horton keeps going up. >> some of the housing stocks have done well when you thought they probably wouldn't >> sometimes the stock market isn't the economy. >> all right >> i have a sector, communication services three cs, cash, content and consolidation. >> all right >> talk about growth and -- >> some say crazy. i got to go. have a good flight back. "the exchange" is now. i'll see you later thank you very much, scott hi, everybody. i'm kelly evans. here's what's ahead. cpi, ism, wages, jobless claims, all these different data points are giving you different stories about the economy right now. are we growing or slowing? we'll break it down and debate whether it is safe to invest in these markets. speaking of which, the meme stocks are back. is it a red flag or a green light for equities more broadly? on the heels of the proxy fight at disney, a very special edition of three buys and a bail that you absolutely do not want to miss. very much looking forward to that

but, first, let's get to today's markets with dominic chu where are you? >> we're at session highs right now, kelly the s&p 500 is down about 2 points to 3 points we were down 36 at one point today. the dow industrials now just about flat up 22 points. and the nasdaq up 7. and big bank earnings are a big part of that story the reason why i'm going to show you this, four big names reported today it was bank of america, jpmorgan, wells fargo and citi if you take a look at those names, the reason why it is important is each one of those is in the green right now. why? because at one point wells fargo was down 5% intraday, that was in positive territory, up by nearly 2%. all of these stocks right now have moved towards their highs of the session, and are green, they are again markedly red later on this morning. look at these commentaries out of the cfos, remember, the economic outlook is so heated, many of these discussions, check out jane frazer who says we continue to see the u.s. entering a mild recession the

second half of the year. that is city's outlook wells fargo'splanning for it t get worse and we're preparing for a whole range of different scenarios. then you've got brian moynihan at bank of america, saying our baseline scenario, contemplates a mild recession and jamie dimon at jpmorgan, maybe a mild recession, maybe not, i'm pointing out there are geopolitical uncertainties which are real and we had our eyes focused on them and we hope they go away, they may not. the bottom line, all the big bank ceos have a more conservative outlook about the economy in the coming months >> dom, wait a minute. you have three of them, all using the exact same term, mild recession? >> mild recession. >> i don't like that >> it is almost consensus at this point, which makes you wonder whether or not there could be acounter trend issue that develops. >> makes me think we're either going to grow 5% or collapse to something much deeper. great thing to highlight, thank

you. we appreciate it dom chu. this is the point we're trying to make right now. there is so much macro confusion. which way does the data point, to an economy that is growing or an economy that is lowing? in the growing camp, you jobless claims at 205,000. payroll expanding, wages still rising at 4.6% year over year. sounds pretty good, right? jobless claims still low this is a pretty good sign story doesn't end there. as we all know in the slowing camp, cpi posted another monthly drop, biggest since april 2020 year on year headline in core readings, they have dropped, each of them, by over a percentage point here. yeah, that's the slowing momentum we're talking about then it gets worse, manufacturing ism collapsing, services ism contracting as well and both numbers are leading indicators back to wages, they're one of the most lagging indicators we have that 4.6% growth is already slowing and the recent monthly figures show further deceleration ahead where does my next guest fall? i think i know joining me is ian shepardson at

pantheon, and steve liesman is here as well welcome to you both. ian, i'll start with you, i'll call you in the dovish camp, you're worried about growth, tell us where you stand right now. >> i'm worried about it, but i'm not panicked about it. i think that, you know, getting a recession, the dreaded mild recession is not a crazy idea. i think that getting a really bad severe disastrous recession is much less likely. i think there is a reasonable chance of avoiding both of them. i think, you know if we get to the middle of the area and look back and say, hey, the economy managed to bumble along without falling into any sort of resae recession at all that wouldn't surprise me. what would surprise me is the disaster scenario or the 5% growth scenario. those i think are really pretty unlikely the private sector's finances are under stress from the fed. but they start off in reasonable shape. so, if you think that a

recession or downturn is proportional to how aggressive the fed has been and the state of the private sector's finances, the fed has been very aggressive the private sector's finances are okay so, it seems like a reasonable starting point it could tip either way. >> so, first thing you mentioned, i don't really -- to me it is not such many about does it happen if a calendar year how big is this looming thing going to be? how big is the iceberg it is interesting to me. we have bank ceos talking about as if it is a given a mild recession. that's not necessarily consistent with what the yield curves are telling us. they're telling us a major iceberg is coming. >> yeah. they are they are this is a real problem for forecasters now. i'm for investors. we have a bunch of mixed signals. if you look at housing, total disasters. ism surveys are alarming if you look at consumption in the fourth quarter, it is going to be 3% plus probably

big jump in people's view of the current economy, people getting a lot less worried about inflation and the consumer is nearly 70% of the economy. capital spending is weak, but not terrible and they look like they bottomed out. there is a big bunch of conflicting indicators it is important for everyone to keep their mind open as to where we could go. this has been very a unusual economy for three years. since covid struck all the old rules are out the window all the things that used to be reliable indicators now sometimes are, sometimes aren't. we just don't know and it is easy to be blind sided. we have been blind sided by inflation for sure maybe this year we get blind sided by growth. it is really difficult. >> the worst data point we got today, 5 to 10 year inflation expectations, up to 3 % for the consumer, this is after the gas thing. the fed's obsessed they're obsessed they're going to look at that and go, we can't back off now, inflation is becoming entrenched >> i think the story has been

that inflation expectations are relatively under control i think they're going to stick with it, with a small increase at least for now i think ian is on to what -- i don't know i would make more of it than you do, ian from the federal reserve standpoint the big story has been 400 basis points of tightening, and an economy that is strengthening as we end the year. i think when it comes to the federal reserve, i think they're looking at that, we had bullard talking about it yesterday now, the kind way they process this, they say, hey, this is great. we can fight inflation, raise rates and not hurt a lot of people on the other hand, if they under their formula they see the economy, they have to bring growth down below potential to create slack in the economy, and by the way, there is reason to think potential might be a little bit lower than it was before and so that would mean from their standpoint, they have more work to do so, this good news on the economy, this spending number

that we have, the employment numbers we have i think are key. i think it is bad news for federal reserve that is trying to fight inflation. >> ian, your delay is throwing me off what were you going to say >> sorry so, of those rate hikes last year, 275 basis points came in the second half of the year. and i think it is very likely that hardly any of that is filtered through to the economy already. and yet inflation is rolling over right now so, by the time those other -- those 275 basis points work through, that's putting downward pressure on the economy, which has already moved into the disinflationary phase. payroll growth is strong part of that is just a tail end of the post covid catch up hiring that began in the summer of '21 that's fading away now as it disappears, we'll be left with the cyclical component, and that cyclical component is going to come under pressure from the

rate hikes some are talking about this, the lags on the cumulative tightening they have done so far. the question is being asked about whether maybe they have done enough or nearly enough i agree they're going to hike again on february 1. i do think when they sit down in march, you'll have another couple of cpi reports which are pretty good and payroll growth softening and wage growth continues to soften as well. i think markets will bethe same, do you really need to keep going at all any further the skepticism among investors is really building as to whether the fed is ever going to get to this 5% plus they're talking about. if they do, how long they stay there. >> i have a chart for that we're going to look at what has happened between the fed and the market and the gap since june. and what we see here is there was a big gap in june, where the fed was placed for its year end 2023 numbers it was as high as over a full percentage point then the market started rising with fed rhetoric and the data and they were all in agreement on that next move up to a year

end rate of 24.6%. then we get to the december hike and you zoom in there, and what you see is the fed went up to 5 and change and the market was like kareem abdul-jabbar in the center with the driving guard, they rejected it they absolutely slapped it down and said, no you can see now as we zoom in on the june chart, what are you looking at the fed going up to that 5% year end rate and the market saying no and then it said no some more on the jobs report. and it said no some more on the cpi report. >> to your point, we show the longer one, the market caught up with the fed last year. >> or the fed caught up with the market, one or the other i think what we're looking at here, kelly, is this idea that the fed has limitations for how far it can go if it doesn't bring the market along and the market is just not buying what the fed is selling. >> i think it is more what you said yesterday, which is that maybe they do buy it and they're going, oh, my gosh, the iceberg -- you're steering the "titanic" into the iceberg, we're telling you it is coming,

you're not listening, we understand the actions better than you do. >> the implication of what you're saying is, the harder the fed pushes, the more they're going to lower rates >> yes ian? >> yeah. yeah sure the thing -- got to remember from the fed's perspective, they got it really wrong last year. a really strong imperative not to get it wrong in the same direction twice. it would be horrendously damaging they have to talk the aggressive talk, prevent the markets from loosening financial conditions prematurely. they got to sound tough because they got to -- they need the public to believe in them and come along with them they can only do this for as long as the data will allow them to do it it is easy to cry wolf when the wolf is visible. when the wolf is turned around and slumped back into the forest and everyone is looking at falling inflation and slowing wage growth, the market says why are you telling us you're terrified of the wage price spiral it isn't happening we move in that direction over the last few weeks. >> all right we'll leave it there

thanks appreciate it. ian shepherdson and steve liesman. now a bellwether back from the dead, the meme stocks. not just up, but surging this week amc up more than 30% game stop up 26% and what bankruptcy warning, bed, bath & beyond, up 242%. so, does it mean the broader market is soon to follow let's ask bill stone, the chief investment officer at the glen view trust company bill, what is your gut reaction to the revival of the meme stocks >> it doesn't make me feel good, i think the opposite you ahave to get worried there are too many animal spirits back too early. i came into the year, i think, pretty optimistic that we, you know, by the end of the year would be feeling a lot better. but, you know, you don't want people to just argue you don't want to chase companies that the fundamentals are just, you know, nowhere near where you or i want to go. >> if i'm a fed official and i

look at this, i go, well, we better tighten further we don't want these liquidity conditions. >> yeah. it is almost like when the spacs are going crazy, right you can just put that out there, and issue those willy-nilly, yeah, you have to worry that -- like i said, the animal spirits, we talk about the fed, worrying about financial conditions loosening too much, and, yeah, they might look at this as a sign. >> so, let's talk about what you do in a year in which, i'll keep the analogy going, the economy may be headed towards an iceberg. do you party while the music is still playing? i hear people say industrials and cyclicals, i totally understand what they're saying it might work for the entire year who knows when the timing is going to hit what do you do in the meantime >> you're right. you talked about it earlier with every single cfo from a bank and pretty much everybody is in agreement now that there is likely to be a recession,

sometime this year, i think most of us are piled in on the second half so how does the market already discounted it last year? typically you don't get a market bottom before the recession actually starts. but, hey, typical versus what ends up happening? you never know, right? i think my thing is you stick with your game plan of you know the market almost always moves in advance of better economic data so just focusing on economic data isn't going to really help you time the market. so i still say, though, you got to be careful, be invested in areas where they can survive through the recession, because if you don't survive through it, you can't possibly benefit after. so, i think that's the way to play it. >> a couple of examples and it sounds like you're looking for companies where the bar might be very low so, for instance, amazon, anheuser-busch, right? >> yeah, i think amazon is a great one. let's say we don't ever go into recession. i think you got a pretty quick

upside in that thing because amazon, no doubt about it, the earnings would get hurt in a recession but, again, i'm not worried about it going out of business in fact, i argue they would emerge from recession, probably stronger because, you know, maybe one of those stocks you talked about say meme stock, won't be around anymore. and let's just say other competitors won't be around, so i think that is super interesting. the other one anheuser-busch is a different story, but another one well off its prepandemic highs, great brand, don't have to worry about it in a recession, because frankly alcohol consumption does not fall during recession. people trade down a bit. so it would hurt their earnings somewhat, but not worried about it if you don't get a recession, you probably continue to have people buy premium beers, and that helps them pay dune their debt quicker which allows them to more quickly return cash flow to shareholders. >> final comment, what are your thoughts on kind of the bank

earnings we see wells go from minus 5 to plus 2 and the market whiplash tells me people arec confused what is your takeaway here >> i think my takeaway was the actual earnings themselves for the quarter were quite good. core banking earnings continue to be very good. in a lot of cases growing loans, also the loans -- the net interest margin was good i think a lot of that, that was good i thought, frankly, this morning when they were all down, really a response to all those comments you put on the screen, which is, hey, they think it is a recession next year. you probably have to worry about the earnings, a look forward i still think that i think that's the tug of war we're going to be dealing with. >> absolutely. bill, we'll leave it there for now. thank you so much. bill stone. coming up, the almighty hedge funds, there were two

winning strategies we'll reveal them ahead. nelson peltz making a move on disney is shareholder activism one catalyst for stocks or caveat for performance? it is a very special edition of three buys and a bail with a very special guest one of his picks, by the way, up 28% in the past six months as we head to break, a look at the markets, which are back in negative territory the dow down 15, the nasdaq down 3, the russell is hanging on to a four-point gain, the ten-year is under 3.5 "the exchange" is back after this this... is the planning effect. this is how it feels to have a dedicated fidelity advisor looking at your full financial picture. this is what it's like to have a comprehensive wealth plan with tax-smart investing strategies designed to help you keep more of what you earn.

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call... to receive 50% off installation of your kohler walk-in bath. and take advantage of our special low monthly payment financing. welcome back to "the exchange." hedge funds not escaping the awful year we had in markets a select few outperformed with returns of 51 and 19% respectively my next guest says they did it by focusing on two key strategies joining us now is greg zuckerman, special writer at "the wall street journal." great to see you welcome. >> great seeing you. >> let's set the scene here. for the most part hedge funds had as bad a year as the rest of us >> yeah. wasn't anything to get too excited about. it wasn't as bad as some recent years. hedge funds overall were down about 4.25%, relative to the 60/40 index, which i like to

compare it to. that was good. you don't want to get too excited. on the asset weighted basis, where you acknowledge the bigger funds, having done as well as they did, some of them did do quite well, the industry was up 1% not an awful year. >> so, the biggest did better than everybody else, like the s&p, by market cap, it did okay? >> yeah, so the big guys have in the last few years excelled. they're attracting better talent, better at risk management, they're often nondirectional that helps when the market, both stocks and bonds, go down as much as they did but when you look at some of the bigger players, shaw, citadel, renaissance, those are good funds that have done quasi quant or are quant. >> how did we go from writing quant's obituary to it crushing everybody else here? >> i don't want to go overboard.

in general, if you were not directional, you've done pretty well if you look at some of the real embarrassments over the past year, look at tiger, for example, down 50%, they were kind of leveraged long and especially on tech and on private, especially. in some ways that whole strategy has been discredited we did a good story a few months back, my colleagues, about tiger and you dig into the story, how much they farm out, pay dane capital, $100 million to do their due diligence on their privates that whole strategy is really come under fire and in question right now. and the other guys, the ones who do risk management and have these big pods where they have people doing stat or other kinds of multistat kind of approaches, they have done much better >> so statistical, arbitration funds, we talk about quant and say nondirectional for people sitting at home, what

are the lessons to be learned that you basically have to have leading edge, you know, artificial intelligence to outsmart and outpace the markets or is there something -- what more do we know about how they're able to turn it -- to generate this alpha? >> yes, so the lesson here is really hard to beat the market and frankly it has gotten harder during the course of my career, during the course of people's careers on wall street, very little alpha, outperformance, getting information, that whole information advantage, that hedge funds used to rely on. that's gone by the way side. instead, it is people taking a long and short position on maybe two stocks within the same industry i'm really simplifying it. that's a way to make a bet without worrying and relying on the overall market going higher. there are aberrations that do arise in the market. it is because people like you and me, or me, the fear and the greed of individual investor and the more we talk about these meme stocks and people taking -- getting into stocks that are going to go bankrupt or

potentially going to go bankrupt, bed, bath & beyond, the strategies that can take advantage often are the quantity ones >> so, in fact, the very sort of nonefficient crowd source move in the meme stocks is generating alpha for the hedge funds that profit on these kinds of arbitrage strategys? >> yeah. exactly. and, frankly, that's where the talent is going. they have these things called pods, groups of people and the people running these firms, in other words millennium, for example, and two cigna, some others, they can allocate capital where it is most appropriate, and they can also do risk management and frankly, they have a much -- a big advantage over the kind of smaller funds and we're seeing the performance reflected accordingly. >> message to the reddit forums, if you don't want to feed the outperformance, maybe don't create opportunities they can exploit. >> i don't want to cause any backlash on twitter, but, yeah, in general, the millenniums and

the renaissances love volatility in the market. they love people getting in on individual investors and historically speaking, they don't quite as well as, i don't want to say the hedge funds, but some pros. so we are susceptible to the feed and the greed of -- and they can often take advantage. >> fascinating greg, you know it all, thank you for joining us great to see you again. >> coming up, tesla down another 2.5% today that's we off the lows all this on the back of more steep price cuts here and abroad are they getting desperate or is this the right way to elbow competitors out of the market? we'll have the latest. plus, is streaming getting too expensive? is the gig up for the gig economy and is chad gpt overhyped? as we head to break, here is a look at the dow heat map we flip back to negative territory by 34 points now only about seven stocks in the green. jpmorgan and goldman are leading the way today, while disney is

the worst performer once again we're back after this.

hello, everyone. i'm tyler mathisen, this is your cnbc news update here's what's happening at this hour in virginia, school administrators say first graders backpack was searched before he shot his teacher last friday but the weapon was not found school officials were notified the 6-year-old might be armed and that's what triggered the search the teacher was shot in the chest. the injury considered to be life threatening, but she is recovering her condition now stable in indiana, the man charged

with a murder two of teenage girls in 2017 has lost an attempt to move the site of his trial. the delphi murders gained national attention the judge did rule that the jury pool will be selected in a different area and president biden has welcomed japanese prime minister fumio kishida to the white house. they're discussing increased security cooperation about provocative military actions by china and north ckorea. kelly, back to you. >> i'll see you soon thank you. coming up, if it is friday, it is three buys and a bail. today, we're tracking stocks with activist involvement. three to buy and one to avoid in a very special edition next.

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your search history is never tracked, so it can't be shared. and when you leave search, duckduckgo helps keep companies from watching you as you brows. join tens of millions of people making the easy switch by downloading the app today. duckduckgo, privacy simplified. welcome back to "the exchange." shares of disney are lower and the worst performer in the dow today, or at least right now they're still up more than a% this week after nelson peltz pushing for a seat on the board, claiming the media giant has lost its way peltz taking issue with disney's acquisition of fox three years

ago. on the heels of that, today we bring you three buys and a bail. which to buy, which to avoid joining us now is cnbc contributor ken squire, founder and president of 13 d monitor. i'm so excited for this. i can't even tell you. >> thank you for having me, kelly. >> in a market where no one knows what to do with equities, this is a great different way to think about opportunity and stocks, just like the hedge fund chat we were just having let's start with your bail, we'll reverse the order here a little bit and your bail obviously, well, maybe not obviously is disney. why? why wouldn't you want to jump this alongside nelson peltz? >> not because i don't think disney is a great company, not because i don't think bob iger is a great ceo and not because i don't believe nelson peltz can create tremendous value there as a director the company is about to embark on a costly and disruptive proxy fight. and it is just no reason to own the stock during that period after the fight is over, i would certainly reexplore it if he gets on the board, a buy

at that pint. >> if he does succeed, you would jump in alongside? >> yes. >> i'm sure plenty of people agree with you about that approach let's shift gears to three buys you have in the universe of companies you track with activist involvement fresh pet, we don't talk about that a lot 9% stake, they told fresh pet they plan to push for a board seat this year, the shares are up 5% in the past three months, not huge they're down more than 30% in the past year. why is this a buy for you? >> first off it a great product and attractive market. if you're not familiar with the company, it is a refrigerated pet food company that sells premium dog, primarily dog food. they have refrigerators in the pet aisles of retailers of walmart and kroger andtarget and the pet fresh actually buys, maintains and stocks these refrigerators at no cost to the retailer the companies love it. they're able to generate revenue without using any existing shelf space and it is a great move for fresh pet, it makes their peers

difficult to compete with. >> fresh pet a buy for you next one is crown holdings this is why i love this, not names we talk about every day. carl icahns who two board seats. 8% stake in the company, shares are under valued, agree? >> yes, i do agree and it is not just carl icahn in this the two are not a group, but they are like minded they both want the company to sell the noncore businesses buy back shares and focus on the beverage business. 75% of new products that go into cans today versus 30% in 2014. >> what is -- i don't know if you expounded on this, is the macro environment creating an opportunity here as well we had so many different supply chain and inflation issues in the pipeline, i don't know if that's wreaked havoc on the stock. >> well, it is affected the stock. during covid, there is a lot of cans people are going to restaurants, buying a lot of cans for their

house and so that's -- they're dealing with that now coming out of covid and inflation is hurting as well but there is just a secular tailwind to the move from plastics to aluminum, the most recyclable material out there. >> fresh pet, crown holdings, your third buy is dollar tree. they're the third largest shareholder, they added a slate of executives including a former dollar general ceo as chairman unlike the other names, dollar tree is up 10% or so in the past yearment y men year you still think it has room to run? >> it is just starting here. the plan is for the former ceo dollar general who has been brought on as executive chairman here is to at the dollar tree stores move from the $1 price point to higher price points,

makes no sense to continue $1 prices that were established in 1986 when there is inflation, not only that, having more price points will allow dollar tree to offer a more relevant mix of products to customers. when customers go for back to school, they can buy pencils at dollar tree and pencil cases but have to go to target to buy their backpacks. >> for all of these holdings and in general, with fights like these, even where you think the investors are going to push for positive change and all the rest of it, what kind of time horizon do you look for a specific time frame, a year or two, five year, w wait for the campaign to come to a conclusion >> different activist catalysts have different time frames let's look at fresh pet. this is an operational catalyst there. it can play out over years and can get some board seats and

create value over the long-term. there is potential at acquisition of fresh pet this is a -- pet food and babies that -- is the most attractive segment of the consumer package good business and hard to grow it organically they have to be sharing duties to maximize shareholder value and they might go in and sell the company, which might be an easier way to go. >> true. >> something like dollar tree, you know, somebody like mantle ridge, they're unique in that, they're not a hedge fund they have locked up money for many years and they make the performance fee on exit. they can be in this for a long time part of the strategy with the family dollar stores will hurt revenue in the short-term, but should generate long-term value in the long-term so, they're able to do that with their structure. >> great points. i love this. super fun. your disney comments make me think even if peltz isn't

successful, it is like the underperformance you warned about would invite some kind of activist involvement it could be a long slog there. three buys and a bail. we have to do it again >> thanks, kelly. >> thank you for your time ken squire with 13 d monitor. tesla slashing prices yet again and a big price slash here in the u.s. in particular. ev competition ramps up, are they grasping at straws. we'll explore. don't miss two big interviews ahead on "closing bell." well fsing fargo's cfo and brian moynihan the exchange is back here in two.

♪♪ the only thing i regret about my life was hiring local talent. if i knew about upwork. i would have hired actually talented people from all over the world. instead of talentless people from all over my house. welcome back what a story tesla has been lately today's shares are lower, they were down earlier on and still up 7% for the week they announced a major price cut

here in europe, yet between here and in europe let's get to phil lebeau with the details and what is behind the move are these model wise in particular these are big drops. >> big drops it is model three, model y, you're seeing price reductions in the model s and model x here are what the price drops are in dollar terms so people can get some perspective here. for the model 3, the standard version, a cut of $3,000 just a cut that's about a 6% reduction in price. look at the price reduction for the model y. we're talking $13,000, about 20%. there is a substantial cut there. rbc capital out with the commentary saying it will be interesting to see their competitive response as oems appear to face a trade-off between hitting volume aspirations and profitability. that's the main question here. what does this do for the other automakers making electric

vehicles tesla's market share has 64% of the u.s. market share. it dominates the market, not only because it has the manufacturing capacity, but because it has the two best-selling models. the 3 and the y. and those are in demand. other automakers, not only do they have models that are -- not a lot of them, but also they're not close to profitability that's the reason why you see auto stocks under pressure for the traditional automakers, look, gm and ford, toyota, they're all going to respond over time and they have the wherewithal they'll be able to be more competitive with electric vehicles. does this mean it is going to take longer? as for the ev startup stocks, they're under more pressure. they're not close to profitability. and the question now is as tesla lowers its prices, what does that do for other electric vehicles and those electric vehiclemakers, how much are they going to have to take a further loss because they just don't have the volumes to compete at this point. >> it might be desperate, might

be savvy if they can elbow out the less well capitalized competition. phil, thank you very much. phil lebeau with the latest. still ahead, prices up, wages flat and one industry already on the brink we'll tackle three big issues facing big tech next. and check out shares of carvana, still trading near session lows after being halted for volatility the shares are down 14%. a lot of the meme names took a big dip in the last 20 minutes or so. perhaps profit taking after the sharp move higher. we'll ke aeyont.epn e i

i screwed up. mhm. i got us t-mobile home internet. now cell phone users have priority over us. and your marriage survived that? you can almost feel the drag when people walk by with their phones. oh i can't hear you... you're froze-- ladies, please! you put it on airplane mode when you pass our house. i was trying to work. we're workin' it too. yeah! work it girl! woo! i want to hear you say it out loud. well, i could switch us to xfinity. those smiles. that's why i do what i do. that and the paycheck. i screwed up. mhm. i got us t-mobile home internet. now cell phone users have priority over us. and your marriage survived that? you can almost feel the drag when people walk by with their phones. oh i can't hear you... you're froze-- ladies, please!

you put it on airplane mode when you pass our house. i was trying to work. we're workin' it too. yeah! work it girl! woo! i want to hear you say it out loud. well, i could switch us to xfinity. those smiles. that's why i do what i do. that and the paycheck. welcome back to "the exchange." we want to round out the week with the top tech stories we're watching big changes coming to streaming with hbo max hiking prices for first time ahead of their eventual merger with discovery the new york times is reporting that uber drivers were struggling to get by as the company continues to lose money. and more takes on whether chat gpt is hyped or overhyped? breaking it down is casey newton, platform editor and cnbc contributor. great to have you here hbo max is hiking prices, reports of youtube launching

freed ead -- i don't understand what fast channels are maybe you can help demystify this for us. >> it is like every single entertainment company wants to become the same entertainment company. people started in advertising or live tv, they want to get into streaming and companies that started in streaming, they want to add advertising, re-create the cable bundle that's what netflix is trying to do with its partnership with microsoft. i see the underlying driver being inflation happened, rates went up and streaming which looked like the life raft, everyone was going to sail away on into this bright and beautiful future, turned out to be a money pit point out, we're looking at the screen, point out which company is doing fantastically disney fired the ceo netflix has its stock in the toilet warner bros. discovery, which owns hbo max is struggling as well peacock is losing billions of dollars. paramount can't talk about it. everyone is struggling in a similar way and trying to figure

out how do we get through this adding advertising and raising prices of your subscription product, that's a good way >> casey, is nelson peltz coming in here to be the adult in the room or, you know, he said on -- in his interview with david faber yesterday, he thinks streaming isn't that hard and disney needs to make it more profitable what does he see that everyone else is missing? >> it is really hard for me to say. i think that derrick is right. people did just get a business too optimistic about the upside here i still prefer streaming to my old cable bundle, which is full of mostly stuff i never wanted to see but there is just no denying the prices keep creeping up and the quality isn't getting that much better i can understand why there is a lot of frustration all around. >> well said and i can't remember whose tweet it was, this ties together a whole segment today. they said, you know, we have all been sold a bad bag of goods here it is, like, the gig, we were

supposed to have streaming and the gig economy and all these- now we have all these great things that were supposed to help us, now they're more expensive than the things they replace. >> yeah. i hate to be the millennial malaise correspondent, you know, you're seeing it television you are seeing it in the gig economy as well. the fact that uber drivers are struggling to make money i see uber and to a certain extent streaming as well, this is a mark row croeconomic story. you had the housing crisis you had a huge recession you had the fed bring interest rates to zero. zero interest rate policy for a decade plus and created a weird economy, created a lot of illusions about what would be the future of tech and people got into things like crypto or streaming. not that i'm comparing utility there. it ended up not being particularly profitable before

rates went up. uber is having to raise prices like hbo max, except the prices are for the wages for the drivers to get out of their stock market doldrums. >> and we talked with a stock picker earlier this week who is bearish on doordash. if they keep raising prices they will ail yent ate consumers. if you are the legacy business that got disrupted, you went away i mean, this destroyed people's livelihoods. i appreciate the improvements it brings in. in it's not sustainable, especially in a higher rate environment, then what >> i am on the fence you read that new york sometimes story about uber drivers, a lot of people are pulling in between 60 and 100 k a year. they are not table jobs. definitely the case that we are seeing fluctuations in demand and nobody wants to pay more for an uber ride there is a business there. doordash is the same people have gotten used to

ordering food to their doors i am still confident that at the end of the day these businesses are going to be around but we will are to ep coo ep playing around with the higher prices. >> gpt, i think it's underhyped. you tell me, again, the profit here i think this one -- this is -- this so big, we can't wrap our heads around how big it is go to one of these platforms, chatgpt itself, type in write a tv intro and make it rhyme and just watch what it comes back with we're just at the tip of this here, aren't we? >> we are at the tip of it i have no idea what this is going to become. maybe casey has a clearer sense. but, like, i would almost analogize it to, like, if you see something that looks like a tadpole, like, you note, it's 3 weeks old you don't know if it will grow into a frog or human

being or elephant, right i don't know if this is a incredible toy for writers, the next iteration of the technology people play with online right now, or whether we're at the dawn of something that's, like, artificial generally intelligence which is a concept i can't begin to wrap my brain around in terms of gpt being a bubble, i see it as the opt sit of crypto crypto to me was money without utility. it's a technology that is still looking for a use case right now it's kind of like utility without the money. i know how i want to use c chatgpt. i don't know what the business model is going to be i don't know how it's going to innovate with the rest of the economy. i know that it's full of potential. >> it's a great way to put it. we know when we are playing with you hit a monthly limit or weekly limit how much you can use it and the creators said the

computing requirements are so massive they will have to charge for it casey, it's also interesting to go become and think about -- i forgot the question i was going to ask you because i was getting my mind blown about what derek had to say about it. i suppose to make the following comment, which is chatgpt could you go public? you you guarantee you have a bad ipo, wait until you are worth $100 billion and don't let the general public in on it. let's just do this ipo write how, let everyone get a piece. >> wow >> they have a great deal with microsoft. we don't really know what the ultimate business model is here. one simple idea is to charge people for using it and so many people have found it useful for so many things

i think that could be a viable model. look, we also know that this thing is probably gonna be able to replace at least some sort of internet searches. think about how valuable gubl is the we are in the early iest da of this. i think there are a lot of what toys get to 100, 200, $300 billion here. >> i think the final word, if you disaggregate the wage data, younger americans, wages, work -- employment opportunities, things have been looking so good for millennials lately, they cannot complain if doordash costs a little bit more, okay >> i want to use this moment to lodge that particular complaint. >> or streaming. they can't complain. they can't complain about streaming. >> yeah, i'm not gonna serve as the millennial complaint department right now i would say we are living in a strange moment i think where you have this potential recession coming, we don't know when the fed's gonna stop hiking, we know that core inflation is high even

though it seems be coming down it's a weird lav val moment for the economy rchs thank you both. derek thompson, casey newton in our big tech rundown today big tech, big problems, apropos. coming up on "power lunch" -- should we go here or talk to dom chu. how are some of those stocks performing what do you see? >> big tech, big problems last year, right? this year a little bit of a different story. the reason why we show you this is because right now stocks recession highs. the s&p 500 up four points it's 0.1 of 1% gains here. we were down 36 points at one point for the s&p and the nasdaq up one-third of 1% as well the stocks driving it has been the big tech wig problems trade of last year rebounding a bit so

far this year. we will send those things back to you guys and i'll get back to you guys next hour. >> thank you. coming up on "power lunch," while we here in the new york area are gearing up for the giants wild card game on sunday, the nfl may are cheering what thursday night football has done for the season. and the man himself tyler. tom. >> what are you doing here >> i just wandered in. i saw lights and a teleprompter. >> i'm gonna have to take this seat in just a moment. >> obviously, i'm -- >> host extraordinaire, tom bergeron if he doesn't make you want to stick around and find out if he going to do a market cckhe at the top of the hour, i don't know what will know what will we're back after this. inspire is a sleep apnea treatment that works inside my body with just the click of this button. a button?

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