♪ (lovely day) ♪ ♪ (lovely day) ♪ a bank that knows your business grows your business. bmo. good wednesday morning i'm sara eisen with carl quintanilla live from the floor of the new york stock exchange stocks are higher ahead of the fed decision this afternoon. guggenheim partner ceo anne walsh joins us in just a moment with the number one thing she's watching from today's meeting. >> and airbnb releasing some updates, including lower pricing in an effort to take more share from hotels. an exclusive with brian chesky is ahead, but the stock up 66% this year. and we continue to await the opening trade of klaviyo

what arm and instacart's price action will tell us about this debut. topping the tape for us this morning, fairly obvious, that is the fed decision ahead of that, rates retreating a little bit with oil holding pretty steady. b of a today did up its year-end price target on the s&p to 4,600. about 7% upside, while citi says that global growth is likely dom in higher than predicted let's bring in cnbc senior markets commentator, mike santoli. and that bullish note on growth is probably one reason why yields haven't fallen much >> that's for sure that, the fed's message of higher for longer. and just in general, it's all the things we see as headwinds are, as i've been saying, coming against an economy that's already been humming pretty well also, the fed in a pretty good spot, you would have to say. the fact that they basically communicated a likely pause, the market internalized a likely pause, rates roughly where they need to be if the whole debate is about what's the pace of potential cuts next year, that's not a terrible place to be, at least in terms of the market obviously, we could have, you

know, complications to that story. we could have another hike in there, we could have a surprise on inflation but i think it all fits together okay, you know, very low conviction, low momentum market that really kind of doesn't know what it's next supposed to be pricing in i think the s&p is like 3% up or down have even giving a hint at the new directional move >> what's the leadership in the market right now and how has that changed >> it's grown a little bit less cyclical, a little bit less optimistic, a little bit less kind of risk-seeking and a little more defensive. that's one of those things, as you say, as this consolidation period in the market goes on, it's, you know, going on two months at this point you've really lost a little bit of that sense out there that we have, a strong belief in the underlying momentum in the economy. that's the market's message. credit is saying, no real big problems here, but in terms of the rate of change, it seems like we're starting to worry a little bit more about how the consumer and the economy are going to be able to absorb rates and oil prices where they are. >> a couple of external factors

that we're being talked about that would buffet the fed. one is the strike, pretty obvious, depending on how long it lasts the other, as b of a says, if a shutdown happens, no data. fed would be flying blind, which probably means, net net, they would most likely stay pat in november >> that's right. it's a few steps down the line before you get to that point you have to make some assumptions about where we'll be in october the one comfort i would take is the strike something like a government shutdown, even to a degree, supply-driven oil prices going up i'm not going to say they're self-correcting, but usually, once they go back to work, you have a catch-up in auto production once the government is no longer shut down, you have a catch-up in the fiscal side so the point is, it's not like the new run rate of growth, it's more just, this complicates a potentially already vulnerable growth story >> i think the uaw strike thing, though, is not a risk as much more growth, which sure, it is, but it's really on the inflation story and could exacerbate supply chain issues and car

prices, which have been an important input into the lower -- >> there's no doubt about that but to me, when you know the actual cause of the spike in inflation, it's going to end >> transitory? >> and if you no longer have a fed that's looking for excuses to continue to raise the alarm on inflation, if they want to say where we need to be, they'll de-emphasize it. >> i don't know. it depends on how far along they are in that not wanting to -- they're still sort of paranoid about inflation. mike, thank you. let's stay on top of the fed's decision our next guest believes thefed is done. hikes are likely over, and the bigger story she's watching today will be the updated economic projections joining us now is guggenheim partners investment management cio, anne walsh. anne was named to barron's list of 100 most influential women in finance. hello, anne. nice to see you. >> nice to see you as well >> talk to us about what you are looking for as far as the economic projections in the dots >> so i think we're going to get

a sense of where the fed believes they need to go at this point in time. we believe that the fed's probably on hold, whether they signal that with a bit of a hawkish tone is probably to be expected they don't want to have to reverse course and start raising rates again. but we don't see that in the projections. i think what will be probably more informational is where they see the future neutral rate to be and whether they can start lowering rates into 2024 before we even get to that, i think we're going to see continued slowdown in the economy and lower inflation. and you know, that's the trajectory but nothing moves in straight lines, as was just noted oil prices have been increasing, and that, of course will have an influence on inflation in the short run. >> so, anne, how are you guys positioning at guggenheim around

the soft landing story are you gearing up for something, a more pronounced recession? >> so our view is that we will see a slowdown in the economy. whether it's a full-blown recession or a type of rolling recession or just a significant slowdown, i think that's hahead of us. the fed has done a tremendous amount of tightening into this and through this cycle you know, 5.5% fed funds with quantitative tightening, ie, the reduction of the balance sheet that is still ongoing in the background and so i think conditions continue to be tightened for investors, as a result, we're really thinking about how to position coming through a slowdown and that means being more defensive, particularly at this point in time. now the opportunity set exists very nicely in investment grade fixed income

you're getting yield, which we were getting last year or the year before. so investors are getting rewarded to be patient and defensive into this cycle. particularly in investment dgrad corporates and structured credit, where we get 5.5 to 6% yields very attractive at this time >> what about the equity market? anything look attractive there >> equities are a bit concerning, because i think they are overbought at this time. p\e ratios were really -- p\e ratio expansion was really the -- multiple expansion was really a driver of performance this year, and that concerns me with regard to the broader markets, as we were just listening in, earlier, we were talking about the shift towards defensives i think the market is moving in that direction, albeit a little bit slowly and so i think that being thoughtful with regard to positioning at this point in time, but will hold investors in good instead i mean, we're seeing even in

high yield, though, there's still investment opportunity, but we're going up in credit quality there and being more defensive in terms of covenant protection, industrial protections, at this point in time the fed's really right to slow the economy down, drive down demand, and ultimately, usher in the slowdown of this recession that we're projecting. so being thoughtful and being defensive at this time makes a lot of sense >> anne, a lot of skepticism among some that you can actually get back to a real 2% target i would argue, maybe you think it's -- of the people who are watching this closely, you think that is possible, maybe, or getting at least close to it by the end of '24 >> absolutely. i think the fed is going to continue to remain tight the higher-for-longer story is playing out right now. the fed's not likely to want to pivot very soon. they don't want a repeat of the

1970s, where they would lower rates and then inflation would rear its ugly head again so what they're really looking to do is to hold steady, to make sure that inflation is managed, and we do believe that we can get 10 to 2% target, some time in 2024. at that point in time, they're going to reverse course and rates will fall. >> the long end of the curve will fall before that, because of expectations on inflation that trades with inflation and so as a result, we would see that the ten-year treasury, which of course issed a record levels right now, it will reverse course and work its way back down into the lower part of the trading range. we've really been in a trading range of about 3.25 to 4.25. obviously, we're a little bit on the high side of that right now. but as we go through 2024, we would anticipate that the ten-year would retreat from these levels back down to the lower end of the trade range

probably not through that trading range. it would have been to some sort of really severe financial event, which we're not projecting to cause any kind of move in the ten-year treasury well below that. >> in the next, what, year or so is that what you're -- what's the time frame there >> time frame is, we'll start to see the ten-year reverse course probably later this quarter, sbe certainly into the first quarter as we continue to see the economy slow down, and these recessionary elements really come to the forefront. >> got it. anne, really good to hear from you. get your sort of world view, market view. appreciate it, anne walsh, cio of guggenheim. >> thank you getting a news alert this morning on bank of america for that, we'll turn to leslie picker hi, leslie >> hey, cq bank of america is hiking its minimum wage to $23 per hour next month that means the floor for annual pay for full-time employees increases to nearly $48,000. firm said in a press release

thousands of employees will be exacted by this. bank of america doesn't break out a specific number, but the increase is $1 higher than the bank of america's prior minimum wage of $22. bank of america has said that it plans to raise minimum wage to $25 an hour by 2025. that's a 121% increase since 2010 and $23 an hour is broadly higher than almost all of bank of america's banking peers, although some banks do adjust their minimum wages based on location it's also more than three times higher than the federal minimum wage the majority of u.s. states have their own minimum wage laws that are more, but 21 states default to that federal level. working 40 hours a week, that minimum wage equates to just over $15,000 a year. >> having just come off a discussion about wage growth and inflation, thank you leslie picker on b of a. meantime, ubs staying

bearish on retail, but picking a few names can outperform in the near-term. we'll get to that next plus, the ceo of airbnb with us after some new announcements related to prices. those cleaning fees may finally be dropping. all of that and more when "squawk on the street" comes rit ck we're holding on to a gain and pushing a little higher, up 185 on the dow (ella) fashion moves fast. setting trends is our business. we need to scale with customer demand... ...in real time. (jen) so we partner with verizon to take our operations to the next level.

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some retail calls to get to this morning, including jpmorgan downgrading dollar general to underweight after hosting the company's cfo at a conference. concerned about consumer spending, a bit of a catch-up part of the story, considering the stock is trading at the lowest level since is 2019 but the dollar stores have been weak, but overall retail lately has been weak. the s&p spyder retail etf near 3.5 month lows, potentially because of some of these headlines like student loan payments and higher oil prices >> we've been through the ringer on those prints. another retail call on our

radar, the soft line slump from ubs. the firm says it expects a slowdown in the sector to play out over the next six to twelve months joining us this morning, ubs managing director, senior retail skpeshlty soft lines analyst, jay soul great to have you back fascinating note which we talked about yesterday, you've done some survey work, basically looking at holiday spending intentions and i wonder if you think we're getting to a point now where the consumer is starting to make some tougher choices >> well, carl, thanks for having me on the show you're absolutely right. the consumer in our sur vey work is telling us that they feel a lot more optimistic about how much they want to spend in this holiday season in july, they were relatively positive, in september, that positive attitude went away and people are getting really cautious about spending. overall, not just on holiday, but over the next three months >> talk to us about spread about the respondents who say they're going to spend more versus less? >> one of the questions we asked in the survey, do you plan on

spending more or less on christmas gifts this year? and in july, we got some answers. and in september, we got more answers. and typically, the amount of people who say they're going to spend more doesn't change from september -- from july to september. but this year, we saw a big jump in the percentage of people who said they were going to spend less, and really very little change in the percentage of people who said they were going to spend more. and that sort of sequential change, that change from july to september is really notable to us that says that sentiment for consumer spending on consumer apparel and footwear skand accessories is really falling. >> how do you determine winners and losers in that kind of environment? >> i think it's going to be tough, overall we have a bearish call overall on the soft line space and that's because we think if consumers aren't pulling back and feeling like they have to make choices in their budget, one of the main things they're going to pull away from is apparel, footwear, and accessories. it's not going to be great for anybody, but there are some companies that have been taking

share, have great momentum, like deckers on holdings, on sneakers as well. and companies like ralph lauren. >> we've seen some pretty constructive comments on rl in particular lately. some of that's been around cleaner inventories, margin upside, and i think what cotton has done over the last, say, year and a half. >> well, carl, that's right. there's a lot of nice cost savings that will be helping ralph lauren's margins, because freight costs have fallen. but at the same time, ralph lauren is a company that's been through a lot of changes over the past ten years and really, the work the company has done to reposition itself for today's consumer environment, you know, being in places where consumers want to spend with the right kind of products and a brand that's regained momentum is something that the market isn't quite kind of paying attention to and i think we're at a point now where the company is going to start to show a lot of growth, surprising growth. not just in the u.s., but all over the world and that's what we think will make the stock go up they've done a great job and they're on the right track >> you have a pretty wide range

of retail in your coverage universe, from the department stores, to the more higher-income brands like tapestry would have to the dollar stores. are you saying universally, everyone is going to weaken here high-end, low-end, categories? >> sarah, what's interesting about what the survey data shows, it's not just low-income consumers that are feeling the impact of inflation and feeling the impact of having to start to repay their student loans. what we're really is really all consumers of all demographic types are starting to say, hey, we're feeling a little bit less good about our financial situation and about how much we want to spend over the next three months and into the holiday. so it's really not just focused on one group of consumers or one group of stocks. it's really across the board >> jay, fascinating. and we're going to find out pretty quickly here how this shakes out, as we get closer to the holiday. thanks for the time. >> early indication from nike next week when it reports earnings on the strength of consumer we're getting some breaking news out of stellantis phil lebeau has the details.

phil >> sara, take a look at shares of stellantis, the company has announced that it is going to be laying off 68 people at its toledo machining plant as a result of the strike that is taking place down at the jeep plant in toledo, ohio. in addition, it says that it is likely to lay off an additional 300 at its cocomo transmission as well as cocomo castings plant in cocomo, indiana this is the knockdown effect that we've heard about, that we've already heard news from ford and gm, that because of these strikes, if work or parts are not going to a particular facility where there's a strike taking place, they're not going to continue cranking out whatever product or having the people who are working on stuff that would be going to that plant. it's just not possible so as a result, stellantis, laying off 68 immediately in toledo and likely laying off another 300 in cocomo, indiana guys, back to you. >> just to be clear, phil, they're temporary layoffs until the plants come back

>> sure. sure >> all right >> yep >> that's something. >> phil, thank you phil lebeau. the past week has been a big one for ipos, arm, instacart going public street reactions to those ambi debuts still awaiting klaviyo's first trade of the nyse. indication is 35 to 37 we'll bring you that as it happens. stay with us but if it's using untrusted data can you trust the results? your business doesn't just need ai, it needs the right ai for your business. introducing watsonx a platform designed to multiply output by tailoring ai to your needs. when you watsonx your business, you can train, tune and deploy ai, all with your trusted data. let's create the right ai for your business with watsonx. ibm. let's create.

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food business to get to. opi cuts chewy to perform. general mills also confirmed about the pet food business. return to office has led to headwinds for the treats and wet food segments of the pet food category, as people are obviously home a lot less. also new this morning, walmart is testing out a pet telehealth business chewy and petco obviously having a rough morning. that is an all-time low, sarah, on chewy, falling below the $20 mark >> everybody was wondering on some of these stocks when covid giveback would happen. right? everyone adopted pets during covid. they spent a lot, these stocks went up so much. and then they came down pretty sharply. and it feels like it's been a delayed reaction and it's really been the economic weakness that's hurt the category even more >> meantime, european stocks set to close in just a moment. up across the board with retail stocks leading the charge here, as uk inflation numbers surprised investors this morning. both a headline and core numbers fell below expectations.

the numbers pointing to a drop in hotel prices, also airfares dropping, as well as food rising less than versus a year ago. the unexpected move throws the bank of dpengland a pretty big curveball. if they raise by 25 basis points, the 5.5% rate would be the highest borrowing level for the uk since going back to december of 2007 deutsche bank out with a note moments ago saying they expect the boe to hold rates steady following today's data that maybe gives them some breathing room to see about those lags and let inflation come back down naturally it was thought before today that they would raise, because their inflation is higher than the rest of the world. >> could you argue that it's removing one of the most hawkish central banks of developed economies in the world right now? >> if they actually pause. >> if they do pause. although it will still sound pretty hawkish, because it was a

miss and it's good to see that decline by more than double on the monthly rate they've still got to be standing hard not in the clear in terms of hawkish central banks. >> no one wants to go there yet. a couple hours into trading, we are holding on to opening gains. let's get post-to-post with bob pisani >> dp >> good morning. >> we are waiting for klaviyo to open 35 to 37 remember, we're talking 19.2 million shares at $30. so, again, following the trend, not only upsizing the additional talk was $27 to $29, but even indications higher than the initial price here so let's figure out what's going on here. glenn carell, my own friend known for many years, a lot of big ipos down here on the floor over the years how's it looking >> right now, our indication is 35 to 37 we're excited about that here at gts. and the klaviyo team it takes time to build that book, and that's what we're in the process of doing right now >> those of you who want to

figure out what time this might open, 19.2 million shares. a general rule of thumb is fair, wait for roughly 10% you want to see about 2 million shares that are offered. how many do we have offered right now? >> we want to see anywhere between 1.5 million and 2 million. so we're getting close maybe around a million or so, so we still have a long ways to go and still building that book we want to make sure everyone knows exactly what's going on. all investors have that opportunity to participate on the opening price. so we're waiting >> you're very involved in the meetings with these ipos that are coming through you're in these meetings what's your sense of the ipo market we talked with david faber and the guys about the markets opening up do you sense it's opening up >> i kind of get a sense for it. three big runs recently. with the arm ipo, with the instacart, and now we've got klaviyo. so it's exciting and hopefully this will open up the market for more to come. >> we'll see and of course, as we were talking with sara, guys,

earlier, a number of these big deals, cava now has been rather poor recently, it's still up, oddity tech is down from its initial price. ken vue is doing from its initial price. it's the aftermarket returns that you want to look for at this point >> sure, we'll see what that aftermarket brings right now, we're just focusing on klaviyo and we're excited here at gts and for the team >> and the klaviyo team is outside, guys. we're having a very big little social event outside they'll be inside in the next few minutes as we get closer to that opening i'll be here for that, as well >> they already did their cnbc interview, so they're chilling now, waiting that are opening price. thank you, bob we'll be coming back to you often. speaking of ipos, let's check in on two other major debuts. we've seen some weakness, continues to fall despite a 25% pop at the open last thursday. the stock has dropped at least 4% every day since its debut

instacart is lower this morning. that stock popped 40% on the first trade. ended up on 12 pricing at $30 per share, remember, it's now hovering below $32, more than two-thirds of ipos this year are trading below their ipo price. and just on instacart for reference, priced at $30 opened up at $42 for now at 31.90 it's such an important sentiment barometer for the overall market >> for sure, getting them to market and the follow-through. let's get a news update with our contessa brewer. hi, contessa >> hi, there, carl happening right now, attorney general merrick garland is being grilled by the house judiciary committee on capitol hill. it's his first appearance before the committee since the plea deal for president biden's son collapsed. garland asserted this morning that he has not interfered in special counsel david weiss' investigation into hunter biden's case >> knows how to conduct investigations and i have not

intruded or attempted to evaluate that, because that was the promise i made to the senate the company that owns budweiser reportedly will stop cutting off the tails of its iconic clydesdale horses sometimes this year. peta and other animal activists have pressured the company to stop that. there's no timeline for when the so-called tail docking will end, according to the "wall street journal. kraft heinz is recalling more than 83,000 cases of its individually wrapped american cheese singles the company says six customers reported gagging or choking when eating the cheese because of a manufacturing problem that could cause the plastic film to stick to the cheese. that's the news. sara >> yapi can't say that that hast happened to us thank you very much. those plastics are sticky. contessa brewer, the ceo of airbnb coming up next. some new announcements surrounding pricing and fees in focus. the stock has been a big winner

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back back. airbnb announcing it is cracking down on some customer complaints that are common, including fake listings and high cleaning fees. our deirdre bosa joins us with airbnb ceo brian chesky with today's tech check segment >> brian, thanks for being with us good to see you. >> good to see you >> a lot of the announcements that you announced this morning focused on more transparency, better affordability i want to show our audience this chart, it shows that prices are rising faster at hotels versus airbnbs. this is great for people renting on airbnb, but less so for the hosts, right the people renting out their

homes. how are you making sure that they, the hosts continue to benefit from being on the platform they're not losing money here. >> it's probably good to say, over the last year, hotel prices globally are up 10%, while airbnb prices are down 1%. this is data as of july. we want to make sure it's a win/win for hosts. what we've actually found is if hosts charge a better value, they often make more money, because they don't run at 80 to 90% occupancy rates like hotels. one of the best things they can do is provide for value, so they can book more nights, because their occupancy is much lower. we're able to see within reason, this can be a win/win for both guests and hosts >> do you expect this current trajectory to continue do you think that nightly rates for airbnbs will continue to fall >> i think that what's likely to happen next year is hopefully airbnb prices will not go up they'll either be the same, they could go down a little bit and i think hotel prices will probably rise. the reason i think that is because on the last earnings call, a lot of the hotel ceos

expressed optimism that they would be able to raise prices. airbnb has always been known as an affordable alternative for a hotel. as long as we are that affordable alternative, we can all continue to thrive >> something you focused on the recent set of updates are cleaning fees. you here a lot of complaints anecdotally about them where are they going are they being passed on to the hosts? how do you make sure that listings are still clean, they still meet certain requirements, but they're becoming more affordable to the guests >> it's really important that you feel like you're not charged onerous fees when you come to airbnb and that means that now we have an up-front pricing display. you can turn theto toggle on and see the total price, about a third of people do that. but now we have nearly 3 million listings at airbnb that do not charge a cleaning fee. and over the last year, we've worked with hosts in a quarter of a million hosts have either removed their cleaning fee or lowered them this is all about going back to a bigger idea, deirdre we've been listening to our community.

i try -- i want to be one of those ceos that's constantly listening to customers and customers tell us they want affordable listings and make sure the service is reliable so we continue to make updates >> and you've done that while increasing your profitability. but the same question, where are the cleaning fees going if they're not now being paid for by the guests, who's paying for them who's cleaning >> well, the hosts are essentially offering better value. if a host lowers their cleaning fee, what they're really doing is offering better value for guests the way the host makes up for that financially is hopefully, they get more bookings, they fill up more nights a month. so hopefully, as i said, this can be a win/win for both. obviously, we want to provide as good as a value as possible for guests it has to still work economically for hosts we're not the ones that charge, so it's all about finding the balance. >> i'm wondering if the regulation playbook as changed as airbnb has become bigger. you're seeing that crackdown in new york and crackdowns in the past what's different or not different about it this time and what's your playbook this time around >> you know, it's quite

different. i remember deirdre, when we first met years ago, people were asking, would airbnb continue to exist in a world of regulation now they're asking, how is it going to exist 80% of our top 200 markets have a regulation on the book what i've learned, the thing i'm surprised by is by how different every city is. every city has chosen very bespoke ways to approach this. but we actually have regulations in the book in most cities, most cities are pretty stable that i think we've become a very important part of local economies. we've collected billions of dollars of hotel tax we're always going to be regulated and at the table, as long as we're relevant but i think things are calmer than they have been in the past, notwithstanding a couple of specific cities. >> at the same time, new york city is your, i believe your biggest market are you optimistic that this gets resolved soon and it's not going to hit your supply there >> i don't think new york is going to be resolved and new york city, at one point, 13 years ago, was 70 to 80% of

our business now it's a very small percent of our business in fact, there is no city on airbnb that comprises more than 1% of our business, and new york is not in the top three markets anymore. paris and london, l.a., are top markets are now. i think new york, unfortunately, is not going to be resolved anytime soon it was the first city we had challenges with in 2010. it may be the last one that gets resolved but that's unfortunate the good news is there's 100,000 cities all over the world and most of them have chosen to not follow their lead, but to go their own way. >> right you guys have diversified. brian, you recently added google's so-called ai ambassador to your board, james manika. airbnb has long used artificial intelligence on its platform when do we start to see you incorporate generative ai? >> i think you're going to see some smaller implementations next year, in 2025 and beyond, you'll see probably much more profound implementations

the basic idea is when you go to chatgpt and you ask it a question and i ask it a question, we get the same answer the answer is almost an entirely text-based answer. i think you come to airbnb, what if airbnb was like the ultimate host it lanearned about you, asked y questions, what do you want, where do you want to go, what's your budget. and instead of having the simple search box with dates, we could have a much more robust travel concierge that could help you. it would be a much more visual, richer experience. i think this is where travel could be going i think ai will be an amazing opportunity for many companies, i do not think it will be dominated by one monolithic chat bot. i think it will be across the entire platform system >> like an ai concierge. our digital reporter wrote a fun story about airbnb's so-called party pooper how did you come up with this role how does it work you're also incorporating ai here

>> her official title might be a different title, but we -- one of the things -- it's really interesting, we obviously had an issue with parties a handful of years ago. and one of the things we did, we asked ourselves, can we use ai to better detect parties we would over a billion guest rivals that's over a billion data points and we were able to look at regressions at all past trips and start to look at patterns. when do certain characteristics lead to a party? and it might be such subtle things, if the human eye looked at, you would never notice and we deployed this party detection technology in australia and were able to prove that this technology was able to reduce parties by polblocking reservations or asking the people booking, we need more information before you can confirm this reservation we've now brought it out deployable and it's been very successful i think this goes to the fact that we are constantly trying to make our platform nor more secu, we want to be good for neighborhoods, we want to use the latest and greatest technology to create the best

experience possible and we'll never stop that's what today was about. we had five major updates today based on feedback from the community after 53 upgrades next may and have me back in november and i'll have even more upgrades to tell you about. >> i want to hear about that on the host side of things, as well brian chesky, thanks as always for making the time. >> thank you, deirdre. >> carl, back to you at the new york stock exchange. >> still to come this morning, a look inside goldman and apple's scrapped stock trading venture plus, watchi ing ibm. rbc initiates at outrfm.peor why they think the stock can jump another third from here on cnbc.com stay with us 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?

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welcome back as part of climate week, companies are making big promises when it comes to the environment. now new data showing who's actually following through with that, we turn to diana olick who's here at post nine. nice to have you in town

>> and you're right, companies are making these pledges to reduce carbon emissions, but unfortunately, they're not all putting their money where their mouth is this according to a new report from just capital, which ranks companies in the russell 1000. despite a tripling of net zero ecommissions in the past 20 years, up from 110 in 2022, they say action isn't keeping up. the companies that have committed to science-based targets have reduced their emissions the most, but still just 26 of 123 disclose actual reductions companies with general or net-zero climate commissions have actually increased narrow emissions. the biggest emissions reductions were reported by avangrid, owens corning, skband johnsons contro international. i spoke with the chso at pepsi. >> every dollar we spend developing reports is money we

don't spend in investing in solving the problems and we're all in on reporting because it builds accountability and transparency which ultimately builds trust, and trust is so important. but what we would ask for is, please, can we harmonize some of these standards to provide people the information they need, but allow us to spend the money on doing as opposed to reporting. >> and pepsi is really interesting, because you know, we think of them as a beverage company, but they're really a food company so they spent millions of dollars on regenerative agriculture. they just, in fact, announced a $120 million effort with walmart to work with farmers, that's all on sustainability as well as resilience >> so why are we not seeing more progress >> that is the multi-bajillion dollar question. people are making these commitments and committing billions, we see it from the private companies, but from the public sector as well and vc going into a lot of this so we keep hoping.

>> i wonder if -- are people talking about whether governments need to take a bigger role, in terms of mandating and disclosures. we know the s.e.c. is trying to get companies to do this and they're protesting >> right that's part of it. but you have a lot of ira funding, infrastructure funding. that has been tremendous that's also helped bring private money into climate, because they see government money is going into it, as well what a lot of folks are talking about now is higher interest rates. and like right here in new york city, where they want to decarbonize real estate, it's much more expensive due to higher interest rates and that pulse everything back. >> kind of explains why the uk prime minister is on the tape right now pushing back some of their ev decladlines. >> and it's why solar stacks are down higher interest rates make it hard to afford >> easier to do during boom times, i guess >> absolutely. >> diana, thank you. up next, one of hsbc's top strategists weighs in on the impact of this afternoon's fed decision, the end of the hiking cycle and no resecsion a few of his predictions you'll want to hear from him,

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it's called the hour where we started, the fed decision this afternoon. our next guest says we've seen the last of the rate hikes and isn't expecting a u.s. recession, predicting we could see the fed start cutting rates towards next summer. joining us is hsbc strategist. why are you so sure this is the end of the hiking cycle? it does seem like that, but also feels like maybe they could go again before the end of the year if inflation stays at these stickier levels above target? >> yeah, but i guess it won't do an awful lot of good to go another 25 or another 50.

what we've seen is pretty counter intuitive effect where particularly the large cap in the u.s. have actually still hold high to cash holdings, so they are continuing to hold these pretty, pretty high cash holdings and earning high interest on that while at the same time they've extended maturities, pushed out maturities, and that means they're actually still benefiting, perversely benefitting from the higher rates. so the higher rates won't do anything to solve the problem. it's more about what happens in 2024. it's more about what happens in 2025 as well, so really the next two years if we're going to see those kind of rate cuts are priced in or whether the market has to take out a few of those rate cuts that are priced in for the next 24 months. that in terms of the crucial questions for equity, for credit, for rates is much more important then. >> so does the returns for equities, the continued rise in

equities depend on cuts next year and how soon and how much? >> partially does. it does in some parts of the equity market. the growthy part of the equity market, the nasdaq, the tech stuff, i would probably be starting to be a bit more cautious on those parts of the market towards the end of the year. to me it's more an environment now where we're starting to bottom fish and still constructive on energy, still pretty more constructive on the value side of things. overall on the direction, i don't think it does that much because, let's face it, what happened last year is very different from this year, right? last year rates were selling off and yields were massively going higher in anticipation of that massive, massive rate-hiking cycle to crush the economy. it was in anticipation of things to become materially weaker. it was anticipation of a squeeze in margins, a massive earnings

recession. this time around if yields do move higher, if we're on the fed has to go another 25 where it's the exact opposite. it will be as a reaction of things actually being much, much stronger than expected. so then if you have a couple of dips in equities and higher credit, those are the dips you have to be pretty quick in actually picking up and buying those dips which is very much the opposite from last year where it was in anticipation of weakness. this time around it's as a reaction of things being too good. >> i'm curious, yellen said this week you can't rule out spillover effects from china. it doesn't sound like you think any of this data is showing they're stabilizing. >> what we are seeing is really pretty broad based bearishness. you see that in the flow data, in the investor flow data. so for us, mostly latin america,

mexico, it's also brazil, both benefiting from a pickup in manufacturing activity specifically in the u.s. we are seeing definitive signs of manufacturing activity and some of those pmis picking up and that's really where latin america could benefit but also other parts of asia, right, they're not only dependent on china. think about india. india has had a good run. markets like korea have had decent years, a decent couple of months. so that's not just been a china story. and china would say, look, the sentiment has become very bearish. it doesn't need a lot to manufacture a couple upside surprises and, you know, perhaps even china can be a buyer going into 2024. >> max, thank you very much. appreciate your take today on a fed day. thank you.

for the buzz today, our own kate rooney reporting apple and goldman sachs were planning a stock trading app for iphones in the spirit of robinhood before bailing on the idea last year due to the market's downturn. according to sources they developed the product during covid in a time of zero interest rates. that's the launch in 2022. apple reportedly backed off the launch fearing backlash consumers might make money with the assistance of an apple product. apple and goldman sachs have partnerships already. they've launched a credit card, buy now/pay now later. apple and goldman both declining to comment on the story. but interesting when that whole retail trading fever hit during covid they were developing this idea. >> i mean, you think back to the spring of '21 where spacs, it was memes. i wonder how close apple and goldman came to getting sucked into that craze. >> there was a lot of interest. people were at home, people

flush with cash. remember, it was like prime time for retail trading and investing, higher interest rates, man. that's the story. by the way, carl, the dow is up 200 now. the s&p is trying to push a little higher as well. the nasdaq was negative for part of the morning. it's still negative, kind of flattish heading into a fed meeting. as far as the dow, it's being driven a lot by some of the strength in the cyclical names, which is what we're seeing today. industrials are making a little bit of a move higher turnpike the fed decision 2:00 p.m. eastern and then the news conference at 2:30. we'll be all over it. >> indeed. some of the materials are working, industrials, caterpillar one of the best performing dow names, deere is reversing after the downgrade yesterday. i think your attention will be to the dots. >> the dots and the tone from powell. the dots are important because they will set a tone of how hawkish the fed is feeling. do they still expect to hike

again? the forecast for how many rates -- where rates go. are they building in another hike by the end of this year? and how many cuts are they really looking at? last time it was 100 basis points of cuts. will they narrow that and will that be a signal for the market? >> curious on views on unemployment -- >> and growth. >> interesting afternoon on tap. west coast wapner, let's get to "the half." carl, thank you very much. welcome to "the halftime report." i'm scott wapner live today from san francisco. front and center this hour, decision day and beyond. the investment committee making some key moves today ahead of that fed decision. now they'll debate where your money goes from here no matter what happens in a couple of hours. joining me today joe terranova, stephanie link, shannon saccocia and on set with me is liz young, sofi, of course. we are in the green for the dow and the s&p. the nasdaq was. it has turned into the red. we're watching