nvidia a great way to play it as microsoft which has sold off nicely and it will be the number one beneficiary of a.i. in my view. >> joe t. >> i'll see your microsoft and i'll raise you a broadcom. >> all right, broadcom. >> jim, farmer jim, happy birthday. >> thank you, buddy. >> exxonmobil is my birthday gift to everybody. >> that does it for the halftime report, "the exchange" with kelly evans picks it up right now. ♪ ♪ thank you very much, dom. welcome to "the exchange." i'm kelly evans and we begin with the major market news of the day. you see it right there behind me. the ten-year treasury yield surging to 4.35%. that's the fresh 16-year high, we're just a hair below that level right now. the question is whether this is a breakout or a late summer headfake. we have full team coverage this afternoon from the bond market to the impact on the mortgage market, you'll want to hear about that and how fed chair jay powell might react in jackson

hole later this week. let's start with rick santelli out at the cme and rick, why today? why now? >> well, i think because technically we broke through some very key levels not only on a daily basis last week, but on a weekly close friday. let's start at the beginning. ther there's a 24-hour chart, kelly. right around midnight, we started to race higher and the reason is let's make a two-day chart. if you look at the hump in the middle of the left side of the chart there, that was the high session for friday and once we traded above that in the wee hours of the morning, we have not looked back. virtually everything in our time zone has been above friday's highs and friday, we basically closed a smidge above 4 1/4 which if you go to the next chart in my opinion is the key to your question. it's about technical analysis and the fact that two-year yields did not close above their big spike high for march and it took ten years and 30-year bonds

quite a while because this all occurred on october 24th, but nonetheless, this will be the fourth session in a row we've closed above that key technical level and that includes a friday which is a high priority technical close. now if we go back to the last time we had closes of twos and tens at these levels you have to go back to 2007. for 30-year bonds it's 2011 and what's really interesting is today's going to be the first day 30-year bonds closed above their key technical level from the 24th of october and that was 4.38%. we've hopped right over it, but it doesn't change anything. it's still an aggressive close and you asked whether it's a move or just year end or just something towards the end of summer. i think it's already been the type of move technicians are capitalizing on for no other reason other than this chart. twos to tens. i cannot tell you how many

traders the last three months have told me, the next big move on yield curves are going to be steepening and they were spot on because at the last day of july we were at minus 60 -- excuse me, minus 91. we're currently at minus 64. we've deimverted or steepened quite a bit and pretty much all long-dated moves. >> the only thing i want to mention for people looking at that saying we're steepening again and the yield curve is going to be fine. if it's been inverting and then it's disinverting and it's the disinversion before the economic slowdown so it's hard to feel too good about that. >> i couldn't agree more. it's not the type of thing where it's a closed system. when it goes inverted it's going to mean potentially a recession and as you become less inverted and less recession, it doesn't work that way. you're exactly correct. there can be ways where the curve would delever or

resteepen, but currently, we are not seeing that type of trade. >> all right. so, rick, just to put a point on it. basically, the only real reason for why this is happening now is basically because it's been happening for the last couple of weeks, but when i think about overnight catalysts from chinaa growth and anyone who doesn't agree with that, just look at the way the market's pricing. >> all right. rick, thank you. rick

average rate touched 7.48% this morning that according to mortgage news daly and that's the highest since december of 2000, so 23 years. last year at this time it was around 5.5%. home prices had peaked in july of last year, but they've started gaining again in the past few months and all of that adds insult to injury for potential homebuyers who not only can't find anything to buy, but they're seeing affordability get crushed. just to do the math. if you're buying a $400,000 home with 10% down on a 30-year fixed, your principal is their 420 higher, that is monthly, than it was a year ago. more borrowers are opting for ad adjustable-rate loans and that was 6% and the arm share of application rose to 7% and just as a comparison, back in 2020

when rates were setting multiple record lows, that share of arm loans was less than 2%. kelly? >> and yet, you know, i have some friends who again got outbid and they had a house and going into an attorney review and i think twice and it was just in the last couple of weeks with rates where they are and it's just extraordinary. >> people are having to redo what they can afford and there's still pent-up demand for housing and all of the folks who might have wanted to sell their house are now saying i have a 3% rate. it's just getting worse and worse every day. first, why would i trade it for 6%? why would i trade it for 7.5? >> 7.48% and just a hair off, for all intents and purposes 7 1/2. we appreciate it, diana olick. what will the impact and the bond market and the mortgage rates have on the fed's next move. we'll ask steve liesman and he's got the big look ahead this week at jackson hole. these questions took on new urgency, i think. >> it is really a new question

that's submerged, kelly, ahead of this jackson hole summit. how's the surge in higher long end yields play in the mountains? since mid-wijuly, you've had stronger economic growth and a fitch downgrade. the ten-year yield is 60 basis points and remember that number because look at this one. it had the year-end fed funds rate hasn't budged and it does not believe higher long end years will push the fed either way, either down or up. what has moved is next year's funds rate with the year-end 2024 funds rate hierising almos0 basis points and the fed has been successful that the fed will remain higher for longer and though the market still has more cuts built in than the fed has, but the fed will have to ponder if this is more than it wants on the long end. those 7%-plus mortgage rates could be crippling for the housing market and banks could be under renewed pressure like

they were in march and companies will have to refinance the bargain basement rates they had from the pandemic into much higher yielding paper over the last several years where this could be exactly what the fed wants and it would see the yields as appropriate amid the world of higher growth and higher inflation and kelly, maybe a higher neutral rate. >> no, you didn't. you didn't go there. >> i did. >> i was looking at academic titles and i don't think you can talk the richmond felt default in our star from 2018. >> okay. i punned about that long before they did. i just want you to know because i would never leave a good pun, but there is a paper out recently by a couple of economists from vanguard and some time in the end of last week talking about a potential 1.5% real funds rate versus the fed's long rate of 0.5%. later on top of that, this long-held idea from jeff blacker that the equilibrium can move over time and we might, right

now, at least be in the world of a higher star. >> quick, kelly aside. indulge me, steve. so we have now an op-ed by -- who's our friend in "the wall street journal" today calling for the fed to raise its -- calling for the fed -- >> jason furman. >> thank you. >> jason furman. it has come to me saying the fed should raise its inflation target for the next three years and the entire basis of that argument is that you want more cushion in a zero-rate world, and yet all of these academics are at the same time arguing that we are no longer in the zero-rate world because this stuff is structurally higher. this feels like the wrong time to raise a price target that was supposed to cushion us to the down side when we're talking about the actual sort of impetus maybe pushing us higher. >> so i'm old school on this for two reasons. one, i think it is very bad form

for the federal reserve to change the target, at least before it hit it. maybe down the road it stays at 2% and it may have the luxury or the ability to change it. the other thing is i'm pretty sure that's the way powell feels and i'm sure my ability to communicate that is probably the most important thing i can do rather than what i think and i'm pretty sure that's what powell feels and indulging you is one of my great pleasures. >> those name prompts here and there. steve, thank you very much. a lot more to come, we appreciate it. our steve liesman will be reporting from jackson hole later this week. let's turn to my next guest is warning you do need to stay diversified especially if the fed begins to cut rates. here with me is michael cagino, a portfolio of family of funds. welcome. i think it was pre-covid. >> pre-covid, 2019. >> you don't have to get into all of these e-con, geeky things

and they all come back to this question which the ten-year is impressing upon us which is where are interest rates really headed and what would your investment advice be? >> i think they'll likely be higher for longer roughly where we are. i think the big question we haven't talked about yet is the timing. the fed wants 2% and someone else has 3% and when and are they willing to raise rates to choke off economic growth which we seem to be having to get to 2% quicker rather than later. i don't know the answer to that question, but that's a legitimate one. for investors, i think, this is all interesting. if you're a very conservative investor, you have your cds at 4%, 5.5%, you don't have to do much and we think you can do better through a diversified portfolio and if you have convicts in equities, there's an argument to be made there and it's been a stock market and equities do have competition for bond market right now. it seems like a strange world and it's just the flip side of

what happened in the 2010s where you can also bonds and equities at the same time. >> we've been doing the seesaw thing between bond investors and the equity investors and you see the fed being done or close to it. multiples are good and reasonable and there's the excitement of ai and all these growth stories out there. so that's why equities have bled up because there's been an absence of negative news. >> they seem high by historical standards, not least and this is the part i don't understand the most about all of this, they seem to be high relative to interest rates. it is so odd that we say we'll go from zero to five and the stock market multiple will go up and be near its historical highs. that seems so strange to me. >> the broad market multiple is no longer as cheap as it was and there are opportunities that are below market multiples, energy sources and you have to have say strong stomach to do that, but there are opportunities there. the bond investor sees a tightening credit and it sees the fed saying that they'll have

to raise more quickly in a recession, and so that's that seesaw battle that we're having and it tends to change on headline risk week to week. >> let me ask the question differently. for those in the past who own bonds, but traded stocks. should you do the opposite now where you own stocks, but you trade bond, right? the yield's being as high as they are feels like an opportunity to pick up extra cash. i don't know how far out on the curve you'll go, but it doesn't feel like anyone really wants to say i want to own bonds for the long run here. does this feel like the moment to strike while the iron is still hot depending on what happens this year. >> this gets to the investor who was buying equities for yields, right? they no longer have to do that. when they look at the comparable yields and say earnings on the s&p 500 and bond yields right now. if you're a growth investor you'll look at that, and they're comparable, but i like the growth perspective and the

long-term nature of growth and i'll weigh it that way. >> right. >> if you have liquidity needs going the other way and you go with that until you get more clarity. >> although it's not that tax efficient and what do you do with that piece of it? it is what it is, you get what you get? >> it is more tax efficient than the income. >> you mentioned energy. you mentioned rates and you also have stocks in particular and what are they and why? >> on the equity side we tend to invest in a broad array of stocks and people would consider value-oriented names. semiconductors, we think they're rich. nvidia, we own that. it's rich and i don't know if i'd buy it now, but on a longer term pullback, i think it would because it's a longer term story and broadcom is another name we own that's trading at a much more reasonable level and still a little high based on maybe the market multiple, but another

great growth story there, and then we've got energy and something like a chevron, big, diversified energy story. freeport mcmorran which is a copper play which we think is really still undervalued in the long term and that company tends to -- when copper prices go up, the bottom line and special dividend goes up and we think the broader story is a multi-year one. >> you can almost argue it's a copper/gold play. i haven't paid attention lately, but is gold sitting around these levels? >> well, it's come off its highs, and i think rightfully so given the uncertainty of the interest rate environment and the strength of the dollar. the dollar has been very, very high lately and that tends to put the dampers on gold. our view in the long term is that it will be more valuable years from now than right now. i think the $is off the high and it will come off at some point. the fed will start raising rates and likely will cut if there's a

recession issue and those are bullish for gold and gold tends to do well if you have a recessionary environment for those reasons. >> a little bit of everything. >> absolutely. >> thanks so much. we appreciate it so. >> we have a ton more on debt with jackson hole with interviews with philly fed president, patrick harker and cleveland fed's lorestta mester. i'll ask one china watcher what's happening on the front line of the property sector as the china etf is having its worst month in more than a year from nvidia to peloton, we'll preview the retailers out of the way like lowe's and macy's and that's coming up in earnings exchange. >> as we go, let's get a check on the markets under pressure by 131 points and the s&p is higher by eight. the nasdaq is up almost 1% today and the russell is down half a percent. 434 on your ten-year.

that's the number of the day. we're back after this. ♪ ♪ this is "the exchange" on cnbc. ♪ ♪ wake up, gotta go! c'mon, c'mon. -gracie, c'mon. let's go! guys, c'mon! mom, c'mon! mia! [ engine revving ] ♪ ♪ my favorite color is... because, it's like a family thing! [ engine revving ] ♪ ♪

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bridgett is here. she has no clue that i'm here. she has no clue who's in the helmet. are you ready? -i'm ready! alright. xfinity rewards creates experiences big and small, and once-in-a-lifetime. ♪ ♪ welcome back to "the exchange." china's central bank just cut its one-year benchmark lending rate for the second time in three months. the reduction was more modest than expected, though, showing

china's reluctance to take forceful measures for the economic slowdown and chinese stocks with the hang seng down 2%, the shanghai composite a little over 1%. let's get some perspective from brandon ahern, the cio from crane shares and sean rhine who join us from shanghai. it's great to see you both again. brendan, i'll let you give the glass half full argument, and listen, i just -- i read the reporting from lingling and others, and you just think they don't want to do big stimulus and i'm not sure what else the bull case rests on at this point? >> they've certainly taken an incremental as opposed to a bazooka-type approach that they slowly implemented reforms and they're willing to pull the band-aid. some of that's driven by fed policy, and it's driven by some of the geopolitical macro narrative and a little bit about the global economy and taking this incremental approach which has left investors wanting. it is worth noting, kelly that kweb is still more than 45% off

its october lows from last year. we've certainly given some of these gains and certainly as the previous guest noted that the strong dollar has been a headwind for non-u.s. equities in general including china. >> just one more to follow up on this and you were speaking with derek scissors and look, the chinese stock market peaked in 2007 and this isn't a good place to put your capital. >> i think our long-running argument has been that the china proxies, msci, emerging markets and china ten years ago had 11% or 2% in tech so these were really value proxies and 50% financials during a period of great growth outperformance and that's really why we developed kweb, it gives investors an element of the growth in china's economy which is not captured by broad indices like broad em and broad china. >> that's fair. i'll turn to you. back in shanghai, and i'm eager to see how you would describe

things on the ground there and what's the mood generally? >> well, kelly, it's great to be back since i saw you last month in the studio. as you said, i'm back here in china and right now i'm facing a crisis of confidence which is why the government isn't lowering interest rates too much because at the end of the day there's no demand from consumers to borrow money because they don't think the credit can't get the money to grow anywhere. people are scared and i painted a negative position last month when i spoke with you, kelly, now it's gotten worse and there are three reasons why consumers and companies right now are even more nervous than before. the first is the real estate sector. you saw soho, a major property developer sauce a 3% drop year over year and that's off 2022, and the big elephant in the room is what will happen to country garden which is the largest developer in china with over

3,000 different projects. they have missed paying bonds on a coupon last month and that sent a lot of ripples throughout the marketplace and investors ought to be cautious about getting exposure to china in the next two to three-week period and consumers now are nervous. they're cutting back. some of the numbers might not be great for the coming two to three weeks. >> brendan, i'll put this question to you. there are some bright spots, you know? he spoke with a lot of real estate agents and consumers and seeing a lot of trade down at restaurants and tourism remains a bright spot. evs and the ev brands and battery maker cattle is still strong. and maybe we're getting to the valuation point at which you can look at some of the bigger name online retailers. what would you say in response to that, brendan? >> i think in general, we've known that the real estate issue is not a short-term fix. this is going to be linger and it will be evergrand and country garden and sunak. there's a whole host of these distressed property developers that will continually flare up

and have problems for years to come. the key is the chinese government wakes up every day with one mission which is stability and are they going to allow real estate to unfold into the quote, china economic lehman moment. this huge collapse. i don't think so, and i don't think any investor in china believes that this is going to unwind itself in some catastrophic matter. so, yes, it's a problem. these companies are problematic and it's worth noting the chinese government isn't going to save them. we threw a bone to a lot of financial companies when we got in trouble. so, yes. consumer confidence to sean's point is the problem and that's the problem with interest rates weighing, in that domestic consumption remains weak which is why you need property prices higher and we do believe domestic consumption that the companies within kweb can benefit as consumer confidence, as consumption comes back and

certainly, we are still in the thick of earnings season. we have baidu tomorrow and medease on thursday. >> we'll have more on baidu in a moment. sean, you were bullish on china for 25 years before you became bearish during the pandemic. are we going to be bearish for 25 years, too, or what are you looking for? what will it take for you to see more bright spots on the horizon there? >> the next three to six months, kelly, will remain quite rocky. you sawretail sales only went up 2.5% in july. consumers are saying, you know, we'll hold off buying the big ticket items like autos, like houses. i think the luxury sector could be in for rough waters, too. i'm not going to turn bearish in the next three to six months, and i do think in 2024 and in the end of q1 things can look better and the key is what will happen with multinationals. right now they're just not investing into china. they're scared and taking a

wait-and-see attitude about the geopolitical tension in 2023, but i'm starting to talk with a lot of global ceos of fortune 500 firms and they're starting to say maybe we should invest in 2024 in q1 and q2 and that can jazz up the economy a bit and they'll be surprised to the numbers of tourism. i'm sitting in a park hyatt hotel right now. the place is packed. we've been talking with hotels. they're seeing numbers that are as good if not stronger than 2019 and macao is also booming so i would be looking at galaxy, sands and the casinos right now. if you start to see some numbers from multinationals like a hyatt, like a marriott, like a lululemon that are reasonably good, then i think there's going to be confidence by multinationals to invest in 2024. the second thing, hopefully we'll see an end to the relentless attacks by the biden administration on china. last week they imposed more

sanctions and more bans on american ventures and investing in high-tech sectors like semiconductors and artificial intelligence. >> right. we should not underestimate the geopolitical tension that's weighing on consumer and business sentiment in china. if we can see between the two countries maybe the economy will get going. i'm not hopeful in the next three to six months, and frankly, i'm not hopeful for the next year. >> sean rein, brandon ahern, that's the perfect segway into the next discussion because investors at home are trying to figure out if their china exposure is a good or bad thing to hang on it? we turn to seema mody. >> some have been challenged by the ongoing troubles in china. executives have had to scale back their expectation while at the same time hold out for potential stimulus. they say don't hold your breath writing that the appetite for stimulus is not there as beijing

relies on so-called precision-guided monetary tools that focus on targeted, credit easing and evercore isi strategists warning clients over the weekend that if china's economic backdrop worsens and the s&p 500 companies more than 20% revenue in china could be at risk of seeing investors scale back their exposure and they're going to intel, tesla, advanced microdevices and western digital among others. most of these stocks are housed in cnbc's china trade index which you can see has underperformed this year compared to the s&p 500's 14% rise, and fund flows data shows that market participants continue to diversify their holdings with china bringing in less than a billion dollars while indian related etfs have seen 1.8 billion which also tells you a story, kelly. >> i think that's fascinating what shawn said it is one of the

keys and they want the multinationals to invest first and the multinationals are waiting for bigger numbers before they make these investments and it's a waiting game. >> yeah. we're talking about ten to 15 years of investment and it's not an easy market to pull out of. at the same time there are a number of bright spots and companies like starbucks talking about how they're seeing the highest number of 90-day active users at over 20 million starbucks rewards customers and glen fogle a couple of weeks ago, referencing the china outbound travel story starting to gain momentum. so there are these strategic, selective stories within the consumer space that is holding on. >> pockets for sure. >> seema, thank you. >> seema mody. >> still ahead, it is going public with the valuation front and center and we'll get the details in "tech check." "the exchange" is back after this. stay with us.

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matching your job description. visit indeed.com/hire the whole country is like linked into it and they have a -- news update. after bringing high winds and heavy rain to southern california, tropical storm hilary was downgraded yet again, but it is still threatening central nevada with potential flooding and moving towards oregon and even idaho. national weather service reports one to five inches of rain expected across portions of the pacific northwest through tuesday morning which could result in more significant flooding. "the wall street journal" reports that private equity firm rourke capital is close to finalizing a deal to buy subway, the chain of restaurants. sources tell the journal that the $9.6 billion deal could close this week. the company began exploring the sale in january. the chain has been owned by its two founding families for more

than five decades. looking for a new car under $20,000? there are at least a dozen small cars that met that criteria just five years ago. the price for most vehicles new or used have soared since the start of the pandemic, so now there is just one. the mitsubishi mirage under 20 grand and maybe not for long. reports suggest it's being discontinued after the 2024 model year. kelly, back to you. see you in a little bit. >> the only car under 20,000 post-pandemic. get them while they're hot. >> three are set to report before the bell tomorrow and look at the numbers and i'll sneak in a fourth. it's kind of unrelated and we'll ask killburg anyway. let's go to show and tell where we show you the chart and tell the story. palo alto networks leading the s&p and on pace for its best day in two years and how amusing and ironic is the whole story. they reported a beat on earnings and a slight miss on revenue on the infamous friday, late afternoon summer earnings report

after all of the attention and the ceo tweeted more than 5,000 people dialed into their earnings call. that's five times the average over the past five years and here's what he told jim cramer about the timing. >> we are trying to make sure we get our earnings out there and give it a full-year forecast, and you want to give it a long-term contest because there's macro. we wanted to make sure people see us as who we are which is different, so we want to get that done. too, we have about 5,000 people in vegas who are right now getting pumped up to get phenomenal, fy-24. we want to make sure that you don't understand that and hum and haw what the results are likely to be and it worked out that we can do this on a friday, so we did. >> i think we call these sound bites from the future because you can watch the full interview tonight on "mad money" at 6:00 p.m. eastern. hopefully more companies don't think friday night is the way to

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and there's no catch. it's free. we make money from ads, but they don't follow you around showing the millions of people taking back their privacy by downloading duckduckgo on all your devices today. welcome back. quick market flash. sentinel one jumping sharply and briefly halted for volatility in the last few minutes here. reuters reporting the cybersecurity company is exploring a potential sale. early interest in the deal hasn't met the company's expectations according to the report. talks could end without a deal, but investors are hopeful that shares are up 14% right now.

earnings season are winding down and there are big names to report. we're looking at macy's, lowe's and baidu in today's earnings exchange. founder and ceo jeff killburg. we'll start with baidu and it might help us glean more about china's economy right now on pace for its worst month of the year as the company fails to materialize and the shares are down 20%. the search company suffering from the weak ad market and investment in a.i. is part of china's latest five-year plan. that could be a bright spot. what do you do with the stock here. >> you want to be a buyer here. >> yes, despite the fact it will freefall like no bungee cord a tafrped in the last month. i think what you have to understand is not just a china pure play and not because of covid zero policies and they had wild ramifications and the system has not rebooted the way it has in the u.s., but i think it's the a.i. play you talked about and i think that presents an opportunity for baidu.

it is the world's largest search engine and if you get the stock back above $130 and you will fed footing and support and if you get optimism out of china which we've had none, absolutely zero and you couple that with the a.i. enthusiasm that we've had in the magnificent seven all year and you have to manage the risks because this is a volatile, high-beta stock. >> we'll see if it gets that bounce today and we'll move on to lowe's as we turn our attention to a couple of retailers here. lowe's are on pace for the worst month and they lowered full-year sales guidance in may and they're expecting comps to fall between 2% and 4% last year and a good gauge for consumer spending and the housing shortage and will the renovation boom continue, what do you think? the shares are up about 5% so

far this year. >> i think low's -- and i actually want to be a seller here and i don't want to beat up lowe's because i outperformed home depot. home depot which is three times the market cap, i want to own that, but lowe's is fascinating because you're right, kelly from a year previous, quarter revenue that's down from the previous year. i think interest rates are trapping a lot of people in their homes and i think if you look at the version and we talk a lot about pairs trade, so if you own home depot and you've been a laggard i think this is where you sell it and the moving average which is just at $209. if earnings disappoints and if you own lowe's, that's when you switch over to home depot and this is more of a trade and the stock is at a decent run and at the end of the day, it's too high beta and too much of a stock with the real estate market currently. >> you are sort of watching the

209 level and you're a seller and $8 below where we are right now and that's a good round number to keep an eye on. macy's and the former behemoth and it's on pace for a fourth and the pace of the consumer is one question and buyers are taking on more debt in the face of higher prices and macy's vendors are reporting price squeamishness, i'm surprised. are youio a a buyer here, jeff? this is almost a microcap. it's a $4 billion company and a long way away from being the department store it was. i actually want to own nordstrom, and if you want to own macy's, nordstrom gives you more diversification. if you look at a chart, kelly, under $13. look out below. so i think you can be a buyer here. whenever we buy a stock this high or volatility, you need to understand you need to buy it with the stock.

if you buy it here, you have to put in the stop here because under $13, you have to understand this is not a long-term investment. this is a trade and this could be some profitability short term if you own macy's going into earnings. >> it is $2 to the down side before you tell people to pull the rip cord. i have to quickly ask you about zoom because i find it relentlessly fascinating because they're pulling people back to the office now. the stock is just about unch, year to date. >> it is. it is down 77% from the peak of covid and it's had a hellacious move lower and this was the darling during covid when everyone was not only working on zoom. we're having cocktails on zoom and the zoom rate here is fascinating because at $20 million it's a takeover target and it gives optimism on why i look to trade and buy this stock, yes, kelly, another odd buy by myself, and i think you have to understand that ai, they're racing to make new artificial intelligence tools to enhance their platform and that

can be attractive to someone like sir elon musk who wants to incorporate more. zoom is attractive here despite the fact it's been decimated. >> i believe the report tonight, there's still a $20 billion market cap and that's shocking to me. >> hard to believe. >> impressive. let's see if they can take it for a trade. >> we appreciate it. >> still to come, tesla, amazon and seagate are among most impressive stocks in the s&p 500. is that a warning sign? we'll dive into it. >> oftbank arm is expected to file in the nasdaq this afternoon and what to expect whether arm has an the a.i. promise and before we go to break, we take a look at covid vaccine makers and moderna is up nearly 10% and biontech up almost 11% as the virus emerged here in the u.s. and all three are well off their year highs and keep an eye here as we hope so see not so much covid action

and me moves that are rewarding some investors. we're back after this.

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♪ ♪ welcome back. softbank's chip designer arm is preparing to go public in what would be the biggest u.s. listing in almost two years. deirdre bosa is here with the timeline and what to watch for in today's techcheck. we're expected to get the filing this afternoon, is that right? >> that is what i'm hearing and it's a big deal. it's how that is received by investors, and how they're going to digest it will tell us a lot and not just about how the market feels about arm, but the ipo market at large. so it will be an f-1 because it's a foreign filing and it is headquartered in the uk and it was controversial that it decided to list here in the u.s. so that filing will reveal its financials and its risk profile. its key stakes and anchor investors. we've heard that companies from nvidia to intel, to even amazon

could be among those strategic partners so investors will be curious and that could also provide somewhat of a halo effect and drum up more interest because the stakes are high for softbank. remember it bought the company for 2016 for $31 billion and the most recent transaction valued at $64 billion, and that would be a huge windfall for hassan who is going off on the offensive and he wants to invest in more artificial intelligent companies and the key question for arm and what kind of valuation will ultimately fetch is this an ai-adjacent company ore an ai-centric company at a time when investors are in show-me mode and they'll capitalize on ai in the future and wants to know about companies right now. >> why they picked the u.s. and not the uk and it's the nasdaq and the u.s. versus the uk and all of these stories you haven't been able to talk about in a couple of years' time. it's been 18 months since we've

talked about ipo stories. if arm is successful, that could open the window for many more and there's always this debate in nasdaq and who it's going to be, the left lead on the ipo filing. white chose the uk over the u.s., it's the same reason a lot of companies and also sleen as having all of the glory, as well and it's seen as a loss of the uk that it couldn't keep the listing and in another era with hong kong versus new york and it will be interesting after an 18-month freeze sort of which ipo markets, if that's going to happen, which international markets heat up quickest. >> do we know the ticker. is that the thing i look forward to the most. it's got to be arm-h? >> wasn't it? >> i think it was arm-h. how do you not just do a-r-m. is that taken now? ai is taken by our friends at

whatchamacallit. >> a-r-m-r. >> they don't want harm. >> thank you for now and we'll look forward to getting those later from our deirdre bosa. tesla is having a rough month down 15% so far in august. the end of last month is when one of the strategists strategid this name would outperform it over the next year, and these shares are down just 3% by comparison. we'll get an update on the other names he's buying next and also take a quick look at shares of sweetgreen after the company announced last hour it's expanding its executive team. it's up 5% today. the shares have struggled since their debut in november of 2021, they're down $14 a share at the moment. we're back after this. >> announcer: tech check is sponsored by comcast business, powering possibilities. use a hybrid cloud solution to connect data across clouds, then analyze all that data with watson.

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exchange. a couple of weeks ago my next guest made the provocative call that verizon, yes, verizon, will outperform tesla over the next year, and so far so good. verizon's down about 3% since then. so is the market, while tesla is down 16% despite today's little turnup. so is he closing this pair trade

or sticking with it as tesla's stock rebounds. the key, he says is valuation. let's welcome back chris chris san tee, it's good to see you again, chris, welcome. >> thaunnk you, kelly. >> i don't think you're going the kind of guy who's going tyke off a trade after one month. maybe it's met your target in advance. >> well, being down 3% isn't my idea of a great trade yet, but i think over the year, i think verizon stands a terrific chance even continuing to beat tesla from here. it's more, honestly, a statement about the markets and the economy than it is about these two companies. >> so explain that and where valuation fits into that. >> the valuation, the first half of 2023 left stocks like verizon completely behind. like a year ago when mortgage rates started to go up and the homebuilders were absolutely demolished, that's really what happened to verizon here. it's the first investment grade company i've seen in more than a

decade that has a higher dividend than its p/e ratio. we think the dividend is completely safe, the payout ratio is less than 60%. cash flow is strong. it's actually getting better because 5g spending is peaking. but verizon has languished. and folks say to me, nobody cares about verizon, and then i say that's not a bug. that's a feature, that's when you want to buy a stock is when nobody cares about it. e eve everybody's left it for dead. let's compare that with tesla, of course. tesla for all its brilliance still makes cars, and if the economy slows, folks will buy less cars than analysts are now expecting them to buy. that's the hurdle they have to beat, and it's okay if you have a 7 p/e like verizon does, not to quite beat expectations, but when you have a 60 or 70 p/e, you need constant reassurance, which comes in the form of making or beating the numbers. and i just think in a slowing economy, which i strongly see

over the next 6 to 12 months, i think that's going to be tough for tesla. and i'm not saying verizon's a better company, whatever that means. i'm just saying i want to make money and i want to protect myself over the next year, i think verizon's the better way to do that than tesla. >> so the sort of rejoinder to that would be verizon's a value trap and tesla's growth is worth paying for. like its performance is worth paying up for. >> true. >> both of these kind of continuing to go where they've gone is more likely than not? >> i think that's right, but you have to -- i think that's right -- that's the contrarian argument, but why i disagree with that is i think the pendulums in both cases have swung to extremes, and if i'm correct about the economy slowing, that's when you want to make the switch from the very economically sensitive tesla to the much less economically sensitive verizon, which is a tenth of the valuation with a safe 8% dividend. by the way, if we do kind of

lapse into a slowdown, rates may come down and the 8% yield, which looks attractive now will look super attractive if long rates go into the 3s or something like that. that's yet another reason to like -- >> i love it. the line of the day is a company whose dividend yield is higher than its p/e ratio. now i want to run a whole historical screen on that. chris, you always bring us the best, most provocative ideas, and by the way, the homebuilders, they always work out pretty well. we really appreciate it today. >> so far so good. >> chris grisanti from mai capital management. you can always get my news letter, skip ahead on that if you will, there's the qr code, blah blah blah. coming up next on "power lunch," we're going to talk rails with the head of amtrak. you can tweet me your questions, complaints, whatever they may be. our special producer and train expert cofax is helping tyler get ready.

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welcome to "power lunch," everybody. it looks like kelly evans, i'm tyler mathisen, the biggest econ event of the summer, that's the fed summit, annual jackson hole, wyoming, beautiful place. what to expect from chair powell as yields continue to soar. the ten-year at the highest level in 16 years. and as we break down the fed, we're also going to look at the impact they've had on businesses. we'll talk to the ceo of brinker international, big restaurant chain. what is chiles seeing on the inflation front? >> baby back ribs, that's what i always think of. let's get a check on the markets where the s&p is up 18 points. in light of those record highs that tyler mentioned the nasdaq is up 1.25% today. go figure.