we'll make companies, price targets, how much they can actually send and fill and then on wednesday, more on the renewables, how much can renewables actually grow and actually plug some of these holes. we'll see you there. i'll see you in "power lunch" but the show begins right now. we do look forward to seeing you, brian, in 40 minutes or so and next week from europe. welcome to "power lunch. with contessa brewer, i'm tyler mathisen stocks are falling today after a better-than-expected jobs report do markets fear that the fed will have to keep raising rates maybe even higher than anticipated? or are there other signs of weakness in the economy that investors are nervous about that explain why the market is down just a little bit this hour? contessa >> well, tyler, markets are lower right now off the worst levels of the session.

the nasdaq still down nearly 1%. but look at the week the nasdaq the top performer here, one-week change, up 1.5%, one-week change on the s&p 500, up 0.7%. you have the dow, though, which is negative not just for the day but for the week as well tech, the worst performing sector on the s&p 500 today. both software and chip names among the stocks leading the group lower here you've got arista networks down 3.5% and advanced microdevices down 3.8% as well as nvidia off as well. the two biggest winners on the s&p 500 today are solar stocks, so solar tech and invesco you have solaredge up 5.75%. enphase is up 6.7% as well today's jobs report only adding further confusion to the state of the economy, tyler. >> thank you very much today's jobs report only further

adding confusion to the state of the economy despite rising rates. things are still running a little bit hot it would seem nonfarm payrolls up by 26 3,000. that is way above expectations the unemployment rate, there you see it, at 3.7%. that's really very, very low historically by any standards. and wages climbing 0.6% for the month. that was double the estimate but there are some other key economic data points that we are looking out for as well today. steve liesman unpacking the jobs report kristina partsinevelos diving into consumer credit, maybe an increasing concern, and diana olick looking at the housing market steve, explain the economy to us in a minute or so. >> i got less than a minute, tyler. the you're not confused, you're not paying attention this strstronger than expected b report raising fears of more

rate hikes for longer from the fed. isi writing, "this report will reinforce the fed's assessment that the labor market remains overheated and rates will need to go higher for longer in order to bring it back into balance. here are the numbers tyler just walkd you through them 263,000 versus an estimate of 200,000. but it's the average hourly earnings number that freaked everybody out, 0.6%. unemployment, no change, no slack in the economy labor force participation down a independent, meaning less labor supply, all of this resulting in the upping for the federate before powell spoke wednesday but up from 4.83% before the jobs report. the market is reacting to this number not by so much dialing in a 75 basis point rate hike in december but more by increasing the number of another 50-point

basis point. the thinking that the economy is not slowing and the fed will need to lean harder on it to create the slack it needs to bring down inflation >> thank you, steve liesman. we also have rising inflation, and that leads consumers to take on more debt we've seen those numbers come in recently kristina partsinevelos has them for us hi, there. >> hi, contessa. we often talk about the resilience of the consumer, especially after seeing them spend a record-breaking $11.3 billion just this past monday on cyber monday but if they seem to be sitting on this excess saving, why are they tapping droet pay for goods? target's ceo warning in a recent earnings call that, "many consumers this year have relied on borrowing and household dealt has grown to its fastest annual pace since the great recession in 2018" thanks to hefty uses in credit card usage and mortgage balances some consumers say i don't like using the plastic.

that's why buy now, pay later revenue has surged 88% from black friday through cyber monday compared to just a week ago, an installment method that doesn't necessarily cost you extra up front until you can't keep up with the payments. that's when you get hit with the hefty fees and whether you believe the fed will drive a soft or hard landing in the economy, these examples show there will be a much thinner cash cushion to buffer it, tyler >> all right, christina. thanks very much kristina partsinevelos now, of course one area where americans do tend to take on a lot of debt is in their homes, and that debt has been climbing as mortgage rates rise and home prices stay elevated so what would it take to get affordability back diana olick has more hi, di >> hey, ty the formerly red-hot housing market has cooled dramatically in the last four months, but it's still super pricey. we wanted to look at what it would take to get affordability back to where it was just a year ago. so, the average rate on the

30-year fixed has been moving around between 6.5% and 7% over the last few weeks it was around 3% a year ago. so let's compare home shopping at today's rate versus last year's rate. take a $400,000 house, which is around the u.s. median with a 20% down payment on a 30-year fixed mortgage and a rate of 3%, the monthly payment, including principal and interest, would be $1,349. a 7% rate bumps that up to $2,129 the 58% higher payment the we're going to keep the rate at 7 prs, the home price would have to drop 37% to $253,500 to get back to that lower first monthly payment. and much thanks to black knight for doing all this math for me it is highly unlikely that prices will drop that much realistically, it will take adjustments across the board in prices, in interest rates, and in incomes to bring affordability back to those

long-run averages. ty >> thank you, diana. steve, back to you on a scale where one is cold and ten is hot, where would you put the economy right now? and you can qualify it by saying it's a 6 but moving toward a 4 where would you put it >> i think it's like a 5 going to a 6, tyler. that's exactly how i was going to answer it before you gave me leave to answer it that way. we have the hot retail sales report >> right. >> we had a stronger than expected jobs report some of the stress in the consumer that was just reported about does have my eye i am watching that there has been a boost in some of the credit card numbers that are out there. if diana is going to get half of the 37% of decline in housing that she's talking about, i had diane swonk on a panel at the cfo council the other day talked about a 20% decline in housing

prices that will create a feeling of being poor among consumers, that will matter, but right now i feel like you know the novel about waiting for goudeau. goudeau never arrives, and i'm feeling more and more each day like certainly we're pushing out the time that goudeau arrives, but even some people more and more are saying maybe there won't be a recession it's minority call, but i'm hearing more of it >> the interesting thing when we're talking about consumers and whether there's pressure already on consumers feeling the pinch, kristina, you mentioned consumers using credit more often, but the real problem doesn't come until they don't keep up with their credit card payments is there any indication that that is starting to happen with more frequency or more severity? >> you mean in terms of delinquency rates. >> yes, exactly. >> i actually don't have that data just yet, especially encompassing the holiday season, but if we were to use a personal

savings rate as a benchmark in terms of how much cash is left, the personal savings rate for americans has dropped to the lowest levels since 2005 these numbers are from october, so we don't know, again, the holiday season look at that drastic drop many the last two years even that -- steve just talked about raising concerns because of credit card debt, but what about student loans, for example? we've had a holiday here in the united states for past three years. if biden's plan doesn't pass through, you know, capitol, that means a lot of younger people or middle-aged people, et cetera, will be hit with, you know, an extra slew of payments due in the very near term >> and diana, what about home foreclosures for me, you know, and what we went through in 2007, 2008, 2009, it feels like yesterday, and it was so significant. are we seeing anything to indicate that we could be bracing for an onslaught of

foreclosures >> absolutely not. and i'm very certain in that because this is a completely different type of housing market you have the vast majority of borrowers in 30-year fixed mortgages that have been underwritten responsibly nothing like they were back in the last crash also steve talked about people feeling less wealthy if they lost 20% of their home value, but i don't believe home prices could fall 20% given the supply and demand issues in the market right now. but even if home prices were to drop by say 10%, and they haven't really fallen yet compared with a year ago, you still have prices up 40% just since the start of the pandemic. 40%. and you have a huge amount, trillions of dollars in home equity that borrowers are sitting on now, even if they lost some of it, maybe they don't feel quite as wealthy, but they're in no kind of danger of going into foreclosure on these homes because they have responsibly underwritten mortgages that they can afford >> i was going to ask you, diana, when steve mentioned -- and i was there for the moment where diane swonk said a 20%

decline, how do you react to that, and it seems like that would be -- that feels really dramatic and drast toik me, but as you point out, even a 10% or 20% decline only takes you back to levels of 2020, right >> exactly exactly. we're still 10% higher on home prices from a year ago now, prices have been coming down month to month, but that's seasonal they always come down in the fall because it's a slower time of the market. now, have they been coming down more than usual? yes. but still, we're not seeing a dramatic drop, a crash, like we did last time. absolutely not. >> my guess is because there are so many borrowers, diana or steve, jump in here, who do have locked-in, fixed-rate, low-rate mortgages. they're not going to be rushing to put their house on the market because they know that the next how else they'll have to borrow at 6% or 7%, it will cost them more, so that's a supply constriction, right?

>> right and that props up prices because supply remains low >> go ahead. we got your point there. steve, jump in >> one factor that maybe out there is guys like the black strike zone group, the reets may not be out there as better buyers because the financing world has changed for them, so we're not sure they'll buy additional assets. that may put a cap on or limit what happens to the housing market here. i want to make one point, tyler, which is it may be much more simple than we're making it out to be. look at one number the 3.7% unemployment rate the vast number of people have jobs and have income and as long as that remains the case, the credit situation, the housing situation, those are going to be okay if the jobs market deteriorates strongly, that's when you worry about these other things but as long as americans are employed, they'll pay their debts and they'll spend. >> one note on blackstone, they

told me yesterday that, in fact, they are looking -- part of the reason they were excited for this deal on taking the share off the table in las vegas is because they look forward to redeploying that capital in rental units they think there's real growth there. we'll wait and see whether that follows through. diana, steve, kristina, thank you very much. >> where does this lead the investor taking on more debt, the housing market may be weakening just a bit, prospects of the fed slowing down anytime soon, lower by today's jobs report, which was strong let's bring in michael landsburg, chief investment officer with landsburg private wealth management, forinsight and perspective. welcome. good to have you with us >> thank you good to be here. >> you have a somewhat more dour estimate, i would say, of the economy and the market than some of your peers. why do you feel defensive positioning is the right place to be right now? >> i think traditionally there

are a few factors. obviously we soo the economy slowing. i see names like mcdonald's, for example, great company they reported, you know, decline year over year in third-quarter earnings so the consumer scares me as the previous segment mentioned you're seeing credit card levels at very, very high levels, cash savings super low. the consumer is being stretched. i think that's concerning. the fed raising rates, they're restricting liquidity that typically is not a recipe for increasing profits so, you know, it's not that we're negative on everything, but there are sectors we look for transparency and there are a lot of sectors that concern me with what's going to happen in the future with earnings. >> you point out in two years inflation went from 0.6% to 9.1%, and you don't expect that to reverse in quick order. but so what if the rate stays higher longer? is that information, is that news that's already sort of being digested in the markets?

why do you think that we should be bracing for more bad news, michael? >> i think part of the issue is i look at the fed's ability to manage this process. if you looked a year ago at fed notes when inflation was about 4.9%, they expected it to be 2% right now. that's 8% september time my concern is their ability to navigate this, and going forward, i think we're in a disinflationary environment. i think we saw the height at 9.1% i think it continues to go lower. i just think it takes longer to get there than people are anticipating people want this to be over fast, we'll raise the rates and it will be cutting rates in the back half of the year. i don't see that i think they'll come lower with inflation, but i think it will take a couple rates to be there and i think they'll be higher for longer that's what i took from powell's speech the other day it will be stubbornly high we'll be here for a while. it will drift lower but it won't get to a fed target rate anytime soon >> talk to me a little bit about one of the derivatives of the

market we've had this year, and that is that cash is no longer trash. and you can actually make a decent yield on treasuries, on some cds, and other forms of to very, very conservative fixed income so, should that portion of an average investor's portfolio be expanded just a bit given your viewpoint? >> absolutely. i mean, you hit it on the head for years we've had no rate basically to get cash was trash nobody got paid. and now all of a sudden you're loofk looking at cds, all north of 4%, so i think that's astrong to component for people when we're in this unclear period of time nobody needs to be a hero trying to pick a bottom there's a lot of uncertainty with the market, a lot of opaqueness surrounding earnings, so it makes sense to put more money into cds, dollar cost average back into equities over time and be selective. first time in a long time there is an alternative to equities.

it's tough to argue you can get a dividend stock and get paid. >> would you ladder maturities here i assume that's the smartest way to go. >> we've been doing that for clients basically from about three years to a year, 15 months anything longer seems to be problematic in terms of getting that return. that's where it makes sense. we've kept that as a component of a fixed-income portfolio. >> look at three-month t-bill at 4.3%, that's about as sure a return as you can get. michael, thank you have a great weekend >> you too appreciate it. coming up, goldman sachs almost perfectly flat on the year, but reportedly trying to cut costs. that could start with the year-end bonus pool. look at the names hitting 52-week highs today, including las vegas sands, ulta, and campbell soup. ulta is at an all-time high.

>> there was no person in charge i understand what the scale of the market crash could look like there were absolutely huge management failures. >> what are your employers telling you right now? are they suggesting

despite a stronger-than-expected jobs report, more layoffs and bonus cuts are hitting wall street as deal making stalls this week morgan stanley became the latest to announce job cuts. goldman sachs and jeffreys are warning about a challenging bonus season we bring in banking reporter for cnbc.com, this is the real coal in the stocking for those who work in finance this year, right?

>> it is, contessa how's it going it is particularly if you've been on the trading side at a place like goldman sachs say you've been a fixed-income trader and, you know, you just had a bonkers year you really killed it this year and, you know, as of the first nine months of the year, trading revenue was up approximately 15%, 14% at great lakes. so you could be forgiven for sitting there and thinking that you were going to have an up year it turns out, you know, you don't exist on an island, you are part of a diversified business model that happens to include things like investment banking, asset management, which are down 45% and 71% respectively year to date. and it's because of that, because of the pain in other parts of the goldman universe where the traders we understand are being told that their bonus pool is looking to be down at least 10% and that could, you know, change as we get closer to the end of the year and there will be push and pull with that. >> what's your sense on how much

this is because the companies themselves, these banks think this they need to position themselves for whatever is coming in 2023 and how much of this is about the investors who are really celebrating cost-cutting and belt tightening? >> it's all the above, i think, contessa to your point, 2023 doesn't look good, and, you know, talking to management at several of the firms, there is pessimism about next year. it is going to be slow there are projections of an economic downturn, a recession and in those scenarios, we don't see a lot of activity necessarily to do with ipos, closed and remain shut trading is looking like maybe it won't be as strong because for the most part people have positioned themselves for interest rate environment that's been telegraphed for the past -- >> i don't think we have -- >> he's come back.

>> and, you know, on top of that, in terms of positioning yourself, you know, in a normal environment you can't really hurt people on compensation too much because they'll go across the street and work for a competitor that's not really the case anymore. you have more options, you have the ability to lay people off selectively -- >> yeah. we're having some problems with the audio. >> -- across the street. >> hugh, i'm sorry your microphone is cutting in and out. to the point i think you're making is about competition and how even the companies, tyler, that have to think about cost-cutting, they have to think about how to position themselves, they also have to think about how to retain their talents in what is still a tight labor market. >> a tight labor market. losing a bonus is one thing. losing a job is another. and there are likely to be i think several of the executives who have said they'll be reducing their head counts in 2023 if they haven't started to do that already.

it is a challenging time. >> hugh wrote about this on cnbc.com, so if you want to get the full story, there it is. >> sorry we lost the audio pick up with you again soon. ahead, energy up 6% this week ah ahead, an opec plus meeting that commences sunday after the break, we'll look at some of the key energy etfs ahead of the decision. we'll be right back. hello, world. or is it goodbye? you know, it seems like hope and trust are in short supply.

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time now for our weekly etf tracker. this week we'll look at energy stocks the group had $431 million in outflows as you see there in the week ending yesterday. several big issues weighing on this group, the looming price gap on russian oil, that's one, europe just saying it would be $60 a barrel plus, opec plus meeting next week sul brian sullivan will be there. they could cut production in response to falling prices and worries about demand from china as covid cases continue to surge there in that country, labor under a virtual shutdown as for some of the individual etfs, the energy spider down 1%

or thereabouts for week, the energy spdr. the funds focusing on exp explo exploration, production, down even more. invesco dime energy down 5.7%. and spdr s&p oil and gas down. for more information, go to the ft wilshire etf hub. ahead on "power lunch," trust the musk touch elon facing a wave of criticism following his purchase of twitter. but he's had some high-profile ceos step in to defend his management skills. plus, despite further signs of an overheated economy, investors don't seem to be worried. we'll debate what comes next and hit some key movers of the day

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check in on your current speed through the xfinity app today. a little less than 90 minutes left in the trading day and week we want to get you caught up on the markets, stocks, bonds, commodities and more and look at why investors remain so bullish with some shaky signs out there. let's begin with the market. we are down but off the lows of

the day. the dow was off more than 350 points at that jobs report earlier today, now down about a third of a percent or 103 points as we close out the week, communications services, discretionary, they are the big winners, energy and financials the big losers chinese tech names continuing their week-long climb. jd.com, baidu, win duo duo 30% gains for last one and zscaler one of the biggest drags after the company warned that longer sales cycles have become a head wind for billing now, let's move to the bond market always fascinating, all the good to hear from rick santelli rick >> hi, tyler you know, what a wild day, a wild set of data points we had with the jobs report today, and everything popped, rates but drop in stocks look at the interday of two-year, at 4.28%, sure it's up

5 on the someday, but open that chart up to week to date, we're down 18 basis points on the week and if you look at a 30-year bond, 30-year bonds are now down 3 on the session, down 17 on the week, 10-year note yields are also down a lot, down about 17 on the week as well. and when we consider what fed fund futures say, everybody's been talking about, wow, they really dropped on this number, and they did look at a july '23 fed fund futures. i picked july because all the contracts keep going down until you get to july. then they start to go up that's the fulcrum right now it's down 6.5 basis points when you're down, that means a higher probability of fed tightening but if you look at a week-to-date chart, they're up 10, which means less tightening. so we really have to take a view here and keep in mind 264.7 million new size of the civilian labor force, age promote but even having said that, it's

5.2 million bigger than january of 2020 but we have the same amount of people employs do we have a lower participation rate, lower population unemployment rate, and that is a problem. tyler, back to you >> rick santelli, thanks very much we have oil closing for the day ending down more than 1% around $80 a barrel. this coming ahead of a huge week for crude. brian sullivan with a look at that you will be a traveling man this weekend, sir >> i sure will we have the eu price gap which looks to be in place at 60 bucks per barrel, brent crude price cap. that looks like that's going to get done the opec meeting is virtual on sunday but just because it's virtual doesn't mean they won't make a change mos expectations are they will not but do not be surprised if they do some kind of a small or medium-sized cut, sort of based on my own reporting. we will see the eu oil sanctions, tyler, the ones that

were basically agreed to in may, they finally go into effect on monday the secret is that there's actually still russian oil flowing into europe. these sanctions kick in monday designed to kill any of that, any oil going into europe, which is fascinating, tyler, because there are some refineries, one huge one in italy, one in germany, that have effectively said to we don't know where we're going the get the oil to make fuel or at least all the fuel once we cut this off. excuse me. i get a little choked up talking about it, tyler. there is a lot going on. opec, the price cap, the sanctions. keep in mind, the sanctions and the price cap are -- they're cousins. they're sort of related because the u.s. wants more oil from russia flowing we don't want no oil, then prices go like this through the roof, but they want to cap any kind of profit to slow down funding putin's war machine. a lot coming up, and the big

variable is this -- how will russia, how will putin, how will opec react we'll tell that story monday the rest of the week we have other cool stuff for you and i'll drink plenty of water >> brian sullivan, we'll be looking forward to your reports next week. today's job report showing continued strength in the labor market, but other data showing cracks may be starting to frm in the economic picture stocks, however, seem to be shaking off those warning signs. ron insana is senior adviser to sh roaders north america and michael farr from hightower advisers gentlemen, welcome there's been anxiety, i suppose, rog, about the pace of income growth that was revealed in this morning's numbers. but income growth usually is a pretty good thing, isn't it? >> yeah. tyler, i'm tiring of some of the concerns that people have about wage growth, particularly with inflation coming down and crossing through that wage number that we saw

inflation is beginning to fall below the increase in wages. so you're not looking at a wage price spiral if the two are not going up in tandem, and with a little more buying power and savings having been bought down rather dramatically, the savings at prepandemic lows, i'm not so sure why everybody is getting sbirply concerned about this and the fed has almost a vietnam approach to this they'll destroy the village to save it by driving up the unemployment rate to get slack where we have no people. it's not that the labor market is so tight because the economy is overheating jay powell himself said this week, we are short human beings. raising rates won't solve that >> it's interesting, michael, because i'm very closely watching what's happening in las vegas and the spending that's happening there, and they're just printing money on the strip. they're pacing 20% of all of 2021 by the end of october when you look at that, i don't know, you have to ask are rumors of the economic demise greatly

exaggerated? >> yes and no. the consumer has been sort of revenge spending you've heard about revenge travel, sort of pent up from the great pandemic there's sort of revenge spending now too, i think and people are feeling better about these increases in their paycheck even if those increases in the paychecks aren't keeping up with the increases in prices at the store, they can't afford as much, they still feel better consumer sentiment is hugely important. how the buyer feels is hugely important in an economy that's two-thirds driven by the consumer it's really important to see if they have any money. ron mention it would savings rate it's come from 9.3% to 3.1%. and the credit card balances are really on the rise so the consumer is running out of wallet even though the consumer isn't running out of attitude at some point, the attitude runs

into the elasticity of wallet. i don't know if we'll get there soon, but it's coming. in the meantime, spending is still on and the mood is still ebullient. >> when you're looking at the companies in this case, we just had a report from hugh son about the pullback in bonuses on wall street from the big banks. you look at the way that a lot of the tech companies are paring down and doing some cost-cutting it seems like they're taking, companies in the united states are taking much more seriously the threat of economic recession than consumers and their revenge spending, so to speak. how closely are you watching how that may take us into recession? >> well, i wouldn't necessarily say wall street and silicon valley will kick us into recession. >> but ad spending, media, ad spending is way down. >> yeah. no, listen, i'm entirely worried that next year we have a recession. if you look at the slope of the yield curve, fully inverted by

every measure, the gentleman who did all the seminal work on this, arturo estrada, at the federal reserve, points out we've had full-month inversion, somewhere between 16 and 17 months away from a recession, since 1968 when we've seen this kind of inversion, there's been a recession 100% afterwards somewhere in that period of 16 to 17 months it takes time. i don't else inially believe that fed policy works with this considerable lag we have a big recession in real estate already and, again, as michael indicated, the cuomonsumer is overextended and may run out of gas sometime soon. bonuses are being cut on wall street and silicon valley is laying people off. it's a matter of time before it happens. again, i think the fed is probably going to go through all of this before all is said and done. >> generally what happens. they start too late, they go too long and too high. be that as it may, michael, you say the market tends to look over the next hill and start to

turn when you get two-thirds of the way to what's called the terminal interest rate hike. okay so maybe we're two-thirds of the way there. maybe we're three-quarters of the way to the peak in short-term interest rates from the fed. but we also, as ron just pointed out, we may also be six months away from a recession. so what is an investor to do am i -- obi one signal i'm supposed to go into stocks, by another signal, i don't want do that if we're going into a recession in the next 16 to 17 months >> buy six-month t-bills, tyler, get more than 4% and kick back until -- >> that's what we were talking about, saying cash is not trash anymore. absolutely not >> not at all. >> go ahead, mike. >> ron's right they've got the six-month bill, the one-year treasury, everything over 4%, this is really good. what we're trying to do is figure out how to be disciplined investors and know when we should buy low

well, we were at 3,500 and change, below 3,600 in september. that would have been a good opportunity. above 4,000, fanld you look at the signs that ron has outlined with a recession coming, you get an earnings contraction to the s&p 500 an average of 20%. so it seems like it would be early. i think if you're disciplined you can find a name here and a name there that will help you get through. and we don't want to time it but one of those better places to put cash to work >> would one of those names be j&j? >> you know, what an interesting idea, tyler. it's not one i've ever thought about before >> no. never. >> okay. ladies and gentlemen, i'm sorry, but tyler mathisen has been giving me hell about johnson & johnson for at least 15 years because it's my go-to pick, a stock i've owned 20 or 30 years personally right now 16 times earnings, growing earnings at 9% with a

2.5% dividend. the aaa balance sheet. it's a company i can own a long time, particularly through tumultuous times like this >> we have to leave it there. >> if it doesn't work, just put a band-aid on it ron insana, michael farr go ahead, ron. >> two spots to watch, one, collateralized loan obligations in the private debt market there are some risks there and tether, stable coins watch those because they could be two hotspots that cause some problems down the road insana and farr. thanks a lot still to come, a nice midday pop for boeing and a huge three-month gain for the stock y the street so bullish that's next. [newscast audio] hello, world. or is it goodbye? you know, it seems like hope and trust are in short supply. [clap]

now, as businesses we can blame and shame. or [whistles]... we can make a change. [clap] we can make work, work for our communities. create more equal opportunities. [clap] maybe, just maybe, get a bit more unity. ♪ let's have less cancellation and more conversation. prioritize conservation. and... empower future generations! [clap] [chuckles] let's question again what we think we know. use our power and our people... to pay back what we owe! [clap] ♪ it's time for business to show its true worth. because it's not goodbye, world. it's hello, team earth. [clap] now, let's get down to business.

this is realtime insights. chris, than so much for joining us we're talking about m&a. given all the volatility in today's markets, what pressures are ceos facing? >> so, most it's the financial valuation, but our research leads us to believe it's employee engagement and talent retention. having a defined strategy is so important to being successful in an integration we've defined it as humans at the center focused on the people. >> what do companies need to do to get that strategy right >> our strategy is to look at things from a persona perspective. we look at the different types of employees and how they digest information differently, how they learn differently so we can communicate with them digitally or through town halls or other ways they will be able to come along for the journey. >> who is it that leads that charge is it h.r. >> they set the strategy but we need the c suite and the leadership to come on board and deliver those messages and make sure they're engaging with the employees. we spend a lot of time learning

how the employees are learning so they can stay connected and engaged throughout the ingration. >> if it isn't right >> if it isn't right, we'll lose employees, have disconnected employees and won't be successful in the day-to-day business but also the integration itself boeing shares up 3.5%, a nice pop midday in addition to nice gains recently. phil lebeau brings us the news moving the stock hi, phil >> contessa, it happened a couple hours ago when the jsw put out a report saying united airlines is considering a hefty order for boeing 787

dreamliners. that order could be anywhere between 50 and 100 planes. it hasn't been finalized and may not even happen, but that was enough to give shares of united and boeing a move higher, although united has given some back today looking at united shares this year, keep in mind, they've been aggressive about saying we are going to address our fleet and position it for growth in the future and if you're going to do that, you have to upgrade your wide bodies when you look at their fleet plan, it comes down upgrade is wide bodies where the 787 comes in, see continued growth with international markets, dreamliner is perfect for that you don't have to do as many flights between hubs you can pick out select market where is the dreamliner can do those long, narrow, but lucrative flights if you will. then you've got boeing and airbus options there's possibilities that this may not all go to beg if it happens. it could be partially split between boeing and airbus. that's why you look at those shares, both companies and both of their stocks have moved

hilger in the last couple months largely because people are saying, okay, the airlines are seeing continued demand, especially in the international routes that is good news for both of these companies. but if boeing were to land this, guys, it would be a huge order the list price, and these planes are never sold at list price, $300 million per 787 dreamliner. again, they're never sold at list price >> how long does it tornado warning to deliver those >> big win for boeing if they got it >> how long does it take to zplifr. >> depends on how they structure and what boeing has -- remember, they had a number of these that were essentially built but still needed to be final certifications because they delayed deliveries while they were working with the faa on new inspection protocols so they've got about 100 of those they have to clear out many of those are spoken for with other airlines, but when a company like united comes to the table and says we want to place a big order, how quickly can we get these aircraft in to use, that's when the negotiation really kicks into gear >> all right phil lebeau, thank you, phil all righty

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time for today's three stock lunch. goldman sachs out today with a list of laggards that could be

buys, it says, heading into 2023 three names on the list we thought merited a closer look, adobe, salesforce and fedex. who better to do it than art hogan with b. riley wealth management adobe, do you like it or not >> yeah, we do like it it is a name on our focus list this year, and was actually tracking the nasdaq so off of it september rolled around and they announced an acquisition of figma. the company has been around since 2012, is it is privately traded and it was actually gaining some traction and what is called collaborative, creative activities and then it operates on the web. so it was a disrupter and competitor to adobe and adobe decided to take them out so, what happened in september is they paid $20 billion for half cash, half stock, and half cash portion at $10 billion is investors had assumed would be

put into share buybacks. that disappointed investors pretty quickly i think they misunderstood the acquisition and how creative it could be in 2023 so the deal closes in the first quarter of next year they expect it to be creative by the end of the year, trades 22 times, cheap for adobe historically they had revenue growth in the last quarter and record $4.34 billion in revenues and they're running at 87% gross margin. i don't think they appreciate the acquisition just yet i think as we work our way into next year, it will start to become more apparent how important this acquisition was. >> next up, art, salesforce, year to date, down 37% is it a good opportunity to get in or good opportunity to stay away >> i think it is a good opportunity to continue to avoid. so, salesforce crm missed the last quarterly numbers and missed two out of the last three reports. and if that wasn't bad enough, their co-ceo bret taylor is

stepping down. co-ceo with marc benioff who is returning and one thing that people really like bret taylor for, he was more of an operator in operating the assets they had. one thing marc benioff has been known for is a bigger picture guy and he's made larger acquisitions i think that the fear is without the operator, bret taylor, who has done a good job of aligning crms or salesforce's operations at optimizing things, it is going back to the marc benioff let's make some big acquisitions and see how long it takes to get them online. so i think they have got at least a full year of underperformance. >> let's move on now to one that is really topical and timely, and also controversial, fedex. >> yeah. we like fedex here i think it is a real turn around they missed a couple quarters in a row. even after preannouncing but i think they're really looking to achieve those cost reductions they talked about

everybody in logistics overbuil during the pandemic. u.p.s., fedex, amazon. but i think the global shipping industry is consolidating and it has a high barrier entry i think fedex is getting it right and i think where it is trading now, it is trading at a company likely has a significant turn around. needless to say, consumers shifted their focus from goods to services. there has been a slowdown in goods purchases, adversely affected everybody in logistics. i think fedex is one of the best turn around stories in the whole bunch that goldman put on the list. >> fascinating thank you very much, art art hogan, appreciate it. >> thank you. up next, elong, the musk train, the twitter owner getting his arofshe backlash. he still has some allies, next power e*trade's award-winning trading app makes trading easier. with its customizable options chain, easy-to-use tools,

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♪ ♪ ♪ ♪ ♪ well, this has been a tumultuous week for elon musk. monday, he went to battle with apple. and then admitted his beef was a misunderstanding a self-proclaimed free speech absolutist, he faced a barrage of backlash for reinstating controversial accounts he did suspend the rapper formerly known as kanye west, now known as ye, after ye posted an image of a swastika inside a star of david. according to critics, though, hate speech has flourished under new management

"the new york times" reports today that slurs against marginalized groups have surged to unprecedented levels since musk's acquisition and it pushed many companies to suspend or limit advertising on the platform some big names say they believe in musk as a businessman, as a leader morgan satanley ceo james gorma said he wouldn't bet against elon musk, his words listen to what netflix's co-founder and ceo reed hastings said earlier this week. >> i 100% am convinced he's trying to help the world in all of his endeavors give the guy a break he's got all this money to try to make it much better for democracy and society, to have a more open platform and i am sympathetic to that agenda >> yeah, but he's also picked a lot of fights. he picked a fight with tim cook and called him out for not advertising on the platform when a lot of companies don't feel like they want to take that risk

right now with hate speech surging. >> and saying that apple was, quote, censoring twitter by not presenting it on the platform. i would say that is a company that is making a decision based on its business interests as to what it wants on its platform. that doesn't mean it is being censored to me at least. hey, kelly's back next week. it has been a wonderful several months with you. >> tyler, thanks thank you. i appreciate that. thank you for watching "power lunch." >> we'll see you the dow turning positive "closing bell" right now >> stocks started the day deep in the red following a hot jobs report that enflamed inflation fears but we're rallying as we head into the close. the s&p just below the flat line this is the make or break hour for your money welcome to "closing bell." i i'm mike santoli in for sara eisen. there is a 1.25% decline in the s&p 500 to start the day it clawed its way back bond yield jumped, moderating as