>> it could be challenged if the federal reserve stays on their policy. >> final trade >> on semiconductor, at 16 times. look for this stock to break out into the 90s >> okay. we'll see if the s&p can break out above 4200 that's the big question. i'll see you on "closing bell. "the exchange" is now. >> thank you, scott. welcome to "the exchange." i'm kelly evans. minneapolis fed president neel kashkari is a voting member, could a skip be just a hop away and it comes as a debt default looms large and tensions with china keep rising. why are large stocks shrugging it off a key metric flashing a major warning sign in the trucking industry is that a sign of what's to come for the rest of the economy?

the ceo of freightway says he hasn't seen anything this extreme since covid. one of our guests has an under the radar name he calls a clear leader first, let's get the latest on these markets with mr. chu >> kelly, you mentioned the fed headlines and kashkari and it's all playing in right now and overall we have a market that's mixed and one in a wait and see mode a lot of things happening geopolitically and debt ceiling issues and the dow industrials are down just one-quarter of 1%, 33,327 the last trade day and a 0.1% trade hovering just below the 4200 mark and again, the trading range has been somewhat more muted today at the highs of the session we were positive by 18 points and actually down by 12 at the lows. a decent size range. we're sitting about in the middle of it right now and we're seeing gains and losses. the nasdaq composite, the real

outperformer up one half of 1% at 62,720. the rates picture we're seeing everything across the yield curve. every maturity rise in terms of yield fall in terms of price the one-month t-bill one that's more sensitive to what's happening with the stalled debt ceiling negotiations has now risen up to 5.6% right now the one-year t-bill, just a hair below 5.08%. and the 30-year long bond, 3.7 and by the way, yields have risen for the seven straight days and we're keeping an eye on the shifting narrative of the fed and it's moving across the curve for rates. the stocks to watch today, pfizer in particular some headlines coming out about one of its treatments in the works right now to treat weight loss a pill format one that seems to do just as well, perhaps more effectively than some competing products out there, specifically from nova nortis you can see when the headline

came out and it's been holding for the most part all day long and by the way, i'll show you the intraday board what's happening with novo nordisk with its experimental drifks and novo nordisk, compared to pfizer it seems like a lot of people like that news. >> that is very important to watch, dom we'll come back to that. dom chu. >> the fed keeps insisting they'll continue rate hikes even if we skip one for now and tensions between the u.s. and china are back in the spotlight with micron, the latest company getting caught in the crosshairs with a unified stance at the g7. kayla kayla tausche is at the white house and first and foremost, let's get the latest on the debt ceiling. >> top aides will brief him of where negotiations stand with house speaker kevin mccarthy that's at 5:30 this evening and they'll trike to break an

impasse that's eluded staffers another meeting of negotiators just broke up after three hours with no agreement. according to a gop participant shalonda young arriving on the hill progress stalled over the weekend and they're still at odds over where to set spending levels and for how long. house speaker kevin mccarthy has held firm to the republican stance that spending levels, no matter what, must go down as part of any deal >> what we have to do here is get the spending addiction to stop that's caused so much pain to the american people, inflation, more dependency on china. we want to spend more after covid. we can pull money back that's just sat there and we can grow the economy by making us energy independent and so many things we can do to make us stronger and curb inflation. >> republicans have proposed an

increase in defense spending with stricter work requirements for medicaid and food stamp recipients and no tax hikes. d democrats are open to work changes to limited requirements and that's not been enough to make a deal and kelly, even something short of that that signals progress will be taken as a welcome sign. >> kayla, stay with us much more to cover let's explain where the market goes from here richard bernstein is the ceo and chief investment officer at bernstein officers and welcome to you both. dan, i'll turn to you with a quick pile on with the tiktok. can i offer you a frustration of mine >> please. >> we should be thinking eight steps forward through this already and even when i read, you know, washington strategists. nobody seems to have any answers and i don't know if it's just because it's unknowable and what

do you think it's about to happen in the next couple of days here because the market continues to shrug it off? >> first, the treasury department is injecting a lot of liquidity into the system and we think we'll get another $60, 70 billion in liquidity that's cushioning the markets for this toxic political debate that we have the reason why investors are conflicted on what's happening with the debt ceiling is this a much more politically polarized environment on the far rightan on the far left. so there's concerns that they could test the debt ceiling breach i would argue that if we cross over june 1st we still have a couple of days of cushion, probably until about june 7th and so there's a little bit of cushion there, but we really needed a deal last night to be able to get that bill to the president by june 1st. so each day that clicks down that there's no deal, that pressure is going to continue to rise and kelly, as you know, interest costs have been exploding and tax revenues have been falling and that's pulling

forward the statement and something that we'll be watching very carefully today ultimately, this is the first step of austerity and it's the hardest one because congress isn't ready to do that yet >> i don't want to get into that all over again and if people don't go back and watch what you said, dan, 14% and rising debt service. that is the much larger picture here and real quickly, what is the liquidity that treasury has been injecting what do you mean by that in the treasury general account and this is the treasury bank account outside of the banking system that's how they're paying our bills right now. so when they make that expenditure it's going right into the banking system. janet yellen's bah zz uka is stronger than the qualitative tightening we think there's more risk to the equity market and so the debt ceiling gets raised before. >> rich, before we turn to the other overhangs. i just want to ask about the debt ceiling and how it factors in

why are we even talking about it on some level? if you look at the stock market in the way that we're off to the races or just the fact that we're up in general, i mean, you are as observant as any business cycles do you have anything on behavior and what comes next, rich? >> i think we for a speculative environment. i think i mentioned that to you before when we have a narrow market, where if i'm not mistaken, year to date about 50% of the s&p's performance will do three or four stocks. that's not a very healthy environment. that's a very speculative environment. in fact, the narrowest leadership since the peak of the tech bubble since '99 and 2000 it's not like the whole stock market is taking part in this and even today you see the nasdaq up and the broader market doing basically nothing. >> right so, rich, i guess the question would be in an environment and social media was fun this

weekend because you can watch people one by one trying to figure out, do they throw in the towel and capitulate and a 4500 price target on the s&p and buy everything or do they stick with the bearishness which has been the prevalent sentiment and traders that are being on the sidelines if they still are. >> look, i think the opportunity sits outside of those five or ten or 20 names is extraordinary right now. i think if -- one has to understand that if you're investing in those five, ten or 20 names your implied economic forecast is incredibly bearish, like only five stocks are going to grow? five companies are going to grow in the entire global economy that's ridiculous, but that's the implied economic forecast. so i think one has to understand and what is the implied economic forecast and that says to me there are plenty of opportunities around the world and i wish i could tell people when this kind of mania in these five or ten names will stop, but

who can? >> i'll jump around topic wise because you are so bullish on international stocks where does china fall in that? it feels like 1989, practically on that front. can you say whether those would be included in your enthusiasm for international stocks or are those separate storieses >> both japan and china. i think when talking about china one has to realize this is a cyclical story, a five to ten or six to 12 month type story chinese corporate profits are revving up and that's a pretty good combination when we go out and look at the development of the chinese consumer then we can start talking about more risk on a global scale in terms of a potential invasion of taiwan and one has to realize that they are the world's biggest exporter and an invasion of taiwan has to cut off their nose despite their face and i don't think they have

to do anything over the next five months. >> why is the economy so weak? >> how bad is the property bubble why do they keep going after international businesses everything seems to be the opposite of a strategy, with the stock market performance, rich >> there are many in the chinese stock market right now, and i think you don't want to invest saying there are risks you want to invest saying there are risks. are we being compensated or overcompensated for risks? given that china sells to a half to a third of the nasdaq valuation and the nasdaq is everybody's darling, i think we are being pretty well compensated for risks right now. >> kayla, let me turn to you for a bit color here i was struck and i don't know if others were struck by the unified anti-china stance that the whole japan summit seemed to have and it seemed quite intentional and even china's response to that, as well. just curious, kind of, what do

we read into all of this >> well, kelly, certainly also notable that that summit was taking place in beijing's backyard, but i would argue that these allies stopped short as going as hawkish as they possibly could have. the communique talked about derisking and diversifying away from china and trying to bolster supply chains and to be sure, the white house has gotten support from allies like the netherlands and japan in introducing export controls in semiconductors like china, but you haven't seen that g7 wide and product wide beyond chips and even though there was a discussion about what additional sectors may be to introduce here and trying to unify some of these export controls, if countries like france that are just not onboard with it and have a completely different posture toward china and the president himself yesterday and secretary yellen privately debanked ceos last week, the u.s. policy toward china is about to get even tougher when

those outbound export controls are released which i'm hearing could happen in the next few weeks. certainly, that's something that the u.s. is doing unilaterally and so far many allies are not joining us in that fight >> looking at the currency as well, up above seven dan, i'm looking to you for context here. >> sure. we are now for the first time in 40 years have a high-inflation environment, high-interest rate environment and we have an increasing debt servicing cost for the first time in 35 years and for the first time since the berlin wall came down we are deglobalizing based on what kayla just said. with that said, investors should expect slightly higher inflation, 3% instead of 2 and higher p-es on stocks and you have to be like this in this environment. most investors were investing in the complete opposite environment that we're going into today and companies need to have their ear to the ground in washington because washington will have a much bigger impact over their business models

moving forward >> you never like to hear that interesting point. rich, i saw you nodding earlier about valuations upon. i appreciate you kayla tausche, richard bernstein and dan clifton. that's having an impact on mortgage rates let's get to diana olick for the latest diana? >> kelly, the average rate on a 30-year fixed has been climbing sharply on concerns over the debt limit and new comment, conflicting comments from kashkari and bullard over the future of interest rates bond yields took off on that the average 30-year fixed went up to 6.95 and up 40 basis points in a week all according to mortgage news daly and after rates rose just a little this one's going to hurt more. if you're buying a $400,000 home with 20% down your monthly

payment went up $100 in just one week they're con fending with sky-high prices and they're more sensitive to small-rate moves than they have in the past zillow posted that if a deal on the 30-year picked the average rate could go over 8%. >> i can't tell if it will go over 8%, if a deal is reached i'm shocked that the ten-year is as high as it is and we had luren on thursday or friday and he said if we had historical norps, but the it would be so low reit now it should be at 6% right now, not seven. >> everything is different post-pandemic and with the pulling out of mbs purchases and that spread on the ten-year versus the fed is very wide right now. i don't see it coming together very soon. >> for now, diana, thank you 6.95% on the 30-year fixed rate mortgage today coming up, eqt is coming off its

best week in three months after nat gas prices hit their highest levels since march and it's one of the only energy names that's even in the green this year. we'll check in with toby rice on a deals day for energy next. the ceo of freight waves join us with the realtime data on the supply chain and it's not painting a pretty picture for trucking and what it means and what it could mean for the transports and the market. >> let's get a look at the broader indexes. the s&p has turned negative at 4189 and the nasdaq up a third of a percent and the russell small caps up 1% today the ten-year sitting right at 370. we are back after this ♪ ♪ isth is the exchange on cnbc [ giggles loudly ]

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welcome back to "the exchange." nat gas back in the, after prices last week and prices have collapsed 46% so far this year despite that there's one gas name that's outperformed this year including the sector itself and eqt up 7% year to date now got to bring in the ceo, toby rice toby, welcome back it's good to see you >> thanks, kelly what explains this buybacks i mean, you know, are you mining lithium? what gives

>> well, i think it's pretty simple when you step back and look at it number one, we have low-costasets and investment grade balance sheet and all of this produces a low file and sets up a bright future and we have a forecast that will allow us to retire the entirety of our market cap in addition to that it's the quality of the product that we produce in a world that struggles with energy security, in a world that struggles with rising emission. our product natural gas addresses two of these issues and natural gas will be the energy of the future. >> yeah. >> and for those two reasons the values are being reflected in the performance of the stock >> i just read that after shutting down indian point, the nuclear plant in new york that it's nat gas uses and the fragility of the nat gas supplies and not to get off on that tangent and to talk about

conditions in the market more broadly, as we start to see, have we seen the normalization of the louisiana facility and the others that are going to normalize nat gas prices in the u.s. or not? what is normal >> what wooee've seen today, anw had the unseasonably warm winter and we've seen operators respond and to date we've seen a count that will help balance the market and we're sitting with low prices as expected when we have significant weather events like that, but we are looking at rising prices in the future, and while storage levels are relatively full here in the united states and in europe, recognize not much has changed structurally we're having the challenge of getting pipelines built. inflation is still rampant and the war in ukraine rages on and global emissions are still surging and this is a brief period of time where consumers are getting relief on low prices, but i think we're in the eye of the storm and we need to

take action with permit reform to be able to let this industry get back the industrial capacity so that we can protect americans and our allies around the world with energy security and the ability to lower global emissions with the natural gas that we have >> permanent reform makes you think maybe nowing some will happen on that front let me ask you about the deals lately and how much has to happen i was struck by, who was the deal today with exxon and the assets where they're paying a 10% premium. that's nothing, right? what does it tell you about the sentiment in the energy space and granted that's oil and what have you, but when people are saying, you know what? i don't know what the cycle will look like -- chevron, in this case i'll take chevron shares and swap the better asset for my shareholders and walk away i'm curious about sentiment and the prospect for decent returns over the next couple of years and how much consolidation needs to happen? >> kelly, we have a fragmented industry here. there are thousands of operators and at this point in time the exploration's been taking place.

we've done the discovery and now it's about harvesting and i think you're seeing some of these smaller operators look at their assets and say how am i going to create the most value from this asset base is it going to be part of a small company or a part of a much greater company with bigger scale and providing better opportunitieses. that motivation for the smaller players to make that determination themselves, that's what we've seen other operators make that decision by trading into eqt, and as the global commodity for natural gas breaks out from being a regional commodity and becomes more of a global commodity, the opportunities only get bigger and the scale is really going to be a differentiator and companies like eqt can offer that scale and create value, and i think you're seeing that same type of determination being made on the oil side, as well >> and i don't know if everyone talks about how we're about to have an el nino cycle and nat gas is bullish, but if other companies want to emulate, you know, the outperformance that

you have posted so far, what would they have to do to clean themselves up or to have the right levers to pull in in this kind of environment? >> i think we've got some differentiated aspects of the business and it will be incredibly difficult to replicate the asset base that eqt has that -- it's going to be very difficult to get that ig grade balance sheet and eqt is unique in this aspect and the overall disciplined approach in the actions that we've taken to deet as it relates to m & a. we're not looking to drive accretion on per share, we are also looking to do deals that make us a better business and lower the cost structure and we are bearing some fruit and showing outperformance this isn't rocket science. commodity business and eqt is staying disciplined to create the most value for our shareholders. >> i'm glad you made that comment about what kind of m & a you would be interested in and

the one oak magellan deal and i don't know if that would be interesting to you and what would lower your expense space what kind of deals would fit what you're looking for right now? >> high quality assets is a good start and we're in the process of closing on the transition with tug hill. that is an asset that will lower the cost structure by 15 cents and that's pretty significant. that would have an impact of lowering the cost structure of $300 million per year. it starts with high quality acreage proximity to your existing asset base and that will unlock the ability to achieve synergies which would be over the top of those benefits and it would add 4 cents lower on the cost structure and another $80 million per year, but it takes discipline and there are a lot of deals out there and we have a very high bar and today, what we're looking at which is certainly an attractive acquisition opportunity for us is our own stock and we've got the resource to execute the buyback program and continue the success on that front, as well >> very interesting. toby, thank you very much for joining us today

we appreciate it >> toby rice is the ceo of eqt >> coming up, you think you know macro? it's the e conversion of the national spelling bee happening in new york city and we'll have it here and who better to host it than our very own steve liesman and he is live at the new york fed as the excitement builds hi, everybody. hi, steve. >> hi, kelly we just got finished with the first round and mount hebron from maryland beat 6100 students from around the country to become the tops in the david ricardo division and when we come back, we have the advanced division and we'll have four high schools and you can tune in to find out if you're smarter than a 12th grader when it comes to economics let's have a big round of applause for mt. hebn.ro [ cheering ] [ applause ]

welcome back to "the exchange." a jump in bond yields want having an effect the s&p fluctuating in positive territory by five and the nasdaq's up half a percent let's check on some of the movers this afternoon where alphabet, microsoft and meta all hitting new 52-week highs today. you can see the one-year gains again going back a full calendar year and now your year to date smooths out this inflexion that happened around the turn of the year and one-year gains are starting to look impressive and up 26% for microsoft and up almost 30% for meta. what's been the big driver year to date. you know the answer to that, ai. tech, ai and deep learning etf and its ticker learns, lrnz and

it is up 17% compared to the s&p's half a percent gains top performers is zscaler, datadog and crowdstrike up between 20 and 43% this month. let's get to tyler matheson for a cnbc news update. >> there is an etf for everything, isn't there, kelly >> the murder suspect accused of fatally stabbing four idaho college students last november stood silent in court today forcing a judge to enter not guilty pleas on his behalf prosecutors now have 60 days to give notice if they will seek the death penalty against bryan kohberger. he is tentatively to stand trial october 2nd. >> the consumer product safety commission has a recall of 456,000 powerxl waffle makers. three of them resulted in burns and people needed medical attention. defective models were sold

through october last year 2022 carmelo anthony is retiring after 19 years in the nba. he finished his career making him the league's ninth top scorer he shared his decision in a pre-taped announcement on social media. he ended his career with the l.a. lakers and spent the bulk of his seasons with the new york knicks back to you. >> to some of us he'll always be a syracuse orangeman tyler, thanks. see you next hour. >> coming up, a nightmare for the trucking industry, the key metric falling to a record low and why it means more downside ahead for drivers. "the exchange" is back after this.

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♪ ♪ welcome back to "the exchange." we often talk about the dow transports as a leading indicator for the market or the economy, but on an even more microlevel there are alarm bells going on inside the trucking industry about impending weakness the tender rejection level just hit an all-time low surpassing the lows of covid as truckers become so desperate for cargo they're accepting any rate for any shipment

freightways founder and ceo. craig, good to have you on well in. >> thanks, kelly thanks for having me >> what you're tweeting is a lot of bad news. what is happening? is it macro or industry-specific? >> it's doom and gloom some have described it as bad as the great recession and i've heard staples that there are folks that believe it will get worse than the great recession so that tells you how much pain is currently in the market what's caused this is a classic boom and bust cycle. trucking at its core is a commodity which means when you have robust pricing and robust conditions, we're going to have a lot of new entrants that enter the market to take advantage of that and that has caused the bust cycle as we're looking to come off of the covid economy and the round-trip, the broader economic activity and the goods economy what we've also ended up with is a lot more capacity than we had before. >> that's super interesting because obviously that happens in commodities all of the time oil prices go to a hundred and a

ton of people start drilling and next thing you know there are 30 and it goes bad and no one can recover. so, how much worse could it get and is there a macro sort of warning point here or is it just, hey, there were too many people that came into the industry and they all need to go out of business and there are cycle implications >> there's certainly that element of a trucking specific and it's different between the oil sector and what we've seen trucking is the barriers to entry in the trucking company just don't exist >> true. it is very easy for someone to buy a truck and get financing where as if they'll drill for oil there's more capital that's involve said as well as i have to have those leases that tend to go at much higher rates than what it takes to run a trucking company. what you end up with is a market because it is so accessible and there is no moat, it is very easy for people to get into the market looking forward and what this means for the u.s. economy at large is the goods part of the economy has largely slowed down. we're seeing that for a lot of

the core sectors that drive freight demand, and we believe that at least our assumptions and our assessments are that the freight market is telling us and we believe that the freight market is a leading indicator by about six month, the broader u.s. economy we believe that the broader u.s. economy is slowing down more so than what a lot of people recognized simply because we're seeing such really soft rate demand >> oh, sure. what about people say everyone's in hotels and on airplanes and they're traveling to the caribbean and it's all services now and so the goods thing is overexaggerated. >> some of that is certainly true, there has been a displacement in how consumers spend their money, but when you look at the sectors who drive a lot of the core parts of our economy and things like housing and the whole elements around the housing sector, that certainly is showing signs of concern. really just discretionary goods consumption. i have a friend that owns a

small liquor store he's down 11% year over year because people aren't buying as many goods and the cardboard box industry is also reporting a lot of challenges. this is a goods challenge or a goods part of the economy challenge, but i think it will play out in the broader part of the economy as the sector slowdown there isn't as much production >> the fed says maybe we'll skip -- maybe we'll pause. i just feel there was more urgency in responding to the leading indicators that aside, the last time we checked in with you was after the collapse of svb and your firm was impacted by that. in a sense i'm surprised the industry wasn't more affected, how has it been the last couple of months navigating that incredible uncertainty >> as i told you the last time i was here that our board was able to advance us the money. svb systems came up by wednesday of that week so we were actually not only able to make payroll by our own

organic capital, but we were able to access all of our bank lines and banking systems within just a couple of days. it really was a -- it certainly gave us concern and pause, but it didn't affect our business that impacted us one of the concerns in talking to small business own sers what happens with bank lending and how the banks are responding in terms of managing their own balance sheets and how willing they are to lend capital certainly, the trucking industry, the only party that can regulate new capacity or new entrants into the market are actually the banks >> true. >> banks are slowing down lending while it's not a positive for the broader economy, it actually would be positive for the trucking economy because it means a lot of new entrant would not come into, and they would not suggest data that they would tighten credit and it's something that we're watching. >> we know it's been tightening

up overall craig, great to see you again, craig with freightways. >> dom chu has a market flash. is it pac west, dom? >> it is it's related it's pac west bancorp and those shares are near the highs. now 18% session highs at this point, now the upside is being driven for the most part by news that the embattled regional bank has sold a $2.6 billion real estate construction loans to kennedy wilson holdings. they've also got another deal for another set of construction loans worth $363 million in place that's pending approvals and it is all basically helping to improve pac west overall liquidity profile and those shares of pac west even with the big 19% gain so far are still down about 70% over the course of this year to date period. a lot of ways to go, but still

on the regional bank side of things and it's a positive incremental development, kell. >> still ahead, everyone's trying to position from the ai g gold rush, and it is up 26% this year and he says there's still more room to run and we have that next and what makes it such a standout plus, it's just about time for some of the nation's smartest high schoolers to show us just how much they know on the economy on live television no pressure, guys. we'll dip into the national economics challenge and steve liesman getting ready to kick off the questions. you'll see it on the other side of this break. the biggest ideas inspire new ones. 30 years ago, state street created an etf that inspired the world to invest differently. it still does. what can you do with spy? ♪

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♪ ♪ welcome back it's kind of the economics version of the national spelling bee. almost 6500 high school students entered the national economics challenge this year. they're battling it out for the top spot our own steve liesman is hosting the event and standing by live

to kick off the advanced division national competition finals and we get to watch and maybe play along live. hi, steve. >> hey, kelly. thanks very much we're about to begin the council of economic education competition for the adam smith division that's the advanced division and these high school kids are not just smart they're ph.d smart i think a chatbot's got nothing on these kids here, really left standing to compete after a brutal series of elimination rounds we have on my right here. carmel high school from indiana. [ cheering ] >> and we have the gwinnett school of mathematics, science and technology from georgia. [ cheering ] >> we have hunter college high school from right here in new york [ cheering ] >> and phillips exeter academy from new hampshire [ applause ] >> you're all winners for getting this far, but only one school takes home the coveted crown of the biggest economic

geeks in the country you guys all know the rules. we talked about it and we have a series of judges here we go let's play the national economics challenge. question number one, assume clara's nominal salary is rising by 10% per year while inflation is at 4% per year. how long would it take for clara's real income to double? >> ten seconds >> five seconds. get something on your board. >> time is up. [ bell ringing ] >> carmel high school? >> 12 years. >> gwinnett? >> 11.17 years [ laughter ] >> hunter? >> approximately 12 years.

>> philip exeter >> 12 years. [ inaudible >> and the answer? >> so the answer is either 12 years or 11.7 years so carmel is correct. hunter high school is correct and philip exeter is correct >> one point each. [ applause ] all right. here we go moving on to question two, the score carmel 1, hunter college 1, philips exeter 1 and gwinnett zero if a movie theater were to raise its ticket price from $10 to $15

and ticket sales dropped from 300 to 225 how is the price of elasticity of demand characterized and what is the effect on total revenues 20 seconds >> yeah. >> five seconds now. [ bell ringing ] >> time is up. >> time's up >> carmel high school? >> an elastic total revenue increases. >> gwinnett? >> an elastic total revenue increases. >> hunter? >> unit elastic total revenue does not change. >> philip exeter >> an elastic total revenue increases. >> so the answer is inelastic and positive or increases. so carmel is correct

hunter college high school and philips exeter is correct. [ applause ] >> sorry correction, carmel high school is correct gwinnett is correct. hunter college is incorrect and philip exeter is correct >> okay. so now is that the correct score, chris >> yeah. >> okay. there we go. >> we have carmel and philip exeter tied at two, gwinnett 1, and hunter college at 1. now for question three the social security tax changes from proportionate to regressive -- >> oh, i have so many questions. i am sitting here and the last one is how is that inelastic if they raise the price and the revenue dropped. i would have to go back. i wouldn't survive in the national economics challenge i would not have gotten that last answer right and our thanks

to steve liesman and the whole group who made this work for us and allowed us to watch and join in a little bit. that was the national economics challenge as i mentioned, the finals for more go to youtube.com/cnbc television and you can continue to follow along. it's a very fun event and there is more on "power lunch" nex there's more on "power lunch." we'll see which of the teams can go forward. still ahead, my next guest says there's one name that may not be getting headlines that it deserves but is emerging as a clear leader he'll join us with the name and the reason why next. and smooths dry skin. with 7 moisturizers and 3 vitamins, you can pay more but you can't get more. gold bond. champion your skin.

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welcome back to the exchange we're highlighting a new ai play that you may not have heard of yechlt take a look at at dynatrace. they host analytics and applications securities and my next guest believes they can be one of the leaders in the race he says dynatrace is a clear leader in ai it's good to see you, keith. how do you know this isn't hype and branding or whatever

>> sure. i'm glad i wasn't part of the economic chachlkt so happy to be talking about dynatrace. in terms of ai, you have to think about the big picture of ai and the new category called generative ai, which is what microsoft and other leaders are talking about. in terms of dynatrace, they've been a leader in the bigger picture. to put it in simple terms, what they enable banks to do is keep track of how our network and applications are performing, and there's a tremendous amount of automation built into it so we can do it effectively both from a performance basis and also from a cost basis. so what dynatrace really does is leverage the big picture of ai in terms of automating a number of i.t. functions. >> if i could, i might call it

enterprise systems i have to imagine there's a host of companies who want to race into the market with similar offerings. what makes them unique or what's their m.o., so to speak? >> it's a good question. i think both scaleability and really developed practices around ai. for instance, what dynatrace can do is identified problems. number two, they can give organizations help on what's the biggest problem where's the priority and three is remediate, which is a fancy word for saying help solve the problem. and when you have organizations that's 40,000 or 50,000 people, it tends to produce many different problems so we think ai's capabilities are far in advance of what competitors can do. >> do you think they're going to get out in a bigger way to become one of the poster

children for ai or hold their cards a little closer to their vest i don't know i'm just curious again, most of the companies seem to be so eager and use the ai term 13,000 times on their earnings calls and what have you. is dynatrace that kind of company? >> not really. every company we deal with is focused on presenting an ai strategy right now, and some of it is playing a little bit of catch adjustment dynatrace has had pretty formable capabilities in the last two years -- several years, i should say, and probably hasn't been promotional about those capability, but i think in the course of time, dynatrace is a leader in the broader category of ai, which, again, creates sustainable competitive advantage in our opinion. >> you raised your price target to 55. it's trading at a 55 forward pe.

>> we think the sustainable growth is plus or minus 20% as we look out over the next couple of years relative to those growth dynamics and precash flow generation, we think the risk reward tilts very positive. >> certainly if people agree this is a name they need to have in their portfolio, thanks for joining us we appreciate it. >> thank you very much. >> that does it with us on the exchange thanks for your time, everybody. for more on the markets and economy, you can get minus letter by signing up or scan that qr code on the screech. next on "power lunch," we will speak with the winners of the economic power challenge perhaps a yelin or lea mhbseaclt i'll join him on the other side

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good afternoon, everybody, and welcome to "power lunch. alongside kelly, i'm tyler mathisen president biden and speaker mccarthy expected to meet for what was a productive call i think 5:30 was the date and time mccarthy said the sides are still far apart. can a deal get done in time and what is the real deadline. plus, is artificial intelligence raising an artificial stockmarket rally couldthis reverse just as quickly as it began? kelly. >> hi, everybody first let's get a check on the markets. very similar to what we've been watching all day long. the dow down a third of a percent, 109, the s&p, a hair below 4200 and th