last week they said earnings will be low, 4.5% dividend. >> fleet dccro is a financial stock. >> do you own it? >> yeah. >> dow is down 188. do your research, folks. "the exchange" is now. >> thank you very much, scott. and welcome to "the exchange." i'm kelly evans. ahead this hour, mary said she put a historic offer on the table. uaw workers not seeing the same and have begun a historic strike. there will be ripple effects throughout the economy, especially if it goes beyond a few weeks. we'll look at how wide those ripples could get. our market guess is standing over there. he says he still sees gains ahead, but they will be much

harder to come by. he's here how to find them. on the heels of arm's big trading debut, we have a special three buys and a bail 2023 ipo edition. gina sanchez joins us with a bonus bail from a prior crop, but a cautionary tale for what could happen after the initial ipo hike. let's start with a look at these markets and we seem to be breaking the green streak. >> gains are even hard by today. big rally yesterday, not so much today. as you can see here, we're just about maybe half a percent lower on the dow industrials. 34,721, up 185 points. for the broader based s&p 500 large-cap index, 4468, down 36 points or about three quarters of 1%. it's been a down day all day. at the lows, down roughly 45, so tilting toward the lower end so

far today. the nasdaq composite lagging the most, the composite down 163 points, over 1% decline there, 13,762 the last trade there. one place that we have seen an extraordinary amount of volatility intraday is oil prices. we have crude now back above the $90 mark. one half of 1% gain there. at one point today, we were up at the highest levels since going back to november 8th of last year. and then at one point, we were much lower. the catalyst to the upside generally speaking today was better than expected economic data on the retail sales front, industrial production out in china, leading to some issues whether demand is stoking up in the world's second biggest economy. also, some refinery utilization numbers suggesting more demand out there for crude. so we're watching oil prices going higher on that. and we'll finish off with the

arm ipo. we're up another 1.5% today. $64.62, a blockbuster day yesterday, 25%, 26% gains after the ipo price. so we're continuing that move higher. it's helping to propel sentiment, kelly. a little more positive, which is why we expect instacart's ipo next week. so arm holdings, it feels like the ipo gates are opening a little wider. >> dom, thank you very much. dom chu. we begin this hour with the thousands of uaw members striking at three key auto plants after failing to reach a deal on a new labor market. chrysler seeing nearly 6,000 workers. gm and ford have less than 4,000 each on the picket line. shares of the three are generally moving higher. here's what gm's ceo said this morning about the economic ripple effects of the strike and the urgency of getting a deal done. >> we need to get there fast, because this is not food for our

employees, not good for the communities, their families, and for every gm job, there's six other jobs in the economy that depend on us running. so we have to get back to work. >> phil joins us now with diane swan, a chief economist. we'll talk about the ripple effects in a moment, diane. but phil, what is the latest this hour? >> reporter: not much change, kelly. that is the latest. if you were expecting today to be a day where you might hear news regarding negotiations, that's not going to happen. bargaining in terms of the big group getting together and sitting down and hashing out details, that's not happening today. the uaw says bargaining will begin again tomorrow. we may see some developments over the weekend. today, what we are seeing at the three plants that are on strike, picketing out in front. 12,700 workers, approximately, are on strike at these three plants, one in michigan, one in ohio, one in missouri. the uaw is shutting down

essentially 15% of the big three's u.s. production by shutting down these three plants with these three plants going on strike. in terms of the bottom line here, it's the wages, and the all-in wages. you have general motors, ford and stellantis about $63 to $65 an hour, all ahead of the foreign automakers that are selling vehicles manufactured here in the u.s., and even further ahead of where tesla is. they are offering a 17.5% to 20% pay raise. that's not all of what goes into that $65 an hour, but sit a healthy increase in pay, potentially. here's mary talking with us this morning about her frustration over the negotiations. >> i'm extremely frustrated and disappointed. we don't need to be in strike right now. we put a historic offer on the table that not only has very

significant gross wage increases through the contract, over 20% that compounded is 21%. but we also have job security, we maintain world class health care. there's so many aspects of this -- of the offer we have on the table, that i think is going to resonate with employees. so we didn't need to be here. >> reporter: as you take a look at shares of general motors, here in downtown detroit there will be a rally by the uaw later this afternoon, but no direct talks in terms of the big stuff going on today. that's expected to resume tomorrow. >> a great piece on cnbc.com by our colleague. i'm curious what you make of the analysis here that we could see the ford piece of this resolved first, maybe gm second, and chrysler could take some more time because of all the plant closures in the u.s. they have already been talking about. >> reporter: well, yeah. everybody has known for some time that stellantis is perhaps in the trickiest position. they have idled the plants in

belvedere, illinois outside of rockford. the uaw wants that reopened. they want production there. the question becomes, if you are stellantis, do you reopen that? that is a huge cost, that is another final assembly plant. or do you repurpose it for electric vehicles? that's all part of the negotiations here. and they have far more inventory than gm and ford. so it can wait this out a bit to a certain extent. they've got more inventory than gm and ford. >> i just saw the numbers, about twice as much as gm does, and ford in the middle. phil, we appreciate you joining us with that report today. our phil lebeau. now to diane. i should mention to viewers, not just what the fallout might be as you warned from this strikes in the u.s. economy, but we could be facing the biggest health care strike authorized against kaiser permanente on the west coast.

>> we are seeing a lot of strikes right now. we already were at the highest level of strikes in the august employment data that we have seen since 2003. we could easily go back to 1998 very quickly in the month of september and october. the real effects of these strikes really don't tart to really bite in the employment data until we get into october. the survey week is the second week of october. the people that are paid this week will show up on payroll, so that's very important. what we did see, though, was already some idled plants, 3,000 workers, an increase of 3,000 people on unemployment insurance claims due to an idle production plant in the auto sector. that will show up as a manufacturing loss in the september data. but what's important is how quickly these tend to snowball. once you shut down a full assembly plant, you start to affect suppliers very rapidly. the people who are furloughed and not on strike in the suppliers are eligible for

unemployment insurance, but they will be counted as unemployed workers, where strikers when they walk out of a plant, are not counted as unemployed. >> and this will become extremely important. i want to bring everybody some news. former president donald trump sat down with incoming "meet the press" moderator kristen welker. here is what he had to say about the strike. >> let's talk about the economy. i want to start by talking about this big standoff between the autoworkers and the big three auto manufacturers. my question for you, mr. president, whose side are you on in this? >> i'm on the side of making our country great. the outauto workers are not goi to have any jobs. if you look at what they are doing with electric cars, they are going to be made in china. the autoworkers are not going to have any -- i'll tell you what, the autoworkers are being sold down the river by their

leadership, and their leadership should endorse trump. the reason is, you have choice, like in school. i want school choice. i also want choice for cars. if somebody wants gasoline or all-electric, they can do whatever they want. but they're destroying the consumer and they're destroying the autoworkers. the autoworkers will not have any jobs, kristen, because all of these cars are going to be made in china. the electric cars, automatically are going to be made in china. >> so let's talk about uaw's leadership. the president has withheld his endorsement of joe biden. this is what he had to say about you. "another donald trump presidency would be a disaster." how would you win that endorsement. >> if that's the case, i probably won't win his endorsement. i don't think he's doing a good job in representing his union, because he's not going to have a union in three years from now. those jobs are all going to be gone, because all of those electric cars are going to be made in china. >> you can see more of the

exclusive interview with former president trump as she debuts as moderator of "meet the press" this sunday. the same invitation to sit down with kristen has been expended to joe biden who has not accepted. diane, i hadn't heard that answer before. i just wrote the newsletter about this issue this morning, and i want to unpack a couple of things here because this is so on point. china right now is about to become the world's biggest exporter of cars globally. three years ago, they weren't even in the top 15. only because of trump's tariffs on chinese made batteries and that kind of thing, they haven't made inroads into the u.s. yet, but they're probably going to, whether in partnership with toyota or one of the other top-selling cars. this is a -- you know, we've been talking about the impact of the strikes on the economy. how about the impact from the uaw and even tesla being back footed. if the consumer can buy a $40,000 chinese-made ev and that's going to dramatically transform the fortunes of the auto industry in this country as

we know it. >> well, we've seen this before. we've seen it with the japanese producers in the 1980s, which i'm really familiar with. >> right. >> we have also seen those producers also move to the united states, which is really striking. i think what's important to see is what we have seen in terms of response to all the trade wars and tensions we have had with china, we have seen a major reallocation of supply chains around the world. and mexico's been the largest winners. largely because of the usmca. now, that's really important to understand, because that means a lot of production is shifting not only by other producers around the world and u.s. producers into mexico as well, but also chinese producers are shifting around the world to deal with some of the issues and the tensions within trade. i think that's important to understand, because we are going to see that be a big -- mexico is now our largest trading partner ahead of canada and

china in 2023. that's a new move for mexico, and it's a direct response to what were initially the tariffs on china, which have been extended under two administrations. >> that's why i want to broaden this out. we can talk about what -- listen, as dan and others have said, if this strike goes beyond four weeks, you see the economic impact pushed out into 2024 for the carmakers and broadened out economically here. so there's kind of the near-term tussle on labor and inflation, all of the issues we know about. but looming in the background is this larger question of this existential threat to the automaker's survival. if we take a billion or two out of profits next year, gm made $10 billion, ford lost $2 billion last year. there's not a ton of fat there. >> i think the real issue is, you know, what are we going to see going forward? where is the electric vehicle plants going to be? right now, there's been a huge bias to build up electric

vehicle capacity and try to catch up in regard to that in the united states and most notably, mexico being the biggest winner in that move that we are seeing going on out there. in some industrial parks within mexico, they now have zero vacancy rates and they're going to other latin american countries to recruit workers. and the wages are cheaper than those in china. so i think that's important to remember, as well. at the end of the day, though, all of what we are seeing is dependant on having an infrastructure for electric vehicles that works much better than the current infrastructure. that's something that is also going on at the same time. but it's really tough to get to that critical mass necessary to have it be a major shift in the next three to five years. i think over the next ten years, you will see a very large shift. and the automarrkers are making commitment domestically and abroad. what's important for the

autoworkers, they're looking at what is their role going to be in terms of those plants? >> thank god for tesla. otherwise, i'm not sure what would you haveset the potential impact of this major inflection. diane, let me ask you about some of the other economic data this morning. consumer confidence sentiment was weaker, we have had higher inflation reports throughout the week. the fed is going to meet next week. do you think they're still on hold? what is the shakeout of all this? >> absolutely. the fed -- this is one of the reasons why september was always such a tricky month anyways for the fed. one, they're trying to calibrate are we at our peak? i think they are at the peak in rates. another rate hike is not likely. but they want to keep the option out there, because they knew this could be potentially a lot of noise. you can't ask for much more disnance in the economy as they go into this meeting. at the same time, they're debating how do they calibrate getting to the exact right rate

on rates, and that is a heated debate, even as the economy overall inflation numbers are cooling but energy prices are picking up. the fed's also looking at the fact that we've had blistering heatwaves and droughts, which have meant -- are going to mean agriculture and higher food prices. they like to strip those out and look at core. when it all happens at the same time with oil prices going up, as well, we tend to see with those simultaneous shocks more spillover effects towards inflation. so the fed will sort of try to stay on the sidelines in september, but leave options out there to continue raising rates, if necessary. but certainly the mantra of higher for longer is not going to go away, even though we have seen a significant cooling in inflation since last year. >> diane, thank you. we really appreciate it. a lot of balls in the air.

we'll hear from janet yellen when she weighs in on the economy and the latest round of labor strikes. that will be monday at 10:00 a.m. eastern. the dow is right near session lows at the moment ahead of that fed decision on interest rates next week. my next guest says the stock gains will continue, but be a little harder to come by. join me now is steve orr. >> thank you, kelly. >> i'm just going to throw this at you. why would you think that gmand ford, why are all the company shares trading higher today as they look into what looks like an existential crisis for them? >> it may be buy the rumor, sell the news. a little bit of bounce here, thinking that -- people realize the strike is not affecting all of their plants, which is what everyone was thinking. they're only talking three

factories. i don't know. this is a tough business. they're trying to make a transition to ev. they've got labor problems. tough way to make a buck. >> i remember sitting here with bill miller, i think we were in new york. maybe five or seven years ago, around the time that tesla was on one of its stock spurts. i said what about ford and gm? you can take a look at it. i think the stock prices might be where they were back then. >> yeah. they're trying to work on two platforms simultaneously. tesla is only working on one, electric. >> that's hard enough by the way. >> these are very capital intensive businesses. and so it's just -- until they make the full transition, which could be another five, seven years from now, they're just tough businesses. >> tesla, these stocks have been the easy stocks. where do you think the harder money or the harder gains or the harder investment decisions are

now in the market? where do you think people should be looking? >> we think the market is going to broaden out here, kelly. the broader market is trading at 15.5 times earnings. >> is it that low? >> yeah. equal weighted. >> okay. >> and there's lots of stocks in the financial sectors trading in single digits. industrials, you know, trading at mid double digits maybe at best. so i think those are going to be the areas here as the concerns about this recession kind of blow away and you have all these companies where the management teams were preparing for the recession, so inventory levels are pretty tight, and the stocks are kind of reflecting a recession that doesn't come. so you get a double goose there. >> yeah. >> it's kind of a to be picking game from here. >> that's what i was going to say. you're not buying financials broadly. you're buying best in class like

goldman, pnc. you do have some tech. asml is maybe the quietest and most important company in the world right now. you also have alphabet, amazon. you've got ibm. >> yeah. ibm is a kind of value play in tech. it's a misunderstood story. people fell asleep. it's mostly software and services now. it's got open cloud computing is a big piece that will be an ai beneficiary. stock is starting to move, but trading way below the levels of other big tech stocks. the value names like that are interesting. >> would you say you still have major concerns about the setup in markets? some people are worriedyied abo bond levels and how that could play into next year. i'm just curious what you see as the biggest potential pain point? >> well, it's been a slow-moving adjustment. we say that time is on the side of the ball. you take the regional al banks.

every homonth that goes by, the put away a couple percent of reserves against the commercial real estate crisis that everybody knows is coming. so these slow-moving things give managers and investors time to adjust. so i think that's been sort of the theme here this year, that the more this thing gets put off, the more everyone else gets to adjust and then it doesn't happen at all. that's kind of where we are. >> if the freight train moves slow enough, then you and me can avoid it. steve, thank you. it's a pleasure. >> thank you, kelly. still to come, airlines, especially delta, was on such a hot stroke a few months ago. but shares are down 20% from their highs as jet fuel prices have soared, prompting the airlines to cut guidance for the current quarter. top airline analyst jamie baker joins us on that next. a special three buys and a bail ipo edition on deck.

as we go to break, let's get a look at the markets. the dow moves lower today, down 285 points. it's the outperformer today. the s&p is down about 1.1%. nasdaq is down 1.5%, even the russell is in the red as the ten-year yield pops back above $4.3. back after this on "the exchange." every day, businesses everywhere are asking: is it possible? with comcast business... it is. is it possible to use predictive monitoring to address operations issues? we can help with that. can we provide health care virtually anywhere? we can help with that, too. is it possible to survey foot traffic across all of our locations? yeah! absolutely. with the advanced connectivity and intelligence of global secure networking from comcast business. it's not just possible. it's happening.

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welcome back to "the exchange." some of the country's biggest airlines are warning on profits. delta, the latest carrier to cut guidance yesterday following moves by american, united, southwest, and alaska. a surge in fuel and labor costs cutting into profits at a time when travel demand has been slowing down. oil prices can keep climbing. should you stay away from this trade or could it be a good entree point. jamie baker is senior airline analyst at jpmorgan. last year, he was inducted into the institutional hall of fame of coverage of airline stocks. welcome back. >> good to see you. >> even though buffet was in them for a while, then he got out. all the excitement and then now down 20% from the highs. is this an entry point?

>> we think that it is. fuel prices have been steadily ascending since july, so i don't think that came as much of a surprise to the market this week. but if anything, the guides that we received across the industry this week, you know, really affirms something that we believe from spring, springtime this year. if you don't cater to the premium passenger, if you don't fly internationally, if you don't have a robust loyalty program, then at the moment you don't really have a seat at the grownup's table. >> i've been telling people, you know, not that -- you know, why fly other airlines and put yourself at the risk of major delays, cancellations and all the rest, as i understand part of the issue that the airlines are -- they have fewer flights scheduled than they used to. so it's harder to rebook you. >> i think that's a fair point. load factors have, you know, reclaimed their all-time highs. so in the event of a disruption, it tends to be, you know,

difficult to be reaccommodated. that's an unfortunate reality at the moment. but operationally, if airlines start setting aside, you know, a material number of spare aircraft just in hopes of, you know, dealing with weather delays, that's only going to have a material impact on ticket pricing. so kind of cuts both ways. >> yeah, you're underweight on jetblue, overweight on delta, united, american, with some significant upside. so is this jet fuel issue third quarter? how much is jet fuel, how much is labor? >> labor costs by and large are incorporated in the guides we have gotten across the industry. so the move in the last week, the formal revisions to guidance, were largely related to fuel prices. i do think there's some demand weakness at the more elastic end of the demands curve, the consumer that is feeling

pressure from student loan repayments. you know, that end of the demand curve is showing some weakness right now. those are the types of passengers that tend to skew more towards the spirits and the frontiers of the world than the americans, deltas, and uniteds of the world. >> yeah. so jet fuel being one of these things that takes them down for this quarter. how significant of a setback for what their profit hopes might have been for this year? and do you expect the price to stay as much of a headwind as they are? >> as a good oil analyst, i would be something different for a living. the industry by and large generally takes four to six months to sort of recalibrate to sustained higher input costs. and they'll do that through capacity cuts and fare increases. so at this point, we are not seeing anything in the oil market that calls into question what we think the industry can earn in 2024. clearly, it's a disappointment

for the third quarter. for the fourth quarter, we have been modeling close to where spot fuel prices are right now. so at this point, no major revisions are required. but, again, it really comes down to the rate of fuel price change and the persistence of that change and whether these elevated prices, you know, prove to be sustained. >> yeah. still some significant upsides in a lot of your target prices. is tom brady worth the money for delta, do you think? >> i've been doing this a long time. i did not see that one coming. you know, airlines -- different airlines have different cultures. in the case of delta, i think the idea of bringing some proven outside leadership is an interesting idea. we'll see if he can rally the troops there. as motivational speakers go, it's not like tom brady has been living in a van down by the river. i assume he knows what he's talking about. but it's not the sort of thing where i opened the spread sheet and twisted the knobs to make any changes. i do give delta credit here for

thinking outside the box. >> it is very much playing to their audience, so probably see themselves as tom brady acolytes. thank you so much for joining us today. >> thank you, kelly. coming up, instacart raising its ipo range after arm's debut. we'll talk about whether this will provide better results for investors or whether it risks getting heady again. the dow is down more than 300 points. home depot and intel are among the worst performers today. there's only four stocks in the green. disney is one of them, hinavg their best week since march. we'll get you details on the potential deals, next. ime?! 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?

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welcome back to "the exchange." disney is on track for its best week since march. remember, just last thursday it closed at its lowest level in nearly a decade and breaking below $80 a share. now a little different story, but there is a reason. julia brings us the details. julia? >> reporter: well, kelly, it's the beginning of the end of an era for disney, as sources tell me that the media giant is talking to a wide variety of potential buyers for its linear tv assets. a source close to the situation tells me that next star media group, the manation's largest t owner, expressed interest in buying abc and stations. and the ceo byron allen says he offered $10 billion for those assets, plus fx and national geographic, based on the

assumption of $1.5 billion. it's unclear how he's going to be raising the funds for that offer. disney says -- while we are open to considering a variety of strategic options for our linear businesses, at this time, the disney company has made no decision with respect to the divestiture of abc or any other property." analysts are split on these talks and potential move. key bank writing, disney's view on pay tv is that it will soon implode, which to us means applying meaningful discount rates to all linear cash flow. rosenblatt writes, disney could extract meaningful asset value by breaking up and exiting broad cast could provide that. so this all comes amid reports that disney is cutting its targets for disney plus subscribers by tens of millions. the charter deal excluded some of the smaller networks as the company focuses on the growth

potential of the direct-to-consumer business. >> it feels like they're all right to a degree. maybe the best financial move for disney is this, but it doesn't signal a lot of optimism in their status quo, which had been such a cash cow. what do you think the rest of the media industry is doing as it watches this play out? >> well, i think it will be really interesting to see who else comes into play for these assets, whether there's some potential private equity buyers, or whether there's a consolidation with the local networks. if next star were to acquire these assets, you would see meaningful strength in the local networks. but in terms of what it means for disney, i think we'll see a dramatically slimmed down company if iger movesforward with a lot of the things he has talked about, trying to streamline the business here. i think it's interesting reflecting on how this interacts with what we saw with the charter deal, and the fact that disney was willing to give up distribution of some of its much

smaller networks in order to gain the distribution of broader exposure for disney plus with ads. the whole company shifted to that direct-to-consumer relationship. and these local networks don't fit into the majority of what disney is focused on, which is this powerful ip and brands. >> if you fast forward to a world which maybe youtube and hulu and some of the rest of these are the point of contact for the consumer, could we ever see a rebundling of these existing bundles, where they say to a youtube, if you want our carriage, you have to cake all of our channels. could we ever put the jeannie back in the bottle with different ownership? >> i think you're right that bundling will always sort of be the name of the game. i think ala cart will with a short-lived moment in the legacy of the media industry. i think we're going to see a rebundling of skinnier bundles.

right now if you pay with hulu or youtube with live tv, it's a smaller bundle than the mega bundle that we all used to subscribe to as a standard for the pay tv ecosystem. we heard talk about interest in bundling media assets together. and i think we can even hear a lot more speculation that will see different ones of these media companies bundle their products together. in this regulatory landscape, it's going to be hard to get a mega media deal approved by r regu regulators, but what if you could bundle together some of these apps? how valuable would it to be to have max bundled with netflix and disney plus? that could be a super bundle, but a lot of people are saying that could be a way to lock in subs subscribers. >> julia, thank you.

we appreciate it. let's get to tyler mathisen for the cnbc news update. tyler? >> kelly, thank you very much. a jury cleared three defendants in the final trial over the plot to kidnapmichigan democratic governor gretchen witmer. they were found not guilty on charges of providing support for a terrorist act and a weapons charge. 14 men stood trial for the kidnapping conspiracy. nine were convicted and five have been acquitted. european legregulatored han down a $360 million fine to tiktok for failing to protect children's privacy. this is the first time they have been punished for breaking the ruhles. when teens signed up, their accounts were made public. the features and settings listed in the report stem from violations in 2020. inflation is hitting october fest. analysts have estimates that revelers in germany will pay

more than $14 to lift their steins. the annual festival in munich begins this week. the price of octoberfest beer has soared at an average annual rate of 3.9%. that's well above the annual rise of 2% in inflation, and 1.8% rise paid for beer at retailers in germany. more expensive to have -- raise a glass. kelly? >> plus, the plane ticket if you're going. tyler, thank you very much. coming up, a special ipo edition of "three buys and a bail," include thing name that is still a buy, despite being down 20% since its ipo in may. tweet me if you know it. gina sanchez joins me next to make her case. there's your clue. back in a moment. y is using dato create a competitive advantage. ♪ ♪ it's raising capital that helps companies change the world.

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welcome back. of the 73 ipos we have had in the past two years, 70% are trading below their ipo price. yesterday,arm became the biggest public offering and closed up nicely, so can it buck the trend? we are looking at arm and some other recent listings in "three buys and a bail." joining us is gina sanchez. welcome. so let's begin with the stock of the week. arm trading above its $51 ipo price. still today almost $64 a share. you're a buyer, right, but maybe

a cautious one? >> i'm a cautious buyer because sit a tremendous valuation. this is a company that is profitably with massive sales in revenue. that's huge. right now, the markets are rethinking what is going to survive over -- in a world where interest rates are higher for longer. that means that you need more value for what you are buying. a lot of the ipos that came out in 2021, '22 came out with a lot of expectations, they came out unprofitably. arm is not that. arm is shipping billions of investments and making revenue, you know, well above the $2 billion mark. so this is what you need right now in order to survive. i think arm can buck that trend. >> all right. you're sticking with it. let's move on to a lesser known one, but with how few p.ipos we have had. this is down 11%, but above the

$18 ipo price. the thrifting trend to continue to drive sales. do you agree? >> i totally agree with that. we're seeing it all over the u.s., we're seeing it globally. this circular economy concept has really caught fire with millennials. they are a very large cohort of buyers and consumers. so the idea that you can take something and wear it all the way to its life to the end of its life, right down to when it has holes and still make it trendy and fashionable. there are items being sold in thrift stores that are more expensive than the original items to begin with. so we are seeing a lot of value being created in this. you know, they lead right into that. >> that brings us to our final buy of the ipo crop, and the mystery chart that we showed before the break. it is ken view, the spinoff from j&j. a lot of headline troubles for them. they dipped below their ipo

pricing, off almost 20%. they could benefit from the fda's findings on decongestants in the long run. why are you buying here? >> so look, i think yes, the headline was terrible. i agree. if you look at the broad swath of brands that was included in this spinoff, these are names like tylenol, band-aid, j&j sham tee. they have a tremendous amount of brand value and consumer recognition. i think they will continue to weather that storm. so the fact is, they can weather a storm like this, and this is the kind of -- these are the kind of products that people buy when the economy slows and we are expecting a slowdown. we're not calling for a recession, but we expect a slowdown. and in a slowdown, people buy stuff they know. >> we should mention all of your buys are from the 2023 vintage. and your bail is a little bit of an earlier one. i any the vintage year has a lot

to do with the performance here. beyond meat opened t ad 46, broke -- they are now facing an existential threat, losing market share and trying to preserve cash. >> yeah. it's a tough haul. you have a lot of names like beyond meat. these specialty food and specialty beverage segments, when people get really concerned about their cash flow, they kind of go to stuff they know. that's my thesis for j&j, and the opposite is true for beyond meat and anything like beyond meat. you know, these are things that people like when they're feeling flush with cash, and that's not going to be the case next year. >> incredible. $10 stock now. you also mentioned oatly. it's become too small for us to mention and at risk for being de-listed. do you think this was just

unique to the last couple of years or still a risk for any ipos coming to the market? >> i think the idea of these food products are interesting. but the question is, are they interesting enough to command wallet share? this is the real push, right? can you make an argument that people are willing to spend, because they think their health is going to be better as a result of this? i don't think that people are seeing that tradeoff quite yet, or they're not seeing it fast enough to be willing to lean into it in a slowdown. right now, we are focused on defensive names and meat and potatoes, and i mean real meat and potatoes. >> gina, thank you very much. gina sanchez with "three buys and a bail." a quick check on the nasdaq. a somewhat of a barometer whether the market is open to ipos. having a tough session, the worst of the major averages down about 1.5% today. instacart -- there's adobe as well. they had earnings last night.

that was supposed to be a nice ai beneficiary. the stock has done well lately but not enough to stop that 4.5% decline. instacart is targeting a nearly $10 billion valuation after arm's debut yesterday. diedra joins us now for "tech check." i don't know, instacart might be happy about this, but we better not go bag to the bad old days. >> well, i mean, $10 billion, even if you get close to it, still a far cry from that $39 billion, where it raised that just a few years ago. so given that it has come down so much, there are going to be a number of investors underwater in this ipo. anywhere near $10 billion, even at $20 billion, there is going to be losers. so we made up this graphic. you can see the late-stage investors, the ones that got in later in the valuation had already been bid above $10 billion. it's institutional investors,

some of those holding them in mutual funds will be under water. on the other side of this image, you see the early stage investors. they're going to make money on this no matter what. they were all in, in the series-a round. that happened in 2013 when instacart was valued at just $25 million. so they stand to benefit from this. sequoia could be off as much as 400%. the founder, of course, his stake will be worth nearly $1 billion when they go public at this valuation. but there's other names familiar to our audience. they all got in as angel investors in the early stages. this is very different than softbank and arm. in arm, there was only one potential winner or loser, and that was softbank and masa. this is a traditional venture backed ipo. ten rounds of equity financing,

with almost 100 different investors on the cap table. so there's going to be people who make money and lose money on this. >> 4% growth in the first half of the year, if i'm not mistaken. >> right. and that's part of the reason why it's going at such a lower valuation. you have seen sort of we talked about valuation disparity. that's the idea that private markets like public markets so we have seen this correction for tech companies certainly in the public market. some of the ipo class of 2021, the hot enterprise names even the consumer names, instacart waited to go public so it's sort of taking the hit as it goes public, and you know, private markets we call this a down route. that's essentially what this is. so we talked about this before. maybe there's more upside for the retail investors that are not getting in at the peak. >> deirdre, thank you very much. deirdre bosa reporting. meanwhile, the tax man cometh for all this year's t. bill capital gains.

find out whether now is the time for investors to diversify into tax exempt munis and check out planet fitness, after the surprise ouster of its longtime ceo. the company says he will remain on the board. planet shares down almost 15%. we're back after this. every day, businesses everywhere are asking: is it possible? with comcast business... it is. is it possible to use predictive monitoring to address operations issues? we can help with that. can we provide health care virtually anywhere? we can help with that, too. is it possible to survey foot traffic across all of our locations? yeah! absolutely. with the advanced connectivity and intelligence of global secure networking from comcast business. it's not just possible. it's happening. ♪♪ we're not writers, but we help you shape your financial story. ♪♪ we're not an airline, but our network

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t. bill and chill might have been all the rage this year, but now the taxes are coming due, and for investors staring at big capital gains bills, munis offer a welcome tax exempt alternative. take this example. new york issues a billion dollars in 30-year debt last month, priced to yield at 4.35%. with tax adjustments the wealthiest residents earn yields equivalent to 10% taxable debt according to reports. so should you forget t. bills and move over to munis? jennifer johnston is director of research for franklin templeton fixed income community bond group. i'm guessing you're going to say

yes. >> yes, i'm going to say yes to that trrx sure. there's actually a variety of reasons. one we always talk about which is exactly what you're dressing which is the tax advantage nature of the asset class in general and the fact you can get tax-free income which depends on your tax bracket can result in absolute yulds that really outperform other segments of the other asset classes. and second, we feel pretty comfortable about the muni market from a credit fundamental standpoint. we think that they are good from a comparative basis to corporate bonds as an example, we tend to have lower default rates. so even in times of economic weakness, you can still feel pretty good about the credit quality of your investments as well. >> so for some investors who are maybe not in the highest brackets, they might say, it's not as big a deal. is this really a strategy just for those who are wealthier? >> we think anybody in any tax

bracket can benefit from this. what we would look to in that situation is perhaps the tax advantage aspect isn't as powerful, but again, going back to the credit quality, to the fact that default rates are lower, and overall credit quality is actually higher than similar indexes, say on the corporate side. so we think it's a good diversification from a credit standpoint as well. >> i don't know if you saw it today, but ray dalio made comments along the line of cash is great, but he wouldn't own bonds. what would your response be to those investors like him who are a little on the hawkish side still? >> we get a sense there are quite a few people with money still on the sidelines and we can't wait for them to jump into the muni market. we think this is a great time to be in the fixed income asset class in general even because rates are higher than they were two years ago. you're getting perhaps up to 200 basis points more than you did two years ago. so to be able to capitalize on those higher rates, this is the time to do that. and to the extent that the fed

is actively involved with trying to control inflation, we don't know how long this rate environment could last. so it might be time to jump in. so that you want to be at the head of that process. you don't want to be the last guy back into the asset class. >> do i have to worry new york is going to default? >> no. you do not have to worry. of all credits that new york is going to default. we feel pretty confident in general about credit quality. coming out of the pandemic, that economic recovery, we have strong reserves and very strong management, going into any kind of softness. we are seeing revenues to cities and states slow down a little bit. again, those are driven by inflation. so asinflation is controlled we're seeing revenues come down. but it's not to a level where we're concerned about municipalities, new york included, being able to fund reserves or cut spending in order to manage a balanced budget.

>> all right, jennifer. thank you. as always, we appreciate it. a lot of people learning a lot of lessons about taxes and bonds this year. jennifer johnston, thank you. that does it for the exchange. if you want to read that newsletter about china, sign up at cnbc.com/newsletters or scan that qr code on the screen. next on "power lunch," we'll tackle the recent casino hacks with a cybersecurity expert who warns there could be more to come. i'll see you on the other side of this break.

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