see huge growth. we'll look at taiwan semi's record investment in the u.s. coming up on "power lunch. it begins right now. welcome to "power lunch. i'm jon fortt in for tyler mathisen here's what's ahead. stressed, slowing. it's not just a description of your work life in december it's how the consumer's being described by the ceos of some of the world's biggest companies. we're going to look at what that means for spending and the economy as we head into the holiday season plus, boeing's big run the iconic company has been under pressure for years but the stock is making a dramatic turnaround, up 35% in two months is this the start of bigger gains? a deep dive on boeing later this hour kelly? >> jon, thank you. hi, everybody. and let's look at the markets where we're sinking again throughout the day just off session lows. the dow is down 417 points all 11 sectors in the s&p are lower. 3935 to bob pisani's point last hour we've kind of round-tripped to

where we were before we heard from powell. way down in energy and tech particularly today oil trading poorly the s&p's down four days in a row and the nasdaq is down another 2% take a look at big cap tech as well meta down 6% today amd, nvidia down 3%. apple down 2%. 143 the latest there and according to cnbc.com morgan stanley cutting 2% of its global staff. the move impacts about 1600 of the company's 81,000 employees shares are just off session lows, jon, down about 3.2% >> yeah, kelly, and as you just mentioned one of the biggest questions facing the economy is whether the consumer is stressed according to jefferies credit card balances are growing up 15% year over year meanwhile the savings rate falling to 2.3% vs. the pre-pandemic average of 8.8% here on cnbc ceos of some of the world's biggest companies are growing concerned about spending >> they're still stressed. we serve everybody americans come to walmart.

we've got some customers who are more budget conscious that have been under inflation pressure now for months itrail started changing in march, april of this year. and that sustained pressure in some categories i think is something customers are having to deal with as we approach christmas. >> i'm not going to call a recession, that's for economists to do but right now we're seeing a strong consumer. >> the consumer is spending 20% more than last year and they're spending it on different things. that's a tremendous sum of money and they have a trillion and a half dollars more in their checking accounts more than precovid spending is down inflation is eroding everything i just said. and the trillion and a half dollars will run out sometime mid year next year so when you're looking out forward those things may very well derail the economy and cause this mild to hard recession people are worried about. >> if i didn't watch cnbc in the morning, which i do, the word recession wouldn't be in my vocabulary just looking at our data >> which is it joining us is diane swonk, kpmg

chief economist. is the concern the consumer is running out of steam based on the rising cost of credit, you know, lower savings balances, or is the sunny side that we don't have to worry about that until next year and a lot could happen between now and then >> i think it's going to be more of a next year phenomenon. but i think the important issue is what is the fed's goal here the fed's goal is to hammer demand to bring it down to what it sees as a supply-constrained world. and that's a very hard thing to do even though we're only talking about a small increase in unemployment, i think it will be a recession, a shallow recession. that shift from 4.3 million, over 4.3 million jobs year to date relative to almost double the pace of the 2010s, that helped to keep consumer spending buoyed along with that savings amassed. much of the be savings we had amassed during the pandemic is now concentrated only in the

highest-income households. the lowest-income households ran out of it by the end of the second yquarter. and that's what you're hearing from b. the differences as you disaggregate the data. it matters where it sits as well as what happens to the number of paychecks that have really provided support for the u.s. economy and made it resilient. that very resilience is also what the federal reserve is worried about in sustaining inflation and putting a floor in how low inflation can go >> diane, i was struck by how strong, how much stronger than projections consumer spending was for black friday and cyber week i think the predictions were for something about flat but it was tool up considerably but then at the same time i wonder, does that continue throughout the rest of the quarter and how much discounting is necessary to achieve that in order to move the inventory? how important is that setup for what happens q1 and what we have to look forward to as far as the

consumer and the job situation which affects the consumer heading into '23 >> so first of all, the black write sales were good but after adjusting for inflation not as good and that is even with the deep discounting what's been really interesting in watching the credit card data is how sensitive consumers have been to discounting. they are now very much more cost conscious on average, and that is important we had a lot of early discounting in october which pulled a lot of spending forward, and then credit card receipts slowed down dramatically until we got to those black friday sales which actually came back this year remember, they weren't really discounts a year ago so that's really important, is the sensitivity we're seeing the good news for the consumer through the end of the year is we got a little extra boost in energy prices coming down and finally prices at the pump coming down. so that will help buoy consumer spending but as we get into next year the issue for the fed is, you know, can they cool inflation enough

to not have it metastasize and become a much more fatal condition? and the reality is he they feel they need to raise rates a lot more in order to do that i think they're going to stick to a half percent at their next meeting but the end point on rates likely 5 1/2%, that's much higher than they were even a few months ago in their own projections, and we think that's enough to derail the employment growth once you take away all those new paychecks in the economy, it is a lot harder to sustain consumer spending >> do they have to go this route, diane i take scott kirby's point that out in the real world there's not a lot of recession talk right now, but can't ignore the message that markets are sending with these inversions and so on. should the fed be heeding that message and pursue a strategy that's a lot less hawkish right now? >> well, remember, the federal reserve -- first of all, powell is a student of history. history has taught us over and over again they won't repeat the

mistakes of history, that if they don't go far enough on inflation and derail it now it could metastasize. and he was really clear in his comments, his written comments, which were much more hawkish than his q&a in his written comments he was really clear in his last speech about where the underlying inflation resides. in the service sector outside of shelter costs. a lot of things are coming down and that's great news. but it's not enough to stop inflation from metastasizing and that's what the federal reserve is dealing with. and if they do not stop it now, that risks a much more severe kind of recession like we saw in the early 1980s. they don't want to go there. they would rather have a rise in the unemployment rate today and slow the economy i think it will tip into a recession. it's kind of splitting hairs at this point in time they think it's 50-50 between what they call a soft landing, which is a rise in the unemployment rate, and a sharp slowdown, and an actual contraction in growth. but at the end of the day they

want to get rid of that because if they don't you risk the kinds of problems -- this is a global in scope problem -- that you had from a two decades-long series of mistakes, policy mistakes, including the federal reserve not going far enough they're not going to make that mistake this time. >> all right they're going to stick to it, she says diane swonk, thanks for your time we appreciate it diane swonk from kpmg. now, with stocks near session lows our next guest says the fed's tightening won't necessarily cause a recession, and he's telling investors not to be scared of that inverted yield curve. 82 basis points, peter anderson. that's what we were just showing on the 2s and 10 rz. he's the chief of the investment officer at anderson capital management peter, what makes you so sanguine >> well, first off, the focus that we have on inverted yield curves, i understand that, kelly, but one of the things we have to think about is that is created by us, investors it isn't some kind of divine message from the heavens that we

think we should interpret it as an independent assessment. so think of it this way. if i'm bear, i'm going to trade treasuries in a certain way that's going to construct that yield curve. then i'm going to look at the yield curve and say wow, this yield curve is implying a recession. so it's almost a vicious cycle that you get in. and while it's an academic interest to look at a yield curve and analyze its inversion, i don't necessarily think that it guarantees we're going to have a recession >> i hear you. but les just talk about the 10s vs. the 1-year treasuries, for instance they've inverted 11 previous times. 10 of those ended in a recession. the 11 ended in a sharp slowdown with fed rate cuts >> yes and i would love that we could use these more than rules of thumb as like a factual physics equation but as we know, this is a complicated field. we use emotions, fear, reading

all kinds of articles about where we're heading, and last but certainly not least this is a total different recovery, isn't it i mean, i think the fed is somewhat confused about is this a recovery or a boom and i think most of them are thinking it's a boom i tend to think it's a protracted recovery just because it was such a crazy entrance into this world pandemic and i would love to see a textbook recovery. but i think we have to relax that expectation a bit and say let's calm down, things will improve but it's going to be very, very lumpy along the way >> okay, peter so you say an inverted yield curve doesn't scare you. what would scare you collapse of consumer confidence and spending some unforeseen geopolitical shock? >> well, there's a lot of scary things out there and i do get scared myself so i wanted to negate that, first off. but what i look at are the financials of companies. you know, their cash flows i'm a former bond investor so i'm very, very pessimistic

and worried all the time about cash flows, ebidta, leverage and coverage so when i look at stocks, i try to find stocks that have prevailed through this past thee years. and believe it or not, there are some out there that have done very well. from a pond holder's perspective. their coverage has increased and their leverage has decreased even in the face of, say, decreasing revenues in a macro sense. >> peter -- >> so that's what would scare me, is if i were not to be able to find companies that had these improving metrics throughout this >> sure. and maybe if at some point the fundamentals really deteriorate that's one thing but for now you've got at least three namdses you like. boos allen, united rentals >> you look back and united rentals, their ebidta has increased 20% over the past year and their revenues are up on an annualized basis the past three years about 12%. the stock is up slightly, 5%

but just think of that i mean, that's a serial acquirer it just bought one of its major competitors last month for $2 billion. it did a fund-raising for that via the high yield market. so there's a company that i think regardless -- sure, the fed is going to impact almost everybody if they keep hiking. but some will be hit less than others and the numbers don't lie. as opposed to, say, the yield curve, which we make up as trading, when you look at financial statements and especially the purest of pure say ebidta, that is not made up by us. that's made up by the actual transactions of the company. and the same applies for booze allen hamilton let me mention about that consulting company i donate think many people have realized that this is about 90% business from the government, the u.s. government, mainly in security and -- >> if you're worried about recession, recession never comes for the government except maybe tea party times >> i was going to say that

because their backlog is four times their annual revenue right now. and while we can't say that's guaranteed revenue, just as you were joking, you know, they're pretty solid predictions about their contractual revenues >> fair enough peter, thank you it's great to have you here today. and the yield curve, you know, devotees can come your way >> okay. thank you. >> peter andersen, andersen capital management coming up, taiwan semiconductor triples its planned investment in the u.s. with new chip plants in arizona. a look at what it means for rebuilding the supply chain and rebalancing our dependence on china. plus, boeing's tail winds. the stock surging 38% over the past two months. is this the start of a bigger turnaround and before the break, paramount global shares are falling, down more than 6 1/2% after the company said its ad revenue in the fourth quarter is going to decline from the third more "power lunch" in two minutes.

welcome back to "power lunch. today taiwan semi announcing a $40 billion investment to build chips in arizona this as the u.s. tries to diversify from china when it comes to chips kristina partsinevelos is covering that story for us today. seema moldy is also looking at other companies which have had to diversify their supply chains kristina, let's start with you huge day >> yeah, bigger and better that's what tsmc, taiwan semiconductor is promising with

its $30-40 billion investment for two manufacturing fabz in phoenix, arizona is one already under construction expected to be ready in 2024. the second fab should produce even more efficient wafers or fabz a fraction of what is being produced in taiwan but the united states is determined to diversify away its production from asia and create more advanced chips on american soil that also means more jobs. roughly 10,000 high-tech ones and an additional 10,000 construction jobs just over the next four years or so. tsmc isn't alone in its building endeavors. intel is building out its fabz in ohio. micron has announced new investments. even foreign firms like samsung are expanding here they are incentivized not only by the piles of substance discoming from the state level and eventually the federal level with the chips act but also the push from customers like apple to diversify away from china

tsmc's presence in the united states also helps with developing new products with u.s.-based clients like nvidia it's not going to be easy. tsmc will have to deal with language barriers procuring equipment and finding the talent, kelly. >> wow >> yeah. i mean, it's a challenge that intel is also taking on, especially when it comes to the more advanced process technology what about oversupply concerns because these are such advanced chips, is that not an issue just as long as they're able to execute on the plan? >> i guess that could be an issue five years from now, but that means that every single company is going exactly to plan intel, you brought them up they have issued a statement to me about this because tsmc said they were creating the most advanced nodes intel is saying no, we are also creating a three nanometer node as well and we're working on that for 2023. yes, they could create an oversupply, but it's bringing it to the united states, which is the goal the white house thinks that they

could pretty much satisfy all the demand here in the united states not sure if that's necessarily the case given how many little parts go into absolutely everything but -- >> is there any dispute about whether these are -- and does it matter if these are state-of-the-art chips that they're building here, or is it just hey, any supply that, you know, we need throughout the supply chain right now goes a long way >> well, to the oversupply part, that would most likely be more at the lower level the ones that are used in the auto sector. that's why it is a benefit for many of these chipmakers to create the advanced ones here in the united states. is it going to be -- we need that here. that's something that the united states is lacking, no doubt. but unfortunately, and i just mentioned it very briefly, taiwan is still going ahead and creating the most advanced ones, the two-nanometer. that's starting as of next year. >> here or there >> no, there not here samsung as well. they're going to be expanding here but they're not going to be bringing the most advanced technology here. >> this is just kind of a hedge, right? >> yeah. >> i mean, taiwan, that's where it's at. that's where it gets built out

but for those kind of advanced military purposes, for graphics chips you want to be able to have that supply, some in the u.s. in case things go south >> be able to work with u.s. companies like nvidia, amd to work together and build these products so that can help build that relationship sxwrp kristina thanks now let's brick in seema mody. as more companies try to become less reliant on manufacturing all kinds of things in china seema. >> and jon, efforts to diversify away from china really gathering pace csx ceo james foote saying there's uncertainty surrounding china. chip supplier teradyne mentioning companies or regions like southeast asia, malaysia and taiwan as they figure out how to diversify and then referring to the need to diversify as a prospect for more lockdowns experts say a lack of expertise in countries like vietnam,

malaysia, thailand, that is slowing down the move. the head of india's practice also saying how heightened tensions between india and china challenging efforts to diversify there. one example being visa restrictions on chinese nationals entering the country cfr's manjari miller also pointing out india banned china's tiktok and is conducting tax raids against huawei and zte. but india is hoping to capitalize on china's trouble, working the phones ministers flying to silicon valley over the past three months to pitch companies there. next week the minister of uttar pradesh, that's a major state in the country, coming to new york to the indian consulate to meet with business leaders. guys >> seema, in a way building the buildings and getting the equipment in them is the easy part, as expensive as that is. training up the workforce, which takes years so that you've got the full ecosystem to support

manufacturing, is another piece of it. how committed are various countries or regions you're hearing and maybe even india specifically to that harder part >> yeah, the ability to ramp up talent and expertise in building out highly complicated devices and chips and other technological components, that seems to be where there is a major challenge. there's efforts to diversify but then to get the talent to meet the expertise and to fulfill that demand, that's where you see a lot of expects say that's where we need a lot of help. and what's extending these timelines. we've been talking about diversifying away from china since the trump administration when toes u.s.-china trade efforts were literally front and center and now here we are talking about efforts to still move away from a country that has done such a good job at not only providing great expertise and making these certain chips and components but also price effectiveness as well. in a country like india it is cheaper but it's gotten more expensive over the last two to

three years, so that also is part of the negotiations that are taking place >> great point seema, thank you very much our seema mody speaking of the supply chain, ahead we'll take a look at one company using the cloud to improve trucking and logistics that's in today's working lunch. but up next, a meta loss the stock today is on pace for its worst day since october as the eu may ban it from running ads using customer data. the latest after the break it's e 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.

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welcome back, everybody. shares of meta are down almost 7% today they've just continued to trade worse throughout the session this on pace for its worst day in months after a potentially unfavorable decision by the eu let's bring in steve cove avp to explain. what's going on, steve >> this one's really wonky so i'm going to make it as simple as possible and explain what happened here. eu privacy regulators decided to recommend limiting how meta's apps like facebook and instagram process personal data. that's according to the "wall street journal." now, in this case that means asking permission before collecting data within its own apps that's a step further than what apple forced meta to do last year, which is those pop-ups you've been getting to ask you whether or not you want to be

tracked across third parties and websites now, obviously this would make it harder than ever for meta to target ads, and we already saw that apple's schied s. change decimated sales growth for meta. but, here's the big but, guys, there's a lot more that has to happen for this to actually go through. the eu regulators sent this recommendation over to regulators in ireland who are actually responsible for enforcing privacy rules against meta those irish regulators aren't expected to make their decision until next month so for now this is all happening privately and behind closed doors. now, if they do decide to adopt this new rule, meta has the option to appeal before it goes into effect. and even if that happens meta tells us in a statement it can find other legal avenues to process the data it needs to target the ads under eu's privacy laws and rules plus it's going to take a lot of people to opt out of that tracking to have any kind of big effect on meta but that's part of what's sending meta he lower today, the

risk it could face yet another major hurdle to its ability to use data in its apps to target ads. we already saw what apple did with it, guys. >> well, you said apple. and so i've got to ask about app store changes that are com coming a much bigger menu of prices not necessarily what developers are charging but what they get to charge. >> this is a settlement from a class action lawsuit from a lot of developers against apple. they wanted more pricing options within inapp payments and how much they can charge v charge in stores basically instead of going 5-cent increments or 99-cent increments you can do a whole dollar you can go up to $10,000 if you want to dhafrnlg much for an app. basically apple didn't want to go to court with this case and they settled with developers to give them those options. but they really hold it to developers overall when it comes to splitting the fee there's still a big battle going

between those two cohorts. >> always a battle with apple. steve thanks >> thanks, guys. >> now let's get once again to kristina partsinevelos for the cnbc news update kristina >> hello, job. here's what's happening at this hour a whopping 305 criminal counts have been filed against the suspect in the colorado springs mass shooting at a gay nightclub. authorities say it could be the most heavily prosecuted murder case in state history. the charges include murder, assault and hate crimes. anderson lee aldrich is suspected of killing five people and wounding 17 others the house committee investigating the january 6th attack on capitol hill will make criminal referrals to the justice department panel chairman bennie thompson did not say who the targets will be or whether former president trump will be among them thompson says the panel is seeking to publish its final report by the end of the year. and a federal judge has ruled that oregon's voter-approved ban on high-capacity magazines can go into effect onthursday the judge also issued a 30-day stay on a permit to purchase

requirement for new firearm buyers after law enforcement agencies said they needed more time to set up permitting systems. back over to you, jon. >> all right, kristina, thank you. and now ahead on "power lunch," coming home to roost housing stocks struggling in recent months as rates rise. luxury was holding up in the pressure, but will that last and boeing, boeing gone. the aircraft maker having a strong month, recently announcing a major deal with united we'll discuss after this

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welcome back, everybody. 9078 minutes to go and once again we're right about at session lows p let's get caught up across the board on stocks, bonds and commodities plus boeing's big recent rally. let's begin with the markets where all the major averages are down once again. the nasdaq leading the way off more than -- almost 2 1/2% right now. we're trading below 11,000 for the nasdaq this as a more than 30% drop year to date the s&p 5003920 down 2%. the dow is down about 520 points solar names, solar edge getting

hit. ev maker lucid the worst performer on the nasdaq 100 a lot of these stocks don't like tight liquidity. tesla also down about 2% today and about 50% on the year. shares of sanofi and glaxo soaring right now with the companies getting a big legal win in their class action suit over the heartburn drug zantac gsk for instance up 7% let's head to the bond market now where the yield curve inversion continues to deepen and rick santelli is tracking the latest for us from chicago rick >> yes, always i afavorite in the old days on trading floors, that's 30s vs. 10s, istoying with inverting again now, remember, last wednesday was the brooking institution q&a and testimony of fed chairman powell so that was one of the last days where he was protesting. the markets aren't hearing what he's saying. so this is interesting let's look at a two-year since then it's hovering right at the low range of last wednesday the 30th

ten-year yields are actually well below the low yield.price above the high price of that session. not what the chairman really wanted and if you look at july fed fund futures of next year these are the fulcrum, that's where the price stops going down, starts going up ined if fund futures, it's hovering around the same price. and here's what's interesting. look at the dow jones industrial average. it's below the lows of that day. as are s&ps. only the nasdaq isn't. but it's close why is any of that important no matter how much the chairman protests it seems equities are paying attention but certainly not the treasury complex. back to you, kelly >> all right, rick, thank you. rick santelli. oil is also grabbing the headlines with its deep slide into the red it's back below $75 a barrel today. it's negative on the year after everything that's happened let's get to pippa stevens for the very latest. pippa? >> hey, kelly, oil is tumbling today with wti falling to its lowest level of the year now, macro headwinds are driving

the action, with traders worried about a slowdown in global demand that's counteracting the positives of the eu russian oil ban as well as the $60 price cap. u.s. oil hitting a low today of $73.41 although it is closing slightly above that level currently at 74.23 for a loss of 3 1/2% brent crude right around 79.44, a loss of 4% now, gasoline futures and heating oil also down sharply with rbob now in the red 420.22. we are also watching european gas prices which are bucking the trend and in the green a cold snap has hit the continent, and wind generation is down, leading to a jump in gas demand finally, energy stocks falling alongside the broader market the drillers are leading those declines with marathon oil, apa and eog all down more than 3%. kelly? >> a stunning turn of events pippa, thank you meantime, shares of boeing are contributing to the dow's decline today. they're down more than 4%.

this after a 34% run in the past two months could it be the start of something even bigger? let's bring in sheila kailu, aerospace and defense analyst over at jeffries sheila, it's good to see you again. first of all, what accounts for the sudden change in sentiment for boeing >> really when it started was the november 1st analyst day when boeing set out a target of $10 million of free cash flow in 2025-26 time period. that's really went from zero with it making boeing look extremely cheap compared to other industrial stocks and other aerospace stocks if they could get anywhere close to that. to put some framework on it the biggest driver of that $10 billion of free cash flow is to get the maxes off the ground the 737 maxes that they have which they're producing and shipping at a rate of about 25 per month right now. the target is to get to 50 by 2025 so doubling. that's why boeing's attractive right now. and the free cash flow per

aircraft, we estimate, is around 10 million that's a very low estimate given the issues they've had with that aircraft >> so strong free cash flow. solid fundamentals at a time when people are nervous about the macro outlook. what do you say about the big recession debate as we head into next year? it's all well and good for boeing, but if this -- if the economy takes a turn for the worse then what? >> i don't think it will matter much air photographic is still 25% below 2019 levels overall. that's really being dragged down by china, which is 70% below 2019 levels still. so any signs of a reopening we think will drive boeing up even further. our forecast is for 4% air traffic growth over the next three years. that compares to 6% over the last decade. we think air traffic is a two to three times gdp play and therefore airlines will need that sort of lift. they'll need from 25 per month today of maxes being producinged, and that's mostly for domestic traffic, to 50 per

month. so we predict they're going to need a doubling of new dp deliveries over the next three to four years. >> sheila, how exposed is boeing to a shift in sentiment on aviation i mean, people have been talking so much about revenge travel, people just want to get out there, and so there has been that but what happens if that shifts as perhaps the consumer gets tapped out as we were talking about at the beginning of the show could happen heading into '23? does the valuation perhaps take a hit? >> there are certain sensitivities. so in terms of our 4% air traffic forecast, you know, we assume if the consumer slows down a little bit, let's say it's 3%, that would be a 3 per month hit to boeing's aircraft production off the base of 50. so very minimal. there's only been four years in the last 40 years where air traffic has actually declined. so 3% estimate is essentially a recession for air traffic.

so we think the 4% is rather subtle growth actually by the aerospace industry we've taken a point off for china not coming back as strongly and another point off for some zoom replacement. we've already accounted for that in our view in our forecast. so it's more about the production rates getting up there and airbus announced just two hours ago that they're cutting their forecast for the year not because of demand but they can't get the planes out the door quickly enough. >> right we'll see if that thesis flies sheila kahyaoglu, thank you. next up my interview with the ceo of samp czarra. we'll be right back.

welcome back kelly, it is crunch time for global logistics networks. here in the thick of holiday season everybody wants to have enough inventory but not too much and all of this is happening as consumer demand is spotty and truck drivers are still scarce and all of that makes a great time for working lunch with sanjit biswas, the co-founder and ceo of samsara

the company makes cloud-powered technology for efficiency in the supply chain from trucks to manufacturing floors the stock spiked 20% last week on strong results. sanjit grew up in silicon valley, went to a high school a few minutes from apple headquarters, and sold wireless tech startup maraki later on to cisco for about a billion dollars. the valley's innovation culture has motivated him from early on. >> and i think it was really great sort of of inspiration, right? that all these tech companies were around. it wasn't just apple and adobe you had cisco systems. you had sun microsystems you had all these industry giants doing big things. netscape, if you remember that name it's funny, you no i work with marc andreessen who's on our board. it's just kind of amazing how the world works out. definitely felt a source of inspiration from there you could dined of just feel it in the air if you wanted to learn about computers or the world wide web or whatever it was, networking, it was kind of open to you, at least here in the bay area here in the '90s. that was a great environment to be growing up in

if you were curious, you wanted to tinker, you could basically find those resources even if you didn't have them at home it's not like i was able to do all this stuff at home a lot of it was being done at school >> you took advantage of it. it's been a year since samsara's ipo. no surprise it's trading lower like other growth stocks but interestingly the company's fundamentals are more than holding up so far as customers look for ways to save on things like insurance and gas customers in these largely paper-based industries are just starting to take advantage of artificial intelligence and data for smarter operations >> first i want to know where those vehicles are and that's the gps tracking or telematic side of what we do that's where the business got started. but they also care about their over the road safety so are these drivers distracted in any way can they be coached to drive a little safer, increase their following distance, basically reduce the likelihood of an accident and the way that we help accomplish that is through data. so we have cameras that run ai at the edge, in the device itself and can basically alert the driver if they're maybe

following a little too carefully or closely, not wearing their seat belts or looking at their mobile phone, which happens to many of us, right? it's the kind of daily distraction. >> right now samsara's got a $6 billion market cap just reported 724 million in annualized recurring revenue, up 47%. it's interesting, kelly. sanjit told me about one customer that saved half a million dollars in fuel costs using the technology to remind truckers not to idle during stops. and the company then spent some of that savings on driver incentives to keep that efficiency going >> it's fascinating. reading here more about it, cisco, the restaurant supply company, uses it to monitor for driver distraction, capture road videos so they seem to be more on the b to b side but in telemattics we see their spread throughout areas like insurance a lot of people have these on their cars to monitor driving. it's basically incorporate noud with tesla software with safety scores and all the rest of it. >> the way samsara's using it is the insurance play is companies

can prove their driver wasn't at fault in certain indications and therefore those claims get resolved in their favor, their rates stay lower so all of that being in the cloud, being able to search through and find key moments that that cameras have captured on warehouse floors as well as on the road give companies more insight into what's happening and preventing bad things from happening. >> incredible to watch how this man in particular has had such success it seems twice now but to your point about the stock, what should investors right now be gleaning from how this company's fundamentals are doing? maybe the stock like you said has been a struggle. but at a time when we're looking for green shoots would we consider this one? >> this is one of those times when you've got to look beyond the trajectory of a stock price and really think about what thewhat are the fundamentals of the company? how are their profit margins doing? what's the customer momentum is this something that customers seem willing to spend on even if they're not spending on certain things reminds me of intuit in that sense. they had their report a few days

ago. small and medium businesses are committed to digitizing their back office. it's for efficiency, yeah, but it's also for flexibility. they found they need td during the pandemic intuit saw that core part of their business holding up even better than the consumer was so i think the question is is a stock like samsara like that for industrial, that needs to go digital? if you look across at something like pro corps in construction does it show that same stickiness within construction management and their cloud we'll see. >> and if those customers do start looking for savings is that actually a catalyst for further adoption in what could be a tough time? >> exactly >> good stuff, jon thank you. up next, everybody, a rare double upgrade for jpmorgan. we'll trade that name and two ocluh. tay tees inod'shr stk nc lily! welcome to our third bark-ery. oh, i can tell business is going through the “woof”. but seriously we need a reliable way to help keep everyone connected from wherever we go. well at at&t we'll help you find the right wireless plan for you. so, you can stay connected to all your drivers and stores on america's most reliable 5g network. that sounds just paw-fect.

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welcome back we're trading three of the day's big holds in our three stock lunch. we've got one on general electric oppenheimer upgrading it le estee lauder is upgraded and j. jpmorgan is being upgraded let's bring in todd gord dong. great to see you again, todd

>> hey, kelly. >> what do you think about this stock? >> yeah, hey, welcome back this one -- for me, this is not my kind of play. this is a no touch for me until we get more clarity on the spinoff. the stock has performed really well on a relative basis on the broader market the 200 day is about 77 so they broke into three parts, aviation, health care, power generation power has been under pressure from the renewable side. decreased demand in the u.s. aviation on the other hand has done well. we have a travel recovery, resurgence in orders from boeing and airbus it's done well in the commercial military space so there's pretty bullish price targets on it. the for me this is a move that's come up on the turn around story. not my cup of tea if you know what i mean. >> okay. now what about estee lauder.

beauty is supposed to be recession proof and luxury what do you think? >> yeah, that tom foord was interesting. it's not all that significant, john a $2 billion deal. estee lauder is an $83 billion market cap company it's not very dilutive for that. it's a staple coming into a recession. you know, it's shown relative strength it's performed better than the s&p. i don't personally own it. i would consider it. i think it's pretty richly valued got 39 pe. trading 57 on price tofree cas flow you compare that to loreal with 37 pe, 32 to price free cash little bit lighter there trading 43 times next year's earnings yield is 1.15% for me, john, i'd like to carry through resistance at 246.

>> what about jpmorgan double upgrade saying it's recession proof. what to you think, todd, is it >> boy, i don't know about that. the this stock has had an unbelievable run i own it in our dividend portfolio. financials are doing well. just to let you know, john and kelly, we did just today put some hedges on for a potential continued drop here over the next several weeks with our company so i just want to caveat that certainly very bullish 26 analysts are following it 9 are hold 8 are ouer t balance -- there's no sells on that i forgot the breakup there the expected earnings per share in the financials going into 4q, only down 2.5%. s&p is looking to drop 5%. financials are expected to weather. if we could buy a pull back in j.p., maybe it's a good place to

hide you have to watch the yield curve inversion. three month compared to ten year, 70 basis points, that's going to weigh on their net interest margin. the trading activities from fixed income and equities should be good so, you know, maybe buy a pull back here in jpmorgan i'm going to hold it. >> hold it, not a seller not sure if it's recession proof. todd, thanks so much great to see you we appreciate it. major indices bouncing off the lows as we head towards the end of the hour. the latest read on housing toll brothers after th we will tell you what to expect. even if you got ppp. and all it takes is eight minutes to find out. then we'll work with you to fill out your forms and submit the application. that easy. getrefunds.com has helped businesses like yours claim over $1 billion in payroll tax refunds. but it's only available for a limited time.

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sfx: bubblewrap bubble popped sound. get a first-hand report on the housing market toll brothers is going to have results. diana olick joining us with more on what to expect. diana? >> john, toll brothers is going to say they have fared slightly better than their peers. they have more wiggle room in their wallets. they may not be mortgage dependent at all that said, toll did lower its guidance in august and ceo do you go yearly in august also said demand had dropped sharply early in its q3 as rates spiked in june. as you see here, rates pulled back slightly in august so he said we have seen signs of increased demand as sentiment is improving and buyers are

returning to the market. average weekly deposits in the first three weeks of august were up 25% compared to july. well, fast forward a month and rates shot back up over 7% again in october we did see sales of new homes jump 7.5% in october month to month as more builders were reporting adding big incentives, specifically buying down the mortgage rate. so we'll have to see if that played into toll's results now kelly? >> wow everyone wondering if that bear market in stocks for housing is over, at least that's what someone suggested last hour. diana, thank you very much have a quick news alert on netflix to mention co-ceo ted serando speaking. he said there will likely be multiple ad tiers. on the sports front added we have not seen a profit path to renting big sports today we're not antisports, we're just pro profit and have yet to figure out how to do it. >> they have to do small sports

like t wil-ball and corn hole. >> they've done it with international content. i don't know that's not what investors want to hear. >> maybe not they are probably reassured about his pursuit of profit at a time like this thanks for watching "power lunch." "closing bell" starts r now. stocks are just about near the lows of the session. more pressure adding to monday's losses nasdaq getting hit the hardest down 2.25% this is the make or break hour for your money welcome, everyone, to "closing bell." i'm sara eisen dow is down and s&p 500 down 17 p 1717 po -- 1.75%. the