bo and a boeing cvs had great earnings today, beat and raise >> cart miller, great pricing, good deliveries. i think these guys could do $18 to $20 in earnings power over the next couple of years >> all right good stuff i'll see you with gundlach in overtime "the exchange" begins now. we're going to start off with some breaking news there is a fed interest rate decision in just about one hour, surprising, i know the big money question, will jay powell and company stay aggressive will they back off whatever they decide could swing stocks big in either direction we're going to set you up for all of it. we're going to count you down to all of it. plus, the ceo of logistics giant ch robinson is here with what he is seeing on inflation and shipping we've got a lot to do in the next 59 or so minutes.

let's begin with the markets ahead of the big meeting dom chu has got the numbers. it's like the kickoff to the super bowl are you getting pumped >> 59 minutes and 15 seconds worth of pumped left in me but we're watching the markets, as you point out, brian. this is very much a wait-and-see environment, although a little bit more tilted towards the negative side than you would expect to see, given a federate decision to put things in perspective right now, the dow industrials are down about 1.25%, 68 points, 32, 584. the nasdaq composite, 10,780, down 110 points. the real laggard on the session, down about 1% full the s&p 500 is staying in this kind of static marginal loss mode right now, but we have seen a little bit more of that's tilted to the downside we've been pretty much negative all session long, but again, not dramatically so, but very much wait-and-see one other place we're watching very closely is the megacap

technology and tech adjacent type names, apple, microsoft, alphabet, and tesla. they're all down 1 to 2.5% right now. the reason why i want to call your attention to the top three is because they are now the only members left in the trillion-dollar club yes, because of amazon's market declines that we've seen post earnings amazon shares are now worth roughly, call it, $970 billion so only three these stocks are in that $1 trillion club amazon falling below that tril trillion-dollar mark we'll keep an eye on big tech, as a sentiment gauge given interest rates and then one stock today to keep a close eye on, bucking the trend. the best point contributor to the dow jones industrial average today, boeing shares up 3% $4.50 to the upside, $147.96 this is after the company's chief financial officer told investors that boeing could see free cash flow gains, positive free cash flow from anywhere from $3 to $5 billion next year,

and that's huge, because what they could do is see a ramp-up in 737 max and 787 deliveries there. that could be driving some of those results that positivity is driving shares higher. and a real bucking the down trend overall with boeing shares we'll see if that sticks around after the fed minutes or the fed announcement comes out at 2:00 p.m. this afternoon. >> i wonder how many tech employees of facebook and others may have tied their mortgages to barring against their stock. let's hope not many or none at all. you know what i'm talking about. >> it is one of those situations that there could be a huge ripple effect. let's hope a lot of people aren't tied loan wise. >> loan your equity out. now the bank, stocks go down now let's hit bonds, because

those moves may be ahead of the fed. credit folks can't wait around they have to make their moves before the actual news rick santelli is at the cme. you're pumped for powell and company. >> i sam so pumped for powell and company. 2s are virtually unchanged 10s are virtually unchanged. all other maturities are basically within a basis point of settlement, which is actually quite typical. but the lead-in is very interesting. remember, the 20th and the 21st of the last fed meeting. let's look at all maturities of relevance were affected by the last three quarters of a point increase on the 21st here's two-years they're currently up about 57 basis points they were up several basis points below 4% on the 20th. the day before the three quarter point increases.

here's what's really interesting. three months of 10st the recession spread is definitely paying attention to the last fed meeting they were positive 27. now they're minus 10 and now five sessions in a row that we've closed inverted the dollar index, well, it's about a penny higher than it was a the last fed meeting here's where it gets interesting. you said, what is the market preparing for? is it pricing in well, january fed funds of '23, i sloisolated it. right now it's roughly around 95.57. it was around 95.75 at the last fed meeting. it built in a little less than 25 basis points. but to the previous meeting, it built in 75 basis points i know we're going to get a big move after the hike at 2:00 eastern, but it will be very relevant to see how much more fed fund futures build in to see

if we laid it out. >> joining us now is head of u.s. rates strategy. i'm actually confused. if the fed goes 75 basis points today and indicates -- if they indicate a half a percentage point in december, would that be considered dovish? is only 50 basis points the new dovish >> probably not. i think the fed is going to sound hierarchy at this meeting. so what they might do at the december meeting, and the focus is very much what they do in the december meeting they might hike rates by 50 basis points

they're now pricing it at around 5% the question for me is if the employment picture remains as robust as it is right now, what will day do then so i think they have to have a good idea of what the policy will be and that thagr that's where they can sound a lot more hawkish. >> here's the thing. jay powell, they're all smart people, very successful. they were so wrong their dot plots one year ago were like 3% away from where they are now no matter what they tell us, david, it's clear from history one year ago, it could wildly

cha change what powell said in 2020, we're going to stay easy as long, and it won't have a difficult residual impact. and it turns out out in '21, that it did. now the exact opposite, we're saying, there's no rate that we could go higher. we can stay higher for longer. and that's going to work out just fine and that the economy can deal with that if powell is to be faulted for anything, in my mind, it's extreme on both ends what we're seeing in residential housing sin addiis indicative o happening. we could see 300,000 to 400,000 job losses in residential construction, 2 million job losses next year across the economy. at that point, will we see lower inflation? the fact is that the fed will cause us to have a reduction and

that will be priced into the market -- david, has it already been priced into the market, when interest rates go up, you have to discount valuations, because things like free cash flow assumptions come down multiples must come down have they come down enough >> i think you're exactly right. interest rates have caused multiples to come down on today's earnings level what has not been priced into the market is we could have average corporate earnings down 10% next year and the combination of higher rates and lower earnings has not been fully priced into the market yet. remember, there has never been the low point in the market reached before a recession actually occurs. and the inversion of the curve is what we're seeing right now, indicating that the probability of that recession is far higher today than it was just a few months ago >> and i guess that is the question i know you're not the equity person, but has the market discounted what is likely to be a recession? i'll ask it this way

has the market sufficiently discounted where you see interest rates one year from today? >> i think that repricing is still happening, right i mean, last year, like you just pointed out last year at this time, we were not prepared for how much the fed would hike. and i would argue that this year, we're not prepared for how much the fed could hike next year, if you don't see a meaningful change in the employment picture, to the downside, that is. and broadly speaking, i think that the transmission mechanism of higher rates is a lot slower in some respects, the mortgage market is in a very good place household balance sheets are very, very strong. so it's becoming much more of a struggle for the fed to just rely on rate hikes as the primary mechanism around the economy. if you look at the yield curve, it's definitely pricing in a recession. the curve is inverted. that's a metric that the fed

tracks but o'methods are probably not fully appreciated the potential downside to the market that's really where i think the concerns are broadly speaking. >> ala 2013 so-called taper tantrum where ben bernanke freaked everybody out, came out of nowhere, spooked be the bond market i will give powell credit on this has he sufficiently, because everybody else on cnbc, we have a headline from a fed speaker. kashkari says this at a conference in vegas, whatever it might be have they sufficiently telegraphed what they're going to do? >> i think they have telegraphed that they are going to be data dependent. broadly speaking, that's what you'll see from powell today, is that they're going to be very transparent in saying that they're doing everything they can right now and they'll have to adjust as they go along that's how i see policy playing out for the remainder of this

year and perhaps even well into next year. why? because they don't really have transparency on the outcomes on inflation. it's a global phenomenon it's that and the concerns about financial stability. broadly speaking, volatility, hab very high, liquidity has been very poor it's going to be very, very challenging for the fed to navigate all of these different factors. >> we've got to leave it there david, to my point, one year ago, the high dot, the high projection was for fed funds at 0.75% that was one year ago. that's like betting the bengals will win 50-3, but they lose 100-0. really appreciate it >> thanks, guys. appreciate it. get ready for the fed. coming up, it's not just about the fed. we've got stocks, semiconductors, and streaming. we'll tell you how to position for robinhood, qualcomm, and roku ahead of their results. but first, that fed

decision, yeah, it's front and center for you and it should be they're going to be keeping into every single word in the statement. so your next guest is looking at the little details of chair powell's language and what that may say about the fed's next move 47 or so minutes until that decision and we're back right after this zero-commission trades for online u.s. stocks and etfs. and a commitment to get you the best price on every trade, which saved investors over $1.5 billion last year. that's decision tech. only from fidelity.

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>>. all right. when alan greenspan ran the fed, some investors would do what they referred to as the briefcase indicator. depending on the thickness of his bag, his briefcase, the market tried to decipher what would be coming next in other words, how many papers did he have in the briefcase, furiously shuffling through. these days, we don't interpret words like we used to. we dissect them online we have to change ongoing to further, rising to stabilizing, future to current. and those changes in language could alter the direction of the markets. in fact, i think former goldman sachs lloyd blankfein, who is wickedly funny on the side, tweeted, i imagine jay powell and the rest of the fed governors are right now sitting with a thesaurus trying to find a word that means "pause" or

"not pause" depending on who's listening. it's probably too close to reality. joining us now, annetteta marcowski, chief financial economist at jeffries. do you have your thesaurus -- easy for me to say -- thesaurus ready, but any change in any of those languages and i just posted the last statement on my twitter account, is going to move markets, i think. what are youing? >> i would say in a statement, there is only one word that matters. if the fed wanted to signal some kind of a shift, they would change that. like more rate hikes will be appropriate or further rate hikes would be appropriate that would be a little more finite it's not my base case that they change that today. i think it's a little bit too early, but it's certainly something that we'll be keeping an eye on. and if they do change that, i think the market would perceive that as a pretty significant

sh shift. >> and i'm trying to figure out what the hawkish language would be is it somethings like remain remain evaluated oddly, the fed actually -- they need the job market to cool off. >> that's right. i think he will -- well, actually, i think the main language that i'll be interested in during the press conference is how powell characterizes the balance of risks because up until now, fed officials have been saying, at some point in the future, risks will become more two-sided they're asymmetrically skewed to the upside that would be a very dovish tilt not my base case it's not my base case, because

there's just no evidence that the fed can point to that would give them, you know, any confidence that inflation is on the rightpa, that the labor market is on the right path. i think he'll talk about that data or back to 1.9 job openings per unemployed that's, you know, basically just below the cycle highs. there is really no meaningful decline in that trend. and something that powell really talked about pretty adamantly at the last press conference is this idea that core inflation, when you look at it on 3, 6, and 12-month averages, it's fire to six per month. inflation is still very sticky and there's nothing that they can point to in the labor market that gives them any confidence that those pressures are going to abate >> in the last statement, quote, job gains have been robust in recent months. unemployment rate remains low. look for a change in the line "robust. here's the line that sticks out to me and others the committee strongly committed

to returning inflation to its 2% objective. i mean, if we have a change in language where it's like, we would like to see inflation that's the kind of stuff we're talking about, right, that would indicate a slightly dovish pivot. >> and that is not going to change one of the questions that i get from investors very often is, you know, why wouldn't just the fed accept slightly higher inflation, if that avoids a lot of pain? avoiding pain is really not an option, right? the only question is, do you want to take some pain now or more pain later? that is the trade-off, realistically speaking and so, you know, and hinting in any way that the fed will be, you know, willing to live with higher inflation, i think, potentially, unhinges the long end of the treasury curve. so that doesn't necessarily do us any good, either. so i think powell will be very, very adamant about his desire to

turn to that 2% objective. >> well, the language is up on the twitter accounts annetteta, we'll let you get ready, get that dictionary, thesaurus, lexicon, whatever it might be, get it ready look forward to your analysis. anita markowski with jeffries, see you soon on deck is what's on the dock how logistics giant ch robinson sees the world and inflation right now. the first time you made a sale online was also the first time you heard of a town named... dinosaur? we just got an order from a dinosaur, colorado. start an easy to build, powerful website for free with a partner that always puts you first. godaddy. tools and support for every small business first.

at fidelity, your dedicated advisor will work with you on a comprehensive wealth plan 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. welcome back nasdaq losing a little steam normally you don't see any move

ahead of the fed is it a take on the fed or something else dow down 68 points right now some of your big money movers include paramount. it is the worst stock in the s&p 500 and it tanked after missing estimates on the top and bottom line that stock hitting its lowest level since may of 2020. they're big in china, lockdowns really hurting and airbnb, we talked about it yesterday, plunging despite beating better than expected results. we don't beat better than expected results the company's guidance coming in moreau some estimates. that's the problem airbnb says cancellations rates for the third quarter were higher than 2019 levels. maybe a lot of people getting excited about a trip and then

changing their mind. airbnb stock down. now, let's get a news update with tyler mathisen. >> brian, thank you very much. welcome, everybody there is a peace agreement in ethiopia to stop hostilities in a brutal civil war in the tigray region victims could number in the hundreds of thousands. the agreement calls for a coordinated disarmament and a restoration of law and order in brazil, supporters of jaer bolsonaro continue to protest. bolsonaro has not conceded defeat, but he has stopped short ofcontesting the election and says he's going to cooperate in a transfer of power. meantime, in japan, nearly a hundred hot aballoons are takin flight for an annual festival. on the news tonight with shep smith, an unexpectedly close

race for governor in oklahoma and how an unprecedented endorsement from a major tribal leader in the state could affect the outcome. >> tyler mathisen, thank you very much. still ahead, roku, qualcomm, robinhood, all on deck with their numbers. the key things to watch and how to position ahead of their earnings we call it "earnings exchange," and yeah, we're even doing it on this fed day you're wco, era.elmeamic we're back right after this. g 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. - yieldstreet presents: alternative investing

with kal penn and older kal penn. - oh, the stock market is doing that fun thing again. - hey news from the future, you're going to live through that about 10 more times. (laughs) - oh, it's no stress. i just discovered yieldstreet. they vet investments that don't ride the stock market rollercoaster. - ooh. i think some of my gray hairs just reversed. - yeah. you're welcome. - [narrator] become an investor today. yieldstreet: private market investing.

all right. we call it earnings exchange we're doing it even on a fed day. we'll take a look at a story and a trade on three key names that are reporting after the bell today those names are qualcomm, robinhood, and roku. all right, first up, that is qualcomm shares are down 36% this year, on pace for their worst year since 2001 this despite the fact that qualcomm has beaten the street on earnings for four straight years. kristina partsinevelos has the story and nancy tangler, ceo and cio of loffler tangler investments has our trades kristina, it's like

semiconductor week we had infrastructure week, this is semiconductor week. i don't know what that was you just did >> it was an excitement dance. >> you also get to talk about them, not just aboot them. qualcomm, what's the set-up? >> let's talk about qualcomm you just mentioned the stock was down over 35, 36, 37% right now. a lot of that has to do with the fact that it is highly exposed to the consumer end market two major factors for this report is that you are seeing a slowdown in a 5g adoption. the second major factor too is that china shipments have declined these are smartphone shipments down 19% year over year for the september quarter. we talk about some positive for the companies. 2023 had samsung as one of his high end consumers it announced that it's making chips for its handsets to it tablets. we may start to see that

reflected in the march quarter apple still a big question market around that it will still be customers will apple continue into 2024 with qualcomm chips? if so, that could be a positive. the third positive is the automotive segment, which accounts for 3.7% of q3 fiscal revenue. the company's narrative is that this is going to be a majo driver that they see this market as $100 billion total addressable market by 2030 so definitely some strength there. but, that's long-term. long-term. >> hold on you can't just scoop over point two. you said with, if they break up with apple, that's like tom and gisele that's -- that would be a massive split. >> well, no, they're already supposed to be doing it. no, no, they are supposed to be doing it, but the rumor is that it's going to be delayed, because apple can't create its own chips with the phone that's why and i've asked qualcomm this, and i will be sure to ask it

again when i get on the call with them when the earnings hit. but, yeah, this is something that could still -- >> are you breaking up with apple? that's kind of a big deal. i'll make sure to do it exactly like that. >> do it in san diego. are you a buyer of qualcomm here >> no. we own it. one of our equity strategies has a much longer time horizon, focused on dividend and dividend growth but i think that kristina nailed the two most important things. the other is the smartphone issue. and they are investing in other areas, but it's going to take a very long time to turn this queen mary around. if you already own it, i think you're fine. you hold on, get paid to wait. if you don't own it, i think there's better places to be if

you want to have chip exposure one of those is broadcom a higher dividend yield, growing at much faster, like growing at 32% annualized, five-year annualized growth rate the dividend, that is. and half the business is software in this environment, where we know the problems with chips, you want to be very specifically selective about which companies you own in that space. >> i get the reference i hope it's not the queen mary that has been rotting in port for 30 years in long beach nancy, kristina, thank you very much next up is robin hood. it is riding a four-month stock winning streak, but like so many others, still down 34% on the year it's still not profitable. the street expecting another loss for the third quarter kate rooney has the story. like, permanent losses forever, kate like, any sign of profitability? >> we'll see that really is one of the big focuses. when is this company going to be profitable and the markets are down this year we all know this if you've been watching cnbc,

people are trading a lot less and robin hood tends to make money when people trade more the expectation is pretty low for trading volume, which is where they make a bulk of their money. for robinhood, it's more about what the company can control what levers do they actually have and a big one is cost cutting. we've already done layoffs wall street is looking for some more cost discipline, especially in guidance. and watch net interest income. robinhood makes money on rising rates. the big question is will that help offsmoet some of the tradig slowdown watch account growth are people leaving the platform. are they still able to monetize the users that are right now still on the platform? >> i guess that is the question. nancy, i'll say this to summarize what kate said they'll lose money on every trade, but don't worry, they'll make it up in volume >> and i think this is not the time to own companies that don't

have earnings and don't have earnings in site this is a trader stock, to be sure i'm not saying that you can't make money on the trade. one of the top headlines that came out this morning about the stock was that it had its longest winning streak in its history. it was eight days, the stock has gone up 20%. but as you pointed out, it's down 33% year-to-date and down 83% from its all-time high in a rising interest rate environment, in a slowing economic environment, where people actually are back to work, i don't think this is the stock you want to own. we call them terminally cheap in our company. we would rather own something like schwab, where you're actually getting paid. there's earnings, an experience management team. and you're getting paid a dividend to wait during the period that it's going to take to bail these stocks out >> a final comment, kate this has been a brutal year not just for robinhood, but any company that doesn't make money

gets their teeth kicked in >> it started to turn around when the fed started raising rates if path to profitability is the buzz word for a lot of these companies. the companies that are getting rewarded are the ones that are doing layoffs. that are scrapping some of the more ambitious plans and getting more focused you can see that in paypal that stock has outperformed recently because it's got this activist investor eliot coming in for robinhood, it's really about, can they take this seriously. can they pull back in a time when their core business isn't really making money? and again, what is the path to profitability? >> it's like that bridge behind you to treasure island >> this is the path. >> but the bridge just keeps going. >> it's on this side, right? >> no, this side >> my dad was stationed there in the navy my dad was on that island in the navy a long time ago kate rooney, thank you very much right now it's like $1 million condos or something. the final name is roku this stock down 75% this year. more than 80% off of its highs also not profitable. smart tv growth, julia boorstin

joining us julia, i'm old enough to remember when roku was like the hot kid on the block and that was like last year. everyone is like, this is the future of streaming. what's happened? >> roku's stock in many ways is seen as representing the health of the streaming market. this is a company that benefits when there are more streaming services launching, because those streaming services advertise on the roku platform now, of course, it also has its own add-supported channel. there are a couple of key things to look at here for roku the first one is research growth roku is expected to report 2% revenue growth in the third quarter and guide to 2.5% revenue growth in q4 i think guidance will be in focus, representative of what kind of ad trends we're seeing the other is active accounts that's a key number to watch for roku, to see how engaged users are, and where it else about the health of a streaming market as a whole. the other thing we're watching here, just for active accounts,

there are 64 million that's the number to watch and path to profitability, we were just talking about it with kate rooney there, but this is a company that is expected to go to a -- from a profit in the year ago quarter to an adjusted loss of $1.28 per share in the quarter and the company is expected to continue to report losses, going forward. i think anything about path to profitability, ability to increase average revenue per user, those things are all going to be in focus but the health of the consumer and the health of the ad market, those are the big risks for a company like roku. >> it sounds like roku got so close. they were talking about the path to profitability, then the big, bad wolf happened to be on that path i'll take a wild stab that you are not a buyer or owner of roku >> we used to own it during the st stay-at-home bubble. we didn't get out at the top, but we did okay. we realized that there's a heavy dependence on hardware sales

and that is going to be important to watch as well this stock is going negative next year i can't make up a reason why you would want to own this stock over the next year or two. kathy wood has much longer and better vision. but almost has an almost unlimited time horizon i need earnings to to have some metric to go by. >> i've got to correct you unless you're the vampire lestat, nobody has an unlimited time horizon, nancy. i wish we did. if i can make julia boorstin chuckle, that's a win. you always make me chuckle what did eunice yuan say one day, every time i see her face,

i laugh. thank you both very much kate, christina, out there somewhere, thank you both very much >> coming up, what do the cheesecake factory and cesar's, not the salad, but the casino, have in common here's a hint. it's electric. we're back after thi hi, my name is tony cooper. and if you have both medicare and medicaid, i have some really encouraging news that you'll definitely want to hear. depending on the plan you choose, you may be eligible to get extra benefits

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- oh, it's no stress. i just discovered yieldstreet. they vet investments that don't ride the stock market rollercoaster. - ooh. i think some of my gray hairs just reversed. - yeah. you're welcome. - [narrator] become an investor today. yieldstreet: private market investing. . welcome back could the las vegas strip soon turn off the lights, at least part of the time to save money well, it might have helped caesar's bottom line last quarter if it did. but it is not the only company getting hit with high utility costs. pippa stevens joining us now with the restaurants that are feeling the pinch, from a rather unexpected and perhaps unwelcome visitor. pippa? >> that's right, brian rising energy costs are eating into restaurant companies' results. it's the latest headwind for the industry, which has also grappled with higher commodity and labor costs.

let's run through some recent comments mcdonald's saying that margin pressures remained significantly under pressure due to commodity and wage inflation, as well as evaluated energy costs the company said this is especially true in europe and that they expect the pressures to continue. olive garden parent darden noting expenses rose year over year and part of that was due to utilities' inflation which ran at 16% cheesecake factory missed earnings estimates last night, saying profit margins in the quarter reflected higher than anticipated operating expenses, particularly in utilities and building maintenance and plooming brands said inflation ran at 13%, driven by utilities and they expect those pressures to continue this quarter. chipotle, texas roadhouse, and yum brands are among the others also pointing to rising energy costs. overall, utility costs are

typically about between 2 to 4% of restaurant sales. according to bernstein, they do fall under the occupancy and other costs category it's not an enormous number. but with power prices jumping, the firm said it could double the cost base for what brian, is usually a fixed cost >> wish we had time to begin, but i'm getting the hook from the producers. you know i hate talking about energy thank you. coming up, logistics runs the world. it may also be the best or maybe only real crystal bar we have where the economy is going and ch robinson's ceo is up next on just that stick around you on a comprehensive wealth plan 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.

just look around. designed to help you keep more of what you earn. this digital age we're living in, it's pretty unbelievable. problem is, not everyone's fully living in it. nobody should have to take a class or fill out a medical form on public wifi with a screen the size of your hand. home internet shouldn't be a luxury. everyone should have it and now a lot more people can. so let's go. the digital age is waiting.

all right. quick market check, because the dow jones industrial average is soaring. and by soaring, i mean, it's up 20 points. but at least it's in the green it was down earlier today. the nasdaq is still down i don't know if i need to tell you this, folks. there's a very important federal reserve rate decision in about 13.5 minutes chaser of ch robinson falling after missing on both the top and bottom lines that is not the most interesting or concerning part, maybe. ceo bob beasterfeld saying that

the demand slowdown was playing out with weakness in the retail and hougds market. he joins us now. bob, good to have you on covid lockdowns, china, we can't figure out what they're doing to their people the rates you're getting have crashed. 1 to 2k in what used to be 20,000 >> no question, brian. first off, great to be here. but we've seen significant changes, particularly in the global forwarding part of our business, in terms of the economics of moving goods on a global basis, whether it be in the transpacific to the west coast. that's clearly the area where we've seen the biggest downturn in terms of pricing. the good news for consumers and for businesses is that there's more available capacity now on the water. and when we talk about inflation, you know, we're removing some of those costs that are are driving inflation >> is this a short-term thing with china, because of all of these lockdowns.

or when you plan, how do you plan, because it's like your business is almost subject to the whim of the chinese president. >> part of the strength of ch robinson, we have a leading presence, not only in the transpacific trade lane, but domestically in truckload, and we continue to diversify our forwarding business into other parts of the global forwarding landscape, specifically in this quarter alone, our new business, 60% of it existed outside of transpacific >> domestically in the united states, what are we seeing i know there was a huge inventory build, bob, where everybody couldn't get anything, then you bought everything i don't know if the slowdown is some sort of economic slowdown or just because everybody overstocked on inventory what do you see? >> it's the right question to ask. and there's no question looking back that we absolutely saw are

a pull forward in inventory in the first half of the year, which has provided us with an extremely muted peak season. and that has really driven down pricing across the board, whether it be surface transportation here domestically, we've seen spot market rates30%. we have seen the pricing come down on the water and we're seeing declines in air freight so no question the inventory build up occurred earlier in the year and it's yet to be seen as we progress through the balance of this year and into chinese new year to see if there's any ter material changes >> what about the operating cost landscape? i may or may not have some people i know that work at your company. they heard something about operating cost reductions this morning. if you're an employee, got to make your ears perk up >> no question on our call this morning, we talked about the fact that you know, given the slowing freight markets and change in demand we're seeing in our model, we

need to take some proactive cost reduction action, which we'll employ over the course of the next four quarters but we're looking at the need to reduce our overall operating expenses by about $150 million over that time the good news about our business is we are asset light so we're not encumbered with hard assets and we can continue to drive strong shareholder returns throughout the cycle >> yeah, and i'm assuming that ships, shipping, all that stuff's taken care of, but how closely are you watching this potential rail strike, bob >> we're watching it closely it makes up less than 1% of our total revenues >> yeah but it gets the stuff to the ports and airports >> even though we've got, we have done a nice job of clearing the ports in the west coast, we still have delays in terms of

getting containerized goods to where they're needing to go based on some of the rail issues we're still about 30% below where we were pre pandemic and that's got to get solved for >> good stuff. appreciate the candor, bob thank you very much. take a short break here. miteawendecision less than t nus ay what if were a trendy apparel company facing an avalanche of demand? to ensure more customers can buy more sherpa-lined jackets, you call ibm to automate your it infrastructure with ai . now your systems monitor themselves. what used to take hours takes minutes. and you have an ecommerce platform designed to handle sudden spikes in overall demand... as in actual overalls. ♪♪ personalized financial advice from ameriprise can do more than help you reach your goals. wow... we 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.

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welcome, everybody, to this special fed edition of "power lunch. welcome, morgan. we're minutes away from the fed's decision on interest rates. a three quarters of a point hike is expected by most observers, but investors will be looking and listening for sign that is the central bank may be stepping back away from its aggressive rate hiking strategy right now, let's take a lock at where stocks are as you see the dow, well, it's higher by 51 points, but other equity measures are in the red

at this hour yield on the ten-year just above 4% let's get to our panel of experts. david kelly, chief global strategist at jpmorgan mona from edward jones and jim, from morgan stanley investment management i think we have, if this was a roulette wheel, slot machine, all three cherries would come up you think it's going to be three quarters of a point, right >> yes >> that's correct. >> let's see the nods one more time everyone nod >> raise your hand >> so what would the language, jim, karen, be like if they were trying to signal something other than a war on inflation? what would the language feel like >> i think this is the key 75 basis points is baked into the cake

i think the language is going to be very, very critical because powell has to thread a very narrow needle and what would be indicative of something where he might be pivoting,which what many in the markets are hoping for, would be something along the lines of saying that we may be thinking about the pace of rate hikes starting to slow, but more likely he's just going to rely on data dependence. he's going to kick the can down the road and allow for people to understand that we need to see the inflation data start to come down before he actually starts to act so that's more likely what he's going to say he has to be hawkish in terms of what he's saying in order to make sure he delivers a message that he's going to remain villa vigilant in fighting inflation >> the data dependence part is report we had jolts this morning, adp, which was greater than expected number of private sector jobs last month

so we're still seeing a lot of strength and resiliency in labor which translates to ongoing strength in wages as well, right? >> well, two things here first of all, what we've seen so far is despite an extraordinarily tight labor market, tightest in over 50 year, we're not seeing that high of wage growth inflation was 8.2% year-over-year we're not getting a lot of wage growth given how hot the labor market is. that's one thing second of all, data dependence is just a very bad idea for monetary policy. if you waste until inflation falls, wage it too long to stave off recession. what we are seeing here is better news on growth. i think growth will stay positive in the fourth quarter i think the fed will have to acknowledge that in their statement because it's better news in inflation.

the key question is whether we're going to get some indication that there will be fewer hikes or there may be some more hikes rather than just ongoing monetary it's all about the message, as jim said >> mona, what would those signals sound like to you? perhaps the tightening phase they're going to be easier on. >> i think jerome powell will be clear if he does indicate that perhaps the next meeting or two will be a less, you know, aggressive rate of increases, maybe lower than the 75 basis points they've done in the last three meetings plus probably what they'll do today. he'll also make it clear that that is not necessarily followed by some sort of pause. a 50 basis point hike is still a very aggressive rate hike by any means so we are continuing to see them tightening. we are well into restrictive territory. we've seen the ten-year three month yield curve.

if he's going to try to thread that needle, he'll try to say yes, we may go at a slower pause, but that doesn't mean there's a pause ahead. for that pause to happen, we would need to hear about inflation rolling over, forward looking indicators of inflation rolling over >> yeah, the language could be clear or very, very subtle let's get to kayla with the fed decision >> a 75 point increase bringing the target range to three and three quarters to 4% the decision for a fourth consecutive 75 basis point increase was unanimous but the statement does add a new flexibility on the pace of future rate increases. the fed says it must pursue policy that is sufficiently restrictive to return inflation to its 2% target over time the fed says in determining the future path, it will consider what it calls th