people to buy? >> that's what i'm saying. >> to buy it now ahead of the earni earnings >> and enterprise spending goes on for years stick with this. this isn't something like netflix -- i'm sorry to pick on netflix. you're down 30% per quarter. i'm not picking on netflix you get the point. >> thanks, everybody ill see you in "overtime." "the exchange" is now. welcome to "the exchange," everybody. i am brian sullivan. here's what's ahead on a big 60 minutes. it has now, a thousand days since the market peaked pre-pandemic is there any coming fed pause or reason to think that we are going to go back to the new highs next year? barry knapp is here with that. target shares, they are crashing and you may not believe one reason why we'll talk about it and all the retail earnings. and we are going to hear in moments from carson bloc he just busted out a brand-new short stock today. that stock is tanking. we'll give you the name. the trade, and why he thinks it

will fall. we're going to get that in moments. right now, let's get to macro markets with mr. dom chu >> generally negative, so to speak. it's kind of not surprising, given the fact that we had a nice rally yesterday and everything going on. but if you take a look at the markets right now, with airbnb shares, at least, that's the reason why they're up there right now. i'm not sure why, but i would show you what's whappening with the overall markets. the indices right now, down about 21 points for the s&p 500. how about half of 1% to put that in context we were down eight at the high, down 33 at the lows of the session. drifting a little bit more in between that range so far today. the dow industrials outperforming flat on the session. the nasdaq composite down 1% the real laggard there, that tech trade if you take a look at the nasdaq composite, the largest stocks on the nasdaq have seen a nice rally, but that's starting to fade a little bit in today's trade. but what we can show you is overall, that particular move for the nasdaq, if we're going

to show you, or it might not be, because we have some technical glitches going on. but if you could see the nasdaq chart, we're up about 12 to 13% off the lows that we saw just about in october if you look at that move higher, whether or not we see any carryover, it's still a market down trend there overall one of the reasons why we are seeing that down trend is shares of damazon the company is reportedly getting close to laying off thousands of people. that may have already started. some reports say around 10,000 koe corporate jobs they've been a big driver of the downside in not just the s&p 500, but the nasdaq trade overall. and remember, about a year ago, we were talking about a company that was roughly $1.9 trillion in market cap. and now we're roughly about, just about $980 billion. so around $1 trillion worth of market cap lost during that span that's a huge deal for a stock down 45% and the stock of the day has to be what's going on with target out with earnings earlier this

morning. it was a mixed picture, but traders are certainly act semplg w accentuating the negative today. comparable store sales, sales growth at existing store locations came in better than expected as well, but it's cutting its all-important fourth quarter holiday season forecast and it's announcing a cost-cutting initiative to try to trim around $3 billion of costs, up to that amount over the next three years brian, target shares down 12%. that's off the session lows. sst certainly one of those retail trades that a lot of folks will be talking about in the coming weeks as we head towards the holiday shopping season back to you, brian >> we'll be talking about target in the next couple of minutes. dom chu, thank you very much in our earnings exchange. right now, happening, short seller carson block just laying out a huge new short let's go right now to jomana with carson block of muddy waters jomana >> reporter: that is correct we're here in london and joining

me right now is carson block, the founder of muddy waters. you just came offstage talking about your latest big short. so tell us what it is and a little bit about the rationale >> sure. we're short d local, which is a payment processor. it went public in 2021 and it focuses on emerging markets, especially latin america. very fast-growing, margins that are far better than any of its comps. and the short of it is, we are highly concerned that this company is a fraud so we -- what we first saw when we looked at it were just revisions in what the company was saying about the components of its processing volume and then also discrepancies in certain accounts receivable. and a lot of times, when we see that, that's the sort of mixed or those contradictory disclosures, that can be because when you're not telling the truth, you kind of forget what you said before and things don't

balance out. so that told us that there's a good chance there's something seriously problematic here and when we dove deeper into the company, we actually saw a series of events in accounting related to a loan that was actually made to pre-ipo to the president and the ceo, to the company seems to have taken pains to re-write history. now, our view is that either the disclosures around this are inaccurate, grossly inaccurate, as a result of a level of incompetence that few of us will ever experience in our lives or it points to fraud so likely they crossed the rube conicon te in terms of changing accounts when they shouldn't have changed them, accounts that diverged from reality and then we get to these questions about how the funds move so when you look at the company's accounts, remember, they're handling billions of

dollars of other people's money per year the annual run rate right now is almost $11 billion at any given time, there's a lot of money sitting there that doesn't belong to them and when we did reconciliations in 2020, it doesn't reconcile. it doesn't -- the company did not have the cash flow to make the payments in 2020 that it did. so that certainly brings up concerns about controls over client funds i will point out that the other possible explanations there are that the disclosures that we relied upon are inaccurate or they're incomplete, but again, you saw this at the consolidation level and at a subsidiary level, and the subsidiary level is a lot simpler than the consolidation level. >> that is quite a big allegation allegation of fraud. i should mention also that cnbc has reached out to the company they have responded with no

comment. >> okay. i'm sure they will comment, eventually i want to just pursue that point. it is a big allegation to call out a kpecompany for engaging i fraudulent activity. how do you discern the difference between a company coming out with aggressive or optimistic marketing material and reports, which is within the realms of what's illegal, versus engaging in ill faith, bad faith? >> that's a great example. what we saw with the spac boons were about these overly optimistic forward-looking statements that companies could fall back and say, these were statements of opinion. we're talking about what did and did not happen and what the company says about history what the company says about these loans is not what actually

happ happened and we have a lot of paperwork that shows money moving that in ways completely contradict what the company's stories is and when you get to the cash flow, this is the sort of reconciliation that other investors can do but those are -- this is all based on their filings now, the one other thing that's also really important to keep in mind with this company is that when it went public in 2021, directors and managers sold about $330 million worth of stock in the ipo the company only sold about $87 million worth of stock then there was a secondary offering, just five months later in which the same group of insiders sos sold over $600 miln worth of stock within five months of being public, and this is about a year

of being public, they sold about $1 billion worth of stock. i'm talking directors and managers, not just the venture capital fund that backs them >> i want to make very clear, jomana mentioned it, that these are your allegations this is your proprietary research we have reached out to the company. could be never to your point but these are serious allegations that you are making, car carson in your report, you note something called regulatory arbitrager if i was sitting here interviewing you and said, you're wrong, where could your

thesis be wrong? >> to the first question, there's a long list of governance failings that we've published. the key one is regulatory arbitrage. specifically, we see that the company is -- appears to be intentionally dodging regulation by the uk's financial conduct authority, the fca and that's important because in 2020, so that's just in the lead up to the ipo, that's when wire card blew up and within weeks, the fca significantly tightened the rules and supervision of payments companies so there are two primary subsidiaries that dlocal has here that handles an amount of the flow the other subsidiary which was a legacy one, at the end of 2019 had 57 employees, at the end of 2020 had zero. why is that? we expect that the company is

trying to avoid supervision by the fca saying we have nothing here so we're not certain that that's the exemption that the company claims to avoid being regulated by the fca, but we suspects is it is. but these are major payment processing entities and we see no reason why they're not licensed by the fca. instead, they're overseen by malta. as far as what the company would say, i don't know. we present a lot of different elements here. they probably wouldn't ask questions, but i think that they would just -- look, what companies tend to say is, you don't understand our industry. you don't get it and your report is full of factual errors and you're a short seller so what i invite the company to do then is to go out and actually explain what those errors are a lot of times in those

responses, they won't answer the questions that they're actually being asked. they'll answer questions that they wished they were asked. so investors need to read closely, unfortunately, side by side, what we wrote with what the company says our allegation is, and try to figure out whether the company is actually responding to our conclusions or they're just effectively responding to something that we're not accusing them of >> carson, can i ask you about sizing here. and quote/unquote, staying power. often times, it takes a little bit of time for these shorts to work out you're drawing some parallels with wire card over here in europe, which is a big story similar kind of story that you're presenting. but it took a while for the short to play out. how are you thinking about sizing your position >> it took years for that to play out really, wire card first came under suspicion in 2008, and for anyone who shorted wire card in 2008, the stock went up numerous times before it blew up in 2020. one thing that's a big difference here is that wire

card was protected by the german state. they had the regulators go after "financial times" journalists, as well as pretty much every short seller who spoke publicly about the company. that will not happen in the case of dlocal. i don't think you get that kind of protectionism but we have to manage positions. there's a threshold that when a company reaches that threshold, we trim and the stock starts coming down, we add back a vast amount of short sellers have gone out of business since the financial crisis it's more art than science when it comes to that risk management >> carson, i want to jump back in and change gears. dlo stock is down about 26% on this and we are waiting for the company to respond if you're out there watching, drk lo management, give us a call, send us an email we're here for you i want to talk about a bigger potential fraud. you're known to dig into books for months maybe longer.

i want to talk ftx, and bizarrely, carson, they are connected a little bit, because in a regulatory filing, dlocal says it had $5 million with ftx. that's near here nor there do you have a take on what's going at ftx because it appears that there's more due diligence being done on somebody applying for tsa precheck than billion-dollar institutions did on this firm, and i want to get your take as somebody who digs into books for a living, what the hell happened here >> well, i think this is a great example of greed and fomo. i'm going to be a little bit glib for a moment and speak as if there is a collective mind that controls these things when it came to crypto, why did everybody flood into crypto? well, during our lifetimes, we

saw the equity bubble, right, and people as much as myself, even though i wasn't a short seller, but still skeptical said, hey, this doesn't make sense. it's different this time turned out not to be so retail was easily able to buy equities they learned a lesson. then houses. people like me voiced skepticism no, it's different this time then that blew up. there needed to be, in order to have an enormous bubble, there needed to be an entirely new asset class that nobody could -- that nobody could say, well, this has happened before because to get this kind of bubble and to trust charlatans like sam bankman-fried and his coa c cotterie, you have to suspend belief and have an asset that has no value crypto, there's generally some value in the gas fees, but if you look at the value that these things trade, the real value is a sliver of the entire price of these things it's been a bubble and it's been

unregulated. these guys sit in bermuda. so who's mining the store? >> bahamas >> bahamas, yeah this was one of these things that several months ago, i just quickly took a look and i just fell that there's obviously something wrong here, because he went from zero to i'm worth $20 billion. i'm putting our logo on major league baseball umpire uniforms, and on the miami heat arena, it seemed really trying hard to establish yourself as a household name there was an interesting article that was done last september about alameda research, in which the reporter said, oh, we verified the assets of billion, but it was in substantially all in solan and solana has tanked and they didn't talk about the debt when sam bankman-fried was out there saying, maybe i'll buy it, that said to me, this is a guy trying desperately to avoid a margin call. and, you know, i was wondering, well, what happened to the value

of all of the assets relative to the debt that i assumed alameda had, it's client money and when nobody is minding the store, and there's very little regulation and it's an asset that really is of questionable reality, this is what you get. >> carson, a question on your broader portfolio. last year, we saw an attack of the short sellers by the meme stock community, the retail investing community. is there still a legacy impact of that? does it affect the way you think about your next shorts >> well, we did get a lot more -- and this actually started happening towards the end of 2020. second half of 2020, we really started thinking more about technicals and flows and massive that must buy a stock and what is the actual flow when you look at the nominal flow of stock, when you looked at gamestop at that time that it squeezed, you take out the

michael cohen portion, and the massive, and when you have this much short exposure to this much real float, that's what you get. that kind of squeeze it so really did make us pay a lot more attention, not just to the nominal float but to the actual float and how much passive money was flowing into it that process did start for us in probably july, august of 2020, when we were short this fraud from china called gsx, that guy bill huang has since been arrested for manipulating that, allegedly. >> on that note, with we'll leave it there thank you very much for joining cnbc today, carson block from muddy waters back to you. >> jomana and carson block thank you. just a quick note here, a reminder that we have reached out to dlocal, dlo is the ticker, on these allegations they are carson's allegations with his own proprietary research

if and when the company reaches out to us, we will bring their comments to you. coming up, remember when the smart money told you back in january that macy's was going to outperform big tech stocks of course you don't remember, because it never happened but that's exactly what's happening and we'll talk about retail, coming up. ♪ ♪ wow, we're crunching tons of polygons here! what's going on? where's regina? hi, i'm ladonna. i invest in invesco qqq, a fund that gives me access to the nasdaq-100 innovations, like real time cgi. okay... yeah... oh. don't worry i got it! become an agent of innovation with invesco qqq you'll always remember buying your first car.

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here's the good news inflation starting to come down, at least for things like used cars and socks but not so good news, one big retailer, target, seeing a weak consumer ahead and raising red flags about a potentially weak christmas. where does retail and the markets and your money go from here joining us now is barry knapp with ironsides macro economics i would like to talk about carson block and ftx, but i'm told you're coming on to talk about the markets and inflation, so with that said, mary daily kind of throwing water on the old fed pivot, barry what's your take >> i'm not sure she really threw water on the pivot so much first of all, i've been describing it not as a pivot, but when you hit that rate of change point when they slow the pace of hikes. and eventually, they'll pause, i'm not actually in the camp that they're going to be cutting

in 2023. i think they're going to stop sooner than most market participants expect, because of the things dhal that daily mentd her talk about the labor market starting to cool, her focus on goods prices, because of what lale brainerd has been talking about, financial conditions, we just had a 20-year auction, i'm sure you'll go to rick santelli about it it was particularly strong but just before cpi, we had a decidedly weak ten-year auction. we still have that market functions and financial instability to deal with but ultimately, what i've been penciling in with steve's survey, steve liesman, that is, that the fed pauses sooner than most people think, but actually finds themselves tightening again in the back half of next year that said, that path from 9% cpi down to 4 through the end of this year, and the first half of next year should be a very

favorable period for equities and treasuries for that matter, and that really what we should be focusing on right now >> i go back ago all the way back to 1995, back in the old days, took a horse to work. and the fed raised rates i think it was 2.5% in 1994. in 1995, the dow rose, i think it was 33% i'm going off memory so maybe off a little bit, but you get my directionally correct comment, barry my point is, just because the fed is raising rates does not mean that the stock market cannot still go up i think i said like eight negatives, but you get my point there. >> i talk about that period all the time i was taking a ferry to work in those days, pre-9/11 and the real inflection point came after the 75 basis point

hike in november they never announced a pause or pivot until june of that year, and they stopped with the process and the stock market explode. tech led the way the banking sector looks very similar in terms of price-to-book valuation and return on equity as it did back then and the market exploded through 1995 when greenspan was giving speeches about they may have ove overdone it and there's a recession risk the dynamic is pretty similar to 95 when the fed funds rate was hiked from 3 to 6, as you acknowledged >> trying to put a positive spin on rate hikes, although i will say, americans have almost $1 trillion now in credit card debt, which is mostly resolve and over $2 trillion added household debt, a lot of that is home equity line which may be

movable as well. student loan debt. we'll see what happens thank you very much. >> thanks. coming up, do you have crypto losses? if so, you might be looking to ease the pain? well, don't worry. sharon epperson is here. she's got some advice from the pros about how to find maybe a silver lining in all of this stk ou icarnd what if you were a major transit system with billions of passengers taking millions of trips every year? you aren't about to let any cyberattacks slow you down. so you partner with ibm to build a security architecture to keep your data, network, and applications protected. now you can tackle threats so they don't bring you to a grinding halt. and everyone's going places, including you. let's create cybersecurity that keeps your business on track. ibm. let's create 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

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all right. welcome back let's talk solar stocks, because with a big climate spending bill now in force, a lot of money is expected to go to the industry and solar-related names like sunrun, sunnova, first solar, enphase energy are all up guest.

your next guest initiating coverage on many of these stocks and see some bright days ahead for the sector joining us is research analyst at deutsche bank i hope i got the right inflection on the last name. did i get it right >> that's pretty good, brian we can do it in bad french if you want, but let's do it in english. what is the macro thesis on solar. does it all have to do with the inflation reduction act or is there something else here? >> i think there's a little bit mo more >> definitely the inflation reduction act is the most powerful regulatory environment that we've ever seen at the federal level. i think if you take a look on the state level, especially california, this might be a little bit of a different story. but the there is more than just that

we were pretty bullish on the industry growth. and it might not be a straight, linear growth year over year, but that space, we're talking about a secular growth stock and that's underpinned by the number of positive we're seeing. when you think about it, it's 4% of u.s. homes. that could grow to 15% the by 2030 that's a significant growth rate you can see over the next eight years. and i think it's also a qu question, it's a question of comparing clean energy versus utility when consumer heat with significant price increase over the last year, pushing them to favor solar. so when you package them altogether, you have one of the most powerful macro and environment for stock. >> do you worry about an economic slowdown in the united states, even with some tax

credits, solar, at least the initial installation is not cheap. you might get the return down the road, but it's not cheap, and borrowing costs have gone up >> that's a very good question and we look into that. and i think we're not really seeing the slowdown right now and i think you have a very strong backlog pushing for a strong 1q and probably 2q. i would probably put some focus into the second half of next year, as well when the net metering equaling zero in california could come in place, which actually right now is being discussed and facing a decision by mid-december so i think over the very near-term, i don't think that we'll have an impact you might see a shift versus people maybe going like ppe versus loan, but that's a minimal impact for the space

>> all right, a buy on enphase and first solar as well as some others, i believe, it was -- [ speaking non-english ] your first appearance on the nectar, correct? >> correct thank you, brian all right, now let's get a cnbc news update from tyler math they know. >> and it will be in all english, brian thanks very much here's what's happening at this hour, folks. mitch mcconnell has been re-elected as republican leader in the senate. he fended off a challenge from florida's senator rick scott the final vote was 37-10 with one abstention it was the first-ever attempt to oust mcconnell after many years as gop leader. prosecutors say the university of virginia's shooting suspect was targeting specific victims, one of whom was shot in his sleep. christopher darnell jones is charged with killing three of the school's football players. lake-effect snow piling up in

parts of michigan and northern indiana. it is coming down at 1 to 2 inches an hour, 6 to 10 total forecast the buffalo, new york region, it snows a little in buffalo, expected to get the worst of this storm as it often does with some areas at the risk of getting 3 to 4 feet of snow, folks, by sunday winter, brian, is coming >> i want to say something serious to you, my friend. a lot of people may not know, they know that you are a what hew, a uva graduate, and obviously the tragedy, and virginia tech has been on the other side of this, and i am a virginia tech hokey. and i think, i can speak for the hokie nation when i say our thoughts, everything goes out to our one commonwealth, uva. thoughts out there >> we all grieve together and you've been through it so, thank you. >> tyler, thank you. coming up, cisco, nvidia, macy's, they've all got results on deck. all negative in the print. we've got the reaction jeff fillberg is here. stick around

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welcome or welcome back, everybody. we hope you've been with us for a while.

time for earnings exchange and today we're doing it on cisco systems, nvidia, and macy's. share's down 30% this year continues to struggle with macro headwinds supply constraints, that left the company with an enormous order backlog frank collins joining us now with the story jeff kilburg on set, and an a contributor. frank, kick it off what is the story on cisco >> hey, there, brian shares of cisco down 30% over the years, but over the last month or so, they've been trading even with the s&p, up double digits. the company flagged a lot of supply chain issues over recent quarters in fact, they had to reresign hundreds of products they had to source components from different places. a lot of issues here even redesigning some products in the backlog due to the covid lockdowns in china they had a lot of optimism those covid lockdowns would ease, but as of yet, we haven't seen it in china and you're seeing that the issues with the supply chain are just not easing. the company reported a record

backlog. we have some insight into the backlog with the remaining performance obligation or rpo. as you can see, it stayed pretty stable over the last fourth quarter quarters with 53 to 54% of that expected to be realized over the next 12 months. that's a mixed signal. it shows a strong demand pipeline, but it also shows it's not converting orders out of that backlog as quickly as they would like and third, last, but certainly not least, the issue about guidance last quarter, cisco gave full-year guidance that was with the dollar being a headwind for the company and a lot of other companies cisco gets 40% of its revenues outside of the americas. will that change the guidance when it comes to research? >> well, frank ended on a question >> he did. >> answer frank's question >> i'll take it from there, pal. when you talk about this backlog, that's the multi-billion-dollar question. if they can deliver. if they have no cancellations on that, it's traded at a 4pe of

12.5 times when you look at cisco, yes, it's been beaten up, but i want to be a buyer here, as you continue to see them get market share in cloud when you talk about the name itself, it has the ability to recover. it will be fascinating to see if cisco can kind of come back from really being beaten up, but there is value in this growth name, sully. >> we should have done this standing up between the three of us, i think it's 19'1" that's 19'1" i think would be the total. >> brian, one other thing, march something to watch information out about ceo chuck robinson he wanted to spend $1 billion more to retain workers margin has been an issue for this company, as they mentioned. they're redesign products, sourcing from different places something else to watch. >> margins, very important and they're paying people more frank, thank you next up, semiconductors. nvidia now, micron today, micron announcing it would make more cuts to its capital spending

plan a lot of people concerned that nvidia could be next kristina partsinevelos joins us. there are some worries out there. >> well, some worries, but if you read some lines from analyst reports close to a bottom, risk/reward remains attractive, captures long-term opportunities. this is all about nvidia these are three different quotes from three different analysts. some are calling a bottom. some are quite bullish on the stock. they're saying that data center revenue which accounts for 57% of the quarterly revenue for nvidia is going to be a strength, it's going to help offset the weakness from possibly mining and crypto we know that's been pretty fickle over the last little while. and you pointed just before to the stocks in general. nvidia stock has increased 36% in just the last month alone so will this continue? is a lot of the bad news already baked into the stock another driver could be the fact that nvidia said in august that they would have a $400 million hit in the quarter because of

chinese revenue loss that was because of the u.s. export rules that were imposed however, just two weeks ago, they announced that they had a chip that would -- i shouldn't use the word circumvent, but god the green light, green stamp of approval from the u.s. they can provide this chip to chinese customers. maybe this can be seen as a good thing. however, the margins on this chip that they'll be selling to china is lower, so that could hurt and two of the major things is data center revenue. will that hold up and offset weakness elsewhere and will the chinese revenue fall not be as bad as expected and keep in mind, too, meta, they announced that they were going to increase their capex. meta wants to spend on ai, nvidia makes ai chips. we'll be looking for comments on that, as well. >> there's the story from christina, jeff. what's the trade >> great story i think trade is, you want to be a buyer here to her point, we've seen a lot of this priced in. if you look at where it started in 2022, this was above $200 it's come down dramatically. but what's interesting today is

the microsoft announcement do you remember the movie "war games. >> i literally watched it last night. i literally watched it last night. >> that's remarkable what we're doing last night is building a super computer. nvidia's gpus, they're going to be buying tens of thousands. microsoft will be gobbling up tens of thousands of these chips, which will potentially put a bottom in the stock. but if you look at the 200-day moving average, you want to be a buyer here -- you watched -- >> i don't know how you -- to the viewer listening, we did not talk, did we >> no. >> i've come to the conclusion that your system blank i literally watched it last night. don't judge me, by the way that is random, but interesting. so is kristina >> random but interesting! yeah, i'll take it >> rbi finally, let's talk about macy's they literally made a christmas movie at macy's sort of about macy's so will it be a merry holiday season and a pretty good decent year, relatively so far.

let's ask cnbc.com reporter melissa repco. >> santa's about to come to macy's the big question is, are shoppers ready to spend? especially after what we heard this morning from target there's a lot of questions around whether shoppers are feeling in the holiday spirit. if they really feel that holiday cheer or pinched by inflation and are going to pull back the second factor i'm watching is inventory there's been a lot of talk about this and macy's has been in a better spot. its inventory was up 7% year over year, last quarter, in a much better position than a lot of its competitors that were up by the double digits has it gotten in ean even cleane position and the final thing i'll be looking at is the discount dilemma. the problem is that a lot of promotions are all over the place, because shoppers see that excess inventory and so they expect everything to be a bargain. so macy's, like other retailers will be under pressure, so how much will that weigh on their

profits? >> all right, macy's the good news is, the stock is up off its lows of a year ago. the bad news, down 8% today, likely on sympathy from target what's the trade obig "m," macy's >> i don't think you catch a falling knife here most of us have said we want to see santa show up to macy's this holiday season, but i hope that bad santa doesn't show up. for the last decade, 2.5% decrease annually in their dividend that does not reveal strength to a shareholder. what i find interesting as they're almost done with their three-year makeover, remember the polaris strategy, they're still finalizing that, but they haven't found a bottom yet obviously, a big downdraft today. i want to stay away from macy's, sully. >> staying away from macy's, you like nvidia. so to buys and a bail, i guess you would call that. got some breaking news guy adami just texted me and, i

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all right. welcome back to "the exchange. the balance of power was not the only thing determined in the midterm elections. voters also approved some $57 billion for local projects things like road paving and school and police buildings. about 90 billion more in municipal debt issued. it's the largest amount of bond issuance approved on an election day in at least a decade is this the turnaround that the beaten-down muni market needs? bring in now tom koslik, head of research and analytics at

hilltop securities first off i find it amazing everybody wants better schools, ventilation, all the stuff the 130 billion to, quote, reopen schools, most of that's not going to be paid out for years. we know that as well but it's still coming. why are these school districts issuing so much debt now >> so thanks for having me, brian. i really appreciate it i think that there was a -- one of the most important takeaways from my perspective from last week's elections was the bond referendum approvals that you're talking about and i think that that sends a really strong message to lawmakers that infrastructure's important the infrastructure that we've seen, the infrastructure upgrades and the infrastructure financing that we've seen over the last couple years have not been enough. i think that this sends a message that infrastructure's important to axpayers. and most importantly it sends the message that taxpayers are willing to pay for infrastructure

>> okay. so how do we make off -- make up money off all of this spending how do our viewers make money from that debt >> so one of the things that i think investors need to be thinking about going into 2023 is that municipal yields, and specifically municipal yields have risen pretty substantially. one of the things that i've been talking to investors about, especially over the last couple not just weeks or months, but it's not necessary to reach for yield and increase the amount of risk that folks are taking i'm recommending right now that folks are looking at, you know, high-grade state and local governments just because the yields are so substantially higher than what they were at the beginning of the year. >> is there any type you like more than others not all muni debt is -- there's states, there's cities, there's

counties where are we buying? >> yeah, that's a good point and i'll add to that, brian, that even all the high grades and aa category for state and local governments, they're not all the same the issues that i'm talking to investors about specifically are those that are more structurally balanced, that there's been a substantial amount of federal money that's moved into state and local government debt. that is helping to make it so upgrades have significantly outpaced downgrades over the last couple quarters and i'm expecting that to happen over the next at least -- into the middle of next year. but i'm talking to investors about really zeroing in on those high-grade state and local governments that are going to keep their credit quality if and when there's a recession at the end of next year >> all right municipal bonds. a lot of debt on the ballot as well building out new -- 2 billion in austin, texas for schools. of course that city's growing so fast they'll probably need more soon tom, thank you very much appreciate it. >> thanks, brian

>> tom kozlik of hilltop securities coming up if you're a crypto investor who's lost a lot of money this year, first off you're not alone but you're going to want to stick around because tax season could prida tt b oa lver lining to your losses stick around welcome to ameriprise. i'm sam morrison, my brother max recommended you. so my best friend sophie says you've been a huge help. at ameriprise financial, more than 9 out of 10 of our clients are likely to recommend us.

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as always, one more thing before we go and if you've lost a bunch of money in the crypto crash this is for you there is a way to ease some of that pain, and it comes down to taxes. sharon epperson joining us with that story sharon, give us a little reason for hope >> there is some hope. there is in fact a silver lining as well and those steep losses in digital currencies this year. you could also actually have some gains, even with bitcoin down over 60% this year. if you were trading a lot of bitcoin or another digital currency on the ride up, you may

have some profits and a tax surprise here's how you avoid that. whether you have profits from crypto or mutual fund payouts at the end of the year or other assets like the sale of an investment property you can use crypto losses and other capital losses to offset capital gains if you have more losses left over you can use them to offset up to $3,000 of ordinary income this year and then carry forward extra losses to future years now, there's usually an important rule you also have to follow in tax loss harvesting in order to realize that loss investors are blocked from buying a substantially identical security 30 days before or after the sale. >> you can't buy microsoft, sell it at a loss, and then buy it back the next day. the irs will say you are not allowed to use that loss you've got to stay out for at least 30 days to avoid what's called the loss sell rule. that does not apply with crypto. >> that rule does not apply to crypto because the irs treats it as property, not a security. so you can buy bitcoin or

another digital currency right back after you sell it brian? >> if you have money in ftx, you don't know the status of the money, how would you work around with that if up don't actually know what you may have lost? maybe you count it as zero >> this is the key part here you have to have assets to sell in order to use this tax loss harvesting strategy. talking to the irs, they don't have guidance at this time on that particular situation. they are still look into this. they don't have guidance right now. people have r. going to have to wait and see what happens. >> and hopefully get their money back or know what they lost for those taxes, i suppose that's a double hit for those folks that have the money in ftx. sharon epperson, good stuff. maybe a little silver linings playbook, i guess, in what's been a tough year. >> that's right. >> all right, folks, just a quick recap here if you missed the top of the

show, d.l.o., d local is the name, carson block shorting it we reached out to the company for comment because he was alleging all kinds of stuff. we have not heard back as far as i know from dlo, dlocal. they are based in uruguay. so again, if and when they do give us a statement, we'll bring it to you. stock down 25% we'll see you tomorrow "power lunch" starts right now brian, thank you very much and welcome, everybody, to "power lunch." i'm tyler mathisen and here's what's ahead. we're going to look at the state of the consumer this hour. october retail sales were strong across the board the ceo of lowe's says he's not seeing a discretionary spending slowdown, not at all but target warns of a soft holiday quarter. this hour a deep dive into the american shopper meantime, shifting gears, advanced auto parts misses earnings expectations and says the outlook isn't much better either th