the new york stock exchange. ahead this morning, tom lee is with us. get some reaction to the inflation data today, what it means for margins and why it's bullish that a session is not in sight. nyu is with us with risk premium in the market and whether valuations are getting too lofty. >> jim stewart on the reverse leverage studios have in the writers and actors strikes. first up on the markets, a little recovery seen in the last half hour or so. the s&p 500 was positive a few

moments ago. it's negative, but not as bad as earlier this morning the dow remains positive, up 92 points it's being held up by united health care and walmart, which is getting a lot of analyst love ahead of next week tech continues to be under pressure, carl as for the data flow this morning, it's really been about two reports investors are focusing on, ppi, comes in a little hot a little it wasn't extreme, but there were some weird factors it like lea pointed out. then we got the inflation expectation from university of michigan and you got a surprise on the one-year and five to ten-year outlook that's good news for the markets that are rooting for lower inflation. >> some reports on ppi and the financial management prices.

i think one headline is what the stock market gives, the stock market takes away. kind of a weird meta dynamic. >> the whole reason was higher stock market let's dig into the week's economic data. against the back drop of hotter than expected ppi and cooler cpi. our next guest says the odds we see a recession from here are getting lower. joining us is managing partner, tom lee. you've been very optimistic on the market and on the inflation story and on the economy story so is your bottom line all reinforcing your view? >> yes i think yesterday's cpi report kind of shows inflation's on a glide path lower the things that are still inflationary like auto insurance, motor vehicle aren't things the fed is trying to target with higher rates but it's more of a supply chain work through that so i think over the next three months, we could see core cpi at

0.2 or less. that would really allow the fed to breathe easier. that's why i think the last hike was july. we have $5.5 trillion on the sidelines. i think once we get through this rough august, i think it's going to look pretty goods for the rest of the year. >> the counterargument is the market has already priced in the softer, no landing scenario you just painted and the fed being done and now there are questions of whether that's really the right call core cpi, for instance, is still 4.7% we still have indication that things are rising, like wages and energy prices that calls into question either the last rate hike or time till the first cut. >> i think one of the things we have to be careful of is looking

year over year because it lags, changes. let's say core over the next two months prints the same as it did this, which is 0.16. >> 0.2 you round down, you round up. >> in two months core is going to go from over four to something with a three it's going to drop more than 100 basis points in just two months. you're dropping all these big numbers from last year and then from a stock perspective, people forget that early in expansion, multiples typically expand by seven or eight times. we should expect pes to push 22, 23 forward because we're early cycle, and then earnings start to catch up. >> margins stabilizing what is your s&p number for earnings next year >> we think it's going to be around 250 but if the dollar softens, you could be 255, maybe even 260 even at $90 oil, you don't really kill the earnings story

in the s&p $90 oil is where it was in 2018. it's not like it's an economy killer >> but how much more runway do you think this market has for that view, for the whole soft landing view, what the fed has done and they haven't created a recession, isn't that why the market is up double digits already this year? >> yeah. you're asking a positioning question i don't think people are even that bullish this week everyone's very quick to turn bearish. one just has to look at the comments from a lot of folks and they're already back in the hard landing camp or the top is in. yet we know investors pulled $150 billion out of the stock market this year and there's $500 trillion in cash. mortgage rates could drop dramatically if the fed is done and the ten-year stays, mortgages should drop to 5.5%, that would be huge, so a lot of catalyst. >> and unlocking a lot of supply people wouldn't feel bad listing. if you had to pick a worry between inflation and growth, i

assume it's inflation? >> i think the worry could be growth because the fed could stay -- if they're higher for longer and inflation is dropping, they're actually really restricting the economy i think it's going to be important forofficials to recognize they probably need to cut rates earlier than they think. >> you'll be on the watch for real rates to start to perk -- >> yeah, because in two months core cpi is going to be more than 100 basis points lower year over year and fed fund rates are still 5.5% we're talking about rates dramatically tightening. >> we had a discussion this morning about the amount of debt that's fixed and isn't that -- isn't that pass-through going to take longer to demonstrate than we think >> yes but you'll feel it through things like credit card, revolving debt there are a lot of people who, unfortunately, do have short-term debt and one-year

a.r.m.s. you're still on the fringe going to see it. >> are you a buyer specifically on this tech >> yes but in the second half our top three sectors are industrials, energy and tech faang. we like tech faang but there's a lot to like about industrials and energy. >> so tech faang on lower rates, industrials on - >> cyclical improvement and earnings recovery, yes all because of financial conditions eventually easing. >> you always manage to maintain the optimism and bullishness >> he was cautious about august, i got to say, going into august. >> yeah, i mean -- >> what happened to that caution? we've done it? >> well, it's been messy i think the second half of august will be better, but it's been messy, yes. >> it's felt like that tracking another down week here. tom, thank you tom lee from fund strak. meantime, short-term treasury bonds continue to be a hot trade. not just for buffett or ackman

b of a are buying ke ing t-bill. >> the fed has been holding rates up and while we discuss maybe they'll cut rates in '24, they're not doing it now, and the -- there is an alternative the alternative is 5.5% yields on t-bills or 5.25% on money market funds the long-term average of the stock market is supposed to be 9% i could get two-thirds with zero risk in a money market fund. so, for a lot of people it's attractive it's not 2019. if you wanted to stay out of the market, you got nothing.

>> one of the characteristics of the last few weeks has been this march higher in yields despite what everyone thinks, which is the fed is done or nearing the end point of the rate-hiking cycle. so, what do you think happens with yields from here? >> well, i think that the march higher in yields is because people think the fed is done with the rate-hiking cycle we've had a steepening of the field curve. fancy term for meaning long-term interest rates, 10 and 30-year rates are rising faster than short-term rates i think there's a fear in the market that there's going to be some reacceleration of inflation. not to nine or eight, but maybe back towards 3.5 or 4. and if the fed's not going to fight that, i don't want to own ten-year notes that's what you've been seeing in this market so, ironically, if the fed is going to be done raising rates in this type of environment, the result might be new highs in yields because there is a

confidence that the market doesn't have about inflation so, if the fed wants to stop, we might actually see longer term rates and mortgage rates and other rates like that go up. unless the market is completely convinced that the inflation story is behind us i don't think it is. that's why you see the yield curve steepen. >> that's why yumish was so interesting and long-term expectations are not following the trajectory of at least headline cpi, right? that's a little worrisome. >> yeah, except i'm going to push back on yumish. i'm not a big fan of surveys it was 2.9 down from 3 today but it's been between 2.9 and 3.1 for the last two years in the last two years we've had some wild inflation numbers. a 40-year high, a move from 9 to 3 and that survey never, ever moves. i really question what it's really telling us. if a 40-year high and then 9% to 3% move in year over year

inflation doesn't move that survey, i don't know what will at this point. i don't know how useful it is, to be very frank about it. >> what you just said is the polar opposite of everything tom lee just said, who was on just before you, who likes stocks because he does see this disinflation as real and the fed stopping raising rates and mortgage rates and other rates should come down does this mean you're bearish? >> well, on bonds, yes, i do think yields will continue to go higher from here on stocks, stocks you've got two options the way i want to put it simply option one is we go into some kind of recession or some kind of softish landing that might be a little softer than people like then we have to contend with, you know, declining economic performance and maybe we have to decline -- with struggling earnings option two is the camp i'm in, which is probably more aligned

with tom, the no landing camp. we keep going, there is no recession, but that keeps demand on interest, that keeps demand on inflation, pushes prices, keeps interest rates up. now, given those two options, i think the stock market's better off with the higher inflation, higher interest rate scenario than the potential of a recession right now. so, yeah, is it a headwind for the stock market sure but it's not as big a headwind as the other story, which is in six months we would have a recession. that i think is a bigger headwind. >> really quickly, we're all focused on the auction given the fact the government had to issue so much debt any big concern from you from what happened with the 30-year demand picture yesterday and just going forward, what these are going to look like >> people over -- put too much emphasis on these auctions the day before the ten-year was great. then the 30-year wasn't that great. auctions have a self like of 24 hours affecting markets.

we're already past that and onto other things i think we way overstate the importance of auctions on the long-term interest rates. >> good to know. >> maybe next time we'll talk corporate debt as well that's getting interesting good to see you, jim coming up, the dean of valuation, aswath damodaran is with us. a bold note making the rounds on the street today wolf saying maybe you buy intel and short nvidia we'll break down some of the reasons after the break.

lowest level since last june now on pace for the worst week since november uhm about 3.6% freeport and southern among the losers there are we talking about dr. copper these days as a macro? >> yeah, global economy, china economy. china had lending numbers overnight that were particularly weak i think it's part of the dollar story with the chinese currency selling off and the -- >> and their import data. >> yeah, china, weak, weak so were exports this week as well. buyer beware when investors consider stocks to buy, our next guest says there's a key measure they should be taking into account, risk premium. with us is aswath damodaran, professor of valuation, we know

you pay close attention to equity risk premiums why do investors need to be paying better attention, explain. >> your hopes, your fear, your greed, your panic. everything shows up in that number to me it's where you get a sense of the market. what are people afraid of, what are they hoping for? it's keeping a gauge of what's going on in the market that number is the number to watch because as an investor, whether it's asset allocation of individual companies, it becomes a number that plays a key role. >> what does it show right now >> i mean, based on my judgment, it's about 4.4% down significantly from the start of the year, indicating again hopes win out over fear over this year the start of this year, of course, people are terrified terrified of inflationary recession. that seems to have receded by july but who knows what the remaining six months will bring. >> isn't that high >> it's not historically low

this isn't 1999 when that number was 2%. >> isn't that a high level it's higher than what i've seen for the street. >> that's because people use a shortcut they use the earnings to price ratio as proxy for what you can earn on stocks i ve no problem using that measure but it's very flawed it's a shortcut. it's back of the envelope calculation and understates the true equity premium. >> you make the point that some coverage of equity risk calls themetric somewhat esoteric. i'm wondering how it applies to your current view of the actual market >> i think people use the word es esoteric but everyone uses equity risk premium they just don't call it that when you say you're putting less money in stocks, you're telling me the equity risk premium is too low. when you tell me coca-cola is

cheap, you're telling me something about the equity risk premium. we may not use those words but it underlies almost everything we do as investors, asset evaluators, as people and individual companies. >> what is the data that gives you -- talk about the significance of 4.4 and what that tells investors to do. >> well, i think here's the catch. if you're looking for an indicator that will tell you what the market is going to do next year, that is none of the indicators are going to tell you that, earnings to price ratios, dividend yields, cash flows, whether it's momentum indicators you cannot predict markets over the next year. the sooner we accept that reality, the healthier the discussion becomes if you're looking at the next five to ten years, there is predictive path. when exquity risk premium comes but it's over the next ten years. whether they become low in years

five, six, seven or eight or low in years one, two, three or four makes a big difference that's market timing everybody does it, but nobody pulls it off >> can you briefly talk about which elements or parts of the market you think are the most mispriced? >> i think tech had a really good run this year, especially big tech it's been a very selective run up in tech it's not all tech, big tech, profitable tech and i think the market is overreached whether it's apple or amazon or tesla. and i think you're going to see some cleaning up happening because of that overreach. does that mean we'll go back to 2022 levels? i don't think so i think we'll remain above 2022 levels markets overreact in the other directions that, again, is a feature of these stocks market never get it right. they overshoot, they undershoot. and rather than wring or hands about how crazy markets are, think of it as an opportunity. if you haven't done any of these stocks, you will have your

moment sooner rather than later. if you want to own ip individual yeah, it might come sooner for you than you think. >> how do you factor a.i. into your traditional evaluation analysis >> a.i. has to be converted into revenue. so, in the case of nvidia, the answer is easy they make money by selling chips that run a.i in the case of microsoft t might be subscription. a.i. is just an entry point. you've got to tell me how you plan to make money on a.i. and then we can test out that business model so, companies that benefit from a.i. absolutely for most of the market a.i. will be a cost. and i think it's going to give them a particular profit boost because if everybody has it, nobody has it. >> aswath, thank you for joining us good to get your latest thoughts on equity risk premium from nyu. >> thank you still to come this morning after the break, a check on china's market as the president here calls that country a, quote, ticking time bomb

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let's go global, as we do, with european markets at the close in a moment. the story abroad once again involves china with strong words from president biden calling china a, quote, ticking time bomb and saying they've got some problems and that's not good because when you have bad folks have problems they do bad things also said on the heels of consistently disappointing economic data out of beijing those comments were made at a fund-raiser in utah, as reported he also had some statistics about china which weren't exactly true but on the bottom line and the ticking time bomb he was worried about aging population and weaker economic growth those two things are largely

true lately it's just been on the weak economic recovery out of covid, high unemployment and now more property problems. >> interesting the comments came on a trip to a gop state with a gop governor, who even got heat for meeting with the president maybe you might expect his rhetoric to reflect that. >> politically charged i wonder if china will take it that way campaign trail stop. let's get a news update with contessa brewer. >> hey, carl here's what we have for you this hour the judge in the trump election conspiracy case rejected special counsel jack smith's request for a broad protective order to prevent the former president to talk about evidence gathered during discovery a hearing is under way in a d.c. courtroom but the judge has ruled this order would only restrict materials deemed sensitive. the special counsel appointed to handle president biden's mishandling of classified documents

sources tell nbc news talks have been going on for about a month. and the messy effect is real the owner of inter miami says the number of subscribers to the mls season pass on apple tv plus has more than doubled since superstar lionel messi joined the club apple has not confirmed those numbers but tim cook called out messi's contribution when they reported earnings. inter miami says half of the viewers watching messi's game is in espaniol. when we come back, go long intel and short nvidia we'll discuss. a new wolf research note making waves. credit suisse, the latest to up its target on walmart ahead of earnings next week as the stock continues to hit all-time highs in a tape that isn't all that friendly. 'lta authaafr e break. retirement, but i wish we had more cash. you think those two

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take a look at the smh etf, it's on pace for its fourth straight negative day and tracking for the worst week of the year for semiconductors going back to december question is, start of a trend or just a reversal of what's been a good year? >> four straight days. that downtrend for semis brings us to a note from wolf grabbing our attention. the firm calling, perhaps, for a long position intel and short nvidia yes, you heard that right. they look at the price action

between the two year-to-date, seeing more runway for intel kristina partsinevelos going to weigh in on this one hi, kp. >> hi, carl. this is based on technicals. take a look at the three-year chart of intel it's on the right-hand side of your screen. you'll see a u-shape recovery. really on the far right of your screen it's hovering under $38. the analysts are suggesting intel could actually break through that resistance level which is just another saying of a price level a stock has trouble breaking through they believe it has momentum and could ride through the next resistance level which is 40 bucks. that's almost a 6 buck gain if you look at today's price action of $34.51. for nvidia, same three-year chart. we can put that on your screen on the right you can see it's in the opposite direction, like an umbrella shape it's just hovering above $400. they're suggesting the stock could fall through the $400, which is closer to the 20-day

moving average the reason for that is because it's so overbought so, that's the reason why they're pointing to intel going up and then nvidia going down. >> we should note that this is, as you just laid out, purely technical analysis, right, and price momentum the fundamentals are the reason why a lot of people would think this is nuts what do you see? >> true, but i could find an argument for both cases. nv nvidia, there's a lot of concern about supply yesterday super microcomputers, customers of nvidia. that was a warning sign. part of the reason you saw nvidia sell off yesterday. super micro is down the lane when it comes to getting gpus. the gpus from nvidia are given to the hyperscalers first like google, meta, but there is overall concern about that supply level if that's the case, there's only so high nvidia can climb because

they can't increase that utilization level. they can't keep producing the gpus if they don't get supply. the story is pc recovery we saw it in the latest earning report, return to profit for intel after two quarters this could be another reason this stock is trending upward and a reason why memory prices have also increased. there's a lot in there but the fundamental argument for wolf. >> you made it, thank you. kristina partsinevelos next up, we'll turn to retail credit suisse raising their price target on walmart to $180, expecting momentum we'll also hear from competitors in retail earnings season next week senior retail reporter courtney reagan joins us with more on what we can expect it is interesting to see the wall street analysts continue to love this stock, walmart, even

as it's maintained near record highs, right >> it is the report you point out here, credit suisse, is looking for another $19 upside here if you go by their price target they moved up here today. it does seem wall street analysts are favoring walmart over target when you look at a trade of two retailers we often compare to one another they like walmart with continued share growth in groceries, which is something that numerator data put out recently saying, look, walmart has gained in grocery share over the last year they're getting more than 25% market share in grocery. of course, we know that's a repeat trip driver credit suisse also thinks they've seen transaction growth, growth in private label business important because that general merchandise category is likely to remain a bit under pressure for walmart and for others that is where the higher margin are. but i do think it's interesting that credit suisse also points

out potential gains in the health and wellness category, pointing to these drugs that so many people are taking for both diabetes and weight loss walmart, of course, has a pharmacy the cfo pointed it out on one -- on a recent call -- a recent conference, i should say john david rainy he said, yes, we are seeing some pretty significant growth there when it comes to sales of this category of drugs. however, it is lower margins so, sort of a double-edged sword. >> i'm curious to know your thoughts about a year-to-date chart of walmart versus target because it really has been a reversal of fortunes i wonder if you think that's about inventory management or cultural, political controversies. what happened there? >> i hear what you're saying, carl i think it's a little hard to tease out exactly what's going on for the divergence at every step of the way. i do think target has struggled more with inventory over the last year or so. we know they told us that and they had to discount product to

sell it. we know target overindexes when you're talking about discretionary categories -- apparel, electronics both target and walmart have said those are weakening as consumers get a little more discerning with their dollars. their weakening is going to hit target more than walmart because of the percentage of sales sold there. yes, those cultural issues for target are something that did happen in the culture wars during the pride month with the merchandise being out in some stores, angering some customers and target coming out and publicly saying, look, we have to move it away for the safety of our employees that is something target sort of got caught in the crosshairs with that walmart did not necessarily. it doesn't mean they didn't have some of that merchandise but for whatever reason it wasn't as much of a cultural moment. there's a lot going on in these businesses we like to compare them. there's a lot of differences, too. i think that's why you're seeing wall street diverge and then the stock charts you started the conversation with.

>> this is the first time we'll see the impact, if any, on results of the boycott thank you, courtney reagan coming up, the writers strike has passed the 100-day mark, one of the longest in recent memory, but a breakthrough may be on the way as parties return to the bargaining table we'll look at what's at stake for the media giants as a new tv season approaches. ese bills aree has no idea she's sitting on ae goldmine. well she doesn't know that if she owns a life insurance policy of $100,000 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.

some news today negotiators in hollywood return to the bargaining table today as that strike that ground production to the halt crosses the 100-day mark that and the impact on tech and media companies is the subject of today's "techcheck" segment with our own julia boorstin in los angeles. julia, light at the end of the tunnel >> light at the end of the tunnel because today the writers guild and amtpt are restarting official negotiations. these are the first official negotiations since the strike started back on may 2nd. both sides are feeling the pressure now that the strike has lasted longer than the 100-day writers guild strike that was 15 years ago. the wda writing to members yesterday, quote, our committee returns to the bargaining table ready to make a fair deal knowing the unified wga membership stands behind us and buoyed by the ongoing support of our union allies this strike has already cost the california economy an estimated

$3 billion with more impact in atlanta and the other markets that have a big production base. the industry is seeing growing impact from the writers strike the emmys were delayed the broadcasters are bracing for a fall tv season with a derth of content and movie studios are considering moving more films from the fall to spring because actors won't be around to promote them unless there's resolution this comes after sony moved the release dates of seven films, including a ghostbusters sequel. two key sticking points in negotiations reflect the tech-driven transformation of the last decade, all about streaming. the transformation that could come with artificial intelligence at the center of the negotiations for the writers and actors, greater compensation for streaming films in series including residuals tied to success and looking ahead, they are asking for a.i. protections,

including banning a.i. from writing or rewriting projects and preventing writer material used to train a.i. the fact writers and actors are striking together may give them more leverage and could make the writers guild cautious about compromising too much. >> thank you for that, julia boorstin let's bring in jim stewart joining us at post 9 speaking of leverage, you do think that the cash pile that's growing as a result of all this is somewhat leverage. >> absolutely. it's true that time is on the side of the actors and the writers, but short term they have just handed the studios a multibillion dollar present. i mean, netflix said they estimated about $1.5 billion savings, which really means reduction in cost. others haven't estimated but

it's going to be in the same bal ballpark warner was saying it's $100 million, going to be more by the end of the year. wall street is saying you're overspending, you're spending too much on content, and suddenly, you know, that arms race is over thanks to the strike >> great excuse to cut costs but at some point they need content. >> of course they must be watching very closely because it will show when people start stopping their streaming skrictions because there's nothing new on there to see. so far we're not seeing that there's a flattening of subscriber growth. i haven't heard of anyone saying, oh, there's no fresh material so i'm going to cut as the months go on, as i said, time is definitely going to be on their side. on the other hand, you know, like iger said this week for disney that, you know, they have got to cut costs they have to come up with a business model in which streaming makes sense. if the revenue isn't going to grow that dramatically, you have to cut costs so they said they're going to make far fewer films and cut

costs on films which means fewer writers and actors are going to get employed and make less money. >> when do you think the pain flips? when do you think it becomes an issue for the studios instead? >> it's heating up right now i think that's why they're back at the table and these are very tricky issues to negotiate but i would say another month they're going to start looking at serious damage to the holiday season that is big. you know, you need that new material coming out, the excitement of that i think that's going to put significant pressure on the studios. >> how do they deal with issues like -- i mean, the streaming models is one thing and a.i. is a whole other can of worms. >> they're both incredibly difficult. the so-called back end of the compensation model collapsed with streaming the studios now own these materials. it's not the producer who owns them and then relicenses them and they get reruns. there are no real residuals as in the old days. how do you calculate if it's a hit? the way writers and actors get

compensated if something is a hit is they get hired for the next project and they get a big raise for that it's not like they don't get any recognition if it's a hit, but measuring that on a streaming platform and how much of the revenue is due to that, i think people really had trouble getting their heads around that formula. >> diller made a great point a couple of months ago that is the marginal players in this particular cycle, namely apple and amazon, these costs are -- are they immaterial if not, they're close to immaterial they have infinite patience on this kind of thing, right? >> that's true this is a tiny fragment of their overall revenue stream on the other hand, they don't want to be seen as the -- you know, the darth vader of the industry i think they have some incentive. again, the financial pressure that the writers and actors have is pretty limited. i mean, you know, the time to strike, in my view, is when things are good, when times are good, when the people you want to get more money out of are flush. they're like bumping up against,

you know, a wall street that is really intolerant of losses in streaming sector right now it's a really -- it's a really tough situation, i think they're in. >> you mentioned iger and someone who wrote the book on disney i'm curious what you make of -- now that we have another quarter of progress. he has a long to-do list and still some pretty big strategic questions here of whether you have confidence or whether you think investors should have confidence he can do it. >> he's up against the same structural issues that everyone faces which is rapidly declining revenue in profits from linear television, the ongoing struggle to make streaming profitable there are so many uncertainties. he said, we don't know this pricing demand model here. they really raise the price. they're going to see how that affects demand they don't really know i mean, they're like feeling their way through this there's so much uncertainty in that model and whether it's ever going to work. >> i don't know if you've seen the reported increases in -- in

streaming fees for the nfl like 40%, 50% increases. as sports will bes on tensably all we have. >> sports is the talk of hollywood. when i was there earlier this year, that's all anybody wanted to talk about, these sports rights everybody has decided the key to keeping viewers in a streaming service is live sports that's the one thing they will not drop their subscription. there's always a new one coming up the biggest test will be the nba rights, which are coming up. the negotiations are going to start pretty soon. that involves disney, warner, the turner cable channels. that number -- and supposedly the apple and amazon and nbc are licking their chops trying to get their hands on that. i think sports rights are going to keep soaring. >> i do wonder, for disney and the industry, if the cost discipline and cuts will come at the expense of growth ultimately. >> you have to wonder.

again, if netflix keeps the spigot on and goes back to spending once the strike is over and is bombarding everybody with new material and then the others are not producing, you know, compelling new programming to stay on, then these marginal players are going to start really having trouble. i think it's -- you know, the keys so far to the streaming model has been fresh material to keep people renewing their subscriptions. if that's starts to taper down, who knows. how much do you need i have to admit, i keep finding things on these streaming services that have appeared and i never even knew they were there. there's a lot of stuff on there. >> yeah, especially when you go abroad go to the foreign language stuff. there's a lot. >> we'll see what the meeting yields today, if anything, jim it's good to see you. >> nice to see you, too. when we come back, is the work from home phenomenon powering strong job gains? tea usth qstn ueio afr quick break.

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when you stream on the xfinity 10g network. as we search for what's been driving the strong job gains this year, some economists think the answer has to do with work from home. steve liesman has more on that >> thanks. economists at bank of america and the university of chicago say the work-from-home phenomenon could be providing

the extra bodies that have been empowering these strong gains. bank of america wrote the rebound in labor supply in 2023 has been sharp and unexpected. one argument is that increased remote work and flexible work arrangements have pulled more workers into the work force. the participation rate of workers 25 to 54 is a full percentage point above the pre-pandemic period. almost all of that is from women and work-from-home could play a major role here along with higher wages steven davis from the university of chicago and the hoover institute found work from home has drawn the health impaired into the labor force his data showed people with health impairments participate in greater percentages when they can work from home for example, the participation rate on the right side of your screen of those with the most health impairments or self-reported, 2 1/2 times greater when they can work from home davis tells me work from home

expands job options for people who live in remote and left behind places with a limited set of nearby job opportunities. this work-from-home phenomenon has gotten a bad rap of late in part because there's concern these workers in some cases are less productive. that could be hurting some individual companies but the data suggests for the broader economy there are benefits that fuel job growth that may not be as inflationary as the fed believes. >> that's pretty interesting about the inflation tie-in, but it doesn't really get to the fact that we still have this shortage of workers, right and we need bigger policies to address that >> right precisely. but how short is the labor supply that's the question. the mystery has been we keep doing 200,000, 300,000, 400,000 jobs a month, the demographic estimates are that there's only

75,000 to 100,000 new entrants into the work force. that suggests we're pulling in some people from somewhere, some of this could come from immigration. clearly when you look at the participation rate at prime age there are more people working from home, work-flexible arrangements are probably all responsible for this phenomenon. >> we minds you why the labor strike we've seen is in areas where you can't digitize the work, the ports, u.p.s >> great point carl, what we're talking about are the wages of those who have to show up, right? u.p.s. workers, they're not delivering packages from home. >> very difficult. when they figure that out, you know we're getting somewhere >> exactly thanks when we come back, gig workers beware a new tax law could impact payments on services like venmo,

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( ♪♪ ) ( sfx: people cheering ) ( sfx: stock exchange bell ringing ) ( ♪♪ ) ( ♪♪ ) ( sfx: people celebrating ) ( ♪♪ ) ( sfx: people celebrating ) ( sfx: stock exchange bell ringing ) the latest tax battle in congress could impact gig workers that use popular payment

apps robert frank is here with the details. what's the story >> well, the house ways and means committee approved legislation that would roll back the gig tax. the tax requires paypal, venmo, ebay or airbnb to send 1099 forms to anyone reporting business income of more than $600 in a single year. this is supposed to take effect in 2022. the irs postponed that until 2024 tax year, which means that income you receive this year from the payment apps could generate a 1099. the ways and means bill would lift that $600 limit to $20,000 and then a customer would have to have at least 200 transactions in a single year. the gop saying americans shouldn't be harassed by the irs for just selling things on ebay or paying a friend for concert tickets. the irs says only business income would be subject to this

reporting. if you sell a couch or a car for less than you paid that is not taxed or reported because it's not a gain almost half of the income that flows through these apps is going unreported and that has added to the tax gap, the half trillion dollars a year that goes uncollected by the irs. there is also a proposal to lift the threshold to $10,000 we'll see where all of this shakes out >> all right, robert, thank you. good heads-up on that tax provision. carl, if you look at stocks, we have a little rally in the s&p. it went positive about an hour ago. we lost that now now down 0.2%. not a sharp slide, but we have not been able to hang on to the rallies this week. >> things got interesting this morning as we got within seven points of the s&p's 50-day moving average santoli pointed out it's not the end all be all of averages, but that's something the bulls would

love to see defended next week, we mentioned some of the big stuff. japan data, china retail sales, fed minutes and our own retail sales on thursday. >> a lot of earnings reports from walmart, home depot and target it will be all about the u.s. consumer which has shown some signs of strength and spending lately we'll see if that's confirmed. >> dom is in for the judge on post nine. let's get to the half. thank you very much, carl. welcome to "halftime report. i'm dominic chu in for scott wapner front and center this hour, is the market at a critical turning point as the nasdaq looks to hand in its first week of back-to-back losses this year? our investment committee is standing by to help you navigate through all of this. joining us is shannon saccocia, karen firestone, with me on set at the stock exchange, steve weiss and bill baruch. let's check the market right now. as sarah pointed out in the past hour, we have seen a bit of a