nxp is a relatively safe way to play it because their end market is mostly-out motive, where there's strong demand for production >> joey t. >> the instagram effect is real. people still want to look good, even in bad market ulta beauty. all-time high today, remarkable. >> thanks, everyone! the exchange begins right now. >> thank you, scott. i'm melissa lee in for kelly evans. here's what's ahead. stocks giving back earlier gains. treasury and the dollar on the move after the bank of jab failed to make a move, and there are ways to play it. we'll drill down on the decline in the dollar and the stocks poised to benefit. moderna's rsv news driving the stock higher, setting the stage for a new post-covid battleground we've got the very latest and we'll talk to one biotech analyst who says this could be a game changer for moderna and surprise, the u.s. will hit its debt ceiling tomorrow, soorp than expected, and the stage is

set for a dc showdown. that showdown could come at a very high cost we take a look at the potential fallout for the markets and the economy. we begin with today's markets. it feels very technical today, dom. >> the reason why, everyone is watching that 3975 level in the s&p 500. it may be simplistic, but it's the 200-day moving price some traders look at that to gauge the longer term medium in the marketplace. the s&p 500 is solidly below that right now 3946 it's down about 45 handles we are at the session lows at the highs of the day, we were in positive territory, and down 45 roughly at the lows right there at the lows of the session right now, down over a percent. the dow industrials, down 435 points now, plus, and then down one and a third percent there on the nasdaq composite the outperformer is down a little less than 1%. 10,990, the last trade there

even one part of the market that was solidly higher earlier today, the oil market is turned lower on the day wti crude now just about flat on the session, at one point up one, 2% here, on some of the at least perhaps positive elements of china's rep opopening, plus forecasts from the international energy agency, saying that we could see fuel demand higher than it's been ever in certain parts of 2023. so wti crude, a mixed picture so far, tilting towards the low end of the trading range. and one of the reasons for the relative outperformance of the nasdaq so far in this young 2023 has been megacap names that have been beaten up over thecourse of the last year three names in particular have taken huge beatings in the last 12 months. amazon.com, nvidia, and meta platforms, on a year-to-date basis, about some two weeks into the trade, we were up 14% for amazon, 19% for nvidia, and about 10, 11% for megaplatform

very much a key focus right now. whether that momentum can hold up remains to be seen. i'll send things back over to you >> investors are tracking the latest economic data for any clues about growth and future inflation. steve liesman is here with more. what's the verdict here? >> wish i had better news for you, melissa a slew of ugly numbers today, showing a u.s. economy slowing sharply and possibly teetering near recession the only upside we got here was slowing inflation. here's the data. retail sales were down 1.1%, missing by a tenth gas station sales fell along with lower gas prices. but you also had autos, food and drink establishment, and department store sales falling as well. lower inflation, a half a point down on the wholesale price index. more than expected takeout, food energy, and trade, you are up 0.1 the year over year, just 4.6 there and falling. industrial production, that was really ugly report, down 7/10 of a percent with a big decline in manufacturing output, that is notable. the december retail sales report

included a downward revision until november and there are forecasts that this is just the beginning of a consumer slowdown. consumption growth is set to slow significantly in the first quarter. that slowdown will deepen in q2 if we're right expecting a slowdown in job growth despite the negative numbers and better inflation, fed officials continue to bound the drum beat that rates need to rise above 5% market having none of that, it continues to reject the fed's jute look, lowering its pricing for the peak funds rate to 488 and for year-end '23 to 436, that's more than three quarters of a point below the average forecast of fed officials. bond yields falling as well today on the economic reports. and the bank of japan's surprise

move overnight, not to raise the upper band in which it allows the ten-year bond to trade could be a sign it might be less concerned with inflation, but we're not hearing that from the fed. just before i got on, melissa, mike flengland says if you get decline in jobs in january, the nbr might be data recession to the beginning of this month. >> wow what was striking about bullard, he was sticking to the rate being as high as 5.5%, which is so divergent with what the market was pricing as you had walked through and if you take a look at retail sales, you know, they're not adjusted for inflation, so we did see a decline in inflation so a decline in the cost of goods. that underscores how weak that spending was going into january. >> just so people understand the math that you're sblii ingmplyi, melissa, which is that you have a decline in retail sales, but also because there was inflation as well, the raeal spending

number might be more on my spreadsheet, i have a running tally of the fed market gap and i'm using the number that is 78 basis points, which is one of the higher gaps we've seen and as you suggest there, that gap is even bigger and we have to watch how that closes what would be more painful if it closes by the market >> steve, thank you. steve liesman. >> the dollar hitting the lowest level since the end of may, and that is a tailwind for some of the multinationals here is jims tyranny with alliance bernstein great to have you with us. >> thanks for having me. >> we almost forget what a

dollar appreciation had been and we've had a tremendous decline the dollar index is down about 12% from its september peak. already we've seen that pressure alleviated for a lot of multi-nationals, on top of the decline in treasury yields so is this actually something that you're factoring in when you're saying, you know, these stocks look like buys right now. are you depending on that dollar to remain down >> first and foremost, we're looking for great companies, companies that have secular growth, that will be able to weather the earnings recession, that we're in in 2023 in our opinion. that said, if you get a tailwind from a lower dollar, that's a really nice change from what we saw in 2022. >> right so one of the names you like was active 65% international revenue. what countries, what areas are

they most focused in >> they're very heavy in europe and very heavy in china. and quite frankly, we like the name because of the transition from internal combustion engines to electric or battery vehicles. and their content per car is at least twice that s so we don't need to sell more cars each year, just have the transition from internal combustion engines to evs happening and it happened last year and it will happen again this year, so a great secular growth story, and you have the tailwind of that much of their revenues overseas. >> zoets is another one, 47% international revenue, jim >> so on the theme of inelastic demand, if you have an animal, you need to take it to the vet each year, it needs its medicines. and i think that's a great tailwind and when you look at approximately half their business overseas, what had been a headwind in 2022 becomes a tailwind in 2023 and i don't think investors ever really factor in currency as much as they should even though

we see the numbers every day i think investors will be surprised by the fourth quarter numbers and certainly by 2023 numbers on the currency front. >> so many people are afraid of the vines that companies would give and they're seeing treasury yields cooperate, and to therefore maybe parts of the debt market are more open to them than had been a quarter ago, that perhaps the guidance would be a little bit more bul bullish. >> i think the guidance on those two fronts will be bullish, but the consumer is pulling back and pulling back in terms of discretionary spending so we're really focused on who's driving revenues, who has the secular growth, who has the inelastic demand, and if you have that with some of the other factors that you talk about, i think you could have real surprises on the earnings front. if you don't, there could be

really disappointments over the next couple of quarters. >> jim, thank you. moderna is leading the nasdaq after announcing positive feedback for its rsv trials. >> rsv is a terrible respiratory viruses that we've been dealing with this winter along with covid and flu. moderna applying that same technology to this rsv vaccine, yesterday after the bell reporting phase iii data from a trial in adults ages 60 and older, showing essentially 84% efficacy in that late-stage study, beating wall street's expectations, showing also at least in this initial look that it was well-tormented with no serious safety concerns. and saying it plans to submit for regulatory approval in the first half of this year, but this is shaping up to be an incredibly competitive race. sort of the next big vaccine race pfizer and glaxo smith klein have already filed with the fda. their vaccines look like they have slightly different profiles

that's how this race is going official start to shake out. j&j, bavarian, and nordic in phase iii studies. interestingly, moderna is the only one using the mrna technology here. you see pfizer and gsk using re recouple bant protein technology it could be a gigantic market. morgan stanley estimates $7 to $10 billion in adults alone for rv vaccines. and of course, these companies are also testing this in kids and in pregnant mothers to try to protect babies, which is a really important area, as well mel? >> right, meg. there's also the drug that's being co-developed by sanofi and astrazeneca for the development of rsv how does that factor in and differ from a vaccine? >> you might have multiple options in the markets if you have babies who are at high risk, who would be eligible for that, we'll have to see how the vaccine, if and when it's

approved, sort of stacks up against that but you would have different options, based on different patient populations. >> meg, stick around our next guest says this validates moderna as a post-covid player, sees the stock rallying more than 40% from here. let's bring in michael ye, managing director at jeffries. michael, good to see you when you think about that 40% rally from here, this seems like a very crowded marketplace here >> yeah. it's a great question and good to see you both. first, remember, the stock is down over 50% off of the pullback over the last two years, and most importantly it's a covid stock, and the upside is covid moving behind us, and talking about multiple pipeline programs across the program, both from the positive rsv data today, also talked about over the last months, there's also what's boosted the stock is the

personalized cancer vaccine data, to the cancer platform partnering with merck, who's extremely bullish. that's now opening a new chapter. and importantly, even though rsv is a competitive space, note it's the only rsv vaccine, but that is also important, because the technology is validated through the opportunity of the combination vaccines so if you listen to what is now next later this year, moderna will be presenting data with the combination of covid, flu, rsv, covid, et cetera in one inje injection. and mrna technology is pretty much the only application of that that's another leg to think about for the long-term. >> with so many variants out there, though, meg, i'm wondering how dependent this sort of notion of combining these therapies is when you could have one variant, and another one could resurface, and there are so many variants out there, and the testing is not

very thorough in places like china. so how important is that aspect? >> i think it's really important, because, you know, right now, we are in the process of seeing how we're going to be updating the covid vaccines. potentially annually, we don't really know. we'll see the fda's advisory committee meet later this month to talk about how to do that but if we have that combo vaccine, which mike is talking about, which is the ultimate goal here, you could have the flu vane, which of course gets updated every season, and then the covid vaccine, which may be getting updated. so each season, this gets updated to target what is currently circulating. and you have to hope that mrna can do that pretty quickly and get a really good lock on what's circulating, but it will be a different vaccine every year >> in terms of these combo vaccines, michael, i'm wondering if you can walk us through this is not a stock you've covered, but this could be a competitor to moderna. cure vac, which has had an astronomical rise this year and

that they're riding on is a combination flu/covid vaccine and their platform may be even better than moderna's mrna vaccine. >> cure vac is kocovered by another analyst, but i think the two points are the application and power of mrna as a technology i think we should all agree is important whether you played that through moderna, which has significant cash, resources, leadership, huge pipeline, obviously, personalized cancer vacs and a whole lot going on there, i think is one thing, both from a liquidity cap perspective and resources, as well as the smaller players, as well, partnered with sanofi, who is also helping to fund all of that and of course, you shouldn't be surprised, hey, why is big pharma trying to get into this probably because the stuff is working pretty well. so i think whether you're playing both of those, i think, totally different focus in on moderna. sees significant upside, given the leadership here and the position and also the cancer vaccine

application. >> yeah, meg, what i thought was interesting also for moderna, and specifically as it relates to the rsv vaccines, that they're also studying the efficacy in milder infections, but they haven't released that data yet and they plan on releasing a full study later on. what is the hope there that maybe this could offer some insights into preventing some other more sort of common infections is this a new, a different market >> well, potentially, i mean, i think the concern, primarily, for all of these things is the severe disease and the most vulnerable populations but if you step back and look at what moderna is kind of aiming to do more broadly, longer term, they're looking at getting a vaccine out there that can protect against tons of respiratory viruses that are circulating every year so not just rsv, not just covid, not just flu, but other common coronaviruses, too so giving you a shot that might protect against more like the common cold, which i have right now, which is why i'm home in my attic, because i didn't want to give it to you so something like that is a

longer term prospect, but it will be really fascinating to see how well that works. >> yeah. we're going to leave it there. thank you so much, michaelee and meg. i appreciate your concern for my welfare. mike terrell all right. morning rates making some pretty big moves there. diana olick's got story there. >> rates took another big leg lower this morning following that drop in the ten-year yield. the average rate on the 30-year fixed dropped 13 basis points to 6.04%. that according to mortgage news daily. and that's the lowest rate since early september of last year the rate hit a recent high of 7.37% at the end of october, which caused home sales to grind to a halt. to put this in perspective at today's rate, the monthly payment on a $400,000 home with 20% down on the loan is now $283 less than it would have been at the end of october, but still, $315 more than it would have been a year ago when rates were in the 3% range. melissa? >> diana, when you talk to and listen to the conference calls of the various home builders

that have reported, have they mentioned this, the comedown in mortgage rates as a tail wind for them >> they've talked about it a little, but more, they're talking about incentives, that they're giving to the home buyers, like buying down the mortgage rate, because it is still higher than a year ago, and also offering them other potential incentives that they might want, just to get them into that contract >> all right, diana, thank you diana olick. coming up, it's been one year, one year since microsoft announced its $69 billion to buy activision, but investors are still waiting on the final say from regulators. we'll take a look at the likelihood of a deal getting done and hear from a former ftc chairman on what the current environment means for future deal making. but first, the stage is set for a debt ceiling showdown in d.c. can congress strike a deal to raise the debt limit we'll take a look at the risks and why this time could be different. quick check on the markets, s&p 500, 3939, this is close or at session lows right now, down by 1.3%. nasdaq is off by a little more

than 1%. t"the exchange" is back right after this ♪ ♪ a cyber-attack can grind everything to a halt. cisco security keeps your company moving forward. because if it's connected, it's protected. cisco. all across the country, because if it's connected, people are working hard to build a better future. so we're hard at work, helping them achieve financial freedom. we're investing for our clients in the projects that power our economy. from the plains to the coasts, we help americans invest for their future. and help communities thrive.

welcome back to "the exchange." the u.s. is one day away from hitting the debt limit, forcing the treasury department to take extraordinary measures to prevent the country from defaulting ylan mui is in washington with what is driving the debt

increase and why this deadline snuck up on us here, on congress, specifically ylan >> yeah, melissa, there are two factors that are speeding up the debt limit fight in washington one is short-term and one has long-term implications the first is the biden administration's pause on student loan payments. the white house keeps extending this program at an estimated cost of $5 billion a month it's now set to end in august for a total price tag of $195 billion. and that could make a difference as we get down to the deadline now, the other issue is interest rates. and the cost of paying down our debt last spring, the cbo projected that interest payments would be about $400 billion in fiscal 2022 the reality is that the total was $475 billion more than we spent on veterans' benefits, transportation, or higher education the reason, of course, is because the fed hiked rates more aggressively than anticipated. melissa, the amount we spend on interest payments is on track to employee past the record of 3.2% of gdp by the end of this

decade, if not sooner. back over to you >> ylan, stick around. let's talk more about the potential fallout for the markets and the economy. don schneider is the deputy head of u.s. policy at piper sandler. don, great to have you with us you say that we are likely headed to the brink, and of course, you remember the 2011 debt ceiling fight, crisis, whatever you want to call it the s&p 500 was down 15% then, and so i'm wondering, if you think we're headed to that >> i think there are a lot of similarities between what is going on now and 2011. i think market participants are a bit more aware of the consequences and we know more about what would happen in the event that treasury had to prioritize debt payments or what would result in a technical default situation. and i do see additional risks relative to 2011 i think one is that kevin mccarthy, who is seeking spending cuts in exchange for an increase in the limit, and with

democrats saying that they will not negotiate on those terms is, of course, one risk. another, what kevin mccarthy owes as speakership in part to conservative members he made those concessions to and likewise, i think republicans in the house have said that they are beginning to consider some sort of plan to tell the treasury what to prioritize, in the event of a technical default, which i think tells you that at least a large number of members are not bluffing about taking this to the brink. >> so they're not bluffing it is different this time around, ylan, in terms of people actually digging in their heels, because, you know, traditionally, the market reaction, at least at this point in time, before extraordinary measures run out, before, you know, tax receipts start rolling in, in april, for instance, which gives us a little bit more time to figure things out, is that there will be a solution of some sort or the can will be kicked down the road to the point where the markets are comfortable with that. what's your take on why it's different this time? >> let's certainly hope there's

a solution that comes out. i do agree with don that one variable here that's a real risk is the fact that any one member can make a motion to vacate the speaker, meaning that kevin mccarthy could lose his job, if he makes some sort of deal with democrats to increase the debt limit. i think what is good here, if there's one little ray of sunshine, is that what we're hearing from conservatives so far is that they're saying that we will not default. they're saying that they will look to protect medicare and social security, even, as they say, there need to be broad spending cuts or at least a plan for broad spending cuts. so, i think that conservatives are saying that there is still plenty of time to negotiate on this that they are at least willing to sit down at the table, and they are trying to put the blame on democrats for saying that they're the ones who are sort of moving the stalemate here, and saying that they're not willing to come to the table and negotiate. i think one person to pay attention to in all of this will be mitch mcconnell he was there for the debt ceiling fight in 2011, he tried

to play hardball with democrats back in 2021 it did not work. this time around, you're hearing a lot more compromising rhetoric from at least senate republicans. so we'll see how marginalized this conservative block becomes during this debt ceiling debate. >> so, don, what are you telling clients in terms of what the timeline is and how much time there is, in fact, to negotiate, when you take into consideration extraordinary measures, how much time that buys, corporate tax receipts, what's the actual deadline that you're thinking about at this point? >> what secretary yellen said in her statement to congress is that we have until early june, saying that treasury is very comfortable with their ability to meet payments until that point. and afterwards, they're uncertain. i think sort of a market consensus and at least my own forecast would suggest that the true drop dead date is in mid-august either way, it means that this needs to happen before august recess but i think the way that

secretary yellen has phrased it is to be prudent and say, be very cautious about, you know, whether we have a recession or if there are some other factors that lead to uncertainty in the amount of cash on hand so for that reason, she said early june >> all right let's hope there's a resolution. don and ylan, thanks so much don schneider and ylan mui coming up, holiday sales may have disappointed, but one industry watcher says some stores will continue to benefit from a pandemic shift. we'll take a look at the winners and losers ahead plus, if you're one of the hundreds of millions who shop at walmart, chances are the retailer has some of your personal data stored at its new tech center. we'll get an exclusive look inside the operation only two stocks in the green right now, travelers and goldman bouncing back from a tough day yesterday. honeywell, ibm, and coca-cola the biggest laggards "the exchange" is back right after this maybe it's perfecting that special place that you want to keep in the family...

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gold bond. champion your skin. welcome back to "the exch exchange". we're now down 433 1.3% is the loss s&p 500 is just about seven points off the lows there, down 1.7% the nasdaq the best out of the big three, down by 0.9%. apple on track to snap a seven-day losing streak. united airlines moving lower shares racing on a 4% gain from this morning now to tyler mathisen for a cnbc news update. hey, ty. >> here's what's happening at this hour, folks the justice department has charged the russian founder of a crypto exchange with illegally

processing more than $700 million worth of payments. prosecutors say "the exchange" moved funds for users of a hydra market, a dark web marketplace for drugs and other illegal goods. and marilyn has sworn in its first black governor democrat wes moore took his oath of office with his hand on a bible owned by abolitionist frederick douglas. moore is america's only current black governor and just the fourth in u.s. history a new study shows that greenland is the warmest it's been in more than a thousand years. researchers looked at ice cores from greenland, which until now have not shown convincing evidence of climate change now they do. the author says the new data is a clear signal of global warming. melissa, back to you >> tyler, thank you. up next, if activision's ceo is to complete its merger with microsoft is to be believed, there's just six months to complete it. but with the fda's recent

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welcome back to "the exchange." microsoft announcing plans to cut 10,000 jobs for less than 5%

of its global workforce and taking a $1.2 billion charge in the second quarter steve kovach is here with more on the bell tightening going on in big tech. we're hearing this and amazon with another layer of cuts really, it's far and wide right now. >> and the story here is, their customers arepulling back on spending, therefore they need to cut back on spending and we saw microsoft hire like gangbusters, and now they have to rain in the cost back as we see the economy starting to slowdown satna nadella says parts of the world are already in a recession and that is a global company with foreign exchange headwinds and so forth that we've, talking about this whole time. >> where are the cuts the deepest within microsoft where does that tell us about where microsoft sees the growth? >> there have been reports within the hollow gralands grou.

artificial intelligence, top of mind, number one nadella says this is the next computing platform forget the metaverse and those buzz words we know reportedly they're going to invest that $10 billion in the chat gbt company that could be coming on top of that, gaming, cloud, also a huge thing. activision announced a year ago today, $69 billion they still want to spend that. $69 billion seems like a big prize tag in this environment. >> totally especially, it's a bad look when you're firing 10,000 people and yet saying, we have 70 billion plus to spend on other investments. that doesn't feel so good for the employees being let go, but at the same time, this is clear where nadella sees the vision of the future and nadella is right when he first took over microsoft, he called it. we'll be a cloud-first company and that's what spurred the growth throughout his entire tenure this is what he seeing >> steve, stay with us we want to stick with microsoft here it's been one year since the tech giant announced that $69

billion acquisition of activision blizzard, but with the ftc suing to block the deal, getting a deal done in the time frame seems pretty optimistic. joining us now is william kovacik, the former ftc commissioner william, great to have you with us lina khan made it clear when she first took over the post that the ftc would be an activist, it would be the check on big companies and how big they can actually get was this one step too far, challenging a vertical merger seems like a very ambitious sort of thing to take on. >> it is very ambitious. this is the most ambitious merger challenge that the ftc has undertaken during her chairmanship the advantage she has going for her is a process that could be called regulatory swarming in the global environment that ceo nadella referred to, you're not just dealing with the regulator in your own jurisdiction, you're dealing with others. and the other major authorities

that are coming at them at the moment are the european union and the competition of marks authority. so the fact that those reviews are proceeding in parallel complicates the transaction with china, perhaps, at the very back of the process, and so it's not just the fc that they have to worry about, it's this larger collection of authorities that are coming at them at one time >> they are, but what are the -- when you look at this, what are the odds at least here in the united states, you know, their response to the ftc, william, would be that we make concessions we're going to make sure that games like "call of duty" will be available on playstation, nintendo, and not just on the xbox so they are making concessions to sort of address some of the concerns the anti-trust concerns. >> i would say if the ftc was the only institution they were dealing with, they could have confidence that they would prevail. that they would be able to go ahead and close the deal on the timetable that they have the ftc hasn't gone into federal court. they're using their own administrative process and i think they could have some

confidence that they could design the package of concessions maybe with some adjustments and get a successful outcome. they have strong political support from labor joins, which are delighted that microsoft has committed itself to allowing collective bargaining during the activision community labor unions in europe also supporting them. they have some strong political support that is lined up behind them, that pushing in the direction of taking a deal >> and in fact, to that point, the communication workers of america, the labor union that's been behind a lot of these unionization efforts we've seen across technology, they've put out a one-page ad in thing with post, i believe it was last week, with microsoft saying, let this deal happen, we think this is great microsoft preemptively, a little less than a year ago, after they announced this deal, they came out and said, we're opening unionization we understand this is a concern of the ftc, we'll let it happen. in fact, they put their money where their mouth is, and let

another video game studio they own, they let with no contest or arguments, let them unionize they are doing what they said they would do and aleleviate these concerns ahead of time one other thing about the ftc case, they're trying to narrowly define this video gaming market to the high end versus the low end. and this merger is way more complicated than that. high end, consoles that cost several hundred bucks, low-end, they lump nintendo in there. the ftc is trying to redefine the video game market as they try to kill this >> this is very activist, william. and i would imagine this would have long-lasting impact, because you're really testing the bounds of anti-trust law and sort of trying to rework it through case precedence in the courts is that how you view it and is this, you know, is microsoft much more of a target? is this particular merger much more of a target, because it would be a feather in the cap of

the ftc and be precedent setting, versus, for instance, when the ftc went after another vertical merger, it was a gene sequencing blood test maker buying a cancer blood test maker, and there wasn't much of a challenge there. >> this is unmistakably an effort to reset merger policy and set it back within boundaries that existed in the late 1960s and early 1970s there's an important test in the courts in california right now involving the ftc's ability to block. the district judge is set to make his decision by january if the ftc prevails if that case, that will embolden them to proceed on the path that they have now, to be much tougher with microsoft in negotiating a possible solution. if they lose, on the other hand, i think that creates an environment in which a

settlement with the concessions that microsoft has suggested becomes much more attractive so we're going to get, i think, a very good test by the end of this month about how difficult the path ahead is going to be for microsoft and the activision acquisition. >> this would really have far-reaching ramifications, steve, for what big tech is able to do in terms of growth through acquisition. they can't acquire, for instance, you know, another company that competes directly with it and they can't acquire another company that it doesn't compete with >> and while we're talking about anniversaries, it's also the one-year anniversary of the ftc coming out and saying, we're going to re-think the way we think m&a. we don't want another facebook buying instagram to happen that was a year ago today, also, bad timing with the microsoft announcement and they're going to be the proof. and if lina khan is that serious -- she just had a baby, by the way, so congrats to her -- but if she's sheerious about this, this is the win she

needs to collect during her tenure to prove the point behind her thesis this is the reason why biden in theory appointed her to the position no better case than this to win. >> steve's exactly right, that is, you either have to win meta within, which comes up first, or you have to win this one because as bold as your statement of principles is, your ability ultimately to shift the deal making environment involves winning cases. >> so you've got to win meta within or you've got to win this one. >> going to leave it there gentlemen, thank you steve and william. >> thank you coming up, shares of this big wall street player down 6% this week. we'll hear from the ceo about the changes afoot and the decisions behind them. that's next. lomita feed is 101 years old this year and counting.

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welcome back to "the exchange." let's get to a quick show and tell we show you a chart and tell you the story. shares of goldman sachs lower by

6% after getting whacked on disappointing earnings that came on the heels of a big job cut plan at the bank last week and goldman's ceo told david solman's "squawk box" this morning those were tough, but necessary. >> during the pandemic for two and a half years, we stopped the normal process of reviewing jumpbd performers, the environment has changed, and we made the difficult decision and it's kind of a reset and it was a right decision and a position that's very well as we go forward, we see the environment forward. i hate the fact that we had to do it, but given how we've grown the firm and the head count, it was the right decision to do >> coming up, from shopping to security, walmart making a big push to expand digital services. frank holland is at walmart's tech center with a look inside hey, frank >> hey, there, melissa walmart is higher even as other b e cap tech companies announc jocuts why there's an increasing focus

on cybersecurity, coming up after the break right here on "the exchange. she knows my goals and can help me reach them with confidence. the markets may fluctuate but you're still on track. more than 9 out of 10 clients are likely to recommend us. ameriprise financial. we all have a purpose in life - a “why.” 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?

just look around. so let us focus on the how. 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 consumers cut back this holiday season as inflation and higher interest rates pinched spending.

the second straight month of declines with americans seemingly trimming budgets before recessions arrived. let's bring in our contributor, sandra campos on the board of big lots great to have you with us, sandra >> thank you for having me >> you make the point and we have all seen this throughout the holiday season that there are a lot of discounts, there was price erosion. how can retailers go back on that in 2023 with the consumers feeling more strapped than they did at the end of last year? >> the question of the year, i think 2023 is definitely something that we're reflectin on the slowdown and discretionary demand so one part is absolutely agility in terms of inventory. so that's the first part, the appropriate level of reserves. so from a retail stand point, matching it so the retailers can stay nimble and having the

merchandise the customers want at the right time. and a.i. is really helping in terms of pricing and making sure that the price points are what the consumers are expecting and competitive across the board those are at the top of the list >> in terms of price points and pricing, are you a believer in the sort of barbell approach to retail the low end and the high end, that they will do well in this environment and not in the middle >> well, the luxury consumer is definitely staying the course. it's sustaining, and they're still spending at the same time, we do have tradedowns so it is trading down, and that consumer is able to find the value price points and products. whether that has to do with the retailers tj max and big value chains or trading down to a more contemporary price point >> china saying the reopening is

really helping how do you think about china factoring in and whether it be the return of the chinese consumer to traveling, buying more luxury goods, and/or, you know, the wave of covid that is expected in china because of the increased travel, et cetera. and potential supply chain issues, which really hurt the retailers a year plus ago. >> right the supply chain issues are definitely becoming less so. retailers have opted to also look at other manufacturing options. the recession hit manufacturers across the board, and we saw that earlier but when you look at the chinese consumer overall and their ability to travel and the luxury demand that they have, that will help a lot of the u.s. businesses and luxury brands, because they have been a big consumer out there that younger demographic is spending, as well.

>> one thing in the notes that really stood out is it's an interesting way of thinking about all the people who migrated to different parts of the country during the pandemic and how that's boosting certain kinds of retailers you mentioned boot barn and tractor supply specifically. does that last or was it a one-time thing you go buy your boots or hats from tractor supply and you're done with that >> well, tractor supply is a different type of retailer, but retailers were definitely benefiting to migration to the rural areas. tractor supply, they have a much more resilient customer and need, because they are dealing with farmers and people who have to go to that store to be able to pick up their feed for their animals and all the different aspects of what they do to be able to manage their farm. so it is needs based, as well. they have an incredible loyalty program, and they have done a great job of merchandising, as well i would say boot barn, it

remains to be a seen, whether that be trends "yellowstone" is driving some of the demand, there has been a trend towards those retailers that have a bigger footprint and that's a plus. >> sandra, thank you good to see you. speaking of retail, one big box giant is getting ultra high tech walmart is giving c nbc a behind the scenes look. frank holland is at the global technology center with that story. frank? >> reporter: hey there, melissa. walmart's 230 million weekly shoppers using digital payments more and more, making cybersecurity a growing priority today, walmart is demonstrating how it secures payment and

medical information. walmart's cap increased by 25% this year. the company's chief information security officer says there is a focus on automation for cybersecurity. >> we couldn't possibly hire enough people to do everything manually that would not be efficient or effective. so we focus heavily on automation that will get you a long way but at the end of the day, you have to have really smart and dedicated professionals. >> reporter: so you heard there, the ciso addressing the shortage of 700,000 cyber workers here in the u.s. walmart is recruiting professionals and paying full tuition for 2500 associates to get cybersecurity degrees. walmart grows its marketplace with over 100,000 sellers and builds it in house, buy now, pay later product. >> cybersecurity is essentially important to new business ventures, because they're disruptive and anything that disrupts our

business causes a lot of momentum we recognize that as we move into new businesses, the things that create value for our business very often create risk in our space >> reporter: and he says walmart is hiring right now. back over to you >> i wonder what the sales pitch is to move to arkansas from where you are. maybe silicon valley, frank. >> not a bad town. >> i guess you have seen it firsthand yourself what are some of the other tech priorities walmart is spending on >> reporter: automation. we're going to visit a sam's club here where they are using what they call next generation fulfillment centers where they have a lot of automation to power their ecommerce business we talked about ecommerce slowing down, but sit a big part of their business and will be in the future

>> all right frank, thank you so much frank holland at walmart ay fre just about two minutes awrom "power lunch." we'll pick up things on the other side of this quick break [music playing] ♪ imagine something of your very own. ♪ ♪ something you can have and hold. ♪ ♪ i'd build a road in gold just to have some dreaming, ♪ ♪ dreaming is free. ♪ accenture, let there be change.

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♪ is something that... ♪ [ music stops ] [ beeping ] cars built with safety in mind, even for those guys. the volkswagen atlas with standard front assist. ♪ ♪ hi, everybody, welcome to "power lunch." i'm tyler mathisen glad you could be with us. coming up, the fed telling us about economic activity across the country. and more evidence in the recession versus soft landing. >> plus, a couple of positive signs. mortgage numbers are up, builder permits are rising, too. is this signs that the housing slowdown may not be as bad as feared but first, a check on the markets. as you can see, we are in the red across the board the dow off by 1.25% the s&p 500 down a percent