then suddenly, you know, there's nothing. but if interest rates are peaking, it's great for them, and yeah, we like it >> all right brynn? >> abbvie, down 10%. did $21 billion in free cash flow and a 4% dividend >> farmer jim? >> strong consumer we talked about it that should benefit general motors when we report next week. >> great weekend, everybody. i'll see you in "o.t.. "the exchange" is now. thank you, scott hi, everybody! i'm kelly evans and here's what's ahead on this friday. slowing or growing there hasn't been this much confusion over the economic data since at least last year which way does the fed see things as their next meeting looms. should they be hiking or declare mission accomplished we'll dive into it and ask >> plus, intel is selling off after those brutal earnings. bernstein calling it the worst report of their history in covering the company it comes as washington is spending billions to benefit the chip giant, so we asked, did

d.c. back the wrong horse? and buybacks tend to make gina sanchez's skin crawls, but there are some exceptions. she lists three buybacks you should like. is it chevron? a special i addition of three buys and a bail kcoming your wa. >> generally positive to close out this week. it's looking good right now. green across the board here in terms of the major indices if you look at the dow, we're currently up about 120 points. one third of 1% gains there. the s&p 500, solidly above 4,000 now. up 17 points, about one-half of 1% for context, at the highs of the session, we were tilting that way. we were up 20, down 12 points at the low. so kind of tilting towards the high end of that range the nasdaq composite, up another 109 points one pull percent gain here 11 11,620 as you can see behind me here, the sectors that matter are leading the way higher that's technology, communication services and consumer discretionary. meanwhile, energy is lagging speaking of that technology trade, check out what's

happening here with the van eck etf. kelly mentioned the intel trade, but nvidia is higher on the day, so is amd, which is worth now more market cap wise than intel. it has now gained 40-some percent since the lows that we saw this past year so watch those semiconductor stocks, maybe a leading indicator, we'll see what happens. and then the stock of the day, a consumer discretionary name that we don't often talk about, it's a smaller size it's not the apples of the world, but hasbro. the toy maker is now down 7% right now. it comes out and gives a forecast it's going to report earnings in the middle of next month in february but it comes out and says, don't expect the fourth quarter to be that good, expect it to be down 17% in terms of revenue growth over the last quarter. the same period last year. the toy maker is also going to cut 1,000 jobs, 15% of its workforce. so kelly, more job cuts, more sad news on that front, but that's the reason why hasbro shares are in focus today. >> just to be clear, you're

saying that hasbro's holiday quarter was down 17% year-to-date >> they are forecasting that that number for revenue growth will be down 17% in the first quarter versus the fourth quarter of the previous year and yes, that's important, because it encompasses that all-important holiday shopping season >> absolutely. that's quite striking. dom, thanks for now. that kicks us off to look at the deluge of data we've gotten this week this is just a small sampling that gives us a feel for whether the economy is growing or slowing. all investors are waiting, of course, on what the fed will do in its first policy meeting of 2023 on wednesday. let's begin with the strongest jobless claims not up here, falling to 186,000, the lowest level since april of last year no question, that goes in the growing camp inflation expectations, this goes in the slowing camp, but in a good way you see the survey this morning, consumer sentiment, one-year expectations coming back a bit that should give the fed some relief core pce, same story this morning, growing 4.4% year on

year yes, it's still high, but means fed policy is now running roughly at neutral durable goods, this one, you thought it was strong. 5% month on month, that was a lot of boeing orders kind of a one-time issue the core durable goods orders were lower and manufacturing has been in recession since september. check the industrial production data i ain't lying. on the consumer side, consumer sentiment, as i mentioned, that's been looking better lately as well whether that will retrench on the back of higher zpleen prices is a question. and spending which isn't up here, but we also got this morning in real terms dropped for the second month in a row. that normally only happens in recessions here to help us all make sense of it, ethan harris is head of global economics along with our very own steve liesman welcome to both of you ethan, kick things off for us. why do you think the fed should keep tightening here >> i think the economy is slowing down there have been some pretty wild signals in the data lately but as you pointed out, if you kind of run through the numbers, things are slowing down. but we're not in a recession yet. and i think the real problem the

fed is facing right now is that they -- they're not getting the labor market under control you talked about jobless claims. 186,000. that's an incredibly low number. and we're likely to get another strong jobs reportnext week an you can't really cure the inflation problem unless you rebalance the labor market and that's the challenge of the fed. the economy is slowing down, but the labor market is still too high >> it's still striking if you go through the nbr's data, there's six monthly metrics they use most of them, i would say all but two of them on the employment side had actually peaked we're talking about a business cycle that is essentially stalling out, except to me it feels like it just hasn't shown up in the employment data yet. >> i think that's right. i think -- think about the job market in the last few years i mean, companies had a miserable time finding employees. and so they've got a lot of pent-up demand for workers now, business is slowing, but they're not ready to stop the

hiring you talk about hasbro laying out of some people and some of the tech companies laying them off, laying off people. but most companies are still higher, because they weren't able to fill their jobs. so the labor market's a very slow, lagging indicator of where the economy hits >> steve, weigh in on this i should add people are going, okay, we have the data pointing one way to a slowdown, sort of exthe employment then you on the other hand have things like mastercard and visa and american express i pointed out this morning that visa, in april of 2008, said they didn't see any signs of a slow down in their data. we had been in a recession for five months at this point. and people are saying, that's a ridiculous and ludicrous comparison to make i'm curious what you think >> you know, i've been confused about all of this as you are i was sort of ready to write off the consumer until i saw that credit card data you sent, kelly. i saw that this morning.

that amex number was very good the visa/mastercard data is good one way to think about this is like a batter up to the plate. and it's two strikes and one ball so if you think about october, was a huge month for the consumer and november and december, they've come off does that mean he sits down? no, he's still got another strike left, at least one more so you look at the spending numbers, it's one way to say, you know, you have these big social security payments coming in this month. that could help the consumer you still have strong employment you still have decent wage gains. and given the credit card data you gave up, kelly, i'm just not ready to write off the consumer yet, considering there's this possibility that what we saw in november and december was a pause. i agree with ethan, there is definitely a weakening, but whether or not that weakening means we go down to zero on gdp or negative, i think that's still a question that's out

there. i know the atlanta fed brought down their first quarter to 0.7. i've seen others be negative for the first quarter. just not ready to write it off you show me january, i think the consumer may have a chance of coming back here and we might still have some decent numbers ahead of us. >> i wonder, when we know that we're already slowing, why do we need to keep hiking rates? because we haven't yet seen to what point the slowdown is going to go. why does the fed feel like it needs to sort of push harder in that direction >> well, i think that the fed just needs to keep tapping the brakes let's think about this in a normal cycle, they do hike by 25 basis points they're now slowing down to a point where they can actually assess the data, no longer look at the plans but i don't think they can argue that they finished the job and again, it comes back to this really lopsided economy right now, where a lot of things have

slowed down, but job market hasn't and that -- the fed doesn't hate the job market, but it is part of the economy that's completely out of balance, still. i think we should take powell at his word when he says that he wants to finish the job of getting inflation under control. i think he has learned quite a lesson in the last year about falling behind the curve, and then making sure that you do the job of being the only institution that really cares about inflation. so i don't think they're going to be slamming the brakes here i think they'll feel their way forward. we've got them hiking three more times and then they're done. but i do think that they have a little more work to do >> steve >> ethan, i was just going to say, kelly, what if the lesson he should have learned was not to be obstinate about policy, and to be more nimble like he promised he was going to be? i think that one of the characteristics of the easing cycle was he kept that

quantitative easing going, even after the fed rhetorically pivoted. it took way too long to raise rates. and now he's sort of stuck in this, we're going to 5% come hell or high water mode. and maybe that's not the thing that needs to be done. there's an idea out there from vice chair lalebrainerd that w take care of the other things that raise inflation, that wages and services will take care of themselves >> but how do you get rid of high service cost inflation with a 3.5% employment rate and with jobs growing $200,000 a month. i don't get the math here. yeah, we can get goods inflation down, the supply chains are improving, commodity prices have cooled ff. >> but it's only 3%. i had it calculated this morning by my friend, the three-month annualized core services ex-housing is run 3% year over year i mean, i don't think i would want to create a recession if i

had the choice, because it's not at two, by a percentage point. maybe it will come down over time maybe not, but i just don't see that that is enough to want to cause a recession being off by a percentage point >> i don't know. i mean, listen we've had a crazy overheating economy. i love it if the consequences of that were that there's no recession, there's no real cost to it, we just slow down and kind of, bygones are bygones, but it just feels too pollyannish to me to think that we can put this kind of inflation back in the bottle without any damage to the labor market at all. i just don't get it. that can't be the case that 3.5 is a normal labor market, or that having 1.7 job openings for every unemployed person is normal this is an unbalanced market jobless claims how can we have below 200,000? we should be up like near 300,000 in a normal job market

there's just too many -- you can find some indicators that suggest that things are normalizing and we're fine, but there's too many components of this picture that just don't look right >> ethan, to be clear, you're not in the soft landing camp, are you? you're saying that the economy has to basically be in a recession in order for them to get the job done >> i think with the scale of the inflation problem we're having, we need a mile recession think of it this way they're talking about recession as this horrible thing well, happened in the last two years is the fed waited too long and they let things overheat all they need to do is kind of reverse that overheating now, getting from here to there is going to require a rise in the unemployment rate and gdp growth that turns negative for a few quarters it's not the end of the world, though is it really that bad to have an economy with 5% unemployment -- >> i think charlie is on the sidelines going, i just need to

get into this discussion right now. but ethan, what i would ask you, no one would say it would be that bad for the unemployment rate to go from 3.5 to 5%, it's just that it's never happened before every time we tip, don't we tend to crash >> you crash, you have a recession. and so, again, i think it's kind of -- there's a lot of wishful thinking out there that somehow the unemployment rate is going to go up and the economy is going to grow through it i don't see how that happens there's no magical return of workers here we've had a bred out labor market anyone who wanted to come back to the labor market is back by now. we're not going to be rescued by returning workers, but we have to cool job growth down and get a rebalancing. and again, it's reversing and overheating. it's not fundamentally creating a bad economy. >> well, if you guys will indulge me here for a second, i've brought charlie brabrinskoi into this discussion to be clear, you're a hawk on inflation, you're not somebody

who has been sitting back, you know, saying the fed -- so you right now think that they're going too far. you've heard ethan's points in what steve was talking about please jump in here. >> i'm so glad you had ethan on. you need someone to articulate what the fed is thinking skpe than did a great job of describing what the fed is currently thinking, the problem is that's just wrong, wrong, wrong. we don't have an overheated economy. it's growing at a very modest rate we don't even -- the inflation was not caused by an overheated job market wages have gone up by less than inflation. so the job market is not what's caused this inflation rate what caused this inflation rate was a 40% increase in the money supply we flooded the u.s. economy with money at the beginning of covid in an unprecedented growth, too much money chasing too few goods is what causes inflation that is what happened. it is not because of an

overheated economy i just, i'm sorry to be frustrated about this, but this is -- ethan is articulating what the fed is currently thinking, and that's going to be a policy mistake, if they stick to this because the economy is slowing >> so ethan, what would they say in response? >> i studied law as a grad student. my adviser, i know how monetizing work. there's no magic link between the money supply and inflation and growth strong money growth stimulating spending and creates capacity problems and that's what creates the inflation. you don't have a link to jump straight from money. it's the spending and the demand it's creating. well, if you look at the money supply now, we're still miles above where we were before this pandemic and before the fiscal stimulus poured massive amounts of money into people's bank

accounts we're still like 15% above normal in terms of bank deposits so if really, the story is getting the money supply back to normal, then the fed used to do even more than what i'm talking about. >> charlie >> kelly, do you have the graph? >> i assume so, yes. we've got -- >> for the first time in history. the money supply went -- there it is. the money supply went up by the most in history, in february of 2020 that is what caused the highest inflation in the last 40 years but look what happened in april of last year for the first time ever, we've never had actually the money supply go down in a year it's now going down. it stopped going up. there is a lag, but we're coming up on almost nine months from when the money supply stopped going up and so now we're seeing inflation coming under control yes, we still have year over

year inflation, but on a month-over-month basis, we're down to about 3% and even that is overstated because the housing data is miscalculated. so we are very close right now to acceptable levels of inflation, money supplies coming down, the last thing we need to do right now is send us into a recession and mess up the job market >> ethan, i'll give you a final word on this >> okay. so i have that same chart and this shows you how crazy economics is i have that same chart in my deck, but the way i interpret it is differently during the boom phase where the fed was pouring liquidity into the system and fiscal policy was throwing money at the economy, the money supply was $4 trillion above its trend line that's the -- you can see in that chart, it's massively above what would have been had it called a trend now it's $3 trillion above trend. it's still $3 trillion above trend. now, the reason it's dropping is because all of those people who left money in their bank

deposits from their stimulus checks and everything else are now out there spending their money. and that's kind of giving the economy this last wind that it's had in the last six months with consumer spending holding up but the money supply is like miles -- it's $3 trillion above its trend line that's better than being $4 trillion above the trend line. but it's just -- it's still a sign of an overheated, overstimulated economy we've got to get back to something closer to normal here. >> steve >> yeah. i'm sitting between literally and figuratively two very intelligent men with two excellent arguments. to me the answer is, they're great arguments why to tighten and great arguments why to stop. to me, the answer is for fed chair powell to go very slow, take the data as it comes, and to back off this hard five they had out there. you can't shoot a hard five in

californias, i guess do a hard six, but i would back off of this hard five. i would allow my committee to debate i would allow my committee to take it all in and i would say, you know what, i'll do this quarter, but i don't see a reason to necessarily telegraph the next quarter or even telegraph how long i'm going to remain at 5 or whatever the terminal rate is. inlg there's good arguments on both sides there's plenty of uncertainties. ethan has a little bit of a contradiction in what he's saying if money supply and bank deposits are so high, why is it that the consumer doesn't have any money to spend they'll got plenty of money still in the bank. you can't, i think forecast a lousy consumption while you have these massive bank deposits. it's one or the other, i think you can answer that another time but i think it's a reason to go slow and not do anymore harm >> they'll kill me, but ten seconds each and a final word to investors. >> i've got the final word i think that, listen, they are

spending some of it. but at some point, people are going to say, okay, i've spent down enough. i'm worried about my job, and you'll see consumer spending roll over. >> and charlie to the investment audience >> the job market is not overheated, but the consumeris in decent shape. and so that, people were predicting a hard economy. we may get a soft landing, which would be very good for the cyclical stocks that got crushed last year, that are actually doing pretty well this year. >> now you sound positive! now i'm like, well, then, what's the problem? >> that will be derailed if powell has his way and keeps tightening and sends us into a massive recession. >> all right >> the market is doing better because we think finally he's getting the message. >> quickly, steve? >> kelly, you've got clarida coming up, ask him about money supply i'm doing your tease for you >> it's perfect! we love it thank you guys very, very much for playing ball here. ethan harris of bank of america,

charlie bobrinskoy, thank you very much. still ahead, got to talk intel getting hammered after that horrific quarter and giving guidance that's blow even the lowest estimate on wall street did the biden administration back the wrong horse by betting on them and championing that new chip factory we'll debate plus, chevron's big announcement this week has buybacks back in the spotlight, too. we'll break down some of the biggest names in today's edition of three buys and a bail and as we go to break, here's a quick look at markets on the way out dow's hanging ton a 66-point gain nasdaq leading the way up almost 1% ten-year yield, 352. we're back after this. (vo) this is more than just a building. it's billion-dollar views. perfectly located. an inspiration. and enough space to start an empire. loopnet. the most popular place to find a space.

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welcome back, everybody. keep an eye on shares of loose s lucid motors which are surging 49% right now. they've been paused a couple of times for volatility three times in just the past half hour. no official news yet on the ev maker, but mid-january short interest showed that roughly 34% of this float was held short we'll definitely bring you more as we get it meantime, shares of intel going the other way and down 8% today after absolutely i business mall results and guidance a # 32% revenue drop, a loss of $664 million rosen pablatt calling it an

historic collapse. keown says the results were worse than feared. and the company's original plans proved to be fantasy intel's ceo was on tech check earlier today trying to stay optimistic >> we do have strengthen of the product lines. we do expect some, some improvement in the market conditions, and obviously, as we ramp our new products into the new factories that will improve the situation in the second half of the year, with more, you know, competitive products, as well but overall, you know, we still see the outlook as being pretty challenging in the first half of the year >> and that dismal quarter comes just months after gelsinger and the biden administration cheered the passage of the chips act back in august president biden attended the gr gr groundbreaking ceremony for ohio's plant with the company reporting a surplus of chips and weakening demand for factories, did washington bet on the wrong horse? let's bring in james

pethokoukis, senior fellow at the american enterprise institute and a cnbc contributor. what do you make of this, jimmy? >> well, i think once washington decided that chips were a strategic commodity and one that needed to be made inside the united states, okay, then it took the next step then it decided that it needed to make bets it needed to be in the horse betting business once it decided that, it had to bet on intel because intel designs and manufacturers chips. that doesn't guarantees that company's success, obviously although it's obviously a little too soon to tell the impact of these subsidies, other than they will cause more plant subsidies in the united states but when you're investing not for market efficiency, but for other reasons, geopolitical reasons -- >> but do you just -- >> you should not necessarily expect that to be an efficient investment >> so i think, listen, you know, on the margin, is this investment worth making sure that, you know, we don't have to be overly reliant on taiwan, all

geopolitical implications of that sure, or china, you name it. however, are we risking making intel a worse company than a better one i think that's a little bit of the question hanging in the air right now. does it need market discipline to catch up, making sure they're making the right investments and so on, and are we right now risking propping them up and creating a less-efficient,less-useful company in the long run? >> i think that -- if you're going to bounce off the two sides, on the good side, you're going to maybe ensure more of these chips are made in the united states. but on the other side, to some degree, you're shielding this company from competitive forces. it's not fully making decisions based on sort of the fiscal situation without the government having any role. so it's not a purely business decision and are you creating fundamentally over the long-term a zombie company that would not exist at some point in the future, if not for government. you don't want that, but could

that happen? clearly intel, as washington sees it right now, is a too important company to fail. i'm not sure it's about to fail, but that's sort of the position it's placed it in. >> and it's -- we don't want to call this a bailout either, but when you -- you know, the best way to frame it would be a position of strength, something akin to world war ii you know, mobilizing industry to build ships at a massive rate and o' -- we've done incredible things when we've had a specific mission and a goal here. can that be copied with success in this case, do you think >> well, a lot of people have been looking at china, china's success in subsidies china has in the done a good job creating with massive subsidies, creating its own domestic advanced chip-making industry. and they spent a lot of money. i think that's a lesson we should think about you mentioned bailouts again we're not talking about a bailout, but i have little doubt, if it came to that, given that they view this as a

strategic commodity, now a strategic company, yeah, i think they would absolutely bail out intel, which just as we bailed out the automakers back in 2008. >> and then the question again becomes, to make sure, how do they keep up with market forces, get ahead of them the fact -- it's notable today -- >> subsidies don't create a nimble company subsidies do not create a nimble company. >> and we have rivals using, of course, outsourced technology that are able to grow and flourish and power ai and all the next generation of technologies yiyies in the mean. james pethokoukis with aei also ahead, china's got another crisis on its hands, and it's one of energy shortages how it's further complicating reopening efforts. 'lte y, hexcnge" is back after this usic - cover's “dreaming”] [music playing] ♪ imagine something of your very own. ♪ ♪ something you can have and hold. ♪

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welcome back to the exchange look at the nasdaq leading the way again with this 1% pop apple and microsoft are on pace for their third straight positive week for the first time since august we're also seeing meta getting a lift from maybe this renewed interest in going after tiktok here's megacap tech. amazon up 2.6% today microsoft up only fractionally apple adding about 1.5%. cnbc's data team crunched the numbers and we wanted to show you some of the big-name stocks with at least $100 million in market cap and more than 25% short interest right now, especially given what's going on with lucid shares, which have been halted the last couple of moments here, on and off that stock up quite sharply today. other names on the list that meet these categories, how about silver gate. 70% of the flow to short

market cap down to $410 million. carvana is the second highest with 60% of the flow you can see the shares popping today. by the way, pay attention to this if you're the fed and you want to see that liquidity is not too plentiful in the market. seeing shares of carvana and lucid pop is probably not what you want to see. market cap here, 1.3 billion bed bath and beyond, 45% short interest market cap,300 million. ed this a big move yesterday just last hour, more reports, the retailer is struggling to find a buyer in bankruptcy this after yesterday's announcement that they defaulted on the credit line with jpmorgan and don't have enough cash to pay down its debts for more on all of this, go to cnbc.com and you can't talk about short interests without talking about game stop. >> today is the second anniversary of its best day ever, when shares jumped 134%, closing at $348 a share. that was before last july's four

for one stock split. $348 was the high, in the midst of the so-called reddit rebellion. the stock down nearly 80% since that period of time. it's at 22 bucks, even with a 10% pop today and its short interest now is about 24%. got that, tyler? over to tyler mathisen for a cnbc news update >> that's a lot of content thanks, kell here's what's happening at this hour. your cnbc news update. ben crump, the lawyer for the family of tyre nichols is thanking prosecutors for quickly murder charges against the officers involved in tyre's arrest, but he is also -- crump, that is, also questioning why officials moved so quickly against these five black officers when charges against white officers accused of crimes often takes weeks or months, he says he says the case of tyre nichols should set a precedent >> we now have the blueprint, america. and we won't accept less going forward in the future. we won't have black officers treated differently than white officers we want equal justice under the

law. three men have been arrested in a plot to assassinate an american journalist who has been a critic of iran, according to the doj. the attempt was allegedly sponsored by the iranian government the journalist that was targeted in the attempt is calling on u.s. officials to take strong action against iran for plotting her death. and in kentucky, wet roads turned into sheets of ice as temperatures dropped this morning. many roads closed and at least dozen collisions have been reported in the state. schools in one county closed for the day, because of the treacherous conditions, ice in kentucky >> wow, tyler, thank coming up, everybody, three buys and a bail, buyback edition, including one stock our trader says high expectations to outperform during a recession. eemeou can guess what it is, twt @kellycnbc. and we'll tell you after this break. unds.com can see if it may qualify for a payroll tax refund of up to $26,000 per employee. all it takes is eight minutes to get started. then work with professionals to assist your business

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welcome back to "the exchange," everybody buybacks, some considered a dirty word and they're front of mind this week as the white house slams chevron's plan to buy back $75 billion of its own shares amid record profits for the oil industry that got us thinking, when are buybacks a signal to buy and when are they a signal to bail let's welcome in cnbc contributor gina sanchez to answer that question she's chief market strategist at lido advisers. good to see you, gena. welcome. >> let's start with walmart. that was our mystery chart announcing $20 billion share

buyback in november. it lifted its skpaels profit forecasts, they benefit from cost cutting and high inflation and recession fears. shares are up 13%. and you think this is a buyback that people should invest in, accordingly. >> yes and remember, we're investing despite the buyback. really, what we're looking at is companies that have, you know, the potential to make it through the recession and walmart is one of those as people belt tighten, as households belt tighten, people start -- day stop shopping at the higher-priced stores and go to walmart and, you know, this is a place where you can get a lot for very little that's going to be the name of the game for the next six months and the expectations for revenue growth at walmart are quite high and they have been giving very, very conservative guidance, but we actually think that there is some upside to this stock. >> okay, so why don't you say, in spite of the buybacks i'll ask you the question as we move on to costco, gena, another

great company executed well over time they just reauthorized a $4 billion buyback last week, replacing the current one. it did about 1.5 billion what do you say? >> well, we like costco because again, this is a cost-cutting story, but also a way to get quality, quality in bulk you know, costco has actually done very well this past year. the expectations are expecting to moderate and so they feel maybe a little more highly valued than some of the others but when companies are buying back, kelly, they're giving you one of two signals either they're trying to inflate their growth numbers or they just don't have any sbempbl uses for the money, any place to invest in. they're saying, hey, let me give it back to you maybe you can find some place to use it that's just not a great way -- that's not a great signal. >> can't they sometimes say, we think our own shares are undervalued and one of the boast investments we can make is buying them back right now >> that's the most optimistic view, kelly. i leave it to you to be the optimist here.

that is one of the options is, hey, we think that our shares are tremendously undervalued and we're going to go for it. now, some of that was because there was a lot of cheap money around so it was very inexpensive to just borrow money and buy your shares back and make the spread. that was a great plan for a lot of companies and they did that for a long time. that's going away. in some ways, buybacks have a higher hurdle. maybe if that's the idea, then this could be an interesting signal >> berkshire, they talk about, you know, buying back shares if they get to that level it's kind of got the warren buffett stamp of approval. what about procter & gamble? i saw that look. they announced plans to buy back up to $8 billion in shares, fiscal 2023. that's a pretty sizable move, as well >> yeah, well, you know, procter & gamble this is a set of products that everybody needs. everybody has to take a bath, everybody has to wash the dishes, everybody has to go to the toilet these are basic needs. and the valuation on procter & gamble is actually, you know, attractive

and the thing is that these quality types of companies, defensive quality companies, they're only getting more expensive. this past month, we had a rally and the rally was all value and garp stocks. so people want defensive, they want quality, and this is a name that lands in that category. >> those are three names with buybacks despite that, people can still feel comfortable investing, but meta is your bail today. they spent $45 billion on buybacks in 2021 shares plummeted 64% last year for its worst year ever. what does that tell you? >> look, i mean, they me think that their stock is cheap. it went from 70 times forward earnings to, you know, 17 times forward earnings so, yeah, or 14 times is where it's at now. you know, that does look cheap that could also be called a falling knife. and if procter & gamble is a necessary buy, we think facebook and meta right now are an unnecessary buy. they're changing their whole business model the core business which is ad sales. that whole space has been, has

had a really rough year and it's not expected to get any better next year. the meta verse within what is that we don't know what that product is yet the product's not there yet. it's really hard to value what the sales can be against that. so, you know, it's kind of unnecessary. >> okay. we'll leave it there gena, thank you so much for this very special edition of three buys and a bail, buybacks. thank you, gena sanchez. coming up, tax season is officially upon us one analyst sees potential haeld winds of the likes of $25 billion. he'll explain why and the companieth cldaks atou te a resulting hit, next on "the exchange." hi ladies! alex from u.s. bank! can she help? how about a comprehensive point of sale system... that can track inventory, manage schedules- and customize orders? that's what u.s. bank business essentials is for. (oven explosion) what about a new oven, can u.s. bank help us there? we can serve loans in as fast as 12 minutes. that would be a big help! huge! jumbo! ginormous! woo! -woo! finding ways to make your business boom.

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today. let's get to the bottom of this tax refund issue that investors are so focused on. your refund is likely to be a little bit lighter this year with those pandemic-era reliefs expiring let's introduce chris senec of wolf research, chief investment strategist great to see you again, chris. first of all, i've heard a lot lately, people saying, wait a minute, the economy might be slowing, but won't refunds provide a boost for now. on a macro level, what would you

say? >> we're doubtful that -- thanks for having me on, kelly. you know, when we crunch the numbers, there's some one-offs that were present last year from the pandemic that won't be there when folks file their tax returns this year. most notably, the child tax credit expired at the end of last year. that was $3,000 per unit and that's reverted back down to $2,000 and there are some other nuances with if folks couldn't be found for their stimulus checks, they got through refunds the prior year when you add all of that and do detailed work on it, we see at least a $25 wl headwind this tax season and remember, tax refunds in the aggregate run about $300 billion. so when you put that into our crystal ball, we think there could be some headwinds here for retail sales in february and march and what could be a week of q1. >> we're talking about $200 on average per filer, these

refunds. but $500 on average for the lower income consumer. so again, less there is a big deal what do you think some of the stocks are most exposed to this week >> if we think about the names that could be impacted, auto parts retailers, we have in our low-end retail basket. you have casual diners like cracker barrel might be impacted, was people don't go out and spend. maybe they trade down and go to mcdonald's or wendy's or somewhere else electronic firms firms that cater to the dollar stores to lower income folks and even the walmarts of the world might see some headwinds in their sales given their wide swath across the economy so it's going to be broad and it worries me as we get into these next couple of months here because money is just not going to be there. >> if that's the case, what do you make when people go, maybe the consumer is holding up okay right now. look at visa look at american express might not be quite the segment, but what's your response to that

>> i think there's a lot of puts and takes. i think the lower-income folk that have been under pressure for a wile, banks are tightening credit for credit cards, interest rates are higher, we've seen housing in cards slow and they're still drawing down that excess savings i think it's a tale of two consumers. >> exactly which wouldn't be the first time chris, thanks so much. we prappreciate it. >> thanks for having me. >> chris senec with wolf natural gas on pace for its sixth monthly strait decline it's a very different story in in wchs presenting another challenge to consumers and president xi we've got the story, next. -silo your data. and start crunching a year's worth of transactions against thousands of compliance controls with the help of ai. now you're making smarter decisions faster. operating costs are lower. and everyone from your auditors to your bankers feels like a million bucks.

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welcome back to the exchange natural gas prices may be way down in the futures markets but they are sky high in china according to "the new york times," the country is facing shortages as temperatures plunge this was the fear for europe, remember, that didn't materialize because of high temps now we're seeing it play out in china and it is another challenge for president xi following the zero covid policy and abrupt reopening. joining us, fred floit and ken found. both are cnbc contributors i'll start with you. rationing of when they could cook and that kind of thing. >> it is pretty bad but it is partly a self-inflicted wound,

kelly? that it is a market structure that only a planned economy could achieve. because the local municipality buys the gas on the open market or forced to buy it on the open market at whatever the heck price it is and china locked in some very expensive gas in the aftermath of the ukraine war like everybody else was scrambling tor supplies. but the local government has a cap on what they could charge retailers. so that is a really bad combo when you have to pay extraordinarily high market prices for gas and then sell it at retail at way below the price you bought it at so they don't have the money to subsidize it so they're shutting off consumers at their home in the dead of night and they have not been lucky as we have in europe in terms of warm weather. the polar vortex has set up shop in that part of the world. >> you could imagine turning off the gas in the middle of the night. the heat basically so how do you expect the contours of this conflict to play out >> well, i think everything john

just said is correct i don't think that there is -- this is going to be as big of a problem anywhere near as big of a problem for president xi as was his zero covid policy. part of the reason is that this is taking place in the north it is a problem as we talked about with local governments which lack the funds to put in place to buy supplies because of all of the money they were paying for their zero covid policies you could already see that the government is trying to deflect the blame on to the local governments and to a certain extent -- a certain degree i think they could do that and get away with that what it does do is another chunk in the armor of president xi he was seen infallible and now he has slowing growth and got property difficulties, he's isolated himself from many european countries by backing russia so it is really getting in the way of his corrective actions following last year's party

congress when he got his unprecedented third term. >> and we've benefited from the tact that natural gas prices have been pretty low it is such a bifurcated market now, it is hard to use it by proxy. but would you say they only have room to go higher from here or will china be all right and they locked in at high prices and maybe they could re-set at lower ones. >> they're stuck for this year and for the rest of the winter for sure they've locked and loaded. it is like anything when you buy it and store it and pay double-digits for it, it is going to be that expensive in storage until you use it the issue, though, is that here in the u.s., we are certainly at the lower band now of prices this is historically where they've been again, the weather increases production, that is coming online, has certainly helped to engineer that. and the lower oil prices, a lot of times natural gas is priced basis on an index to oil so with the oil price coming down that should help china for next year but i think a lot of

lessons will be learned around the world here that the sky is falling narrative for parts of the energy market rarely come true. >> it is always feels a little bit pointless to talk about the pressure on xi jinping because it feels fatalistic. if something has to give, how is that something to give we've seen protests and white paper demonstrations and signs of unrest. but it just feels like the regime has done such a good job of marshaling technology and all of the rest of us to retain power no matter how dissatisfied the public might be. >> i think you're absolutely right. one thing that he achieved at his party congress is he has loyalists all around him he got rid of anybody who would not be a loyalist. so he had as a lot of political room to maneuver rhodium that works with us doing economic forecasting for china, they think that the real growth in 2023 is only 0.5% economic

growth for that size of a country, that is politically dangerous. now they could get it up to 4% to 4.5% but they could only do that through a large scale investment program that could have inflationary aspects to it. so xi has got some very difficult decisions to make and he abandoned the zero covid policy because it wasn't working. >> right. >> and he may abandon some of his economic policies an put more reforms in place give tech companies again a little bit more freedom as he recognizes that he needs more economic growth sustained by the economy itself. >> and quick final comment, as we've seen crude, commodities, those prices bid up on this idea of china coming back in and having a lot more demand do you think that has gotten ahead of itself? >> i am. i'm less worried about the impact of commodities than other folks. it is -- there is some revenge travel for sure, worried about the jet fuel market to a degree but beyond that, i don't see a

huge impact from it. >> it is like steven roach said, your comments remind me of his when he said he's more worried about china than he has been in 25 years of being an observer there. we'll leave it there now john and fred. and it is not just tech seeing layoffs toymakers are now cutting jobs tyler mathisen and i will discuss that on power lunch. you could catch us on the other side of this quick break technology lets you monitor your pet when you're not at home, but to monitor threats to your hybrid workforce wherever they are... you need more than technology. you need cdw, who gets to know your business and can design and deploy custom solutions, with pre-configured hp notebooks with hp wolf security. ai-enabled threat detection and remote management protect your endpoints 24/7, giving your defenses some real teeth. bummer. hp makes always-on remote security possible. cdw makes it powerful. lily! welcome to our third bark-ery.

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when covid hit, we had some challenges. i heard about the payroll tax refund that allowed us to keep the people that have been here taking care of us. learn more at getrefunds.com. happy friday, everybody. welcome to power lunch, i'm tyler mathisen alongside kelly evans. welcome. coming up, intel the big loser after the results. company missing targets left right and willy-nilly giving a weak forecast. when will a turnaround take hold we're hear the ceo and what he had to say