real quick do you like energy or not? >> i like canadian energy a little more. i think the companies are better managed. >> did they pay you to say that? [ laughter ] appreciate it. i'll see you on "closing bell. "the exchange" is now. ♪ ♪ thank you very much, scott welcome to "the exchange." i'm kelly evans, and here's what's ahead a major media shakeup. cnn's ceo chris licht out after barely a year on the job and a year marked by multimillion controversies and perceived missteps brian stelter is right here to react, with our very own alex sherman for more on what it mean force media land scape jeffrey dunlop sees a higher chance of a recession.

jamie dimon says the economy is fine and janet yellen telling cnbc she sees more bank consolidation ahead. why is it so hard to see clearly what shape the economy is in and a lot of the retail names looking like home builders from a year ago. that's ahead first, a quick check on the markets with the nasdaq hitting a 52-year intraday high, although we're mixed to slower s&p is down about 13 points. energy is the top performing sector today marathon, apa and halliburton are some of the biggest gainers. let's get now to the big shakeup in the media world cnn's ceo chris licht stepping don just days after the atlantic published a profile about his tenure at the help shares are up 7% after this news amazon headlines a little while

ago, as well cnbc's parent company and fox hired 1.3% today in february 2022, after two months after chris cuomo was fired, jeff zucker resigned. licht was his successor a few weeks ago, as discovery was merging with warner media. before taking the helm, licht was tasked with announcing the closure of cnn plus less than a month after its launch, about 250 people lost their jobs as a result licht officially became chairman and ceo of cnn last may he wanted to broaden cnn's appeal to political conservatives, but then had another headache when don lemon, whom licht installed, was fired after his comments about nikki haley. then cnn hit another speed bump after hosting former president

donald trump in a widely criticized town hall that brings us to last week, when the atlantic piece came out. reporter tim alberta spent months talking to licht, and his piece led to licht's departure today. cnn just announced a coo just 24 hours before that piece came out. joining me now to discuss what is next for licht and the network, brian stelter is a former cnn anchor, and alex sherman joins me, as well. brian, we should have put you on that timeline. if only there was a national weekly show to talk about all the drama. what is going through your head right now? >> there is a lot of sadness, but a lot of relief for cnn sta staffers i had more than one anchor say if we could just get the last year of our life back, and it distracts from the news. >> i guess the larger question is how much damage has been done

to the cnn brand as a result of this kind of ill conceived turn around plan? >> i had executives say to me, you know, viewers are confused they don't know what we stand for or who we are. but i believe that is repairable when there's a very bad or very good event in the world, audiences come back to cnn whether it's a space launch or something catastrophic the next time an event happens, i believe the audience there come back. and it will take months to find a new permanent leader of cnn. >> that big event is 2024 presidential election. cnn was hitting its stride and now has to face four interim heads running it and now let's talk about david lazloff's role in this there is a lot riding on him getting it right shares are up 7% right now, but how much hangs on his next move

sngs >> there was a perception with chris, and depending on who you ask, it sort of ranges in reality. but i think it's fair to say that chris took his marching orders from david, and to some degree, john malone, who has been on our air talking about how he felt cnn should be more of an old-style, you know, early 1990s cnn, where it was down the middle, just the news, just the facts. he made a comment about we need to bring in journalists again, which rubbed a lot of people at cnn the wrong way. there are thousands of journalists there, and they have been doing journalism for the past few years if you are going to find a new leader, do you task that new leader with a new vision for cnn? or do you just keep kind of repeating the same things you have been saying about cnn like, well, it used to be an advocacy network, now we want to make it down this middle network, with

republicans. i don't know if that is enough of a vision to get everyone there on board with the mission. >> a lot of us when we were at cnn in the trump years felt we were advocating for reality and the truth. others felt that was left leaning. but cnn was evolving because of the political environment. >> but it was evolving anyhow before licht rrived. >> yes i think there is a right to have this desire to have a much less controversial political environment, but we don't live in that world. it will only get more chaotic with donald trump as the leading contender for the gop leader in an environment where people don't just want plain, vanilla news >> one of the things that went wrong for chris licht is the donald trump town hall he's talking to hundreds of screaming fans that are egging

him on one of the major challenges is going to continue to be, how do we cover zdonald trump on cnn? i don't believe that question has been answered. i think what chris licht wanted to do was to tone down the hysteria, having gone through four years of the donald trump presidency, he saw what cnn had done as turning the knob to 11 at all times one of the first things he did when he stepped in, you have to get rid of the breaking news all the time we can't live in this heightened world. >> which we all loved. there were a lot of staffers who supported licht's version who wanted to be on the journey with him but when he disparaged the network in the interview with "the atlantic," it was too far gone >> but there needs to be more of a vision than we have to turn down the knob here one of the big things he did was kill off cnn plus. and that was, for better or

worse. you can make an argument that was sort of the half baked product and shouldn't have been launched when it was but at least it was a northstar for cnn. it was something where they said the linear world is hemorrhaging millions of subscribers every year more people cancel cable, so let's make this new thing. yeah the ratings are going to be lower, but we can tell investors we are building a new subscription business, it will take time. when they killed that off, there was no there there any more. >> let's talk about warner brothers shares are up 7% today is that because there is a sense that this opens up the likelihood of another deal happening? there's been talk about a nbc universal, some of the other media assets out there it doesn't have the scale of other companies. does this create a necessity almost for them to do something

strategic? >> i'm not sure that this plays any role into a larger deal between warper brothers discovery and another media company which faces regulatory hurdles and wouldn't be centered around cnn, which is a small percentage of the entire company. what investors may be thinking today, does this increase the likelihood of its sale of cnn? does warner brothers discovery say you know what? we feel like this asset is not the best fit here. certainly, from everything i've been told, privately, before this, that's not been part of the plan but chris licht was very much part of that vision, so that may be one of the reasons you're seeing the stock bump today, if they can get an $8 billion price tag, that does make sense. >> when i look at this, i think this is such a headache for months and months. he's had to be more involved with cnn than he may want to be involved and it does raise this question, if cnn was worth $10 billion in 2020, is it worth $8 billion

now? because the wild card would be the 2024 election could turn this around. there could be a story in one year about a cnn stronger than ever before, firing on all cylinders. and elections do wonder for cable news >> and now you have this interim leadership team, and then to the new leadership team. the final question is about not david's credibility, but there is a lot riding on this next decision of his, who to install as the leadership, what to do with cnn if something more strategic needs to be done this is going to be the main focus he will have when so much is in the air. >> and he's dispatched the coo to manage the operations of cnn. that's a very savvy move, leaving his already help stabilize the place. staffers feel good about being there, but they are concerned about the vision question and corporate interference

historically, cnn had ownership that was hands off at&t was very hands off with cnn at a very challenging time staffers want to know that they are the ones assigned the news >> amongst a couple of other leadership lessons you might draw from this, when you read licht's comments, an almost obsession of not being jeff zucker, that'scome back to haunt him. so it's not just hey, i'm not this or that, and there were some criticisms about moving his office up to whatever floor, he had a chief of staff, you couldn't reach him directly. so this is a story with larger lessons to draw from >> if you have hundreds or thousands of people here in the position that like the other guy, then you are setting yourself up for problems there you need to win over people quickly. i think chris had trouble winning over people very quickly. then those people gravitate toward the old regime where they are like, we like that better. >> in the case of disney, bob

iger came back or in the case of starstarbucks. any chance that zucker could come back? >> i've been wrong before, but there's so much bad blood between the old and new regimes. but i heard this situation -- people on the inside were rejecting the new leader, they wanted iger back this is a similar case >> thank you both for being here today. now to the latest on the ai front. while nvidia and big tech get all the headlines, there is another race going on in the travel industry. >> google, once seen as a formidable competitor in the online travel space, now seen as a partner with priceline the ceo says google's cloud's generative ai tools will allow travelers to communicate with a chat bot and personalize bookings, as well as help agents speed up to give advice.

this is after expedia revealed a new chat bot that the ceo tells us will increase bookings. airbnb also working on embedding ai, with the ceo saying it will lower costs and level the playing field. investors like the move. expedia was upgraded to a buy. saying ai will disrupt how we plan and book travel, whether current players around google search, ontization will be the leaders in the age of personally intelligent assistants remains to be seen he says these companies have a huge data advantage, but there is a risk, which is why they're all moving at a fast pace. >> thank you very much we appreciate that one of the companies helping to make sure priceline is running smoothly is pagerduty.

shares are down 16% in the past week, after they reported better than expected first quarter earnings but cut revenue guidance for the year. they introduced three generative ai capabilities for operations cloud. joining met now is the ceo of pagerduty. thank you for joining us >> nice to see you thank force having me. >> i don't know how much you want to dig in on what's going on in the travel industry, but this is a major issue for them, how done the leader coming out of the gate with generative ai >> i think generative ai represents an incredible opportunity, probably one of the biggest technological transitions in our time. it's incredibly exciting, and in some ways daunting i think the travel industry is a great example as a place where consumers expect a perfect digital experience they have an idea of what generative ai should be able to do thafor them

we did a deal over the quarter with a large online travel platform that is using generative ai across their platform to personalize the journey in planning and the actual travel process. and what they found was that there is a big operational chasm to cross between the digital experience you build through apps and services for your customers, and the way companies operate, which is based on traditional command and control models what pagerduty is doing is helping those companies cross the chasm to help their teams, their technology teams, their customer service teams, security teams, detect issues that happen on these platforms that are unexpected, unstructured, unpredictable but high impact, and prevent them from impacting.

>> not dissimilar in terms of how you are becoming the infrastructure for the customer. what is your point, is and we all experience this working in corporations, the entire thing needs to kind of come alive. how do you do that that sounds expensive. i don't know >> we do it with 84% to 86% gross margins on a regular basis. >> it's probably good for you, but for the company it feels expensive to reengineer these systems. >> for sure, except that generative ai really helps people improve their own productivity it helps companies drive efficiencies throughout just about every part of the value chain, whether it's where the consumer is engaging or how you manage your technology or the pace that your developers can ship new code and new applications and services to enhance that experience. we're all being asked to do more with less in this macro

environment. i think it's whet the appetite for employees and leaders alike to experiment with different types of automation that is in service of people doing higher value added. >> you have the macro going for you, you have ai why are the shares still down more than half from their ipo price from 2019? you know, you could say well, the market overall rates are higher, and i get that but how is it that people would be less excited about your prospects today than they were four years ago >> i think there's been a lot of volatility in the market since we have been trading as a public company. we experienced a global pandemic and a great resignation. we now have a volatile macro environment. unless you are a technical leader or developer, it's hard to xwgrasp the value of pagerduy we see customers measure the

value and usually over 800% are on line in three years that is a big return on investments they make. but if you're not a technical developer and you don't understand the material business impact that this can have if it goes up managed, you might not estimate those kind of things. >> i want to ask you two more questions. number one, how is enterprise demand holding up? because we have gotten mixed messages on that front and number two, what is the workforce like are you still hiring, what is going on with wages? >> enterprise demand is holding up we are seeing enterprise loyalty and upper mid market retention be very resilient. we are seeing cautious buying, smaller transactions you get to the same value, but it might happen over a handful of engagements opposed to just one. but we are an essential

infrastructure for customers we serve 70% of fortune 100. so we are important, and i think our leaders and our buyers understand that. the employment environment is still very strong. the fact that generative ai is going to create productivity and efficiency for developers doesn't mean less developers it means developers are going to have more amazing services we are hiring. over half of our workforce is remote we have people in offices. i love being in person >> are you pulling people back >> we don't have a mandate we are suggesting that people develop norms to collaborate on a regular basis. but we want people to work the way that drives the most productivity and the most fulfillment for them and so far that's worked well for us >> thank you so much for your time today

>> thank you coming up, treasury secretary janet yellen warning about the threat of higher rates to commercial real estate. we'll discuss the fallout with just a week before the fed's next meeting remember when home builder multiples were in the low single digits now it's retail going through the ringer as we go to break, here is a quick glance at the market 17-point drop for the s&p. 150 drop for the nasdaq today. while the russells continue to be up 1.5% the ten-year yield just below 3.80 back after this. (sirens) [due at target in 5!] copy that. make a hard left down the alley. network's got you covered. [please confirm requesting back-up.] -changing route. -go. roadblock ahead.

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welcome back to "the exchange." we're just a week away from the fed's next decision on interest rates. a pause seemingly in the cards, even as jeffrey dunlop warns economic indicators are looking recession nar. but jamie dimon is saying the economy is in good shape, and janet yellen saying more bank consolidation is likely ahead. paul donovan joins me now, with andy capper onset with me. andy, i'll start with you. welcome.

are we -- markets have been priced out entirely this year. >> which is the right move, given the underlying fundamentals the next meeting is likely to be perhaps a pause, but it might be more appropriate to call it a skip if you look at the economic developments over the past few weeks, take the jobs report. that is not what a recession looks like, 335,000 jobs created is a large number, pretty robust >> i will just say, february '08 was the first time we had negative payrolls, and the recession was december '07 >> look at some of the things that are more predictive of the economy. things like excess reserves, look at things like excess savings built up during the pandemic but still getting put to work. i think the consumer is fundamentally healthy, but the consumer foals bad, because you

asked a generic question, do you feel like it's a good time to buy a house? of course it's not >> people are saying not really because of inflation paul, where is your head these days, bullish, bearish agnostic is not a choice >> so i mean, what we are saying is that there is more resilience in the consumer. this is not your classic economic downturn. there is a lot more uncertainty out there. the payrolls report itself is just less reliable as an indicator of what is going on in the economy. the job status is shared guess work by this stage so we are struggling a little bit in terms of the decision that's what worried me about the fed. they have this hike, hike, hike mentality and never stop to pause to reflect on what ac actually is going on in the economy and how much certainty

do we have about that. so we are seeing inflation come down and seeing a moderation of demand on the part of consumers. certain groups in society, certain sectors of the u.s. economy are slowing down at a fairly marked pace i think that the continual tightening really does have to come to an end >> can i ask you both about -- just to highlight that, you think the tightening needs to end. where do both of you think the profit margins or profits overall are headed do you see profits growing, earnings per share from here >> profit margins declined a little last year, but what we saw last year is frankly companies doing a pretty good job being able to pass through higher cost to consumers, sacrificing only a little bit of margin at the time this is a function of a very tight economy. regardless of whether we're headed for a recession or a soft handing, i feel like profit

margins over the next few years are likely to normalize and come down a little bit. >> but that's still supportive of an expanding economy? that means bad things are coming >> but profit margins are a function of a lot of things. consumers have capacity to spend. it's their will right now, if you look at the data, they have cash they're just not really eager to spend it, like do you want to buy a house or a car it's hard to feel good about these decisions. >> paul, real quickly, in a word, where do you think profits are headed >> i think mparticularly towards the end of supply chains, there is now going to be growing consumer resentment and political pressure, which will squeeze margins. >> gentlemen, thank you. we'll leave it there still ahead, used car prices

dropping for the third month in a row. it's not for the reasons you might be thinking. we'll tell you why and look at some winners and losers. "the exchange" is back after this welcome to the place... where people go to learn about their medicare options... before they're on medicare. come on in. you're turning 65 soon? yep. and you're retiring at 67? that's the plan! now's the time to plan ahead. learn about an aarp medicare supplement insurance plan from unitedhealthcare. here's why... medicare alone doesn't pay for everything. a medicare supplement plan helps pay some of what medicare doesn't. and that could mean fewer surprise out-of-pocket costs for you. call unitedhealthcare... and ask for your free decision guide. or talk with a licensed insurance agent or producer about plan benefits, options, and rates. this type of plan lets you choose any doctor, any specialist, anywhere in the us who accepts medicare patients. so call unitedhealthcare for your free decision guide... and get help protecting yourself

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because investing isn't one size fits all. allspring. purposefully divergent. ahhh! icy hot pro starts working instantly. with two max-strength pain relievers, so you can rise from pain like a pro. icy hot pro. ♪ ♪ welcome back to "the exchange." we have a news alert out of the faa. the air quality in the new york area, maybe all of the east coast has gotten worst phil lebeau has this story >> when you have a congested air space like new york city with three huge airports, you have to

take steps, and that's what the faa has done, announcing it has paused flights from the upper midwest and east coast, just flights from those areas into laguardia. at this point, they have been paused unclear how long that will be in effect flights to newark liberty have been slowed down here's the reason why. you look at the visibility and how much it's come down. remember, they have already taken steps, the faa has, to ease congestion by cutting back on the number of flights into and out of those three airports in new york city because of the limited number of air traffic controllers. so you add in another dimension with the smokiness and the lack of visibility or the diminished visibility that's why they are taking the steps to pause flights for now into laguardia we have a call in to the faa to set a sense of when that pause might be lifted. but rough day if you are traveling into or out of one of those airports in the new york city area.

kelly? >> how much might it affect air travel across the country, phil? >> well, there's a ripple effect, obviously. at this point, the faa is saying that it's pausing flights, not all flights, but pausing flights from the upper midwest and the east coast into laguardia. so you will see some impact there. but how much this ripples across the country remains to be seen >> all right phil, thank you. let's get to tyler mathsen now for a cnbc news update >> thank you very much the gop presidential field is expanding yet again, as candidates try to position themselves as an alternative to donald trump the governor of north dakota launched his campaign today, the same week as new jersey former governor chris christie, and former vice president mike pence who kicked off their own campaigns. prince harry left the witness box today in a london courtroom saying he was suspicious of how mirror group

newspapers obtained information for stories about him. he did not offer phone records or much other evidence to support claims that he was hacked the prince fought back tears on the stand today and said he launched the case to protect his wife, meghan he is among a group of high profile people suing the paper for damages. the pope's surgery went without complications. he's expected to remain in the hospital over the next few days as he recovers kelly, back to you >> all right tyler, thanks. coming up, is retail a red flag or bargain buy. don't get me started on some of these individual pe numbers. wait till you see them at nt. at do you see on the horizon? uncertainty? or opportunity. whatever you see, at pgim we can help you rise to the challenges of today, when active investing and disciplined risk management

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welcome back to "the exchange." let's take a look at some potential bargain opportunities in the market, specifically those with a super low pe ratio. last year, we saw home builders in that position with low multiples before rebounds. fast forward today, and dr horton and others are up solidly, 50%, 60% over the past

1 months now retail is in a similar position take a look at these super low pes and retail names like macy's, best buy, and others despite the opportunity for a bargain, the next guest is warning investors to stay away from the trade and he likes the home builders chris, great to see you again. welcome. >> hey, thanks, kelly. i'm here live from new york with the smoke. >> it's wild it's like an orange, red glow. great comparison i liked the home builders a year ago, and also as you know, these retailers have wrong bottom pes. but there is a bunch of reasons why you should be more careful with the retailers than the home builders back then this is kind of weird but it's important. inflation is going down, and for

most folks that's a good thing but for the retailers, they're losing pricing power that's happening at the same time that volumes are starting to decline they made up for that six months ago by increasing prices, but they're having trouble because inflation is going down. one of the biggest reasons is, we think there's a recession coming we're obviously a year closer to whenever that starts than we were last year when we were buying the home builders so you add up does things and it makes me wary not to go in there. >> so why was it -- let's rewind the clock when we talked at length about some of these home builders trading at 2 1/2 times earnings number one were you bearish back then or more bullish and part two, if you're bearish

on the economy now, would you exit that? just compare the macro with the setup for retailers. >> so home building is a really weird industry so what you have is you have mortgage rates going up a year ago, so the home builders plunged. but what ends up happening, this is the period part, that folks like you and me who own their homes, we think we're not going to tell right now, because if we buy a new house, the mortgage is going to be double so those houses stay off the mask and the only homes coming onto the market are the home builders so supply stays short, but the home builders have the only supply out there and their businesses are surprisingly good. it's a really weird situation. also at the same time, lumber prices plunged so those guys, the home builders had enough money with decent sales and with lumber places plunging, they can subsidize the mortgages for moek folks and git

to them under 5% having said all that, kelly, i am getting nervous about the home builders trade. they're up 60% in a year so i don't think the economy is going to be better this time next year, it's going to be worse. so we have taken some money off the table. >> are there any retailers who you do like? are there any super low valuations at some point, if it gets -- some of these names, some of the department stores are approaching, you know, two or three times earnings at some point, there has to be a margin of safety >> right just like the home builders, we didn't go with the lowest pe here, we go for retaile ers who price has fallen a lot

so that makes me worried but dollar general, which just got the crap beaten out of it last week, we think is really interesting here this is a long-term story. but dollar general does better in a recession as folks start to trade down it's trading at one of the lowest valuations in ten years, and it's about as cheap as it ever gets. >> i'm smiling, because that sounds exactly like a strategic move i don't know what was more informed, the stock picks or what's going on behind you >> i know, right i might have to sleep in my office tonight >> chris, thanks so much >> thanks, kelly still ahead, amid higher rates and recession risks, what are the wealthy doing, t-bills bitcoin? and take a look, we just mentioned the faa pausing some

flights in and around the new york area thanks to that smoke from the canadian wildfires. here is another live shot of new york city and exactly what's happening there. flights from tupper midwest and the east coast to laguardia are now paused we'll talk to the former faa commissioner about these health risks. that's coming up you got this. let's go. gobble gobble. i've seen bigger legs on a turkey! rude. who are you? i'm an investor in a fund that helps advance innovative sports tech like this smart fitness mirror. i'm also mr. leg day...1989! anyone can become an agent of innovation with invesco qqq, a fund that gives you access to nasdaq-100 innovations. i go through a lot of pants. before investing carefully read and consider fund investment objectives, risks, charges, expenses and more in prospectus at invesco.com.

welcome book "the exchange." you know, they might be millionaires, but like most investors, they can't come to a consensus about where the market l go from here but they are in agreement with two things, higher rates and a weaker economy >> the reason we do this survey is millionaire investors own 85% of the individually held stocks. so their money moves can shape the markets. right now, 38% of them say the market will be down this year.

that's a lot better than the 69% read we got back in december in fact, more of them, 40% say the market is going to be up at least 5% this year so they don't know they're still bearish on the economy and inflation. most of the economy is going to be weaker or much weaker than the end of 2023. when it comes to their invesmentes, nearly 2/3 put more money into cash. the short-term cash equivalents like cds, that has nearly doubled to now 24% they have cooled a bit on crypto only 2% plan to add crypto to port portfolios, but they're not worried about fallout from the banking crisis 2/3 say they're neutral or not concerned about their own deposits only 6% moved money out of their banks. 2/3 support raising the fdic limit. read more about our survey

findings at cnbc.com/millionairesurvey >> they support raising the fdic limit. push your cash somewhere else then what is the prevalence of t-bills, things like that, are they draining everything out of their banks? >> 20% of them moved money out of stocks into short-term treasuries right now, as one investor told me, 5% return on risk-free cash equivalent, that's a strategy. it's an effective strategy as inflation comes down it sounds simplicity to say, but the most sophisticated investors -- >> what did you say about crypto and their appetite for that? >> not much, only 2% that's very concentrated in millennial millionaires. they still love it >> robert, thank you still ahead, as the used car market shows signs of a slowdown, there's one name

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welcome back to "the exchange." more news on this heavy smoke from the canadian wildfires that's blowing into our area the biden administration saying their team is in touch with the canadian government as well as impacted state and local leaders. we also just got more from the faa. fill lebeau is back with an update what now, phil >> reporter: kelly, which told you just a few minutes ago that they were pausing flights from the upper midwest and east coast into laguardia well, now they are pausing all nights into laguardia. now we should point out that the aircraft that are already in position and scheduled to take off, they are still leaving laguardia, but for now they are pausing all flights into laguardia, and they are slowing down flights into newark, though departures continue for the aircraft that are in place at newark, so clearly what you're seeing here is the faa taking the steps to ease congestion even further given the lack of visibility or limited visibility in the new york area >> absolutely.

and, phil, stick around as we want to talk about another story. used car prices are one of those sticky inflation stories that turn the market upside doup, but they might be rolling over by some metrics though they remain elevated the big online auto retailers have been snapping up inventory at better prices and these caps are on the tear, carmax, car river guru up 43% and ccarvan up 26%. and joining me now is marvin fong, the btig analyst alongside phil lebeau. what's the best place to sell my used car in. >> first of all, thanks for having me, kelly yeah, according to our study we looked at four of the largest platforms out there, including carmax, carvana, but the winner of our study was a study called cars.com, you know they had the best over in our

pricing study 52% of the time. this actually follows a good performance in august of last year when he ran a similar study with the same set of cars and cars.com came out winner in that survey it looks like the first place to look to sell your scar cars.com. >> duly noted. >> shop around and look at all the different pricing engines out there. >> i would expect you to say good for consumers, not great for the company. they are overpaying for inventory and the rest of it, but you're quite bullish on this company and think they benefit from this business model >> yes different companies have different models like a carvana carmax are buying for themselves cars.come an intermediary. they don't take possession of the cars i have talked to the company, and what they told me is they have backstop partners who have agreed to take the car, you know, and stand behind that

price should the dealer decide, you know, that they don't want the car, that they can't sell it for the price that cars.com said it's worth they have backstop partners so cars.com is protected in that sense. meanwhile, you know, they are getting dealers to sign on for additional services. the after-trade product is an add-on and cars.come, only 3% of their deals sign on to acutrade which is the name of the service, so we expect continued adoption by dealers because deal remembers hungry for inventory. >> great point phil, where are we, if i could call it in the used car price cycle? >> we are definitely seeing prize come down, kelly no doubt that is what we're seeing and will see probably over the next couple of months new data came out today from cox automotive showing that the wholesale prices, and we should point out wholesale when dealers through online auctions or

in-person auctions are buying vehicles from each other they then turn around and sell those vehicles to you and i and other consumers. wholesale prices down about 2.7% compared to april down 7.6 april compared to the same month a year ago, and a big part of why this is happening, kelly, is you're seeing more vehicles available for people to buy in the new market, and the new market, how much is available, that really does drive price on the used market a lot more than people realize if there are more options out there on the new side, people will gravitate towards that. not that they are going to ignore used but that really sdros a huge impact on used pricing. >> how does that play into if i want to be an owner of these stocks in the next three to six months >> you know, all the automotive marketplaces will sell used and new. used is under more pressure because, like fill was saying, prices are elevated, the

traditional price differential between a new car and used car is unusually tight meaning that, you know, used cars are expensive relative to new cars, so you might as well shop for a new car, especially as you've been waiting for that inventory to come online and improve what we like about the stocks that we looked at, especially cars.com, is that, you know, they are pretty agnostic the dealer -- a used car dealer or franchise dealership is in the going to cancel their subscription because, you know, sales are down 5% or 10% in fact, in a tough sales environment, they need those sales even more because they are driving, you know, the leads, the interested consumers that go to cars.com and then they send on, you know, their expressions of interest on, so dealers need that foot traffic. they need those kind of pre-qualified consumers, so they actually kind of stick with a cars.com even more when the sales environment gets tougher >> phil, i'll give you the quick last word. >> just what he was talking

about here it highlights, kelly, what we have long said, and everybody knows it's true. if you sell your car online or at a dealership, you're probably going to get a little bit less than if you were really persistent and you did it on your open and real worked at it. that's the price you pay for going through either a online auction site or through a dealership, and that's where they make their margins, so it's only -- it makes sense that whether it's cars.com or car gurus or carvana, they will profit off of you selling their vehicle to them. >> all right gentlemen, we'll leave it there. appreciate the deep dive into the used car auto market today phil lebeau and martin frong from btg that does it for us. coming up, dr. scott gottlieb will talk about the associated health risks from the smoke support canadian wildfires blowing into the new york area here's a look at the broader region you can not see the buildings.

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everybody. come on inside and get some fresh air. alongside kelly evans, i'm tyler mathisen the s&p near five-year highs and the fed meeting is a week away from the next decision what will the fed do pause, prison what do you say? we'll get a take from a former fed official and break down what it means for the markets plus, the mega merger that shook the world of golf. reaction was swift sometimes angry, but if fans and sponsors eventually look past the saudi money, could it come for teams in big u.s. professional sports leagues? the nba, the nfl and mlb or hockey kelly? >> you wonder. thank you, tyler hi, and let's get a check on the