2022 was terrible, 2023 is set up better. >> general motors, i think the end of the year is going to be a really good time to own the stock. >> good day to stick with that as is ao smith >> staying with it >> good stuff. thanks, everybody. i'll see you later "the exchange" is now. ♪ ♪ thank you very much, scott hi, everybody. i'm kelly and here's what is ahead. a little over 24 hours to go until the latest fed decision. we'll look t what the market wants, when the gap between the two can close and where you can find opportunity right now you might be surprised by some of them. and shrinking cash, bloated inventory and falling profitability. which retailers are in the best and worst positionpositions. we'll look through the dead levels in particular and what is going on with digital apps

we'll look at whether competition or recession is the real reason the big cap names have been struggling as earning reports loom but first, let's get to dominic with the latest. >> earlier this morning, we thought we were going to wobble for sure we were in the red at one point, but a number of earnings catalysts drove the upside here. so what which are seeing is great across the screen. the dow industrials up 150 points, half of 1% gains there three quarters of 1% for the s&p 500. 4,048, up 31 handles the highs of the session, up 33. at the lows, up 3. so very much towards the high end of the rake nge right now. the nasdaq at 11,515 what has been driving the performance, the nasdaq 100 overall, has been the outperformance in key sectors like consumer discretionary.

think amazon, tesla. also communication services. that's the reason why those two sectors, the biggest gainers so far in this young 2023 the worst performing sectors so far this year, utilities down 3% no surprise. and then the stock of the day is general motors a legacy automaker, and it's had its problems in the past, but right now up 8%. still down over 25% over the last year. profits and revenues reported this morning, coming in better than expectations. also, the forecast in 2023, above estimates. despite profit margins that were lower, kelly, year over year, investors accentuating the positives. gm shares up 8%. back over to you >> that was a monster quarter. thank you, dom the latest decision in interest rates is due out 24 hours from now. a quarter point hike is the

expectation, but can the economy handle it? and will it turn out to be the last hike of this cycle? we have all these angles covered from main street to wall street. steve leaseman is on recession watch, on the market fallout we have brian weinstein and on the main street, siemian siegel has the best and worst positions to handle another rate hike. steve, let's start with you. >> thanks, kelly the fed meet thing week amid diminished but high expectations for a recession. and now let's look at inflation set to come back a bit the recession probability is at 51%. you can see that right there but 63% in december. still higher than the normal, which is around here, 20%, 25%, just 9% think we're in a recession already. whether we are or not, the

outlook is for trend growth in 2022, giving way to anemic growth of around 0.4%. that's actually rounding up. and then it bounces back, you can see in 2024. expected rate hikes this week, 25 basis points, and then 82% see another rate hike coming in march. peak rate, 5% april 2023, may hold for nine months but 44% banking on a cut in december inflation seems to be climbing the 3.2% and 2.9% next year. most don't see the fed hitting inflation targets for several years, if at all >> come on over, steve the one that jumps out, as we open this up and kick it around, the fact that 44% of people think a rate is coming, a lot of people think why bother hiking >> if only the fed were on board with that idea, they are going to eventually cut.

it's not unusual for the fed to hit a peak rate and fine tune. but the idea of the unanimity of the fed at 5% or higher, and then you also have that point in the minutes, which stood out from the last one. no fed rate member sees a rate cut in 2023. it was like the feds showing the back of the hand to the market >> interesting brian, do you think the market will slap the fed around >> eventually, yes i don't think quite yet. yes, the market is often right but i think tomorrow you will see the fed go 25. they must feel pretty good inflation is lower than expected they have to lower the forecast. they're not happy about growth being close to zero. you'll see a fed that is resolute, they'll push back against the market, but the market probably won't care >> and i look at your notes, chris. you know, you say the case for recession is getting stronger and stronger five indicators that are either

rarely or never wrong. they continue to say recession is ahead inverted yield curve, contracting m2, soft home building and falling leading indicators chris, as an equities guy, what do you do? >> first, i don't think you panic. but i also think that you don't have the fear of missing out with this strong market, because, you know, the market, as predicted two of the last eight recessions, but also eight of the last ten comebacks. so i don't think this will be a strong comeback. by mid year, things will have slowed down marketedly so this is a nice time to take profits and pick and choose more with a rifle than a shotgun about where you want to be in this market. >> and the home builders, we talked about this months ago when they were trading at two and three times, and now you think? >> we own the nvr, which had

decent earnings today, but the stock is up 45% since june, and some home builders are up even more they are discounting good news that may or may not come true. so it may be time to take some profits off the table there. >> brian, i'm trying to figure out the new, sort of popular kid in town, which is fixed income, and i don't know, all parts of fixed income have people salivating with these yields i'm trying to think what steve just told us the likelihood of a downturn or of rate cuts coming. how does that maybe change what parts of the curb you think people want to be in right now >> i think it's really interesting. listen, the front end of the yield curve, the fed is trying to entice you to go there, and you should to get 5% for a little while is a great return the dangerous part is that two

to five-year part of the curve, but that's where the eases are priced in. so if those don't come, you don't get enough but if you go further out, owning longer duration quality assets and locking in that yield, we haven't seen yields up to this level in eight, ten years. we're popular for a reason, the income is pretty good. >> one thing that i find curious, people say yes, the fed should pause, but they can't pause prematurely, because equities could fly this idea that, especially if we're heading into a slowdown that the fed is going to be afraid of letting stocks rally too much in what could be a bear market bounce, i'm curious your take on that >> i've spent a lot of time gaming out what i think powell

will say i've come to a dead end about him saying almost anything positive for the outlook for rates. these two guys are sitting there with their finger itchy on the trigger. if powell says we think we're nearing the end of the rate hike cycle, boom, hit it. if powell says, you know, we think maybe the lifk risks are a balance between growth -- if they say we believe that we may have to -- i mean, people never say this, we have to reverse course toward the end. the market is poised and ready to bounce on it. he has to be monotone and not make almost any comment at all that would -- that could be perceived as dovish because of what you just said >> here is my controversial question -- why should that matter why are they so afraid of a stock market rally, especially one that could be a dead end if the economy is slowing >> i think what they see the stock market as is just another

piece of the financial conditions index they do not believe -- what they want is they want an economy that is running below potential to create slack, to bring down inflation. they're concerned right now, financial conditions have not really tightened a lot they have loosened a little bit since the fed went up to that 5% forecast an economy where rates are essentially -- or the market rate is essentially juicing growth is one that is not one the fed believes will reduce inflation. >> chris, if he -- to steve's point and as the market seems to be snuffing out, if powell comes out to make sure there's no hint of them doing anything other than further rate hikes, what is that likely to mean for stocks in the meantime? >> you know, the market right now, kelly, seems to take everything as a glass half full. what i would say to the watchers is hey, be careful what you wish for, because if you really think the fed is going to cut by the end of the year, what kind of

circumstances would lead this fed, which steve has said has given the back of its hand to the market to cut. so i think the only thing that would lead to do that is some bad situations in earnings and in the equity market so, again, be careful what you wish for >> it's well said. i just want to mention a couple of other names you are looking at domino's mpizza comes up, first republic bank. so there are places that people can ride this out? >> absolutely. the good thing about a bear market, and we're still in a bear market, there are opportunities created. first republic is a terrific bank it was down 50% in october it's come back a little bit, but that's a great franchise that is available at a very infrequently cheap price. so we like that a lot. and would buy it even if we think the economy is going to slow >> finally, brian, to you, as i mentioned yesterday deutsche

bank are starting to get cautious on credit for some of these recession concerns and so on what would you say to people who think maybe corporate credit isn't the place they want to be? >> there's risk. you get less yield than before, so yeah, you have to be careful. the fed will stay at a high level until they cause some pain so you can't just buy credit like you did the last 15 years so that's a very important note. you do have to be careful. it's in cash and important at these yield levels >> all right we'll leave it there, thank you all. still ahead, we'll dive into the retail aspect of this as the consumer starts to wobble. we have the names most exposed to rate hikes. plus, is recession coming to the digital ad pace? we'll hear from one exec as competition grows and budgets

shrink and green across the board, with the nasdaq back in the leadership position. unless you count the small caps, up nearly 2% we're back after this.

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exchange." the fed's tightening strategy is being felt from wall street to main street. here is the headline from "the wall street journal," the u.s. consumer is starting to freak out. there's recession risks, higher credit card rates, no more stimulus and the next guest says it's putting pressure on consumers and businesses alike, separating the best from the rest in retail simeon siegel is here. welcome. thank you for coming out here. so we should start with the idea that there definitely is a consumer slowdown happening, but also that stimulus was so broad and helpful for everybody, it might have papered over a lot of cracks that are now emerging where do you think these cracks are deep snes >> we think about retail -- first of all, great to be back i think we think about retail as being the zero sum game, the consumer versus the retailer covid eliminated that. everyone was on the same side. so what's happening now is everything we keep talking about in terms of the consumer

overpurchasing and overextending, companies did it, too. it was the same story. we watched them overbuy inventory, think these stimulus times were they have going to stop now we're paying the price so what is interesting is figuring out, we're in a new scenario that was a lot like pre-covid. >> does it -- is it that the same group was sort of the leadership then is back in sort of the solid leadership now? or have things changed and there is a whole set of people benefiting and being hurt? >> i think yes and no. there has been some special companies that took advantage of covid that said i'm going to change and improve the business. victoria's secret has improved their profitability perspective. that's the trick people will figure out how much excess capital they had in their personal accounts. because of stimulus and how much they changed their spending

habits companies are seeing the same thing. >> you mentioned victoria's secret some of the other companies doing well here, mr. car wash, am i right in that nordstrom. you mentioned burlington gap is another name, well. what do you think they have done right? >> they surprised me leverage is tied to debt and cash cash is the big trick. so i think mr. car wash is its own special beast. that's a conversation for another time but i think everyone needs a car wash in their portfolio. but we're watching some of this, and part of the debt analysis is to figure out who is in trouble than who is in a good place. you don't about to show up in a debt report.

one of the questions we have, if i'm inside that board room, i'm wondering should i be cutting dividends? one of the interesting things we did is looked at who has a big-fix debt paydown and how does it correspond to their own profitability? so next year, vf has to refinance. and it's a fixed cost. >> in a very high interest rate regime >> and it wasn't when they started. that's why we are looking at a fixed versus a variable. and this stands out. >> two other names that come up, weber and trader both of those look poor on this metric, as well. >> listen, it's a fact if you came public in '21, chances are you had a lot of fixed rate then that's just the unfortunate reality. if y so you got hit by both of those

aspects. fortunately, those retainer costs are going to help them more than anyone else, as well so we'll see what they do next year if there's anyone that got hurt by spending $5,000 to ship things over in a container, that pivoted to $25,000, it was big heavy growth that, and peloton bikes. so you have this fixed cost debt and then you have vivada >> so you're separating the best from the rest. should we use this as a launch to talk peloton more specifically it was the poster child for the pandemic on the way up and down. where do things stand now? >> fixed income, i'm not smart enough to touch that what is fascinating is how much the consumer led the conversation before there was inflation, there was lower promotions we talked about it three years ago. they mean the same thing

victoria secret raised the price by 30% that's inflationary. it lags. so from my perspective, we learned in college economy 101, supply and demand. there was a mismatch in that peloton was the perfect example. first, it was too much demand, then too little demand, then too much demand and too little supply so peloton moment, they thought the good times would roll, they didn't, and now i'm stuck with inventory. we're back to some semblance of normalcy being a retailer is hard for the past two years, you had to predict supply and demand now we get to see who understands their consumer >> i was noticing a conversation the other day, someone was asking for advice on what treadmills buy

the question for a company like peloton is, how do you forecast production rates now that everybody is talking about this question of what we're heading into recession it's extra difficult this year >> it is extra difficult but at least you know what you can get. for peloton specifically, you think about their actual tread, peloton has been very vocal about not wanting to be in the equipment business they love their subscription business, 60 plus percent contribution margin. they do not like their equipment business so right now, i think if you're lucky enough to have not over-inventoried and over-infrastructured and lucky enough to have just over-inventoried, find the consumer and figure out the cadence to sell your product and you will win

>> bath and body works, capri, tjx, planet fitness, underarmor. >> the way i would say it, beca if i'm barbelling in this rec recessionary type of business, tjx wins i think bath and body works benefits from their replenishment. capri, they have been the vocal company and underarmor is just -- >> simeon siegel, thank you. coming up, it's aussia's richest man. we'll dig into the short seller report threatening one of the

we wealthiest men in the world. >> here is a look at the board while we go to break think he's posting about all that ancient roman coinage? no. he's making real-time money moves with merrill. so no matter what the market's doing, he's ready. and that's... how you collect coins. your money never stops working for you with merrill, a bank of america company.

welcome back to "the exchange." we're back to the january pattern. here the nasdaq is up 1% to pretty much lead the way the dow up 180 at the highs and just off those levels right now. let's check out mega cap tech where every name just about is

in the green amazon with about a 1.5% gain there to lead the way. and here are some of the other movers you'll hear about it time and again, the home builders seeing some nice gains. look at pultegroup, leading the way. we talked about nvr earlier, as well a lot of these names hitting 52-week highs today. no longer the days of trading two times per earnings international paper surging 10% and having its best day since march 2020 they are having its best month in over a decade, with this 20% gain if you think that's a big move, we're not done yet check out these shares, up 26%, this is today after they launched a new, you guessed it, artificial intelligence product for businesses this is the new block. just put a.i. in anything.

what was that energy drink company? change your name to a.i. and you will see the stock flying. the stock is up 81% in january for its best month on record over to tyler mathisen now for a cnbc news update >> here's what's happening at this hour, folks icy weather in texas and the south continuing to disrupt flights across the country about 1600 flights have been canceled so far today. this according to the tracking site flight aware. most of them are to or from the dallas-ft. worth airport, southwest, american, the hardest hit airlines with more than 900 cancellations. both carriers do have hubs in the dallas area. the family of tyre nichols plans to speak on the latest developments in the case, including the suspension of two police officers and the firing of three emergency responders.

the remarks will come on the day before tyre's funeral. and pope francis demanding foreign countries stop plundering the natural resources of africa. he made the plea on his trip to the congo, home to 50 million catholics. francis is the first pope to visit the country since back in 1985 back to you. >> thank you coming up, a spending slowdown is slamming the ad market, as companies tighten their purse strings. could artificial intelligence be the answer to advertiser's problems that's next. you ok, man? the internet is telling me a million different ways i should be trading. look! what's up my trade dogs? you should be listening to me. you want to be rich like me? you want to trust me on this one. [inaudible] wow! yeah! it's time to take control of your investing education. cut through the noise with best-in-class education resources

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welcome back huge week for tech earnings. they are all on kdeck posting strong gains snap is up 27% but could those rallies be derailed as spending continues to falter? digital ad spending growth could slow to its lowest level in five years. for more insight, mark douglas is here. welcome. great to see you and joining us remotely is

joanne stern you don't need an intro, joanna. it's great to have you here. mark, just real quickly, what are you seeing in terms of an overall slowdown in spending >> the big names are just very indecisive normally in january, they would know what they were planning to spend for 2023, and you just didn't see that this year. and so it's making like the whole digital land market be in suspended animation a bit. >> i'm curious, because the last recession, the financial crisis, the digital ad market was so nascent, that did it experience a slowdown or gain share during that period? >> any time there's any kind of a broader decline, we talked about this in the past, it happened with covid, it happened before them. i look at the current slowdown,

and in the previous ones, it was like there was a crowd of people that just rushed to the next opportunity. it was like in 2000, it was housing. then covid, everything is discounted let's just buy everything on discount now everyone doesn't seem to know where to go and then you're seeing that reflected and retailers just not knowing what to do with their budgets and just kind of holding back >> and joanna, i think it's also interesting for this market to wonder, okay, is it recession to mark's point that is keeping everybody in wait and see mode and is it competition? the fact that netflix is going to get a piece of the advertising market this year, and everyone else trying to figure out what to do with these ad blocking things going on, what are you hearing >> yeah, i'll raise the tech flag, tech person here how much of this is about tech, right? in 2022, the big story around ad tech was the impact of apple's

changes had on users and targeting them we saw a lot of that and discussed in the meta earnings calls. we are really focused on what is going to be the rebound to that? what are the improvements that these tech companies have made in the last year to combat that specific targeting they lost with apple i think on meta, there's something promising in you they're using ai, and to hear from them how they're using ai specifically on instagram and making in road there is to compete with tiktok with their reels product. the journal had a story which said internally they are very optimistic about what they are doing on reels so that being more engagement, more opportunities for ad targeting, and back to that first point, using the data in smarter ways that they may have had to recoup because of apple's changes. >> mark, what would you say -- we're going to have earnings,

but this is a little bit of a q4 story. we want to hear anything say they about the way that we're starting off this year >> i think q4 is likely not the -- you know, huge but not disappointing. but i think what -- something that's really different is that because i don't think you have seen this like real pullback in spending among the tech giants you would say. that means it's not going to be explosive growth as the market does recover so if we're kind of just hovering, i think what i hear from a lot of advertisers is that they're looking for new opportunities. so that is going to favor maybe tiktok it's going to favor streaming. it's going to favor, you know, the word ai. >> exactly, exactly. >> it's not going to be like, okay, we're back to normal and now meta just gets explosive growth in the next couple of quarters >> this is super interesting, joanna if the same analogy in the

financial crisis was people migrating to online for instance, is the migration now going to be to social, streaming, and ai? >> i don't think that's different from where we have been yes, we have more buzz words in the mix now. i agree with mark, there's got to be another buzz word that add verytizers get excited about i think ai is that right now i'm not sure what ai means for that, but we'll see, even though i said ai like 15 already on the show >> you're not seeing anyone to commit budgets here yet. >> chad pte is very exciting, but when google first came about, there was just so many people using it before they had an ad business,and they were using it constantly. with chat pte, it's like this is a fun toy to play with >> when google first started, we

were like wow, it's so clean, and little did we know it would become one of the greatest ad platforms of all time. >> exactly >> to that point, i will say the excitement around it, that's not only making consumers excited, but the tech companies have been so sort of pushed along. it really lit something under them i'm not going to say the three letter word, but it lit something under them to get ahead of ai. so maybe that inspires the entire industry. >> yeah. and i think also what is little known is that add vertisers are not ready to accept the reporting from google and meta but now they're developing their own models, almost like investors coming up with their own ways of looking at the data. again, they're looking for new places to place dollars. so i think streams is going to do very well >> for your sake, we hope. thank you both we appreciate it today

still ahead, asia's richest man is fighting to save his fortune and reputation after short seller hindberg spuput ou scathing report. we have the latest, next as we head to break, here's a look at the map. utilities, the only group in the red right now, with materials and consumer discretionary leading the way. backft ts. aerhi another busy day? of course, you're a cio in 2023. but you're ready. because you've got the next generation in global secure networking from comcast business, with fully integrated security solutions all in one place. so you're covered. on-premise and in the cloud. you can run things the way you want... your team, ours or a mix of both... with the nation's largest ip converged network, from the most innovative company. bring on today with comcast business. powering possibilities™.

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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. welcome back adami enterprises climbing today after getting a vote of confidence from investors. india's largest secondary share sale yesterday after sinking last week after being accused of fraud and price manipulation welcome to both of you

why is this having such a big impact not just in india but around the world >> he needed this, a $2.5 billion equity sale. we didn't see too many retail investors, and the largest equity sale india has seen it's helped stop the downward climb in adami's stock price for now. but in the meantime, over the last week, we have seen billions of market value erased due to these stock price allegation concerns >> what do they boil down to when we heard fraud and manipulation, and this is the most powerful man in the country it sounds like >> he is and the hindenburg report, they claim that adami is accused of stock price manipulation using shell companies that are using their money to pump up the stock of adami enterprises it's a report that many are concerned about. >> what do we know about him,

robert >> he was like a super nova of wealth last year he was the world's second richest man at $155 billion. last year, all the billionaires in the world lost money, he gained $55 billion he came out of nowhere just over the past four trading days, he's lost around $30 billion, one of the biggest wealth losses that we have seen recently and he had a very good day today. at least one of his main companies saw their shares increase some of the other shares, there's a whole complex of companies, very complicated in their multiple shares of companies that trade some of those traded down today. they set new limits on those shares but the big challenge now is his debt he's got about $26 billion in debt across this group the bonds, some of which are u.s. traded, are now trading around 73 cents on the dollar. so yes, he had this offering that went off today that was a

good day for him but there are these bigger questions that relate to the debt, and if the debt is trading at a discount, what does that say about the equity >> has he done enough to kind of address the concerns at the heart of this, and what has been the reaction by the public in india? >> to robert's point, the amount of debt on the balance sheet, quest we've seen a huge selloff from yes bank, life insurance, all down over the past ten days. at the same time, as adani has been growing its empire, the exposure to foreign banks happen been increasing, as well there was recent acquisition of a cement company by adani for $10.6 billion, underwritten by standard charter, deutsche bank, as well. and private equity played a role, as well.

apollo, who we spoke to a couple of weeks ago, gave adani a $750 million loan that's the mumbai international airport. so his tentacles are all over the infrastructure story >> that, robert, kind of reinforcing the questions being raised here? >> it is you know, the other broader question, which any investor would ask, how does the stock go up 3,000% in just five years which now trades at a multiple at a pe of over 400 times. setting aside all of the offshore allegations and everything else, just any stock up 3,000% in five years, with a 400 multiple, would raise questions to any investor. >> what is the significance of $2.5 billion, while big, it's a drop in the bucket of what this company and man is worth what would be the best use of

those proceeds, robert >> they will expand the shareholder base and pay down some of that debt. the question now is, abu dhabi had about $2 billion so they were in. a lot of high net worth in investors in india were also investors in this. so have they kept their faith, or do they continue to lose their faith going forward? that's why tomorrow's trading and the rest of the week will be really interesting to watch. >> absolutely. it doesn't feel like this is the end of the story guys, thank you for that still ahead, stocks, session highs right now. nasdaq continues to lead the way with a 1.1% gain microsoft, amazon and tesla having the biggest point impact on the s&p today tesla up 3%. and virtue financial share

robert greifeld is particularly interested in the future of one of microsoft's big bets. he joins us next to discuss here on "the exchange." 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?

welcome back to "the exchange." stocks are higher on this last trading day of the month and the s&p clocks its best january since 2019 but we're just about 24 hours from the fed's next rate decision are the good times about to be over let's ask the chairman of virtue financial, former nasdaq ceo and a cnbc contributor welcome. >> great to be here. >> what's your spidey sense about the market and the economy? mine is a little worried these days but you'd know much better than i. >> i would say this, when you have a january effect after a very difficult prior year, i think it really signifies nothing. so i see the markets gone up in january. i don't think it means much for how we're going to play out for the balance of the year. >> yeah, don't crush people's

dreams too much here what about the people who say, well, but we priced in the downturn and the labor market is still strong a soft landing is still possible and it's going to be off to the races? >> well, see, i think we're in a period of time where the smoke is still up. you this morning talked about basically the employee cost index, it went up 1%, and the expectation was 1.1% so if you're in the soft landing camp, you have the right to say, hey, this is a better number and i think we're on the right path. if you're on the hard landing camp, you can say, well, it's still 1%, which is historically a very high number so i think the smoke is in the air. three months from now you'll have a better sense of where really the market is going to be we're kind of in a 60/40 time when you take surveys. even more shocking to me is when you have 44% of the intelligent people following the fed saying there's a chance the fed is going to reduce rates this year,

right? and you have another 44% saying that's crazy, no way, no how so smoke is in the air three months from now it's going to be easier to be a forecaster. today i think it's quite difficult. >> let me ask you about sort of just the fundamental biggest change here, don't want to miss the forest for the trees with interest rates where they are, how much of a headwind is that for corporate america >> i think the sand is in the gears and we don't know how significant that will be i don't want to play my hand in terms of what i think might happen. >> please do >> well, with respect to the interest rate rises here, there is a delayed effect, everybody knows that you throw sand in the gears, is that going to have the gears stop or just slow down so i don't really know so i think again in three,six months from now we'll see what is the true impact of all the fed rises we had in 2022 my bias is that are we're going to go into not quite a soft landing, a little harder than

that. >> you are a brave man, if i may mention, to be launching a hedge fund in this environment or maybe you think that that's kind of -- you want to kind of get in when people are going, wait a minute, i need someone who i can trust to navigate through a period like this >> well, when people ask me about the markets, i always say don't bet against technology, right? it's just a hard thing to do and you would have been wrong over the last 30 years. technology will particularly advance. now, i have particular expertise in financial technology and that's what we're going to focus on with the hedge fund but with respect to technology, one of the highlights of the year for me was fourth quarter '22 when i started playing with chad gpt it was -- the future has arrived. when you first used that product, kelly -- >> totally. >> -- you knew the world was going to be different. so technology is going to be nothing many things. chad gp is generative ai

when i think of the market, i think how do i make sure i'm not betting against technology >> and i guess what's so fascinating about this is most people would agree with you, and yet look at the market and say this is the part that's most hard hit by rate hikes how much of the technological innovation, capacity, certainly the share price increases that we saw over the past ten years was just the flip side of low rates? >> i can guarantee you one thing, kelly the people in the development labs at chad gpt did not pay attention to what jerome powell did last year. they do what they do so i get discounted cash flows when you're trying to come up with an equity analysis, but in terms of innovation, innovation doesn't pay any attention to the rates. if anything, these developer, you want to get them out to eat on time, not pay attention to what the fed is doing. >> fair enough i would be remiss not to ask you

what happened with the trading glitch last week people are demanding refunds, there's investigations going on. they're saying there was a manual error any insight? >> i don't have any special insight. i'm hearing it's a backup system in chicago it's somewhat ironic that the backup system knocks down the primary system but that's somewhat the life in technology others do a great job of technology but it's obviously not perfect. we saw that clearly with the airlines so they did have a backup system issue. they resolved it in terms of how did they adjudicate the claims of the customers, i have no insight not involved with that. >> there is something -- thinking through that and also when we had those flights grounded across the country on what just appeared to be kind of a random error, it made me think about have we increased the fragility of our infrastructure by moving them into the land of software and technology.

we all think, oh, how could it ever have been that we ran those systems manually maybe we need to think about how to run them better or have more redundancy so we don't have flights grounded for hours because of one system failure or prices for the u.s. stock market thrown into disarray because of a manual error it's ironic something meant to be so sophisticated is making us more vulnerable and fragile in some ways than we were before. >> i would say this, your points are well taken but i'd make sure we don't look back at the past in some romantic way i remember the first time back in the '80s i opened up the back of a mainframe computer and it was a nest of wires. and the reliability of that thing was so low so when you think about how much we're doing in an automated fashion today and the instant of problems per unit of processing power, our problems have declined dramatically.

with that being said, we do need to get better. the world works on that and we will get there. >> well, all i know is i have a feeling -- when the new fund, when there are these ai opportunities out there, we know you're going to be poking around, possibly involved in a big way. >> the future is written in code, that's for sure. >> bob, thanks for your time today, really appreciate it. bob greifeld. i'll join tyler mathisen for "power lunch" on the other side of this quick break. 24 hours to go until the fed decision there he is getting ready. we'll see you in just a moment s? you know, it seems like hope and trust are in short supply. [clap] now, as businesses we can blame and shame. or... [whistles] we can make a change. create more equal opportunities. [clap] it's time for business to show its true worth. because it's not goodbye, world.

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even if you like a house, lowball the first offer. the house whisperer! this house says use the realtor.com app to see three different estimates. also, don't take advice from people who don't know what they're talking about. realtor.com to each their home. good afternoon, everyone, welcome to "power lunch. along with kelly evans, i'm tyler mathisen coming up this hour, the two big things the markets are watching, earnings and the fed we will get you set for tomorrow's big decision on interest rates and break down all th