for the remainder of this day. and i want to highlight apple, as well, which is above the 50-day moving average. $187.44. that stock has been on the move, as well. so no surprise that the nasdaq has done well behind that. and tesla, as well, up by 10% in a week. i'll see you on "closing bell." "the exchange" is now. scott, thank you very much. and good afternoon, everyone. i'm tyler mathisen, in for kelly evans. here's what is ahead on "the exchange." the latest round of economic data show signs of the cooling the fed has been hoping for. but that's not enough to convince our strategists that the u.s. can avoid a recession. why he says stocks are in a "jury duty market." we'll explain what that means and how he's positioning now. and one step closer to a spot bitcoin etf, thanks to yesterday's federal court decision. in an interview, the chief

officer of coinbase will tell us the impact on the company and the crypto industry more broadly. plus, privacy, pets, and pricing. we'll tackle crowd strike, chewy, and dollar general in today's earnings exchange. but we begin with today's market action. and for that, we go to bob at the new york stock exchange. >> hello, tyler. up three days in a row because of goldilocks economic data. weaker jobs report, adp reported a little weaker. so not too weak. you got three days in a row, all three major indices up. nike is up, apple's up 5%, believe it or not. verizon's up. only consumer staples like coke, proctor and gamble. the s&p still same thing. broad rally. the equal weight s&p is up just as much as the market weighted s&p. remember, this started in

august. broad rally, and then thinned out. now it's broadening out again. nasdaq 100 is up 3.5% this week. remember the old bosses? they're the new bosses again. nvidia is back up, tesla is up with a new high there. micron, and home builders are back, because we have more stable interest rate scenarios. so i just want to show you a one-month chart of the s&p. this is a tale of two completely different months. we had the first half where we were basically straight out in tech stocks. we bottomed around august 18 and almost straight up then. that's when the economic news started turning around. so we're up about 3.5% from the lows on august 18th. and if you wanted a simple graphic, that's what we do. in the first half of the month, we saw some different changes

here. we saw essentially stronger economic data, rates moved higher, and stocks moved lower. that was the first half of august. in the second half, we have goldilocks data here. just the way the market wanted. rates have stabilize and stocks moved higher. how about september? if you want issues to worry about, stocks are still expensive. rates still feel like they could creep higher on a few stronger economic reports and china is weaker. but for the moment, it's turning out roses. tyler, back to you. >> bob, thank you very much. this morning's economic data led to a sharp drop in yields with the ten-year hitting its lowest level for more than two weeks. steve leaseman has the numbers. how do we interpret these numbers, steve? >> weaker but not necessarily weak in suggesting an easing of price pressures, especially from

the labor market. adp coming in at $177,000. estimate was $200,000, the lowest number since march. i'm interested in the adp wage data. if you are staying in your job, your annual increase is 5.9%, the slowest pace of growth since 2021. again gdp, being knocked down a little bit. and the price index down a tenth. so all moving in the right direction. adp did answer the job openings report we got yesterday, suggesting an easing in the labor market, pr. 56% on friday afternoon after powell spoke in jackson hole. now it's 45%. so either side of the 50-point line as data comes in, hotter or cooler. all this tees off tomorrow's reports for july consumer spending and inflation number. the pce and pc price index, and

friday's august jobs report in hopes that despite record temperatures on the ground, the economy cooled enough this summer to allow the fed to chill out in the fall, tyler. >> steve, thank you very much. stick around. our next guest sees signs of a mild recession and hike rates in november. let's bring in my next two guests. steve, let me begin with you. your consumer confidence index fell more than expected in august, after two straight monthly increases. what does this say to you about the spirit of the u.s. consumer, and where have these falloffs in confidence been most pronounced, higher incomes, middle, or lower? >> yeah, it's an interesting economy. as steve said, things are just rocking up a little bit up, a little bit down. everyone is waiting to see when

is this recession going to happen? and the consumer confidence index fell in august after two straight months of increases in june and july. it fell predominantly because of food and gas prices, a familiar theme here. as people went to the pumps, they had to put more in. all of a sudden they're getting nervous that maybe inflation is continuing to hurt their pocketbooks. now it's back down to where it was a few months ago. so the consumer is sitting here waiting. jobs are a little bit weaker, but they still feel pretty good. about their own job situation. and you still have about 10 million openings and skillset shortages in certain areas. so a little bit of confidence in their own situation, but a little worried about the future. the weakness was across every demographic group, every age and income group. so this is really just a generalized point of view based on the current feeling here at the end of the summer. >> i guess also of note is the

idea, steve, that the numbers for prior months were revised downward, as well. i often look at these numbers, and i read in them a sort of sense that i'm okay but you're not. you know what i mean? >> yeah. well, look, the fed rwas lookin at super inflation about a year and a half ago. we had 91% of our ceos saying there's going to be a recession, and we had 101% of economists say there's going to be a recession. ceosts throttled back, but everybody is saying where is the recession? but 2% growth rate, you know, revision is up, but it's sitting here around 2%, inflation is on its way down from 3%. so maybe this soft landing, this mythical soft landing could happen here. but we still think at the conference board there will be one more 25 basis point rate hike in november and that will

be it, and it could start then coming down six months later. so i think everybody is settling in here, saying we're almost there. >> steve liesman, one of the surveys that you supervised telling you about consumer confidence about the economy and the likelihood or the perceived likelihood of a recession? >> first of all, the overall takeaway has been that inflation is the most important thing out there. people do not seem to give the economy credit for the job market, and they really have focused on inflation being the number one reason why for pessimism. that along with partisanship is a huge part of all of these consumer surveys. so you have to put that aside and kind of factor that in. the other thing that we have, we did see in the last quarterly

survey we did, tyler, something of an uptick. people seem to be feeling the lower inflation rate but still relatively depressed. for the level of economic growth we've had and the low level of unemployment, people's attitudes towards the economy has been a little incongrues. but you have to wonder, at least on a short term basis, these confidence numbers matter, because spending has been fairly robust. ly be interesting to see that july data tomorrow. it will tell us, did the strong spending we saw, did it continue into the third quarter? and one of the things that could be out there as an outlier is you have that amazon prime date, which seems to affect spending in july. >> an interesting point, steve. steve liesman makes the point that sometimes sentiment is not

necessarily perfect liquor lated with behavior. >> and steve is right on that. i think you have to look at the consumer balance sheets, and there was a lot of cash sitting here from the pandemic, that's worked its way down. you have consumer credit rising. you've got the cost of credit cards rising. it's up above 20%. you've got rates on mortgages that are 7%, 7.5%. so you have to feel like the housing market will continue to soften, and that the consumer should, at some point, run out of cash here and have to go paycheck to paycheck. so what we have is everybody kind of waiting, is it over, when sit over, and how is it going to land before we start investing again? and this is relimtant on the consumer. >> steve liesman, final last word to you. >> very quickly, let me spend a

second to agree with steve when he points out higher delinquency rates. offsetting that was that real income was revised upwards by 0 0.8%. so people seem to have the cash flow with which to spend. >> steve and steve, thank you very much. odlund and leaseman, thank you very much. our next guest is not buying it, saying he expects a recession and likens the current market to an environment for getting selected for jury duty. joining us to explain is a partner at coriant. z andy, what do you mean by a jury duty market, or environment that we're in right now in >> sure. so i came one this story, because this summer i received a jury duty summons. it's important, but it can be frustrating, because you get

this postcard saying you might have to come in for jury duty. you go in, you don't know if it's a big or small trial or whether the attorneys want you on. so a lot of uncertainty, but you're not notice that something would happen. investors got an investor summons. a lot of notice that something could happen. but it might not. and i think the way you manage through those two environments have a lot in common. you get a jury duty notice, you stay in town, you don't plan a trip. so what does that mean for asset allocation? stay local. when the u.s. catches a cold, much of the rest of the world loses an arm. when you go to court, dress comfortably. the seating is uncomfortable. the buildings are old and drafty. bring layers. in a portfolio, the best way to

dress comfortably in my opinion is an allocation in u.s. treasury bonds. >> meaning what percentage? would that be a higher than normal allocation if you were normally 10% in treasury bonds, would you be up at 30%, where? >> a higher than normal one, bumped up by 10%. and in particular, a lot of investors have gotten used to doing what's worked for them. what has worked for them? owning stocks and avoiding bonds at low interest rates. interest rates have risen so quickly. a lot of investors are not aware of how much that dynamic has changed. >> a good foundation is to have a more than normal slug of treasuries, and i assume you are talking about one year and less or what? >> i would consider adding some longer term treasury bonds as far out as ten years. what is beneficial isn't that they're higher today, the interest rates are lower because

the bond market is upside down. but that's not a measure of value. what it's telling you is it's a prediction. interest rates are more likely to fall. >> so draess comfortably, wear layers, and layer them into the portfolio. what about equities? what we have seen so far in 2023 is the resurgence of the mega caps. the nvidias, microsofts and so forth. is that the safe haven now, or is something else the safe haven in case we do have what i think you're projecting as a relatively mild recession. >> what i think has happened this year is mega caps have rallied, in my opinion, on the back of two items. one, is they're a more conservative play on average, they maintain their value better in a recession that was demonstrated in 2020. but i think the other reason is a lot of the first initial hype, but subsequent follow through on

ai. now, what is the third thing you want to do when you get a jury duty summons? keep your plans open. so long story short, i got a jury duty summons. i called them the night before and they let me off. so i took my kids to the beach. what should investors do if they get let off the hook on this recession? consider allocating to smaller companies, which historically are more dangerous, more downside in a recession. but if one doesn't happen, what i see in small caps today is historically very low valuations and a lot of potential for a surge. >> so smaller caps, which have not participated the way the mega caps have. it's been the big boys and everybody else. so that would be a place, a target of opportunity. at the same time, as you say, as you look at the possibility of a recession, you would steer clear or reduce allocations to

international equities. >> that is correct. >> in the small cap universe, are there any standout sectors or can you just be small and sort of buy a small cap index fund? >> i think you can buy a small cap index fund, but remember that you are buying the underlying companies and sectors within it. small caps are relatively more heavy in industrial companies, which is where they get a lot of their cyclical sensitivity. and they are heavy in small and mid-sized banks, kind of in the fed's cross hairs. they've had a hard time funding themselves in the current environment. with that, a recession could be beneficial to them, because it would allow the fed to cut rates. >> so would you want a small-cap fund, let's say, opposed to an etf that would be light on the regional banks? would you look for that?

>> i would actually go with an etf, because an etf organize around very large numbers of companies, hundreds, sometimes thousands. but there's two broad indexes, the s&p 600, russell 2,000, which is the broader gauge. what they select on includes profitability measures, which makes it a more vulnerable allocation. >> thank you very much. coming up, the commerce secretary wrapping up her trip to shanghai and beijing. we have the headlines from that interview. but first, crowd strike having its best year since 2020. and chewy with its worst month for a year. that is next.

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from crowdstrike, chewy and dollar general. here with our trade is a chief economist. good to have you with us. crowdstrike, shares up more than 40%. morgan stanley downgrading the stock, saying slowdowns in two key verticals, tech and retail, as well as cloud consumption headwinds. morgan also sees limited upside in free cash flow. do you like crowdstrike or not? >> tyler, good to be with you again. as you know, that's not our kind of a stock, but i like the setup for crowdstrike here. people want to own this stock in this kind of tech market. except for ai, cybersecurity is the hottest area of tech. the second thing is expectations are low enough that they will be easy to clear. they may be a little pessimistic, but the metric to

look for is net annual recurring revenue. it's still supposed to shrink about 15% this quarter. so even a smaller shrinkage of say 10%, 12%, should be seen as good news. but the other important factor about crowdstrike is that the second half, they need to make their numbers by doing much better in the second half than the first. that's an easy thing to sit back in the first quarter, but it gets a little suffer in august. so we will be looking at how the second half is progressing, if they pushed back a little further, that will be a negative. but the setup is good and i like it here. >> let's move to the next one, which is the online pet food and retail supplier chewy. shares on a down trend the past two months, as we see signs of slowing discretionary spending. cats and dogs are just not spending as much. recent weakness in net user

additions, but did not see improvements in recent quarters. you think chewy is a bit of a hair ball here, right? >> yeah. you know, i think the post covid pet hangover, you know, we all bought pets during covid, and now we're not buying as many pets and we're not servicing those pets as much as we used to. i think that will continue. so you're absolutely right to focus on the customer additions. that will be thestuff people care about. without some growth there, the stock, which is currently at 50 times earnings, you know, i just wouldn't get in front of it. so that's the negatives. the positive thing is that management is pretty good here. they have been fourthright about the issues. last week, petco reported disappointing earnings. so this is still a show me story that will take a few more

quarters to work out. >> don't miss the ceo of chewy on "closing bell" following those results. that is at 4:00 p.m. or thereabouts. finally, chris, dollar general, out before the bell tomorrow. shares of the retailer falling more than 20% since june. the street keeping an eye on sales performances, as discounters are expected to outperform in a slowdown. but oppenheimier staying cautious, expecting weather related challenges to seasonal offerings and moving expectations to the low end of management's full-year guidance. your take, chris, on dollar general? >> this is a classic example of how the street will kind of psych you in and out of expectations. i think i'm not expecting great news from dollar general, but i expect the spot to be just fine. the reason is, this stock has gotten the expectations beaten out of it.

they missed last quarter, the stock was down 15%. dollar tree reported and got clobbered. so already lowered expectations mean that mediocre earnings will be met with a big high of relief. so i like the setup here. this is i think the best dollar store out there. and so you can buy for a ten-year low pe ratio. i think the statistics to look for is not the earnings, but the same-store sales. and the street is expecting a mediocre 1.5% growth. anything worse than that, or better than that, will move the stock. >> is this a trade or investment, chris? >> i think this is an investment, a chance to buy something that could grow for five years and get a great entry price. we open it in stocks. >> thank you very much, chris. appreciate it. coming up, coinbase and

bitcoin rallying after yesterday's court ruling paved the way for a bitcoin etf. we'll speak with coinbase's chief policy officer about that decision. and the company's next steps as it navigates the evolving crypto environment. "the exchange" is back after this. you got this. let's go. gobble gobble. i've seen bigger legs on a turkey! rude. who are you? i'm an investor in a fund that helps advance innovative sports tech like this smart fitness mirror. i'm also mr. leg day...1989! anyone can become an agent of innovation with invesco qqq, a fund that gives you access to nasdaq-100 innovations. i go through a lot of pants. before investing carefully read and consider fund investment objectives, risks, charges, expenses and more in prospectus at invesco.com. my cpa told me i wouldn't qualify for the erc tax refund, so i called innovation refunds. their team of independent tax attorneys will work with your cpa to determine if your company is eligible. [whip sound]

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your shipping manager left to “find themself.” leaving you lost. you need to hire. i need indeed. indeed you do. indeed instant match instantly delivers quality candidates matching your job description. visit indeed.com/hire welcome back to "the exchange." i'm contessa brewer. hurricane idalia has shifted towards georgia as a category 1 storm. the national hurricane center says idalia is now delivering damaging winds about 85 miles an hour to the southern part of the state. and florida where the hurricane made landfall as a category 3,

state officials say they're starting to get an idea of the true impact. >> we're still assessing what is all going on, on the ground in the places that had the initial impact. >> governor ron desantis says urban search and rescue teams have been deployed to areas affected by the storm and about 250,000 people are without power. crews are hard at work to try to get the power back up. tampa is dealing with flooded streets. city officials say the airport was spared. saw only minimal damage and will reopen this afternoon. flights will start landing at 4:00 p.m. departures will resume tomorrow. the airport shut down tuesday ahead of the hurricane's arrival. that is the latest on this storm. we'll keep our eye on it from here. >> contessa, thank you very much. coming up, the commerce secretary says that companies are complaining that china has become uninvestable. that's next.

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welcome back to "the exchange," everybody. the commerce secretary's trip to china wrapped up today, with promises from both countries to keep discussions open about business and security concerns. eunice yoon had a sitdown with

the secretary in shanghai and joins us with the highlights. hi, eunice. >> reporter: hey, tyler. i'm outside the hotel where the u.s. delegation has stayed. they are now long gone, along with the commerce secretary, who left here describing her trip as productive. after a verye visited several places that are symbolizing u.s./china cooperation, such as shanghai disneyland, the nyu campus here, as well as a boeing facility. she talked a lot about the message that she really wanted to drive home to the chinese. in my interview, i asked her about the concerns that many u.s. companies have had and expressed to her about china becoming uninvestable. she said that she told the chinese what they could do to try to rebuild confidence.

>> actions speak louder than words. you know, in all of my meetings, speaking with the premier and the vice premier, they were gracious, open, they said that china wants to embrace american business. so now let's back that up with concrete action. >> reporter: i also asked about the cases of micron, intel, as well as chinese export curbs, about being a chinese policy to retaliate against u.s. companies for her department's export controls. >> i think that retaliation, if it is retaliation, isn't good. like, that isn't the way to build confidence or attract u.s. investment. >> reporter: she also told me that a boeing deal would be a good way for the chinese to show action that they're trying to rebuild trust. >> all right. eunice yoon, thank you very

much. eunice reporting from shanghai. we appreciate that. our next guest says while the secretary stated she stood her ground during her visit to china, things may play out differently in the coming months in the u.s. joining us now is an economist at the american enterprise institute. good to have you with us. my read of your verdict on this trip is it was pretty weak tea indeed. >> yeah. it's not clear why these trips are occurring. obviously, secretary yellen went, secretary blinken went. we have to have a dialogue with china. you can have a dialogue with china over a zoom call or phone call. so there's that problem. i think the important part of the trip is actually after she comes home. she has a very big decision with regard to semiconductor export controls. both the rules and the licenses, that's going to impact u.s./china economic relations and also possibly strategic

relations much more than her trip will. >> so tease this out for me, this decision of the export controls, which have been much talked about and much trumpeted, and the actually senses could be -- there's a way, isn't there, to stay yes, we're going to have these export controls in place, but allow the licenses to proceed, which would sort of obviate the controls, right? >> that's what we have been doing. we put these interim controls on, it's an interim rule in october of last year. that was a step. what i consider to be the right direction, but a step in a clear direction. then we handed out three exemptions to major foreign shipmakers. if we pass a really tough final rule, if that is what the secretary decides, but we say except for these three huge chipmakers, then there's no point to the final rule. so there's two decisions here, what the rule should look like, and if you are going to hand out

licensing exemptions, the rule doesn't matter any more. >> so if your going to go down this route, you would argue you need to make it a blanket enforcement of export controls, not only from u.s. companies selling into china, but for these three foreign companies. >> that's right. i mean, the biden administration talks a lot about small yard, high fence. but if you say, all right, here is our rule, and it's tough and we are protecting these things, in this case semiconductors, but we say except for three very large companies, then you have giant holes in your fence and it doesn't make sense. so people will focus on the rule, as they should. but the bigger decision is actually whether these licenses are going to be extended in which case, the secretary should stop saying she's being tough on china. >> what did she or the u.s. get out of this trip, if anything? >> oh, i can't imagine anything.

the world expects us to keep communicating. i don't know why communication would by itself be a good thing. china's own course is being decided by xi jinping. he doesn't like the private sector or foreign companies. nothing important is going to change in that respect because a u.s. cabinet member visited. >> i'm going to pick up on something you said there. is the opposite potentially worse, having no communication, increasing the possibility of misunderstandings and so forth? >> well, on a security side,ky see this. but we talk about our economic policy steps for months and months. we're not ten months into the export control decision. it's not like the chinese don't hear us discussing it, they don't know what's going on.

the decision that secretary yellen had was two years in the making. so i don't see there's a big chance of misunderstanding about u.s. policy. >> derek, always good to see you. thank you for your insights today. >> thank you. china is sure to be on the agenda at cnbc's event, just four weeks away. september 28th. in fact, less than four weeks, less than a month. scan the qr code on the screen or go to cnbcevents.com. we have a very good lineup indeed. coming up, investors may want to think twice before b buying a buzzy fund. "the exchange" will be right back.

those disturbing thoses they play there. any way, welcome back, everybody. exchange traded funds are closing at a record pace to some of those more niche funds struggle to attract investors. deiedra and kate have been covering this in san francisco. take it away, guys. >> tyler, "niche" is the key word here, right, kate? it felt like there was an etf for everything the last few years. when you are thinking about shorting a company or another etf or providing a more straightforward way, it turns out they weren't that sustainable. the cannabis themed etf, and others, all gone. etf for everything. >> it feels like they were chasing some of this momentum, and as a result, some of them got into the top.

so they tend to launch when there is a lot of buzz around that. you can see with stock prices, they had these crypto etfs. one interesting trend, rates is a big part of this. so higher rates just make the opportunity cost a lot higher for some of these nonprofitable. tech companies we talk about a lot. bond etfs were a thing, but not to the level they are now. 61 bond etfs in '08, more than 600 now. they're boring etfs -- >> it's such a reflection of where we are in the market. it's no longer the buzzy ones, but the agg inflows over the last year, i think $14 billion. these are huge. but you think about the market leaders this year, it's been the mega caps.

we were talking, what is even in this etf? you look it up, and it's tesla. >> and gen-z, they think i can pick my own stocks, thank you very much. but really interesting, it speaks to some of the investor psychology out there of wanting to pick single stocks versus having this broad-based etf. we also learned earlier in the year, stock pick kg bing can be. so you see whether it's talking about fed minutes or opec, you see when that's going on, that's a bigmac row conversation and people flow into broad-based etfs. when the market goes up, people want to get into single stock names. the other point that they made was that this is a lot of money going into leverage and derivatives. so they're seeing flows of way

above 2019 levels when it comes to options, futures, derivatives, and it's a sign of risk, that people want to take that risk on. >> this year so far, there's been nearly 200 etf closures. in 2022, it was 142. so we're on pace to see the most number closed, maybe a record, and it's not that investors passively managed the etf. so it's very nuanced here, but i think the buzzy stuff is no longer as attractive. i know one you have covered closely, mean stocks and it has performed badly this year. >> bigger asset managers are just the ones able to lower fees and have the scale to maybe lose money. so it speaks to the competition among asset managers.

but stocks are a barometer for risks and you are seeing that return. and zero commissions is a big part of this. the commissions went to zero before the pandemic, and there's fractional trading. so you can buy $10 worth of nvidia and five years ago, that wasn't enough. >> versus paying an etf fee. tyler, jump in here. >> i guess i have a couple reactions. on the face of it, nothing seems like a worse idea to me than a gen-z oriented etf. it feels so random. how do you do that? i guess then that goes secondly -- things are a thing, you know. it's a thing until it stops being a thing. when it stops being a thing, it's all over, game, set, match. and then the third thing is when does an etf stop being an etf when it's a managed etf, is it

the ability to price the etf minute by minute that is the distinction? >> it's such a good question. to answer the first part of it, if money is coming out of the arc etf, who wants the short avsarc etf? it's really a theme of the last few years, but people who have etf companies can get a lot of attention. someone did the short etf closes down, maybe those customer also look at putting their money in another etf. that's a good question. >> i love what you just said there, that some of these companies are putting out these etfs simply to get attention. that's a great -- that's the kind of investment i get pulled into every time. kate, finish it off.

>> honestly, by the time it's a thing, it's already a thing and the value is priced in. so a lot of these etfs were just on steroids. you're buying at the top, so it's probably a leading indicator maybe you would want to stay away and you miss the boat there. >> and the ai etf, that has legs. >> thank you very much, guys. still ahead, the chief policy officer of coinbase will join us for an interview about the impact of yesterday's federal court ruling will have on the crypto industry. isft exchange" is back aer th.

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welcome back. call it the shot heard around the crypto world, a federal court ruling that the s.e.c. was wrong to deny gray scale from converting its bitcoin trust into an etf. bitcoin and coinbase both spiked on the news. but analysts are a little bit divided on what it may mean for the company. citi, jmp in the positive camp. barkleys and oppenheimer left optimistic and barkleys saying

that it could result in volumes moving off on coinbase's exchange. and we'll talk about that. and now we'll talk to the chief policy officer. and and i mondayeamon javers isg the conversation. what does this decision mean for s.e.c. and crypto more broadly? >> i think that you have to say that this a big defeat for the s.e.c. they wanted to block this on the grounds that it doesn't meet its guidelines for avoiding market manipulation. now that struck down. the s.e.c. will have some opportunity here to appeal. we'll see if they do that. so the legal maneuvering here is not necessarily over with necessarily. but it is a big loss for the s.e.c. and for the crypto industry, it means that the crypto is being taken seriously as a core underlying asset for an etf now. now you will be able to in theory have the opportunity to buy these etfs and track the price of bitcoin without

necessarily buying bitcoin itself if you want to do that. and there is a whole host of questions about whether that is even a good idea and what the impact will be on the etf market and of course what the impact will be on the crypto market if a whole different group of investors now comes into this pool. >> and so i'll come back to you in a minute. but eamon laid out a complex scenario there are this ruling may indeed transform the miss of crypto ownership in major, major ways. so let me ask you two questions. one is this good for the crypto business, number one, and, two, is this good for coinbase? in other words, is it going to help your revenues or siphon off some revenues? >> i think it is a great development. it is a great question and a great development. the crypto industry for a number of years has been trying to enter the regulated space and

seeking regulatory clarity. we've been trying to do that through working directly with the agencies. we're now in the courts, a number of us are, gray scale has been, we are as well, in trying to get clarity in the courts. but the real action i think ultimately has to be in congress. you've had two big important pieces of legislation that got bipartisan support before the august recess. they will come up for a floor vote in the fall. and we're pretty optimistic that cases like this that demonstrate that the s.e.c. strategy of regulation by enforcement is ultimately unraveling and that congress needs to step in and provide the consumer protections and federal oversight and the jobs in the united states that we all ultimately need. so we're quite optimistic about what it means for coinbase and the industry more generally. >> sounds like the s.e.c. is knocking at the door behind you there. but let me get back to the question about coinbase particularly. is this good news for coinbase in that if more people migrate

away from owning coinbase and moving into etfs, does that help or hurt you? could it help you if you then become the custodian of the bitcoins, of the cryptos? >> well, we're the custodian for gbtc, so it is an opportunity there. but ultimately it helps facilitate the massive institutional interest that there is in crypto. etfs are an instrument that are much more familiar and much more, you know, accessible for asset managers and a whole range of institutional investors who have a significant amount of capital that we are interested in deploying in to the space. so i think that this is enormously important for institutional adoption which i think then allows for broader adoption. >> and my question was going to be how do you think about investor protection in this? the potential for a whole new

group of investors to come in. typically when you buy an etf, you are buying a basket of securities that ultimately have a company behind them, buying caommodities which have a thing behind them whether food or raw materials. here you will have an etf that doesn't have anything but crypto behind it ultimately. and that can be enormously volatile and risky. how do you make sure that investors are protected from what could be an extreme down side here? >> well, you and i have talked in the past about how there is a big regulatory turf war in the united states over crypto and the division has largely been over this security versus commodity issue. it is an issue that is only alive in the united states because the jurisdiction of the regulators is defined based on whether something is a skirt commodity. there is no dispute that bitcoin is a commodity. so the underlier is a commodity.

and has been adopted by hundreds of millions of people around the world. adoption of crypto -- of bitcoin is enormous. the interest is deep, markets are quite liquid. so it is a real thing. and we're excited that there is an etf product. >> and we'll have to leave it there. we thank you both. that does it for "the exchange." let's look next door and see where contessa brewer is. there she is, she is getting ready, it says right here, and i' jn r t oeridlloiheonheth se of this 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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(fisher investments) in this market, you'll find fisher investments is different than other money managers.resumes on indeed match your job criteria. (other money manager) different how? aren't we all just looking for the hottest stocks? (fisher investments) nope. we use diversified strategies to position our clients' portfolios for their long-term goals. (other money manager) but you still sell investments that generate high commissions for you, right? (fisher investments) no, we don't sell commission products. we're a fiduciary, obligated to act in our client's best interest. (other money manager) so when do you make more money, only when your clients make more money? (fisher investments) yep. we do better when our clients do better. at fisher investments, we're clearly different. welcome to "power lunch." glad you could join us on a wednesday afternoon. coming up, a late summer rally especially for tech stocks. nasdaq on pace for its seventh winning session in the past eight days. and lackluster