general? you think we've got a reboot to those names, which have not done anything until earnings started, and they finally got a little kick >> i do. and you look at the morgan stanleys and goldmans of the year, their earnings for capital markets is just shut down. a great opportunity to own those. >> we are just off the highs of the day. a pretty good one going. i'll see you in a few in o.t the exchange is now. >> thanks very much, scott welcome to "the exchange." i'm dominic chu in for kelly evans. we've got all the angles covered on this very busy friday for the markets. stocks heading higher. they are bid, but bond yields are sinking as the fed officials hint that the pace of hikes may begin, may begin to slow and then the yen, tumbling against the u.s. dollar. and snap, by the way, falling 30% after its results is the weakness it saw in advertising a sign of things to come for other big tech companies bigger tech companies? we're also getting ready for earnings beyond big tech it's oil, it's autos, it's

consumer names, all reporting next week. who will win out exxon or chevron, ford or gm craft or colgate we're going to trade them all, but we begin with bob pisani and the markets right now and the narrative has shifted dramatically, bob. what's happening >> well, the important thing is, we were looking like a down day before the open, and some of the earnings weren't particularly helping, particularly american express, and we also had higher yields but that has turned around now, look at this. we've got a nice up day. in fact, we're just off of the highs, and a nice up week, in fact the dow jones industrial average, up almost 4% for the week and so is the s&p. and so is the nasdaq it's a fairly broad rally for the week and i think part of the turnaround and most of the turnaround happened with yields. remember, we're slaving to the macro economic picture, and that is basically what the two-year yield and the ten-year yield had. earlier on, the yields were up and they went the other way, around 9:00, there was a "wall

street journal" story, as dom referenced maybe they'll start pausing a little bit but it definitely moved bond yields to the downside and that helped move stocks up the other big stories, the earnings picture kind of a mixed picture. overall, earnings have been better than feared, but amex kind of surprised people by having fairly large provisions that were put into their estimates, and that led people to any, oh, well, they're thinking maybe there's going to be a bit of a downturn that's all not necessarily going to happen, but that's what people were thinking but you can see, amex is well off the lows here. and visa, mastercard, capital one, they're not really moving that much on this. here's what happened to amex what you have to watch for amex, how is consumer card spending doing. it was really good new cards, a lot of new cards there, 3 million plus. that provisions number, that's what kind of bothered people 778 million for provisions that's potential future losses it's not actual losses, potential future losses. that's about 200 million more

than they had anticipated. elsewhere, let me show you some of these down muir movers today. verizon had a little bit of a disappointment on the earnings exxonmobil, that's a 52-week high for exxonmobil. we've had a good week for energy stocks, and merck has been a terrific performer this month. it's not getting a lot of player commentary, but that's right near a 52-week high for merck as well elsewhere, this whole choppy earnings picture in the last 12 hours, whirlpool people watch for sort of global supply and demand it's a basic appliance maker that's a two-year low you're looking at for whirlpool they lowered their guidance and they're reducing their production volumes, 35%, based on expectations for softer demand so you see, it's a very, very choppy picture out there finally, for the s&p 500, just remember where we've been the last couple of months. we're essentially in a trading range between about 3,600 and about 3,800. you see that this is the last few months there. so i would say, dom, right now,

the trend is slightly to the upside, but still, we've got to get through this earnings season and figure out what the 2023 glide path for earnings is going to look like guys, back you >> bob pisani, thank you very much for the market update there. by the way, we want to bring to your attention right now that the dow is sitting at session highs, up about 590 points right now. let's bring in steve liesman, greg daco, chief economist at ey parthenon. bob had alluded to it during his market update, but let's take us through a little bit of the fed speak and some of the narrative that's driving this market action the dollar has fallen off. yields have come down a little bit, so what exactly happened in the play by play by your account? >> by my account, a lot less than the market seems to believe has happened however, i will dutifully report what i think the market thinks

happened is san francisco fed president, mary daly, who we know to be a little bit more on the dovish side in the context that everybody on the fed right now wants to hike rates and has supported them hiking them very fast and aggressively. that said, daly comes forward and says, probably do 75 at the upcoming meeting, but after that, we'll think about what it is we're going to do, the possibility that we could go slower i didn't hear her suggest a much lower funds rate she said, we really need to think about what happens next. so i'm not hearing a whole lot of really barn burning news, but, again, that's what the market heard and what they heard resulted in the funds rate, if you take a look at where we were for the peak rate on that may contract, we were at 503 this morning, which sort of reflected a lot of hawkish news that was out there. and then it went down, i guess it's 490 now, what does that say 488? we lost about 12 basis points. so still seeing an aggressive fed, just maybe one that gets there a little more slowly

maybe, dom, you're smart about why the market thinks this is fantastic news >> i guess the idea here is that it's been so one-sided right now, right this idea that you could have this unending, unrelenting move higher in interest rates because of a fed that's going to become overaggressive, that any sign of relief is basically something that you can try to hang your hat on i want to point out, greg, so let's bring you to the conversation here. i have a couple of quotes i want to show you, and i'll show viewers as well. this is from daly, coming from the comments that she just made. it says, we don't just keep going up at 75 basis point increments following up by saying, i hear a lot of concern right now that we are going to go for broke. we need to really think hard about how restrictive we need to be, but also clarifies a little bit later on in those comments, daly said that she would like to do a stepdown in the pace of

rate hikes, but notes to laughter in the group that data have not been cooperating. we're not yet there in terms of where restrictive policy will have to be in order to deliver inflation that is at 3% next year that seems like a lot of statement and hedging, statement and hedging on their part, but you've got to kind of agree to steve's point, she sounds relatively dovish to say, compared to bullard at st. louis or others, cash kashkari in minneapolis, right >> i think the fed is having a very difficult exercise ahead of itself it has to communicate its ongoing intent to maintain a very tight monetary policy stance but it wants to distinguish the pace at which it's tightening from the level of rates. and that's a very delicate calibrating exercise if you bring us back to the minutes, the fmoc minutes, you saw in the minutes that there was a lot of conversation around this idea of risk balancing.

mitigating the risk of overshooting on the rates front versus the risk of underdoing it in terms of bringing down inflation. i think the balance of risk is gradual ly balancing itself out, and the fed is increasingly intent on considering tapering the pace of rate hikes as it goes into 2023, in an environment where this global policy tightening cycle has brought about a significant slowdown in global activity. >> so this construct then that we're dealing with now is one where the markets and the economy have to try to find some kind of a balance point here, steve. i mean, this is a situation right now where if you look at the fed and what it has to do, it's fairly evident, the clear and present danger in their mind is inflation so is there any other option right now than to do it, until they see some signs that inflation is actually cooling off? >> i don't think so. and before i answer your question more fully, dominick, let me just point out that

harker yesterday said he expected to end the year well above 4% so he's a very kind of middle of the road guy he's not even an economist, but he's been a member of the fmoc for a while. you want to follow him where the middle is on all of this stuff as to your question, it's well worth remembering, the federal reserve believes that it just became restrictive with rates. think about that, dom. you and i and the markets have endured this huge increase to markets. the fed feels like it is only now restraining the economy. that means up until the point that the fed got restrictive, it was either neutral on the economy or it was either stimulating the economy. and so in terms of the fed stopping now and whether or not we would see any influence, daly pointed out, maybe we're seeing some slowing in the economy right now, but it's probably well worth not looking so closely at the financial markets and more looking at the real economy, dom

and from that standpoint, the fed sees some cooling on the headline side, but is really concerned about continued pressure, which we've had month after month, in the services side both driven from perhaps some wage and labor inflation as well as other input costs >> greg, we're going to give the last word to you here. in your expert opinion, where is it that we are likely to see the first signs that we are at or just near a peak in inflation? >> well, we've already started seeing it in terms of headline inflation, with the recent fallback in energy prices. what we really want to be looking at is core inflation and where that starts to turn. i wouldn't be surprised if we start to see that turning towards the back end of the year, with what's happening on the housing marketfront. let's not forget also that the fed has communicated clearly with its dot plot that it has another 125 basis points of rate hikes locked in for this year. so that would bring us from the initial onset of restrictive policy towards much tighter policy so i think we have to calibrate

our expectations as the fed minutes said in terms of what the fed will eventually do it does not want to sound excessively dovish, but it is increasingly considering that the sum of the tightening from different central banks around the world is greater than the individual tightening processes. and the interactions and financial market conditions implications will have an impact on how the fed decides to move forward, going into 2023 >> all right greg daco at ey parthenon, thank you very much. same to our very own steve liesman. see you later this afternoon the market is on pace for a positive week despite the uncertainty about inflation and interest rates it's also the third straight week of gains for the dow, something that has not happened all year my next guest says he plans to ride out the volatility with vol-oriented stocks and says three names look especially attractive in this venvironment. joining me now is randall ealey,

pres president, so you came armed with a shopping list in light of the conversation we just had about the economy and rates, what do you feel like the economy is telling us about where the markets are and where the markets should be? >> we are clearly in a market that are showing much greater concerns than normal but with all of the debate back and forth as to whether the fr fr federal reserve is about to slow down or is going to keep raising rates at 75 basis points, the prices just back and forth if you notice the three stops that i was actually putting forward today, it seems as if most other investors saw the same thing they're all up sharply so we still like those stocks, by the way one final thing about inflation is that i'm in the camp that believes that we may be at a peak >> okay. so if we're in a peak, in your

mind, a lot of folks may disagree with you here, but if we are, in your mind, what then are the paychecks that you have to rideout this kind of environment? or are you kind of picking these stocks because they're hedged relatively compared to others given the inflationary outlook >> the ladder. if you notice, all of these companies are relatively recession proof. one is a utility, and even though the utilities have been falling, you know, pretty sharply, recently, it's not unusual to see that kind of move when you're getting near the end. also, i don't think that necessarily bodes well for other companies, other sectors, when you see utilities falling like this but utilities are going to reach a bottom and when they do, i think it will be a sign of the acknowledgement of investors that these companies are going to keep earning money, even when

other operations are seeing earnings declines. that their balance sheets are solid. after all, they're monopolies. and the other two we're looking at a consumer durables, a health care company people simply need their goods and services and so, they will be among the very last companies people will stop spending on their products. >> just for the record, can you take us through what those names are in the few moments that we have left? >> yes, exelon coming into today, we were looking at a dividend yield of 3% which is just great in a market where the ten-year, with you know, we've been so happy recently because it actually has hit four but the fact is, exelon is a company that with earnings, we can see those earnings grow. we also see great coverage rates and the dividends are likely to grow in the future, too. pfizer wing most people know

that name with their covid fighting products, and here now, we're looking at also a solid dividend yield, somewhere in the 3.6, 3.7 area, and a price-to-earnings ratio of 9 so you're talking about possibly earning 10 to 12% a year over the next five to ten years without earnings growth. and finally, walgreens lottery investors have been done on walgreens, but they have been reporting profits consistently recently and i think the market is beginning to notice that this month. dividend yield, almost 6%, by the way. and a single-digit price-to-earnings ratio between 7 and 8. so we like this kind of protection strong balance sheets, these companies aren't going anywhere, and i think they will take us through a tough economic environment. >> walgreens, exelon, and pfizer those are the picks from

randall'ly with the lomax company. thank you very much, sir >> thank you, too. coming up on the show, the five megacaps on deck to report next week and one thing investors will be watching for sure the impact of that strong u.s. dollar a look at how much of an impact is expected and who's the most exposed. plus, big oil, big auto, and big consumer brands. also on deck next week, we've got one stock in eachgroup tha stands out for the rest. and as we head out to break, let's get a quick check on the markets as you're seeing right now. the dow is up 4%, the s&p is up nearly 4%, the nasdaq is up nearly 5% at this point here "the exchange" is back after this this thing, it's making me get an ice bath again. what do you mean? these straps are mind-blowing! they collect hundreds of data points like hrv and rem sleep, so you know all you need for recovery. and you are? i'm an investor...in invesco qqq,

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. why the dollar is on pace for its first rise in years, that strength has been a major headwind for multi-national corporations with the five megacap technology companies on deck next week being no exception. for a look at how much it could depress growth and what's being done to mitigate the impact, i'm joined now by steve covak, who is our cnbc tech correspondent this is no surprise. if you're a big multi-national and the dollar costs more, it will hurt your results take us through what you're seeing

>> it's a strengthening dollar that is one of the biggest headwinds affecting all of the megacap names that are reporting next week. like you said, dom, these are huge multinationals that generate most of their sales outside the u.s. and we've got a cascade of warnings from each company on how foreign exchange will put a wet blanket on growth, leading to modest oquarters from names like microsoft, apple, and meta. fx will put a damper on the company's best in class margins. as for meta, they were warning about a 6% drag on sales in their metaverse division called reality labs that already loses several billion a quarter anyway over on microsoft, they were sounding the most exposed to fx with cfo amy hood saying to expect a 5% hit to revenue growth as for apple, they're raising prices on the iphone 14 and in the app store, across the eu,

and south american and asian countries, where the dollar is the strongest. meta also raising prices on its older metaverse headset by $100, and that new metaquest pro head set, that costs an eye-popping $1,500 and companies without pricing power are cutting costs wherever they can we've seen recent layoffs at microsoft and project cuts across google, for example now, the good news for all of these companies, fx is predicted to be more favorable after we get through the end of the year, with microsoft's hood telling investors last quarter, fx should ease up in the spring and summer of 2023, dom. >> i guess it begs the question, steve, anybody, cfo, treasurer, or otherwise has seen the chart, has watched it continuously grind higher how much do you think, then is already expected from these fx headwinds in these quarterly reports coming up in the next one to two quarters. i wonder if investors are doing

the same thing >> it's different by name, too two companies i didn't mention were google and amazon and they actually kind of indicated, we're less exposed to these foreign exchange headwinds with, in part because they do a lot of spending here in the u.s. and amazon, for instance, said, our operating -- we're not going to see any significant headwinds there, but where it does hurt companies like amazon, their cloud business, which is a big multi-national business for them, and it's very -- susceptible to these headwinds, for a change so same thing for microsoft and cloud and google's cloud even if the core businesses are okay, there are segments, important segments within those companies that are very vulnerable >> all right steve covak, thank you very much while the dollar will be a big factor in technology earnings, it will not be the only factor. if snap is any indication, an economic slowdown may already be in play. the company saying its ad revenue growth slipped to single digits for the first time since going public that seems to be flashing a warning sign to the street, with

all of snap's peers in social media and otherwise deeply in the red. so what can investors glean as tech earnings kick into high gear let's discuss this with youssef scully, the managing director over at truist, covers a lot of these technology and tech-adjacent names. youssef, you heard steve's report here. we kind of know what some of the headwinds are going to be. in your mind, has the market for these megacap names sold off enough to make them attractive >> so, thanks for having me. at a high level, me think they have but the devil is in the details. you guys talked a lot about fx we think the market, by and large, has already absorbed a fair amount of it. but if you look at sellside expectations, not every estimate has been adjusted. you probably saw that we had lowered expectations based on fx and bigger prospects of a recession for next year, about three weeks ago. and we've seen more coming, but i'm not sure everybody -- the

good news is, i think the buy side is already ahead of the sell side. in terms of, you know, kind of other headwinds, i would say the biggest head wind is just lack of visibility into 2023. and what kind of a recession we're going to have, if we do end up having a recession. and the other is around just cost cutting everybody has been rushing to cut costs. google has been probably least at doing that. meta will hear next week what they're guiding to, onex for 2023 because at the end of every 3q, that's when they talk about the following year's onex. i would say that's probably going to be the biggest jpi or the biggest data point to check on meta. >> so youssef, you mentioned the exposure, relatively speaking, to what could be a hypothetical economic slowdown. over the past decade plus, many

of these megacap names can be viewed as relative safe havens they have stronger balance sheets, more cash on hand than smaller-cap companies. so what then does become the good value ply what should you be buying? what would you be recommending in terms of which beaten down stocks represent the boast opportunity? >> keep in mind that we cover individual media and, you know, you don't go to sleep very easy owning them, particularly in these kinds of -- in this kind of environment. that said, not all internet names are created equal. we think google or alphabet, considering the fact that 80% of their business is coming from search, which is really utility, should do relatively well. and, you know, we expect them to grow in the high-single digits on a year on year basis, which again, in this environment, is pretty impressive. we think amazon is one that should also do pretty well next

week facebook, we continue to like, but we think on the back of what we heard yesterday, from snap, they're a little more at risk. but certainly not as much at risk as snap among midcaps, the two we like are uber, because we think their mobility business is going through the roof right now with the reopening, and the other door dash, which the stock is down 60% plus. and we think it's one of the best midcaps to own and one of the best to be managed in a pretty high secular growth category, which is delivery, food delivery. >> so youssef, we have a few moments left here. we've got your picks i wonder if you can tell us and viewers and listeners out there how much interest rates and projections for rates factor into your models and your expectations >> yeah, with vvery much so when you talked earlier about increasing the prospect ofa recession for next year, what that meant is, practically in a

financial model, you basically hike your weighted average cost of capital or assume that capital is going to be coming in much higher for these kpcompani across the board and that's why we basically took a haircut to our entire universe and i think it's just a matter of mechanics, but that is definitely one of the biggest drivers of valuation right now from this group. >> all right youssef skulli, a truest appreciate it. coming up on the show, nuclear power has for now been left out of sanctions against russia, but what happens if that situation changes? we look at some of the biggest players in the space including this one, the mystery chart, up more than 100%, doubling just so far this year. and the slowdown in housing not sparing the very top of the market megamansions are sitting unsold. we are live at one of them you're seeing some pictures and video right there.

you'll want to see the rest and how much, say, $23 million gets you in western massachusetts and then as we head out to break, take a look at the dow heat map right now caterpillar, goldman, jpmorgan among some of the bigger gainers out there, american express and verizon the only two in the red on the heels of their earnings "t ehas isorng hexcnge" is back after this break cial advice from ameriprise can do more than help you reach your goals. i can make this work. it can help you reach them with confidence. no wonder more than 9 out of 10 of our clients are likely to recommend us. ameriprise financial. advice worth talking about.

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♪♪ ♪♪ ♪♪ be ready for any market with a liquid etf. get in and out with dia. welcome back to k"the s exchange." at the highs of the session, we were up 602. at the lows, we were down 127. here are some of the big stock movers this hour you've got boston beer, seeing a big jump after a beat on earnings and revenues.

shipment volumes were also up over the same time last year tenant health care got hit hard. and the twitter drama continues. the stock is lower on reports that the administration, the biden administration and officials are discussing whether elon musk's ventures should be subjected to national security reviews, given some of his recent stances on russia now let's send it over to tyler mathisen for a cnbc news update. hi, ty >> thank you very much here is your cnbc news update at this hour. ukrainian forces are piling pressure on russian soldiers in the occupied region of kherson ukraine is targeting supply routes, while preparing for a potential full-scale assault to reclaim one of the first urban areas russia captured after invading the country russia urging residents to evacuate the city and relocate to surrounding areas tonight on the news, a full update on the ongoing war in

ukraine and how the u.s. may respond if russia reverts to nuclear weapons. u.s. republican senator lindsey graham must testify before a special grand jury in the georgia election probe investigators are looking to determine whether then president donald trump and others illegally tried to influence the 2020 election in the state of georgia. and elon musk reportedly plans to lay off most of twitter's workforce, if and when he becomes the owner of the social media giant according to the "washington post," musk told perspective investors in his twitter purchase that he plans to cut nearly 75% of twitter's employee base meanwhile, twitter reassuring its staff that there are no plans for layoffs. now, back to you, dom. >> tyler mathisen with a news update thank you very much. coming up next on the show, we're going from the grocery store to the gas pump to the garage we'll get the names to buy in energy, autos, consumer staples

ahead of their rulests coming up next week. "the exchange" will be back after this break across your full financial picture. a plan with tax-smart investing strategies designed to help you keep more of what you earn. this is the planning effect.

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. we've already talked about the big tech earnings that we'll be seeing next week, but it's

not the only, we've got energy, big a let's talk first about energy, exxonmobil, and chevron, both set to report next friday the sector is expected to report the highest earnings growth of all 11 sectors, at more than 10 100%,. >> so alito owns exxon they're both great companies, but exxon has a little bit of an edge in a few areas. you know, this is, this is a company that has just been able to pay a great dividend, has a great history of beating earnings and guiding well, and

so, from our perspective, exxon is still doing the work and, you know, a company that will continue to participate. >> exxon the pick there. next up, two of the biggest auto makers on deck we're talking general motors before the bell on tuesday, followed by ford after the closing bell on. after a monster 2021, both stocks have suffered big this year, down roughly 41% plus. what's the play here, gm or ford >> we're going with ford ford is a company that's been suffering from some supply chain issues, as everybody knows, it definitely hurt them last earnings however, if you look at what is going on within ford, demand is still very strong. assuming the supply chain issues eventually work their way through, it's also the potential that as the shift mixes of -- as

the mix shifts from traditional ford cars and trucks to electric cars and trucks particularly, the f-150, the company continues to get profitable, which is sort of the name of the game right now. as, you know, markets get tough, so good demand, good profitability. we think ford is a good buy. >> so ford the pick there. finally, let's get to the consumer-focused names we've got big ones, both many staples and discretionary reporting. you've got mcdonald's, coca-cola, colgatecolgate-palmo, colgate taking it on the chin, falling 16% while the other two are both down roughly 5% or so roughly this year. on the consumer-facing side of things, gena, the picks? >> so, lido owns both mcdonald's and coca-cola. these are companies, right now, the consumer space is going to get hit, dom you know that we very likely are already in recession, and you're starting to see that already in the earnings expectations build

into both mcdonald's and coca-cola, but mcdonald's is a company that has a tremendous profit margin. and profit margins matter when you're still faced with, you know, struggling with inflation. and, it's one of -- it's a very inexpensive, you know, priced item, you know, the lineup is inexpensive, and it defends very well even though we're looking at a downturn, we still see support for mcdonald's stock coca-cola, same story, but, you know, throw in there also, a good dividend, right and so, coca-cola is a company that is also expected to you know, feel it in earnings along with the rest of the consumer space. but this is a stock that people continue to demand and so we just -- we see these as defensive consumer -- you know, consumer exposure. >> all right, so we got the stock picks there. i want to follow up one more with a wild card here, gena.

i would like to know in your mind whether or not you think buying ten-year treasury notes yielding 4.25% or more is a good buy at this point. >> so, interesting, i think it -- it definitely is -- the yield right now is quite attractive and so where do we go from here? there is the argument that once you start to see the seasonal adjustments start to drop off in the labor market, that the data will start to look slightly weaker than they have been looking, and it could open the fed up to potentially take a breather and if that happens, yes, i would say, absolutely, that could be -- we could start to see the topping of the current markets. however, if the fed keeps the peddle to the metal, you know,

then, all bets are off in the treasury market. >> i guess it all depends on the data coming forward. gena sanchez, thank you very much we appreciate it coming up on the show, higher rates taking their toll on home buyers, for sure, all across the income spectrum, including the megarich, believe it or not. robert frank is in levert, massachusetts, at a $23 million home with that story robert >> reporter: falling sales at the top. megahomes are coming on the market and piling up unsold. we'll take you inside this 60- 60-acre, 120,000 square foot estate in western massachusetts atasts own indoor water park and we'll give you the price, coming up

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go to getrefunds.com powered by innovation refunds. welcome back to "the exch exchange". we already know the housing market is slowing down, but if it crashes, the pain may start even at the top. megamansions are sitting unsold as mega wealthy buyers and sellers move around the real

estate sidelines robert frank is in massachusetts at a $23 million listing with that story and it's got a three-lane bowling alley that he's standing in front of right now. >> reporter: yeah, dom, if you make it here quick, we've even got shoes for you. this is the private bowling alley of a new 60-acre estate that just listed here in western mass the number of homes priced at $10 million or more soaring 8% in september that's ten times the inventory growth rate that you're seeing in the broader market. now, this particular house is 120,000 square feet. it was just listed by douglas ed lman for $23 million that's a big price in this part of the country it's so big, in fact, that they're hoping that maybe resorts or companies even bid. >> the real estate market for wealthy buy sers is a little bi more difficult, but this property is definitely more unique than most single-family

luxury properties. you have a village all to yourself >> reporter: in addition to the main house, you've got two guest houses, you've got this spa, which is 55,000 square feet of just recreation. in addition to that bowling alley, you've got this billyiard room that's for the adults. for the kids in the family, you don't need a quarter, you just come over to the two-story arcade, which has everything from fuseball to lots of great pinball machines behind that is a basketball court. next to me are two tennis courts that convert into a concert stage. the doobies brothers, hall and oates have performed private concerts in that concert hall. again, this on the market for $23 million. a very tough market for a very unique house dom? >> so, robert, i wonder, can you clear something up for us, because you deal with and you report on the ultrawealthy all the time you're an expert on them can you tell us, buyers that buy

$23 million homes, do they take out mortgages for these things or do they cut checks for them in other words, do rising interest rates factor into this ultra-wealthy side of the equation >> reporter: brokers will say they do typically pay cash for these properties, but what's missed in that argument [ inaudible ] -- >> i think we lost robert frank there in the middle of western massachusetts. again, a $23 million home up for sale i wonder who's going to bid on it coming up on the show, municipal bond performance on track for the worst year for at least the 1980s, but fund inflows, inflows are booming so what's behind the disconnect? and is the worst over for those muni bonds that's coming up next. "the exchange" will be right back ♪ ♪ wow, we're crunching tons of polygons here! what's going on? where's regina?

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welcome back to "the exchange." it's been a tough year for muni bonds. they've lost nearly 12% of their value so far, pointing them on track for their worst yearly performance since the 1980s, but despite the underperformance, it's been a record-breaking year

for inflows. the vanguard tax-exempt bond fund has now added over $6.9 billion alone, smashing, absolutely smashing previous records. so what's to make of all of this muni madness, the split narrative? let's ask paul saks' paul moloy over at vanguard. you would think that tax-exempt investments would always be attractive, so is the move lower in munis strictly tied to what's happening with rising interest rates? >> absolutely. we're now at a point where we're getting yield in the market again, and the only way you generate tax-exempt yield is to have higher yields, so this is, you know, really the beginning of i would say a muni renaissance, and you're seeing it as rates have gone up municipalities get more and more attractive. >> so that's the case because bond values are falling across the board, i get that. what is it that makes those municipal investments, muni bond

investments, that much more attractive right now in other words, what does that after-tax yield kind of look like to kind of make them in contextural approximate estimates more attract sniff. >> yeah, it's actually making it look equity like when you are getting municipal returns right on top of treasuries and in previous weeks above treasuries, you know, you're getting equivalent yields for -- at a high quality part of the market and then you add on the tax advantage in a high-tax state like a california or a new jersey, and once you talk the tax equivalent yields you're getting 8% yields which is, you know, great for the long run right now. >> so if that's the case, are there specific parts of the muni bond market that you're seeing as being more or less attractive on a relative basis? is it going to be in some of those general obligations type of bonds that are depending on taxing authority or is it revenue bonds tied to municipal projects that spin off cash flow where are the opportunities?

>> yes and yes anything in the investment grade space is looking really attractive right now you know, fundamentals are as good as they have been in decades so we're, you know, much more well prepared heading into any potential downturn than we were in the 2008 time period so munis are set up to weather any downturn yields are higher or as high as they have been in years so it's really has a lot of stuff going for it at this point and is, you know, possibly the best investment opportunity within the fixed income class at the moment, particularly longer dated munis. >> you work for vanguard your company obviously runs bonds. you guys are bond and some pickers, and you put them in the funds for investors. how difficult is it to go out there to kind of pick an choose and select the right munis for your portfolio, or are you better off, you know, just putting it in a fund and i know you've got an ax to grind because you're working for vanguard if i were to go out can i pick a

tax-exempt bond from my open state and expect it to be a good value? >> no, you want to be careful. you want diversification above all else what you really want to do is leave it to co-mingled assets, get a lot of diversification and get your expertise and invest in it for the long run and let the diversification work out let the long run tax exemption work in your favor, you know, so it's really the quintessential buy-and-hold asset class and keep your holdings diversified >> paul moloy at vanguard, appreciate it. let's get to some breaking news out of washington, d.c. >> reporter: the house select committee on january 6th is now officially issued that subpoena to former president trump for what it says was the central

role in stopping the peaceful transfer of power on that day. the letter former president trump request that he provide documents to the committee by november the 4th and that he sit for a deposition on november 14th, after the mid-terms would be over. the letter to former president trump states that he was at the center of the first and only effort by any u.s. president to overturn the election and obstruct the peaceful transition of power that ultimately culminated in a bloody attack at the capitol and on congress itself so far former president trump says he's unlikely to comply with the subpoena calling the committee the up select committee and still insists that he has won the election even though those claims have since been debunked. the committee on january 6th issuing its subpoena to former president trump. we'll see what the president has to say. >> the latest on the january 1th probe.

thanks very much. still ahead, we're at session highs as you can see on the bottom right of your screen. the dow is roughly up 615 points here's that mystery chart again. one more time, the one we showed you earlier. the shares have doubled over the past year but really picked up the steam with the passage of the irark the inflation reduction act. we'll reveal the company and the ers recoming up next and whether the'mo room to run the discussion after this. our clients come to us with complicated situations

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welcome back to "the exchange." we want to get to one more thing before we go, and that's nuclear power. the u.s. issuing more rounds of russian sanctions but uranium has ignored those restrictions, at least for now >> earlier this month, the eu agreed on an eighth round of sanctions but russia's nuclear power industry has not been included, and that's because the

country plays a key role while uranium mining, milling and conversion happens around the world, russia controls 40% of global uranium enrichment russia supplied 31% of europe's enriched uranium last year and 28% of the u.s.' as jonathan hinzy fsaid there were enough to cover our need if nuke were banned as the war stretch eds on, utilities are looking to diversify their uranium sources which has led to renewed interest from investors. upstream players have attracted a lot of investors names like cameco and the ura and utilities are another way to get exposures, constellation energy which is unregulated is the largest nuclear power operator in the u.s. other names include entergy, duke and dominion, and with global power prices jumping, citi said recently the nuclear

energy outlook is optimistic, dom, for the year and decades to come. >> and, by the way, the mystery chart that we showed was constellation energy so that's how far it's come. pippa stevens, great story right there. that does it for us here on "the exchange." right now stocks are sitting near session highs, the dow up 1610 points. that does it for "the exchange." "power lunch" starts right now ♪ dominic, we thank you. gefrp, welcome to "power lunch." along with morgan brennan i'm tyler mathisen, glad you could join us on this busy friday. stocks surging as dom just pointed out, but a lot of the action is in the bond market, too. bank of america's rates calls the treasury market vulnerable and subs susceptible to shock. what could be lurking in one of the deepest and most liquid markets in the world, and tapped out. housing affordable being crepe i'd by