times earnings, i think you can buy this stock again >> uber, very quietly down five points in august don't play yourself. >> the stock has been one of the best, that's for certain thank you for that the dow still green. the s&p 500 is still green we'll see if the nasdaq gets there. "the exchange" is now. ♪ ♪ scott, my friend, thank you very much. in for kelly evans, i'm tyler mat mathisen a tail of two retailers, target versus walmart what's driving the divide and which one will likely come out on top in this big boxing match over consumer spending we' we will debate and new clothes in this economy? we'll ask about the demand for thrifting, and what it's saying about the health of the consumer waiting for the fed to

flinch mike novogratz say it could be a boone for bitcoin. we begin with today's action, and dom chu has the numbers and more >> trying to bounce back from some of the string of losses we have seen, although it hasn't been dramatic. if you look at the dow industrials, we're just about flat on the session, up seven points on a 34,770 basis for the dow industrials. so flat on the session the s&p is holding above the 4400 mark. 4410, up 6.5%, about 0.2%, 1/5th of the market in terms of basis points if you look at the s&p, at the highs of the session, we were up 17, down 8 at the lows so nothing mayor in terms of movement, but we're still drifting a little bit down trend wise from what we have seen the markets overall. we're about 4% below the highs

that we have seen so far this year the nasdaq, the underperformer, just down marginally, five points to the downside interest rates are a big part of the discussion in the market narrative right now. if you look at the ten-year treasury note yield, it has been trending higher for the better part of a few months now the reason why this current level is important, at 4.31%, you have to go all the way back to osctober of last year. that was the cycle high around 4.33%. so we're just a hair below the highs that we have seen in a ten-year note yoeld for this particular cycle so keep an eye on that move higher in rates. it will play in other parts of the market, as well. stock wise, take a look at the big drop in cvs health, down 9%. amazon is just up fractionally basically, what we have right now is blue cross of california, big health insurance company, is going to move away from cvs

health's pharmacy benefit management in favorite of amazon pharmacy and mark cuban's start-up pharmacy agency and if you take a look at the divide in these two stocks, just look at amazon versus cvs health this is on a year-to-date basis. the widening gap copes getting wider here watch what's happening with amazon target and walmart, walmart shares drifting lower, down about 2% target keeps bouncing. remember, target hit a 52-week low not long ago these two stocks reacting to walmart. walmart was good, better than expected profits and revenues with the full-year forecast. grocery and ecommerce driving this so still, walmart is sitting right near record highs. >> those are the ones to compare, especially after target's numbers yesterday, which were sort oh of a mixed

bag. dom, thank you very much appreciate it. beyond those big-name retailers, a new call on the street digging into the discounters with student loan payments set to resume this fall our next guest says it's time to pay attention to the deep value names. joining us now is the managing director and senior research covering the retail space at loop capital anthony, welcome i know you put a high value on the predictive value of consumer confidence measures. those measures hit a high last month from 2021. that being the case, why are you leaning towards those more value oriented plays, are you seeing some lack of confidence in consumer confidence? >> not at all. the macro economic indicators we looked at are moving in the right direction and have been for some time. having said that, we are going to have a resumption of student

loan payments this fall. so you have at least 40 million loan borrowers who really haven't had to pay their full student loans for over 3 1/2 years. it's going to be a real shock to the system we surveyed over 500 or such borrowers. over half of them said they were in a worse financial situation now than they were when loan payments were halted in addition to that, over half of them said they're going to cut back on durable goods spending to cope with this so that is the thing we are a bit concerned with, and we could see a trade down as some of these consumers look to stretch their wallets. >> so this looks like a kind of -- you're predicting here a kind of retrenching, as these individuals -- how many of them are there? you said 40 million? >> the numbers i've seen are over 40 million, could be up to 44 million it's a big number. >> what is the average amount of payment that they're going to have to pay? it's going to mean they're not

going to have that amount of money to put gas in their tank or buy clothing or whatever. >> that's right. we've seen different estimates, you know, the number i saw today was about $10 billion. the vast majority of the consumers said they had been saving somewhere less than $500 a month from not having to make these student loan payments. >> so there's the hypothesis, student loan payments among other things will slow the spending that we have seen and that leads you now to some of the choices, the equities that you like. among them are dollar tree, dollar general, national village. walk us through those. >> sure. so, look, dollar general and dollar tree, they are, you know, deep discount retailers. you know, dollar general, family dl dollar are basically small

supermarkets so generally in times of economic stress, you do see consumers trade down from the supermarkets, the consvenience o a dollar tree or family dollar the opening price point in one of the largest chains is two pair of eye glasses and exam for $79.95 and savers value village is the largest for profit thrift store in the u.s. and canada their average retail is less than $5. so these are all four retailers that we think could benefit from a consumer who is looking to save a little money. >> are you talking -- you're coming close to suggesting that the economy might go into a little bit of a recession, but you're not really saying that, are you? >> no, i'm absolutely not. quite frankly, you know, my -- the work that we have been doing really a recession that i think is largely off the table

i think there was a difference, a middle ground between a recession and a consumer who is, you know, still working and maybe making more money, but like i said, suddenly has this incremental payment and is looking for ways to save money >> it's interesting to hear you say that those student loan debtors say their financial situation is worse off today than it was at the depth of the pandemic >> yeah. that was something that really surprised me i mean, my own guess is that it has a lot to do with inflation obviously, we've had a lot of inflation. inflation has receded, but you sort of have that cumulative effect but that was the one thing that did surprise me, particularly given the fact that inflation -- or sorry, employment at 3.5%, is just a little bit below the 53-year low or a little above the 53-year low. >> anthony, thank you very much.

we appreciate your time and your insights today speaking of getting the best bang for your buck, saver's value village posted a 5.5% year over year jump in its first earnings report as a public company. shares of the secondhand shop up 9% since the june ipo. but it is not, of course, the only thrift store seeing a boom in popularity. the nonprofit brand good will is putting out an average of 2,000 items daily across its more than 3,000 north american stores. here with us now on national thrift shop day -- who knew that d -- is ceo steve preston >> there is a day for everything >> i didn't know that this was national thrift shop days. but they have become very popular. >> yes, they have, for a number of reasons people want to find those treasures. you saw the number that said 2,000 items a day.

people go into our stores and look for something special and generally find it. they also find very good value there. especially with young shoppers, they are looking to find something that they can afford the third thing is they want something that creates a social value. there are two ways that happens at good will we're a nonprofit organization, so every dollar you spend in the store and every single donation stays in your local community. it does two things number one, it supports programs, this is our mission to advance economic mobility for people unemployed or in low-wage jobs we provide people with core work readiness skills we provide them with hard job skills we provided over 1.5 million people digital skills over the last five, six years and we work with them to find

that job if they have other issues in life, we may support them to help them find housing >> you mentioned you're a nonprofit. if i go in and buy say a jacket, a sweater, a coffee maker or some utensil, i don't get a tax writeoff for that, do i? >> you do if you donate. we want you to donate -- >> of all the stuff that's been donated, and i've been a donor to good will as i moved children from one apartment to another and they don't need the stuff, how do you curate what is donated and goes somewhere else from what you displace in your stores for retail sell >> so everything goes through an intake process we work very hard to make sure that every item here is what i would call its highest use so we have two online, shop good

will and -- >> who knew that this is from the good will collection >> everything i have >> your jacket is good will? >> my tie. my shirt, slacks, everything is from good will >> we're going to have him stand up and do a pirouette. >> i'm not good with the runway. but in any case, we have a large network of ways to sell goods and to help them find their highest use. sometimes we get things donated that respect sellable. maybe a piece of clothing that might not be sellable, and we work often with companies that may remanufacturer those things. we have a partnership with a company that turns plastics into decking material and we're also increasingly helping emerging recycling technologies in their quest to figure out how to turn unused clothing back into fibers that can be reused.

so the majority that we try to get sold, but if it's something that is not sellable, we work with manufacturing and i think recycling will increasingly come into the picture >> i want to ask you a couple of questions. one is how thrift shopping became a thing, but let me go first to this. when i take some clothing and i put it in one of these bins that are ubiquitous, where does it go how much of it goes to another country or to people who need the clothing, and how much is actually landfilled? >> so a small percentage of the clothing is going to be landfill so where it goes, we take it into the store, we analyze every piece of clothing and evaluate the best place for it to go. as i said before -- >> what about other providers, not you, there are others who do this, not just good will who have bins and so forth

>> yeah. >> where does that stuff go? >> well, you know, it would depend on the provider in some cases, it will go to another thrift store chain or sell it into the whole sell market, which can then go all around the world >> if it's your bin, i donate there, and i may or may not claim a tax deduction. you go through every single piece of clothing -- >> we go through every single item at good will that is donated to good will and then we turn -- most of it will go into the store we have outlets, online channels and some will go into the wholesale market >> how did thrift shopping become a thing there was a song, i forget who did it but how did it become a thing? >> i don't have -- i can't tell you the exact history, but i know that we've been a thrift store chain for over 100 years our founder was -- had a mission

to serve poor people in boston and started collecting clothes from people to give to the poor. and he said, you know what if we can clean these clothes, mend them and resell them, we can get those people jobs. we can get them a hand up. that's what spawned this massive network known as good will that was the foundation of our mission, where we said we want to help people realize their full potential through work. and that turned into job training programs and all sorts of other things that help people become competitive in the job market >> steve, that is a good looking outfit from good will. thank you very much for telling us the story >> appreciate it very much mortgage rates moving higher again. diane has the somewhat disturbing details >> yeah, the 30-year fixed mortgage matched a 23-year high, hitting 7.37%. you probably seen bond rates today.

that shot up this morning as investors divested the release of the fed minutes which suggested that inflation was not cooling off enough for some context, the 30-year fixed briefly touched its high on october 10th of last year just for one day, before that, it was in 2000 that we saw that level. one year ago, the rate was at 5.5% so what a difference a year makes. if you are buying a $400,000 house today, your monthly payment of just principal and interest is now almost $400 more than it would have been one year ago. add to that home prices are rising again, and you see how affordability is getting crushed. >> you mentioned yesterday adjustable rate mortgages. what can you tell us about how many more of those, or the percentage of those that are in the market today compared with three years ago, for example >> three years ago, there were next to no adjustable rate mortgages. why would you get one when you

were getting 3% on a 30-year fixed? adjustable rate mortgages offer lower rates. so we're seeing the share of loans that are adjustable rate mortgages are rising because people are looking for any any what reduce that rate, each if it means going into a somewhat riskier adjustable rate loan >> diane, thanks coming up, is google's search too bing for bing microsoft is having a hard time on gaining on google search's dominance. an exclusive interview with the latest read on markets and crypto and whether he still thinks stocks are in a bubble. and let's get a quick check on the markets. the dow erasing a 122 point gain now down ever so slightly by about 30 points. "the exchange" is back after this

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get way more into what your into when you stream on the xfinity 10g network. welcome back, everybody. the dow ever so slightly negative right now microsoft, of course, was a front runner in the ai boom, probably still is. despite the head start, the tech giant is struggling to gain on its key rival in search, google.

here to discuss is gene munster. let's talk about this. i joined the rush to bing there, but i have to say that i haven't used bing nearly as much as i've been using google, because old habits die hard, i suppose >> yes, tyler. numbers are around those old habits and "the wall street journal" appropriately outlines microsoft is not closing the gap i just want to quickly fill in the blanks here. microsoft, their search share is just fractionally increased since the beginning of the year. we saw that in the june numbers. their search business grew 3% year of year, that was unchanged from the march quarter google's search grew at 5% in june so we have seen this quickening pace, which ultimately presents what i would describe as three pressure points related to how microsoft is going to play out

here the first piece is the case between chat and search, the differences between the use case are still wide enough that people are still going to google for search second is that ultimately, google has a massive distribution advantage 20-1 by my estimates that's when you talk about the behavior, that's the behavior piece that's really hard to break. it's essentially entrenched, through chrome, which is the most popular browser and splitly through android, which has 80% share of the smartphone google market and then the third piece, related to microsoft closing the gap, is google's not done here later this year, they will come out with gemini, a new model that will compete with gpt i suspect that's going to create more attention from users. so when you put this all together, our view is that google will be one of the clear winners in ai, and that's

becoming more clear in the near term related to search >> here's on interesting phrase, and i would like to hear you elaborate, that is the difference between search and chat who uses what for what >> search is what we have been doing for 20 years, and the primary use of search is information. that's about 50% of the queries. about 30% are used for commerce and 20% for navigation so that's search chat is this generative experience that has captured all of our attention sometimes chat has search-like features i ewill give you an example today, i was using bing through their edge browser and asked how to clean tile. and it gave me a response on how to clean tile, and it also gave surprisingly, it gave links, about 15 different links, to purchase tile cleaning products.

that's an example of chat trying to get into the commerce piece tyler, that's the difference between chat and search. right now, people's behavior really is looking at it as two totally different things >> let no one say that gene munster doesn't mind getting his hands dirty. >> that's true >> we know what you did today. so, yeah, i guess i'm thinking if i want to find out the phone number or the menu of my local chinese restaurant, i'm going to search for that, right i don't need chat for that i put in ts ma, montclair, new jersey, and i get the information. chat i would use for a totally different purpose. >> that's right. kind of the way this plays out longer term is this belief that ultimately we're going to go to one source, one piece of information. you said something important in the beginning. you said when i search for something. search and google are basically

interchangeable, that concept. so i think at the end of the day, the lines are that microsoft wants to convert chat experience into search type of revenue. they're trying to do that with some of the advertising they have just started. google realizes this is a potential risk so they're adding more chat-like features that are embedded in their basic search i'll get to write the punch line i talked about three pressure points there's one to this whole story. can google, with their new search paradigm that they're coming out with, can that ultimately create an experience where you just go to google and sometimes you're looking for help crafting an email sometimes you're looking for help trying to purchase something. that's the attention gained. but the advantage is clearly in google's behavior. that's what we are seeing today. >> so i find it -- so tie it all together for me. are you -- what is the

implication of this hypothesis that you just laid out brilliantly for the two stocks especially for microsoft >> i think microsoft's play -- i don't think they'll make progress in search they will do a great job of integrating generative ai into office and i think they'll charge $30 a month more for that. and they will have a good -- a great business around that when it comes to google, i think we'll have another shift like we saw in 2010, when we moved from desk top to mobile i remember at the time i was an analyst, and there was a lot of concern about what that would do to some of the costs per click and the amount of activity ultimately the price per click went down, but the amount of clicks went up exponentially we'll see the same thing once google has more generative ai. we'll go to google a lot more. so when i put this together, we're not invested in microsoft and that says it all

>> you know what else says it all? that you spent the morning cleaning grout >> i do love getting my hands dirty. >> gene munster, thank you coming up, the industrial sector breaking below its 50-da moving average "the exchange" is back right after this

welcome back to "the exchange." i'm dominic chu, focusing on the industrial sector, which has been an underperformer versus the s&p 500 so far this year

as you can see, the white line of the s&p and the orange line, the industrial side. within that sector, there are some heftier dividend payers than the rest. if you look at those stocks in the sector, there are 75 s&p 500 industrial stocks. so we ran a screen looking for which of those stocks have had positive price performance, and are yielding at least 1.5% again, 75 stocks becomes 54 stocks when you put the price screener on it and then a dividend yield screener gets you down to 21 names overall. among the top dividend plays with positive price performance, check out some of these ones they are the heftier dividend payers that have not gone down so far this year stanley black and decker, 3.5% ch robinson, 2.5%. these five are five of your top dividend payers that are still positive so far this year. if you're curious what the other

16 are, i couldn't put them all on the screen, but just go over to my twitter or x at the domino all 21 stocks are there for your perusal. >> once a month of this is not enough let's up the frequency >> you're the boss here. you're one of the executives here, so you tell them >> i'm going to tell them let's get more sector nomics pippa wants more she's here now with a news update a judge declared a mistrial in the case of a father and son in mississippi who allegedly chased and shot at a black fed ex-driver. brandon and gregory case were charmed with attempted first degree murder, conspiracy and shooting into the vehicle in january of 2022.

new york city banned tiktok on government owned devices. the act has drawn bipartisan scrutiny across the country, and congress voted to ban tiktok on federal devices last year. a city hall spokesperson said the ban was a result of the city's cyber command's conclusion that the app posed a security threat to the city's technical tet nnetworks and the family that inspired the movie "the blind side" is ending their conservatorship for michael oher h oher alleged they tricked him into a legal agreement, and is seeking back pay for any money the couple made through the conservatorship, including movie profits. tyler, back to you >> thank you very much fascinating story there. coming up, inflation remains front and center on wall street, main street, even out in the hamptons and that is where we find morgan brennan with a special guest

hi, morgan >> that's right. i'm in the hamptons where wall street does summer we're going to talk the economy, impact on markets and crypto currencies on the other side of this break, coming up. stay with us if you wake up thinking about the market and want to make the right moves fast...

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welcome back to "the exchange." bitcoin sliding today, lowest level in two months, on pace, seventh fegtive week in eight. what the crypto and many of the others are having a banner year as they look to solidify a framework and normalize crypto in business. morgan brennan is hout in the hamptons with michael nomagrantz cyber harbor, is that right? >> you are correct thank you very much. mike, great to have you. >> great to be here. >> let's start with crypto first, everyone had hopes this week that maybe, just maybe we get some sort of s.e.c. decision about a spot bitcoin etf we're not getting it this week, but your thoughts on if we do get it and what it means nor the asset class.

>> no one knows factually, but when we put our applications back in, that starts a six-month clock. and my intuition is it will be closer to the end of that six-month clock, which is probably three to four months from now there is a judge's decision against the s.e.c., and people thought that might break this week and if the judge rules in their favor, the thought process is that there will be an acceleration from the s.e.c. to approve the black rock and other etfs so that's where the excitement came from. we haven't gotten it, rates are creeping high, pressure on assets you know, you're seeing stock losses >> we are seeing bitcoin under pressure today >> listen, we have come a long way this year in crypto and bitcoin. we had a lot of good things happen and get priced into the

market one of the assumptions that risk assets keep making is that the fed will finish hiking rates and start cutting. and all of a sudden, with japan hiking rates, their back end starts falling off our back end starts getting hit. and it's feeling like you're getting a washout of this bond market bubble. maybe it's the start, maybe not. but that's got markets really scared i think you're going to see risk assets under pressure, until you get some basic or bottoming of the bond market. >> you just used the "b" word for the bond market. dig into that a little more for me >> listen, we've had debt to gdp in our country go from 45% to 130% the baby boomers have mortgaged our grand children's future. it all felt normalized because it didn't cost us anything we had this low ten-year rate, low 30-year rate

so borrow, borrow, borrow, right? donald trump came in and ran giant budget deficits before covid. he incrossed government spending more than any president in history before covid then covid came, and then joe biden said it's my turn. build back better, the "inflation reduction act." huge increases in spending so one of the reasons the economy has done so well is because we have given everyone tons of free money but at one point, money doesn't grow on trees. my mother told me that when i was 8. and maybe deficits become normal markets go years without caring. but right now it feels like there's no buyer of long in treasuries or no buyer of ten years, 30 years, here, in the uk and also in japan. >> of course, this has been some of the -- i think the case or the argument that's made by bitcoin bulls, especially in a

high inflation environment, you can make the argument that inflation is coming off a little bit. do we see a run-up in some of these asset prices for crypt ore currencies, or does trading look different? >> bitcoin has two vectors that drive price. one is adoption, like the more and more people that understand it, that like it the etf is the single biggest thing that will help adoption. larry fink coming out and saying i believe in bit. >> caller: i believe in bitcoin, and our partner getting engaged, there's a lot of salesmen in those places so that will drive price the other is fed policy. bitcoin went from 6,000 to 69,000 because the fed started taking a fire hose and giving everyone money it was supposed to goup. it was also supposed to go down when powell started bashing inflation on the head. he's been very hawkish

so it's this inflection when they go from hawkish to dovish, at the same time when the government is not acting responsible and spending, we spend too much money as a government we're at 24% of gdp, and that number has traditionally been 20%. >> i do have to ask you, you are a macro guy. microcosm to the economy, and if so, what is it telling us? >> listen, at least the rich part of the economy is still got plenty of money. you can't go to a restaurant, the traffic jams are horrible. it almost feels like there's not enough infrastructure. all year long, people have been waiting for the economy to slow down it's the service side that hasn't service is 85% of our economy. and they're strong you basically feel that out here now, i know it's not a complete microcosm of the world, because it's mostly the well-to-do but man, oh man, it's the same as trying to get a hotel

reservation or restaurant in new york city. the economy on the service side is still popping >> yeah. of course, in a week where retail sales are in focus, everybody is trying to get a read on the consumer, which continues to stand up under the face of inflation and higher rates. >> the consumer, like the student loan stuff, higher rates, you run out of savings. at one point, fed policy does work it's just taking a lot longer than we thought. >> mike, great to get your thoughts today thanks for joining me. and tyler, we have an action packed lineup this afternoon, including on cnbc "overtime" at 4:00 p.m. eastern. you can see some of the guests we will be bringing you through the next couple of hours, including the co-founder of fortune investment group, and also ceo of new fortress energy. you have jared isaacman, a number of other names.

harvey spevak and bonnie brennan, christi 'americas president. >> thank you very much we're looking forward to that. up next, tv tumbling nielsen reporting linear tv dropping to less than half of all viewing in july. on the other end of the business is reaping the benefits of that growth and raising prices. more on that when we return on "the exchange. 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.

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responsive collaboration tools give your team effortless connectivity to stay focused wherever they work. fetch. lenovo makes seamless productivity possible. cdw makes it powerful. nbc owned streaming service peacock joining a number of platforms that are getting more expensive. the cheaper version of peacock going up by a dollar, and the ad free going up $2 >> peacock is owned by the same company as cnbc. that price increase follows disney announcing a $3 price hike before this fall. this all comes as the streamers look to push consumers to the dual revenue stream of their ad

supported version, as they face pressure to grow streaming profits as the linear tv business shrinks linear tv dropped to less than half of all viewing in july for the first time ever. to compensate, the media giants are raising prices of their direct-to-consumer streaming services, which i'm calling it streamflation. it will cost over $87 a month, up from $73 from a year ago. now, the risk is that those higher prices could drive churn, especially if consumers are disappointed by how little new consent is added this fall as a result of the strike, which could deal a bigger blow to the broadcast networks, which do not have the library of content to teach they are the streamers have to fall back on

the latest sign of media giants struggling, paramount has decided not to sell b.e.t. according to sources close to the situation. they do tell me that pair mount received bids from about $2 billion to $3 billion, but that paramount would have had to sell for well over $3 billion to meet the threshold of this sell having a meaningful impact on deleveraging the company had a no comment, but sources tell me that the company is focused on the value of its linear streaming platform and how efficiencies of scale with b.e.t. may fall into that so trying to make the most of what they have sense they couldn't sell it for as much as they liked >> we talk about linear tv versus streaming tv. but linear tv, for the most part, remains a subscription product, doesn't it? because most people get linear tv through a cable subscription. >> yes it's all about the bundle. so that's the tv bundle. and now you can either subscribe to a traditional tv bundle and

get it through say hulu with live tv or google. youtube has a live tv option, as well what is so interesting is now with streamflation, if you are going to bundle them together yourself, you may end up paying more than you would if you pay for old -- >> that's kind of it you get hooked on it we're talking about these six familiar streamers, and i assume it's netflix, hulu, peacock, maybe a couple more. when i sign up for those, do i still get cnbc do i still get cnn do i still get fox do i still get the abc network >> well, this is a longer conversation, tyler. we can devote a lot more time to this but you don't have the same bundle of linear tv channels that you just flip through if

you're watching cable at home. some of them do have live tv channels, and cnbc is included in many of these bundles but you're cobbling it together rather than a guarantee of all the different channels >> julia, thank you very much. sometime over we will talk it through. thank you very much, julia boorstin still to come, we will get you ready for jackson hole next week it will be big big. my cpa told me i wouldn't qualify for the erc tax refund, so i called innovation refunds. their team of independent tax attorneys will work with your cpa to determine if your company is eligible. [whip sound] take the first step to see if your small business qualifies.

♪ ♪ big week of fed talk ahead what are investors watching out for out in jackson hole? here to discuss is our own steve liesman. steve, all cio of fed rated hermes and one of the biggest bulls on the street. let me begin with you, steve we did this yesterday, didn't we we had two steves on at the same time steve oth, welcome you are bullish. you say don't worry about the student loan repayment issue, it is not that big to begin with and consumer finances and debt loads are pretty good. >> yeah, i mean the consumer debt service is 2 points of gdp to the other i always say time is on the side of the bulls in the time we've been worrying about this, job growth has been 1.6 million people, wages have gone up, cola, security, if you add it up there's been a 3.2%

increase in consumer income in the last 12 months against a .2% hit. it is not insignificant, but there's other positive things happening. >> finish your thought i'm sorry. >> the debt service is the same way. you know, the amount of debt is up but because most consumer's debt is long-term fixed rate a lot of them refinance -- >> that's mortgage debt. >> mortgage debt. >> that's mortgage desht >> 70% to 80% of the total amount of debt actually debt service today is running at about 9.6%. it was 9.8% of income in 2019. it was 13.7% at the peak in 2007 so when people get all worried and think we're near something like that, it is way lower it is much more manageable >> steve liesman, you want to react there? >> i think that makes sense. you know, going back as long as you and i have both been doing this, "follow the money", right? if you look at what has happened

to the fact more people are employed, they're making more money and now inflation is coming down, has increased real earnings, i think you have some of the ingredients to keep the expansion going. i think there are drags and there are challenges along the way. the student loan thing should not be dismissed it is a challenge that could hurt certain retailers and certain places, but not overall the macro economy. you have savings dwindling down from what they had stockpiled from the pandemic, but people were not used to living and spending with that much in the bank now that it's gone, it would be a problem if we still had high rising prices. since inflation seems to be going in the right direction there's less of a need for excess savings to maintain current existing levels of - >> mike, steve auth is pretty bullish. you point out the rise in the ten-year yield on the ten-year treasury it is, what, 4.3%, something like that, and that is pulling

other kinds of rates higher as well what do you think? are you at bullish, for example, as steve or are you a little more cautious? >> i tell you what, it is really, really murky in the macro environment. that's the way we view it. you can almost create whatever narrative you want given the various dynamics going on. you have a very expensive stock market ten years back to post-covid highs, up 100 basis points in a few months you have, you know, fed funds are pricing in cuts in first quarter of '21 at the same time the atlanta fed number is pushing 6% on current gdp. most strategists on wall street are calling for a recession, either the fourth quarter of this year or next year it is very murky environment what we are focused on, of course, is trying to find reasonable ideas for investment and, you know, there's lots of talk been given this year about the large cash flow generators in the mega cap growth technology names, all of the magnificent seven or however you

want to label them what we think and what is interesting is that we find the same dynamic occurring in small cap stocks that we see in large, that is the best cash flow stocks in the small cap world are actually performing pretty well exceptionally well they've outperformed the russell 2000 by 10% or so this year. you are seeing our premise here is that investors are going where they're treated well, as they often do. that is instead of staples and utilities in a turbulent, volatile time, you are actually seeing investors find and chase the cash flow. as steve liesman just said, "follow the money. cash flow investing is profitable, it is working well and it continues to work, it is an under told story. >> we have to wrap it up steve, i'm sure you are heading to jackson hole next week, mostly for the fed meeting but also for fishing, right? >> it could happen >> what are you expecting next week >> they're going to talk about shifts in the global economy i can announce our first interview will be at 10:00 a.m. on thursday morning with philly

fed president patrick harker what i want to know is what is the story with policy, with growth high, inflation coming down, unemployment still tight, how does it affect policy. >> gentlemen, thank you very much steve, steven auth, mike, thank you very much. we appreciate your time today. that does it for this edition of "the exchange. courtney reagan is getting ready ea the other side of this quick brk. i will be joining her in just a moment fficient? i'm listening. well, with ibm, you can use software to help you connect and analyze data— from hvacs to elevators to lights. what if we use ai-driven insights to pinpoint inefficiency? yep. and act on it. saving energy, money... ... and emissions. yup. that's a big one. now you've built something better for everyone. that's the sustainability solution ibm and a global real estate company created. what will you create? ibm. let's create. my cpa told me i wouldn't qualify for the erc tax refund, so i called innovation refunds. their team of independent tax attorneys

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