that. it is winner take all and j.p. morgan's the winner. >> weiss had concerns about regionals, go big or go home some say when it comes to banks. what have you got? >> goldman sachs, which i think you'll see more of the same and you'll see a good instacart ipo and that will say the window is open and we discuss goldman. >> thanks, everybody. i'll see you on "closing bell." "the exchange" is now. thank you very much, scott. welcome to "the exchange" on this monday. i'm kelly evans and here's what's ahead. yields were on the move higher overnight. the latest look, they're muted, but we hit some significant levels and almost 15-year highs ahead of the fed meeting this week and even though they're widely expected to pause. our guest warns it's not good news for stocks and investors who think otherwise live in a fantasy world and he's here to explain what he means by that and the one sector where he's seeing opportunity. plus, what's the cost to the rest of the economy if the strikes continue against the big

three automakers? james geller is back and he's crunched the numbers and he sees the perfect storm forming on the horizon. he tells us where and who could feel it the most and the window for bob iger to get a good deal for abc may be closing so says one of our guests. we'll have the latest on disney later this hour. let's begin with the marks, and we do have green. some modest gains here and almost identical in percentage terms with the dow up 96 points and the s&p up 12 and the nasdaq up 29 and this comes despite the headwind of higher yields and we'll focus on the ten-year. at last check that brought 4.31% and evernight, upward, and you can blame it on japan and the point remains if we were to close there and some would be the highest closing level since november of 2007 and again, this is the area to watch losses on instruments like the tlt and the etf that for years have outperformed the market and are gathering the move of investors and the short end is a sticky

hire, as well and almost 5% on the two year and almost 4.5 on the five. we begin with the latest on the autoworkers strike and ford and stellantis are back at the bargaining table after holding talks over the weekend and gm was there yesterday. shares of gm are lower 1 to 2% and how long it takes to reach an agreement. treasury secretary janet yellen told cnbc this morning it's too early to tell about the broader economy. >> i think it's too soon to be making forecasts about what it means for the economy. the important point, i think, is that the two sides need to narrow their disagreements and to work for a win-win and a contract that's good for the workers and for the industry, as well. >> so how are the negotiations going? phil lebeau is outside the jeep plant in toledo, ohio, where uaw members are on strike. phil, what can you tell us? >> kelly, i'd say the

negotiations are going slow. if you read the comments from both sides and if you look at how far apart they are, there's not a whole lot of progress. in other words, we don't expect an agreement any time soon. that could change, but at this point, here's what we're expecting and you have a couple of things happening and uaw president sean fain calling for pay raises, he says those are a no go. as you mentioned ford and stellantis are back at the negotiating table today and they've gotten no read on substantial progress there and the white house is sending a team to detroit, not to mediate, but to facilitate discussions between uaw and the big three automakers. this strike has stopped 15% of big three u.s. production and it's 12,700 uaw members who are on strike. 5800 here in toledo at the jeep plant owned by stellantis.

as you look at shares of ford, keep in mind the uaw counterpart in canada, its contract with ford expires at midnight. there could be a strike tomorrow and they may extend negotiations, and that is something that we could see develop tomorrow which would put pressure ford and they don't have a ton of facilities on canada, but they have some. gm and stillancis are after ford when they are uniform north of the border. kelly, at this point, it's one of those cases when we will see discussions pretty much on the regular basis my expectation, but i'm not getting any sense that they are making quick progress in terms of reaching agreements. >> no, and it sounds like workers are pretty pleased with a lot that the uaw has been doing and they don't tell the workers where they're going to strike and it's kind of a surprise to everybody and they want the workers to benefit and they feel this disparity needs to be addressed and it sounds that in the very early days,

there's an attitude that we're in this together and let's wait it out. >> i cannot tell you how many uaw members i talked to last week or today who said the wage tiers, it has got to go. those are in place when gm and still aventis and ford gets's similar contract and in the 2009 and 2010 timeframe and they were put in place at least as they were initially hiring workers, that makes sense of the time given where they were in the big three and it doesn't make sense anymore, almost everyone i talked to e kelly, veterans who have been in the uaw for years say it's ridiculous that there are some people making $8, $10, $12 more than the person next to them and they're doing the exact same job. >> some of the numbers making the rounds are pretty eye-popping. is this correct and these come from wells for example owe that

the big three current total labor costs are $66 an hour and that includes benefits. if the demans ds are met it wou grow to $166 an hour and dramatically different than what tesla is paying. >> everything goes to $136 an hour. if they don't get everything that they're asking for it's going to be dramatically lower and that's the expectation that it's going to be somewhere between the 66 and 136. look, most people are focused on a% a percentage increase, and that's the prediction of those who are familiar with this in the auto industry, these negotiations. it doesn't mean that will be the final resolution, but that's the expectation and still a hefty increase, but still not the 40% that the uaw is pushing for right now. >> phil, for now, we'll leave it there. thank you very much, our phil lebeau in ohio. cost of a projected strike for the big three are pretty

forward to calculate. it poses a bigger risk to auto suppliers and the whole supply chain with the u.s. economy overall. joining me now is james gel gelard at rapid ratings and what stands out to you as you see the ripple effects of this. >> good to be with you again. any time there's a strike there are two major parties that are facing off and then there is a lot of unintended secondary consequences to a lot of people and a lot of companies. in this case, i think it will mostly be private company suppliers as you go up the supply chain because big three are in pretty good shape from a financial health ratings perspective and you have stellantis at the top at 89 on a 100-point scale and gm is second at a at a 66 and they're the top

tier, and the boshes and lears and the private companies have been pinched in the last three or four years and they'll have a lot of fallout. >> is there any way to gauge kind of, for every one worker -- i'm just throwing this out there at a big three company, maybe there are six others who are affected up and down the supply chain. i'm just trying to get my arms around the scope of this because in the past the big three was a huge pillar, huge. enormous pillar of the u.s. economy or the supply chain. i don't know if that's shifted with the rise of evs of where cars are produced? >> well, i agree. it has shifted certainly geographically. a lot of the top tier ones, for instance, are non-u.s. companies and many of them are u.s. subsidiaries so the supply chain itself is global. no doubt about it. the workers are global and the union characteristics are very

different and they're not unionized, but when you start talking about ev, you throw a whole different dimension in here because ev production requires fewer suppliers. the drive train of an ev is much simpler than it is for an ice engine and therefore as everyone is looking forward, they are trying to calculate just how many suppliers and how to protect those suppliers is going to be the real challenge. so i think we are at a bit of a s seminole moment here and the shift and the perfect storm of issues that are affecting public and mostly private companies in the pace and then you throw the union -- you throw the strike on top of it and you throw the dynamic and the supply chain perspective. >> do you think the suppliers would be putting more pressure on the union? it reminds me of what's going on with drew barrymore's show route now if you'll forgive the

analogy. sh she wanted to keep going to respect the other people's jobs while supporting the strike. even while we support your goals the rest of us are at risk here if this doesn't wrap up and at what points in the terms of weeks or months do you think it might come? >> i'm sure drew would be thrilled she got a cnbc mention today, kelly. i think there's an ecosystem here of players upstream and downstream that have a lot of invested interest together, there's no doubt about it, but you have the two powerhouses and the oem or the three major oems and the uaw going at loggerheads. everyone else plays a backseat to that, but when you think about the supply chain challenges, the smaller suppliers and the private companies in particular, they don't have that kind of leverage on the oems. if their costs go up as they are from a labor perspective and the

cost of goods perspective and absolutely from the cost of capital perspective and you throw the three things on, you don't have the ability to pass the costs on to the oems and they won't sustain it or tolerate it and you have a problem that you go further up into the private companies and they get weaker because of the elements of the perfect storm and they don't necessarily have the staying power, and if you keep in mind the dynamics over the last few years where companies have had very ready access to capital and very cheap cost of the capital and through covid an injection of even cheaper capital to sustain smaller businesses and that doesn't allow companies it survive where the financial health is deteriorating and the core strengths are looking out two to three years, the core health scores and they've deteriorated even more. the auto sector is the lowest rated group across the industry and they've faced a lot of strain and they've been

sustained as it is harder to get and costs more. it will be a challenge for the oems to handle that supply chain. >> i want to make sure i know what i heard, that they're fragile in the entire coverage universe. let me ask you one more piece of news, we learned that the canadian bank is backing off its support for auto financing and at a time when most people experience this as high-ticket prices, you know, okay, is my car on the lot or not and there is a auto supply chain action for quite some time. >> that's absolutely right. when you throw on the consumer finance challenge and either financers backing out or just the high cost of financing whether you're leasing or buying a car, i do think they're going to see an impact on gross sales across all types of cars. you're seeing a little bit of the used car market and pricing

come off a bit, but you may see that post-strike bouncing back a little bit as people were looking back to either buy used cars instead of new or hold on to cars for a longer period of time and the delay upgrades and the cost of cars is simply going up and it's out of reach for a lot of people that has, again, a ripple effect all of the way up through. so the uaw has a real vested interest, i think, to get through this negotiation quickly and the oems have a real interest in getting through this quickly. that is never necessarily a good recipe for people actually getting through something quickly, but the market itself will certainly benefit if this ends with a reasonable resolution pretty quickly. >> jim, thanks so much for joining us and giving us the fuller story. >> appreciate it. jim gellert. we're less than two week away with a possible shutdown

with funding set to expire in the end of the month and oppenheimer chief investment strategist is downplaying the drama and he writes few politicians can opportunity for political career suicide by voting to shut down the u.s. government and we've seen it happen many a time. let's go out to emily wilkins out on capitol hill. what do you hear? >> lawmakers say they don't want to shut down, but we seem to be headed for one. we are less than 13 days away from the government shutting down. we have gotten an agreement between two different groups of republicans who have come together and said hey, we have a plan going forward. it's not clear that that plan is actually going to be able to get to the finish line. the details of the plan released this weekend include a number of different things such as an 8% cut for domestic programs and not including military and veterans programs and several items for the border and the republicans want to begin

building the border wall and limits on asylum. however, even though this agreement shows a step forward, not everyone is onboard. there have been a number of concerns from hard line republicans who say that this deal does not go far enough. congressman matt rosendale tweeted over the weekend tweeting that this was a continuation of nancy pelosi's policies and joe biden's budget. you also had congressman matt gaetz come out and threatened to vote against this bill and he's adding even one more factor to the mix. he says in addition to voting against it, if mccarthy were to vote against the democrats he would move mccarthy from his leadership position and that complicates things all around and the fact of the matter is even if republicans are able to get the stopgap measure through the house this week, it is certainly dead on arrival in the senate where a lot of democrats are not supportive of these immigration policies and kelly, that means with less than two

weeks out, we still don't have a solution for funding the government before september 30th. >> and that's where we'll leave it, at a crossroads we've seen many times and we'll see where the events take us. emily wilkins. still to come, bond yields on the rise with the bond yield reaching fresh 16-year highs and why that's bad news for stocks ahead of wednesday's fed meeting and investors when say otherwise, they're living in fantasy land. that's next. from tesla to iran and taiwan, geopolitics dominating the headlines this week eend. our rundown with fred kemp and the foreign exchange and let's get a quick check on the markets with a 72-point game all session long and modest increases for the s&p and nasdaq. the russell's underperforming down a third of 1% as regional banks lag and the yields on the ten-year, 4.31. we're back after this. ♪ ♪

>> this is "the exchange" on cnbc. (sirens) [due at target in 5!] copy that. make a hard left down the alley. network's got you covered. [please confirm requesting back-up.] -changing route. -go. roadblock ahead. ...back up, back up... reverse! reverse! next level moments, we're 30 seconds out. need the next level network. [north corridor, hurry!] -coming through! -or 3, let's go. the network more businesses choose. transplant received. at&t business. (swords clashing) -had enough? t-no... arthritis.d. here. aspercreme arthritis. full prescription-strength? reduces inflammation? thank the gods. don't thank them too soon. kick pain in the aspercreme.

welcome back to "the exchange," the ten-year treasury yield rising approaching its highest level since 200 and we're down at 4:31 right now. my next guest says investors who think stocks that continue to do well are like barbie, living in

fantasyland. joining me now is coal smead. always appreciate a good barbie reference, cole, welcome. >> thank you. good to be with you, kelly. >> this is the biggest debate. a $20 trillion debate on how big the number is and do interest rates stay here or not? and you are firmly in the camp of they will and walk us through why you think that is and what it would really mean? >> it's a great question, kelly and i'm also having the blessing to come to you guys, and the third iteration is a successful career, and so it's good to be here. >> let's just put it this way, kelly. i'm 39 years old and in my working career there's really only one other instance of short-term interest rates at this level in 2007 before things fell apart and so we look at this as we've had a 500+ basis point great rise on the short end of the curve, and in effect, the long end of the curve is

saying we're not going to have to deal with any inflation going forward. if you look at the tips market it's yielding 3% and people pricing in 3% inflation and anything worse than that in inflationary terms is very tough for stocks. if you go back and look at the valuations looking back to the high of '21, we really haven't changed stock valuations relative to interest rates and again, barbie didn't want to live in fantasyland either and there are way too many kens out there that think you'll be fine. >> you have a lot of pick in the energypace and we talked with bi about the homebuilders. >> this would be a good junk you are juncture to ask, although i suspect you know the answer and what is the stock market that you think can hold up here. >> for how poor it is for the broad indice. wee not saying all stocks have to do poornd that's not the big idea. to your point, i'll give you a couple of other instances wher

've had this. it's called the 19s and real returns for stocks are poor and you lost real money then and then the 2000s and interestingloi back to those two prior eras despite the money and they have wealth in the energy business and i believe we're probably the most bullish people on equity analysts in the stock picking world and at the same time we're bringing people up to speed about how excited they should be and how high the returns on capital are and how good the pital outpatient and you can find it as good as technology companieout there in the stock market and the energy business, bubecause it's asset intensive or it's not asset like, they're unwilling to en look at it. >> i hear you and you were ahead of berkshire on other things going on in the energy space, and i look at it from a 30,000-foot pot of view, the world is moving away from fossil fuels and are these stocks ever going to command, you know, a price that respects the return

power thaty have, and i know it sounds ludicrous to ask, but wi the going away add distinction? just handy cap what people c get here and they get results. decided that carbon is a bad thing. we'll solve carbon and that's the history ofuman ingenuity and that will never change as long as humans are on this planet. so i point that out because the question would be, if we solve carbon, who benefits the most? the ironoe that answer is it will keep carbon in businesses for the longer tale than people ever thought. you can see a shorter tale if we don't solve carbon. demand continues to grow and coal is not oil and demand is

growing in asia and africa and not growing in the western culture. >> it's a good example oa stock that's left for dead. >> there's no market cap there, kelly and that's the irony and the big, institutional players and the big neutral fund mpanie ouof this. opportunity and the firms that have the ability to move capital around like we do and what are the blessings and they are completely trapped out of this. thank god. >> it now makes me think back to philip mris and what that stock did for investors for a very long timefter the big ment in the '90s. big final question on lennif i'm not mistaken i had a t reaction to earnings and this is a name that screams very highly for you guys home builder confidence is starting to pivoand reverse. do y stick with it here? >> follow stewart mill okay, he's letting the street know we are going to continue to build even to the detrimt short-term margins because the need is so large they're playing

the long game and all of the wall street analysts are going to focus on what's going to happen in the next six months. they're being foolish. follow stewart miller and he's many billions rich richer than the people criticizing it. >> always appreciate your time thank you for joining us today capital management. mead home >> thank you covera of the fed decision thiswednesday live from washington, d.c. tyler and i will both be there and it starts at 1:00 p.m.5% for its worst month in a year and as we head to break, take a look at the dow heat map with apple leading the way up more than 2% today, despite today's gains, though, apple is having its worst month since december and tracking for back-to-back

monthly ss f tloesorhe first time this year we're back after this. ♪ ("un monde pliable" by jeongpill song) ♪ ( ♪ ♪ ) (camera shutters) ( ♪ ♪ ) (camera shutters) ( ♪ ♪ ) ( ♪ ♪ ) ( ♪ ♪ )

welcome back to "the exchange." here are the markets holding on to quarter-point gains dow up 106 and we're up 84 at the moment led by apple. some of the movers we're watching this hour include shares of jetblue down more than 5% today you could argue for no real reason and evenmore significantly hitting their lowest level in over a decade and the chart goes back all of the way to 20 tw12 and we're talking about a less than $5 stock and the jets etf are moving lower, as well with headwinds on this space. of course, you saw them lower earnings guidance for the third quarter and we talked about that

last week and the red continues with even united and delta down less than 2% retail is also taking a hit with target down 3% to its lowest level since the summer of 2020 3% drop today. dollar general, dollar tree, those stocks part of the sell-offs and we're talking 2019 lows and pfizer and jm smucker, these stocks are all at 52-week lows right now let's take a look at clorox which is down since february and not quite as bad and last month's cyber attack can result in first-quarter results and it is still causing widespread disruption it operations as they've been struggling to bring those systems back online and looking for other ways to keep procedures going for more on that story head to cnbc.com over a third of a percent today. over to tyler mathson for a cnbc news update. thank you very much.

israeli prime minister benjamin netanyahu is meeting with elon musk to discuss artificial intelligence and they're meeting at the tesla plant in california and both pledge artificial intelligence after musk has anti-semitic -- taiwan says the chinese military is harassing the island after beijing sense 103 warplanes in a 24-hour period to buzz around the defense perimeter. the defense ministry in taiwan says this is a daily record in recent history china claims taiwan is part of its territory and has been increasing the number of military drills around the island as tensions grow between the two and with the u.s california is suing oil and gas giants for allegedly deceiving the public about the risks of fossil fuels. the lawsuit seeks the creation of a fund to pay for recovery efforts following natural

disasters. the industry trade group, the american petroleum institute says climate policy should be debated in congress, not in a courtroom. back to you. >> thank you tyler matheson we'll run through them with atlantic counsel ceo brad kemp and he joins me next here on "the exchange. stay with us. and now cnbc trend tracker ♪ ♪ (bobby) my store and my design business? we're exploding.

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welcome back to "the exchange." we're kicking off the week with big geopolitical headlines five americans wrongfully imprisoned in iran for years

were released this morning as part of a $6 billion prisoner exchange with the u.s. it comes as the united nations general assembly is kicking off this week with president biden set to speak tomorrow and over in china embattled developer country garden faces another interest deadline and recep tayyip erdogan is inviting elon musk to build his next tesla factory in turkey as "the wall street journal" reports that saudi arabia and tesla are in early talks to build an ev factory there, as well, but musk earlier today refuted that on twitter saying the story is, quote, utterly false let's make sense of all these headlines with fred kemp, president and ceo of the atlantic counsel why not? >> geopolitics are now the order of the day for him, i guess. >> it's the u.n. general assembly and for all of the heads of state, everyone wants to meet with elon musk he has six factories, four in

the u.s. and one in germany and one in china and he's looking at mexico and he talked to erdogan and erdogan wants to have one of these and you have the french, the spanish and the italians and india may figure in this, but turkey's really interesting because it's had a 100-year history with ford and it's used to automobile manufacturing and it can ship to third countries and these types can have some legs >> we also had the report that there was supposed to be this big defense deal with saudi arabia and rtx and it built this missile defense system and that fell apart in the last minute over sanctions and i guess my question is where should the u.s., not that he's going to ask them want musk to bell these factories and where would it not like to see this kind of investment >> i'm not sure elon musk

listens to anybody about where he should build the factories and the fact of the matter is we talk a lot about friendship. it is always great when we have this setup with like-minded countries or countries that we really want on our side so that would be a really good outcome in terms of saudi arabia, one of the things people aren't going to be talking about much this week is the whole pros pekts of normalization between israel and sought rabia and that could be a huge breakthrough and if you look at saudi arabia and that context and that could be one of the foreign policy breakthroughs of the biden administration and that could play a role as well >> that is a breakthrough that could bring oil prices down and i'm curious about this all aligns and cathie wood will be on "fast money" tonight and catch that around 5:30 p.m let me play for you what else we heard this weekend as we saw and tyler mentioned in the news

update a record number of chinese planes in the taiwanese area more than 100 close to the island and former president donald trump was on "meet the press" wrrt where he refused to say whether or not he would provide military support to taiwan with the invasion to china and take a quick listen. >> only stupid people would give it away. i heard the other day desanctimonious say he was going to do this or he was going to do that why is he saying the strategy in why is he saying that? i wouldn't say that. >> you don't take it off the table? >> i don't take anything off the table. >> what's your reaction to that? >> we're in the beginning of the tension with china and it has a slowing economy and that will take some of the resources unless they fix the state control of the economy and the party's leaders which i don't think that's going to happen and that's going to be the case and

on the other hand it's building up its military and ambitions are going around the globe and so what we need to do is a steady set of messaging to china and to our allies of china and the 2024 elections, it could be anything but steady in that respect, and i think the chinese will see the messiness of the domestic politics and trump is playing true to form, but what's really to be watch side will their autocratic system will get activated or will our democracy get its act together in 2024 to be steadier in messaging who we are around the global stage. >> some of those changes lately with leadership certainly raised eye eyebrows about just what is going on there as they prepare for more of an incursion go a had the and before that, you had a foreign minister who was removed and a couple of generals on top

of that so there is instability inside, and it is so opaque that we don't know what impact it will have in the end, and it doesn't help xi jinping that it is so much faster than what was anticipated and there's a lot going on in that country and sometimes we can't influence that and what we can influence what we do, and we have to be steady on with our alliances and steady with ukraine and take the commanding heights of technology and we have to make the democracy and that we can control and what we can't control is what's up and down for china. >> let me ask about the u.n. and obviously, putin and xi are not there, but neither is macron and neither is sunak and neither is modi why? >> well, president biden has the stage to himself and so his speech will get a lot of notice. i think the u.n. which used to be the place tocome to take care of global affairs, now we

have what i call a muddled multialignment so countries don't want to choose china and they don't want to choose the u.s. and you have the brics and the abraham accords and so you're seeing this proliferation of regional and even global organizations, and the united nations is fighting its own relevance and it's doing this with the climate and the planet is heating and they're not doing much to solve the war in ukraine either the second leader of the unsaid the u.n. wasn't created to bring us to heaven it's created to keep us from hell, but if you look at the war in ukraine, it hasn't done a good job for that either and it's battling for its relevance and some people wonder whether it's worth coming here and it's better to have it than not have it, but it is fighting for its relevance. >> i just have to dwell, the u.n. battling for its relevance feels luke a big deal and in

some ways they're hard to measure in the near term, but are worth fuller treatment, but i don't want to let you go, fred, without quickly asking about this prisoner swap unlocking $6 billion in assets is a big number. what does that tell you about u.s.-iran relations and about the prospect about freeing gesh kof iks? >> it still cares about people, and it still cares about human rights and still cares about humanity and a lot of people will criticize the president for the big price tag for some lives, and i still think it shows what we stand for in the world community vis-a-vis iran the real question is can the administration somehow influence china, so that iran doesn't deliver as many weapons with russia to continue to fight its war with ukraine and that's the trilateral that i'm watching

with the russia and china is becoming more and more troublesome. >> fred, thank you it is shedding a lot of light on the world. thank you. >> fred kemp from the atlantic counsel. still to come, homebuilders are feeling pessimistic for the first time in a long time despite the continued need for 340er more housing inventory as we go to break, take a look at the covid trade, despite the high numbers anecdotally around here moderna down 8.5% today. pfizer, bion tech and novavax, and it could be the worst day of the year all of this after the pfizer cfo said the company expects a 24% vaccine rate for osrshis year and those numbers are lower than what they were expecting "the exchange" is back after this 3 to address operations issues? we can help with that. can we provide health care virtually anywhere?

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♪ ♪ welcome back the lack of homes for sale had been giving the nation's

builders a boost in recent months, but higher mortgage rates seem to be finally taking their toll diana olick is here on set with me in the house. welcome. just in time for -- what was the reading this month >> the reading this month was not good affordability is hitting too hard and as a result, builder sentiment went forward and it fell five points to 45 in september and that according to the nahb-50 between positive and negative and that follows a six-point drop in august a year ago sentiment was at 46 builders are blaming, as we said, high mortgage rates which went over 7% at the end of june and have not come back below that line yet, seven points to 3% as a result, builders are going back to incentives and 32% said they cut prices in september and that's compared to 25% in august and the largest share since december of last year. average discount, 6% of the sentiment index's three components and current sales

conditions fell six points to 51 expectations for sales in the next six months also fell six points at 49 buyer traffic five points down to 30. despite the drop in sentiment, builders say they're still benefiting from a lean existing home supply and a special question was added to the survey about who a buying and builders said 42% of their buyers were first-time buyers and that's much higher than the historical norm which is 27%, but i have to believe these are older first-time buyers with higher incomes. >> and it is interesting about cutting prices and i'm interested to see if you start to see that effect nationwide and ware seeing upward pressures. is this because this is a broader universe than just -- we think about the names that are in the home builder index. will their trends be holding up better, do you think >> lennar did so well next week and why is home builder sentiment down if the homebuilders are reporting fantastic earnings and they broke it out for me and they said 12% of this sentiment index

is the big production builders and over 100 homes per year. so they broke it up for me, very nice of them and actually that 12% said their sentiment was also 45, and that doesn't speak well going forward and we're looking at past quarters when they were making deals when rates were down in the 6% range going forward and will they be able to hold that up especially with the bold cases has been this growing market share thing where they say the smaller players struggled with financing and with the crept thing in this environment and that might suggest they stay on their back foot a little bit. >> especially if they have incentives and buy down rates. >> tiediana oleec. it ain't helping the stock much in today's session that's still in the red and while my next guest has a buy, he says selling its tv business is key and the time to do so is now we'll talk about that next and a quick programming note, don't miss a cnbc special, cnbc

"leaders" with ken griffin sara eisen will sit down with the investor and why he's sitting on the sideline of the 2024 republican presidential primary. big implications for that and it's at 8:00 p.m. eastern. we're back in a moment (♪ music ♪) (♪ ♪) the walking tree is said to change its entire location in pursuit of sunlight

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welcome back to the exchange. disney getting initiated outperformed at raymond james today. setting potential for free cash flow generation. but acknowledging the headwinds from linear tv which he addressed in our interview in july. >> they may not be -- disney. there is clearly creativity and content they create that has courted disney. the business model that forms the underpinning of that business and that is delivering great profits over the years is definitely broken. we have to and we have to call it like it is. >> with interest for abc from next start media and byron allen my next guest said -- should not wait too long to get a deal done or it could backfire. internet and media analyst for rosenblatt securities. barton welcome. why would it backfire? >> i think what he said is the

model is broken. the value won't decline over time. if the pressures continue to mount. you talk about this right now there are buyers out there today. there might not be as many buyers tomorrow and the price might not be as good. i think they've already said their position so they should act on it rather than leaving everywhere everyone that works there in limbo. >> is a the first offer is the best offer. i don't know if realtors would agree that is true. is that what you are talking about? >> to a degree. the reason they would sell a business that has been profitable is a secular pressure. the secular pressure will mount over time. it is not going to ease over time. their minds are made up that they see this coming so they should act on it. and every day a is a day the value could slip and people who work there could leave because they're concerned about the future. >> are you surprised there

haven't been any other bidders mentioned? >> i'm not terribly surprised because i don't know they formally i know it is a process. the other natural bidders could be private equity. they may not be as public unless there is something publicly that disney is running. next star has talked about this in some conferences. byron allen i think he likes the position himself very prominently may be ahead of the process. so, i think it is where it is. i think if they are going to do this they should move ahead. >> how significant was the cash raised b for disney and what might come next? >> i think there they are 80% interest in espn plus the flanker cable networks that could generate 15 billion for them. they could get close to 6 billion may be a little less for the abc network and the tv

stations. which is not transformative for disney from the cash raised. it is transformative from investment you get a jv partner let's say espn suddenly you're left with an equity that is really theme parks and content businesses. as its core driver. and streaming services. those are things that i think investors to get excited about. i think that would help sentiment for the equity. help the multiple and help those people employed at disney feel confident about their future. >> you would feel excited about the streaming business? >> i'm less excited about the streaming business of. i'm very excited about their thing park business which is generally shyly iconic. they will talk about that this week. i'm very excited about their content library. i think streaming services will tend to consolidate around the largest platform. so distance plus is a great

focus brand right now. over time i'm not convinced that doesn't become part of a larger tech platform. i think that is the future. it doesn't have to be today. i think the street would see that in equity and i think that would be a story that people could get behind. >> would you rather they not buy out the rest of who? >> i think that i think they can manage whatever kind of comes after from that valuation process. i am definitely more on the conservative side of how much i think disney will have to play relative to what comcast to put out there. we will see. none of us know until the thing is done. i think that hulu i'd rather have them owning and controlling stake in hulu and the tv networks. i think that is a good trade for them. >> barton thank you for your time today. that does it for the

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>> welcome to power lunch. i hope you had a good weekend. coming up three strikes and they're out. autoworkers striking as certain plants. actors and writers still out. now healthcare workers could be set to walk off the job in the next week if kaiser permanente. we will get the latest on all of these battles. plus we talk about the possibilities and the possible problems of ai with