>> and stephanie >> dr pepper, down 13% from its highs in the summer. i think the guide is conservative, and the cfo has been buying stock hand over fist >> and you don't own it, yet thanks, everybody. i'll see you on "closing bell. "the exchange" begins right now. ♪ ♪ thank you very much, scott welcome to "the exchange." i'm kelly evans. we begin with the big story of the day. jay powell wrapping up his testimony before the senate banking committee. we have big market moves he said the fed will stay the course until the job is done, and that could include higher interest rates than previously anticipated and a quicker pace you can see the dow down 400 points on those remarks. interesting to see the nasdaq outperforming the ten-year yield. the two-year yield at almost 5%.

take a look at the screen behind me for the ten-year. now we're seeing it calm down a little bit can that help equities out as the dow is down 400, any way we're hitting fresh lows here. it's almost exactly a point right now. this is the most extreme since september of 1981. let's get to bill lee, but before that, let's get to steve for all the headlines. testy exchange there with senator warren, and what felt like a man who wanted to deliver some new information to the market and it seems to be taking it that way. >> yes, he did, kelly. i'll say he did not deliver certain information. but let me go over -- you hit it, kelly, the three points that matter how fast well, faster than maybe you thought before how high maybe higher than we previously

thought. and how long restrictive policy will be in place for some time. so that creates that whole hawkish outlook. j you can take a look here, it was 23% before he spoke. and now just so you know how things are moving, kelly when we made this turn a few minutes ago at 54%, now it's 58%. so that's becoming the odds on probability. now take a look at all of that combined, and how that affects the fed rate outlook a new high for the terminal rate at 5.63, and a new high for the year-end rate, which is 5.46 or so on that what he didn't say, kelly, was this word of disinflation. he used that term 15 times in the december press conference. nine times in a dovish or neutral way.

he used it just once in this hearing. he was there by the way a lot longer in this hearing than he spoke at the press conference. the only time he used it was in context of him saying that he doesn't see it in the core services sector, ex-housing. bottom line on that, he gave the doves nothing to trade on. >> sure. he said something to the effect of, the process has reversed somewhat maybe sort of like inflation reversed or language like that >> absolutely. he did say that -- he kind of took the governor waller speech and said how important the january data was not only because it was higher than expected, more economic activity, as well as higher inflation, but it's the revisions that changed the paths and made that idea of the stepdown to the 25 basis points something that i think they're reconsidering now. >> bill, are you in the 50 count next meeting now >> i think the markets have underestimated how much is

needed what we are missing is some guidance as to how much is enough powell has said where we are, where we're telling you we're fog is not enough. the one thing that steve and other people haven't mentioned is, the guidance at the federal reserve report gave us, given the policy rules that people have been using to assess different types of pollicpolicio would need 7% to get us back to 2% inflation those numbers are not even on the table. the message is yet to come, and we might actually see if this story disappears and the economy is hotter than we thought. we may be seeing 6%, 7% numbers between now and the middle of the year >> steve and i both thought we were just talking to taylor about this a couple of days ago. he was at 6%, bill but either way, it seems -- let's talk about the yield curve inversion. the ten-year yield at 4% now, i

have to think every time i see these numbers. you're saying we're going to 6%, maybe 7% the ten-year is at 4% and not going back to the highs we saw in the fall? have we started the process whereby the higher the fed funds probability goes, the lower the ten-year yield might go, because it's so concerned where that growth trajectory is taking us >> the fed is not focused on the inverted yield curve but on what it means for the economy if we have a slowdown in inflation, people adapt their behavior, we get the soft landing they're hoping for, we have lower ten-year rates. if you have a crash and hard landing, we also get the lower ten-year rates the fed itself, of course, prefers that soft landing and they're hoping through this jawboning, they're going to be able to get people to change their behavior early enough to avoid the hard landing

the inversion of the yield curve gives us two scenarios, and which it will be depends on how credible the fed's statements are and how much wall street takes it to heart. >> probably one of the worst pieces of news this week -- or maybe it was last week, when it shows that for the quarter, labor costs are still 6.5%, productivity is fallen, so it's now showing evidence of labor hoarding, that firms are reluctant to let people go which means inflation is higher than it otherwise would have been, and we could see more hikes in 6, 12, 18 months. this is going to be a long period of waiting, waiting for these conditions to fully set in >> kelly, i've given up a lot of my optimism here but one thing i've not quite given up yet on productivity, and i can -- i think we can do a segment on this down the road. but right now, there's a lot of

volatility in the productivity numbers, because we had this surge of productivity at the beginning of the pandemic, when some of the lower productivity workers were let go, and now they have come back. so i'm not quite ready to give up the ghost i think we have maybe had some improvements in productivity from different processes that have come out of covid so i remain optimistic on that, but i don't think we're quite giving that up what does concern me is the issue of whether or not we have enough workers in the workforce, and that was discussed i think that we are still several million short of where we relative to having enough workers to do the job. >> i thought it was interesting. he is being asked more about the pockets of the economy commercial real estate was one of them. he tried to say, you know, we don't think we have to have a worsening labor market to bring inflation down, but it's now unit labor costs driving inflation higher this is not about the supply

cheney more. this is directly an issue of the tightness there. it seems unavoidable >> you have to watch out that the unit labor cost is an aggravate number some companies are doing quite well in keeping their costs down and changing their business models and using technology to make workers more productive other parts of the economy have lagged behind on that. so you had this big spike in labor costs because we had seen the flipside of the huge downward drop in unit labor cost at the beginning of the recovery but one thing we have to keep in mind is that disinflationary forces are still in place going back the last ten years, because technology and the changes in globalization are changing the way business models are going about doing their business and i think going forward, we can see that we will have better profits and better results if we can keep up the pace of productivity growth. i think steve is right, productivity is going to be the

heart of what the future will hold for inflation >> here comes ai that alone could save the whole economy. if we don't have to spend our time catching up on these group chats, we'll be fine thank you both very much as we react to stocks at session lows the dow down 470 points, even as the ten-year yield has dropped the three-year note went up. rick, what is happening out there? >> yeah, i'm pretty sure the three-year note auction did not push equities lower. if anything, it should stem the slide to some extent the three-year note auction was pretty good, gave it a b plus. but it didn't have the type of horsepower to move equities, but what it does do is it gives us good information that investors are still willing to step up to the plate on a short maturity. but let's all keep this in

perspective. it was quite a big concession today as rates dropped after mr. powell was done speaking so b plus. 40 million, three-year notes, 4.365 is the yield so pricing was pretty good we put that aside. 2.73 was the second best bid to cover going back to mid 2018 and dealers. the buffet table after investors got done gorging themselves on three-year notes, there wasn't that many left dealers took 16.8% i have a 20-year database. i don't see a smaller number there. so very aggressive on the investor side. tomorrow, of course, we have 10s followed by 30s. mr. powell's testimony didn't seem to have huge impacts on the market outside of what you

mentioned, kelly that, of course, is retesting levels we haven't seen in over four decades as that two-year note really escalated this morning with respect to dropping price and rising yields. i see 103. minus 103 basis points is the most inverted that trade has been today and the session is not over yet >> rick, thank you we appreciate it let's get back to the market session lows across the board. what should investors do now let's bring in michael and courtney welcome to both of you courtney, so nancy had a piece this weekend it's interesting to see this is where investor's minds are going. you know what? maybe the volcker years weren't that bad for the stock market.

equities did okay after volcker threw us into a double dip recession. >> what's interesting to see is we continue to have an inverted yield kufb we saw the two-year treasury move more than the ten-year treasury so inflation is still coming down the big question is how soon it's coming down and how quickly are they going to raise interest rates and for how long this is going to be more of a short-term problem markets see this as longer term. thi it's the bond markets you want to look at the credit spread, when you look at yield that the corporate bond is paying versus a treasury bond, investors are with the higher yield right now there's not a huge difference between corporate yield and treasury we see inflation is still coming down over the long run, a recession is not necessarily being priced in. and that hasn't necessarily changed in the bigger thing is going to be

the data points on friday. we get the jobs report, the cp ireport next week. we need to see what is going to happen with those. >> michael, what do you make of the action today in response to powell's comments? >> honestly, i don't think there was anything new here. in our view, the terminal rate was always going to be between 5% and 6 k%. and i don't think that changed i don't see the strong risk -- you know, soft landing, shallow recession, there's not much difference between those the real risk is a deep and long recession with the employment picture so strong, i don't see that happening. that could be a lagging indicator if employment falls quickly, all bets are off the table. until you have that happen, people are working, spending, propping up the economy. it's allowing companies to push through some pricing power it's allowing businesses to plan it allows inventory to keep

growing. so the question is, at what rate does the economy not grow with respect to interest rates? we don't really know that yet. going back to the bolder comment, we saw in the 1980s that we still had generally high interest rates, because they were coming down from the real high levels of the early '80s, so the u.s. economy in the past has demonstrated that it can grow at higher rates for longer. but it will not be true this time around, because we're not talking the 1980s, obviously. we expect the inflation to come down, given the offsets of interest rates working their way through the economy. but that would be offset by stimulus from the "inflation reduction act" and the budget bill that hasn't worked its way through the economy yet.

so there's a push-pull scenario on how quickly inflation could fall further from that 4% to 6% range. was both like energy oil is dropping as well today in response it's still down year-to-date when we talked to pioneer yesterday, they said they could make money at $40 a barrel yesterday we were still at $80 so they might feel like they're sitting pretty so should investors stick with it >> i do think you should stick with it. i think the fundamentals still look good, and it's not just pioneer. many of the energy companies are a lot lower than oil prices right now. there's this huge supply and demand constraint. as china continues to reopen, that only makes that worse the average dividend is 4%, which is the best yield in the industry in the meantime

even as you wait for some of these price increases, it's paying a great dividend. >> thank you both. courtney, michael. dow down 461 coming up, the ceo of conoco phillips with his take on the weakness in crude. his company is underperforming to start the year. we'll get to his latest on the largest and most controversial pending oil development well in the world. remember, when there is no alternative was all the rage last decade? times are different, and we're looking at where you can get the juiciest deals nowadays. that's next. here is a look at the broad landscape where the dow is down 1.4% today "the exchange" is back after this

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welcome back to "the exchange." thanks to the massive fed rate hikes, there are alternatives to putting your money into stocks strategists are coming up with all kinds of acronyms.

one of those possible alternatives, no matter what you call it, are muni bonds. is it time to get back in? let's ask jamie ikeland, and dominic chu is here as well. >> we love it. >> the short end, the bills are up like 18 basis points. people who bought a couple of weeks ago are like, what am iing to >> the dynamic you're seeing in treasuries is having a knock-on effect the municipal side has some more fundamental drivers of the trade, other than just what's happening with interest rates. but still, if you look at the taxable equivalent yield you can get in certain parts of the high yield and investment corporate trade markets, it does provide some interesting opportunities >> jamie, we turn to you on that note why is it that people were pulling money out of the space flows have been a head wind for

a while now, haven't they? >> they have, kelly, and it's great to be back on the show what happened in february is we saw treasury rates drift back higher, pulling muni yields along for the ride but it's creating, as you point out, a nice entry point into the market i think the big thing that investors are so excited about and gets us excited is income is back and when you look at some of the yields that exist in the marketplace right now, just the full market muni index, which covers zero to 30 pounds, has a short duration of around six years. it's yielding around 3.6% with a aa rating. that's a taxable equivalent north of 6%. we think with this pullback in rates, investors should start looking at the muni bond market and get involved >> jamie, is the issue that people are afraid to pile in because they don't know when rates are going to stop rising

>> i think that's on people's minds. last year was an incredibly tough year in the fixed income market wherever we are in the fed cycle right now, everyone would agree we're moving into the later innings of the fed tightening cycle. so you're they have going to time a bottom in the market. but when you look at the yields available, which are hundreds of basis points higher now than they were this time last year, investors should afternoon and getting involved in the market and not try to overthink timing the absolute bottom. that is very, very difficult to do, even for bond professionals. >> yeah. and state and local runs by its own economy in many ways it's benefiting, because this was the recipient during the stimulus thank you for pointing that out. if i were a muni investor, i would want to make sure that these are five-year investments,

sometimes longer i would want to make sure when that tide recedes, in three to five years and the public sector feeling the pressure, am i going to run into a problem with the bonds? >> from a portfolio or bond thinker stand point, it's much more of a difficult task to figure out where the relative strength will be in certain jurisdictions, locations, different types of projects, whether they're more tied to the taxing authority or the revenue generated by those project what it comes down to is whether or not there is a leg-in option right now. for people who use mutual funds and etfs to gain this muni exposure, you can put in weekly or monthly deposits that leg in. there's no doubt this is a more attractive level than it has been in a while. but it's tough to go out there and just pick the bonds yourself opposed to having somebody do it for you. >> jamie, is there almost too

much competition we were talking about treasuries people can go, okay,ky go to this website it's federal government and we can get 35% on a two-year today -- 5% on a two-year. why would people say munis are a much higher asset class. is the problem too much competition, too many things offering high yields >> it's an exciting thing for fixed income investors treasuries are a very good investment right now when you tax adjust high quality munis, even in this environment, you end up with more basis points than you would owning a treasury people have to remember that the historical default rate of munis is almost a negligible number. it's a place to be safe and get great returns. and even do better than treasuries, which are throwing off some really attractive deals

right now. >> treasuries are exempt from state and local tax. >> but not federal >> and munis are exempt from all of them. >> yes >> is that right, jamie? >> that's right. if you're a new york resident, kelly, and someone bought a new york bond, as you point out, it would be exempt from federal, state, and if you lived in new york city, local taxes, as well. >> it's why people are saying look at those markets in treasuries and certain other parts versus say certificates of deposit with similar yields. >> totally exactly. triple tax exemption is a powerful thing jamie, thank you for your time today. and dom chu, our thanks, as well you can still pick up some good yields in stocks as well. some paying more than bonds. a new piece screened the largest 1500 stocks with yields above the ten-year good balance sheet for the debt-to-equity ratio, and a

one-year turn that's better or in line with the s&p three examples that cropped up -- >> the full list over at cnbc.com/pro still ahead, another round of layoffs in the works at meta, after mark zuckerberg declared this will be a year of efficiency how much more efficient will things get for all of big tech we have the latest on that meta is up about a third of a percent. and thirty, sportswear and cybersecurity. are any of these names worth buying and the dow near session lose. it's the banks dragging down the blue chips jpmorgan and golden sacks the worst performers merck, the only name in the grn ghno back after this.

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it's a place to change the world. loopnet. the most popular place to find a space. welcome book "the exchange." we have a lot of red today the dow down 465 points, with just a hair off session lows that pretty much happened this hour the s&p is below 4,000 take a look at this. so many people watching these levels to see if we can break out above them or not. right now, we are below 4,000, while the nasdaq is down three quarters of 1% shares of starwood up 10%, but the ceo warning on the earnings call last night about the worsening situation in commercial real estate banks are shutting down credit on smaller players any sales are distress sales, and warning that the fed has no idea, this is a quote, has no idea it seems what's going on in commercial real estate markets

fed chair powell was asked about it this morning and he said the fed is monitoring smaller banks exposure but banks are struggling again today, down for the sixth day in the past seven, with zions down 5% and truist, a couple of the worst performers the industrials are only slightly lower today and the xli is just 2% off its all-time highs and up 24% since october. in fact, united airlines is lead thing group with a 45% rally this year, hitting a new 52-week high today, on pace for the best quarter since 2010 let's get to tyler mathisen now for an update. >> good afternoon, everyone. in a major anti-trust action, the justice department is going to court to stop jetblue's $3.8 billion proposed purchase of spirit airlines because it would limit choices and drive up ticket prices.

>> the impact of this merger would be particularly harmful for travelers who rely on what are known as ultralow-cost carriers in order to fly those include working and middle class americans who travel for personal opposed to business reasons and who must pay their own way. >> the airlines say they are confident their proposed merger is pro competitive and will continue with their plan to create what they call a compelling national challenger to the nation's biggest carriers after a massive search, two of the four americans kidnapped after crossing into mexico have been found dead. the other two returned to the u.s. today in ambulances, with a police escort. mexican officials say one of the survivors was injured. in paris, police fought with protestors opposed to the government's plan to raise the country's retirement age

french unions are threatening rolling strikes that could, kelly, go on for days. back to you. >> tyler, thank you. welcome back, by the way up next, crude prices, capital spending and a controversy over conservation. no shortage of topics to cover with the ceo of conoco phillips. he'll join us next throughout march, we're celebrating women heritage share your stories here is the ceo of ups >> 100 years ago, ups hired its first woman into our company that trailblazer's name was jesse bell she worked as a clerk stenographer in los angeles. today, her legacy is thriving, with women playing a critical role at every level of our workforce. i'm honored to be the first woman to serve as the ceo. today, 1/3 of our c suite is

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welcome back to "the exchange." as we hit fresh session lows, the dow down more than 500 points, the price of oil down 3% after comments from fed powell our next guest can shed insight on why prices are high and what he expects out of the biden administration let's bring in brian sullivan with an interview with conoco phillips ceo ryan lance. >> thank you very much a lot to get to with interest rates, the economy and oil demand but first, ryan lance, thank you. >> thank you very much >> we've got to talk -- i don't want to go into the weeds too much, or the tundra, as it were. 20 something year project in alaska it's been signed off on, the indigenous tribes support it, the people of alaska support it.

you are awaiting a decision from the biden administration on whether it will be approved or not, and what in form. tell the audience what you expect -- i know what you hope -- and when we might know something. >> well, what i expect is a very good question. the honest answer is, i don't know i think this could go either way, and it's all a political decision at this point the administration is getting exactly what they have asked for, which is companies like mine to lean in and make more capital investment, that's what the project is all about complete alignment with all our stake holders. so it's become a political decision, trying to balance the environment and what is needed today to get us through this transition and we hope to hear this week. they're under a 30-day clock that started in the first part of february. so we should have a decision by this week. >> it's a big deal would you consider it material to shareholders at conoco

phillips >> i wouldn't call it material it's important in the state of alaska it is important to our company we're one of the last people still exploring in alaska, and we're finding great opportunities. it's just ashame it gets wrapped around the axle of this permeating process >> the indigenous tribes support it, the land management supports it the worst could be that the biden administration approves it, but only in a limited way. then it's not economical for you. so it has to be what they call three pads >> so three spots to drill the wells from to develop the field. we have been very clear with the administration that a two-pad approval is not approving the project. >> but then they can say they approved it. >> that's what people worry about and why we have been very firm with the administration

a two-bad approval is not an approval of the project. >> we had senator sullivan on -- no relation by the way -- from alaska here is a little what he had to say about the project. >> this isn't new. the leases on this were -- conoco paid for them they paid over $100 million in the late '90s, paid its fees to the federal government since that time, has invested $600 million already >> it's obviously been 20 something years. roughly how much -- >> in terms of the leases, et cetera, we went out and drilled the discovery well we have had appraisal activities going on so we spent up to $500 million over the course of this period of time, doing all the appraisal

work, doing the engineering work, all the preparatory, going through a four-year permit process. it's not trivial the amount of dollars we have spent. we've shrunk the development down to the smallest thing, we're utilizing the newest technology to do it. that's why the scientists have weighed in the department of interior will have weighed in. there is an acceptable way to go forward. >> kelly on the intro showed oil prices down. everything is down today the fed is raising rates do you have a macro economic view will it kill oil demand, tightening rates this aggressively >> i think it's a great question we think it's going to be luc by and lumpy the first half of the year we're constructive in the second half of the year

mobility is picking up in china. we think it's going to be a soft landing on the recession, certainly in the united states it looks to be europe is out of their -- they survived what -- >> they survived but -- >> they still have a problem but we see the volatility in the first half, the growth and more constructive market coming in the second half of this year but that's going to impact inflation and have impact on other things that are going on the fed is going to have to take that into account. >> can you explain to people watching, because we hear this a lot again, why respect we producing more oil we talk about that and then gasoline prices there is a huge difference between oil and gasoline exxon, your competitor, is increasing refining capacity for the first time in a long time. even if we produced more oil, say you decided a million more a day, could america today refine that into gasoline or would we just have to export it any way >> there's certainly a balance

in the market. we export a bunch of product, but you're right, we have lost a couple million dollars a day of refining capacity in the u.s some of that is shut down permanently in the united states so we're fortunate to still have a net excess of gasoline and diesel here in the united states, but that plroblem is getting exacerbated. >> ryan lance, ceo of conoco phillips when you get a decision about the well up in alaska, let us know thank you very much. >> thank you >> kelly >> great chat. brian and ryan, thank you both by the way, big day tomorrow with the premiere of "the last call" beginning tomorrow night don't miss it. set your dvr still ahead, meta reportedly set to announce a fresh round of

la layoffs, with stocks trying to hold some gains today. we have the details, next. and look at the sectors as we go to break, with the dow down 519 right now everybody is in the red. energy, by the way, is one of the -- middle of the pack. financials are the worst they are down 2.5% discretionary, that's down less than 1%. the nasdaq down only 1%. back in a moment can see if iy 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 with its forms and submit the application. go to getrefunds.com to learn more. it's hard to run a business on your own. make it easier on yourself. with shopify, you have everything you need to sell online and in person. you can have your inventory, payments, and customers in

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welcome back meta shares trying to stay in the green amid the selloff they're a tenth of a point away from turning negative. this as bloomberg may announce thousands more layoffs as soon as this week, part of a major cost-cutting plan announced last november investors cheering it with the stock doubling off the recent

lows does it mean that facebook and instagram, meta's two big properties, are giving up their hopes of returning to double digit revenue growth let's get over to diedra with more >> when it comes to layoffs, measure twice, cut once, that is typically a good or desired philosophy but that is proving difficult in the colonel environment. meta, which has cut 13% of its workforce, is planning another round that could affect thousands of workers zuckerberg has cuts to middle management and he never said that he was done rather that this is the beginning. here he is on february 1st >> i want to discuss my management theme for 2023, which is the year of efficiency. we closed last year with some difficult layoffs and restructuring some teams when we did this, i said clearly that this was the beginning of our focus on efficiency and not the end. >> that has also helped to

revise meta's share price, up 61% since the layoffs. still, they underline the very difficult moment that big tech finds itself it's not just meta there is alphabet, microsoft, as well amazon doubled its workforce and begs the question, are the others done with their layoffs the seattle times reports that microsoft cut another 700 jobs bringing total layoffs to 2200 since january. layoffs continue to roll in. meta is making a distinction here that it's hiring in other growthier areas. so as you have seen, companies have a tricky line to walk they have to please investors but not scare the workforce. but it's safe to say, meta's

workforce is on edge >> those graphics show that meta just doubled its workforce is that because more people were using facebook and instagram when covid hit there it is, the workforce up 94%. shouldn't we expect a lot more layoffs? >> i'm glad that you make this distinction. a lot of the amazon's hiring happened at its factory and we know that there was this huge boom in e-commerce amazon only cut 6% of its workforce versus meta's 13%. but google, they have cut a very well percentage in terms of its workforce. investors have certainly called for it

i think what this week tells us is that they may not be done, and why not? look at the stock price. i know mike santoli earlier today was saying that meta has a higher multiple than google. you haven't seen that in years a lot of that is largely because of that cutting that zuckerberg has been on. >> founder controlled company but he knows how to listen to what the investors want. thank you very much. deirdre bosa still ahead, inflation i.t. spend, the perils of celebrity partnerships. the stocks are lower today but we've got a dow down 556 good luck finding some green we'll dig into them next for businesses of all sizes, there are a lot of choices when it comes to your internet and technology needs. when you choose comcast business internet, you choose the largest, fastest reliable network. you choose advanced security for total peace of mind. and you choose a next generation 10g network

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welcome back, it's time for earnings exchange. we've got the action, the story and the trade on three names about to report their results. and we'll start today with crowd strike they're after the bell, and their last quarter was a doozy shares dropped 14%, which gave weaker than expected revenue guidance, and our trader today is gina sanchez, chief market strategist and a cnbc contributor. tough day today, gina. i don't know if that makes it easier if you're reporting what would you do with crowd st strike >> crowd strike is a tough one

this is a company that is still growing even though they had a hit. and expectations are that they'll continue to grow revenues but it's a company not making profits, and the market has not been kind to nprofitable companies. even though this segment is unquestionably poised for continued growth and the platform relationships they signed with amazon web service and the hardware provider dell, these are great ways to sell their product, and they will eventually become profitable in the meantime, you know, they are just not hitting the park and i don't think that the market is going to be very kind to them as we go through this next round of expected and quite frankly unexpected continuation of rate hikes. >> you're steering clear of it for now. you know, the p.e. is still 67 it's not exactly a bargain we'll see if that improves we've got brown foreman, a different story but the shares spiked during the pandemic but they're now back to roughly where they were pre-covid. what's the next catalyst for the stock here

and they've got supply chain, inflation, and the changing consumer and all of this to worry about. >> yeah, they're getting hit on the inflation side, and you're seeing it in their margins this is a company that actually had a higher profit margins or higher operating margins than pierce even though the margins are falling, they're healthy at 30%. that's not bad the bigger challenge that you had is that this has been a very high quality stock, defensive stock when people get -- when you get a recession, a pandemic, people drink we saw that during the pandemic, and we would expect it to go on, but it is highly priced, that quality is already priced into the stock. i mean, this is a stock that we own because we think it's a high quality stock. if you believe powell that he's just going to keep going until eventually everybody losing their jobs, well, then you would be willing to paying for that quality. that's what investors have to way, how much is quality worth

right now. >> let's turn to the adidas and nig nike everyone wants to know what they're going to do with easy inventory, product innovations, they've got a new ceo. if you go back to the recent october lows, both stocks have seen a nice pop. nike is up 50% during this time. adidas, too. adidas is still 50% off the peak 21 levels, while nike 30% below highs. what would you do with these kind of stocks and this climate? >> look, this is a challenge, first and foremost, you have to remember, this is the kind of apparel and buy that is not necessary. right? and, you know, add to that the fact that they're going to lose a billion dollars of production revenue off of, you know, dropping kanye and that's going to hurt them about a half billion dollars worth of profitability that's not a great situation to be going into potentially a worse recession than we were expecting. i think most investors were expecting a short, shallow recession. powell's comments today don't

support that >> that's really interesting can you highlight that i was going to ask about the broad markets. is that what you think the main take away is this morning? >> i do think that what powell is saying is that he is going to keep raising rates until he sees inflation back off, and the problem that we see with that is that what's driving that inflation is a shortage of human beings, of people, of people who can work the jobs, and if, in fact, he does that, he could plunge us into a pretty significant recession, and it's just currently not priced for that most are priced for a shallow recession. a fed-induced recession could be very painful. >> that's so interesting that's kind of, to me, the headline of the whole show we'll leave it there thanks for your time we appreciate it. >> gina sanchez. that does it for the exchange. with stocks near session low we're going to stay over the market selloff dow down 556

in power lunch, dramatic moves, wing watchers getting into the antiobesity drug market. dr. scott gottlieb is weighing in, a controversial story. tyler is getting ready, he's back, so happy, and i will join him on the other side of this. i'm happy, hopefully he's happy, see you in a moment.

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