>> we talked about bng the other day, why are we bringing it back? >> i increase the dividends a couple of weeks ago. they are paying down debt, it is operating well, high margin safety. >> good stuff. thank you for that. >> dow is down 200 we will watch video, reconvene in two hours time for "closing bell." "the exchange" starts now. thank you, scott. welcome to "the exchange." the countdown is on for the next one now, that would be powell. i am kelly evans. i had this hour, gains are fizzling out after its blowout. what does that tell us about intimate ahead of share powell's speech tomorrow. the nasdaq down 1%. jackson hole is our big focus today because what powell says and where the fed goes from here has major implications for the economy, the markets.

we will break out the powell playbook and the names involved in each scenario. also, four main street, gathering in jackson, wyoming, we went to a better place to get a pulse for how rates and inflation are hitting the consumer. that would be the jackson hole diner here in new jersey. what we heard there coming up. first, out in the actual jackson hole, wyoming. it turns out the name comes from the hole, they used to send freebies. by the way, the market selloff, is it parker's fault? >> i don't know about that. the reversal definitely coincided with the 10:00 a.m. we did, but it is hard to sort of think about anything he said that would spark a selloff. he told us, he does not see more trade-offs this year, but that could happen next year. >> things are staying steady throughout the rest of this year. then, we will see all the data involved. if we see inflation coming down weaker than we expect, this is

what i am hearing from the soft data i am getting from my contacts, we might cut owner, rather than later, i think we have to let that play out. >> sooner being the first half of the year? >> we will see. >> harker concerned about the economy saying , his business contacts adjusted consumer slowing and loosening in the job market. share powell made some of that outlook in his speech. almost certainly, he will suggest the risk of balance work when the fed met a year ago and gave that speech everybody still talks about, about the need to bring down inflation. inflation though, has fallen sharply since last year. the unemployment rate has not wedged. growth is running above trend. we have a 2.4% trailing, but running 5.9% over that exaggerated atlanta fed gdp. we got to listen closely to martin powell and see if the strong growth numbers are reason for tighter policy and

let that work through the system at in route to an eventual economic slowdown. it is clear, kelly, the inflation numbers does not need to be as hot as last. he could suggest this years are more balanced now. >> any scuttlebutt? normally, i would say in the hallways, but on the lake? what are people whispering about were expecting, do you think? >> i would say that the issue of the strong gdp numbers and inflation coming down is a real puzzle to a lot of economists. it could suggest there is more productivity in the economy. i say this advisedly, i did not want to say this nationally, the word transitory has sort of been mentioned a couple of times and some conversations like that, which is that maybe a lot of inflation ended up being transitory just over a longer period than the by then politic had any tolerance for. it eventually came down, did it come down as a result of the highest interest rates, or was

supply chains opening up, was there some combination of the two? there is a lot of thinking right now to the extent to which you have these two anonymous ideas. >> you went there. we will debate it. i think that is the perfect debate to have, actually. for now, thanks. we will let you go. we appreciate it. let's turn to our all-star panel now as we debate the impact this is having on the economy and could have. joining us now, four atlanta fed president lockhart, andrew hollandsworth and brickley financial group on the set with me. welcome to all of you. dennis, we will start with you. if i may, you want to go there? was inflation transitory after all? >> maybe it is time to rehabilitate the word transitory after a couple of years. it could very well be what we are seeing is simply a lot of things getting into balance of what i would call natural disinflation. i would not completely rule

that out. the fed policy probably helped that, but there could also be a process at work that simply means the supply chains are settling down and supply and demand is getting into a better bed. >> heater, i feel like i need to bring you in here, what would you say about that? >> nothing transitory about nervous inflation. it is always consistently higher, about 3% a year. it is goods prices that have averaged about zero, core goods prices in the 20 years leading to covid. that is where we saw that spike. with services inflation, is it transitory? home prices are 40% a couple of years and not falling. they are still rising, albeit modestly. i think the key of inflation the next 40 years, do goods prices settle back to that zero sort of trend, or are we in something that is new, more structural, or maybe one, two, three goods inflation when combined with persistent service inflation could lead to maybe three to 4% trend height

trends rather than one to two pre-covid? >> it is a great point. it is why people are debating everything from what china will be doing and the impact they will be having to maybe we get more, maybe we don't, maybe does not have an impact. you want to comment on where you think cora glued core goods or inflation is headed overall? >> i think transitory is probably the most clearly goods sector issue, where we have things like used car prices that have came up a lot, they have come back down again. what the fed needs to be careful about is taking too much credit for the lowing we have seen in inflation. there was this special pandemic supply chain affects a period, and that has proved to be in a way, much longer terms what expected in transitory, where you are not getting transitory is inflation agreement, not only in shelter price is where we look at the last three existing home sales numbers, prices moving up and being in double-digit annualized month on month rates, that is not

going to be consistent up a 2% rate. encore inflation, that is where we have structural changes in the economy, which means that we will not have the kind of downward pressure we use to. structural goods prices, stronger shelter prices, and we have wage growth, still running too fast to be consistent with 2% inflation. that will push in terms of not shelter inflation prices. >> from a policy point of view, we did see something very impactful from powell a year ago. if i recall, it was a pretty short speech and people have joked, it was the one where he basically said, is coming for lack of a better term, but he did not come. what do you expect from him now? >> i would expect that he would probably emphasize that the risks are probably two sided now. it is not going to be quite a speech as he gave a year ago. i don't expect him to introduce anything particularly novel in

his speech. i think he will reinforce messages we have all heard before in the press conferences, particularly. i would expect that he might put the current moment in context in order to kind of explain the positioning of the fed at the moment. i don't expect a lot of really news coming out of this speech. >> peter, we are going to talk more about this in a moment. what are you thinking investment lies is at stake based on the comments we will hear in the morning? >> you must interesting thing the past couple of weeks has been a rise in longer-term interest rates. we are also focused with what the fed will do with the funds rate. i think people got complacent that we have this downward trajectory and everyone thinking it is all clear on the rate side., the yield goes up 10 points in a month. that is not in control of what the fed is doing. it is happening for potentially other reasons like ec bqt, doj

winding control. that complicates things here. powell is next thing, tying into investments, do they keep rates high for a while, that is sort of the next battle that powell has to deal with. that reality is now sinking into assets and markets. if the fed funds rate will stay high for a while, do i really want to pay that? now, we are seeing the retail earnings that are pointing to a softening consumer and what that means. i think this rally in the markets deservedly is getting tested right now. at the same time, bonds are selling off. you are sort of in that 2022 situation where, debbie we are on the cusp of an equity cell, at the same time, bonds are hiding off, no way to sell other than short-term treasuries. >> i think that is right. i think the conversation is transitioning away from how high will the fed raise rates,

maybe they will do one more rate hike, maybe they will not. number two, where is the kind of neutral level of interest rates that is going to need to provide restriction, nor stimulus to the economists. that is what rates will be centered around going forward. that will determine the level of long-term yield. what i am interested in from chair powell's comments tomorrow, what will he tell us about this so-called scar, will he reflect the views we heard from president williams that neutral rate has not risen, or will he look at the data and say, look, we have had two, three quarters of 2% plus gdp growth. we have inflation that has not returned to target yet and maybe some emerging upside risks . maybe we should be thinking of a higher neutral real interest rate. when you look at those back in yields and look at ten-year yields that are higher now, i think that is the market starting to price that conversation we may hear tomorrow. >> really quickly, dennis, before i let you go, maybe

powell lays into this explicitly , maybe he does not. do you think the policy, let's call it 2% real terms, is that restricted enough? we have not been a peer since the mid-2000 when equity rates were much lower, we were at half a percent less dictate and we could barely grow. do we need 2%, or do we need even higher, or is that too high already? >> it is being discussed broadly . i am not sure powell is going to comment on it simply because the neutral rate is a concept that is not observable. it is quite debatable and has to be modeled. it is just a little too complicate for the messaging he needs to do tomorrow. i do favor the views that maybe whatever the neutral rate is, it is higher than it used to be. he may make some kind of reference to that, but i'm not sure it is going to be central to his message tomorrow.

>> i agree with what you said, the bond markets and we are trying to figure out if rates will be higher for longer? we believe it there, gentlemen. appreciate your time. dennis lockhart, andrew hollenhorst, and peter. let's look at what is at stake for the market, on what powell says tomorrow. how should you position your portfolio for a hawkish, more devilish outcome? we got ginny to stick around! she is here with the powell playbook. ceo and portfolio manager. let's start with the case, give us the play for that first. >> the dovish case is not really that good. i will give you a preview of the hawkish case, not really good either. what is a dovish case? a definitive pause, patients with getting 2%, terminal rate at 5 1/2. no chance of rate cuts. by the way, no chance of rate cuts no matter what. i would say take that off the table. so, what is behind the dovish

case? because the consumer is weakening, corporate earnings are slowing. the economy is under control and and is not showing robust growth. what is behind the novice really isn't that great. what that would say is, if we are $220 earnings on the s&p 500 now, expectations for 2024 to 40, that is 12 plus percent earnings growth, a dovish case would say, hey, good luck getting to that to 40. that will be hard. >> interesting, most people would assume that is a knee- jerk positive. i guess we know the answer in advance. curious if you could walk us through that scenario as well. >> a hawkish case. in a hawkish case we have-- look at this, sorry, this is my first time at the telecaster. really strong language at 2%, stubbornness on inflation, a need for more tightening. in that case, the erminal rate would be 6 to 6 1/2%. what is behind that, that means that rates are going to be

higher for longer, inflation is not coming under control. that is not taking money out of the consumer pockets too. behind that isn't that great. where we could see earnings actually grow because the economy is still too hot, wet those high interest rates do is say, hey, evaluations are kind of caps here. there is a remarkably precise correlation between inflation and evaluation of the s&p 500. if you have higher inflation, no one wants to pay 20 to 22 times earnings. if you are going to have a market that is higher from here, you need to continue to pay 20 times earnings and have earnings grow to 240, or pay 22 times earnings if they will stay at 220. both of these cases lead you to a market that i don't think-- a broad market, s&p 500, that i don't think has to match upside from here. >> there is always a bull market somewhere. >> that is right, who said

that? famous guy. first of all, if you are an investor, you don't reposition your portfolio. hopefully, you have your portfolio positioned like we have for years in advance when the market is kind of net, you know what we do, we chug along. eventually, a market comes along , a broad bull market, you participate in that upside weird how do you get through this? it is with the stocks that are either irrationally low evaluations, not cyclical, growth delivering, being able to deliver growth, regardless of the cycle and now international too. in that case, you got really low evaluations in our portfolio, which is down 80% from the high trading, 10 times earnings of north face and temporal and is overly discounted. even if the consumer is weakening, the share price is moved way more in the reality of that. cisco systems reported earnings last week, 2013 at halftime, the cheapest tech stock there is . whatever technology is out

there, you need cisco systems, and they are growing. those are kind of irrationally low evaluations out there. >> very interesting. maybe just make sure you are not in a value trap. this is the quintessential question. >> that is a whole separate conversation on the research process and due diligence in understanding what is actually behind it, is there realistic earnings growth, what is the free cash flow like? that is a part of the process. when you run a screen, you can look for things that are a low evaluation and you will get 1500 companies back and maybe only 100 of them you find investable and maybe invest in 30. the research process comes that out, but it is hard work. >> before we let you go, give us one more. do you like anything else? >> this is a really interesting place to be too. you can look at a real estate interest investment trust that owns retirement communities, or look at organon, a healthcare

stock that has a lot-- sorry. i am jumbling my words. sorry. fertility and female health drugs. that is countercyclical. really undervalued. decent earnings growth ahead. >> this was on the market a couple of years ago? >> it has been in that spinoff no man's land in the past couple of years. >> great point. a lot to think about tomorrow for powell. whatever he says, maybe female health fertility efforts is a place to hide. [ laughter ] ginny harrington, thanks for sticking around. we appreciate your time today. powell is not the only one speaking from jackson hole tomorrow. we have got two big first from cnbc interviews. loretta mr. and chicago fed's austin goolsby, we will hear from them tomorrow. before i made it in today, i did make another stop along the way.

>> i made it to jackson hole, diner that is in new jersey, to ask people here how they feel about inflation and the economy. >> what they told us and the high profile guests who showed up too. we will reveal that next. as a go to break, we will look at your market with the dow down 200 points now. nasdaq giving up all of his early games as nvidia falls back from its initial post earnings rally. we are back after this. 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

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welcome back to "the exchange." as we count down to powell's big beach tomorrow, will he signal her for more loser independence? regardless, they have already hiked at the past space in 40 years. is that doing enough to tame inflation? what better way to get the pulse of mainstream america than talking to patrons at our local diner. not just any diner either.? powell's speech, we spot by the jackson hole in englewood, new jersey, here is what we heard. >> it is killing small businesses. it is difficult to-- he pushes you away from going out there, opening a business is. not right now.

>> i am interested to hear you say that. we know it was really bad the last couple of years, is there any sign of it moderating now and things turning a corner? >> i think so, little by little, eventually, but now, even businesses have slowed down, we are getting killed here in new york. >> i work in construction. seeing how the material costs have gone up sky high, it has been affecting our industry. >> i mentioned earlier the grocery store experience, that is what a lot of people are grappling with, what is it like these days? >> expensive. you literally buy stuff and walked out and are like what did i buy oracle $400, it is insane. >> maybe you put a hobby on the back burner or a trip on the back burner, you have the means to cover it, but that does not mean you are living your life to the fullest how you want. my next guest has a front row of how the consumer is doing. let's bring in matt schultz, chief analyst for lending tree. we want to respond to what you heard.

we asked a broad basket of questions about the economy and everything else and it kept coming back to inflation, specifically food inflation, and obviously this general unease about the environment. >> what i just heard does not surprise me at all. the truth is, even in the best of economic times, the average american household's financial margin for error is pretty tin . then, when you factor in inflation, especially inflation on things like groceries, gas, and the fundamental things of life, it really takes a big toll and then you add in higher interest rates and things like that, it is a tough time for a lot of people. >> that said, the big picture data seems to be telling one story while the sentiment data-- the sentiment that has improved as well, the big picture, bank accounts percentage rates are higher, the labor market is still strong, so it does not paint this picture of hardship.

>> yeah. it is such an interesting time. you are right. even generally speaking from the banks, we have heard that the consumer is doing pretty well, that is starting to change a little bit. we have seen some banks in the last little while talk about credit card delinquencies, in particularly spiking. i get the feeling what is happening is people are generally doing okay, they are generally handling their business, but they are not that are from being in a little bit of a dicey situation, whether that is obviously a job loss, medical emergency, things like that. the margin for error is pretty thin. >> in the housing market, usually we are on the front lines. some people have fixed mortgages and very few have been purchasers during this high rate environment. where, if anywhere, do you see higher rates starting to bite consumers?

>> rates are starting to bite consumers all over the place. really, what it has done is it has changed the calculus for a lot of people. somebody who is thinking, a couple of years ago, this is about the amount of house i can buy, or the amount of car i can buy, data had to change that because interest rates play such a huge role and are so fundamental to those cost that it has ended up leaving a lot of people disappointed, settling either for not buying a house, not buying a car, or settling for less than they originally thought they'd be able to. it is a discouraging thing for a lot of people. >> do you think there is any cushion for the fact that people are making money on their cash now for the first time in years, feeling like it is almost a stimulus check? >> no. i don't think there is

any question that the yields people are getting on these high yield savings accounts are making a really big difference for as much negative as there has been about interest rates, there is no denying these high yield savings ccounts where you can get four, sometimes 5%, is really significant, especially when you are talking about in american household where that extra percent or two overtime can really, really add up at make a difference. >> anything else you want to mention? i did notice you said, consumers do have a little bit of targeting power. you can actually lower your credit card interest rate, if i am not mistaken, is that right? >> it is something i preach all the time. lending tree did a survey earlier this year, talking about how 76% of folks who ask for a lower interest rate when one of their credit cards in the past year got one, and the average reduction was about percentage points.

that is like going from 25% to 19%. it is a really significant thing. those success rates that we are seeing, which we have seen for years, even going back pre covid, are an indication that it is not just folks with 7/5 credit scores and long track records that are etting their way on this. it is regular folks too. it is absolutely worth making that call. >> a good nugget as we head into what could be more troubled waters. matt, thanks for your time today. matt schultz with lending tree. inflation and the economy was a hot topic at last night's gop debate. believe it or not, we ran into one high-profile politician at the diner this morning. josh got heimer was literally sitting there having breakfast. on his way out, we asked him what he thinks the fed's next move should be. >> frankly, right now, it is enough of what they have done. they've got to give it time to see an impact. if you look, especially

compared to other nations in the world, inflation was down the last 13 months, wages are actually going up in the right direction. you are seeing things begin to stabilize coming out of the pandemic, which sent the whole global economy into a pill split tailspin. the good news is, we are moving in the right direction. we have taken steps in washington to pay down the debt and cut back on things, which i think is the right move. the bottom line is, there is more to the. there is more work to do, but i think we are moving in the right direction. and we've got to do more on affordability on all fronts. if you look at where we are with wages, job growth, manufacturing job growth, all things are moving in the right direction in the last 13 or so month. >> i love it. go to the diner, running to the local politician. are we so sure we have never seen anything like in video blowout numbers before?

the historical comparison you will want to know about coming up after the break. first, take a look at the dow with boeing, walgreens, and disney all among the worst performers, down 3%. one ofhe t few performers in the green, dow inc. . we are back after this. of her refund to build an outdoor patio. clink! dr. marshall used part of his refund to give his practice a facelift. emily used part of her refund to buy... i run a wax museum. let innovation refunds help you get started on your erc tax refund. stop waiting. go to innovationrefunds.com you really got the brows.

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debate is raging and obviously right now, the bulls are winning this debate after 230, you can see some percentage gain on a year-to-year basis. the q and q trust is driven primarily by the rising zatko four, and even the s&p 500 is seeing an outsized move because of that share. just to put things into perspective, one of the reasons the bears feel this is so overextended is how this is trading a kin to where it is trading over a normal basis. over the last 200 days or so, in the last 50, this is currently trading about 10% above its 200 or 50 day moving average. longer-term over its 200 day moving average, it is 69% above where that is. that is a huge momentum move higher, meaning, there might be a mean reversion trained at some point to see it come down a little bit. that is the barricades for nvidia and why it is so extended. what is the bull case even with

these levels at a 235 percentage gain ? check out the evaluation. entrance currently just around 40 times next year's expected earnings. that is more than double the s&p 500. take a look at this, 40. here is the interesting part, over the last five years, what has been the average orward price to earnings ratio, according to fax set, it has been 40 right there, trading at its historical average over the past five years. when you factor in earnings growth and the price you pay for it, look at this, price to earnings growth over the last five years is actually just about 1.1, near the lowest level we have seen in the last five years. there, kelly, is your will bear debate on why the stock is such a lightning rod for investors right now, because there is evaluation argument to be made that it is trading cheap compared to where it should be given expectations, and where it has on average over the last five years. >> not to mention, i think toward pe would be lower if we were using the actual numbers. >> and the ford has been coming

down because analyst have been moving up their expectations of earnings over the last several weeks now. a lot of people calling it their top pick going into earnings. you can kind of see when the price stays a little bit where it is going higher, but the earnings estimate go higher, that ratio-- >> let's put this into some contact. take a look at how incredible zatko four's run has been. this is a 10 year chart. there you can see, 128,000% gain. especially with the revenue numbers, have we ever seen anything like this? especially where the underlying fundamentals are so strong? maybe we have, actually. none other than cisco had a similar run in the late 1990s with revenue nearly doubling every year during the decade at the internet boom led to a tidal wave of demand for its networking products. the stock ran up from single digits. dom highlighted it to almost

$80,000 with a market cap of more than half $1 trillion. it lost 90% of its value and we know the rest of the story, he traded sideways for most of the next decade. >> this is cisco systems maybe this time around. i would say this, the bold debate get even more complex because, that was very clearly the.com boss. it is hard to say whether or not we are in a .com type of environment. there are specific parts of the market that are acting like it, but the broader economy is very different right now, kelly. >> here is your comparison, one over the other. we report, you decide. thank you very much. to tyler mathis for a cnbc update. russian president b putin acknowledged yesterday's private jet crash for the first time on russian television, offering his condolences to the relatives of the leader, and to the families of the other nine

victims. putin says, the head of committee luminary investigation that will quote be conducted in full and brought to a conclusion. the justice department suing spacex for allegedly discriminating against refugees and asylum seekers in hiring practices. the suit says, elon musk's face company wrongly claims the loss limited hiring to citizens and permanent residents of the u.s. the civil rights division assistant attorney general said, the four year investigation found spacex routinely discouraged asylum seekers and refugees from pursuing work opportunities at the company. barbie, there she goes again , just unseated the super mario brothers movie as 2023's highest grossing film in north america. greta gerwig's "barbie" about $575 million. mario generated $574 million domestically.

the toys are the stars here folks. the film also on track to surpass mario in global box office, bringing in more than $1.3 million, go, barbie. kelly, back to you. >> it is like the war of the toys or entertainment companies. next, my next guest says it this name is the value stock to take advantage of ai. would you rather own nvidia at 32 times earnings or something at im? es if you think you know what this is, tweet me at kelly cnbc, and we will reveal it after the break . ♪ the biggest ideas inspire new ones. 30 years ago, state street created an etf that inspired the world to invest differently. it still does. what can you do with spy? ♪ ♪

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welcome back to "the exchange." nvidia sitting a record high, record is up 88% from the previous quarter, doubling year-over-year. my next guest is heading on a different value play in a ispace. joining me now, vice chair of the investment group. zatko four is a value stock, 32 times? even i am thinking maybe that is a bargain. it is only a $1.2 trilliant company. >> it is now a valued stock. it is a wonderful company. the question, what is their economic like?

can people compete with them? in my opinion, that is the ris . there are lines of other semiconductor chip companies that can do a lot of what zatko four can do and their economic model is not as wide as that evaluation would imply . no argument. extremely weld well-positioned. it was a chip company, now involved to be an ar chip company. >> a lot of guesses around ibm. with bill, drumroll please, what is the reveal? >> it is oracle. we have been talking about this before people were excited about ai. the reason oracle is such a valued name today is because, we think about what ai is. ai is about mining data. computers are not thinking now, they will not be thinking anytime soon. what companies will do with ai is analyzed data, the number one data software company in the

world is oracle, making sure companies around the world have all of their data on oracle software. it is very hard actually to shift to anybody else. now, ai is going to give oracle an opportunity to analyze that data in ways that they haven't before. now, it was a real value stock two years ago, trading around 13 times, it is still less than 20. i would say 18 times earnings. you are getting a real play on using data better at a very reasonable amount. >> this always gets into the question, when would you be a seller of the? are we getting close? once we hit 20, i don't know if that is your kind of thing. >> it is funny, that is kind of the magic number here at ariel. we calculate intrinsic value for the company, and we calculate a forward price earnings multiple, and 20 has historically been a number that we get squeamish on. i would say that at 20, this will go from being one of my

largest positions to a smaller position. i do think this is an extremely well positioned company that can justify a 20 model. >> what are some other numbers in the 13th right now that you like? an number of auto related names, bert warner, after completing its spinoff is the number one producer of powertrains for electric vehicles. you would think that kind of electric vehicle position is the number one company in that space, would justify a multiple in the high teens or 20s, trading below 10 times earnings. nvidia, the internal combustion spinoff is trending about 10 or 11 times earnings. people are nervous about also. we think it would be good rebounding demand for auto and water and finial are good for that space. mac this felt to me for like two years we are the in of this auto cycle, which we are clearly not. how much higher can prices go mark how much more saturated

the market get? didn't everyone buy a new car, new, used prices are coming down. tesla's are cheaper than they once were. i guess you can say, okay, the servicing market or something will stay strong. it seems to me like the court it is an old story. >> yet, but it was a really dead story two years ago, there were no cars on the lot. you could not buy a new car if you wanted one. we still think there is pent up demand. the cars have gotten very expensive and many buyers are struggling to make their monthly payments. there is, in our opinion, still significant demand for new cars. the price difference between new cars and used cars is very small. we do think there is still pent up demand for cars, particularly in the u.s. >> like the energy company sphere is up 20% today. we ought to have you back when

something is not going your way, charlie. >> i warn people, be careful. it has gone up a lot. >> thanks for your time today. we appreciate it. joining me from ariel investments. video is not the only ai share seeing players pop today. this is up 14% and we have two mystery charts today and we will talk to you coming up. before we go, i want to draw your attention to shares of, on pace at their lowest level since 2014. the stock has not been at this price level in nine years. i will be right back. (vo) now you can with once-weekly mounjaro. mounjaro helps your body... ...regulate blood sugar... ...and mounjaro... ...can help decrease how much food you eat. 3 out of 4 people reached an a1c of less than 7%. plus people taking mounjaro...

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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 "the exchange " we are seeing market at lowe's . at the high, we were down with the doubt about two points of the lowest level. dollar tree is the worst performer in the s&p, despite posting a beat on the top and

bottom lines. the ceo saying, a challenging macroenvironment and joining the quality of retailers elevated shrink swollen, or missing, and damaged goods. the stock is down almost 12% now. the eps forecast between $.94 and one dollar for well below estimates, more like $1.28. again, sending shares to the lowest level for dollar tree since may. let's move along, coming up, data privacies slump. our th c gy chart. we will speak wieoary still about that and the i ai craze coming up next. this thing, it's making me get an ice bath again.

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welcome back shares of splunk up almost 14% after its earnings last night. the company beat on both the top and bottom lines and gave a full-year guidance hike, and investors are shrugging off the choppiness in cloud demand management cited on the call joining me is splunk ceo gary steele gary, welcome. >> thank you so much great to be here >> talk to me about what drove the beat last quarter. >> we saw really good execution across the entire product line i'm super proud of the team. i think the combination of meeting the demand for our security buyers, meeting the demand for our observability buyers, and doing it in a really

efficient way, we were super excited about being able to hold at a really low level. >> so it was kind of twofold, you both had resilient demand -- i always think you as part cloud, part cyber security company, for those of us in the middle resiliency partly what you just said about controlling operating expenses talk more about what that means in practice. >> yeah, so in the quarter we held opex down 3% year over year while delivering arr revenue at 60%. that combination was well received by the investment community today. >> is that, you know, kind of keeping wage gains modest? is that a workforce size or adjustment issue is that other kinds of expenses? >> you know, we've been on a journey to drive expenses down, so we're leveraging, for example, global talent centers where historically we'd been very concentrated in california.

we're also just being super thoughtful about how do we drive efficiency in the operations of our business, and we're seeing that across how we think about real estate and using outside resources. we're being super thoughtful about where efficiency can be had and then how we can drive it into the bottom line results >> and just connecting some of those thoughts, are you able to save on both real estate and employees by going to a workforce that's maybe not even in the u.s. or in lower cost areas? >> we're really balancing that we have an amazing team spread across the u.s we're opening up the talent centers to tap global talent markets as our business becomes more international and in doing that, our overall real estate, frankly, we've saved a lot of money on real estate, and there's more there as well. we're on this journey, we are super proud of the results we've delivered, but there's always more opportunity out there >> that's very interesting the top line, what's going on with the customers, you said as

you've seen this whole year, and we've heard from many other companies in the space, you've seen choppiness in cloud migrations why is that? >> a migration represents a project, and it's an incremental project that has costs associated with it organizations can still get the value and the benefits of splunk and use it on premise without going to the cloud and so in this more challenged economic time we've seen some hesitation on the part of customers to make that move to the cloud. they can still get all the benefits of splunk, but they can do it without making that migration. now we fundamentally believe over the long haul there's so much value and opportunity in getting to the cloud, and so we're very opt>> michael:ic ab optimistic about the future but in this economic environment people have slowed that down >> how is artificial intelligence affecting your business >> we're very enthusiastic about the potential of ai. we just came out of our user conference in las vegas in july where we laid out basically our road map for ai, and we see

tremendous opportunity and what it translates to is just better outcomes for our security users and better outcomes for our observability users. so in the security operations center, for example, how do we make it simpler and more automated and less onerous task be performed by individuals? and we can really knock down a lot of the work that is manual in effort, that can oftentimes be repetitive, that we can automate we're very bullish on where we think we can go with ai, and the potential that it brings to all of our customers when you see nvidia's revenue going from $7 billion to almost $14 billion in a single quarter, does that make sense to you? >> i think there's just a tremendous amount of interest. i spend a lot of my time with our customers understanding what they're thinking about and literally the first question is what are we doing in ai? it's on everybody's mind

that translates back into how do you ultimately build out the capabilities across the tech stack to enable that to happen i think the demand curve is there. >> do you think people -- now the next question people are getting, are enterprises going to show monetization, not just deployment and installation, do you think they'll be able to show it in the very near term? >> the near term -- it will just take some time in reality i think organizations are planning where i think it benefits our customers is -- it should take less human resources in a security operations center over time. much more can be automated and so i think from a customer point of view and how they're planning, i think they're being thoughtful about where they begin to see those benefits, but the potential is all there >> fascinating gary, i appreciate your perspective today, of all days, with your business and nvidia's bringing it full circle. gary steele is the ceo of splunk that does it for "the exchange."

next on "power lunch" stocks so leismaybe they're looking good tyr getting ready i'll join him on the other side of this break.

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number on your screen, or visit coventrydirect.com. good afternoon, everybody, and welcome to "power lunch. literally alongside kelly evans. i am alongside kelly evans i'm tyler mathisen we're glad you could join us today. two huge stories to talk about the fed's big meeting at jackson hole, which seems to be weighing on the markets right now, or at least that's one interpretation. let's start with nvidia's blow-out quarter the stock higher today, though off its best levels of the session and down from where it was after hours late yesterday afternoon. for more on that let's bring in kristina partsinevelos christina? if you're a cnbc viewer you know nvidia's numbers blew past expectations you have two reasons