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good afternoon, everybody, welcome to power lunch alongside kelly evans. we are monitoring the developing situation in russia with the crash of a business jet that may, may have had among its passengers. coming up, the day we have all been waiting for in video earnings, they are finally here. the stock has already tripled so far this year. can anything the company says help push the stock even higher? a lot of anticipation surrounding that one. plus, mortgage demand dropping to a 28-year low as race jumped to a 23 year high. the high rates crippling home sales or just a lack of homes to buy? kelly. >> let's get a check on the markets as stocks are higher and the s and p is trying for its first gain. dow is up 218. the nasdaq is leading the way

up 1.8%. we have some major retail movers today. look at foot locker, missed expectations. the stock is down 30% today and 57% so far this year. the ceo siting softening trends in july, we just spoke with the ceo of la-z-boy who said she didn't see the same thing. a big drop in dick's sporting goods yesterday. if you're wondering about the fallout, nike shares were down yesterday, along with dick's sporting goods. and interestingly enough, nike, one of the strongest blue chip stocks could potentially be down for the tenth session in a row if we continue this decline today. that would be its longest losing streak ever. it is not all pessimism in the retail space. abercrombie and fitch, raised its sales forecast saying customers like the new collection, including the new styles of jeans and you would think, wouldn't people steal the popular stuff? but this stock only turning

green today. >> all right, kelly, thank you. stocks moving higher today for the most part, however, august has been a forgettable month. s and p and nasdaq on pace for their worst month since december. our next guest believes what he calls an overdue rebasing is underway or soon to start. he is dan, cio of zerian investments. great to see you, my friend. >> great to see you, tyler. >> you know, dan, i want to set up this conversation correctly. it is sort of high concept, and let me see if i can do that and then let you make the argument. i'm understanding you correctly, you see a variety of factors coalescing right now, fiscal, monetary, economic, political that you believe are going to lead to a great rebasing. what does that great rebasing mean and what does or will it look like for stocks, for bonds, and for consumers and

how soon might this occur? >> so, okay, i think you know that i have been spending a lot of time in a completely different discipline systems biology, understanding how diseases start. how the cascade of this regulation puts your immune system and your biological system out of homeostasis. the political economy has its own biological system and i think the system is structurally out of balance. now on the face of it, it looks fantastic. the fed funds rate is about 5.123%. close to its historical average. the ten-year is right on its historical average with 4.5%

before the crisis. 4.25% over the entire era. inflation is coming close to target. everything looks really great except investors sentiment is declining. it has gone down by a third this month, from 51% of investors to, you know, a significantly portion lower. the results, i think, are about to be revealed of twenty years of monetary policy and governmental dominance in the markets. right now, we have a soft landing, fed funds rate back to pre'08 level. economy is still strong. markets are conditioned for higher interest rates for longer. that's all good, but what's about to happen has not to do

so much with the national and household income statement as it does with balance sheets. and what we have accomplished here as a result of primarily poor policy, not monetary policy, but physical policy and dysfunction of congress is an uncontrolled decade, 15 years really, of debt financed spending that has driven our deficit nationally up 122% to $1.6 trillion a year. the national debt is -- are you there? >> i'm here. this is an opportune moment. you have debt at high levels. you've got a lot of debt maturing or coming due in the next 90 days. it's more than a trillion dollars. you have a lot of new issuance

coming. is there any way, then, with what you've just layed out that we're not looking at level interest rates, but potentially on federal debt much higher interest rates. not 4.5%. not 4.3%, but 6%, 7%, a level that would definitely impact consumers and consumption. >> that's it. you're reading my thesis. you and i have been talking about this for a long time, actually for three years since the modern monetary policy started printing money and sending checks into the economy, which we know is inflationary. the inflation, i think, still think would have been transitory, but for terrible policy decisions causing restructuring in regard to making china our enemy and the ukraine war and the like. i think right now, not only are we going to have higher policy

rates for longer, but the reason we have rates where they are right now is because the fed is giving itself room for what comes next. what comes next? which is quite remarkable. is it the feds balance sheet is still over $8 trillion. fifteen years ago, it was at $500 billion, less than a trillion, after the financial crisis and years of qe, it was $4 trillion. the pandemic drove it up to $9 trillion. and people have been talking about quantitative tightening for a long time. >> but hasn't happened really, you pointed. it hasn't happened. >> basically, what's been going on is trillions have been maturing and the fed has been, you know, rolling them down the curb and buying them on balance sheet. any day now, the fed is going to be abliged to start to reduce the size of its balance sheet, because it's just not credible for the fed. it's a classic ponzi scheme for

the fed to continue to buy all the treasures it issues. what will happen right now is, a gigantic withdrawal of liquidity from the market as the fed allows bonds to mature and be refinanced out in the private market without sovereign bids because of the reregionallization our policy created. private markets are going to set the rate and like you said, i've suggested that the ten- year rate is probably going right past historic average, where it is right now. we could wake up pretty abruptly when people connect these dots fully and see the ten-year at 7 or 8%, maybe even higher. >> let's bring this around third base and to home plate. what does this thesis, hypothesis mean for stocks? for bonds, and for consumers? >> okay. so let's say the fed wants to cut its balance sheet in half.

that's $4 trillion of liquidity that needs to come from private markets. domestic and abroad and those markets are going to set the price. that money is going to come from other asset classes. i would think starting with equities and it is already happening to some degree. but equity is a relatively strong bid. i'm not all doom and gloom here. this is a very necessary and normal reconciliation and we've got everybody over leverage. households savings are depleted. credit card and mortgage debt at all-time highs. corporate debt are all-time highs. as you said, federal debt, i mean, we're financing trillion plus deficits. the debt service on the federal debt alone right now is a greater expenditure than defense and medicare combined. so we have to reduce the

national debt. to your point, it's all about politics. the last time anybody talked seriously about fiscal discipline was paul ryan when he said that the united states was in solvent when the feds balance sheet was a trillion dollars back in 2011. where is paul ryan right now? former presidential candidate. he is running us back. he is in the investment business in the private sector. so, what we need is real leadership that is going to have real discipline. not just a kick the can down the road. but we need very serious leadership to make some very difficult decisions. >> from your lips as they say to god's ears on that one. so, just to wrap this up and then i want to ask you one more quick question. the rebasing that you're talking about may look or feel uncomfortable, but it is necessary. and it ultimately will be a good thing. you're not all doom and gloom as you say. i want to pivot for just a

second to these reports that pergosian of the group, when you were working on the restructuring of the former soviet satellite state's economies and you spent a lot of time in moscow. you spent a lot -- you are familiar with many of the oligarchs. what do you make of the remarks on which he was on the passenger manifest may have gone down with no survivors? >> it wouldn't surprise me one bit. there is a huge power struggle going on inside russia right now. we don't know who is going to be the future leadership and we've learned a lot -- enough in foreign policy to understand that getting rid of the bad guy is not the hard part. it's figuring out what and who comes after. i have a lot of ideas about the

relationship between prigozhin and putin, but there are all kinds of people who would want to kill either one of them or both of them right now. it is just not clear what it is, who it is, and what's going on. it wouldn't surprise me one bit if somebody in the military establishment, not putin, somebody in the military establishment were behind this because i never believed that prigozhin's revolt was a real revolt against putin. i think that putin and prigozhin were in concert, and out to get both of them. >> dan, you know how much i enjoy our time together, but we have to leave it there. dan, thank you very much. >> appreciate your time, tyler, thank you. we're going to stay on that subject. more breaking news on that plane crash out of russia. reportsout of russia saying

eight bodies were on site. prigozhin as a passenger. the head of the group, which engaged in the failed mutiny. joining us now is michael. did you hear our previous guest. do you want to pick up on that? >> it was an interesting conversation. i would only differ on a slight point, although it may be an important point. i'm not sure there's a power struggle going on in russia, especially what happened in the last hour, apparently. i think even though the defense minister and the chief of the general staff who are controversial and not popular with prigozhin. he thought his partnership was so good, he could do something crazy like stage a half mutiny and still get away with it or be rewarded for it, or simply get attention and persuade putin to get rid of them. i think that was crazy.

and prigozhin is meeting his predictable fate. putin doesn't welcome any kind of decent, even by people who have been his friends. my best theory is this was putin exercising payback in a way he can deny and it didn't require a confrontation at the time when there was still danger that the group fighters might still mutiny. putin handed it more gradually. deflated the immediate crisis. didn't amplify or publicize his public dispute with prigozhin, allowed his own forces to reassert full control and settled his scores later with revenge being that is served well cold. that's my best guess. but we're all just guessing. >> let's talk for a moment about the future of the group, who leads it now? how vital is it to russia? is there concern about a negative reaction among the troops who have been an important part of russia's interest in many parts of the world. >> that last concern, i'm sure

is still there. which is part of why i'm speculating that putin waited two months, essentially, to carry out this punishment. but one thing prigozhin said probably will be born out by future events, which is that the kremlin will see that happen. not only it keeps them out of the mess and the trouble in ukraine, but because the group serves the kremlin's interest in africa. it exploits resources. it gains friends and footholds and political allies and it does so all at a very modest cost and with plausible denial ability. they will continue to be active in africa and putin will have a loyalist who is carrying out that job, which shouldn't be that hard for him to find. again, this group in africa is

highly effective in terms of financial and in terms of political influence. >> is it fair to say, michael, if prigozhin his way, russia would be hawkish in the war? and as we understand whether the ukraine offensive is, i don't want to say fizzling out, or at some sort of stalemate, what is russia's next move likely to be as we head into autumn., a wetter season. a season that doesn't favor a lot more of gains on the ukrainian front here. >> so on the first question, i think prigozhin was in some sense correct in the spring to feel like he was being left out with his men on a branch with very little support. they were being asked, as you'll recall, it was a huge way of attack-style thing, which left many of his forces dead or badly wounded. i think he was asked to do the impossible and anybody else in the military chain of command, and i think maybe prigozhin

thought by doing something so dramatic, it would catch putin's attention, that he could persuade his former friend, that they were doing a poor job, provisioning his forces and giving them any tactical leadership. so i think there was an element of correct analysis and understandable frustration on prigozhin's part. a mutiny or almost a coup attempt could be a delusion, and now seeing the likely consequence of that. so in regard to what's going to happen in africa next going forward, again i think russia's approach there is already pretty well established and as far as it goes, it's incredibly cynical, but it's moderately effective. i don't expect any dramatic change there. in terms of the ukrainian offensive, i'm afraid i don't see great prospects for any big

change, frankly next year once ukraine has the f-16s they have been asking for. again, we'll test that on the battlefield. >> thank you for joining us to react today. we appreciate your time. >> thank you kindly. >> fascinating stuff there. as we mentioned, bond yields have fallen a little bit today ahead of chair powell's comments in jackson hole. let's go to rick at for more on the bond market moves. hi rick. >> hi, tyler. indeed we've seen not only treasure rates fall, but the catalyst for treasure rates falling started overseas. whether it's the uk or the european union. the pmis were weak and coming into our time zone, we're already pressured. look at the two-year. we were under yesterday's lows. and a two-day of tenure. two week lows are down 14 basis points. the same as guilds and the big story today might have been 306,000 on early benchmark revisions. we'll know for sure in february next year on the job front.

maybe it's less than we expected. it still draws attention to the fact we make a lot of assumptions on the labor market. we don't want to make any assumptions about tomorrow. let's talk to a trader. how are you doing? bump, shake, this is the big guy and what we want to ask mike is very easy. i see that rates are moving lower, which means treasury prices moved up. more importantly, we're seeing very strong buy-in on lighter than expected volume in equities. your thoughts? >> light volume is what we see in august. i don't think anybody is concerned about jackson hole. i don't think that's looked at a volatility event. we'll probably hear something, we're keeping a close eye on inflation and one more hike left in the cycle and that's it. that's the message we're used to. it's very rare we get a volatility event out of jackson hole. it's similar to the winter, where there are not big volatility events. we could have a move in the market related on what happens

there. >> as i look up and i see these moves, it certainly seems there's nervousness regarding what could potentially happen in jackson hole, because it seems all the trends we had prior have been broken. equities were in a soften mode moving lower and interest rates last week had break out to the upside. do you think this is more of a reverse of those trends or a temporary hold? >> i think it's a listless market. august is quiet. everybody is on vacation. i think when we get back after labor day, when everybody is back in the office. there's no more vacations. people will reassess the numbers. we'll look at where interest rates are, equities are. i don't know if that means we go higher or lower. we'll see days where we move a percent. that's what you expect, we move a percent, we move exactly 1% today. so i don't think we're doing anything out of the usual in the moment, but you know, we could have catalysts going

forward that could create some strolltivety. >> many of the catalysts we talk about is whether it's today's pmis, europe and the uk seem to be either quickly going towards a recession or in one. final answer, do you think that could have a negative effect on what seems to be a strong u.s. economy? >> there's a contagious effect around the world, whether we see interest rates spike higher, something happen abroad. there's a contagious effect. whether that's a real event, we don't know. that manifests itself, but that is something to look at. >> mike palmer, thank you for joining me today. kelly and the gang, back to you. >> thank you both. coming up, the moment of truth is here. the most anticipated earnings call of the season nvidia, of course, shares are up 2% as the stocks and bodies chips, artificial intelligence, and the tech space in general. are the sky high expectations

impossible to meet? plus, primed to explode. tensions between amazon and employees are mounting. now some workers are quitting in response to the company's relocation mandate. details when power lunch returns. from big cities, to small towns, and on main streets across the us, you'll find pnc bank. 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.

welcome back to power lunch. all eyes are on nvidia. at the heart of the ai hype,

the chip maker is expected to report higher revenue in the second quarter than it forecasted even three months ago. but can it live up to sky-high expectations? let's bring in christina. piper analyst covering the space. christina, the big numbers, the guidance rates went from 8 to $11 billion from this quarter last quarter. where are the expectations? >> 12 billion from citi to 4 billion, which is insane when you think of the numbers the previous quarter and the fact that they continue to rise, but can that momentum keep going? that's a big question on this call, especially when you factor in possibly any supply chain weakness. great, everybody wants to buy these, but tsmc has to supply it, they have to ramp up the rates and ship it out. so, on the call, will there be any comments on the backlog? that's what i'm going to be looking for and making sure

that order flow into the next few quarters is going to continue, even if there are supply chain issues. >> when you look at the market value of this company, over a trillion dollars, and it has gotten there very, very quickly. compared with all of the other chip companies, it is greater than them all combined or many of them. does it deserve it? >> first mover advantage. when you think of the ai chip, capable of doing all of that compute. the second best would be amd. if they come out with their chip by q4. it's a timing issue with them. they are a little bit later. i interviewed lisa sue in the past. we worked 15 years on this. it's not like we don't know what's going on. we are later in executing. you have a player like intel that may not have the chip, but wants to build those gpu chips and be part of that entire process. so is warranted? maybe for now. is this all going to be an up

front cost? is everybody going to put this money into buying a chips and what happen as year from now? are they going to buy the software that goes with it? how is that momentum going to continue to justify this high price, this high evaluation and market count? >> you only have a $500 price target, i'm sure you have seen your colleagues on the street. i have seen 780 this week. walk us through, what do you think they will do revenue? what do you do data center, and evaluation if you want to chime in on that, too. >> thanks for having me on your show, guys. the most important number will be the data center number. i have no doubt that nvidia will deliver on the data center number. when we talked to the people that buy the stock, they have a little bit of a longer term view. they are looking at a $50 billion number at the end of the next fiscal year. that is what everybody wants to get to for data center business. this is a step along the way. this quarter is particularly

critical because nvidia has a 78% sequential increase for the july quarter. and if that stalls, getting to the $50 million number gets incredibly hard. the importance of today's number, the guide for october quarter is that the momentum continues to occur and for us, we're looking at a couple things. first, you don't grow 78% in a quarter and then simply stop. i don't think the customers are lined up at your door will simply have everything by the end of this quarter. i suspect they will be extending into the future quarters. second, we are seeing a tail wind from china. there is geopolitical head winds for china with u.s. restrictions. and it's in their interest to buy as much as possible as quickly as possible. we are seeing a tail wind there. we're seeing a shift back towards nvidia, and a new kind of data center in play, gpu

only data center. so there's these private companies. i think you guys hosted the ceo. that company is go inc. to go from $30 million in revenues last year to $500 million in revenues this year to $2 billion next year. and this is nvidia pure play from a data center angle. that's where a lot of your demand is coming from. >> there is this thing call the law of large numbers. i'm not sure what the law of large numbers says, by the way, but it seems to me that what it fundamentally says, when you grow at this rate and you get to this scale, compounding growth at the current rates become more and more difficult as you move forward. so there is an argument, i suppose, that this is as good as it might get for nvidia. talk to me about that and tell me i'm full of water. >> i don't think you are. i think you are spot on. and something very important from a standpoint of how this

is. i think we are at peak growth rate. 78% sequential growth rate followed by 20%, something sequential growth rate. these are as no big numbers. with chat gpt opening, there is a flood of activity toward nvidia. as people start getting chips and start getting the systems in place, and alternatives and intel has alternatives. you'll see the growth rates start to slow down. not saying they will go negative, but they won't stay sky high. which is healthy. >> given the exposure that nvidia has to china, are analysts factoring in a weakness going forward or double ordering that we have been rumored to hear about? >> so i don't think the exposure is that tremendous. the u.s. government has taken care of that issue with the

restrictions. china is allowed to buy last year's version, a trimmed down version of the chip. called the a800. i believe the total exposure may be in the 15% range. but they cannot buy, to be clear, they cannot buy the latest, greatest chip that nvidia puts out. that's one thing. in terms of double ordering, there is always double ordering. it is the beast. and the question becomes, is it enough to become a problem in the near term? so, we do anticipate that somewhere in the 2024 year calendar, probably in the second half will go through a digestion period. if you recall crypto, it caught up, the double ordering finally caught up and crypto crashed. we think it is more tangible than crypto, but i can assure there is double ordering, no question about it. >> i don't think that's what

they were looking for. thank you so much for joining us. we'll look forward to those results with you after the bell in a couple of hours time. let's go to cnbc news update. >> hi, tyler. here's what is happening at this hour. a surprise trip to ukraine for a bipartisan group of senators today. president vladimir zelenskyy just tweeted he met with lindsey graham and democrats elizabeth warren and richard bloomantah. doug burgum tore his achilles heel. he will decide whether he can participate after doing a debate walk-through this afternoon. the gop candidate has to wear crutches. the debate is two hours long tonight with candidates standing throughout. and he's accused of walking

into a boulder supermarket in 2021 and killing ten people. today, colorado's department of human services ruled the suspect in that mass murder is competent to stand trial. the suspect is accused of killing customers, workers, and a police officer who tried to stop him. tyler back to you. >> thank you so much, bertha. america's home wrecker, the 30 year mortgage with rates heading toward 8%. mortgage demand from home buyers dropping to a 30-year lo a very busy news day. (hero fan) uh, yea. i have to watch my neighbors' nfl sunday ticket. (josh allen) it's not your best plan. but you know what is? myplan from verizon. switch now and they'll give you nfl sunday ticket from youtubetv, on them. (hero fan) this plan is amazing! (josh allen) another amazing plan, backing away from here very slowly. (fan #1) that was josh allen. (fan #2) mmhm. (vo) for a limited time get nfl sunday ticket from youtubetv on us. a $449 value.

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welcome back to power lunch. new home sales for july rising more than 4% to an annual rate of 714,000. that was higher than forecast. existing home sales, though, slipped 2% last month as mortgage rates topped 7%. that is the highest rates have been in more than twenty years. our next guest things they won't drop until at least next year. here with more on the health of housing is beth friedman, ceo of harris stevens. good to have you with us. what are you seeing on the ground right now? new home sales, because basically, people who own used homes aren't moving.

>> yeah, i mean, existing home sales are just stalled right now, because sellers don't want to let go of great rates that they have. so the new home sales are moving, which is a good thing. we just saw that warren buffet invested something like a billion dollars into home builders. so there's a big bet there, but i think buyers are on the fence right now, because rates have gone up. they have doubled. the highest they have been in nearly twenty years. so there's less affordability and there's less inventory. it's a little bit of a sluggish housing market right now. it's going to take some time to reconcile that and so we're kind of waiting it out. we wish it was busier, but we have a challenge with inventory and with rates and i think because inflation has come down and that's a good story and we did not enter a recession, that's another good story. people think rates may come down, but my guess is we won't see rates come down until maybe next year if we're lucky. >> are you seeing more buyers

coming to the table or maybe the negotiation with all cash, that's number one, and number two, are you seeing among those people who are taking out mortgages, are you seeing a return to adjustables? >> yeah, i mean definitely a return to adjustables, because there's more adjustability. less money. people prefer that. cash is always king, right? and so we're seeing a good amount of cash buyers, that's a good thing. but you know, look, mostly, probably 65% of homeowners have mortgages today in the united states. so when rates go up this much, it definitely has an impact. and so i've said it before and it's true. the market is now a disciplinarian. things have changed and so it is in a meaningful way. therefore, the housing market has slowed down. it's not flat. there's good inventory places like new york city. so that's a good thing. but places like connecticut and palm beach are challenged. i visited a friend over the

weekend who has a place in connecticut that he bought before the pandemic, before there was a sort of jolt of business in connecticut. he got a great deal. today that house would be worth so much more and sold in a quicker period of time. this period of time in the market right now. >> bess, i don't know what realtors are going to do. nobody is going to move. we had so many people come in the past couple of years. you guys have been there for ever. you are well established. if anyone is going to make the sale, you are. the turnover is so low. people are frozen in place. i mean, i just had some friends lose out on a house they have been trying for years, two properties for sale and people outbid them. it's like winter in the housing market. >> i agree. it is a slowdown. it's not that bad. i mean, we are still doing business and a decent amount. i think sales are down 17% year over year, which is not horrible. again, circumstances dictate what people have to do, right? i mean, the market is there to

serve you, not instruct you. therefore, when people have to sell and buy, they will do so. it's just that people when they are deciding buyers right now, many of them are opting to rent because they see less affordability and less options. and so there are people because of divorce or because of marriage or a baby or whatever it is, they have to buy and sell. so those things will continue. i call those cycle of life things that continue no matter what. good market, bad market, whatever. it's not as horrible as you think. it's just not the best. it's not 2021 where everybody was celebrating and the market was so fluid. >> we'll leave it on that note. not as horrible as you think, bess. >> thanks. take care. >> keep us posted. we appreciate it. >> bye guys. coming up, if you can't join them, leave them. some amazon employees would rather quit than relocate to a new state. we'll bring you the latest details when power lunch returns.

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office, some are quitting rather than relocating. annie palmer, who is working remotely? hi annie, how are you? >> hi, i'm good. >> give us the details on what's going on with amazon. >> yeah, so the latest sort of tension between amazon and some of its corporate employees is this policy where they are asking some folks who have been either working remotely or working out of a smaller office in the u.s. to relocate to what he is calling these hubs in places like seattle and new york and virginia and some employees are basically saying, you know, this is too much of uprooting my life and i would rather leave the company as much as i like working for amazon. >> do we have any idea how many people are being affected by these requests to relocate? >> yeah, so amazon is saying that this is impacting, you know, a small portion of its corporate work force, which is

they employ hundreds and thousands of people globally in corporate roles. they are saying this is a small amount of people. the employees i talked to are saying, you know, they moved during the pandemic to other areas to maybe cut down on their cost of living or thought that remote work would last longer than it ended up lasting. and so i'm clear how much this affects their work force. >> so now what do they do? you know, if people are leaving and i don't know, if this came in a weaker labor market, we all know what the answer would be, maybe people would just move. they feel like they have the wherewithal to push back. >> that's right, yeah. so you know, i did ask employees this question, how do you feel about quitting just given the state of the labor market currently? and a lot of them are saying, you know, i might not be able to find a job in my area that pays at quite the level that amazon does or even within the same skill set that i'm used to, but they find that it is the better choice for them to just stay put where they are.

>> indeed. >> all right, thank you very much, we appreciate your time today. >> thanks so much. coming up, the city of angels caught in labor hell. los angeles and the whole state of california have seen more worker strikes this summer than in the past two years combined. from hollywood to hospitality, workers are frustrated with lack of pay. could the unrest spread to other high cost states as well? our scsidiuson on this continues when power lunch returns. so they can stop the spread of wildfires. now's the time to see what america's largest 5g network can do for your business.

in the golden state, particularly in los angeles, where the writers and actors guilds continue to strike but so do hospitality workers let's get out to kate rogers who has more for us. kate >> kelly, sum are calling it a hot labor summer in los angeles and across the state of california there's been ongoing strikes of writers and actors which you can see behind me, there's been a weekly strike of hospitality strikers in the city as well as a one-day strike of 11,000 city workers across los angeles

data from cornell shows there's been more than 55 strikes spanning 95 locations in the state since the start of the year a big reason for some of the workers to be on strike is housing inequality in the state. >> i would say that's the question that every single working person in los angeles and it's frankly the reason why there's so many workers on strike is because we have to decide who is going to be able to live in the city. is it going to be the few and the wealthy or are working people going to be able to find a home they can live in with dignity and respect and, you know, not have to worry about whether they'll make the rent. >> while housing and wealth inequality are longstanding issues in the state of california because of its high cost of living, a ucla economist warned that california may be the first to see this type of massive labor uprising in the country but it won't be the last pointing to other states like texas where so many california

residents fled during the pandemic facing also the high cost of living, rising rates of homelessness, maybe not to the extent california has seen and unemployment rates on the way up california may be the first to see this kind of big uprising among so many different types of workers but likely will not be the last over to you. >> what are you hearing about two things number one, the potential for negotiations that might move towards some kind of settlement in the writers and the sag-aftra strike, but also the broader effects on the economy in california where so many people are tied to the production business and related, whether it's catering or restaurants or whatever, who are tied to this sort of entertainment ecosystem i guess i'd call it. >> yeah. that's a great question. i think the economists we spoke to said you'll start seeing this coming up in the data. again, really unique to california obviously that this

is happening all at once, but it's not the last we'll see of this your question on the writers strike i believe there was some meetings last night between some of the executives and the writers, but the writers guild saying they're still not there yet. keep striking, continue to strike one fascinating thing we've seen between all of these different classes and groups and types of workers on strike is a lot of solidarity the city workers are supporting the hospitality workers, supporting the writers and actors, they're saying enough is enough, it's too expensive here, we need pay increases, better working conditions, that's something that a lot of the organizers i've spoken to have said they've been doing this for years and they've not seen that type of solidarity in other strikes. >> you mentioned things, working conditions among them, doesn't it all boil down to pay? when you look at the settlement between u.p.s. and the teamsters, as i read that, there was a very generous increase in pay that basically got the deal

done >> it's always going to come down not only to working conditions, some protections that are job-specific. the writers concern about the use of artificial intelligence to create scripts. as you said and as you heard in the piece, who is going to live in the city? who can afford to live in the city who will commute several hours to get to their job at a hotel or a restaurant or working for the city of los angeles. it comes down to who can afford to live here that's why you're seeing a push for pay increases across the board. >> kate, thank you very much still ahead, back-to-school blues. students are heading back to class but there are no bus drivers to get them there. we'll discuss that and much more when "power lunch" returns

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[kid plays drums] life is for living. let's partner for all of it. i'm so glad we did this. edward jones welcome back three minutes left in the show and several more stories to run through. let's get to it. we begin, tyler, did you see this >> i've seen this, yes >> peloton shares are down sharply. >> can they go any lower they can probably go lower than my output on the peloton >> but the speculation now about why? >> no. >> weight loss drugs >> oh. >> maybe it's market saturation. the company blamed a bike recall in this quarter, they said maybe it's summer and people are traveling and doing outdoor activities >> i like that theory about the weight loss drugs having something to do with it. you get on it to burn calories >> but you don't get the same

endorphin. are you still sticking with it >> yeah. yeah did it this morning. >> they should have had you be their influencer along time ago. >> some of the play lists i find too -- too explicit for me >> i'm trying to shield my 3-year-old right now >> put on the headphones >> yeah. >> goldman sachs pulling the plug on summer fridays, according to the "new york post." the ceo recently told staffers that the bank will crack down on any employee who is not at their desk five days a week after sources described goldman's wall street headquarters as totally dead on fridays recently well, that comes as a new survey from bank rate found that 81% of full-time workers say they prefer moving to a four-day work week disconnect >> yes >> goldman has been pretty resolute about wanting their workers back >> and a lot of these other banks. they better walk the walk. if those bosses are working -- they better not work one day a

week from home >> or head to the hamptons >> for sure. a shortage of bus drivers is causing back-to-school chaos across the country "usa today" reporting all 50 states have one instance of a major shortage so far this year. a new survey found that 92% of school leaders reported a lack of bus drivers is straining operations >> we've seen it in our town, actually, where they've had a hard time recruiting bus drivers, getting them trained. it's not easy work you have to have a certain kind of license >> wasn't there the story about the kids on the first day of school who got home at 10:00 p.m. because a new bus driver didn't know the route or something? these are precious possessions on these buses you want people who know what they're doing. the "wall street journal" highlighting one thing that parents will keep spending money on, that's their kids extracurricular activities, sports, music. it's always been key on college admissions with standardized

test scores carrying less weight and the supreme court outlawing affirmative action the process is growing more competitive and therefore parents are not skimping on those extracurriculars >> not enough time >> thanks for watching "power lunch. >> a nice rally. "closing bell" starts right now. thank you very much. welcome to "closing bell," i'm scott wapner this make or break hour begins with the countdown to one of the most highly anticipated earnings reports arguably ever. nvidia set to report in overtime the stock one of the best performing of the year and so emblematic of the enormous hype around ai. we'll get you set up for what may happen tonight here's your score card with 60 minutes to go in regulation. the story today is simple, a drop in yields means that picture is green,