>> he doesn't do any of that stuff the under-promised banks >> carrie, give me a name. >> s&p global. >> okay. >> doug pederson, he's the best. >> jason snipe >> good stuff, you guys thank you very much, scott hi, everybody. i'm kelly evans and here's what's ahead better news on the inflation front has yields down and stocks up he'll be right here on set to make his case. plus recession, what recession academy sports and outdoor stock up double digits on earnings today. the company's expansion plans in full swing the the ceo is here to tell us why. meanwhile the amazon trade is falling apart. it's the only megacap stock negative over the past month and it's lost nearly half its value

this year, so is it an opportunity to get in? we'll have a good old bull and bear debate. we begin with markets, though, and dom chu is here with the numbers. >> we're going to call it mixed and it's been pretty range bound and at this point the bulls will take it. four-day losing streak could be five today if the s&p goes lower again during that span the s&p lost 4% of its value pretty much down on the session. again for the context on trading range at the highs of the session up 16 points down, 19 points at the lows so just in between that trading range, but after the slide we've seen some of the bulls will take that as a win. the dow industrial up 42 points. 36.39 the nasdaq composet now below the 11,000 mark. this is all happening despite a drop in interest rates, overall kelly mentioned some of that software economic data we saw earlier on this morning.

the ten-year treasury note yield currently sits at 3.44%. the reason it's important you've got to go all the way back to september to see the last time we hit this low. is this a peak in inflation and rates for the time being we'll see. but remember at these levels here 4.33% was the high for this cycle. last year we got down as low as 1.37%. that's been the range in that ten. year treasury yield note curve one of the places to watch is the difference between long and short-term rates minus 83 inverted basis points or 0.83%, that would put it at its lowest level inversion the lowest level since 1981. the debate rages how telling this is. one thing lower rates have done, kelly, is propped up a bit of a

housing trade. right now we've got some micro and economic factors driving the green you're seeing. better than expected, up about 8% a carryover effect and all up 3%, and lows, by the way, home improvement they came out with news this morning reaffirming their full-year forecast for profits and revenues and adding $15 billion to stock buy back programs that already had 6 billion left on it from before >> thank you very much now, 18 days until christmas and most of the countries in a pretty grinchy mood about the economy. steve liesman here with cnbc's latest all america economic survey >> thank you, kelly. yeah, the cnbc all america economic survey you can see we have our super hero shield logo here for our survey here 15 years we've been doing this beginning on the holiday, 2007 what we found americans are in a

foul mood heading into the holiday buying season and we'll see how much that affects the buying take a look when we ask people is the economy fair or poor, 85% say it's fair or poor. that's the second highest we've had on our survey here and only 14% say it's excellent, good by the way these are numbers even worse than we saw back in the financial crisis and we'll show you in a second why and where that comes from. mostly it comes from inflation looking at expectations for the economy not a whole lot better take a look compared to june 2008 those who isait's going to get better just a-b little bit more than 2008. 44% saying they expect the economy to get worse compared to 43% back in the middle of the great financial crisis moving on looking at recession expectations, i want to show you the detail on this 56% say it will be 22% are optimistic it won't

happen 9% think we're already there, and 13% are smart enough to be not sure, which is where i am as well i want to show you one other thing and we call this the consumer barometer from this survey those who inspect inflation to increase near an all-time high at 70% home values decreased at 19%, one of the highest of the survey and fears of losing a job 17%. that could impact the spending overall shows americans plan to spend about 10% less than they did last year, but i will say importantly this sentiment comes up against the idea that there are now 4.3 million more americans employed this holiday season than last holiday season. >> when did you get these responses like the last week or month? >> classically right after thanksgiving so the 26th through the 30th

we're always in the field -- the friday through sunday or monday after. >> which is impressive so this is with gas prices down, food prices down, and let's continue the conversation. we're going to dive deeper into the economy with our next guest who thinks the worst is over, grinches, and that things are looking up he's the chief market strategist at jeffries. welcome. do you take my point, dave, which is steve is getting these readings which are horrendous in terms of price measures. >> there's been a theme throughout all of this the consumer confidence surveys, the university of michigan and conference board have all been really bad consumers have been unhappy for a while, so i don't think it's surprising to me steve gets that data there's a lot of frustration out there. covid brought a lot of angst, the reopening logistics. i thought the job stuff was

interesting, though, people really don't see the risk of losing their jobs at all, which that was your silver lining. >> i've been surprised doing all this stuff the low unemployment rate and the good job market has not played a bigger role in peoples attitudes towards the economy. it's inflation trumps everything, and i guess if you make a misery it doesn't matter how you get to double digits, you can get there with inflation numbers and the unemployment rate >> why is it, dave, are we correctly characterizing your views you think actually things might be better next year than most americans and most people in the markets >> better is relative. let's talk about better markets. i think this year was a pretty tumultuous period for people in markets especially a lot of sectors, tech obviously. but we've got 450 basis points, as of next week a tightening in the funds rate

a significant amount of tight 'ing in this marketplace they realized this is going to slow down and not necessarily pause but slow into q1 and eventually we're going to take a break from this breakneck pace of tightening and i think that's a relief for markets will the economy follow suit it's more difficult to tell. but the inflation data do look like they're coming down a bit and there were some good numbers today. >> i don't know if enough people are talking about it but i know kelly will this union labor cost number, and i emphasize it not only because it's an important number but powell has made it into an important number it was the spiking labor cost he made a big point of saying there's labor productivity -- i'll come back to that in a second >> union labor cost is wages and benefits >> that's a key thing when that

was up near 8.5% it was a real reason to freak so to speak. now it's down 2.4% lower expectations -- if you can put the chart up again i think we've made a mistake -- there's the unit labor cost. we had this surge of activity that resulted from all these people left their jobs, we kept output where it was, people came back to work and it fell and people want to make these grand pronouncements about the economy from a cyclical nature of covid drproductivity trends. and we want to be careful to separate this up and down business in the economy. >> let's bring it back to what dom was talking about, the yield curve inversion one of the worst its ever been. ten of them have been recession, the 11th will head the cut why shouldn't we take it as

baked in at this point we're going to be in a recession at this point next year >> we may very well get a couple more quarters of negative real growth i think that's certainly plausible. the interesting bit we have very high nominal growth, so it's not a typical recession where we have deflation risks we inflation risks that's very different from market, something we've bip writing a lot about over the course of this year. and that props up earnings, props up valuations. the total market gap divide by nominal gdp, but i don't think we should get caught up in the recession really brings about some sort of major catastrophe for markets. the fed probably needed to engineer a lot of this aggregate demand slow downs to anchor expectations everything suggests to me their credibility is actually near an all-time high, not low like many of the dpess who come on here

suggests i think the curve in particular suggests the fed has this under control. >> we've talked to people who think they need to slam the breaks down and others who have done such good work on the labor market and says we're going to see wage crushers into next year and they can't pull back here without having a persistent inflation problem. >> i think they're going to try very hard not to declare victory too early. look back to the '70s and the mish steaks of arthur burns. his number one goal is not going down in the history book as the guy who blew 40 years of inflation rebuilding so i don't think he's going to declare any early victories, i we're not that optimistic for the real sort of big upside in equities next year there could be a grind higher. i think the story we're rolling more toward is credit markets. there's a lot of really interesting stories come up in

credit >> high yield offering opportunities. >> absolutely. low teens. >> low teens so basically if you think the economy isn't going to completely fall apart some of these companies -- >> how much of those low teens is credit risk >> it's not all credit risk. we've got 4% yields in treasuries give or take 3 or 4 depending where you are in the curve. we have a consumer very strong, a labor market going very strong even if their margins and earnings might be coming down a bit it's a healthier time for a lot of businesses. i want to reiterate if you're going to take equity risk, you're going to have equity returns. if the fed is going to sit on top of you and drive inflation down, they're going to use opportunities that strengthen the market to be a bit more hawkish. soiodon't see why you take equity risk. i'd rather be lower on the capital structure in the fixed income space where i'm not taking equity risk i'm taking lower risk.

and i'm getting pretty good returns. and some guys in our world, the hedge fund guys will leverage that up and get equity returns out of it. i think that's where i'm leading towards. got to get rid of the heart break. can't go around with a broken heart for too long otherwise people -- >> they don't want to hear that. >> i want to make one quick point which is i think there are two marks to look for. the first is you want to figure out how far the fed is going, but once that is established, i think we can figure out better what's going to happen with the economy and how to figure out what to do with your money one of the things that bothers businesses and investors right now is the uncertainty when i look at the round table and their plans for cap x and hiring they don't know the lag effects and how far the fed is going to go. the fact is in a dynamic economy

such as the united states with dynamic businesses, if they tell them where the buggy is, they can hit it or avoid it or do what they need to do right now we don't know, and that's a big font of the uncertainty for consumers and businesses and investors >> it's a great point. if they don't give you the last word, dave, where do you think the fed is going sphyou had a room full of executives and people in charge of hiring decisions where do you think these people are and what they should do >> they're going to have 450 basis points in the hopper by next year. we're talking about fine tuning now. is it another 25, another 75, i don't know then they're going to be able to sit back and watch they have anchored -- >> let me interrupt, david, because they had the fed fund rate on. i think it's in your zone. >> it's right there in the middle of it, in fact. i think that's a very fair representation where we're going

to end up. over a trillion dollars of qt, that's a lot of tightening they've got lags, they've got the cumulative effects of the tightening both were highlighted in a statement last time. >> no recession? >> i'm okay with a recession >> you can't be okay with a recession. >> two consecutive quarters of negative real growth with nominal growth of 5 or 6%, i'll take that all day. >> up side for credit not so much for equities in the broken part thank you very much. still coming up if you think we're heading for a slow down you'll need some kind of strategy for stocks and our trader has four names where she's finding value. we'll reveal them. plus a retailer is still insisting a recession isn't at hand the ceo joins us next with a look at the consumer "the exchange" is back after "the exchange" is back after this

this thing, it's making me get an ice b >> this is "the exchange" on cnbc 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. at fidelity, your dedicated advisor will work with you on a comprehensive wealth plan across your full financial picture. a plan with tax-smart investing strategies designed to help you keep more of what you earn. this is the planning effect.

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

so let's go. the digital age is waiting. welcome back to the exchange shares of academy sports and outdoors are hitting an all-time high today after hitting their profit outlook e-commerce sales up double digits for the fifth straight quarter.

the stock has been a bright spot in retail this year. here first on cnbc ken hicks, the chairman and president of academy sports and outdoors. great to see you again >> great to see you. >> the uncertainty do you share it >> there's no question the consumer is under pressure and there's a lot of uncertainty that said we're still seeing the consumer out there and they're buying they're looking for good value and valuation is at its lowest price. but i'm also confident in seeing this through other downturns, christmas always comes the customer will still come out for the holiday. >> what happens then some people in the market think we're going to hit a touch patch for stocks, a post-christmas

reality. how can you commit to opening 100 or whatever it is stores when we're going through a tough period for the consumer? >> we're opening stores for a long time. we have a lot of opportunity to continue to grow, and our format has proven as we've entered some of the new states this year that the customer wants us because we bring a great value, so even during down times the value we offer really is important to the customer particularly when they're under pressure >> sure. so maybe you think it becomes a more attractive place to go, but people are still going to wonder about their shrinking wallets overall. maybe you can tell us this christmas what is the impact inflation is having. there's certain product categories more favorable to you right now. what would those be? >> apparel and footwear are definitely ones customers find

our team sports, they still want to play the sports and activity. some of the bigger ticket merchandise is a little more challenging. but outdoor cooking, the customer is looking to do fun things exercise equipment is a tougher category because it's a bigger ticket, but overall, you know, they're looking for value. they will buy something even though it might be a stretch if they see it meeting the need but providing value at the same time >> do you see a lingering effect in covid obviously when we started to focus on your stock is when the outdoor boom happened because of covid. pre-pandemic, still in a pandemic mind-set, what do you see? >> i think we are firmly in post-pandemic. and, you know, there are a number of businesses that customers go that is active in camping, as i mention team sports one that's fallen off is

actually fishing overall we are up over 30% from where we were pre-pandemic so a lot of those categories that grew rapidly have maintained at a very high level. >> so grills are still strong but fishing is not >> yes >> ken, thanks for your time today. what were you going to say >> sushi must be good. >> ken, we appreciate it ken hicks from academy sports and outdoors still ahead amazon falling to the lowest levels since the start of the pandemic. it's down 50% from its record high should you buy it on the cheap, sore is it not cheap enough? plus a behind the scenes look at the fall of sam b bankman-fried. kate rooney is here with the story all you swifties out there won't want to miss i went on their website, uploaded everything, and i was blown away by what they could do.

getrefunds.com has helped businesses get over a billion dollars and we can help your business too. qualify your business for a big refund in eight minutes. go to getrefunds.com to get started. powered by innovation refunds.

researchers believe the first person to live to 150 has already been born. it could be you! wow. really? of course, you'll have to eat your greens, watch your stress, wear sunscreen... but to live to 150, we're developing solutions that help doctors listen to your heartbeat while they're miles away, or ai that knows what your body will do before you do. cool. introducing elevance health. where health can go.

welcome back, everybody. two of the major averages are higher right now the dow by 72, the s&p by only 3, while the nasdaq is down 17 here are some of of the movers this hour. campbells soup getting a nice bump the organic growth above consensus. higher pricing offset lower volumes. a surprising 5.5% pop there. airbnb meanwhile hitting an all-time low after a downgrade to underweight at morgan stanley. the analyst there citing slowing listings growth, occupancy headwinds. that's only a 2% drop and they have climbed back enough but still enough there right in the middle of the pandemic, the company missed profit and revenue estimates they do say they expect consumer demand to grow in 2023 and supply chain constraints are easing shares of southwest are falling

ahead of the investor day as the company said it will resume its quarterly dividend after several years. we'll speak with ceo bob jordan about that in the next hour. stay tuned let's get to kate rooney now for a cnbc news update here's what's happening at this hour. a majority of supreme court justices appear skeptical about issuing a broad ruling on election rules north carolina republicans who brought the case argue the constitution gives state legislators nearly total control over congressional elections including redistricting. eliminating court oversight would allow the, quote, most extreme forms of gerrymandering. and the peruvian president has dissolved the country's congress match that was just hours before lawmakers were debate impeaching him. protests broke out on the streets of peru's capital following that announcement. and the head of the constitution calls his decision a, quote,

coup d'etat. and the russian president says his special military operation in ukraine could be, a quote, long process also said there was no need to mobilize more russians despite growing concerns more civilians could be drafted >> kate, thank you very much ahead, whether or not we'll have a recession might be still up in the air, but some kind of slow down seems likely. our next guest has four names to y eabuahd of a downturn and why it's important to add risk to any long-term portfolios don't go anywhere. the next generation in global secure networking from comcast business. with fully integrated security solutions all in one place. so you're covered. on-premise and in the cloud. you can run things the way you want - your team, ours or a mix of both. with the nation's largest ip converged network. from the most innovative company. bring on today with comcast business. powering possibilities.

(vo) businesses nationwide are switching to verizon business internet. (woman) it's a perfect fit for my small business. (vo) verizon has business internet solutions nationwide. (man) for our not-so-small business too. (vo) get internet that keeps your business ready for anything. from verizon.

welcome back, everybody. blackstone's chair and ceo steve schwartzman addressing those recent concerns. >> he's making comments right now at the goldman sachs u.s. financial services conference. in those remarks he addressed some of the blackstone real estate investment trust and some of the concerns and headlines over the last couple of days of the firm putting up gates or halting some large withdrawals this is what schwartzman had to say at the conference, talking a little bit about aggressive fed action starting to impact the economy. also that the consumers have a lot of income, also interest rates go down, real estate will

be worth much more also that people in the blackstone real estate investment product are actually doing very well. schwartzman product breit product some of the best we've done and that redemptions from the fund came from asia and investors are happy generally with this b reit product coming enconnection blackstone had so call gates put up on products they have in order to limit the withdrawals to avoid firesale conditions for assets some of those investors still with the funds so we'll continue to monther these comments, but those headlines catching some attention here on wall street. >> that's exactly right. and it is an important point to mention they don't want to have to be for sellers down here.

there are a lot seeing big losses >> we're also seeing interesting comments how they protected and mismanaged some of those assets. he basically says they had a situation in place where they'd bought a hedge or insurance product on the fund so as interest rates go up our investors in retail make more money that's been generating what he says around $5 billion in profits on those interest rate hedges. so it wasn't just real estate, you were looking at other parts of the market as well. so again addressing some of those and how they've risk masked some of the down side >> thank you, dom chu. it has been a choppy day of trading, meantime, with the averages trying. check out bond yields the ten-month, three-year spread on pace for its widest inversion, and yes, 22 years since 88 basis points my next guest says we're in for

an economic slow down but she's got four stocks you want to buy now if you want to hedge great to see you again, nancy. welcome. >> kelly, it's so good to have you back >> thank you i love how you're always provocative and to say, listen, we might be having a downturn but there's still stocks you can and should buy now, explain toot that to people you just heard dave say he wouldn't be in stocks for the next while >> most of us aren't able to be all that nimble. what we do our portfolios is try to reposition what we expect in the next 6 to 9 to 12 months one of the stocks i have for you is a dividend player that's been a great place to be. we've been managing dividend growth since dare i say it 1994. this is not a fad for us it's a name yielding 3.6%, growing the dividend 17% annualized over the last several years. only trading at 13.8 times the

s&p versus -- i'm sorry 13.8 on a price multiple investors have been sitting on the side lines worrying about humira the company is confident they can replace those earnings and they're looking to get approval for other indications for those names. then you've got the aesthetics business which has been a workhorse so we like this name a lot. you can sit back and clip the coupons, the dividends >> before we turn and talk about steel dynamics and raytheon, service now is your fourth name. why is this name up there? >> i think they've been the most successful purveyors in the cloud this last year bill mcdermott is probably one of the best ceos in corporate america. he has argued that the secular

tailwinds behind this company are much greater than the macro cross winds. and they've delivered revenue and earnings growth in the 20% range and keep 90% of their customers. their unique application of data management on the cloud puts them in an area that allows companies to save money. they gave an example on the earnings call that one client is going to save $1 billion over the next 12 monthsgist by employing their systems. and that's important when you're in a labor constrained environment. >> exactly or you're looking for those cost cuts maybe it's a catalyst i guess my final question, nancy, and you might get this from people a lot concerned about the outlook and say i want to pull back here. make sure case as to why they shouldn't do that? >> i think to some extent they should remember -- we probably don't remember but in august 2020 we were saying bonds were riskier than stocks. so we moved our clients out of the fixed income market and we

have an inflation strategy both of which have done much better than bonds now about four or five months ago we started moving clients back into short dated and treasuries and corporates depending on their risk profile. so you now have an opportunity to have a much more constructive allocation but equities or going to historically outperform two thirds of the time one of the safest ways to be exposed is through dividend payers and that just happens to be our specialty, but i don't think you want to shy away from equities at all and the last thing i want to say, kelly, is institution allocations to equities is below where they were in 2008 you've got very negative retail investors. the odds at the margin many moving back into the equities is much greater than not. >> she's good at what he does. nancy, thank you very much really appreciate it

it's great to see you again. >> you, too. coming up new details about the collapse of ftx and how sam bankman-fried's management style factored into it this as bitcoin factors in

as the fallout from ftx continues to unravel new details are emerging on how sank bankman-fried's management style precipitated the company's collapse kate rooney on set with more what a story this is >> it's been wild to story but we've been talking to half a dozen people who worked closely with bankman-fried they paid a different picture than what a lot of people saw saying the ftx founder was not the easygoing ceo he portrays himself publicly, that more laid-back persona has been on display on recent appearances where he denied committee fraud and said he was aware of

commingling funds between ftx and alameda. some employees say they felt intimidated into not speaking up and branchman fraed focused on expensive partnerships despite some telling cnbc they begged him to pull back ftx insiders say some of the top brass question his decisions, he surrounded himselfself with a crew of what they call yes men and women. two sources used the word insular to describe it and one former top executive pointed to instances where sam bankman-fried would chew out employees that disagreed with him. we did get a comment from sam bankman-fried. whether sam was in total control of ftx's company here and operations is really going to be key in the bankruptcy in these investigations >> so many ask the question constantly people in the crypto world why isn't he behind bars

how long might this process all take >> it could take years if you look at elizabeth holmes and theranos as a recent example the doj is investigating what's going on here. so it will happen with this bankruptcy proceeding we're seeing in delaware, but it's not going to happen right away they need to gather evidence >> meanwhile what about the taylor swift -- >> she appears to have dodged a bullet they were almost over the finish line what was supposed to be $100 million sponsorship it didn't end up happening but this was painted as an example from multiple sources and those that were close to the deal who said it fits into a fact pattern of sam bankman-fried saying i'm going to steam roll this, i'm going for this deal regardless of what you say. some say the company couldn't afford to do it, they weren't sure they were getting other than potential nfts they were launching. didn't end up happening. >> did she get cold feet

>> a source told me ftx was the one that pulled out. they described it as walking away at the alter. >> wow, perhaps the best such type of occurrence that could have happened for her. still ahead it's not often you see a stock is having its worst year in two decades, but it's the case for none other than amazon this year. it's down 45%, barely off its 52-week w.lo why has wall street lost confidence in the tech juggernaut we've got a bull, bear debate next ...or passing down the family business... ...or giving back to the places that inspire you. no matter your purpose, at pnc private bank, we will work with you every step of the way to help you achieve it. so let us focus on the how. just tell us - what's your why? ♪♪ thinkorswim® by td ameritrade is more than a trading platform.

it's an entire trading experience. with innovation that lets you customize interfaces, charts and orders to your style of trading. personalized education to expand your perspective. and a dedicated trade desk of expert-level support. that will push you to be even better. and just might change how you trade—forever. because once you experience thinkorswim® by td ameritrade ♪♪♪ there's no going back. ♪♪♪ - the past few years have been a challenge for our physical and mental health.

- join kate and me as we get personal about our own journeys and how the conversation around mental health has changed. - watch our conversation on peacock.

welcome back amazon may still be one of the most loved stocks. wall street analysts, more than 80% of them are still rating it a buy, but it's been an underpe underperforming megacap lately alphabet is up 7%, microsoft, too. even apple a 1% gain amazon down 3% although that looks like up, and trading about 3% from its 52-week high in fact it's on pace for its worst year since 2000. it's breaking his seven-year win streak is it an opportunity or not? we have a bull, bear debate. our bear is the only analyst on

the street, ladies and gentlemen, with a sell and an $80 price target welcome to both of you i'll begin with you. are you a long time bear on the stock or a recent one? >> we initiated with an underperformed recommendation i believe it was back in march beginning of this year, and we've kept it all the way through. we really have three main concerns here. first, we think the business model just struggles in an inflationary and recessionary environment, and right now looks like we're finding ourselves in both capx was $10 billion in 2017 it's $60 billion this year they have 1.7 million employees. second thing is we still think consensus is expecting recovery way too quickly. consensus expects free cash flow to go from minus 12 billion this year to positive 29 billion next year that would almost be as much free cash flow as they generate in 2020 during their covid peak. we think that's way too

aggressive we're about 60% below consensus still on free cash flow. >> wow >> and then third on valuation, even on those consensus numbers, the stock is trading on 37 times free cash flow for next year we still see better value on microsoft on 23 times or alphabet we're still comfortable with our recommendation >> rowhat do you have to say? >> those are concerns we've been hearing from investors really throughout the entire year for us we see really 2023 being the next phase for amazon, and so what is the next phase? it's really a multi-year turn around for profits and margins you know, especially as these capital investments are turned in and costs are cut throughout the business this year we see amazon generating and there could be even more up side to this profit

estimate right now especially if amazon decides to cut some of its an ancillary businesses. you have to realize amazon makes major bets, throwing a lot of money away but making bets on -- and some businesses may take off and some of these businesses may not take off as these businesses are cut, you know, that could potentially be billions of dollars of incremental profit in 2023 so it's really less focused on the top line for 2023 and more focus on the bottom line for profits and margins. >> i was shocked to see it's a $10 billion hole for them the alexa business it's interesting your bull case rests on them cutting divisions and basically cutting the investment that will pay off in future revenue and profit growth >> yeah, like i said there's many business streams amazon bets in. they're not going to cut

everything they have to lay a foundation for future growth, so there's going to be some business streams generating a loss next year and they'll keep them and be happy with that this is a time where you know companies investors want to tighten their belt it's that kind of macro environment right now, and most of the issues amazon is facing is largely macro oriented and they're doing what they can to really control what they can and that right now is managing costs because like i said top line growth doesn't look good right now. the e-commerce business is slowing. it has been slowing for the past year there are a lot of top line headwinds, but that doesn't mean it has to flow into the bottom line there are a lot of levers amazon can pull >> maybe to put a differently there's a lot of negativity priced in right now. would you change or become more bullish if they start slashing costs aggressively >> well, i'd say two things. first, you're right they have been taking some action on the call side. when you look at the fourth

quarter amazon's guidance implies anything outside of aws is still losing $3 billion that's about $12 billion on annual run rate basis. consensus has them running that to about 4 billion next year that's $8 billion of mind, the s starting to deteriorate. so that's a bit of a headwind and the second thing, aws really pulled the valuation rug out of amazon aws was sort of the pillar that investors would say at least i know i'm getting aws for a certain valuation. >> right >> yes, we've seen aws growth slow from 40% from q4 to 25% this year, but more importantly, the aws margins collapsed by 600 basis points last quarter. so investors are wondering what's the terminal margin if we don't know that, we don't know the floor evaluation for

amazon >> great point gentlemen, leave it there. thanks for your time still ahead, it's been a big week in the energy markets as eu, russia sanctions take effect brian sullivan is still live in the netherlands with the latest on europe's energy crisis. brian? >> reporter: everybody mike riding bikes soon here, kelly. after the break, we're going to talk about the pros and cons of what shell might consider the energy source of the future and that is hydrogen plus, the personal stories we've talked to a lot of people. some of the measures here the governments are asking them to do and a personal story omfr a taxi driver i had. all coming up after the break on the exchange that's next.

♪ ♪ 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 there's been a lot of hype

and hope surrounding hydrogen. could it be the answer to europe's energy crisis brian? >> reporter: very appropriate we're talking about hydrogen because i'm getting two parts hydrogen, one part oxygen right now. all of a sudden, the h20 is coming out shell investing billions of dollars in the thought that maybe this is, maybe not the fuel of the future, but maybe one of the fuels of the future all right. you hear a lot about hydrogen. some people love it, some don't. let's talk about it. the types. gray that's bad that's like coal burning emissions. blue can be coalish if you crush it natural gas. lower carbon intensity, but not perfect. what shell is trying to do is so-called green, where they use wind power offshore, that then makes the hydrogen which they can turn into feed stocks,

fuels, et scetera you'd be shocked over how passionate people get. what do the bulls say? it's plentiful it's in water. i'm being hit by hydrogen right now. it is low carbon it may be, depending on sort of which kind you do. is it coal or wind-based and the vesting i vesting infrastructure pipelines. the only way to transport it that already exists. the bears will say it's not energy it's a form of storage it's expensive shell's trying to bring the cost down as well and it is hard to ship you've basically go to freeze it you're not taking a ship load across the atlantic ocean. it's got to go through a pipeline lot of debate. still learning a lot about hydrogen renewables, et cetera it's all around us here in the netherlands right now. amazing. >> i feel so bad you're getting rained on. speaking of getting rained on,

the human element of this crisis, we are talking about people trying to keep their heating going. this is to me been the most fascinating part of your trip is what you're hearing about how people are managing. >> reporter: okay, let's end on a serious note because it's a serious issue. we've talked about big picture stuff last couple of days. you know me, kelly i talk to everybody. conversation i had with a taxi driver in the netherlands about how he and his family are dealing with higher costs and everything i'm glad it's like raining because i don't want you to see, it got me a little bit choked up here's a tiny little clip of the interview and about how his family is dealing with it. >> i was working five days now i'm working six days >> sorry is anybody telling you it's going to get any better or is it going to get worse >> everybody is saying

something, but we don't know we will see. >> yep >> i have three daughters and my wife was working 16 years for coffee company and 570 people are fired so she doesn't work >> his wife got laid off he's working six days. he later told me he and his neighbor are going to alternate days heating their home. by the way, the german government is saying to people expect blackouts and power losses they post tips and suggestions this is publicly available on the german disaster relief website. they're saying things like wear sweaters fine, whatever use a camping grill inside the house, although be careful when you do that. oh, and by the way, keep coal and cash handy because you want coal for the fireplace and atms break down when there's no

electricity so keep a lot of cash on hand everybody i've talked to has been a little upset, a little dep depressed. they're not getting income gains like we are in the united states, kelly. all these big picture things, at the end of it is generally a working class family just dealing with it. >> yeah, and moving themselves to their neighbor's house as they trade off who's going to pay for heat that's an anecdote i'm not going to forget for a while. this is why you're the best. we appreciate all the reports you've been doing. brian sullivan in the netherlands and that does it for the exchange "power lunch" begins right now welcome to "power lunch. here's what's ahead. down but not out europe's benchmark on track for its best quarterly performance since 2009

is there an all terntive and can it be down in europe plus, southwest shares rallying 25% quarter to date. the company is reinstating its dividend and forecasting strong travel demand. later this hour, we're going to ask the ceo if rising labor cc costs could put a lid on growth. >> hi, everybody stocks waivering this afternoon. now we're down eight money's been moving into defensive areas. all hitting 52-week high a 5% pop for campbell's today. they're coming off strong quarterly earnings also, new financial guidance from coinbase. they're seeing 2022 revenues down 50% from last year. a lot of that priced in. trading around $41 a share >> there's been a lot of actio