can also own the oih. >> three sectors positive today, led by energy, up almost 1.5%. otherwise, you've got tech and comm services in the green. i'll see you on "closing bell" at 3:00 eastern time. in the meantime, "the exchange" starts now. ♪ ♪ scott, thanks. welcome to "the exchange." i'm kelly evans, and here's what's ahead. goldman slashing their recession odds, taking it all the way down to just 15% for the next 12 months now. the fed governor almost june la -- jubilant today. but will september surprise us like it almost always does to the downside? plus, the one trend our market guest is watching that could pose a threat not just to stocks, but also to the fed's 2% inflation target. and it's not oil. he joins us with what it is and

how he's positioning from here. bailing on home insurance. whether to campaign for it or will gas prices climb sky high? but first, let's get to today's markets. dom, good to see you. >> good to see you, too. and i do not self-insure my home. i pay somebody else to do it, because they're the experts. if you take a look at the markets overall, we have seen both sides of the unchanged line, at least with the nasdaq composite, just so slightly in the green, 14,038. for the broader s&p 500, maybe a better measure of the overall market. it's been down all day, down nine points right now, one quarter of 1%, 4506. even at the highs, we were almost flat, down one point at the high, down 19 points at the low. so, again, a predominantly lower session, just fractionally so. the dow off 93 points, 34,743

the last trade there. kelly mentioned about the oil prices. we are now, by the way, for u.s. benchmark west texas intermediate, the highest oil prices we have seen going back to november of last year, on or about november 15th. that's where we stand, $83.73. up 2% right now. a lot has to do with this idea that saudi arabia, middle east countries, at least saudi arabia specifically, looking to maintain those production cuts. demand may be a little more, but we'll watch that. and if you are looking for one of the hot places in the market so far in 2023, that's cooling n off in a fairly significant way, it's the home building stocks. they are amongst the worst performing stocks. lennar down 5 pe%.

even the home builder's etm is off 3.5%. some concerns about mortgage rates. benchmark treasury note yoelds are ticking higher. the home building trade, kelly, some of them have had to discount or provide incentives to sell homes, the new construction projects. a lot of things are brewing right now. i'll send it back to you. >> talking a lot today about trend reversals. dom, thank you very much. goldman starting off the week with a bold call on the economy. the bank's chief u.s. economist is placing the chance of recession in the next year at just 15%, down five points from the prior forecast. they also say the fed won't raise rates this month and could be done hiking all together. this comes as christopher waller told steve liesman this morning, it was a hell of a good week of data.

by good data, he means mostly bad. that brings us to today's opening exchange. are we in a sweet spot where we can avoid a recession, or are we celebrating prematurely? for more, let's bring in chief economist mark zandi with steve liesman. welcome to both of you. steve, let's start with waller's comments. he was saying more than that, but he, like many, were cheering the data, fewer job openings, and labor market moderations we saw last week. >> yeah, let's just put waller in context. when he doesn't frown, it's like he's smiling. he's not the most jubilant person to be with, but he was not that bad about the data. he was a little more on the hawkish side, and i do want to make a remark about goldman's call. it's not remarkable they went

from 20% to 15%, but what is remarkable is they are doubling down on saying the chance of recession is less than average. so in any given year, there's a one in four, one in five chance of a recession happening. i don't think he's going crazy here, but what he is saying to us in this call is that it's a less an average chance, which is significant. i don't necessarily see the data that way. but certainly we have come a long way in terms of defying the recession probabilities. >> he's been correct out there, to his credit, which is why he's so worth listening to on this. some would say the ligest reason we're holding in there is fiscal spending and stimulus. but he says he thinks the labor market will hold up. so income growth will support spending. and number two, he thought the fed's rate hikes would be fully felt in the economy by early 2024. whereas others seem to be waiting for more of a lag.

>> i'm optimistic, kelly. i'm not as optimistic as jan, 15% -- steve, i think that's the average probability of a recession. so i think he's saying kind of typicalry session odds. but i'm optimistic, as well. i do think that with inflation coming in as gracefully as it is, in large part because that inflation is the result of the supply talks created by the pandemic, as those shots fade into the rear-view mirror, we're getting inflation back in without any damage to the broader economy and the labor market. i think that's the most significant reason for optimism. as that inflation comes in, wage growth is stronger than inflation, so we are seeing people's purchasing power improving, allowing folks to continue to spend, as long as the consumer hangs tough and

does what they typically do, recession doesn't look likely. >> steve? >> i'm reminded by the book "the outliars" where it says it takes 11, 12 screwups to bring a plane down. the same is true with the u.s. economy. you have to have a series of policy failures. charts don't happen, stuff happens. so you put up a chart that shows oh, when the yield goes like this, we are going into a recession. it doesn't happen because the chart happens but something happened along the way that creates a fundamental reality. the discussion is interesting. he does not believe the 500 basis points hike is what will take us into a recession. he says rapid rate hikes, this is from a july speech he gave, are priced in very quickly.

he does not believe there are long lags left to come. people saying those lags are here now. the other thing that happens is that when we get into these refinancings of corporations in the next year or two, he says those are seen, those are the known/unknowns in a sense. it's the things you don't see -- we cover the bases, we try to think about it. but any time you mention something as a possibility that could throw us into recession, it's almost off the list. i don't want to be -- there are certain pills that you can see the hill and it may be too high to climb. but in this sense, the things that are on the table, especially those a year or two out, are the things we can handle. >> the reason i don't fully buy this idea that hikes are felt immediately, you look at the lending rates for small and medium businesses, just in your

everyday. when we talk upwards of 10%, you can't be borrowing at 8% and having nominal gdp growing at 4%, 5%, and think you're in a sustainable situation. >> yeah, there's more fallout to come, but it's fading. the those things have largely been felt. maybe a little more to go here. we have seen the long-term rates are back over 7%. so we'll see some more damage. you're right, we will see effects flow through in terms of small business lending and comp r -- corporate borrowing more generally. but the most significant head winds to the economy are probably also in the rear-view mirror. i think they're starting to fade.

the impact on the economy is becoming less significant as we move forward here. >> last word, steve? >> i want to pick up on something mark was saying. there are bad things that are going to happen, right? part of the idea that you have to have a lot of bad things happen at once is the dynamism of the u.s. economy, you want consumers going down, businesses falling, and that stacks up to a negative. one thing to think about today, oil prices cranking up above 80, 90. guess what? we have an economy that is bigger than saudi arabia inside the u.s. economy, pumping out more oil than they pump out. so while we suffer, and some will be suffering from the higher oil prices, we have this inflow into the u.s. economy offsetting it. and the ability of the u.s. economy to adapt is one of the things that people get wrong when they focus on a single

negative. watch for the stock negatives. >> to put it differently, the lal palooza effect, it takes more than one thing to go wrong. >> just a quick note of caution. when the economy is growing slowly, it is vulnerable. it doesn't take a whole lot of those little things. so i do think that oil and closing in on $90 a barrel on top of student loan, debt repayments starting on top of uaw strikes, you know, i'm optimistic. but we need to be cautious here. another key reason why the feds should end its rate hikes, the economy is going where it needs to go. >> you have been quite clear on that.

lala l >> i know we have to go, they're yelling in the back, but the countercyclical, the way that things have not been in sic, different parts of the economy have sunk down at different times. real estate looks like it's on the way back now. >> that's what makes the state and local spending so significant. contra 2008, that's a massive positive. steve liesman, mark zandi, we appreciate it. time to reveal what my next guest says is one key trend to watch that could derail the 2% inflation goals next year, and it's not oil, but it is all these labor battles. ups, united, american airlines, three major companies that have seen at least a 10% yearly jump in wages. my next guest only sees that emboldening other unions. it's not just a threat to the

fed, but there is a negative correlation between wage gains and stock prices. welcome, mark. so you think this isn't just all show, there's a real effect on the economy here. >> well, there is a real effect in the economy, it's a lag effect. it hasn't been fully impacted. but look at what the uaw is asking. if we think that's going to end there, we're mistaken. it will embolden companies to have more. so the starbucks of the world are feeling pressure. i'm old enough to remember, the late '70s, early '80s and what cost push inflation does, and how it makes things less competitive or a negative to stock prices. ignoring 10% wage gains that will take effect in the future because wages have been declining in the past 12 months does not look at the entire picture. >> unions are a much smaller

share of the population than they used to be and so forth, but you think this will have other workers -- i'll just play devil's advocate, this might be their last chance. if the labor market softens, it won't matter if other workers would like this pay raise, they may not have the bargaining power to get it. >> that is all true. i'm not saying that everyone is getting a 10% pay raise like united, like ups, like the uaw wants. but to think there's not going to be pressure from organizers to get a little more for inflation to remain a little stubborn and then government wages keeping up with inflation, we're north of 4%. that is twice as much as the fed's target. so yes, we have made a lot of progress. but just to think the trend line will continue uninterrupted could be shortsighted. >> it sounds like you're more

cautious on stocks more broadly. is that true, and what would you be doing tactically here? >> i am more cautious, because we like technology and who doesn't? thankfully we stayed there. but the valuations are rich. as asset allocators, we have to go to the value side. the reality is, banks are under a lot of pressure. i had two due diligence meetings with banks, and they all said the pressure for deposits from the internet is huge. i said hey, the internet's been around a while, why now? they both said, when you were paying zero, the online was not a competitor, because you're not going to move for three quarters of a percent. but when you see a splashy 5%, that's a lot of moving leaving and they have existing deposits going to higher cost deposits, both of which are bad for

profits. so financials, the largest sector in the value trade. so we see the pressure today. you exited that trade then, because i know going back, you were looking to pick something up there. >> yes. and we did for these reasons, but, again, just staying on the financial side, rook to non-banks, there are companies like scschwab, that has very it will to do with an asset liability mismatch. they don't have the credit risk that a traditional bank would have, from commercial real estate or the need to gather low-cost deposits. so there are ways to stay in the financial space without putting yourself at risk, which are rising cost of deposits and potential defaults. >> i don't hear you drawing a straight line from wage pressures to sectors you would

avoid. is that how you are thinking about it? >> well, the shakeout already -- look, fedex is raising prices. they're a shipper, not who we mentioned. but there are companies in the sectors that can pass along the wage costs if the demand is strong enough. so i don't think it takes down a specific industry. even in the airlines. look, these ceos are not stupid, they have planes that are full, they made a calculated decision to pay pilots more. the net effect is more in the inflation numbers, and what that causes powell to thinkable what actions we take, and it's more of an overall market impact. >> mark, thanks for your time. coming up, a tale of two halves for the market. we'll look at how differently the second half is shaping up and whether to expect the trend to last. but first, there's a showdown shaping up across the pond. apple and microsoft again in the cross hairs.

my next guest says europe is becoming more like china than people realize. jessica lesson explains what it means for investors after the break. and now a quick check on the markets. the nasdaq gave up its gains. the dow was possible for moments at the bell, but now down 126 points. the russell 2,000, there you're seeing selling pressure to the downside of about 2%. and the ten-year yield, 4.26. back after this. ♪ ♪ connecting to opportunity is just part of the hustle. ♪ ♪ opportunity is using data to create a competitive advantage. ♪ ♪

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welcome back. the headline just now crossing is that united airlines has issued a nationwide ground stop. shares down 4% at session lows. we'll bring you any updates. we see other airlines trading lower, as well. tomorrow, there's the airline board just so you know. american down 3.5%. delta down more than 3%. jetblue and southwest are outperforming. tomorrow, look at the first list of tech services targeted by europe's digital markets act. apple and microsoft are expected to be among the hardest hit. here to explain is steve kovach and jessica lesson.

welcome to both of you. steve, what do we know? >> let me explain this. this is the digital markets act passed a while ago. we know it's going to go into enforcement next year. on the apple front, one of the things targeted here is i-message that we're all addicted to it. but what this tries to do, you remember the green bubble problem, you text someone an an android, you can't laugh at it, maybe your picture doesn't go through or your emoji doesn't go through, this is designed to fix that. if apple reach ascertain threshold, 45 million monthly users, $ 7.5 billion revenue in the eu, and apple passes all those metrics. what we are hearing from the f.t. is, they're trying to fight against this, is because it would force them to make i-message interoperable with other messages. if you prefer whatsapp, you can

text me. apple is pushing back on this, in part because having admitted this in a court case, i-message is such a key lock-in factor for people, when you think about getting a new phone, one reason to go from iphone to iphone instead of iphone to i-message is this. >> so jessica, how should we think about this, as it feels sometimes like another week, another eu headline against u.s. tech giants, or is there fairness overdue and coming to the u.s. market? >> great question, kelly. i think we need to be paying more attention to the digital market's act and the impact across silicon valley and technology. today, the headlines are on i-message. obviously, meta is having to rethink its business model in

europe, as well, looking at a paid version of facebook and instagram. you know, this could have implications, even on the app store itself. if you talk about apple and sort of how it operates on iphones. so this is a big one. i think it is, you know, the next step in europe, really trying to kind of lock down its market and save it. you're going to have to operate in a different way to be here, and it's been a long road. we saw it start with data sovereignty and asking these companies to keep their data on eu citizens in the eu. but i do think the markets act is abig deal and we will see a lot more headlines how it will play out. >> i know i'm being cheeky, jessica, but do you think the u.s. tech giants will ever say, fine, we're leaving.

i don't know how big the eu marketplace is for them. >> threads didn't launch this the eu, not a core meta product and driving a lot of revenue from the company, but that was, you know, a recent move that shows that the tech platforms are thinking differently when it comes to europe. now, do i think they're going to write it off? no. but i also think they're not going to just kind of play ball with every new regulation that comes down the line. so we'll see a lot of posturing and negotiating. but that is the question, and i would not be surprised if certain products launch differently in the eu. we'll see this play out with ai, that's the other kind of hot zone of the battle right now. and i think, you know, as some of the companies like open ai have said, they'll say okay, we'll leave that feature out for you guys. >> interesting. >> i think we'll see more of that.

>> steve, i was struck in canada when they moved forward, something with facebook and facebook said, okay, we're not going to offer whatever product that it was. we're all so used to it, whoever sets the most stringent standards sets it for everybody. are we at the end of that road, where companies might say no. and i look at the microsoft/activision deal in the uk. people were like, don't go to the uk. it's very difficult i think to execute. >> yes and no, in short. we know the next iphone coming out, executives have all but said we're going to switch that plug to the usb connecter, in part because of european regulations. so that will be a global change. it's a new plug, if you have never used the usb-c plug. basically, the eu is forcing apple to make that change.

so that will be a global change. but we're getting reports that there might be a different version of the app store in eu, just to comply with these regulations. and also protect apple's profits in the app store, which is high margin and lucrative. here in the u.s., where there are no such regulations, it makes more sense for apple to split up their software to offer it differently in these different regions. >> i don't think it's going to be the kind of knee jerk response that it once was. it sets up for a good segue to china. china is planning to launch a $40 billion state-backed fund to beef up its chip industry, coming after the u.s. commerce secretary wrapped up trip there, where she stood her ground. jessica, you just came back from traveling to china. on that trip was secretary ramando. so what does this tell you?

>> they are very serious about building, you know, domestic semi industry, and to really advance the technology as far as they can as the u.s. cuts off the supply of the most advanced chips that they need and want for ai. so this is not a new strategy. it was a strategy outlined many years ago, and one the secretary brought up with me when i was interviewing her in her motorcade. she said they told us they were going to do this. we know they're going to do it, we shouldn't be surprised, but we still have to look out for our interests. you know, i think the feeling on the ground from talking to chinese tech leaders was pretty 50/50 whether china would be able to pull this off, and a lot of people say with the right talent and resources, china will become a player in the most advanced chips. but there are plenty of people who say they won't be, and look

at the history of the industry and say there's a reason that china is a player in some types of chips but not the most cutting edge. so i was surprised that there was that level of debate on the ground about it. but the will is certainly there. and it will take years before we know what the results are. >> maybe that makes this reuters story more significant. they know what they say is a breakthrough for one of china's chips, but it seems as though people are looking at every new thing that comes along to figure out whether they're catching up or vaulting ahead. >> absolutely. i think you have to remember a couple things. technology keeps moving. so taking apart one device and copying that chip is actually, you know, the strategy china was playing decades ago to catch up with the u.s. in advanced semis, and it didn't work. so i think it's important to realize this industry is moving quickly.

obviously, leaders like nvidia are moving quickly. china will have more semi manufacturing capacity. but when you look at that leading edge technology powering the latest and the greatest, that's a little different. so time will tell. and it's a complicated industry. there are so many different steps. of course, china controls some of the raw materials and has retaliated against the u.s. so it's clearly the battle to watch, kelly, and, you know, i think the right question to be asking, but we won't know for a long time. >> chip is the new oil is how this is all evolving. even there the tech leaders are split on whether they can leap into the lead, so to speak. jess jessica, thank you for your time today. don't miss commerce secretary raimondo tonight with jim cramer at 6:00 p.m.

still ahead, softbank's chip design firm is seeking that $52 billion valuation. we're back after this with the dow at fresh session lows.

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welcome back, everybody. i'm tyler mathisen. hawaii and maui are being sued by the family of a wildfire victim there. the father of the victim is accusing the state and the county of maui of gross negligence that led to the fires. the suit names hawaiian electric and one of the island's major land owners. this is the first lawsuit stemming from the wildfires to be filed against the state. spain's football federation fired its women's world cup

winning coach. the move comes ten days after fifa suspended the federation's president for kissing a player without her consent. the coach was one of the president's original supporters but grew more critical of his actions. two school districts near philadelphia closed campuses today as pennsylvania police continue to search for a prisoner who escaped into the woods nearby. authorities said killer danelo cavalcante slipped out of custody but has been spotted on surveillance cameras. he was sentenced to life for stabbing his ex-girlfriend to death in front of her children. police are offering $10,000 for information that could lead to his capture. kelly, back to you. >> thank you very much. coming up, the second half of the year is in full swing now, and we are starting to see some big divergences in the market. we'll tell you the trends and takeaways next. and don't miss an interview with

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welcome back to "the

exchange." and call it a tale of two halves. two months into the second half of the year, and things are already marketedly different from the first. the leaders of the first half were tech and consumer discretionary, and they're now trailing other sectors. energy, after a mediocre first half, is now leading the way. so should we expect this new trend to persist into year end or not? let's ask a chief investment strategist. good to see you, chris. would you stick with the new trend or go back to the old one? >> thanks for having me on, kelly. i think it's a mix of both is the short answer. energy performance in the first half was very mediocre, and in the second half it was a top performing sector, and it's our favorite sector, because opec plus is very committed to their cuts, along with the brazilian economy. and even in the face of china, oil has held up relatively well. so we are sticking with energy as our top pick, which is the best performing sector so far in

this half. >> so up 12% in the first half. if i'm a big hedge fund looking for -- i'm not sure i'm ready to jump on that horse. do you expect the investment world to remain overindexed to make a cap check? >> i think so. we told investors to really stick with the barbell approach. we think the market will go into two phases. the first phase h be, you know, slowdown is good news, because it means inflation is coming down, and i think folks will want to continue to be overweight. the technology and consumer sector. i think as we go deep into the year, people will be a little more weary into owning tech. but tech continues to be the leader. so we like tech and energy, we like comm services. on the other end, we would be avoiding discretionary and some of the industrial stocks, which

i think are going to have trouble with the weakness that is very per sis tesistent out o. >> so consumer discretionary you're not as bullish on, but you think tech, which is only up 1% this half after a 42% jump in the first half, you think tech will be okay? >> i think tech will be okay. tech is fighting against higher interest rates, right? over the near term, we think long-term interest rates push higher as the bank of japan moves away from zero interest rates. oil, having upward pressure, puts upward pressure, and even rates. so tech i don't think will be the top performing sector, but you still have to own it. it's fighting against the economy, because tech is very much traded with the economy year to date, surprisingly. over the near term, it's

fighting against the higher rates. ultimately, rates will be lower at year end than they are today, but it's going to take several months to get there, and perhaps even lower oil prices ultimately. >> two more questions. so maybe i'll make a comment. the underperformance of the home builders today is striking. i don't know what is going on with that, maybe it's interest rates. and number two, consumer staples. in this environment, as nancy and others have warned, would they lose pricing powers and be -- they're down 3% so far in the second half of this year, so would either of those home builder staples attract you here? >> i think it's about interest rates there. i think there'ser in-term rates that are higher. staples offer defense, they're not as expensive as they used to be. there are pockets that could lose pricing power.

there's other areas of staples that are attractive. you know, the consolation brands and things oh of that nature that have sustainable demand that offer defense. >> all right. maybe we'll give it 30 days and check back in. >> thanks for having me. still ahead, softbank's chip design firm arm is seeking up to a $52 billion valuation. will it breathe new life into the ipo market or not? that's next. as check out shares of zoom bucking today's market trend, up 4.5%. got a bullish mention from josh brown last hour. and the company also just said it's introduced new ai ckft ttialy. ba aerhis.

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let's turn to the ipo market and softbank bark to arm,revealing some new details about the upcoming public debut. leslie picker joins with us the details. do we have a date yet for this ip snorvegs >> so mid next week, on the 13th and trade on the 14th. i brushed off my spread sheet. it's been some time. and we haven't had a big deal like this in so long. but arm is hitting the road, in what is likely to be the largest ipo in years. softbank, which took arm private in 2016, is selling all 96 million shares in the offering, and asking investors for as much as $51 apiece. that implying $5 billion, of which 15% is already claimed by arm's large tech customers. think nvidia, apple and google, which indicated an interest in purchasing a stake at the ipo price.

$55 billion is below the $64 billion that arm was valued at last month when softbank bought back the remaining quarter of the company it didn't own. it's still relatively expensive when compared with earnings, which declined this year. arm's not-diluted market cap represents about 100 times trailing earnings for the fiscal year through march. that's about double the level of its peers synopsis and cadence. >> more's the question, we talk about whether it spurs open the ipo market. what if it slams the door shut? this ipo is heavily priced. if it doesn't go well, then i wonder about what happens. i thought josh brown did a great job laying out some of the -- this is a company, back when it

was arm-h, was the hottest thing on the block. that's why softbank took it private. since then, the market has matured, it's not that exciting. so investors balk at the pricing, what are the implications? >> that's a really good question. there are a lot of risks here. they have a large concentration to china, about a quarter of the revenue came from china, which is slowing. they have a lot of competition 234 a very mature smartphone market, which is kind of the end use case here. and then not to mention this is a company that, these reportedly was seeking a higher valuation, has paired that back. it scaled back their offering size, as well. because of that important part of the equation here. they have 28 banks on this deal. they want to see those do really well, because they have other clients waiting and watching and making sure this does go well before taking their own debut. but so far, it's been a pretty

muted, you know, first couple of weeks since they filed f-1. >> it's just a different animal. it's coming public for a different reason, trying to ride some of the ai hype. but maybe it's not that much of a tell for everybody else. i don't know what would be a better tell. >> it's sponsor backed. it's over 30 years old, founded in 1990. i think i have that math correct. so it's an older company. it is sponsored back. softbank is selling the entirety of this offering. so you're right, it a's mature company. no growth on the top line. declines on the bottom line. and you've got a market that hasn't seen too much in the way of anything to compare it to. if it doesn't go well, i don't know if it slams the window shut necessarily, but it certainly doesn't blow the window wide open. >> yeah. well said. leslie, thank you. i look forward to a busy midweek

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here, you can try. get way more into what your into when you stream on the xfinity 10g network. welcome back. more and more home owners are abandoning home insurance because of skyrocketing costs. according to bank rate the national average for home insurance jumped 20% last year

to more than $1,400 annually just for a $250,000 home. the jump in premiums is forcing some owners to forego insurance all together while others simply think it is a bad use of money and would rather invest the capital instead, a strategy that obviously comes with high risk. here now to explain and react are angie newman portfolio manager at ubs private wealth management and i'll start with you. are you ever giving people this advice? >> absolutely not >> i can't imagine it. >> not something we lead with by any means. as you said before it is provocative, a hot topic, real, it's happening. and so we as financial advisers work from a planning perspective, look at cash flow analysis, the best use of funds from an estate planning, tax planning, investment planning. and we have to understand that the client really does understand. >> so you're based in new jersey

but i imagine you might have clients. >> we have lots of clients in florida. >> we always think of this as mostly a florida or coastal problem. >> for sure. >> give us some scenarios. what are people coming to you with? what kinds of decisions are they making if this is really popping up where people are saying i'm not paying my home insurance premium? >> it started by them saying listen a flood of investors came to the market during covid, bought a home in a coastal region, paid what they thought was a reasonable insurance amount and then come a year later their insurance company drops them. they're simply not doing that residential business in the coastal area. so then they are scrounging for an alternative. there are very few out there. when they do finally find one, in some cases the premiums are double or triple what they expected. so they are coming to me saying, wait a second. isn't there something i can do that's a little different than that? again, it is not something we recommend across the board. i would say there is a narrow demographic that meets the criteria this might be appropriate for.

usually we say it's a home that cannot have any debt against it, no mortgage, usually not your primary residence, not something that you rent out. you don't want renters in and out of there which could increase the odds of needing to have a claim. you take the cost of a rebuild, the contents, and you decide if that's money you are willing to lose. >> right. >> if you lose that money is that going to make or break your lifestyle or family's lifestyle? >> what does it mean for your industry if a higher than normal percentage of people are simply foregoing insurance all together? >> the cost of home ownership insurance is definitely -- it is absolutely a strain on insurance affordability and availability presenting a serious concern. we as insurance companies are advocating for solutions to try and help address these increasing costs on the families, individuals, and business owners are facing. this is the economic safety net that helps rebuild homes, neighborhoods, and communities and is really truly vital that

the safety net remains available and functioning. >> what can they do? let's take not the example maybe of someone choosing to go without it but someone who says i literalary don't have three or four whatever thousand dollars the number is a year and so i'm going without. are there any other options? >> we certainly don't want them to go forego insurance if they have a mortgage because they could lose everything. if they choose not to purchase insurance it is possible their lender may place insurance for them referred to as lender placed insurance and is generally a lot more expensive that the coverage you might find in the available insurance market place. we don't recommend that. there is a lot less protection because it is designed to protect the lender's investment, the structure. instead owners should work with their insurance company or agent including looking into maybe the state's fair plan for coverage or take other solutions to help reduce premium costs such as your deductible or looking for

other discounts that might help reduce your premium. >> angie, anything else for you to add for people who might be dealing with where maybe it is more of a choice than a necessity that they think i'll put my money in the market? nasdaq triple qs i'll be up 40% and i can easily cover the cost if something happens >> i don't know i'd do the nasdaq triple qs but you are already taking a big risk by saying i'm not going to buy the insurance. if you are going to separate out money and invest it i would suggest you stick to sort of a moderate portfolio. the fixed income market is offering some really nice returns. i had a guy say to me recently, listen. if i can get 6% to 7% for a year or two that's four times what i would pay in insurance. maybe i'll just do it for a year, two years. maybe i will wait for other insurers to enter the market. and perhaps drive the cost down. i wouldn't take a lot of risk in the portfolio once you segregate

out the assets. >> a great point. we've seen other states where they lose all their insurance, maybe louisiana, eventually start to come back in. these are highly sought after clients are the ones you're talking about. >> yes. >> thank you both. we have to leave it there. we appreciate your time today. also want to mention the faa is now lifting the brief nationwide ground stop for united airlines. shares are off their lows but still down about 2.5% today. that does it for "the exchange." we have airbnb news on "power lunch." don't awhe.gonyer at done took over our office. and he's using it to send out medical bills. good hands! hospital bill for prime?! gaaaaap! did you just say gap?! he's talking about expenses health insurance doesn't cover. good thing coach prime knows about...say it one time! aflac! because aflac gets you money to help close that gap! now how do we get this goat outta here? (whistles) aflac! meet one of my new homies! gaaaaap! get help with expenses health insurance doesn't cover at aflac.com. elephant would've been scarier.

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welcome to power lunch. good to have you back home with us at the table. >> good to be here. >> what are the odds the u.s. economy ends up in recession? goldman sachs cutting those chances to just 15%. and the market seemed to think we can avoid the worst