good tuesday morning. setting the agenda, retail warngs on the american consumer from dick's, macy's and lowe's just this summer. regina ra man dough heads to beijing. the downside risks to the economy and a read on friday's jackson hole speech. markets at this hour mixed and have been losing steam throughout the session, although regaining a little bit in the

nasdaq, up about 0.6%. the dow down 92 points at this point in time. >> topping the tapes and the cloudy outlook on where the fed goes in september. fed presidents barkin and goolsbee and bowman set to make remarks. highest yields since the financial crisis as the selloff in treasuries rolls on. the question is, is higher for longer the expectation and can stocks hold up in a high-yield environment? mike santoli is back after a long-deserved weekend. we talked about you because yesterday tesla, microsoft, nvidia higher in the face of yields. we wondered what you thought that meant. >> my case has been there's no linear real-time relationship we can hang our hats on between the current level of yields and the correct price for a large tech stocks. you want to know examples of that in real life? a year ago the ten-year was at 3%. we're now at 4.3%.

the nasdaq 100 is up 16% since then. the s&p is up 6% since then. under the right circumstances, the market can make its peace with higher yield levels if it's happening for the right reasons because growth is resilient. maybe because, you know, higher real yields needs restraint on the economy but one we can handle. all those in the mix. doesn't mean it's an easy path to get there. you can't just shrug it off. my read, to some degree, why longer treasury yields are going up now is almost all of the above. global yields have become unanchored because what's going on in japan. you do have a supply issue psychologically. also, this acceleration in the economy late in the cycle when the fed's already emphasizing higher for longer. it definitely is striking a raw nerve. i also think if the fed is not going to move fast on the short end, the market seems to think they'll skip in september, the long end will restrain consumer spending or ration demand or do

something like that. the question is, can we handle it? can the economy handle it? >> it seems to be having quite an impact on the bank. we saw the s&p echoing some of the same sentiments we saw from moody's and fitch and the idea the higher rates are having an impact on both sides of the balance sheets for the banks. particularly this idea of the deposit shift into higher yielding assets. while it may not be taking the wind out of the sails for tech, it's certainly at least in recent days, it's certainly having it for these banks. >> you mentioned deposit flight risk which has already been an overhang. the paper losses doesn't help. the cyclical impact. we're seeing the idea of are we going to have to start worrying about credit? to me it's not so much, hey, if we grow at 4% real, we can deal with these yields. is it going to be fast and slow or a print and then a stumble because the economy is going to have to have a hiccup at some

point down the road. i think that's the big question in the mix. when it comes to nvidia, tesla, we're not talking about some kind of cfa exam algebra. we know what the 20-year cash flows are going to be and we're going to discount them back at the risk-free rate. they believe these are magic companies. they'll be printing money forever. if you believe in the mission the earnings are so low because they're going to save the world twice over. that's the story there. it's different from a microsoft where it seems as if it's a much more of a known profit stream you're trying to value in real time, i think anyway. >> it's going to be the topic of discussion tomorrow night for sure. thank you. talk in a bit. mike santoli. our next guest says high rates are just one of the big potential downside risks for the u.s., but that we are still in better shape than europe and certainly china, at least in the near term. joining us this morning, apollo's chief economist torston

slock. you've been consistent reminding us of the risks the consumer here faces. i wonder if you think macy's comments on delinquencies this morning is one micro reflection of that? you would think that's the case. monetary policy is working exactly as it was intended. when you raise rates, people start falling behind on their payments. this is not only corporates, it's also consumers. for that you do and you should expect to see consumer spending begin to slow down as a result of interest rates beginning to hit harder, in particular on households that have run out of savings and also households that generally have higher risks of being more vulnerable to rates going up. >> we just had a discussion about if the fed is not going to do this, maybe the long end will handle it for you. i wonder if you are sort of concerned about, i don't know, the bond vigilantes, for example, are they going to create true stumbling blocks or do you want to have that cop on the beat given what inflation has done? >> well, what's going on, carl,

when long rates do their job, it's more tricky for the fed because the fed can control rates for the reason you spoke earlier about. and then you have a significant risk, including, of course, also that you have that rates are now going up because of the downgrade, because of qt, also because of everything that's going on with yield curve control exit. the bottom line is the same, namely that the fed is beginning to lose a little control here, then the loan rates moving up is a little more challenging in terms of managing what it means for getting the economy to get that soft landing we all would like to see. >> interesting. what about the debate about how far the fed needs to go to really squeeze the economy to get to that 2% target? do you think that more needs to be done on that front or is that target something that can be more floating, say, towards a 3% inflation? >> the first observation is that despite this being the fastest

rate hike cycle essentially since world war ii, the economy is incredibly good shape. so, one conclusion right up there is, well, maybe the fed funds rate needs to go quite a bit higher. the other way of looking at this is, well, maybe we should wait for the lag effects of rate hikes to come through. given the fed doesn't know the answer is we need to do a lot more or wait for the lag rate hikes, then their response has been, and this is likely what we'll hear friday in jackson hole, just wait and see. status quo and be hawkish, we have to see the data slow down. that slowdown in the pipeline continues to be very important for the fed as they continue to try to get inflation down to the 2% target. >> speaking of those lag effects, of course, you kind of mentioned earlier in the conversation this idea of consumers running out of their excess savings. the restarting of student loan repayments. are all of those kind of part of the lag effects that you're expecting to have a real impact

on inflation? >> yeah, exactly. and i think that's also why -- i mean, if we really think about what the fed is trying to say, well, they are trying to communicate now that this is a time to begin to pause. what are the arguments for pausing? well, they probably worry about there is more in the pipeline that could begin to drag the economy down. it's a very delicate balance they have to walk between inflation still being -- particularly core inflation at 4.7 still being too high and the atlanta fed gdp now estimate for this quarter at almost 6% is incredible. all of that would argue for more rate hikes. why is it they're not hiking? because they are probably worried about the lagged effects coming through. given as you spoke about, given some things we're seeing with delinquency rates going up on auto loans and credit cards, you're seeing default rates for high yield start to spike higher in the last six months, all those things combined make it quite challenging for the fed as they try to manage the process here of getting that soft lapped

i landing. we introduced you by saying we would rather have the u.s.'s hand than china's or europe's. what do you say to weakness in china being overstated? oil got a bid today as thinking it's not as dire as some have said? >> i think that's an important question but i think the key is the slowdown in the u.s. is engineered by the fed. in other words, it's the fed trying to cool the economy down, to cool inflation down. the slowdown you're seeing in china and for that matter the slowdown in europe is not engineered by the central banks. it's a slowdown coming in the china case because ofglobal export slowing. it's also because of some problems in the profit market. those things are difficult to deal with for policymakers in. in europe, slowdowns to exports to russia and china. those are more difficult things to deal with. i think if there were to be a harder landing in the global economy, and if we have a sharper slowdown in the u.s.,

the fed can turn around. whereas we have a slowdown in europe and china, it gets a lot more tricky for policymakers because the source of the slowdown in europe and in china, in particular, is not policymakers but, instead, homegrown issues with what's going on in the housing mashlg every market and what's going on with global growth. >> our thanks as always keeping us honest on some of the challenges we face even in the wake of decent growth. thanks. we have a market alert on lowe's. courtney reagan speaking with ceo marvin ellison moments ago. joins us now. court, it's been a busy morning. >> it has been. i have to keep these retailers straight. lowe's expected higher than expected. affirming full-year guidance across the board. i did just get off the phone with marvin ellison. he said though we are forecasting home improvement to be down in single digits in the second half, we believe our specific total home initiatives will allow us to outperform the

market by 100 to 200 basis points and overall we remain really bullish long term. the lack of available homes on the u.s. market, the average age of a home being 41 years old and price appreciation of 35% from the pre-pandemic are all pause of drivers. the pressure on consumers, he says, are more about consumer confidence and consumer sentiment rather than financial wherewithal or the ability of credit. what our customers are telling us is they feel good about their employment situation, they feel good about the amount of equity if their home and they know there are projects they're going to get done. they're just waiting to see what happens in the macro environment. interestingly, while shrink has been a pressure for lowe's for years, unlike what macy's and dick's executives have told me today, ellison says shrink from theft from lowe's is flat year over year. he said he believes he is one of the only major retailers that will not see a hit to margin.

>> fascinating. the highest mortgage rates in 23 years, is that encouraging more people to stay in their homes as opposed to move and, therefore, some home renovation projects, that's the tailwind they're seeing here? >> i think that's all part of it. the cost to move is high. the age of the home is over 40 years old on average in the united states. it makes more sense to take on some smaller remodeling projects. the pro demand was stronger, though, than your do-it-yourself demand in the quarter. i guess that also speaks to some homeowners taking on bigger projects but with the help of a professional. when it comes to things on their own, holding back a little. >> at least lumber is cheaper. >> that is true. >> busy morning for courtney n jim, "mad money," 6:00 p.m. eastern time. earnings revisions are coming down for retailers reporting this week. thursday afternoon we hear from nordstrom, whose estimates have only shifted down slightly. gap has seen a pretty stead

decline so far this year. first up tomorrow it's foot locker whose outlook has truly fallen off a cliff. all three seeing double digit short interest as a percent of float heading into their quarterly reports. a far cry from the roughly 2% average of the rest of the s&p. while foot locker is the least shorted of the three, options markets still indicate as much as 11.5% move going into the tape. we actually like looking at these implied moves in advance of the print because it gives you a sense of how wild it might be. >> absolutely. it's super important, as you kind of look at how to game out the different scenarios here. interestingly enough, short squeezes this summer, according to this new note by goldman, the increase this summer was one of the largest short squeezes on report. but funds have reversed their course in august. so, going into kind of this august slump we've seen, a lot of the heavily shorted positions were effectively squeezed and hedge funds were getting their

returns on the long side. but they've gotten a little reprieve in august. so, we'll see if that can continue, at least for those who are big players in that short basket. >> yeah. unless yesterday was the beginning of a new one. we'll find out. july was pretty nuts. still ahead, shares of medtronic is higher. ceo geoff march that will join us next. s&p global downgrades several names across global banks. wall street's two-way street up next.

welcome back. take a look at medtronic, higher by 2% after posting a beat on the top line, bottom line and raising guidance for the fiscal year as demand for medical procedures return to pre-pandemic levels. joining us in a cnbc exclusive, medtronic ceo, geoff march that. you raised guidance 25 basis points, and analysts are saying you baked in some conservativism here. is that true? >> i don't know about that. first of all, it is a strong start to our fiscal year, our q1. we had broad-based performance across all four projects. all growing at 6%. it's really driven by some good execution. you know, some underlying --

well, some underlying strength in our markets. and some new products we're bringing to market. so, really pleased with the start. >> what were some key drivers in the quarter, especially as it pertains to some of those new products? >> sure. probably the biggest one is our diabetes business. we effectively doubled the growth of our diabetes business. it's really on the back of the launch of our latest technology in the united states. i mean, this technology has been growing very quickly. outside of the united states, grow in 18% or so this last quarter and we're just launching it now in the u.s., which is the largest market. and that really -- this is really the beginning of a nice turn-around in growth acceleration for our diabetes franchise. >> and there's also some headlines regarding your renal denervation system as well.

tell us about your business in china, there's a lot we talked about the potential slowdown there. are you seeing that? anything you can provide or any color you can share about what's happening on the ground in china right now? >> sure. first of all i say for the medical technology industry and for medtronic, china, it's less about our supply chain exposure there. it's more about the end market. it's a big end market with lots of growth as the chinese government is committed to driving more access to the advanced health care we provide. it's a big opportunity medium and long term. in the short term, the kidynami we're seeing is higher procedure growth. procedure growth is very high. the government as part of their drive to increase access and affordability for the 1.4 billion people, they have focused on bringing pricing down in our industry. what we're seeing in the short term is some price declines, and we're seeing the procedure growth go up.

and, you know, for the remainder of this fiscal year, you'll see price declines eclipse the volume growth. this past quarter we were at 4%. historically we were more like double digit. we anticipate getting back to high single digit, double digit growth by the beginning of our next fiscal year. big opportunity for us. it's something i think the u.s. government, chinese government can agree on is helping patients. >> i don't know if you have an answer to this one. the market with the phenomenon of weight loss drugs, does that mean diabetes growth is degrades somehow if the populous is less obese, for example? >> well, first of all, these gop1s are an exciting development for patients. it's something we're watching closely, doing our own analysis, and a lot of dialogue with

physicians around the world. particularly in areas that we're in. like diabetes, bariatric surgery, cardiovascular, all questions for the reasons you indicated. we don't see a material headwind for the medical device industry caused by them. regarding medtronic and diabetes, we're mainly treating type 1 diabetics. we're not seeing an impact on type 1 diabetics from the glp1s. the one we've seen a short-term impact, very small, is in bariatric surgery. and we actually, in talking to our clinician partners around the world, yeah, they've seen that short-term impact. like i said, it's small for us. they're talking even longer term these products will drive more patients into the obesecy care pathway that may lead to more bariatric surgery. and the cardiovascular piece is

early and hard to tell. again, we don't see it as a major headwind for medical device companies. >> interesting you're already seeing kind of changes on that front. jeff, thank you for being here. appreciate it. >> thank you. good news on schwab today. at session lows. dom chu has flash alert. >> what we have are the shares down near session lows at this point. this is coming on the heels of news we got yesterday via regulatory filing that schwab plans to reduce its real estate footprint, also cut jobs in an effort to save costs. new this morning there is some reporting out of bloomberg citing a source familiar with the matter that schwab is looking to raise capital in the debt markets. it's planning a larger size bond offering right now. and what it looks like is that some portions of this particular bond offering on the 11-year side of things, the longer duration side, may yield about 2.05 percentage points, 205

basis points over comparable maturity treasuries. it's a curious move. it appears as though schwab is trying to batten down the hatches a little bit, rein in costs, shore up the balance sheet with more cash. the interesting thing about this, carl, checking on certain benchmark parts of the high-yield and investment grade markets. if this were to price a little over 200 basis points above comparable and maturity treasuries, that would put it towards some of the higher yielding parts of the bond market. right now investment grade indices are currently about 1 to 125 basis points above treasuries. so, an interesting bit of news there just to add some color. carl, schwab shares down about 4.25% as we look at things right now, carl. back over to you. >> especially on a day where financials are the worst performing sector. thanks. still to come, what home buyers need to know about

surging interest rates. and we continue to watch dick's sporting goods. theft slowing sales and an earning miss dragging down those shares. down now about 24%. with gold bond... you can age on your own terms. retinol overnight means... the smoothing benefits of retinol. are now for your whole body. plus, fast-working crepe corrector diminishes wrinkled skin in just two days. gold bond. champion your skin.

tech is our story abroad with european markets set to close in just a moment. stocks higher buoyed by renewed optimism in the sector. taking dutch group's asml and st micro, with arm's listing -- or f-1 disclosure overnight helping to boost sentiment. microsoft and activision back in the headlines as microsoft revises its $75 billion deal to satisfy uk regulators. the buzz overseas is all about

commerce secretary raimondo set to visit beijing as u.s. exports hampers china's economy. carl, it's been a very big week for china. you have stalling growth over there, you've got a potential real estate crisis, consumer confidence, youth unemployment crisis. her going over there amid some geopolitical tensions is noteworthy. >> did have decent action on the fxi earlier this morning. it's interesting the diplomacy efforts. raimondo now going, blinken and yellen have been there. you have camp david working on allies to confront china, perhaps, as a group. and now reuters saying the president is going to go to g20, the summit next month. >> it's pretty amazing. the overall interconnectivity as

a lot of companies, a lot of multinationals are looking to expand outside of china. areas like india, areas like vietnam trying to diversify, given the challenges over the past few years. >> sort of explains the fixed asset and foreign direct investment china doesn't have as has been the case the past few quarters. let's get a news update with bertha coombs. john eastman who was indicted in georgia, along with president trump, became the first codefendant in the georgia election conspiracy case to surrender to authorities. eastman, who is charged with trying to overturn the 2020 election along with the former president, will be released on a $100,000 bond. president trump says he will surrender to authorities on thursday. the faa is setting up safety meetings across the country after a series of runway near misses. the agency is planning meetings at 90 airports over the next few weeks. so far this year the national

transportation safety board is investigating seven near misses at u.s. airports. and could we be one step closer to the sci-fi idea of a universal translator? meta seems to be trying to get there. the company releasing a new a.i. model it says can translate and transcribe speech in dozens of languages. it's a process that could soon lead to real-time communication across languages. if it really works in real-time, it would be great when you go and travel abroad, wouldn't it? >> travel abroad or i was thinking some of the foreign streaming products that you get, you won't have to use subtitles, even though i personally love the subtitles. bertha, thank you. up next, mixed messages on financials. s&p downgrades another batch of u.s. banks over liquidity concerns. orflows outpacing every other sect. who's right? that debate next. stay with us.

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schwab. i want to point out the key story about schwab and the way to look at this. this is primarily a bank. i know people think it's a trading operation, and it is to a certain extent but a large percentage of revenues come from the bank. we've been talking about the flows into the money market funds continuing.

schwab acts like a bank. they're losing depositors to pull out into higher yielding money market funds. that's one reason it's been under pressure so long and looking for head count reductions. the banks keep dropping. the real banks keep dropping. co-m comerica got a downgrade. look, we went from 45 to 55 and back to 45 on comerica. that's what a head and shoulder top looks like. all the regional banks are looking like that. it is remarkable to see the weakness in the retailers on some of the disappointing reports from dick's. macy's down very big. what's amazing is how little these companies really matter. this is a $3 billion market capitalization. almost irrelevant. you see here that stock's been down rather noticeably. that's a two-year low for macy's at $13. what's not irrelevant in retail is nike. n nike is not just a dow component

but $160 billion market cap. this is the lowest since december. kohl's has been sinking, even nordstrom on the retail. it's been a rough day overall for the retailers. carl, back to you. >> rough day for retailers and a rough day for financials. bob, thank you. let's dig in a little more to financials from the desk of bank of america. analysts are seeing a sixth week of inflows into fms. the longest recent buying streak of any sector. from the desk of goldman sachs analyst see them lifting at the highest tilt over the russell 3000 in a decade. s&p downgrades multiple banks, including comerica and keycorp over profitability. it's idiosyncratic situations. i would surmise a lot of this is

single stock in nature, not etf, not a broad thesis on sectors, but looking at winners and losers. case in point the green shoots we talked about yesterday in the deal market. there will be inflows if those investors -- i spoke with one last week, a hedge fund manager who said, i think we're on the cusp of a big m&a boom. you buy the bank's most exposed, most leveraged to a real deal boom. so, that's kind of why you see this dynamic taking place. there are significant headwinds. the broader sector has definitely traded lower in the last six weeks or so. >> that said, i think you could argue the fitch and s&p downgrades have landed like a thud. like, tell us something we don't know. today the reasons s&p gives is the kitchen sink. it's commercial real estate. it's deposit outflows, higher funding costs. i'm not sure. at the same time you have capital markets showing life. >> you're exactly right. none of these credit rating agency reports have really

delved into things that weren't out there in the market. what you've done, and you can see the price action today, kind of an example of that, they reminded people. these issues are still here. because earnings looked better than revised estimates had projected doesn't mean these issues have gone away. here's your reminder. that's why you're seeing the selloff. speaking of financials, our next guest says to look for stabilization in the treasury market in order to see some consolidation emerge. joining us chief investment strategist victoria fernandez. where does that consolidation take place and at what point in time and how do you see some stabilization in treasuries, which have been quite volatile this summer? >> yeah, they absolutely have. i think you have to get stabilization in the yields in the bond market in order to see the equity market take a sustainable move higher. where do we see that consolidation moving higher? in the equity market we're anticipating 4200, 4300 for the

s&p. we've been saying all year long we thought we would have a mild recession or at least a significant pullback towards the end of this year. so nasdaq is back, what, 6% so far this month. we're getting close to the 7% to 10% pullback we were anticipating. but we've got to see those yields come down a little bit. i don't think that's going to happen until the federal reserve comes out and says what their plan is in regards to cutting rates. so many people thought they were going to cut rates this year. that was never part of our outlook. we do think they'll cut rates some time in 2024, which really supports the dot plot. if they can confirm that, whether that's at jackson hole or the next fed meeting, then i think you start to see yields calm down a little bit. that will help stabilize the equity market. >> do you really think a conversation around cutting rates is on the table for friday? >> probably not. i think what we would like to hear powell say is talking about, have they reached that

restrictive level? what is that r-star number? we don't really know but i think you might hear some talk around that. when you have an inflation target of 2%, then they haven't moved it, right? they said, well, we're happy with 2.5% or 3%, i think you would see a little sigh of relief coming into the markets, but we're not seeing that. is he going to come out and say, we're definitely cutting rates? no, he's not going to say that. but can he say, this is where we see neutral, we think we're in this restrictive territory, where we're we need to be, that would help markets. i just don't think that's the message we're going to get. i think the fed has more to go and the market needs to prepare itself for that. >> so, what are some specific names you have been adjusting in your portfolio to account for this dynamic you're currently seeing in the markets? >> one of the things we talk to our clients about is having that balanced portfolio right now. you don't want to be completely out of the market because you want to take advantage of the upside, but you do want to be a little bit defensive because we

think there's quite a bit of choppiness coming. we've liked health care. we've liked energy. you look at cigna or mckesson. or conocophillips. these are areas you can add to your portfolio to have for a longer time period and you'll benefit as the market continues to chop. >> fascinating. victoria, thank you very much for being here. appreciate it. >> my pleasure. new housing data and the highest mortgage rates in 23 years has home buyers on edge. taylor morrison's chief cheryl palmer is with us. plus, can't keep our eye off nvidia. another -- well, it was an all-time high, but now the shares are down about 2%. turned lower after reaching that all-time high earlier in the session. barclay's pointing out the options market is predicting a move just below 8% after results tomorrow. ayitus.

welcome back. let's dig into housing. home sales lower in july. mortgage rates hitting the highest point since the year 2000. the 30-year fixed jumped from 6.95% on the date of our next guest's last appearance a month ago to 7.48% today. that runup is leading to this aaffordability issue. bankrate says an average monthly mortgage payment is up $2300 from the pandemic low of $977.

joining us is taylor morrison ceo. we did get a tick up on days on market, a tick up on supply. can that be built upon? >> i was looking at it as well. it's a modest change from june numbers, carl. i don't think anything in the data -- i don't think anything in the data this morning was very surprising. as you mentioned, we've seen rates move. i think we have a couple things happening. we've seen rates move 50 -- almost 50 basis points in the last 30 days. 25 basis points in the last two weeks. at the same time, because inventory is so tight and we've seen, you know, strong sales momentum and we've also seen prices move. so, i think for the consumer,

trying to buy a home in a difficult environment. on top of that -- now, that seller has a difficult time assisting a new buyer with maybe support on buying down mortgage rates. and i think that's why we're seeing, you know, new tick up of percentage of total sales. >> how do you think it's going to feel moving into the off-season? i mean, how are we going to think about seasonality if we're truly in a new rate environment overall? >> as we talked about last month, i think we have seen a bit of seasonality come back into the marketplace. i think that's somewhat welcome. i think you've seen, as we get into the summer months, demand quite strong but moderated from the strong spring season. i expect a little bit more of that. once again, when we think about the market and we think about rates, we continue with that lockup effect.

something like over 90% of mortgages today are below 6%. and i think over 60% are below 4%. so, i think that's going to keep the resale market pretty tight, along with low inventory. i think we'll continue to see good traction. but rates have moved, prices are higher. i think they're going to stay a little -- i think rates are going to stay higher for a little longer. we should expect normal seasonality or moderation. >> this, of course, is acutely felt for first-time home buyers, an index of housing affordability for this group. the lowest on record. what does that mean for the demographic implications of the housing market as a whole as you look out two years, three years from now? >> you know, i think that's a really good question. at taylor morrison we have about a third of our sales to that first-time buyer. over 50% of our sales are to

mill millenials. when we look at the numbers of the millennial population and the generation behind them, i would -- i would suggest that we're going to continue to have a very strong housing market because shelter is just a need that all consumers have. the numbers are so large with the first-time buyer even though it's a little more difficult to get a consumer into a mortgage today given the rates. i think, once again, that's why consumers are turning to new because buyers -- or builders have the ability through forward commitments and buydowns on much of our inventory to help consumers get a rate that works for them. it's just a reading last night, two testimonials from two of our fha buyers with a high 4% rate. that made the difference for them to get in. >> yeah. we're definitely watching fha, too. there's so much to asober right now in housing, sheryl. it's good to get your

temperature, though. hope we talk again soon. >> take care. thank you. chip designer a.r.m. filing to go public. what is expected to behe t biggest ipo of the year after the break. we're back in two. the us, you'. helping businesses both large and small, communities and the people who live and work there grow and thrive. we're proud to call these places home too. they're where we put down roots, and where together, we work to help move everyone's financial goals forward. pnc bank.

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running up and down that field looks tough. it's a pitch. get way more into what you're into when you stream on the xfinity 10g network. welcome back. softbank-owned a.r.m. reported narrowing profits in its ipo filing last night bringing into question what the fate looks like for this company backed by

founder and ceo son. what it will look like what this big debut likely to be the biggest debut of the year has in store. our deirdre bosa takes a closer look at his moves in today's" tech check." hey, dee. mayayoshi son wants to lead the revolution. a.r.m. could help the case. the biggest market is smart phones. that shows through in financials, shrinking revenue and narrowing profitability and even a successful ipo may not make up for other potentially bigger missed opportunities. perhaps the biggest ai black eye for mayayoshi son is the undisputed ai winner. softbank wanted to sell arm to nvidia but couldn't get it past regulators. it would have given softbank a $25 billion stake in the chip maker that would be worth nearly $100 billion today given

nvidia's giant runup this year that would have been a fourfold return in just a few years and far better than a doubling of arm since softbank bought it for $21 billion if it manages to be valued at $60 billion when it goes out, the lower range of its reported target valuation for this ipo. in fact if arm, even if it goes at the top of the range, $70 billion, the return for softbank still underperforms the nasdaq during that period. so even if you chop that up to regulators and say, okay, this was out of softbank's control, don't forget that softbank bought a 5% stake in nvidia itself in 2017. it sold that stake a year and a half later for a tidy $3.3 billion gain, nothing to scoff at there. had it held on it would have been worth tens of billions of dollars. given masa son and softbank's credibility to sell arm to public investors. buffett says in the long term the market is a weighing

machine. it is possible arm creates a ton of value in the public markets, maybe rivaling that of nvidia. there's still a lot of uncertainties ahead and masa son, remember, earlier this year said he was going on the offensive for his strategy. he wants to invest again. for now he will have to play a fair amount of defense as he sell's arm's ai narrative which at best i think is a little cloudy. >> deirdre, i'm just thinking about soft bank's recent ipos here in the u.s. we know what happened there. uber, we know what happened there. is this going to be different? anything they're doing differently to make sure it's more successful in terms of the actual debut itself? >> that's a great question, and it really underlines the idea masa son needs a win, the fr freshest memories of softbank is uber, barely trading at its ipo

price. i mean, he's kind of running the same playbook. if we take the valuation in the private market moving arm to soft bank, that's within the range. that was in 2019, according to a few sources. that is at the high range. you look at the wall street notes, bernstein says it should be worth $40 billion. so he's shooting high by have you ever known masa son to do anything otherwise? sometimes it pays off. alibaba, that gave him the reputation to do this, raise $100 billion. nvidia could have been the second alibaba or come close to it. he still has work to do. he's hoping arm can be that. deirdre bosa watching the arm filing. still to come as we're close to session lows. if you're in the market for a

new car, what $30 million gets you at rolls-royce.

$30 million can get you a custom rolls-royce. our robert frank breaks down what exactly that looks like. hey, robert. >> reporter: well, carl, this is a trend we're seeing throughout the luxury industry where you have profit and margin growth from special editions and customization rather than more volume. rolls-royce is seeing record profits from what it's called bespoke program where customers choose their own paint color, the seat fabrics, dashboard, even the ceiling lights. the average sales price is now $500,000, but customization can more than double the price. for a select few rolls-royce will even build a one of a kind car just for you from the ground up. their latest coach build was unveiled over the weekend. price tag over $30 million. the wood parquet on the dash took two years to carve from 1,600 pieces of black sycamore

wood, has a champagne chest. don't bother trying to buy one. you have to be invited. >> coach build is what i would call the pinnacle of customizing. you as the client tell us your dream about what the car should be and that takes them far over four years, and you as a client, you are constantly with us. you are signing every single engineering step off because you have commissioned the car, and we are building it in your own personality. >> reporter: now if you don't have $30 million, if you just have $420,000, they launched the fully electric rolls-royce called spectre. it is sold out until 2025. this is the one ev maker that does not appear to be cutting prices right now. >> i don't know, man. it's not bespoke. why hang out with the riffraff, robert? >> a lot of money to pay. >> it is pretty amazing at that

level having done some reporting on the rolls factory in the uk, customers don't care as long as it's the only one in the world. >> is it still a depreciating asset? at $30 million, does it go up? >> robert, thanks. we're going to get urban tonight before we get to nvidia and snowflake on wednesday. let's get to the judge. carl, thanks so much. welcome to "the halftime report." i'm scott wapner. front and center, the state of stocks and whether a rough august is a precursor now of an even tougher stretch this fall. the investment committee debating your money. joining me josh brown, stephanie link, jason snipe and shannon saccocia. a check on the markets. the dow down 130, pretty much the lows of the day. the s&p down 6.5. the nasdaq was strong. not so much right now, a quarter of a percent. i guess we'll take it. steph, retail tough -- macy's, di's