflation and the state of the economy and how voters, the aspects hit directly their pocketbooks, what the key demographics that's going to decide these elections >> i don't know if there's a key demographic, challenge for democrats is that younger voters they rely on maybe less engaged certainly seeing some movement depending on what part of the country but some movement among hispanic voters toward republicans especially in the south, a little less so out west, definitely across the board. and how engage ready black voters and black men, they may be enough to turn some really close races in a state like georgia, so again, i think demographics across the board are tougher for democrats but i

would just point out a couple of examples where they have acute problems. >> i wonder as you take a look from strategy standpoint on what matters the most and what types of issues are going to swing states one way or another, what's exactly is going to be that pivotal set of issues that are going to really kind of change the outcome of this election >> well, i mean, it's gas prices, you know they did let up a little bit over the summer but they have resurged or started to spike back up over the past couple of weeks, you saw the announce from the administration this week about releases from the strategic petroleum reserve which i think is too little too late but there are cultural and socio issues at work, too, crime is a big issue and it's going to move voters in places like

pennsylvania, so, it's a combination of economic issues of gas prices but, you know, worries about crime as well. >> so, what does that mean, red wave manifest in both houses coming into next year, what does that mean in terms of policy approach and what does that mean in terms of market's reaction to that policy approach >> so i think the first reaction is a relief rally by the markets, i think markets rally on divided markets and lower growth rate in the level of spending, not lower spending lower growth rate, so that's the first market reaction, then for policy longer term because it's grid lock there are going to be fewer solutions coming out of washington, there's the he heightened prospect of government shutdowns because the two parties are going to have a tough time agreeing with each

other and the debt level has to be increased in 2023 probably the second half of the year, republicans will use that as leverage to get concessions but they see it as leverage so we could going back to, you know, kind of 2011-ish with the standoff over the debt ceiling we're not going to default but the market volatility combined with some government shutdowns i think we see a more volatile situation from washington in 2023 that kind of weighs on markets at given times. >> going to make -- would make for an interesting lame-duck session too. >> absolutely. coming up, the housing recession will get worst that's theout look from a prominent economist who will tell us just how bad it might get. plus, a retail bear starting to turn a look at the stocks he

says are in better shape now than just three months. and before the break, shares of allstate on a hit leading the s&p lower. the hiring process used to be the death of me. but with upwork...

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welcome back to "power lunch. new everyday today that the housing market is undergoing is massive reset. now existing home sales for

september falling to a ten-year low, marking the eighth straight month of sales declines, housing starts out earlier this week fell to its lowest level in more than two years, home builders sentiments at levels not seen since around 2012 with an exception of a brief drop at the virus pandemic mortgage demand dropping to a 25-year low, this is the average as 30-year fixed rate on mortgage soars to 7.37%. how deep a housing recession are we in? let's welcome in chief economist over at kpmg are we turnly in a housing recession or are we going into one? >> i think we're already in a housing recession the housing market is the most industry-sensitive sector out there, what's so unusual about the runup in mortgage rates is how rapid debt runup has been,

there's a lot of asymmetry in terms of demand when you have rapid increases in rates that's very important to understand these rapid increases have taken a toll on demand, we'll be seeing the housing market the worst performer in the gdp data as it comes out for the third quarter and continued drag from the second quarter on as we get into the fourth quarter and into 2023, we'll continue to see double-digit declines in home sales and in overall housing construction but as we get into next year you'll see the national pressure on prices and despite still-tight inventories. you're going to start to see a deappreciation in housing. lot of people are locked and loaded on those low mortgage

rates and they have a lot of equity in their homes, it has a wealth effect that i think will slow down the economy even further into recession and a much more broad-based recession take root as we get into the turn of the year. >> in this case here is the housing and real estate dmi a leading indicator for the rest of the broader economy and i ask that on this point the fed has hiked interest rates mark edly since earlier this year and they're starting to have an effect on real estate? >> that's the million-dollar question at this stage of the game the fed is clearly, you know at this moment in time lock and loaded in terms of another basis point like and potentially further after that i do think they'll have to stop around 4.5%

on interest rates likes. it's not clear to me that those won't have amplifying effects. we're starting to see some of the effects in overall consumer spending, consumer spending in the third quarter is running at its coolest pace so far this year with the pivot away from goods, housing related, to deal with the monotony of quarantine, into services and you can't replace services the same way of course you can, you know, holiday party cancelled due to the pandemic is not recouped and i think that's important as well we'll see more weakness as we get into the turn of the year from the consumer. >> i think about union pacific the ceo was on this morning, he talked about they're seeing a softening in terms of those consumer-focused goods they move on the rails, do we know yet

whether we're looking at the beginnings of a recession that the consumer is engaged in right now from an economic standpoint versus a normalization pre-pandemic to those spending patterns >> that's a great question and, you know, right now we're the still in a normalization and even though the consumer is really cooling off and slowing a slowdown, a pretty sharp slowdown in consumer we're seeing, 1% in the current quarter on an analyzed basis, so i'm worried about that, the third quarter, we're now in the fourth quarter already in october the world seems to be going awfully fast these days but it's important to remember that it doesn't take much for the consumer to sort fall on its back or flat line or go a little negative and have other negative aspects of the economy and investment which is sensitive to

industries, that's going to be the real one to drop in the business sector and in the drawdown in inventories and all of those things together are going to get us into a recession early 2023, late 2022, early 2023, that's not great, the only softening effect we have a shortage of workers and unemployment rate is so low it's not going to spike really high as long as the fed can sort of get to high level and stop or at least assess where they are and my own preference is they get a little sooner rather than later because i think going up at the pace we're seeing and amplifying rate hikes as it's happening around the world even though they feel pretty confident they're not going to break something in financial markets i think it's worth going a little

cautious >> from your lips to fed officials' ears, we'll see up next, semicircling consequences, there could be consequences for some chipmakers plus, the mississippi indicator. there's a new problem growing on the mississippi that could drive shortages as welasris en gher pceev

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shares of land research gaining today the company could be caught in the middle of the ongoing chip battle between the u.s. and china >> a loss of almost literally $2.5 billion for lam, and a

possible $400 million quarterly hit to both applied materials in nvidia that aim to choke china of its abilities to make chips lit cost these companies in loss revenue but what about the unintended consequences in other companies could stop using u.s. tools. few u.s. parts in their machines allowing them to continue shipping certain machines to china, business could shift to other countries. lastly if china can't make advanced chips they could focus on low-end chips making it hard for companies like intel to compete on chips a new bloomberg report says

chinese ministries are holding emergency meetings to address these curves >> thank you state of play in computer chips. a cnbc news update. happening at this hour, as an outbreak of ebola spreads through yuganda, as of tuesday, 60 confirmed cases and 24 deaths since the outbreak began last month. the risk to americans is low healthcare providers are being advised to remain alert of ebola symptoms. spacex launching a falcon9 rocket today that marks the tenth time the booster rocket has flown and the 46th mission this year from the kennedy space center, today's mission continues to spread its

broad band mission. president biden arriving in pittsburgh to promote the r recently passed infrastructure loss he'll meet with john fetterman for a closed door reception ahead of next month's midterm elections. >> thank you very much for the news update. ahead, the retail end of decline, retail getting hit hard by inflationary fears. down 34% so far this year. lus, today's three-stock lunch, we'll take a look at names that you could get a discount on. "power lunch" will be right back on your goals, whatever they may be. all that planning has paid off. looks like you can make this work. we can make this work. and the feeling of confidence that comes from our advice? i can make this work. that seems to be universal. i can make this work.

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welcome back to "power lunch. we're now 90 minutes left in the trading day, we started the day higher with major averages now we're lower. stocks, bonds, commodities, weather retail is ready to rebound, so let's begin with bob where this orning's gains have

evaporated, bob. >> we had a nice rally going but then patrick harker had to say something, inflation is too high, that was the implication, we were 50 points higher on the s&p 500 just about noon and you could see we're lower, however the earnings saga is pretty good overall, look at at&t one of the best days at&t has had in a while. their numbers were good. ibm, very good numbers, above quarter guidance, the big mover on the dow, lam research also doing very well, las vegas sands, that stock is also rallying, this is washed out activity but some of these companies.

metal stocks, steel dynamics, nucor a somewhat cautious outlook. up 2%. everybody else moving along with that some misses out there. knight was a big one in transportation sector. that's down 6% and curiously some of the superregional banks hadmodest misses of a few cent but can translate into big declines i think the big story here right now is yes, down day but earnings not falling apart and you see there third-quarter estimates still up 3% and fourth quarter still up 5%. that's not recessionary earnings activities yet. >> a push pull between earnings and rates. we turn to rick santilli now

rick >> as a matter of fact, they all have a higher yield than yesterday. quite simple, every one of those maturities is going to make another cycle high yield close and in the case of two-year let's look at 1.5-week chart you can clearly see, past the beginning of that chart there's a volatility area there that was cpi on the 13 i will continue to show that, you can see the way we elevated with the way we traded here's a ten-year, june 2008 last time we were at these levels once again, volatility one third through the chart the only one that hasn't is the next chart is the dollar index hasn't traded

high since thursday. that's significant, we're talking about liz truss and the charts don't lie, lot of political issues but when it comes to the markets judge for yourself, the pound versus the dollar, it settled at the end of last year at 135 when liz truss took over, next chart, it ended last year under 1% and on the fifth it was at 3 percentage a little lower, you can see what at least under her tenure, those paths are well established whether it was the bond going down. morgan, back to you. >> big moves in a short amount of time. oil closing today slightly higher, more on the crude's move. >> oil is right around the flat line giving back a 3% gain from earlier in the session, reports

that china could ease lockdown measures had lifted crude and this of course followed yesterday's rally even as the white house tried to put a lid on prices brokerage saying the price response is quote further evidence that the u.s. has lost its influence over global oil markets, wti global delivery -- the more actively contract for december is around 84.60 energy stocks are mixed. kind er morgan is down after an earnings miss. also wanted to point out the oih in the green again today over the last six months it's lagged the xop more direct exposure >> thank you

now to retail and hints of a rebound? our next guest has been bearish on the sector but it's starting to soften his stance joining us now is wells fargo securities senior equities analyst. why now? >> thanks for having us back i think our view is that things are stable, right, a great word to talk about when, you know, we saw demand trends fall off a cliff this summer definitely more stability in foot traffic and web traffic and i do think this earnings season will be more fruitful than 2q was. i don't think you're going to see something to that extent, however, while we're less, you k know,less concerned harder to drop in full-fledged optimistic here the holiday is going to be

tough. concerned in near-term remain inventory levels, very elevated coming out of q3 the multinational levels, it's decelerating, adidas today, levi's last week, we're hearing border books are going down. we're not bad in near term but i don't think we're out of the woods just yet. >> yeah, magic word inventories, so given this scenario and given what you think about retail at least in the near term what would you be buying as we see those earnings start to come. >> look, so, what we would do right now, we're trying to look for 2023 visibility, i think this year 2022 is almost a wash, so where do we see some reasons

for optimism the off-price sector we recently named burlington one of our top ideas remember, tradedown is a big thing that happened after '08/'09. weak economy for the next several quarters inventory dine might bes will be much cleaner coming out of q4. some other tail winds in margins. after underperforming for much of the last two years and burlton is the best way to play that. >> ike, you look at a name like burlington there will be tradedown, economic concerns will be there but you've also liked tapestry, arguably not at all on the low

end side of things, you also like bath and body works that's not exactly on that lower tilt side of things what exactly is the common theme if you will that kind of links those top three trades of yours together. >> the common theme, i would add far fetch in the digital channel to complete the top four, one common theme you're not playing in the apparel space, the apparel space is challenged right now, vendors under pressure because there's going to be lower border books at stores, the apparel vendors have geographic exposure to europe in a big way that's going to be an incremental problem and lot of them have an exposure to china where things are still remaining pretty volatile

if we're talking about new money looking for inflection stories i do think off-price for a sub sector that's been under a lot of pressure for the lasttwo years this is where you see a big rate of change in 2023. >> ike, thank you very much for the picks. we appreciate it all right, coming up, supply chain woes, slowing down barges on the mississippi jane >> where i am right now the river is almost negative 11 feet the water should be 5 feet over my head, these barge have been sitting here for three days with nowhere to go and not a lot is

rolling on this river. we'll be right back. at fidelity, your dedicated advisor will help you create a comprehensive wealth plan for your full financial picture. with the right balance of risk and reward. so you can enjoy more of...this. this is the planning effect.

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welcome back if there's one thing that the

u.s. economy does not need right now it is another inflation-causing event but the low water levels in the mississippi right now are making it difficult if not impossible to ship some goods so other ways usually more expensive ways need to bem mroid. jane is the tennessee right now on the banks of the mighty mississippi river with that story. jane >> reporter: the river shut down five miles north of here because you can't get through. they're waiting for a drudging boat to come out thousands of barges have been stuck in parts of here like here near memphis the river is h hitting a record low of minus 11 feet almost, messing up the move of commodities a towing op operator says you

need barges to replace -- >> you'd be seeing barge tows that were six low and eight wide coming down the river that would have the equivalent of something like 2600 trucks on one barge tow. >> now, also impacted is the river boat cruise industry the american queen is the lowest inland boat it's now upriver >> later this fall early this winter we would probably more focused on the lower routes down to new orleans but we'll probably reroute some of those to alternative places. while the lower mississippi is getting sorted out. >> at least he has options farmers trying to get their grain out of here have to go south. barge rates are up a whopping

2,000% above benchmark good for towing operations but pete said he would still rather have a full river >> jane, to talk about where you're located the river where you are is closed right now, but the barges behind you, what are they filled with, is it grain or other stuff? >> reporter: so these barges are trying to head north, and they're probably carrying something like fertilizer, maybe some chemicals one of pete's tugs was towing a chemical barge it's the grain where the river is closed fooifl miles north on the other side trying to come down south that would be the grain, also have oil trying to get back and forth and steel, so it's amazing to me and i didn't realize that one single barge equals about 15 rail cars and 38 trucks which makes it much

cheaper until rates jumped 2,000% >> wow those are some staggering numbers right there. i didn't realize that either thank you. coming up, trading some heavily diouscnted names, which stocks are set to surge? three-stock lunch, next. what's going on? where's regina? hi, i'm ladonna. i invest in invesco qqq, a fund that gives me access to the nasdaq-100 innovations, like real time cgi. okay... yeah... oh. don't worry i got it! become an agent of innovation with invesco qqq

all right. time for today's three stock lunch. are some names maybe just too cheap to ignore? ratios that could earn earnings per share by 10% or mo three of the names are pfizer, dr horton and west rock. here to trade them is our trader >> i think pfizer is a buy here. it's been treated like a pandemic darling, because of their vaccine, as opposed to a company that is been around since 1850, and in six therapeutic areas, but it's 2x its competitors, multiple about seven times.

the chart just put in an inverse head and shoulders, so we like it here. >> next up, contrarian pick, if you will, dr horton. >> yeah, it could -- i agree with you there, but if you look at the space as being washed out, if you look at the potential for nany new supply, t jumps out at you it has broad distribution. they're an entry-level cost. clearly this is a company that's been washed out, and has been at that level for about three months, the breakdown could take it to 76 >> finally, let's go to westrock, a name very well known

for pandemic people who played those derivative plays, we're talking about corrugated dar board products amongst other things >> also we can talk po commodity prices coming down we've seen a significant drop in those prices westrock unfortunately is correlated to online commerce, and westrock is a well-run company, finds it solicit in a very difficult industry. the reporting on november 11th, they missed four of the last eight quarters they reported i suspect this will be no different, and they'll likely have to guide lower as prices are coming down. art hogan, thank you very much for more on stocks that this bear market may have made too

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welcome back to "power lunch. let's get to some other stories.

defense etf on pace for its best week since november 2020, up about 7% for the week. it's just turned negative. some of the big winners, lockheed martin, up double digits after an earnings beat. another defense northrop grumman, hii 9% gains there. there's a number of factors at play you've got defense budgets, the latest coming from japan, and earnings and comment tears on the airlines so far, looking for more demand for aircraft. >> the whole idea of global conflict, this is the whole area of aerospace and defense, when

conflict arisesing you have demand for more of that tough. you know this is the world we live in. there is a more aggressive stance towards protecting one's self these days. >> you're seeing the defense budgets world over increase. long lead times, so it will take a couple years for some of this. >> but like you mentioned, the primes, those are the ones we watch. >> for sure, for sure. all right. so what i'm watching right now, morgan is a survey showing just how much inflation is hurting the average american prices will go up, you can't control that, but if you can try to bring in more money from the inckcome 57% of workers say they want the opportunity to work more overtime or pick up extra shifts 37% have said that they have

looked for a higher-paying job, and around 52%, more than half of workers polled. morgan, they've said they will look into picking up a second job in order to deal with the rising costs of living you have a bunch of workers out there who don't feel as though the job they have can actually support their cost of living any more, so they want to try to find extra work. that's what it's come to i mentioned this, because earlier we did a whole segment about the mid terms. the reason it's resonating with people, is that it's hitting just about everyone out here >> wait, i thought the consumer was still so strong? we have conflicting signals, depends on the data you deinto this sounds more like reality. >> it's not just that. here's the other thing we talk about if we're in a recession or not, but the fact that people can go out and try

to find other jobs maybe means there's still jobs to find, so that's a good sign that the workforce is still intact. >> dom, a pleasure to do "power lunch." we're signing off for today. we'll see you tomorrow "closing bell" stars -- >> right now stocks giving up an early warning. this is a make-or-break hour for your money welcome, everyone, to "closing bell." where we stand in the market, we lost that earlier rally. the dow was's high as 3.99. you still have two positive sectors right now, communication services and energy. you ca