you have to pull some strings. you know the guy that knows the -- you are the guy jeff, thank you very much. echo extended suites congratulations, virginia. rolling. all right, folks, that's it for us on "the exchange. power lunch will pick up fed coverage tomorrow. we'll be here for it we'll see you then as well n now to "power lunch. from one virginia to another. i'm tyler mathisen along with morgan brennan 24 hours to that big fed decision another three quarters of a point hike is expected from the central bank so will its fight in four decades against inflation actually come at the expense of jobs we'll debate the fed's strategy. plus, retail risk. all over the place fed rate hikes, floating rate debt becomes more expensive. and that can be a blow to retailers' balance sheets.

we'll look at the companies that are most exposed morgan >> well, tyler, stocks are starting november with a declines as tomorrow's fed decision does loom the dow, s&p 500 and nasdaq all in the red off the lows of the session. off the highs as well, i might add. we did actually start this morning with gains shares of meta spiking in the last hour. still following comments from an sec commissioner that the government should ban tiktok those comments came in an interview with axios shares of snap moving higher on that report as well. and ahead of tomorrow's fed decision, the yield on the ten year treasury right now it is hovering around 4%, 4.052% to be exact. tyler? >> all right morgan, the countdown is on to the fed decision the central bank likely to approve what will be a fourth consecutive three quarters of a point hike but what does the fed do next? well, it depends in part on how

rising wages feed into inflation. tow day we learn that demand for workers remains strong job openings in september surged totalling 10.7 million that was above estimates and it comes despite fed efforts to loosen up a tight labor market so will the fed have to keep hiking until the job market cools? james is economic policy analyst at the american enterprise institute. cnbc contributor and mike console is the director of macroeconomic analysis at the roosevelt institute. welcome, gentlemen let's talk about really the big question here is whether the fed can engineer what is called a soft landing nerd, they can slow inflation, slow the economy so it's not so overheated but not, you know, create such job loss as to create distress in the economy >> yeah. i think we have seen quite a bit of success we're watching month to month.

but if you watch over the course of the last six months, we see a pretty good deceleration towards 1 2019 rates job openings, quarter by quarter are down 10% for the year. we see wage deceleration down to 2019 levels. job numbers are coming down quite a bit. also the distrcretionary spendi points to the idea of a soft landing. and, you know, we know the fed hikes, you know, a long lag. in fact, we have seen the deceleration exactly where we want to see, quits and wage growth and job numbers without -- while still adding job numbers. that is the idea of what they wanted to see at the beginning of the year. >> james, do you agree with mike zblfr i think if we were going to have a soft landing, a disinflation, you know, can you make the case as mike just did that this would be the one i would also say, you know, this is kind of a really unusually

unusual situation. we have the pandemic this is a case made that employers freaked out, cut too many jobs. that's why we've seen the sustained job growth if we were going to have that situation, yeah. maybe this the time. man, i would not count on. that even shallow recessions historically, you're going to see a couple of points increase in the unemployment rate which can take us to 5.5%. we can get out of this >> james, you are selling that our session is inevitable if you want to bring inflation down and in that process bring wage growth down which means higher unemployment rate? >> listen, i i'm not andrew melon during the early days of the great depression dying to liquidate labor

i'm saying that, listen, history -- listen, if history is a guide, we're going to have higher employment. we're going to have a recession. all right? so that should not be shocking that in itself does not mean the fed has done a bad job i think it is super important to get inflation under control. remember, this are all these people back, you know, early 2021 saying this is an impossibility. used car prices. don't worry. we need the stimulus and i certainly those are the same people today saying don't worry. we can avoid recession i would be skeptical i sure hope we can though. >> all right so, mike, i mean, just looking back historically, have we seen other scenarios play out where the fed has actually successfully had a soft landing when inflation is running at these levels i ask that knowing that the goods piece of the pie when it comes to inflation is, in fact, coming off right now but those stickier services, they don't seem to be following suit. at least not yet >> yeah.

so, you know, there is not that many data points to look at. there are some periods in the 90s. we also have not had a recovery that looked like this. one where the market is both very strong and had plenty of room to slow down while still having wage growth where we had supply elements so out of whack that we move from services to goods. we do see many parts of the supply chain easing. demands for goods are normalizing. cars to semiconductors are rebounding that is going to take pressure off inflation. you know, wage growth is already slowing to the extent that you're worried about inflation and services i think we have already taken a big chunk out of that. that is going to continue the next couple months it's not so much that inflation hasn't come down, it hat has not. what i worry about is that the fed has done so much hiking and has such a long lag with it that it can easily overshoot by far there's been a significant amount of tightening in the financial markets, particularly in real estate and if it overshoots, it can't really correct it. in so much the fed has said it doesn't juan to lower rate

it wants to raise rates during the psych which will is an argument and a political constraint they feel they v you know, if they overshoot, it's going to be hard to correct that you know, there is a lot of room for inflation to come down a lot of room for the economy to continue to decelerate without having to force into a recession. >> so, james, let me turn back to a question that hangs heavy in the air a week from the midterm elections. the gop candidates tend to call this the biden inflation who or what is to blame for the state in terms of inflation that we find ourselves in why did we get here? >> right i think you have to divide inflation into a two periods the 2021 inflation and i think can you make a pretty strong case that the two trillion dollar american rescue plan played a not insignificant role in that inflation with demand really overshooting the supply side of the economy. so in that sense, republicans are right.

now then you have sort of the 2022 version where you had high energy prices, that is different. so the republicans are kind of right and in an election season, you know, that's close enough for government work. >> and where then does the fed fit in that? and the fed's quaun taeasing >> did they get behind the curve? i'm not sure anybody -- maybe mike has different opinion -- i'm not sure that anybody argue that's they did not get behind the curve. and obviously that criticism of the fed is absolutely warranted. that said, it's also still the fed's job to fix the problem so sort of the cause of and solution to the inflation problem. >> yeah. mike, i do want to get your thoughts on. that i also want to get your shots on the idea of at least until we got to the black

outperiod with fed officials a couple weeks ago there is a lot of job owning around this concept of keep hiking for now, bring inflation down but perhaps slow the pace of hikes. and then all the talk and redefining of the word pivot and the market reaction as well. is job owning enough to get dare i say ahead of the curve now in terms of the conversation around the economic cycle >> yes they're going to blame power that's what they do. inflation is a global phenomena. can canada, australia. they didn't have a fiscal stimulus that we had we had inflation earlier and a significantly larger growth earlier than others. you have to put that into consideration. the next two rate hikes, you know, i think they matter at the marg margin the real moment is in january or the communications will be done in december. the fed wanted to tighten

significantly. they feel like they overreacted last year. in hindsight, can you say anything it's a very difficult call for the fed to make. how much do they want to pause or slow down going into the new year i think with so much rate increase that's is happening with real rates up significantly, with deceleration across the major indicators that we want to see, i think there is a reason to pause and can see how the economy evolves. we've not seen inflation pick up more or wage growth continue to persist at the levels it had there is plenty of reasons to think inflation will slow down there is reasons we really don't want to avoid recession if we can at this moment >> yeah. we'll leave the conversation there. it is a tricky conversation. we could probably spend the whole hour talking about this. >> oh, yes >> just look at the job openings higher than expected which is just another data point in this bigger conversation. james and mike, thank you for joining us of course, they did turn the market lower today our next guest says the fed's 2%

inflation target will be elusive. investors should favor qualities with pricing power to maintain the margins. let's bring in jack avelin, crescent capital founding partner and cio. jack, great to you have on i want to get your thoughts on the recent rally we've seen coming off the best -- the best october since the 1970s for the dow. you're thoughts? >> yeah. i'm not going to sneeze at i ahuge r - at a huge rally like that. the fed has been muzzled for two or three weeks and what we saw previously was, you know, every time the market rallied, federal -- what i call the federal open mouth policy comes out and starts to beat it down well, they couldn't do that this time in fact, this he can start jaw boning again coming off and flapping their arms tomorrow

american households are trying to tie the financial well-being to their salaries and 20% of american house holes tie the financial well-being to the stock market this near term, there are equity prices come down to try to get some of this demand out of the pipeline >> are we fairly priced? do we need to see earnings estimates going into 2023, for example, come down how you are thinking about it and how does the potential recession fit into that, i guess, analysis by you >> sure. so if we dial back to 2007, the last time the ten year treasury rate was above 4%, what you can see here in this chart is that the total return of the market which is depicted in blue has

really pretty much tracked earnings and dividends now if we also look at earnings expectations i'm going to call that fair value. we have essentially taken this 2.5% to 3% move and interest rates and we dropped accordingly. so if we do get a recession and we have to knock earnings growth down and the ten-year treasury drops by a quarter percent, we could see net positive in the s&p 500. >> i was on in the last hour with jim cramer doing an event and one of the points he made, it was an interesting and provacative one. investors have to get used to the idea that technology and particularly big technology is

not likely to be the market leading sector that it has been for so much of the past two decades going forward. and your stock picks, chevron, archer daniels midland and mccormick, in lots of ways couldn't be further from technology than they get big tax day is behind it and time to get closer to the land, i suppose, mccormick and archer daniels and so forth >> i'm not going to write off tech completely. i think there are certainly -- >> neither was he. >> there is a longer term horizon here as we start to navigate, i think one thing the fed is going to likely do in interest to avoid a hard landing, is to sort of pair back on that 2% target i think we're going to end up, you know, maybe in the threes, maybe in the fours and they're going to call that a success at least near term

so what that means to me is i want companies first of all you'll notice they're all, you know, commodity type stocks, food or energy for one thing they have the ability to pass their cost as long they also are high quality companies with strong dividends and strong dividend growth so, for example, you know, chevron has been growing its dividend at 5.3% for the last ten years. archer daniels midland, 4.5% per year and mccormick, it's a very small dividend, has been growing at 9.5% dividend growth over the last ten years so there is a way to capture where we are in the cycle and i think it's probably a good way to sort of navigate this higher for longer inflation >> we you got. grange, spices, oil, all there right in there right on the table for you.

jack, thank you, man >> all right thank you, tyler >> appreciate it >> i think from the cloud to the land i saw where you were going with that >> close to the earth. you know >> all right coming up, folks, the economic angst at the ballot box. stubbornly high inflation flip the senate and the house plus, the recent market rally hero he hinges on the ballot box a look at share of uber when we come back. up 13% after reporting better than expected revenue. uber's prices are higher, of course uber ceo tez the core business is stronger than ever. more "power lunch" in two minutes.

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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. welcome back to "power lunch," folks. midterm elections one week to the day. the economy is a topic, not the top issue for voters inflation, fears of recession, who will voters blame, the fate of congress up for grabs so will the republicans take back control of the house? maybe the senate and mid terms, we're only two years away from presidential election km contenders are emerging we knower who. this let's bray in larry sabato, director of the university of virginia center for politics let's go first, larry, to the senate which i think is terribly interesting. the three races to watch are in pennsylvania, i think georgia, and nevada

how do you handicap those? >> what we know about georgia suggests that it will be a runoff in early december you know, george has that strange rule they're one of a kind. you have to get 50% plus one of the vote and there is a libertarian on the ballot so probably goes to a runoff and we may be sitting waiting to determine who controls the senate until then. but i also think it's possible we'll know within a week of the election because, of course, the balloting and counting and dispute will take that long. so i agree with you on nevada. that is very close probably a slight edge to the republican at least that's the way it appears today pennsylvania, so much contradictory interesting and polling. john fetterman has managed to maintain a slightest lead over dr. oz so if it doesn't change, he

might be able to pull it out and democrats will have flipped a republican seat. but it's also possible oz will have surpassed fetterman by election day and that won't mean democrats probably don't have much of a chance of winning a republican seat. but if i can add one thing, tyler, there are five other seats throughout the country that are not one sided they're relatively close one side has led most of the time and that enables us to suggest who will win but i can't remember a midterm election without one, two, three major upsets that can determine the senate. it is so closely competitive. >> what are those just quickly, i am guessing wisconsin. i'm guessing ohio would be in that list of others. >> you're correct on both of those. north carolina would be in that list personally, i lean all of them to the republicans but the one that seems to be

most kpetcompetitive is north carolina followed by ohio, wisconsin. and then also on the republican side, mark kelly from arizona who has led consistently doesn't lead by much in the republican candidate for governor there kari lake is heating most of the polls. >> so those are the wild cards let's assume that nevada goes the way you kind of suspect they will pennsylvania, let's say it goes towards fetterman. then you have a net gain of zero for either side. then it all comes down to georgia? >> yes, and because of georgia's rules, we all have another full month of misery. hundreds of millions of dollars of tv ads, you know, wild charges, negative charges.

eventually, they need to change that rule. >> so larry, a nail biter here in a week, potentially plus month that you just laid out, we know markets supposedly like gridlock there is a scenario given that it's so close and with the senate that there are potentially up for grabs, is there a scenario where this doesn't fall into gridlock >> you have the house. the adds are substantial that republicans will take over the house. so that is automatic gridlock. you only need one house of congress to be controlled by the party opposite to the white house and then a president is pretty much reduced to vetoes even executive orders and, you know, threats of various kinds and that's -- that is the probability. now the senate goes republican too, then biden is really behind the eight ball there will be gains something for 2024 because presidents are often re-elected if they have a

double figure in congress. if they can run against congress because of the other party controls it. >> really quickly, larry, what are the things that matter most to voters turning out in this he lek election now >> by a mile, inflation. no question about it dobbs decision to overturn roe v. wade is second. that's in the democratic direction. but it's not nearly where inflation is in the list of voter concerns >> okay. larry, thank you for joining us. >> thank you >> after the break, private defective? a new stress test showing there could be a growing risk of defaults in a private equity space. plus, tips and tricks. that unprecedented 9% i bond dropping to 6% now investors could find even more attractive opportunities in treasury and inflation protected securities we'll be right back. hi, my name is tony cooper, and i'm going to tell you about exciting medicare advantage plans that can provide broad coverage and

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welcome back the fed is expected to raise rates department that will take it to nearly 4% this the year it's an increase in rates like that that can cause shocks to the market leslie picker is looking at

potential problems specifically in private credit. leslie >> morgan, yeah. this is an area to watch the private credit industry ballooned in recent years as regulation forced traditional banks to reign in low rates prompted companies to take on more and more debt but some are concerned that $1.2 trillion industry may soon reach a tipping point. pimco's ceo said delivering risk in december. they say private credit is the biggest concern right now. that is because in part this type of debt is floating rates so as the fed continues to hike, investors generate more income but the borrowers have to shell out more cash to service higher interest you payments. a recent test applied interest rate stress as cross thousands of private companies and found that a terminal feds rate of 525 basis points would lead to a 60%

increase in interest expense as a result, more than 60% of companies they looked at wouldn't generate the needed cash flow to cover the higher payments a statistic that doesn't even incorporate the impact on a potential recession and inflation. now the concern is that may lead to a way to default which creates losses, of course, for investors as well, guys. >> it is such a key point, leslie and it strikes sort of this whole idea of so-called fed pivot or a fed pause if the fed was actually going to start pausing now based on the data laid out innocent frof it, that is the counter argument, right the systemic risk is growing and that it is something potentially breaking what are the companies saying about this in the earnings calls so far >> you heard from kpr this morning. at least very big in the private credit space and they basically say that so

far they're not seeing much many the way of material credit weakness that actually they're being open opportunistic as big banks are pulling back we have seen this in financing and the inability to syndicate the debt so the private credit firms are really stepping into fill that void what is interesting is that given kind of where rates are right now, despite the fact they have risen so fast is how to create as much pain as the past as some have expected. but the stress test indicated that, you know, things could get ugly quickly once you surpass that 5% threshold. >> all right thank you very much, leslie. we appreciate it >> let's get to brian sullivan we have a news update. >> tyler, thank you. parkland school shooting survivors and family members the victims got their chance to face convicted killer nicholas cruz his sentencing hearing began

today. they described the pain that cruz caused. >> you don't know me but you tried to kill me i will have a star on my arm and the memory of you pointing your gun at me engrained in my brain forever. a broken and altered and you will never look at the world the same way again >> steve nash is no longer coach of the brooklyn nets in a surprise move, the nets announced they fired nash after disappointing 2-5 start to the season nash led the nets to the playoffs in both full seasons he had with the team. and the rockefeller center christmas tree, guys, it has been chosen. it is a norway spruce. it is located about an hour north of albany. it will arrive in new york city on november 12th it will become with the exception of ones in our living rooms, the most famous christmas tree in all the land i look forward, morgan and tyler, to getting to 30 rock

with you and having some egg nog and dancing around the tree like we used to >> yes, indeed sounds like fun. you'll be there won't you, morgan >> i -- yes. i will be there for that lovely dance party. and throngs of tourists. >> it's a good place to go thank you, brian ahead, is a relief rally beyond hope? we'll speak to a market expert who says any bullish momentum is premature. >> and retail baggage. as rates rise and inflation fears go companies have to seriously watch debt levels especially retail we're going to discuss that. 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.

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less than 90 minutes left in the trading day. we want to get you caught up on the markets. stocks, bonds, commodities, and bulls get took hopeful let's begin with markets they're low area cross the board right now. small losses compared to the big gains we saw in october. we're off the highs. dow is up 240 points earlier today. we got some hotter than expected jobs related data this morning so that is sending the stocks lower. dow is down 07 points.

s&p 500 is down .3%. 38.59. the nasdaq is down about .6% shares of amazon though weighing on the nasdaq, down 5% down 20% in a week since reporting its results. and can you see those shares are down 5.5% now. uber shares down -- excuse me, up 1% a2% the company losing $1.2 billion on a net basis but posting earnings on an adjusted bases and they believe the company is it on track to net profitability. now the bond market. rates are holding steady ahead of tomorrow's fed decision to are that we turn to rick santelli who is tracking the action >> hi. indeed, lauren we look at inter tens. a lot of information there we know that jobs were better than expected. we saw prices paid they were much lower than expected those are gr to the economy. usually good for the kbhe is

better for rates look at the big reverse there, especially the way it curved around 10:00 eastern you open the chart up to three days, we move from the below yesterday's low yields right back into friday's rain. and the dollar on this chart, followed right along with rates which is normal. you get better dat yachlt you get higher rates the dollar is just follow rates. the dollar, yes, they've been coming down. i'm not talking pivot. i'm talking common tense getting to the end of the cycle doesn't mean it's going to stop tomorrow or the next meeting but we are closer to the end than the beginning and that's important if you're watching foreign exchange as a matter of fact, if you open the chart to a week on the dollar index, what you'll see is we're right back to where we were on the 25th so highest prices in 5 1/2 sessions but it's also building on the base of 26 you see on the left that, was a six week index lower.

finally, going into tomorrow's fed meeting, we're on pace for the fourth consecutive close it could be minus five basis points that is something to pay attention. to i'm sure that many are going to vote tomorrow is paying very close attention to the recession spread morgan, tyler, back to you >> that's right. really recession indicator rick santelli, thank you oil is closing higher for the day. crude moving up. and nat gas is sinking let's get to the commodity desk. >> starting with oil it is advancing. the dlart asent cools. china and the countries covid policy does remain front and center it is the largest crude importer turning to natural gas, the big moverer falling more than 10% and giving back almost all of yesterday's 12% gain part of the decline comes as it looks increasingly likely that f freeport return to production will be delayed. it's been shut since a fire back

in june. less demand for nat gas. there are a couple notable movers in the energy patch today. marathon petroleum jumping to a record high after the third quarter net income came in at $4.5 billion that's up from roughly $700 million during the same quarter one year ago fellow refiner fphillips 66 also on the move. >> thank you the recent runup in stocks sent the dow to the best monthly performance since 1976 may not last in a new note, barclay's calls the hope rally premature let's bring in head of the u.s. equity strategy with barclay's investment bank. great to you have you on what do you mean the so-called hope rally is premature? >> morgan, our point of view is that there is still a lot of uncertainty. and every market still not

factoring in the rapid acceleration of funds which we see. en that is still in the early stages and second, all the correction you're seeing in equity this year has been through a contraction valuation multiple which have been driven primarily only by the rise of inflation and interest rates so what is not being factors in is sort of slowdown in growth. and we still see the street is more optimistic even now for example, our estimate for s&p earnings were 23 is $210 that compares to consensus of 232. so more than $20 left to go. and remember, consensus is just two months ago was 252 it came down to 243 in august. came down to 239 in september. and here we are at, you know, lower than 232 we feel there is still a ways to

go and most importantly, last point i make is that this $210 number we have is assuming the fed wins inflation battle but it is at the cost of a shallow recession. so if we have a worse recession, then that number could be a lot lower. loser to 190 >> okay. so then what would you be doing right now? fading the rally you wouldn't be somebody who is telling your clients to buy in here sounds like >> no. our view is that market has yet not found a bottom over next two to four years, we feel that bottom has to hit. it will be probably the 32, 3400 range. once that happens, we feel that is a time to start accumulating. we do see the s&p 500 ending closer to 3700 next year valuations were correct. and we find bottom in earnings

and then values expand and we're in a better environment. so, yes, we will fade for now. now we do recognize that people in light positioning in the markets that there is a fair market graphics. and we feel right now exactly what it s it's a bear market rally. but it's not sustainable based on macrouncertainties and the fundamentals in the market. >> all right thank you for joining us >> thank you all right. after the break, folks, we will return and bring you more "power lunch" betting on bonds. those are a lot of people talking about those and tips and i bonds which is the better investments? we're going to be talking about bonds for a long time.

we all have a purpose in life - a “why.” no matter your purpose, at pnc private bank we will work with you every step of the way to help you achieve it. so let us focus on the how. just tell us - what's your why? inflation and interest rates rise, sharon epperson looking at places to park your money and

which alternatives provide the best bang for your buck. hi, sharon >> hi. the new headline rate on the i bond made up of a new fixed rate of 0.4%. that is an addition to the portion that adjusted for inflation. that is how you get the 6.89%. bonds is the fixed rate is now above zero the big cons are that you can't take out the money for a year. you lose three months interest if you redeem them within five years. and there is a limit on what you can buy. $10,000 per calendar year. another $5,000 if you have that sum in a tax refund. so let's compare that to tips. treasury inflation protected securities whose rates have been going up recently. as of october 31st, the real rate would yield 1.6% on top of inflation. now the big pro for tips is that they have fuel restrictions. you can buy and sell them daily. can you purchase $10 per security tips have a principal adjusted for inflation based on cpi changes and the interest payments are percentage of that

inflation adjusted principle so the total return can fluctuate and you can lose money. increases in tips principle pal value though is subject to federal taxes in the year they occur. but you won't receive those increases until the tips are cashed in or they're sold. that's where some financial advisors recommend tips for tax deferred acts. >> thank you very much a lot to process there viewers are interested in i bonds or tips, how do they buy them where do they go >> your money summit that we did online, a lot of people wonder how they can get into i bonds. can you get them directly on treasury direct.gov. can you buy them right on the treasury department's website. you can do the same with tips. you can buy them right there on the treasury department web side you can also go the secondary market buy them through a broker or some people prefer to have tips held in a mutual fund or an etf. simpler for them to do it that

way so there are several ways can you purchase them. >> all right, thank you, sharon. appreciate it. >> sure. well, the debt of retailers is in focus. the fed hikes rates. will the cost of servicing that debt be another blow to the sector we'll discuss which names have the most risk. that's next. i promise - as an independent advisor - to put the financial well-being of you and your family first. i promise to serve, not sell. i promise our relationship will be one of partnership and trust. i am a fiduciary, not just some of the time, but all of the time. charles schwab is proud to support the independent financial advisors who are passionately dedicated to helping people achieve their financial goals. visit findyourindependentadvisor.com ♪♪ we all have a purpose in life - a “why.” maybe it's perfecting that special place that you want to keep in the family... ...or passing down the family business...

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welcome back we're less than 24 hours from a fed decision and another interest rate hike will mean borrowing costs will go up for individuals and companies. wells fargo says that could spell more trouble for the already beaten-down retail sector the xrt down 30% so far. wells fargo has identified the most at-risk retail names because of their floating rate debt loads let's welcome managing director and senior equity analyst at wells fargo. ike, obviously there must be floating rate debt in lots of companies. we're going to focus on some of the retailers that have it before we get to individual names, is the exposure so sizable that it could be material to these companies' earnings if they have to pay more to service their debt >> yeah, thanks, tyler

good to talk to you again. so, you know, it's a question that's on investors' minds we've done a ton of phone calls over the past couple of weeks where this is very top of mind look, at the end of the day, we know for consumer discretionary the fundamentals are challenged. i think numbers are down about 35%, 40%, year to date the question becomes, if this is going to continue through holiday, we've got companies guiding down q4 into next year, how bad does this really get we start looking at balance sheet risk and that's where the leverage gets scary. so floating rate debt, you know, maybe 2%, 3% headwind to the group overall, but some names exposed more than others it's not just the floating rate debt it's debt maturity, who has debt coming due in 18 months. >> i would think that it isn't just those that have floating rate or revolving credit lines or whatever, it's anybody who has debt coming due and needs to

refinance that debt. it's not going to be at whatever it was it's going to be at x plus so let's look at a couple of the companies that you say have a more risky position in that in the floating rate area hanes brands and vf corp., clothing manufacturers. >> yeah, so both not surprisingly, two businesses that are pretty fundamentally challenged they're having a tough time. vf, you mentioned with the floating rate debt they also have about a billion of debt coming due next year i think they're paying less than a percent on that debt right now so that's going to be a re-fi that's going to be dilutive, i assume, when the time comes. hbi, we have an underweight on it so it's floating rate, they've got $1.5 billion due they'll have to refinance and some financial covenants that if things come up bad they're going to come up against

those are the two we highlight in the report as being the most at risk right now. >> i know what to steer clear of based on your analysis what's in a good position given the current environment, whether it's from an interest rate standpoint, a consumer standpoint or something else >> look, we've become much more optimistic on the off price sector over the past month or so burlington we've named one of our top ideas. we upgraded ross stores a couple weeks ago. the idea of the economy remaining weak and trade down accelerating into next year, defensible names that are cheap relative to history where we see visibility into fundamental outperformance next year, i think the off-pricers are a good place to look and we would refer ross and burlington over t.j., just simply because t.j. has had a good year. t.j. was the off-pricer to own in 2022. i think burlington and ross are the ones you want to own in

2023. >> thank you for joining us. >> thank you. up next, the re-sale revolution and spphoers driving the thrifting craze. "power lunch" next

- oh, the stock market is doing that fun thing again. news from the future: you're going to live through that about 10 more times! (laughs) no stress. i just discovered yieldstreet. they vet investments that don't ride the stock market rollercoaster. - [narrator] yieldstreet: private market investing. welcome back to "power lunch. everyone loves a bargain and that desire for finding good deals is leading to a surge in secondhand shopping. dom has a look at the

revolution. >> i am in many ways secondhand. it's called re-commerce, so e-commerce, so you kind of get where i'm going with this. well, there is a staggering statistic about just how prevalent re-commerce has become according to offer up, which tracks a lot of this business, 82% of americans, four out of every five americans, has bought or sold something secondhand, and just to give you an idea of what that is, it roughly equates to about 272 million people that have bought or sold something secondhand used. if you take a look at some of the other numbers of why this is such an important thing, according to offer up, we're going to see 80% growth over the next five years in re-commerce and it's going to become a nearly $300 billion industry commerce-wise, people buying and selling used goods as if that weren't enough, some of the real issues around that are about why people are doing

it oftentimes it is to save money, and according to coupon follow, about $150 per month is saved by people buying something secondhand so on an average year it could get to $1,700 to $1,800 you'll get by buying secondhand as opposed to at the store. thrift is most certainly saving money the big reason people do it it's not just that it's also about sustainability some people like buying used items because they can get the same utility without having to purchase something new or make something new, using the energy and materials to do so it's not just people looking for a bargain on the lower to middle side of the income spectrum. a lot of luxury items, hard-to-find ones are being sought in the secondhand markets right now. so it's not just about finding values sometimes you can't find that expensive luxury item without getting it secondhand. big deal, for sure.

>> could be home furnishings, anything. >> i'm not sure if you've done it i have actually purchased things secondhand and it's pretty amazing. i've done it with clothes, electronics. i just bought some stuff on ebay. >> thank you very much thank you for watching "power lunch." >> "closing bell" starts right now. well, stocks had been tracking for more gains to kick off a new month but early-session data took the steam out of the rally this is a make-or-break hour for your money i'm sarah eisen. welcome to "closing bell." take a look at where things stand. the dow is certainly off lows. we're coming back nicely, only down 58 points got as low as 226 but earlier as high as 242. what's contributing the most goldman sachs. value sectors are doing quite well, energy, utilities, health care that's green s&p down