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and fed ready to raise rates if needed. stocks higher. bonds on the move. dig into the whole story this hour. plus, nike on track to end its 11-session losing streak. is the worse over jer we'll ask an analyst who is still dullish. meanwhile, abercrombie and fitch soared. hear from an analyst skeptical. kelly? >> don't want to pile on the trends today. dow um almost 200 points leading way half percent gain. boeing outperforming. not strongest but a big point contradicter. s&p up one-third percent to 4392. nasdaq hanging on to a 50-point gain. all this against the backdrop of yields chopping around today in wake of comments from chair powell initially perceived as hawking, then a little dovish. and call it 4.237. ty? >> start with the main event out in jackson hole. earlier today fed chair powell's speech. he said that he's ready to raise interest rates if necessary to

tame inflation, but admits there's still a lot of uncertainty. >> as is often the case, we are navigating by the stars under cloudy skies. in such circumstances, risk management considerations are critical. at upcoming meetings we will assess our progress base and a totality of data and evolving outlook and risks. based on this assessment we will proceed carefully deciding whether to tighten further or instead hold the policy rate constant and await further data, here with reaction, david wessel. senior fellow in economic studies at brookings institution. long-time follower of the fed ron insana, cnbc commentator and chief market strategist and dynasty financial partners and our guest host for the our, portfolio manager at dcla and a cnbc contributor. a lot of contributors here, folks. begin with you, david. as you look at the text what

chair powell said, anything that stood out to you? anything that was sort of unexpected? >> i don't think there was much unexpected. i think he made clear that they're not going to cut rates anytime soon. the choice between raising themalities more or holding them higher for longer. he used the word "carefully" a couple times. code word for "don't expect a rate hike in september." and i think he made clear that the labor market is really important here. he referred to the vacancied unemployment ratio, said unemployment rate has to go up a little bit. i think what they're looking for is softening in the labor market to give them confidence that they've already raised rates enough. he said in the quote you used, it's a risk management. that means a year ago they said we have to raise rates to fight inflation. now things are much closer call and we have to decide what's the bigger risk? too much inflation or an unnecessary recession?

>> ron, do you see him as more bullish or less or more bearish than you expected here? and was there anything in his remarks that led you to believe that they're close to done? >> i mean, i think as david suggested, going to be careful. so that sounds closer to done. although he struck, to me, anyway, a slightly more hawkish tone than i would have expected. focusing, as david said, on the labor market. i tend not to agree wages cause inflation. they might be a symptom of it if prizes rise faster than wages. that's not happening now. this preoccupation with the strength in labor market a time we're seeing important increases in the bottom 10% earning more than they might otherwise have or some unions getting better deals after 40 years of capital outperforming labor to me still a catch-up. i don't think it's a type of problem that he or folks like

larry summers continue to describe. should be closer to done. i still think with everything that he said today, some of the variables they look at within the inflation component themselves will likely trend lower, not higher. >> and speaking of larry summers. one chashtrts or columns making rounds. drawing comparison to cpi now thersz '70s. a peak and crash and went up again. back then oil prices tripled. i don't know if it would take literally something of the same nag in a tude to follow that trajectory upwards again? >> important part. fed doesn't want to fall into the mistake of the '70s. as oil then, but could be something else. could come back to oil as well. nobody knows what's happening in russia. so many years, input prices, commodities, kind of, hey, we need to wait and see. a lag effect. go too early, even if the fed hinted, said maybe cut rates, people will say, what are they seeing we're not?

not we're cutting rates because things stabilized. oh, god. seeing demand fall off or an issue out there. stay the course and watching. you don't want to make that mistake. already had credibility issue before. let's not fall into that trap again. >> go ahead? >> yeah. that chart that you referenced about larry summers in the "washington post" op piece, jim did adjustment of it and agrees could see inflation reaccelerate adjusted for the way it was calculated in the '70s versus the way it's calculated today trying to account other variables. jim shows a different chart. analogs don't match up nearly as precisely as larry summers suggests. i'd throw out that chart. nonsense to make that comparison with the '70s. as you say not only oil prices tripledin '73, doubled in '79. vastly different than the experience we're having today. >> david, jump in here.

you used phrase, used the phrase earlier "september may be off the table." you don't expect an interest rate hike then. what is it that leads you to that conclusion? >> well, partly it's the use of the word "carefully" and powell used it twice, which i think is code for "we don't need to rush" and pointed out that things are moving in the right direction. and as long as they keep moving in the right direction, we can be patient. associate myself with ron's remarks on that larry summers chart. thought it was beneath him. we don't need ph.d. economists doing chartist stuff. and making fun of him on twitter. just -- getting us to talk about larry summers. it worked. >> a little thing in this defense. is there an analogy on the fickle side of things now in the

'70s. reading bernanke's book and talked fisk's side of things spend more, try different ways to tamp down inflation but basically kept flighting or undermining what the fed was trying to do. i look at spending now from fiscal side wondering if that's a risk. >> right. we good question. set aside historical analogies. '70s different. inflation not anchored but you're right to point out fiscal policy a real contributory the reasons inflation and doesn't seem to be any sign congress or the president is willing to start to pull that back. some of the stuff is long-term spending on investments that could increase the supply side of the economy. so i'm not worried about near-term increases in the deficit causing inflation. but it is a different situation than the one that bernanke dealt with after the global financial crisis when congress was too stingy. now a congress seems to be only

able to move things one way, which is spend more and not raise taxes. >> all right. >> surratt. a couple months ago i don't remember specifically. has your view of the overall chi changed since tfor the better o worse? >> the view to factor in interest rates looking at valuation is much more now. i think where rates are potentially higher, you really have to see what companies you own and kind of what the cash flows will come out. investors now have an alternative. you can buy treasuries, you can buy corporate bonds, munies that for the next two to five years that are 5% to 7%. i think the opportunity there. then really look specifically what stocks you own. one of the big things going into the fall. >> when you look at some of the stocks that are at what we might describe as stretched valuations. i don't mean to name names but i'll name names! nvidias of the world. some of the others that come to the top of the mind.

how does that make you think about that? >> well, if you look at what the fed is trying to do, which is slow down the economy. how are you going to have companies that will grow at these fast rates, again, if the idea is until the things slow we're not going to stop raising rates. so you have to be really comfortable with what you own and if it's nvidia, great. owning it two to five years. not trying to say goes down 20%. again, shouldn't be the overall part of your portfolio but part of the growth part of your portfolio and look at other companies. do i want to own some health care stock? pharmaceutical stocks? those will do well and some have secular growth. maybe in the j & j or bristol-myers? like an uber. positive cash flow. interest rates don't matter to them anymore. looking at growth rate of that company. or parent company of, you know, here. cnbc. comcast cash flows are increasing. where does it go down the road talking about streaming and the

costs incur? capital to cost important and und what you own. growth rates are slowing down and seeing it leading indicators from auto sales. those things are slowing down, and select retail also slowing down. >> thank you very much. david, thanks to you. ron insana have a great weekend. appreciate it. surratt will stick around for the hour. we're glad. coming up, nike's long losing streak looks like it should end today but down 11 sessions coming in today and only up three quarters of percent now. yesterday heard from a collegiate swimmer saying nike is cool but a lot of athleisure competition. up next a bullish analyst take on the stock. heading to break a quick power check. shares of hasbro up 5% after maintains buy rating raised price target to 94. hasbro currently trading just under 70. meantime a bad week for advanced auto parts continuing to fall

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welcome back pap look at shares of nike. nicely on pace to record 11-session losing streak. slowdown footwear in china could weigh on the stock and down 16% so far this year. brining in seen jer rear search analyst at open moppenheimer. buy rate 150 price target on stock below 100 now. when do you throw in the towel? . w >> not throwing in the towel. each time goes down a better buying opportunity. investors intermediate to longer term. my view, talking with clients, i get it. a lot of concerns out there now. you mentioned in the opening, concerns are consumer demand in china. still concerns about consumer demand here in the united states. competition. inventory clearance.

we've seen this from nike. actually performing very well in all of these concerns. hard to say when the stock breaks out again. look, fundamentals are in place and i think a matter of time before the stock once again begins to reflect those fundamentals. >> surratt, thoughts here? >> a question. i understand what you're saying. look, in my experience buying a global brand on discount is time to do it. historically how you've made money. the question, given valuation now where you see the ten year, still trades 30 times earnings going forward. what's the base case of earnings reset? looking at bear case earnings now. obviously pe is high whir earnings are down so low. look at how you spread it, what do you think is a fair multiple for a stock like a nike that's a global brand when it comes back hot. everybody wants to get it. now momentum guys, actually move on investing? a. great question. something we wrestle with. to answer your question, look, i

think nike steady, 30 to 35 multiple-type stock. odds trade higher than that. particularly when rates are low. right now using algorithm niking trading significantly below that range. you bring up a good point. earnings now at least somewhat cyclically depressed. the next few years getting to nor normalized circumstances. stock get to $150 price target, multiple back within that range. using low end of that range. and normalized earnings trajectory for the company. >> talk a little about china. what do you see happening there and how important is it to nike's future? i assume the answer is pretty darn important and, two, competition to the extent there is more of it and they may not own the market quite the same way that they did five years ago. >> yeah. look, got to be honest kbrop know if anyone has a great read

what's happening in china. okay? if you look at nike's most recent commentary. nike reported its fiscal fourth quarter results in shares. cfo and ceo very much talking up what seemed to be a nice rebound in the chinese market. okay? same time talking continuing strength in the nike brand within china. okay? only two months ago. so, look. nike lost player in china. heard comments from nike itself. i think nike is doing well there. now, i get it. say it almost every day on cnbc, talking about some risk to the chinese economy and i see whyspooks investors. nike is in the market performing well and frankly taking market share as well as continuing to fend off competition, many global players trying to emerg. >> if it's a great buying opportunity. of course, always has been. i think about disney, for instance, during covid.

goodness pick up his company $85 a share. fast forward to today back at $85. maybe demand for nike's product is intact longer term but the same level we might have expected in the past? just is this really kind of the once in a lifetime opportunity it seems? >> no. i think it is. look, i say this somewhat jokingly but actually serious. we're all dressing much more casually now. this was a trend in place before the pandemic. i think it accelerated during the pandemic. now i think it's postpandemic seen the trend stick. because i'm visiting clients. we're not dressed up any more. a big benefit. that trend is, seeing this in the united states. starting to see my travel overseas as well. this casualization trend, positive for nike and lululemons and other players in the space speaking market share opportunity. to answer your question, kelly, the underlying demand for nike

now, demand potential is better than last few years. i think we're buying more of this product for everyday wear. >> all right. >> brian what are you talking about, more casual? >> you should see how good tyler looks today? >> what are you talking about here? a tie. funky shoes. the whole thing. with ya, man. >> see ya. >> and dress out of the same closet. >> really did. thanks. appreciate it. quick programming note. don't miss another stock special. mike santoli and josh brown return to face the issues in the market as only they can at 6:00 ptnsctn.tern tonight right after "oio aio" "power lunch" will be right back. tion refunds help with your erc tax refund so you can improve your business however you see fit. rosie used part 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...

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welcome back to "power lunch." i'm steve kovac with your cnbc news update. lawmakers looking to regulate ownership of u.s. real estate due to fears chinese farmlands is creating a national security risk. looking to tighten controls and increase enforcement with purchases and potential bans on certain countries from buying land. also a new york judge ruled musician r. kelly and university

music group must bay over $500,000 in music royalties to victims of his sex abuse. kelly is currently serving 30 years in prison after being convicted of racketeering and sex trafficking in 2021. and finally, the director of the british museum is stepping down after items were stolen from the museum's collection. a member of the museum staff was dismissed last week after items including gold jewelry and gems from as early as the 15th century had been found missing, stolen or damaged. tyler, back to you. >> thank you. breaking news to those session highs right now. we've had breaking news on that instacard ipo and deirdre bosa has details from san francisco. hi, de. >> and we have been waiting. dig through financials. intacard revealing plans its public offering. the company trading on nasdaq under ticker code cart,

c.a.r.t., cart. and purchasing $175 million of preferred stock in a private placement. underpinning this ipo is a grocery delivery app launching over a decade ago pap long time coming. played a long time. will they, won't they? here it is. filing says 85% of the u.s. grocery market. 7.7 million monthly angtive users. in terms of financials, revenue up 2.55 billion dollars in 2022. also turned profitable last year. earning net income of $428 million. this really differentiates it from uber and oordash who went publicly with losses. ad revenue. looking at it closely. what separates it, in this business a long time. ad revenue in 2022 of $740 million. that represents year over year growth of 29%. tyler and kelly, we're continue

to dig through this. the risk factors, the stakeholders and bring it to you as we get t. all-important question. to me, what the ticker's going to be. i love it, deirdre. i love it! c.a.r.t. >> thinking. >> elegant. >> trying to guess. didn't occur to me. cart. >> the other day, a.r.m.? ticker symbol arm? genius. boy, tell you. deirdre bosa. >> creativity here. queen of the tickers! deirdre bosa thank you. still to come on "power lunch," luke capital upgrading shares of netflix to buy raising price to 500 saying large pipeline of unreleased consent will help it weather the hollywood strike much better than competitors. look what they've done with "stsevyby?ui" erod listening to the analysts behind that is next.

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and once-in-a-lifetime. nice footwork. man, you're lucky, watching live sports never used to be this easy. now you can stream all your games like it's nothing. yes! [ cheers ] yeah! woho! 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. kwk back. as disney looks for partners for espn, amazon emerged potential player in future of the sport giant. mention disney that it. julia boorstin joins us. welcome. >> amazon early talks with

disney about working on streaming version of espn that company has in, works making minority stake. amazon and disney told us, no comment on this report. the idea here that amazon which has rights to nfl's "thursday night football" package to help espn grow subscriber growth inevitably launch information reporting that the streaming service could cost as much as between $20 ands $35 a month. this after disney's ceo bob iger told cnbc in july the company was looking for a strategic partner for espn and we have reported that espn has talked to the leagues, the nba, the nfl, the mlb and nhl about potentially being those partners. espn chief told me last month they are rested in partners that can "make the flagship product for compelling in terms of

distribution, technology, marketing and content." amazon prime video has advantage of an already massive viewership base. ann amazon prime viewers, 157 million in the u.s. behind netflix with 172 million according to insider intelligence. while accelerating cord cutting has put pressure on espn to work on offering this streaming option, this will certainly make cord cutting faster if you can get espn outside of that tv bundle. another factor to watch here. how all of this comes into play. then, of course that price point will be essential. s $20 to $35. a lot per month for a streaming service. >> and for espn+ product? their current streaming offering? is that what we're talking about here? >> no. we're talking about traditional espn, tyler. right now espn+. primarily content you don't find on sell vision. >> correct. >> right now get that core espn

channel you need to subscribe to some sort of tv bundle. what espn and disney have talked about is creating a vegs of espn that would go direct to consumer. likelialities keep something on linear tv with the same rights but need to renegotiate everything with the leagues to make sure they have the right to bring that simultaneously direct to consumers. this is obviously a complex thing. have to worry about relationships with the cable distributors et cetera. but what espn and disney and bob iger acknowledged in light of cord cutting they have to figure out how to efficiently and at the right price point figure thousand bring that direct to consumers as well, and if they have a big partner, amazon makes sense considering its reach and viewership stats, also remember, would make sense for them also, perhaps, to bring in the leagues as partners. far from a done deal makes sense disney is talking to everyone. >> point on espn plus watching a

boston college/south carolina women's soccer game on espn+ because i know a player on one of the teams. ask you quickly. partner scale. the deal that disney espn did with that gambling company a month or so ago, that's not the kind of scaled partnership we're talking about here? >> that's a different situation here. what they're trying to figure out what does it look like when you take this tv channel that's been so essential to the tv bundle and you offer it outside the tv bundle? how much do you have to charge? who do you want to make sure you have on your side and maybe as an investors to make sure it can reach massive scale? compensating for the fact you probably will lose even more revenue from that linear tv business. >> thank you. thoughts of disney espn here? >> i think really smart if you think about what they're trying to do. we don't know the details. turn the espn asset we know not getting any valuation really, depleting asset, but cash flow.

>> depleting because of cord cutting. >> cord cutting. losing subscribers, those that aren't watching. take content. live tv, live sports everybody loves, find the right audience who will pay for it allowing to you carve out espn from disney, holding back the valuation of disney. getting a separate valuation potentially for espn. amazon makes investment, eventually spin it out or sell it to private equity or do something. it is cash flow rich. you need the ript optimization of capital structure. >> very interesting. can't wait for college football to start sard. one media name best positioned for the strike. saying hiking price target to $500. saying best content pipeline to drive this. and joining us, i don't believe we mentioned the company we're talking about here nap would be netflix. why do you like it so much?

>> first, thanks for having me on. >> netflix best positioned for what's occurring now. number one, all of the competition is raising price and they're cutting back on the amount of content. so netflix will be the better competitive advantage. better position. two, they're best positioned with the strike, because they've got a bigger pipeline of unreleased consent and more global production capability than anyone. three, streaming rationalization is inevitable. take the four large u.s. traditional tv studios. they will probably lose about $6.7 billion in streaming this year. netflix will make over $7 billion. next year lose probablies $3 billion. can't go on forever. too many players. there will be rationalization. they'll be accommodation. one go by the wayside. that should improve netflix's market share. the strike? we think the length of the strike is a little longer than people anticipated.

i think that's going to accelerate the decline in linear tv. then that will help streaming and with netflix the leader in streaming should help netflix. the paid sharing, password sharing rollout smoother in the u.s. than anticipated and advertising is still on the table. we think very well positioned. earnings estimates over time will go up. i think usage goes up given these advantages. we like the stock. >> a really muscular thesis you just late out there, alan. and what i hear among many things i like to pick up on. the idea the other studios, whether it is universal or paramount or disney. that they are going to be -- well, victims, my word, of the muscularity of netflix. >> you know, right now comcast or peacock losing $3 billion.

should be their peak losses for comcast, but i don't see brian roberts standing by and continuing to lose large sums of money in the streaming business. paramount plus is losing. >> what does com cost do then? get out of that business? >> no. >> can't afford to do that. >> well, some sort of a combination, i don't know. i mean, for example, could be something as simple as peacock and paramount plus have a joint venture in europe. where they have joins forces. could it be a joint venture like that or something of a greater scale? people think at some point comcast spins out nbcu and merges it into wbd, warner brothers discovery and a merger of max and peacock. but it's some way, shape or few, fe form, fewer in the business. >> not accustomed to hearing the

same kinds of rumors. shwrought? >> where do you see netflix now? growth coming from new viewers, raising prices? is the pie kind of grown to where it's at maximum or more potential there? >> from both areas, both from users and from revenue per user. as you know, they claim they had 100 million people using password sharing. about 40 million of those in the u.s./canada market. captured some. certainly haven't captured all those players sharing, still willing to subscribe or maybe take the $6.99 advertising base tier relatively inexpensive. i think you'll see price increases. netflix tends to raise prices about once a year. this year they did not raise prices. as the password, charging for password sharing effectively a price increase.

look now. disney has gone from $7.99 to $10.99 last december raising it tos $13.99 this november. 75% increase in about year. hulu has a list price $17.99. higher than $15.49 price that netflix charges for its standard tier. i recognize most people probably take hulu and bundle with disney plus maybe with espn plus. most aren't paying that price. hbo max or max now called,s $15.99. again, premium to netflix. room for netflix to raise price and some additional gains. >> fascinating conversation. a lot going to happen in the business in which we work. thank you very much. alan gould. luke capital, thank you. >> thank you. abercrombie & fitch blewed away estimates. shares more than doubled this year. morgan stanley skeptical they can keep up momentum for the long run.

is the bank pulling at threads eacae for concern? we discuss 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." shares of abercrombie & fitch

shares doubling after strong results in part thanks to demand for the new trend in jeans. wide leg. i think it is, anyway. morgan stanley upgrading stock to equal weight and remaining skeptical in the long term. joining us the analyst morgan stanley research analyst alex stratton. great to have you here. stay on trend on what do you think about the company? >> hi, kel pip thanks for having me today. look, our view isn't intentionally thoughtful, it's balanced in the range of outcomes we see for abercrombie. in a bull case, momentum continues to turn around groups more durable, calls reflect more wholesomely. that's the case, the business could certainly deliver high single digit or low digit number margins moving upward in the stock. say $70 or more. almost 30% upside from here. >> right. >> but on the other side, you

have to be fair that there's a real reality that out performance is well above historical trend. hollister isn't perfectly on inflection point. over time i have to be fair the business could revert back to its historical meme, a low margin. so for our base case contemplate and you get to 35. obviously some down side from here, too. >> quickly before i bring in ty and sarat here. saying, in other words, abercrombie single digit? profitable. forget ebitda. have probtable ableprofitable m? >> yes. part multifaceted. the turnedaround one of the only ones to think about in retail history, quite impressive and after a decade of challenges doubted profitability where it sat. historically aggregate business low single digits.

now on trook do high digit and really driven by and how abercrombie pivoted has been a few things. dropped customer base, expanded assortment behind casual and bakes enabled higher pricing, a keep part of the margin turnaround and also rationinalized, more inclusive and welcoming. a lot of thriving towards profitability. >> what have they done right? you hit on a couple things. aged up customer base. means gotten older and what specifically brought in to their merchandise noix mix to appeal that older customer? >> what they've done really is basically further differentiate the brand from its sister brand hollister. abercrombie targets a 30-plus aged consumer. in older than that. still quite similar to hollister

but more of a middle to high school age. created that began there. in part of what it's done to the assortment moved from a jeans and ts business to something more similar to where you can find dresses, alternate types of pants. really how the assortment has changed over time and as they've done it been able to take price. so impressive in apparel market. deflationary category. that means price effectively declines year after year after year. their ability to invect this has been honestly nothing short of amazing, bus also part of being except iccal. few businesses, almost none, able to do this within specialty apparel. >> when you look at them and going to the fall season and christmas, do you see a sustainable model? one of the most difficult thing answer retail investing is great, a good quarter. what's next? and you need new products and you need to go to the fall/winter season to get earnings up again.

where do you see that? >> yeah. it's a great point you make. i mean, covering these fashion-driven specialty retail stocks. high cyclicality and, thus, really high margin and wide margin swings. can be a very wild ride covering that. it's very hard to pull that turn. that's why kind of the thought around the scenarios outlined previously is where we're landing. more nuanced. we see a range of outcomes for abercrombie & fitch to outperform and acknowledge it's not guaranteed. i will see these fashion tend to run from our anatural snis three to four quarter cycles. even should abercrombie slow, hollister will offset that. nice to have two sister brands within the portfolio so if one is struggling the other offsets it. >> interesting.

i'm going to ponder all weekend the phrase you uttered. ultimate pants. i really like that. alex, thank you. >> ultimate forms. >> ultimate pants forms. that's cool. thank you, my friend. coming up, payment power. buy now, pay later surging on blowout fourth quarter earnings. too late to buy the shares? after the 30% gain? we will ask our trader residents in "the whale." "three strock lunch."penden your company is eligible. [whip sound] take the first step to see if your small business qualifies. (upbeat music) - [narrator] what if there was a hearing aid that could keep up with you?

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welcome back to power lunch. look at hostess, shares up 25% on a reuters report it's fielding takeover interest from the likes of pepsi and hershey. so we see we've reached out to the company for comment here, but this would be -- it's on pace now for the best day ever. so we're taking a look at this, up 23% here. tyler, over to you. >> steve, thank you very much. time for today's three stock lunch. big movers of the day served up with a twinkie. ulta beauty lowered. here with our trades, nancy,

ceo, cio. what do you think of ulta? >> i think this is an opportunity to step in and add to holdings or initiate holdings if you don't own them. they delivered a good earnings report, raised guidance. the street is worried about gross margins that were impacted by supply chain increases and priets increases, and, of course, shrinkage in the stores. they have taken steps to solve the shrinkage problems. i think that this is a company that historically has been able to solve their problems over the long term and in the short term. they have got 42 million loyalty users, and they have multichannel distribution, which they have found really results in higher spending from customers. so we have been waiting for a

chance to get in. we will be initiating position in ulta. i think this is one you want to buy. >> i learned they have more membership numbers than starbucks. so, wow, good for them. all right. nancy, this is -- we were talking about this one. much more controversial. affirm. skyrocketing, 30% after a beat their fourth quarter earnings last night. what would you do with the stock? >> if i opened it, i would take the opportunity to exit. the stock's down from 160 in 2021 during the pandemic mania. they are doing a couple of things right, but this also a commodity business. so i'd rather be exposed to the payment systems that are exposed to the high-end consumer. uncertain economic environment, i wouldn't want to own this. no earnings, high interest rate environment, this is not where you want to be focused. >> and shares of the gap up over 7% today. they reported results for the latest quarter mixed ones. what is your take on gap? we are talking about a new

dynamic with the ceo coming in there. >> yeah, has been there three days. so i think -- we are very focus on management. in your guy from a brand standpoint, revived the barbie franchise. we know what happened there. he has experience with hot wheels and fisher-price. i think you let him do his work. margins are improving. the cost-cutting and recalibrating has taken place. you wait for evidence for top-line growth and then step in and buy it. >> as always, great to see you. have a great weekend. >> you, too. >> what we are learning about instacart next on "power lunch."

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reported earlier today. instacart filing for an ipo trading under the ticker symbol cart. you have been dealing in this. >> 300 pages. we will continue to dig through it. here is what we learned so far. at first glance what separates instacart from other gig companies that have gone public the last few years is profitability. in 2022 it shall earned net income of $428 million. the two years before that losses less than $100 million. uber, doordash and lyft, they were losing hundreds of millions. billions of dollars a year in the case of uber. some questions still over how much of instacart's profit is

due to tax write-offs as it marked down its valuation. we will continue to dig into that. the financial profile is helped by as we expected the advertising business that does have better margins. revenue growth another key metric and that is decelerating. it's still above 30%, but in the risk factor section, the company warns that post-pandemic trends and macroeconomic factors have, quote, resulted in customers purchasing fewer items per order and reduced demand for premium or discretionary grocery purchases. another thing, dual class shares, they allow founders to keep control of their company even after a ipo. not here though. there are no dual clash shares or outsized voting rights by insiders. another thing is pepsico, it will be an investor as soon as instacart goes public. >> this speaks to instacart's proposition as an ad company in addition to what we know, is

grocery delivery. pepsico has long been a partner with instacart in terms of shopable ads. them putting significant money, $200 million into the ipo, could help with investor interest. as the company now embarks on its road show, guys, that typically takes two weeks. we could see this thing hit the markets this, let's call it, the second week of september. >> surratt gave us, in two minutes, more content than i could digest in a month. >> cash flow positive is important. growth of earnings is important. the camp of uber. when eububer was public they dit make money. $4 had today, was when uber announced they would be cash flow positive and they were going to grow earnings. they are doing the right thing. no class shares, come out and you have a great partner, pepsi, because you have somebody not just as a strategic but a financial partner. >> a real investor to say. >> the key is sustainable

earnings, cash flow, what is the growth rate of the cash flow. >> would you be a buyer of the ipo? >> i would have to look at the metrics to understand the balance sheet. we don't know how much debt is on there. what is your debt coverage, covenants and what is your sustainable kind of recurring revenue growth. >> great to be with you. thank you for watching "power lunch." >> the weekend read being instacart. "closing bell" starts right now. thank you. welcome to "closing bell." the post-nvidia state of stocks and what comes next for a market that's already on edge. here is your scorecard with 60 minutes to go in regulation. take a look at that. the market suddenly awakening. major averages happen all over the megacap following that jackson hole speech. the dowe-sa boeing one