again. and now as we've seen sort of gas prices decline, start to moderate a little bit, that message is really resonating with voters because they're not necessarily seeing the relief that they hoped they would >> a lot of money flowed into the economy via the fed, number one, and via fiscal policy that was -- during the pandemic at least rather more bipartisan than we're accustomed to but at any rate be that as it may, thank you, ylan, very much. ylan mui reporting that does it for "the exchange." i'm going to join mill friend contessa on "power lunch," which starts right now when & welcome to "power lunch. i'm contessa brewer. here's what's ahead. is apple recessionproof? it's a key question. we may get answers when the company reports earnings this afternoon. and critical to this is whether the iphone's super cycle can continue as the economy slows. plus, calling a bottom past bear markets show we're not there yet. history also shows that severely

beaten down stocks bounce when the market is deeply oversold. some silver linings coming up. tyler. >> all right, contessa a tale of two markets today in response to earnings and new data on the economy showing that it did grow faster than expected and hinted at waning inflation you just saw the president cheering for the gdp report. the dow up very, very nicely at this hour, as you see right there, up by 287 points. it was up much higher. but on track now for its best month since november of 1987 that was post the crash in october of that year up 12% for the month of october so far you've got your boeing, your caterpillar, your honeywell. those are the three top-performing dow stocks right now. cat on pace for sits best day since at least march of 2020 and you know about meta? you hear about it? worst-performing stock in the nasdaq 100 22% -- 23% of its value lost

today alone. issued some weak guidance that led to several downgrades of the stock, contessa. >> well, tyler, attention now turns to apple, the world's most valuable company that could move the broader markets when it reports earnings in just about two hours. now, investors are going to pay close attention to what apple says about the i14 sales and whether economic conditions are starting to weigh on the high-end electronics market. also important, the impact of the strong dollar and the potential drag on growth there will be also a focus on the growth rate of apple's high margin services. apple raised prices on both apple music and apple tv plus this week. plus apple's impact on the s&p 500 is massive it represents about 7% of the index's entire value with a market cap of more than $2 trillion we're joined now by barton crockett with rosenblatt securities he has a buy rating on apple and a $189 price target. and tim higgins, technology reporter at the "wall street

journal. tim, i'm going to start with you today. so shares of apple have largely outperformed microsoft, amazon, google what are their big headwinds what do they need to say to continue that kind of momentum >> yeah, this is all about the current holiday quarter today. investors are asking record revenue in the september quarter that just passed, but they're looking for signs from tim cook that he's optimistic that those high-end iphones will continue to fuel just an amazing growth that we've seen over the past few years. now, that growth probably won't be at the 40% level that we've seen, but even a couple percentage points could make it a record quarter >> barton, let's talk first about these three things that you and your colleagues are watching the i14 sales. the dollar impact and the service business margins of these which do you want to tackle first >> next to the high-end iphones.

we've done some survey work that would tell us that 2/3 of american adults looking to buy an iphone are skewing toward the the pro, the pro max, you know, 20%, 25% higher average sales price for those. much higher kind of focus on that than we've seen before. so that's worth i think several percentage points in the growth in the iphone revenue line they report if that's extrapolated globally which i think we're going to see that type of pattern around the world because people are loving the high-end devices. these things are more important than ever before and that's really the tale of this quarter i think the computer market, the mac, the ipads, apple's been gaining share but those markets have had a pandemic pull forward. nothing really impressive to look for there except that those are smaller in the mix. and services, there have been some slowdowns in game play on the app store, but we think that they'll continue to see some growth in advertising.

and their subscription services are becoming meaningful and we think a strong contributor as well as their care products and, you know, i think that that setup there is they can continue to put respectable growth in services against a lower kind of expectations with the company where you're looking for things that are tougher to buy, and they'll warm up to it like a staple and that will be helpful for relative performance of this equity >> you know, let me ask you, tim, if i might, about some of the tsh i -- i hesitate to callm secondary products but they're not the iphone the ones like the watch, the mac, the ipad. what is the company expecting there? and were so many sales of imacs, of macs, pulled into the pandemic year that you don't expect a good quarter this time or you see that sort of slackening sales tim. >> i'm definitely going to be

looking for mac and ipad sales because you know, it's interesting this summer tim cook was telling me that they didn't have the inventory to even be able to tell if there were economic headwinds against those devices. they didn't see any headwinds for the iphone sales but they were seeing it in some of those cheaper products such as the watch. but when you talk about macs and ipads, unclear so now that inventory should be improving, which they said should happen in this september quarter, it will be interesting to see where the economic world order is affecting those products because as you point out they were some of the big surprises during the past two years. really fueling some of that record growth with the iphone. so going forward they could face some headwinds to try to match those year-over-year results into the 2023 -- >> barton, if i'm understanding correctly, as with the iphone where it looks like the pricier version is doing very well, you sort of see the same with the new version of the iwatch, that

the highest-end version of it with all the bells and whistles, to use the cliche, is doing better >> yeah, this is an $800 watch and in our survey, you know, those looking to buy a watch, nearly half said they wanted to buy the ultra. that's not everyone like, you know, basically a fifth of americans were looking to buy a watch. but that's a large population and a heavy skew to the expensive model. and this is their real kind of debut in pricey watches. i mean, before they had expensive watches, but i think it will be a nice help for the wearable segment >> it tells time, doesn't it >> yeah. >> my heartbeat and ovulation and all that but it tells time. >> you raise a good point there because apple keeps -- even if they don't have the big new thing, they keep innovating. they keep pushing the envelope further. >> innovating. >> absolutely. here's these mega market cap

losses that we have here look at their declines year over year the total loss, $3 trillion. but of that apple has the very tiniest -- it's barely a nibble out of of that apple 35 billion lost in total do you think there's something that is sort of protected about apple in that people who get into the apple ecoschl tend to stay there and even if the apple watch costs $800, not a $50 timex. i don't know how much a timex is but they're willing to spend that because they're loyal customers, they're going to stay in that ecosystem? >> yeah. i think the theory that apple has, integration of software, hardware, services make a better mousetrap, and they're taking share hand over fist all over the place. and it's really like nothing we've seen and i think that they're taking share in the most important parts of the modern economy.

you know, your phone, your connection to the world through that it's never been more important to you and the watch, the fact your air pods work better with your computer loop you into that ecosystem. >> though they still haven't figured out how to make silent truly silent on those phone ringers. >> yeah, somebody's phone was groaning right there we heard it. it wasn't mine >> it wasn't mine. but we're not asking -- we're not going to name names. barton crockett, tim higgins, we really appreciate it looking forward to apple earnings >> i think you're so right once you get sucked in you are -- it's sticky to get out. but the products are good. >> but also because you're buying all of those accessories that only go with apple. it's not like you can use them and switch from place to place once you're in that ecosystem it's hard to switch. >> and they work all right. the major indexes have seen a

mini rally since the october 12 low. the dow is up close to 10% if you can believe it the s&p more than 6% but according to our next guest history says this isn't a bottom and the bear market will likely inflict more pain. joining us now paul hickey from bespoke investment group oh, you party pooper, paul why do you say this? >> well, tyler, i wouldn't say i'm a party pooper here. all we're doing here is comparing the characteristics of typical bear market lows to the current period and what we highlighted at the time a couple weeks back was that the last legs of a bear market from all-time highs are typically very violent and they inflict a lot of pain. so you tend to see a real sharp decline on the way down. in the last six months they tend to decline over 20%. in this current period, the october 12th low, we declined 14%. the the three-month decline was also much milder than average

it's only the one-month decline that was in line with the historical norm, so to speak so just pointing out the fact that bear markets are typically violent. this one wasn't necessarily violent. the other thing about bear market bottoms, though, which is important to remember is the low is -- there's usually a small window to get in in the current median amount of time that a bear market low trades within 5% of the ultimate low is 10 trading days and then on either side of that low. whereas in the current period we saw more than twice that amount of trading days so far so there was an extended window for investors to get in. so all we're highlighting again is the fact that bear market lows are typically pretty violent. this one was painful but not quite as violent in the past the other thing to remember, though, is on the other side, and this is what we advise in the report, is that that kind of behavior shouldn't cause someone to sit all out and get all out

of the market. you should never be all in or all out. and that's because on the way up the rally typically is just as extreme as the leg down. so what we've seen historically is in the first month of a bear market, of a rally off a bear market low the s&p rally median 15% and over the next six months it's about 30% so investors just have to take a wait and see approach to the market and weigh the pros and the cons and there are certainly -- while the historical playbook doesn't necessarily hold suit, there are some positive signals within the market we've been noting as well you've got to take the good with the bad and inch in here as you see -- >> let me get a quick response to something i heard in the last hour, and that was one of our guests saying that the gdp number out today sort of indicated that maybe the economy's doing a little better than some people thought number two, that i believe she was starting to sort of sense,

her spidey sense was that maybe we're in the later innings of the interest rate hike cycle and that after november perhaps the fed will not pause but maybe change its language a little bit and that that may be one of the reasons why the market is moving the way it is. do you sense that at all what would you say to that individual >> well, so i think that's a great point. the fact is that the market low happened -- the intraday low happened the day of that cpi report, which basically killed all hopes as far as sentiment was concerned that inflation was abating. so the ball was there for the bears to take this market and take it much lower, and they went the wrong way with it, so to speak, and we ended up rallying that kind of signal from the market tells you that perhaps, you know, while the market is looking forward when investors are looking at the headlines and that they're not market positive but the market is looking forward. and inflation numbers are going

to start coming in here we think just based on the comparisons in things i think in that respect the prior guest, what they were referring to in the last hour would make some sense. >> paul, i'm looking at a couple of your recent purchases generac and tesla. you're getting in when a lot of other people were ditching out why? >> well, so in these rallies, whether it's a bear market rally or if it's a new bull market, i mean, we don't know, nobody kn knows, but in these kind of rallies it's not the attractively valued stocks or the defensive issues that see the strongest rallies, it's the stocks that are the most beaten down and it's hard to think of a stock that's more beaten down than generac it tripled off its precovid highs. and now it's down over 75% the stock trades about 13 times

earnings and while it faces headwinds because of residential housing, over the long term here we look aat backup power as, say, what air-conditioning was in the early '70s it was a luxury in the home in the '70s less than half of new homes in the early '70s were built with air-conditioning included. it's now 96% i think if you go 50 years from today, i think most houses are going to have some backup power, especially if the grid remains as unreliable as it is now and tesla's another name it fell 20% in the span of seven days earlier -- last month it's down 50% from its highs the overhang of the twitter deal was really weighing on shares. and with that set to close, you know, this week i think some of that overhang will be removed from the stock and that should benefit the stock going forward. if you listened to the conference call yesterday, the traditional oems are all in on evs and tesla is the leader there. they're going to be playing

catch-up for years >> paul, it's great to see you thank you very much, paul hickey >> you too thanks coming up, kimco realty coming off a strong quarter. the stock is up about 13% this month. and it could benefit big-time from the kroger's albertsons deal the ceo joins us next. plus meta doubles down on the metaverse, spending especially despite growing calls to pull back is silicon valley addicted to growth at any cost auto-related stocks hitting all-time highs in today's session. auto zone, ginn parts and o'reilly automotive. look at that up almost 4% we have more "power lunch" in two minutes.

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welcome back solid quarter for kimco realty, the largest publicly traded owner of grocery-anchored shopping centers in the country. occupancy rates are higher, rents are up the company's top tenants include home depot, walmart, albertsons and kroger, the two companies that are just announcing their merger. big beneficiary potentially, kimco could be, of the kroger-albertsons mega merger. joining us now for a first on cnbc interview is our friend connor flynn, the ceo of kimco realty so why don't we start with kroger and albertsons? how does this help you apart from the fact that i understand your company has some equity in albertsons >> hi, tyler nice to see you.

thanks for having us >> you bet >> kimco had a phenomenal quarter this quarter we're very proud of the team and the results really speak for themselves we are uniquely positioned to benefit from the albertsons-kroger merger actually dating back over ten years ago we made a strategic investment in albertsons and have seen the fruits of our labor really pay off we actually generated over 300 million of proceeds from selling close to 11 million shares of albertsons prior to the end of the quarter, and we still have 28.3 million shares remaining in albertsons so as the kroger and albertsons deal moves forward we're in a great spot to have ample amounts of liquidity really at a time where obviously capital is going to be king, cash is king and kimco's sitting pretty there. >> remind me, if you can ballpark it, there's the albertsons brand i believe they have safeway, acme, king's, a bunch of other -- jewel, if i'm recalling. and then there's of course

kroger how many, from this complex of now combined stores, how many of those stores are big tenants in your malls >> our grocery-anchored shopping centers typically have a grocery anchor in them either from a kroger, could be an albertsons it also could be a whole foods or it could be a trader joe's. albertsons has a number of different flags, as you said if it's out west it's typically a safeway or a vons. if it's in the east it's typically an acme or a jewel where kroger has a number of different banners as well. the way the deal was structured it's going to be a really solid combination of two powerhouse grocery chains coming together to really deliver hopefully a lot of value to their customers. we'll have to wait and see as the approvals run through their normal course of action. kimco is going to be in a good spot regardless if the deal gets approved or not. because kroger's a better credit so if they do merge we'll get a better credit with the combined entity but if they don't merge we'll still have two wonderful grocery-anchored operators

continuing to be actually thriving in this environment if you think about how the consumer is behaving today, the grocery store still provides a tremendous value as inflation starts to hit a lot of different areas of the economy, people may look to trade down, and one of the ways to trade down is really cook for yourself, and grocery stores are still benefiting from that >> i'm looking at your top tenants here the biggest one on the list currently, and this is before the kroger-albertsons combination, is t.j. maxx. and at the bottom of that list is walmart with a little more than 1%. a lot of these companies are going to face scrutiny in their next earnings reports about how the holiday shopping season went, whether consumers are still spending, whether there's strength of these consumers moving into 2023 and the prospect of recession. are you recessionproof are these tenants that will still pay their rent to you no matter what comes down the pike with recession >> we are very fortunate to have investment-grade tenants across

our portfolio. specifically the ones you mentioned there. kimco as a whole is a defensive play you think about it, we're everyday goods and services, essential goods and services so we'd like to think we're well positioned for what may come next the economy is obviously anybody's guess right now with the inflationary issues that are rippling through it is interesting to think, though, that our retention levels are 20% higher than they have been for the last five years. so the value proposition of the store in our shopping centers is actually being recalculated by our retailers because they're not just selling the product out of the door. they're now fulfilling those online orders and using the store to do that and that's why you're seeing the supply and demand really being to our benefit as we're able to lease up space really rapid will i the pricing power is there on our spreads and the occupancy continues to grow and retailers are really embracing the omni channel world. >> the other thing i wanted to ask you is according to what i've read this deal with albertsons and kroger is going

to provide you with a billion or so of capital after you harvest it all out is there a way for you to deploy that now in this time when capital markets are all but frozen that takes advantage of what we know is a lot of empty retail storefronts, especially in malls do you have an opportunity in front of you because you have that cash? >> we do have an opportunity we have to actually live by the reit rules we're a real estate investment trust. and this is a unique situation not a lot of reits are in a position where our investment in albertsons only has 100 million of basis and so it's worth about a billion three. we did just harvest 300 million. the next billion dollars we have to sell about 300 to 400 million each year in order to retain our reit status. so we can't harvest it all at once but we've done 300 million this past month we feel like next year we'll be able to do another 300 to 400 million and the year after that

another 300 or 400 million we're reaching all-time occupancies. you mentioned the enclosed malls are a very different sector of the retail world the grocery-anchored shopping center is in perfect position to take advantage of the supply and demand imbalance because we're getting the benefit of not only the t.j. maxxes, the burlingtons, the grocery stores, the home depots but we are seeing a surge in demand as well from some of the better credit mall tenants as well looking for open air shopping center expansion. think of seve osha we used to have ulta cosmetics be the dominant player in beauty for us now we have sephora looking to expand dramatically in open air shopping centers and the same goes for other retailers >> connor, it's really a pleasure -- >> i want to ask conor one more question >> please, tyler >> it's a really important question conor, is that where you usually sit? is that your office? >> this is our office. we just did our earnings call and our all-employee call. this is our office in jericho, new york -- >> i like that you sit there, you're a man of the people you sit there -- >> also those ceiling plights --

>> come shop in jericho. >> you've gota halo effect here do you see with the ceiling lights >> some of the best schools -- one of the best schools in america, jericho, new york, correct? >> that's exactly right. that's why our retailers do so well here. >> conor, great to see you, man. >> always a pleasure thanks for having me >> after the break, high net taking high risks. despite the major slowdown in bitcoin, a lot of wealthy investors are upping their crypto investments this year we're going to discuss those details next plus further ahead tech might be struggling but industrial earnings really provide some positive news look at caterpillar. beating expectations having its best day since march of 2020. we're gointo tdeg ra that name in today's three-stock lunch we'll be right back.

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bitcoin has lost half its value this year and has been pretty steady near the lows these past few months, but some high net worth investors aren't quite ready to throw in the towel. kate rooney joins us now so who are they? why do they want in? kate >> contessa, that's right. the bear market in crypto is looking like a bit of an opportunity for some of the professional investors, high net worth investors out there as well according to an annual survey from fidelity digital assets,

about 58% of institutional investors bought cryptocurrencies in the first half of this year even as bitcoin at the same time fell about 60%. that total was up six points from the same time last year 74% say they plan to invest at some point in the future high net worth buyers drove those results. almost half of those surveyed say they now own crypto. financial advisers were the next biggest group. and then pension funds and endowments still have the lowest allocation they tend to be the most risk averse of those groups the top reason for buying right now, more than 40% say they see crypto as an asset with high potential upside or as an innovative tech play and despite its correlation with the nasdaq and qqq a quarter of institutional investors are still banking that it's something that's uncorrelated to some of those other assets out there including the nasdaq i asked the head of research of fidelity about that and that report in general and that sort of dichotomy between being uncorrelated and those assets.

clients, he says, in this case tend to be longer-term investors. they're willing to wait for some of those other use cases to play out. the biggest barrier so far, half of respondents here say it's still price volatility keeping them out of these markets. they also mention lack of fundamentals to gauge its value, security, market manipulation and then regulatory risk tyler, back to you >> kate, thank you very much kate rooney. let's get to bertha coombs now for a cnbc news update bertha >> hi, tyler here's what's happening at this hour in santa cruz, california several schools have been locked down while police investigate a report of an active shooter. police say no injuries have been reported more than 1 in every 60 american adults is suffering from long covid. that according to a study from massachusetts general hospital the study also found people who were vaccinated were less likely to report long covid symptoms. and for the first time ever conservative republican liz cheney has endorsed a democratic candidate.

cheney is voicing support for michigan representative alissa slotkin, who's in a tight race for re-election against michigan state senator tom barrett. and the first woman to ever lead the new york fire department now has a job on a permanent basis. laura cavanaugh has served as acting commissioner since february new york's bravest are still overwhelmingly male. just over 1% of the city's firefighters are actually women. tyler? >> great for her good for the nyfd. appreciate it. still ahead on "power lunch" sill korn broke? meta's cash bleed. why doesn't silicon valley know how to stop its spending amazon earnings on deck. the e-commerce giant seeing a big slowdown in its retail

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our internet isn't ideal. my dad made the brillant move to get us t-mobile home internet. -which... we have to share our signal with the entire neighborhood. yeah, now we do some weird things to get our speeds. well... i'm up. -c'mon kids. this sucks. well if you just switch maybe you don't have to be vampires. whoa... -okay, yikes. oh sorry, i wasn't thinking. we, uh, don't really use the v word. that's kind of insensitive. we prefer pro-lunar. yes, much better. all right. 85 minutes left in the trading day. we want to get you caught up on the markets on stocks and bonds and commodities and this question should silicon valley change its culture? let's begin, though, with bob pisani at the new york stock exchange we've seen a lot of optimism

today in the markets, bob. >> yeah. and here's something you don't see very often, contessa the dow's up 1%. the s&p's down a half a percent. and the reason that's happening is heavy weighting in tech and communications services in the s&p 500. and they're having a tough day butless wher not so much industrials are having a great day. look at caterpillar on the earnings report. boeing rebounding after yesterday. but recently honeywell, great report, mcdonald's great report. those four stocks, that's basically all the gains in the dow jones industrial average merck got a new high that's an historic high at $100. and that's the earnings report but other earners that we had reporting, either after the close yesterday or this morning, also had generally good results. service now, southwest air, auto nation, anheuser-busch, all decent earnings as we head about halfway into earnings report it will be late friday or early monday when we get halfway there. the problem isjust big cap tec

in general we're waiting for apple after the close. but you saw what happened to meta amazon, microsoft. the weighting of these stocks in the s&p 500, we're talking about the biggest stocks that are out there. that's why the s&p is essentially down today finally, on mobile i just want to point out something rather distressing about ipos we had a great start to mobile priced at 21 ended up 25% on the day. and you see it down 6% today contessa, this is a very sort of distressing trend with big ipos. they tend to pop on the first day. most ipos are up 10% to 20% on the first day. but the following daze they tend to sell off. that's what we call the after-market performance is a bit disappointing. that's what's happening with mobileye >> we'll keep our eye on that. let's get to the bond market now where yields are falling on signs or maybe hopes that inflation is starting to slow. rick santelli has all the action there. hi, rick >> hi, contessa. well, there doesn't need to be so much hope

the hope is what inflation may do down the road but when you look at a 4.1% gdp pricing following 9%, it's pretty hard not to get a little optimistic look at an intraday of two-year note deals and obviously yields peaked around 8:30 eastern global interest rates started to come down due to those dynamics. and if you look at a two-day of tens, looks like we're on pace for the first close in two weeks under 4% and when it comes to bunds, there's a two-day of bunds, big drop, three-week low yield close. and the ecb of course met today. they had their second three quarters rate in a row they raised rates we haven't seen in offer a decade and by some of the wording changes it looks like the ecb's going to be less aggressive. the recession seems to be spreading. and when does qt start very blurry there. if you look at bunds and you open the chart up you can clearly see first time we're going to close under 2% since the 4th of october

gilds, five-week low yield as all sovereigns moving in the same direction finally here's a three-day xhart of the recession spread three months to ten-year on pace for its second inverted close right now hovering six basis points inverted contessa, back to you. >> rick santelli, thank you very much oil higher once again today. trying to get back to 90 bucks a barrel pippa stevens at the commodity desk hi, pip a&e. >> hey, contessa oil is extending yelled's gains with brent pushing back toward $100 now, earlier today the dollar hit its lowest level in a month, which gave oil a boost a strong dollar can impact demand since it makes oil more expensive for foreign buyers wti is up 1.4% at $89.11 natural gas, though, falling once again that november contract does expire today with the more actively traded december contract trading at a premium right around $5.90 per mmbtu now, turning to energy stocks, which are having really a

monster month, up nor than 20% in october, conoco, hess and marathon petroleum hitting all-time highs today exxon also hitting a record ahead of the company's report tomorrow morning chevron will also post quarterly results tomorrow while next week we'll start hearing from some of the drillers including devon and eog. contessa >> thank you for that. and turning now to what we're calling siligone broke, talks of cost cuts, layoffs, hiring freezes across wall street as america braces for recession. and yet tech giant spending more than ever before take meta. capex spending expected to grow nearly 70% this year from 2021 and hiring 3700 new workers last quarter. and yet shares plunging on its earnings miss. down almost 25% on the day wall street is screening, we're not accepting growth at any costs. why isn'tn't silicon valley listening? let's ask jim stewart, "new york times" columnist and a cnbc

contributor. do you think that these -- >> hi, contessa. >> -- big growth companies, jim, are they incapable of belt tightening >> well, they're clearly capable of it. the question is do they want to or will they and i think what they really have in common, we're seeing now, is there's incredible disconnect between normal market disciplinary forces and these big tech companies because they are, most of them have controlling shareholders who do not need to listen to the marketplace and don't really even listen to their own boards of dreshlirectors if they don't to another fascinating thing about them like a zuckerberg or ibzos, they are so rich even if their stock goes down 25% or 50% they're not personally particularly affected. i don't know that they care whether they're the richest person in the world or the third richest person in the world. they're still phenomenally rich. so they're living in a world that is disconnected from the average investor, let alone the average person

>> what you're describing is basically an emperor who looks out at the kingdom that he has built and says i don't need to listen to my advisers, it doesn't matter that i spend profligately, i'm going to continue to do what i think is best in order to grow and retain control of my empire and you see it happening even outside of this megacap names. draft kings has a founder that also has all the voting power where this comes are you going to start to see a switch from investors who get spooked by that kind of structure in and of itself, jim? >> well, they've certainly been ignoring it over the last decade as long as the stock price is going up i don't think anyone really cared about it. but i think yes, there is going to be a renewed focus on corporate governance and a look at how these people are responding i think another big issue that's particularly true of meta, look, the stock is down 24%, 25% today. and they've done a terrible job

of communicating to investors what to expect and also what is the rationale for this spending. i'll give them the benefit of the doubt that they are genuinely acting what they believe is in the best interests of the company and shareholders. but they have not been able to explain that to the average person you know, what is this -- >> but also aren't shareholders in it for the short term you get all of this pressure quarter after quarter after quarter to show results. when i've heard ceos say i'm trying to build a long-term vision here. how am i going to come up with the next big thing if i don't invest the money in that now >> well, amazon was kind of the classic example of it. shareholders let them lose money for decades. but they did a good job of explaining where they were going in the end and i think others need to follow that lead i think a lot of investors in these companies are long term. i mean-i know plenty of people who bought in early with google alphabet, bought in early with facebook, hoping it would be

their walmart, that they could hold it for 15 years and retire. and for a while it looked like yes, these things were going to pay off. long-term holders have done very well until this year in these companies. and i think shaking -- this is now beginning to shake that long-term mentality. >> sheryl sandberg left. a simple question, jim does meta have a zuckerberg problem? >> well, i don't personally know zuckerberg but i think there is a sense that you need -- let's concede that he's a genius, he was brilliant at seeing the potential of facebook. does he have the discipline to run a megacap company like this? it would be asking an awful lot for one person to be able to do all these different tasks, to be both a visionary and a great chief financial officer, for example. so i think investors, they're very reassured at alphabet, for example, that they have ruth pourate as the chief financial officer, someone they know, they trust, wall street knows her,

she's an adult in the room i don't think facebook has, now that sheryl is gone, in particular has a figure with that kind of stature on wall street the question is will they get someone like that, do they have someone like that? and again, if they do, they haven't really done a good job of communicating it. this is clearly, has always been the zuckerberg show and you either go with him or you don't. >> interesting answer, jim thank you, as always great to see you, sir. >> nice to see you 'lbeig bk.wa wel rhtac

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welcome back to "power lunch. right now the dow is having a very nice day. it is up about 300 points. it was up higher earlier but 299's pretty good. the nasdaq is down more than 1%. meta figuring in that. big name tech stocks dragging down that index. meta, as i mentioned, it's really just getting crushed. there's no other way to put it amazon also lower ahead of results after the bell today not before after. amazon 4 1/4%. some key things to watch, the impact of prime day there at

amazon foreign exchange headwinds the growth rate for aws. the state of advertising which others haveseen big declines in. contessa >> well, after the break, caterpillar's cows and cloud computing. and contessa let's throw it all in there. >> all cs. >> that's three big movers in today's three-stock lunch. 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, a fund that gives me access to... nasdaq 100 innovations like... wearable training optimization tech. uh, how long are you... i'm done. i'm okay. i promise - as an independent advisor - to put the financial well-being of you and your family first. i promise to serve, not sell.

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toim now for the time now for the one, the only three stock lunch. today, we are going to sip on names all higher caterpillar reporting robust demand including a 33% jump in north american sales from last year mcdonald's seeing traffic rise last quarter and service now saw servings per earnings, servings. earnings per share coming in 12 cents higher than analysts expected here to help us trade them all, lee munson welcome back why don't we start with caterpillar? they've got a nice story to tell >> i love caterpillar. nice blue chip i love the numbers here's the thing look how this stock has per

performed this year and been rewarded for beating estimates oh, and by the way, i love that china, it's not a big part of this it's 5, 10% of their sales and wasn't absolutely horrible but notice they went from reducing 3$300 million worth of inventories to increasing. meaning they sold more stuff to these dealers on the books and the bears were quiet nobody wanted to point that out, to needle it i'm bullish, but i think it tells you so much about sentiment where you can have a situation where inventories dramatically rise and there's not a burnch of flies everybody just says i'm glad they can push through those price increases. >> is mcdonald's always a rece recession special? >> it is now, i admit, bull markets can get tiring after about nine months and months ago, i was on with you guys talks about

mcdonald's about the theory people trade down in recession a company like mcdonald's will work out classically it's so nice that still exists they're raising dividends. europe was still strong. nobody's complaining in senior management and the strong dollar, which i love it shows you they know how to manage we fully wrote off russia and that wasn't a surprise on how much money they lost so this is just classic. i think you want to buy this or a thing like caterpillar don't trade it buy. hold it until we're in and on to the next growth market so to speak. i just love this stock >> number three, service now the stock is jumping let's take a look at the stock chart then get your response to it as we see the stock is up 13%. am i chasing something that's already left the station or what

>> might be short squeezes service no that's my tag line for the day here's my issue. for ten years, we've been sold a bill of goods by private equity that as long as you change the company into software as a service and made a subscription model that you're recession proof and that debt isn't a problem. i agree with that concept, but it's not talking about the price of stock you've got a $400 plus stock that's making pennies, a few dimes per share. so if this thing was growing at 20%, give me a nosebleed hundred pe, not 500. it's not its first day at the rodeo. most big, large firms already use their hr software so while they have some growth, this thing's going to start to moderate it's just too rich and i just would rather find something that's a little bit more realistic in terms of valuations >> always good to see you, sir thank you very much. lee munson

>> up next, elon musk has a message for madison avenue on the eve of his twitter deal. that's next. power e*trade's easy-to-use tools like dynamic charting and risk-reward analysis help make trading feel effortless and its customizable scans with social sentiment help you find and unlock opportunities in the market with powerful, easy-to-use tools power e*trade makes complex trading easier react to fast-moving markets with dynamic charting and a futures ladder that lets you place, flatten, or reverse orders so you won't miss an opportunity go. go lights. go big city lights. go spotlights. go stadium lights. emerson software helps clean energy become reliable electricity. go “good night.” go boldly. emerson.

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scape. he said the reason i acquired twitter is because it is important for the future of civilization to have a town square where a wide range of believes can be debated in a healthy manner without resorting to violence. it comes on the eve of the deadline to acquire the company and follows a report that advertisers are concerned about whether content will be moderated. it's interesting to say he doesn't want it to become a hell scape, but he does want more lively, fiery debate to be allowed to proliferate >> i'm reading here over your shoulder, a healthy manner without resorting to violence. well, words are not in and of themselves violence. it's question to me is whether the words incite violence. the violence is the action how do you make the tie then between what is on a platform and published? i think of these companies as

publishers publishers not just anadine communications platforms. how do you tie the violence to the rhetoric >> and the real versus intent may be different >> why don't you all go away now and think about this for the next day and we thank you for watching "power lunch. >> "closing bell" starts now >> a strong gdp print, solid blue chip earnings helping off set the drag from meta's meltdown that is make or break hour for your money take a look at where we stand in the market look at the dow. up 276 points. then you've got the nasdaq down 1.5% the story there is big tech and meta in particular, which is down at the moment 25% just ugly. dragging all of tech with it apple and amazon right at the bottom of the li