or more she can sell all or part of it to coventry for cash. even a term policy. even a term policy? even a term policy! find out if you're sitting on a goldmine. call coventry direct today at the number on your screen, or visit coventrydirect.com. welcome to "power lunch," everybody. alongside contessa brewer, i'm tyler mathisen glad you can join us coming up, is this banking crisis over? jamie dimon says no way and the repercussions will be felt for years. but we'll speak to an analyst who is upgrading one regional bank saying there's value there. >> it took the best way to get laid off in person in the office or from the comfort of your home mean, most of us who have been

through it before how about not. our panel will discuss that and several other hot topics of the day. first, let's get a check on the markets. stocks mostly lower, a weak adp number on jobs raising concerns about the economy. the dow has a small gain up.02% and the nasdaq and s&p are off and in the red as is the russell 2000 tyler. >> speaking of the nads lack, let's go there and kristina partsinevelos pass more. >> an earnings report from adp shows a sector downturn. utilities, health care and higher are the best performing and tech and discretionaries are the worst group which leads me to what's going on the concerns about the economy are hitting high growth names

like zscaler, crowdstrike, down 7% and these are the biggest losers on the nasdaq even named like palantir are saying they are expanding its partnership with microsoft from the public to the private sector and the doug is 4.3 names. you've got the utility names, the defensive plays winning on the nasdaq american electric power is up 4%, and xcel energy is up 4% and another bright spot is u.s. health care providers and we can see that with the ihtf, a good barometer, on pace for its fourth positive session in a row led by united and molina healthcare. >> today's adp data show more signs that we could be heading into a recession, but as slowdown risks climb, we want to break into three key sectors that wall street is watching,

banks, technology and industrials. zion is getting an upgrade from buy to bear. the weakness in the group is beyond overdone and jeffries raising its price target on meta saying interesting in ai to boost revenue there and caterpillar is lower today and down 2% so far this week growing concerns around the health of the global industrial space. we've got through analysts making these calls and covering the newsworthy names here to weigh in now we'll begin though with zion, that stock down 43% in the past month. here to discuss is baird's david george i guess babies and bath water tarring with brushes that seems to be what you're saying here. this company doesn't deserve to be hit and taken to the wood shed the way it has been david? >> yeah. good afternoon, tyler. thanks for having me that's right from our perspective this is not a cries, but banks have been priced as such, and we think that's provided an outstanding

opportunity to buy a number of regional banks and zion is one of them. the stock trades at less than five times earnings. we think the market is pricing in a permanent impairment and profitability which we simply think is unlikely. >> conservatively a double that -- you don't hear that very often here on cnbc what is the risk to that forecast here? >> well, the risk i think for the most part is really not a lot of the issues that market participants and the media have been discussing. when the banks start to report earnings over the next week or two, we'll find results are likely fine for the most part, and the vast majority of the deposit movement that we're talking about has been confined to the likes of california and new york and a handful of banks. it's not something that we think is particularly systemic clearly, as the economy slows,

we're fully on board with the notion that credit is going to deteriorate and really normalize from current levels. to give you perspective bank non-performing loans and losses are at multi-year if not multi-decade lows, so by definition they have nowhere to go but higher, but at these valuations, again, at less than five times earnings, we think that there is a very considerable margin of safety to buy a number of these stocks right here right now >> so you have jamie dimon saying that the current crisis is not yet over, and even when it's behind us there will be repercussions from it for years to come. how do you coincide his take, his perspective with what yours is that this is all silliness at this point >> well, so we cover jpmorgan, and we've had meetings with jamie many times over the last 20 years that we've covered the stock. obviously we have a ton of respect for him and his views, and there are things with lasting implications

in particular, private equity deposits is something that won't be encouraged by commercial banks. i would imagine that that degree of concentration is something many banks won't be comfortable, and then furthermore he talked about a lot of interesting things, one in particular was that federal regulators encourage banks to buy treasuries and now they are being vilified for them by all the mark to market tourists that want to mark these banks to markets, so, clearly, there are going to be some ramifications, probably on the regulatory side, but, again, at these prices you're getting paid very handsomely to take that risk and, again, that margin of safety in our view is very, very high. >> all right david george, thanks for joining us appreciate that. >> thank you. despite the negative sentiment around meta and the big push to the metaverse, that stock is up 75% this year. our next guest sees even more gains. let's bring in the senior analyst at jeffries now. i'm curious. where do you see meta making an

upside climb here? is it on these ai investments? >> you know, the first leg of this journey, contessa, was driven on savings as stock doubled since zuckerberg took a u-turn on the stock and the next will come from revenue rate acceleration and that will happen in the second half of the year it will be modest. won't blow your socks off. it will go single-digit decel. next year you put a high teen, low 20 multiple on it you're at $240 to $280 on the stock pretty quickly with not a crazy multiple, so the metaverse isn't going to drive this. what's going to drive this is advertisers coming back to the platform, the re-engagement back with reels and ultimately i

think, you know, the upside scenario is if tiktok does get banned it's all gravy. we're not embedding that it's going to get banned in the model, but that would also help them as well. >> your thesis leads me to two follow-up questions here one is on revenue. are you assuming then that the advertising environment is e easing up a bit, that companies are getting red to tiptoe back in with advertising, and, two, on the extension front, some of the expense-cutting has come at capital expenditures, that they are pulling back in on what they are spending there could there be a medium to long term backlash against that kind of moderating of cap "x." >> i've said this across tech. tech was overspending and sec wasn't sustainable, and ultimately we think overall tech is overspent so we're getting back to a normal environment so a-plus to them on making that

u-turn we don't think this has any impact on that in terms of your question on advertising, i would say, look, in the front half of the year i think it's a tale of two halves. front half, everyone is worried about the economy and advertisers are maybe frozen out of their seasonality, and in the back half things will start to open you've got easier comps and you've got some of these improvements that they have made again, i want to be very clear like the stock has had a huge run up over 70 plus% year to date we're not making the callterm will straight line from here what we're seeing it taps the air brakes in the short-term and flies to 250 and it's flown to its current point and ultimately the call will just grind from here on advertisers slowly coming back to the platform and a lot of these changes we talked about are being optimized throughout the platform than layering all these ai changes over time. you've got i think a better story that's not trading at a crazy multiple. >> brent, you brought it up.

i was going to ask you whether tiktok's banning is central to your thesis. clearly it's no. you said it would be gravy for meta if it did happen. i me i guess is do you think it's going to happen, number one, and, number two, what percentage of the tiktok users might migrate to ingram, or does ingram and meta sort of lack the cool factor and that there might be some other competitor who would pick up a fair share of these users instead? >> as a father of three teenagers, they are all on snap and they are all on tiktok and instagram so they use them all. >> they use them all, and they use them for different things, and so i think ultimately snap is a messaging tool. they are not influenced by the brands they use instagram for high quality pictures and travel and then, you know, they get silly on tiktok like everyone else does think about there's a use for all three that ultimately i

don't think it gets banned that's my view right now, and i think there's a way they can pentagon figure out what's going for the consumer and what we have to do around security i think they will find that fine line what that line is i don't know but i think they will find middle ground. if it does get banned and i'm wrong, then it's obviously going to be great for snap and going to be great for meta. >> all right brent, thank you very much great to be with you today >> thank you. >> all right caterpillar down again today after falling 5% in yesterday's session. the stock down 16% in the past month making it the worst performer in the dow here to discuss the issues weighing on cat, rob worthheimer with milus research. rob, has cat been overly punished here? >> well, we do think it, a so if you by it what the drivers are for caterpillar, it's all the disruption we've seen across the

last year, the energy crisis and the need for energy in europe where cat is going have tremendous business selling, pipeline equipment it's infrastructure in north america, it's reshoring in north america and the we've had a decade of underinvestment, and those things are still intact. the banking stuff has definitely caused uncertainty in the market, and there's modest spillover to the actual end markets for cat, but the industrial upcycle still has strong support. >> how much are they dependent on government funding, and how might government fund thing cuts affect them? >> yeah. if you think about what happened last time we had a real kind of meltdown in the financial markets way back in '09, we did not have an infrastructure bill really waiting in the bills to come through in funding. i wouldn't say cat is dependant on it but support we didn't have a decade plus ago. you think about reshoring hand these are happening for geopolitical/supply chains and security reasons and we didn't have that driver either a decade

ago, so certainly that is a strong support, but the fundamental drivers are not really government money but it's just the need in the world for investment in bolt old and new energy and factory capacity. >> what are the big headwinds for caterpillar? >> boy, i mean there's a bunch of tailwinds the headwinds of the market has been focused over the past couple of weeks let's say is does banking tight necessary, does tightening of credit cause people to purchase fewer machines or does it caught project delay, et cetera think the bigger issue in the economy is the fed is trying to slow things down there's too much activity and too much work there, but some of the work that needs to be done and is more or less funded is on that infrastructure side >> caterpillar -- correct me, if i'm remembering history correctly, caterpillar has these kinds of moments where it goes into the deep freeze and then it comes back it will be the worst stock in the dow this year and it might

well be the best next year am i right on that >> you're 100% right as the tech world has grown, you know, the flow of money that flows in and out of tech is quite large and it's even relative to larger industrials i think we've seen a little bit of that over the past couple of weeks. you can't have the 75% move in meta that was just discussed without the money flowing out of it. >> coming out of somewhere. >> that definitely happens our messaging is that, you know, the end markets for cap, the drivers for cat are still pressed. >> all right thanks a lot rob, appreciate your time. coming up, the latest on the battle to win ai google is already fight microsoft in the search. now it's taking on nvidia in the race to make the fastest chips we'll have more on that nicks. johnson & johnson shares are higher today as the company may finally be close to settling lawsuits related to its baby powder it won't come cheap. "perun" lle ghow lchwi brit back m ready for this. heck ya! with e*trade you're ready for anything. marriage. kids. college. kids moving back in after college.

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welcome back time for today's tech check and we take a look at aim with deirdre bosa >> been interesting to see the tech giants go back and forth. the 5udiens might remember when chant gpt was debuted the owner wanted to make google dance. the company has now published a

scientific paper that seems to fire back letting envieda another giant in the space that they are dancing but they don't even need a partner. the supercomputer is faster and more efficient than comparable systems from nvidia and that matters because the chips at the compute level is what drives the products like chat gant and bard large language models are becoming so big, guys, they cannot be stored on a single chip so they have to be split across thousands of chips which then have to work together creating a supercomputer so google here is saying its inhouse chip is known as the processing unit or tpu is being used for 90% of its work on ai training and google says it can be strung together to create better generative ai the context here is that more big tech is designing their own chips like apple and its m-1 series that displaced intel and amazon's custom computing chips lowering costs for customers,

and, guys, this is likely the start of the ai battle at the chip or compute level that will drive these consumer-facing products at this stage wall street is somewhat skeptical that goggle is going to displace nvidia any time soon. google compared its system to a less advanced version of nvidia and the initial stock movement that saw nvidia shares was called an overreaction certainly looks that way since they are back in positive territory. there is, however, that longer term risk to nvidia's higher valuation that they shift to their own chips. the winner there would be arm. >> let me talk about something tangential to something you were talking about saying google has their own chip they manufacture this chip where do they do it? do they march it in their own fab places or what >> so they design the chip with the help of arm.

arm is the chip company that is owned by softbank that's expected to ipo in the next year, and then those chips are typically made by one of the big manufacturers like tsmc, but the importance here is that they are designing and displacing some of the chip-makers that we know very well, like intel and qualcomm and others in the future plausibly because they are bring it inhouse and that helps save costs for them and their customers. >> you've set this up in a sharks versus jets kind of way, deer drag, but in reality look at intel they have already seen what can happen when you've got a tech giant saying we can do this ourselves and do it better and do it more cheaply what should nvidia be reading into this? >> exactly we should really note that intel and nvidia are in very, very, very different positions i mean, intel has had problems for decades and nvidia is really seen as the giant of the space the leader at the compute level for artificial intelligence,

nobody, including google, will be able to challenge that any time soon, but it's the longer term case there could be less reliance, and there's even doubt over the google chip and what it can or cannot do cold water thrown on that paper. it just underlines the fact that the battle in ai is taking place at the top of the stock for consumers and at the bottom of the chip level and there's going to be so many more iterations of this in the years to come because we're still in early stages. >> thanks so much. deirdre bosa reporting from san francisco for us great to see you. $> johnson & johnson reaching an8.9 billion set military in its at all couple powder lawsuits we'll take a look at that one next - double check that. eh, pretty good! (whistles) yeek. not cryin', are ya? let's tighten that. (fabric ripping) ooh. - wait, wh- wh- what was that? - huh? what, that? no, don't worry about that. here we go. - asking the right question can greatly impact your future. - are, are you qualified to do this?

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. welcome back to "power lunch" right now the dow eco-ing out a small gain of about 68 points, but the nasdaq is more than 1% lower and the s&p 500 kind of splitting the difference off about half a point. bob pisani is at the new york stock exchange and let's go there now. bob? >> reporter: soft landing or hard land, they can't decide you can see this in the sectors

and how crazy it's been in the last couple of weeks look at the cyclical group here. deere, caterpillar, cummins all up last week hoping for a softer landing and down essentially this week as the economic data has come in a little bit weaker than anticipated take a look at semiconductors. big leadership group in the last couple of weeks, generally all trading down today again, same reason, can't figure out whether they are getting a hard landing or soft landing defensive stocks are holding up good which is why the dow is up today and it has a lot of consumer staple stocks and health care stocks in it so johnson & johnson hopes for the settlement am again and procter & gamble trading to the upside. you don't see utilities lead the s&p 500 very often, first, but american electric leads the s&p 500 today. yeah look, this is, of course, as you saw yields come down on some of the big treasuries bonds, we saw utilities move to the upside here's the fundamental dilemma,

the hard versus the soft landing and very simple police it's tough to get the goldilocks story right. the bulls need the data to show the economy is slowing so the fed can stop hiking but recent data we've seen in the ism services and the jolt report it's slowing a little more than they had anticipate, and so then you call it a more serious recession. the bottom line here, contessa, is getting the tone right for the soft landing and the goldilocks is proving extraordinarily difficult for market investors contessa, back to you. >> bob, thanks for that. let's get right to bertha coombs right now for a cnbc news update hello, bertha. cash app founder bob lee was reportedly killed in a san francisco stabbing according to sources 491-year-old tech executive and former chief technology officer of square was taken to a hospital with life-threatening injuries and later died. local police say the incident was being involved by the

department's homicide detail. former president donald trump is encouraging gop lawmakers to defund federal law enforcement ahead of the fall deadline trump made the statement on his truth social calling for the cuts to the justice department and fbi. trump's comments come one day after he was arrested and pleaded not guilty to criminal charges in new york and billion ear elon musk has been bumped off the top spot the tesla in chief is now the second richest billionaire behind bernard arnaud, the chairman of luxury giant lv & h. musk is now worth an estimated $1890 billion, down roughly $40 billion from last year i imagine when you're down 40 billion you must have

belt-dooigt tightening going on. >> he made a big prnchings 44 for twitter. i wonder if the return on that investment is paying off for him. >> not yet it doesn't look like. >> thank you ahead on "power lunch," a red scare hits silicon valley in the white house. the white house warning companies to keep an eye on aye and corporate america is stling on how to handle layoffs we'll discuss all those stories next

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welcome back to "power lunch. middle of a shortened trading week and we want to get you caught up on some top stories we've been following lawmakers visiting silicon valley and hollywood with a warning on the threat from china. a growing number of voices raising concerns over the advancement of ai and more corporate layoffs raising the questions about the best way to notify your workforce. we'll talk about all three of those topics with ed lee, "new york times" reporter and a cnbc contributor. jeff kilburg, kkm financial founder and cnbc contributor and dom chu who contributes probably more than anyone at cnbc how are you? good to have you all here. ed, let me start with you. i did not realize that there was a house select committee to

study the chnts communist party and some members that have committee are going out this week to meet with, among others, bob eiger and tom cook explain why they are going to be talking about. >> so, the committee is i think relatively new i think with house transferring power over to the gop they have started to kind of formulate these commites to look specifically at what they consider big threats to the u.s. china, of course, is a big threat that both sides, both democrats and republicans have been looking at very carefully, but the meeting apparently, this big sort of trip out west is really just to kind of get a feel for what are you doingnent at the same time, and when are you doing in technology to give us the ability to compete better now it -- it's very political, of course, but, look, let's take a close look we buy half a trillion worth of stuff from china every year and they buy about $150 billion worth of stuff from the u.s. so it's not face there isn't always a lot of interaction, a lot of

trade that kind of cooperation in a sense but when it comes to intellectual property like with movies, what's allowed and not allowed and when it comes to technology of course, we all know what's happening with huawei and with tiktok and now with ai so there is a sense that we need to be more strategic about how we're producing our goods, what we're selling to them and not selling to them, so i think it's more taking the temperature than anything else, but clearly i think this -- the house, congress definitely wants to take more point actions on this. >> jeff, let me turn to you. there's the tech trade there's the china trade. is it a both and an either/or. how do you navigate in this sort of difficult space >> well, tyler, it's all of the above. ultimately when you see the fact that we really have the opportunity to get some reconnaissance mission with this group that's going out to hollywood, softbank here in

chicago that didn't get the invite, nonetheless i think it helps us better understand where china is moving forward. if you think about from a trading perspective, the last three years, you look at china versus the s&p 500, china has dragged 75% so that's why there's a goodopportunity to have some exposure in china i.talked to a lot of our clients and this is the time when it feels the worst. there will be implications moving forward due to the taiwanese president meeting out in california as well. >> there's a lot of fact saying you shouldn't overthink that the taiwanese official is going to come here so china, just be calm i'm looking at this from the perspective of a group of companies that i cover in macaw that the ratcheting up of tension between china and the united states becomes very nail-biting for the companies that need and want to do business in china.

>> it's not just that. if you put all those dots together, what it comes down to, contessa, is that ratcheting tension. this is just the latest of it, right, because it wasn't that long ago we were talking about spy balloons and shooting those things down, and they were from china and being tied into the business angle it's not just the casino operators with a lot of operations in macaw. if you look specifically at the hollywood angle of this. the number of chinese production chaps have either bank rolled or invested heavily in some of the biggest blockbuster movies that have been released over the last 10 or 15 years is huge so do you still want to have those. investments from those production companies to bank roll some of these large hollywood operations, or do you want to look a little bit more about whether or not you can wean yourself off them i'm going to be very serious to hear what the big media ceos say about it and certainly what somebody like tim cook does. >> let's talk a little bit about that artificial intelligence arms race that's caught

attention of business leaders elon musk and jamie tymon as well as president biden. here's what the president said about the benefits and the risks of ai yesterday at the white house. >> we're going to discuss the opportunities and risks of artificial intelligence. ai can help deal with some very difficult challenges like disease and climate change, but we also have to address the potential risks to our society, to our economy and to our national security. tech companies have a responsibility in my view to make sure their products are safe before making them public >> jeff, how much do you think that the ceos of some of these big tech companies are going to have to keep addressing the potential risks and reward of ai >> i think it's going to be persistent, contessa, and absolutely jamie dimon talked about ai it's going to be a part of our luv. it is a part of our luv, and as we continue to see the evolution of ai i think we have to realize it's a double-edged sword. he talked about the bad dharks

will be -- bad characters that are in the space and when you look through all the noise, i think semiconductors by themselves will continue to grow in involvement. if you think of semiconductors as a $400 billion space that's going to grow at 55% that's projections it will grow at 55% for the next couple of years as we kind of keep up with ai. >> ed, i would imagine it's going to be a looming specter not just for business but for police as well >> for politicians, for basically the media. i mean, if you think about how very quickly just, know, after chat gpt was released to the public, we're seeing ai-driven photos and video completely made up i can only imagine the equivalent of a bot army using ai whether it's coming from a place like china or russia or anywhere else, any bad actors out there in the world, how much havoc that would wreak on this country politically but also in the media sphere so,

unfortunately, the cat is out of the bag, right the pandora's box has been opened it's now just a matter of figuring out how to -- it's not about containing, it's how do we deal with it >> go ahead, jeff. >> you bring up a great point because when you talk about the interact with chat gpt, a couple of teenagers are trying it it's not authentic, not real, almost not real and there's an official wave of everyone wanting to get on ai and then will be a reversion to human connectivity in person we're realizing that post-covid. i think there will be a lot of ups and down as ai evolves. >> one thing that ai is doing, it's going to make parenting a hell of a lot harder because you can ask questions to ai like i saw the other day, what's the best way to get the smell of alcohol off my breath, okay? and it will give you a -- a good doggone answer >> that was not artificial

intelligence. >> not at all. >> so the interesting part about it this is an extension, ai, right? what it does is i focus on the national security side of things this is very much an extension artificial intelligence of the supercomputing battle that has been happening between the u.s. and china specifically for the better part of the last 20 years, and i think i got more finally in tune with it because i did a story about 5, six, seven years ago when the oak ridge national laboratory revealed the summit, and the whole point was you had the best supercomputer over china this is ai and if we're talking about pausing development here, otherwise they are going to beat us. >> and jamie dimon did have the largest group of disciplinary ethicists that he can call in to make sure that jpmorgan is

looking that the and all it takes is one bad actor you're right there's no putting the genie back in the bottle. >> and mcdonald's announcing a wave of corporate layoffs which i might have been subject to which almost came out of my mouth had a moment ago, but the way they are going off about it laying offices and notifying people at home has people talking about what's the best way to cut workers let me turn to you, ed when i first heard this i thought this was chicken. >> chicken what? >> just chicken, that they didn't want to do it. >> it's cowardly. >> cowardly lionish. >> yes i'm with you on that it just -- you know, i think it's -- certainly they are taking advantage of the potential moment, right, sort of the statement that mcdonald's made was let people -- a lot of people traveling during the week so we decided to make this easier in terms of how we're relaying the information i mean, just -- unfortunately,

that's the world we live in now. people are laid off via email and by your swipe badge, like you can't swipe in, you know >> i suppose, dom, there is an argument to be made for this because if you're doing layoffs the old-fashioned way, somebody will get a call. you go to an office in hr. everyone in the office sees you walking, and they know what's happening. they know and so there is in some ways a privacy advantage here. >> this has all been created because of covid, right, and because of work from home. >> agreed. >> i don't believe that if you didn't have covid lockdowns, i don't believe that if you have a hybrid work environment like we do right now, where people come in two or three days a week or whatever it is, that you would have a company doing this kind of thing, but the downside to having remote workers or people working from home is that a company can then use that as cover in a way like this to avoid having some of those conversations person-to-person,

and for me, i -- i don't necessarily agree with it, but i kind of feel as though if you want to take the good from work from home hand hybrid, you take some of the bad and to me this is bad i would much rather somebody, if they were going to have this kind of decision, do it face to physical and person to person? it's a very personal thing when somebody losing their job. >> ranting in your living room is not staying to your boss. >> jeff, you get the last word. >> jeff, you're the founder and ceo so you don't have to worry about getting laid off it's a congruity line and it's rude rude of mcdonald's employees are not loving t.shareholders are loving it though if you look at the stock, all-time highs today it's remarkable to seal forward earnings 27 times. i don't want to be a buyer and if you think of the culture we're living in now, you walk into chicago in a corporate setting it's changed so i hope we have some reversion and i hope people will treat each other like humans again. it's disheartening >> ed lee, thank you and dom churks the ultimate contributor.

still to come. yields falling on adp data the latest signs of a slowing economy. we'll get into it next all the time? not like that. like this. getting this beer... all over the world... right when they need it. yes, with ibm consulting, ai-powered software can help automate your supply chain— so beer can be ordered, produced and delivered more efficiently. so happy hours keep going. salud! and the beer keeps flowing. that's the automation solution ibm and a global beer company created. what will you create? ibm. let's create.

the yield on the ten-year note falling to the lowest

levels in september. rick santelli tracking that action for us from chicago hello, rick. >> reporter: hello, and no matter which direction you look on the treasury curve, yields are dropping precipitously just consider look at a three-day of two-year note yields and look at every one of those swan dives we have each session. on monday it was ism prize paid, the lowest levels since july of 2020 that was manufacturing yesterday was jolts, under their 10 million, smallest level since may of '21 and today it was services that's the key sector, and that price is paid, also the lost since july of 2020 open the chart up and there's your seven-month low in the making with regard to ten-year note yields and finally consider this a two-year note on the th3rd, 3d of march had a close of 5.07%, look at it now, 3.75 basically ten-year had a close hat 4.25, a whisker pleau, 4.24.

on october 24th we're almost 100 basis points lower 2s to 10s at minus 46, that's because tibl yields are staying high, two-year notes not so much three months to two year is the most inverted going back to the '80s at minus 109, and the definitive recession trait, minus 155 three months to ten-year there's no way to put a good face on this the only thing that i can say is that i don't know what the federal reserve officials are looking at maybe inflation isn't coming down as fast as they want, but ultimately with the economy doing what it is, it certainly is coming down rather quickly in my opinion tyler, back to you. >> some of the data will back you up there, rick, very much. rick santelli, thanks. up next, fedex cutting the costs and reconfiguring its operations division into one organization, so what does it mean for the stock

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>> time now for three-stock lunch and we're sipping on big movers of the day. fedex higher after hiking its annual dividend by 44 cents and consolidating its operating structure, as well united health higher on an upgrade to strong buy at raymond james and c3 a.i. on pace for the worst day ever after dares capital accused the firm of accounting regularities. here to help us trade the names is carmen garcia at payne capital management and a cnbc contributor. okay, courtney, let's start with fedex? >> fedex, i have a buy on here we have positive news that came out which you alluded to, but basically, they'll be merging the ground and express businesses moving forward. the reason that's so important is because it will lower their cost moving forward and this will lower costs by 2025 by $4 billion. another $2 billion by 2027 and that's on top of cost-cutting

efforts they have like cutting employees and what's interesting is this will be similar like ups, their biggest competitor, is structured and interestingly enough, ups has unionized workers yet their profit margins have been superior and it's likely because they're more efficient and all of their businesses are together and that just goes to show how much more upside there is for fedex now that they'll consolidate businesses like this and they increased their dividend by another 10% which is always a good sign. >> nice to see you, courtney let's go to united health. >> united health, i also have a buy on here. i think what you're seeing with united health is a couple of things and there were some concerns that changes to medicare would be a headwind for united health and it does look like it will be more beneficial than previously been feared so not as much of a headwind and they have the recent acquisition of change health care which will

benefit optum because there are cost strategies there and you've seen a pullback with united health and health care industry in general and there was a lot of optimism last year and these things have done well and there's been this rotation out of the space and the fundamentals continue to look strong and united health would be a good name to play here. final name, c3 a.i >> i do have a sell on and there was news out today that you had brought up and there were accusations that there were questionable accounting methods to boost what they were looking like and i don't want to comment on that too much and that's why it's down so significantly today and the bigger concern is this is a company that's up over 90% this year. its had a good run, but it's not profitable and it doesn't may a dividend and that's not the company that you want to be in currently and when you look at the customer acquisition and as customers are ending their trial period and they're not signing on for larger contracts i don't think that's the kind company you want to be in, as well.

>> courtney garcia, thank you. avg . nk you for hinme johnson & johnson paying to settle talc cancer claims. the details are next i think i'm ready for this. heck ya! with e*trade you're ready for anything. marriage. kids. college. kids moving back in after college. ♪ finally we can eat. ♪ you know you make me wanna...♪ and then we looked around and said, wait a minute, this isn't even our stroller! (laughing) you live with your parents, but you own a house in the metaverse? mhm. cool...i don't get it. here's to getting financially ready for anything! and here's to being single and ready to mingle. who's ready to cha-cha?! ♪ yeah, yeah ♪ identical twins bethany and stephanie both struggled with cpap for their sleep apnea. but stephanie got inspire, an implanted device that works inside the body. there's no reason to keep struggling. inspire. learn more and view important safety information at inspiresleep.com.

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johnson & johnson agreeing to pay nearly $9 billion to settle lawsuits related to its

talc-based baby powders. meg terrell joins us >> a lot to untangle here, but investors really like this and the fact that investors are bidding the stock up on a $9 billion settlement offer shows how much is hanging over j&j, with the thousands of talc-based lawsuits that they had given them cancer. j&j, disputes these claims and increased a settlement offer to almost their 9 billion from the previous offer of $2 billion this was a complex strategy known as the texas two-step where they were putting liabilities into a separate company and filing that bankruptcy with a $2 billion settlement in addition to the higher amount they say they have 60,000+ claimants who are onboard with this new settlement offer. that is not a done deal. they have to get 75% of all of the claimants to vote in favor of this. i am told there are 90,000 to

100,000 potential total claimants and they have to have the 75% threshold. there's no admission of wrongdoing here and they're doing this because, quote, resolving these cases in the tort system would take decades and impose significant costs on ltl and that's the companies that held the liabilities and the system with most claimants never receive anything compensation this is taking so long and costing so much they just want to settle. >> a couple of questions, the $8.9 billion sounds like a lot of money over what period of time is the money paid out >> 25 years is what it's going to be done although they've taken a charge in the first quarter of that additional $6.9 billion, and i saw an analyst note today calling that amount diminimus for j&j that's what i've driving at here is it's the charge is not insignificant, it's $9 billion, but the amount of cash out from the company to the claimants per year over 25 years is not. >> that's right, and so that's why you're seeing the stock go

up on this even though it seems for a large amount for a company of j&j,'s size and fire power, it's not. >> the interesting thing is years ago when the talc litigation first started there were a lot of questions from analysts for insurance companies about what their exposure was to litigation settlements and/or verdicts because we did see some winning verdicts. >> we did, big ones. >> talc lawsuits, i think there were some more than $2 billion and we didn't really know because the insurers themselves when asked they said we don't really know what our exposure is and what re-insurance is going to do and what the legal process takes a play out, but you have travelers and the chubb that were listed as possible insurers it's going to be really interesting to see whether this is all johnson & johnson self-insured or whether some of the insurers have exposure to this settlement, as well really interesting definitely agree not sure of the insurance situation here and certainly people are pretty happy.

>> in the cases that have gone to trial, the talc cases was johnson & johnson winning or losing >> they were doing both. >> individual cases, they were going through thousands of them and you can see the risks there. thank you for explaining it to us and thank you for watching "power lunch". >> "closing bell" starts now i'm scott wapner from post 9 at the new york stock exchange this make or break hour begins with the fed and the economy going head to head more data showing growth, the slowing and another central banker says rates must still go higher and stay there for longer stocks and your money, well, they're caught right in the middle and there's your scorecard with 60 minutes to go in regulation and the dow carried most of the day by health care names in more defensive areas while the broader market sees selling in technology and more economically sensitive sectors like industrials and autos. bond yields, they are falling as