or so, a lot of bar neighbors have appeared, and nxp is one of them. >> crowdstrike just had its annual conference with a lot of great stuff to say about subscription, gross margins going up. i'm still in the name and i like it. >> i'll see you right back here in a couple of hours and guide you through the final hour of trade. "the exchange" is now. ♪ ♪ thank you very much, scott. welcome to "the exchange." i'm kelly evans. ahead this hour, oil higher, the dollar's higher, and yields are breaking out to 16-year highs. is this the reaction the fed was looking for after its meeting yesterday? and how should the central banks grapple with the glut of government debt? that seems to be also pushing yields higher. we asked the man who created one of the rules for the road for central banking, john taylor. and with stocks stalling, is the bond market the place to be buying right now?

one of our guests says yes, the other says no. we'll debate where they see the best opportunities. claviyo is said to be another bellwether, as the stock pulls back towards its ipo price today. and for one publicly traded name in particular. but first, the latest on the markets with dom chu and red, dom, 231 points or so down on the dow now. >> and not just that, kelly. if you look at the dow, kelly mentioned the 232 point, 2/3 of 1% for the dow, which stands at 34,210. the s&p 500 large cap index is 4352. that's down 50 points, north of 1% losses there. and just to give you an idea, it's been a down day overall so far. even at the highs of the session, we were down 25 to 27 points, down 52 at the lows. so, again, right at or near the lows of the session right now. the nasdaq composite, though,

the real underperformer, off 1.25%, 13,300 the last trade there. kelly mentioned the multi, multiyear highs we're seeing in interest rates. these are fresh cycle highs. you have to go back to 2007, november 1st, 2007, to see yields back at this 4.47% level. that's how long it's been. that's why it's so significant right now, and why some folks are debating about whether there's quote unquote value in treasury bonds right now, given a 4.47% yield. it's been a long time since we have seen this. that's adding to the angst we have seen in the big technology trade. and a mega merger, takeover thursday we'll call it. splu splunk is being acquired basisco systems. it's going to pay a good amount for this stock, and it's cisco's biggest deal going back to 2007

when they bought scientific atlanta. splunk is about all the cybersecurity element, and can cisco provide some of those solutions to clients going forward? so a big deal there. we're going to talk more about this throughout the course of the day. but splunk and cisco systems, the deal of the day. >> dom, thank you very much. as he said, stocks are sliding after the fed paused yesterday but warned of another hike this year and higher rates for longer. the next guest says it's good news because the feds fund rate is getting closer to the tailor rule setting. joining you now is john taylor and steve liesman is here with us, as well. mr. taylor, great to see you again. yeah, before i go too far down the road here, give me your thoughts on the actions so far. >> i think they're in the right direction for sure. remember, it wasn't long ago, it was 25 basis points.

and they're a lot closer now, 5.5 is pretty close to where they're going to be. so i think they're doing the right thing, maybe a little bit more. but they're doing the right thing. i've seen a little bit more, and i don't think it's so bad. >> i'm just going to jump to a bunch of conclusions here or different parts of the talk. so how do real rates figure into everything? we always talk about the taylor rule, but i'm looking at the ten-year tips yield at 2.1%, more than double than may, with ideas fs floating how it might supply driven, because there is so much more government debt to finance. i just wonder if you could comment on that. >> it's not completely outside of the taylor rule. we have an inflation rate that is most recent readings, 3.7%, well above the 2% the fed has indicated the target is.

and so it's close to the taylor rule but not all the way. sometimes these are put in, sometimes they're not. i think in terms of the inflation rate, it's still well above 2%. jay powell decides 2% is where they're trying to go, so that's a factor. >> steve, let me bring you in here. >> yeah. john, i'm a little bit, i don't know confused or whatever, but when you see the fed's own forecast for next year, they do show inflation coming down. they have a pc inflation number of 2.5% on the headline. 2.6% on the core. and yet, they maintain a funds rate of 5.1%. that's according to the average. again, this is not policy, this is the average of the official's forecast. but when you do the math, john, help me out here. doesn't it mean the fed gets tighter next year? and why would you want to be

tightening policy into falling inflation? do i have my math right and please tell me if i'm wrong. >> the inflation has come down. it was 9.1% not long ago, now it's 3.7%. it's on the way down. i think rate, based on historical comparisons, is about where it has been for similar inflation rates. so this is a little bit of a tightening and a restriction. but it's important for economic growth. they've done this in a way that has not stifled economic growth so far, and hope it doesn't. >> but is there some danger here of overtightening? they seem to be on the trajectory for a soft landing. if they tighten next year, make conditions relatively tighter, don't they risk snatching defeat out of the jaws of victory? >> i think the main thing is the inflation rate, and it's on the way down.

they're doing the right thing in that respect. if it doesn't come down, then the calculations are off and you have to reconsider. don't forget, this is a global phenomenon, steve, not just the united states. it's the rest of the world, the ecb, latin america, this is all about of this whole thing. the more we emphasize that it's not just the united states. the united states is the leader here, but it's not the only game in town. >> professor taylor, help us understand, let's take germany as the example here. it's got ten-year yields at about 12-year highs and in its third quarter of basically recession. would you say that ecb thought tighten? their inflation rate is also quite high. so our gdp is better for now, but how much of a move in the global bond yields is related to what is going on with the fed? and how much has to do with the fact that we have this massive glut of government debt to finance? >> well, the debt is a big issue.

it seems to be there's efforts to bring it down. we'll see if it takes place. i think the main thing that this has been hinted out in jay powell's discussion, is maybe the normal rate, the natural rate is no longer 1%, maybe it's a little bit higher. and that's an issue which the market is trying to digest. >> just let me pause there so that our viewers can follow why you bring that up. is it possible because there's so much more government debt, that kind of natural interest rates have to be higher now? is that a good or bad xhthing f the economy? >> i think the best thing for the economy is we begin to wind up this debt. it's not just monetary policy, it's fiscal policy and they are related quite well. regulatory policy is very important, too. but the debt has been on my mind for a long time. monetary policy has been on my mind. remember, 25 basis points a little over a year argo. so we're much better now than we were then. i think that's something you have to take into account. it's related to these decisions

about the interest rate that the fed is going through. >> john, could you help us explore this idea that kelly just brought up, higher neutral rate. it's a lot of gobbledygook to a lot of people, some days it's gobbledygook to me. but the idea that powell hinted at yesterday in response to my question that maybe the neutral rate is higher, does that mean a higher funds rate for longer, higher interest rates for longer? and in addition, kelly brought up the idea of debt. what is behind that, and is it something we should be making lower or do you just live with it? >> i think you have to live with it, but there's calculations, there's difference of opinions. i think -- remember, it used to be 2%, now it's down to 1%. now it's creeping back again, at least that's what the fed is

saying. i think if that's the case, we'll see a normal interest rate, 2% inflation, 2% real, that's 4%. maybe that's where we will be eventually, but i think that's what people should think about. and probably that's what is going on in the markets right now. maybe the calculations about that will affect monetary policy. we don't know. >> steve, quick last word, where do we go from here in terms of what we should be following? >> well, i'm looking -- i'm sorry. they just had the chart up, and i'll let john have the last word. but look at the chart that we have the probabilities they just had up, the two up bars and the one down bar. we see 40% probability for a hike or a 45% probability of a hike -- there you go, guys. 45% probability of a hike by december. tlanld and 43% probability of a cut by

june. so i'm watching how the market digests this news from yesterday. it's all in a forecast, which means it's all federal. but you look at the two-year, you look at the ten-year, and the words in the forecast of the fed end up creating a reality. whether or not that reality ends up being true in the future is irrelevant to how people process it today. and as you know, it's being processed in a higher ten-year note. also a higher two-year note. so those are creating realities and creating essentially tightening or restricting a policy. yesterday, i'm calling a verbal or a virtual tightening yesterday. >> interesting. professor taylor, last word. >> i think it indicates a little bit more tightening, but only 50 basis points. the main thing is next year with the inflation rate coming down, we hope, maybe to 2%. we'll see. and then the interest rate will be lower. >> gentlemen, thank you both. appreciate your time today. john taylor and our own steve

liesman. the fetd's comments are causing the bond yields to spike. the higher in 16 years. and the 30-year now at 4.55%. so should you be a buyer of these juicy yields or get out of the way of the bond sell as it gathers speed? keith fitzgerald and joanna join us. joanna, i would love to know which side of the debate you're on? >> we're definitely on the side that investors should be eyeing a lot more fixed income portfolios now, especially that it's very clear that rates will remain higher for longer. fixed income across the spectrum, even all the way up to high yeelsdields, will be an important tool to act on now. these yields are now durable. for the foreseeable future,

probably into 2024, you'll be able to use bonds to reduce the risk in your portfolio and achieve the same level of return that you were adding equities for so long to do. >> and i should have guessed that bond blocks, you weren't going to come in here and say we hate bonds. i am sell pathetic to your point. so when some of these long bonds are down 16% if you had been a holder a couple of years ago, i mean, they're not going to see row. at some point, do you see an option there? >> that's the tee. t -- the key. this stuff comes and goes. you can very eloquently make the argument for bonds at these yields, because they add a stabilizing impact to your portfolio. but what are you going to give up if you elect to go to safety? what you have to do is look at who is going to grow out of this. you want to be thinking about

stocks, because you know that stuff is going to be the future. none of this selloff interferes with the business case of owning them. >> i see you have nvidia, for better or worse. the stock is still up 200% this year, but we have circled bab substantially. are you trimming at this snoinlt >> no, i'm going to be going on the warpath. we retreated to where we were last may. you have a company with 80% plus market share, it dominates the ai space. there's so much runway in front of this, and at a time where we are quadrupling the data we create every single year. so absent another player, that's a company i'm very keen to own more of. >> joanna, one theme here is how well corporate credit has held up. the benchmark, the treasuries backing up, just behaving horribly. but if you own high-yield debt, the spreads are narrowing. what do you think about that?

>> spreads are narrows. the coupon income has been the driver for all higher income over the last 10, 20 years. so yields even in triple c up to 13%, you know, it's a really compelling time to consider high yields. i would also say, you know, i think there's a shift in the last 10, 15 years. investors have been focused on taking risk in ek with i-- in e. and i want to remind people that high yields had half the volatility of the s&p 500 broadly. >> that're surprising. >> even less of the volatility of the russell 2,000. so we are used to these stories, we're used to equity be the term, we're used to growth at low rates. that's changed. we've come to new levels and baselines or interest rates, this income can be so much more

po powerful. and traditionally, it's important to start considering it now and act on them now. the resiliency is continuous. >> let me just ask you both quickly, if you think bond yields are rising for good or bad reasons, you can point to jobless claims this morning, which are astoundingly low and say look, the economy is fine. but then you look at the behavior of the long end around the globe, and it feels like there's maybe something a little more nefarious going on, and that would not be a pleasant environment for the stock market. >> no. unfortunately, it wouldn't be. but there's not a lot you can do about that. we can't control central bankers. but what we can control is the stocks we buy, the quality we pick, the instruments we use. either bonds or stocks doesn't matter. you can control that as an individual investor. that is at least a silver lining. >> quick last word, joanna? >> i would just say that the fundamentals are a lot stronger than people are appreciating.

we should just consider the traditional role that fixed income has in a portfolio. >> why is the bond person telling me how strong -- nothing makes sense anymore, joanna. >> it makes sense if you think about how you came into this market, you know, the issuers had low rates, they have bonds that aren't going to mature. only 5% of the high-yield debt will mature in 2023 and 2024. so to weather this period between now and the next three years is very, very different and unique. it's so hard to keep your head focused on those fundamentals. but they've been resilient for 2022 and 2023 and the same for 2024. >> i take your point about high yields, but for treasuries, you think maybe the yields will go back downwards. i appreciate you both joining me today. we do have a news alert out of the ftc. leslie picker has the details.

>> a new lawsuit with a rare allegation against private equity for anti-competitive activity. the ftc's complaint filed in district court, claims a firm walled welsch, carson, anderson, and stow consolidated anaesthesia practices in texas through its company and drove up prices. the ftc says that usap entered a deal to fend off another anaesthesia provider from encroaching on its territory. the ftc says this rollup and the dominance in the market has cost texans tens of millions more each year in anaesthesia services. the chair says in a release, the ftc will continue to scrutinize and challenge serial acquisitions and other consolidation schemes that undermine fair competition and harm the american public." this may be construed as a warning shot to private equity,

which often flies under the radar. the ftc is looking to remedy te alleged impact and prevent it in the future. i have a call out to welsch, carson which has raised over $41 billion in capital. i've also reached out to usap but haven't heard back from either yet. >> private equity facing another head wind. leslie, thank you very much. we've got a news alert on google and broadcom. christina has the details. >> earlier this morning, you had the information that i reported. google was looking at cutting ties with broadcom by 2027. i reached out to google and they're saying otherwise right now. they said, we are productively engaged with broadcom and multiple other suppliers for the long-term. our work to immediate our cloud

needs benefit from our collaboration with broadcom. they have within an excellent partner, and we see no change in our engagement. they said, right now no change in the engagement, but that could change in thenext few years. the relationship between both companies has been going on for years. broadcom makes the chips that are designed by google and provides a very specific ip embedded. you saw the stock price where broadcom dropped this morning, but it's been climbing steadily higher. kelly? >> very interesting wrinkle here. despite what we just heard from google, the make your own chips movement appears to be gaining momentum. even microsoft is betting on its own chips to support the company's ambition. microsoft with some ai announcements and the launch of their latest computers and tablets. that's where we find steve

kovach with a special guest. >> yeah, joining me today, yusef metti from microsoft. he's head of windows and in addition to everything else you've been doing the last 30 years. so thank you for joining us. >> thanks for having us. >> the big news of the day is co-pilot, your ai assistant that you are putting across teams and outlook, it's coming to windows, as well september 26th. the one that everyone back home is the co-pilot for microsoft 365. $30 per month per user, coming out november 1. that's when you will start selling it. the big question, why is it worth so much money? that's a hefty premium. what are customers getting for that extra $30 a month. >> some incredible capabilities that you can't do today. in the testing we have done with customers, you near a meeting. you can have a meeting summary, and the ai can summarize the

entire meeting and give it to you in bite-sized chunks. you can get all of that, that time is unbelievably precious. for $30 a month, it's an incredible value. >> you're learn thing from a couple hundred companies that are beta testing. what have you learned from the people learning co-pilot now, how did that feedback come back and now that you are ready to lunch? >> we learned about where the fit is. there have been a couple different cases. creation in our power point, word excel apps, people are loving the value there. and most recently what we announced today, microsoft chat, the ability to ask a question and have the ai reason across all of your information. so let's say your meetings, your team's chats, your text messages and your documents where you can

say tell me about what happened this last week, what's hot for me? what are the three things going on? you can have that all done automatically. >> sounds good for someone who takes a lot of vacation. kelly in the studio has a question. >> does this only apply to microsoft teams meetings? a lot of these have gone back to in-person. is there any way to catch up with in-perp things i might have mised? and this report that maybe microsoft is pulling back a little bit on how much of nvidia's chips it needs or just how much usage it's seeing of ai tools broadly now maybe versus six months ago. >> so on the first one, kelly, we see value for the co-pilot across all those efforts. even with those in-person meetings, they still run the teams capability to keep track of what's going on, to have the teams chat. so we see that value, even for

in-person meetings. and the other cases individually, when you use it for your own use to say look across all your documents. you get a much better acceleration of finding what you had, knowing what action to do. so we have seen great uses across the board. in terms of our ai chips, we still have the great partnership with nvidia. the demand is so huge in terms of customers. there's a waiting list for m-365 that we are doing everything that we can to meet the demand with our partners. >> you said a little bit about the hardware today, because that plays into the ai story, as well. so we have new two laptops coming out on october 3rd. the high end, the studio, a lot of stuff can be done on devices it sounds like, whereas this whole year we have been thinking about ai, you need those clouds -- there's a big issue if the cloud processing all this. is that coming down to the pcs? how is that evolved?

>> great question. one of the things that we're delighted to show today was the power of ai software experiences like co-pilot, being accelerated with ai chips and special computers. what we showed today is the ability to run a local ai model, the meta's llama model. we ran that without a connection with the power on that chichlt as we go forward, the ability to use cloud and client and understand when you want to use the power of the chip to accelerate things or do things offline, or add additional context, we think that's the next step of what will happen, some of the breakthroughs on systems. >> so when are we going to start seeing this expanding? a lot of people need this on mobile. a lot of people need this on other devices that run windows. >> we've been working a lot with our system, with dell, hp,

le lenovo. we have been doing a lot to tee up this new platform. so expect to hear more from them soon. and with mobile, we've been doing a lot to connect to your windows pc. and now what we show today is you can use co-pilot to say hey, tell me what is going on with my text messages and send one on my behalf. >> thank you for joining us today. microsoft announcing the pricing and release date. thank you for joining us. >> thank you both very much. yeah, i've seen analysts tweeting how this microsoft meeting was smoking the mac book on visualization, as we hear intel talking more about device ai. coming up, the deal of the day. cisco buying splunk in a cash beale worth $28 billion.

cisco is also the worst performer in the dow, down 4% on that announcement. and unh is outperforming with some other insurance names. we'll tell you why, after a break. (group singing for kids birthday) toooo youuuuu! (sean) i wish for the amazing new iphone 15 pro! (jason) sean! do you mean this one - the one with titanium? (sean) no way i can trade this busted up thing for one. (jason) maybe stealing wishes from the birthday boy is not your best plan -- switch to verizon and trade in any iphone and get the new iphone 15 pro on them. (sean) what!? (jason) yup, and on an amazing network. (sean) and i don't have to ruin anymore birthday parties!

(jason) yeah, that ship has sailed... let's go get you the iphone. here we go, come on hon. (vo) trade in any iphone in any condition for a new iphone 15 pro on us. only on verizon. welcome to ameriprise. i'm sam morrison. my brother max recommended you. so my best friend sophie says you've been a huge help. at ameriprise financial, more than 9 out of 10 of our clients are likely to recommend us. our neighbors, the garcias, love working with you. because the advice we give is personalized, hey, john reese, jr. how's your father doing? to help reach your goals with confidence. my sister has told me so much about you. that's why it's more than advice worth listening to. it's advice worth talking about. ameriprise financial. ♪ opportunity is using data to create a competitive advantage. ♪

it's raising capital to help companies change the world. ♪ opportunity is making the dream of home ownership a reality. ♪ ...and driving the world forward to a greener energy future. [applause] sometimes the only thing standing between you and opportunity is someone who can make the connection. at ice, we connect people to opportunity. welcome back to "the exchange." dow is well off the session lows at the moment, down 128 points. the s&p down about 0.9%, and the nasdaq down almost 1%. the declines have moderated somewhat. still a reverberation effect from the fed's meeting yesterday. some of the movers we're watching include crude oil, back near $90 a barrel, helping marathon and velero hit all-time

highs. watch that space. also, the insurers are rising today. why? elevance health has a potential strike at kaiser permanente. and office furniture makers steel case is higher today, set to close off a 52-week high. why did they raise profit guidance? they're citing improvement in office attendance. over to tyler mathisen for the news update. tyler? >> thank you very much. whistleblowers are saying the federal government has poor oversight and it could have led to migrant kids working unsafe and illegal jobs. a watch dog group raised concerns that the health and human services department may have failed to have properly matched migrant children with vetted sponsors. the report said that hundreds of children sat in the facility for weeks without talking to a case

manager, and that there were egregious errors in the discharge system. hunter biden was ordered to appear in person at his arraignment over three felony gun charges in october. the delaware judge in the case said the president's son should not receive special treatment, and must be physically present for his initial appearance. lawyers for biden said he will plead not guilty. and sophie turner sued joe jonas to return their two children to england. the petition said the kids were to stay with jonas in new york until turner quit filming. the celebrity couple filed for divorce earlier this month. a spokesman for jonas says his only concern is the children's well-being. kelly, back to you. >> so tricky. tyler, thank you. coming up, it's a mixed bag for the recent ipos with arm threatening to break below $50 a

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welcome back. let's get back to leslie pick we are an update on the ftc case against a private equity firm. what are we hearing? >> reporter: we talked about that ftc complaint earlier in

the hour against u.s. anaesthesia partners and welsch carson, a firm that the ftc alleges engaged in a rollup scheme that was anti-competitive in nature. we have now heard back from usap. dr. derek shopa, a practicing usap physician in texas and a board member saying -- kell? >> thank you very much, leslie. meanwhile, when it comes to

direct-to-consumer, there's been a bigdy diver intelgence. figgs, not too far behind, down more than 20%. it's a totally different story for the platform names. shares of braise and shopify up around 60%. and klaviyo, the marketing platform that debuted yesterday, up 3% today. is it time to ditch the names and focus on the platforms? let's ask my next guest. welcome. good to have you here. >> thanks for having me. >> you know, this is like the most consequential part of the markets in some ways, like software in the service platforms. yet these names, tell me -- and klaviyo, and shopify, i mean, this is ultimately, you know, this is the ecosystem. >> that's right.

so this is a case where it's better to provide the tools for companies selling online than to actually sell online. selling online is an incredibly competitive business. there are few companies that provided tools at scale for merchants to sell online. and you just mentioned three of the best ones. >> shopify, listen, as a consumer, i'm obsessed. when i see them at checkout, thank god i can do this on my phone. what you're saying in other words is the very difficulty of being a direct-to-consumer platform requires that brands use these tools and marketing tools in particular to troy to break through, is that right? >> that's right. let's not forget, when you are selling online, you are competing with amazon. if you can sell through amazon, then you're just renting the customer from them. what these companies allow you to do, and first and foremost,

spo shopify allows you to have your own store front. that's how it's grown to millions of merchants. once you have that customer, staying engaged is very important. and klaviyo is a company that allows you to stay engaged with your customer, if you're a shopify merchant, and they do it very well. they do it by email, through text, and increasingly through other channels that consumers interact with those. braise does it for brands and larger companies that want that type of engagement and communication with their customer around various digital media, braise helps you with that. klaviyo does it at the low end, at the small end with e-commerce merchants, mostly on shopify. >> in many ways, we have been customers in a way of klaviyo without realizing it. so it's not that you are covering klaviyo, but you cover

braise. even in the era of high interest rates, post pandemic, you know, return to office, we're shopping on line a little bit less. what's the macro to you look like? >> well, very much so. now, two different pieces to the macro. one is enterprise spending. that's still subdued and will be likely until next year. but in terms of the growth online, e-commerce and the share of overall retail, that continues to be double digit growth. shopify's volumes grew 17%. shopify's revenue grew 30%. braze grew 34%. the shifting commerce continues, and the companies providing these valuable tools to merchant also continue to ride this wave for a while longer. >> all right. gill, thanks for joining us to dig deeper into one of the bigger ipos lately. appreciate your time. >> thank you.

still ahead, cisco, some big news today, announcing they will buy cybersecurity company splunk. cisco down more than 4%, though. why they agreed to pay a 24% premium in its largest acquisition ever? that's next. and check out shares of deere, down 3% after the company announced they will lay off 225 workers in illinois effective next month. it's worth noting, agricultural prices like wheat, corn, and soybeans have been much lower this year so far, wheat down 27%. corn down 30%. and that's been a headndorwi f deere. back in a moment here on "the exchange." (birds chirping) go. and go and go and go. ( ♪ ♪ )

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cisco striking a deal to buy cybersecurity company splunk. $157 a chair, that was a 30% premium from splunk's closing price yesterday.

$28 billion dole, more than 10% of cisco's market cap, a little bit of investor nervousness there. >> kelly, there's so many great angles backed into this. it's what it says about cisco and legacy tech and what it wants to do, like software. but there's also what it says about software valuations, the implication is the m&a market. splunk was part of the class of software that was aggressively correcting at the end of 2021 and 2022. now, the fact, kelly mentioned this, that cisco was paying a 30% premium, $157 a share, that is appealing to other companies that saw their valuations plummet. that feeling, perhaps best expressed in a beat referring to the deal. he says wow, we are so back. what that means going forward, does this lead to more m&a, hor

maybe hold out for a better comeback. splunk, it's still unprofitable on a gap basis, but it's been narrowing losses. it's still growing, and that kind of company has proved to be really appealing, as well as klaviyo. >> diedra, connect the dots for me. i struggle to sink my teeth into this one. what are the bigger ramifications do you think? are they ramifications for cisco, which has been casting about? i don't know, is it for splunk and -- i don't know. i'm unsure what to make of this. >> all of the above. so let me try to break it down quickly for you. for cisco, this is a legacy tech company. its main business is hardware, it wants to move into software and services. splunk offers them that. cybersecurity, and there's an ai play here, as well. so these are two of the buzziest, hottest subsectors of tech. so it gives a legacy company that's growing at a slower rate.

it gives them the topline growth it's looking for. for splunk, what this means for the software enterprise area, this stock went down to $75 at the low point. the fact that it's going for $157 now, you can see other companies, stock companies in the public and private markets saying this base is coming back. we don't want to sell yet, because we can get more, or we don't want to ipo yet, or they can say it's a pretty fair price, maybe we will. so implications are all over. >> you're right. the fact that the ipo market has been lukewarm, but that there's some hot deals in the making gives everyone up and down the food chain a little bit of a sigh of relief. diedra, thank you for bringing it to us. diedra bosa with tech check. still ahead, the summer travel season wasn't very kind to the airline stocks. jetblue, the biggest laggard, falling 43%. through is another way to play the travel trade, including one that has seen positive returns

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welcome back. airline stocks have gotten hammered lately but the travel boom still playing out in the muni bond market with surge ing

rates. and less than a third of the amount seen the prior year, but sales in august alone were nearly that amount. $2 billion according to reports. and with major city airports like chicago, atlanta and dallas reviving plans to tap the $4 trillion muni market and build and renovate runways, concourses and terminals, my next guest is a buyer. and joining me to discuss is head of muni fixed income. >> great to be back on the show. >> explain a bit the dynamic. what is it doing to 3450umuni b investors? >> yields are moving higher in sympathy with the treasury market. they are looking at higher than longer and listening to the fed and that pulled our yields hi higher. hire yields mean more income for investors. and as you move into the fall, i get into a time of year where

supply tends to go up. that could create further weakness in the market and again, i think that it is a good time for investors to a ss to s and start buying. >> and so broadly speaking, what kind of levels can you get on munis right now? >> twoyields began with a one. today you could buy aaa rated bonds with at least a 3% yields. and if you go further out on the yield curve, 4% to 4.5% yields for high quality munis are pretty readily abundant. so the whole landscape has changed and i think that that is why the market looks really compelling and we're advising clients to buy. >> and i expect that you are a hold to maturity situation. and so let's talk about the airports. given what you are saying, if people will pile in and buy the debt, they can come up with some

pretty nice revamps of what their offerings are, can't they. >> airports are exciting sector obviously. dicey when covid started but travel is back. any miles per hour that has been at an airport the last nine months can tell you how packed they are. and as you point out, the bigger airports like chicago o'hare, dallas/ft. worth, those bonds tend to be in the "a" rarted category. you can pick up 50 to 70 basis points of additional yield. we are an active manager. when dallas came to the market in august, we jumped in pretty hard and bought those bonds. and in the ten year part of the curve, you picked up about 70 basis points of additional yield for aaa rated bonds. we thought that was a phenomenal deal so bought aggressively. >> and i watch as the shutdown looms, one of the things that they keep warning us about is lines at the airports. is there any near term or long term risk here?

>> we feel pretty good. i think if you look the service economy is super strong. people bought a lot of goods at the start of the pandemic. now they are back into getting out and traveling. they are into experiences. and we think that that is pretty good tail wind for the airport marketplace right now. so, yes, the government shutdown could always cause some volatility. but overall, we are very constructive on that part of the market. >> do you ever think they take on too much debt? some are smaller airports. charlotte, minneapolis, places like that. you know, chicago obviously much larger or be much larger compared with the others. what kind of get levels are appropriate? >> as you point out, they are doing venerations, laguardia has done a great one and really made that phenomenal looking and efficient airport. i think also when you look at airport credits, they have maintained throughout the years

very, very strongly liquidity positions with cash on hand. so they have to invest in the infrastructure. that is how you continue to track people to travel. i think that they have room given liquidity positions to do these infrastructure projects and take on some additional debt. >> and where else would you be looking kind of maybe related to the airports or maybe elsewhere? >> i'll stick with the transportation theme and we like toll road bonds a lot. obviously people stayed inside for a while when the pandemic started. but they are back out on the road. and you see some toll roads and n. states like texas and california that are showing really, really strong growth in traffic back to pre-pandemic levels. and some of the toll roads can be high bbb to single a rated credits. so again 00 50 to 100 basis points for additional yield. and we like those credits a lot right now. >> and we noted the headlines,

new york one of thof the higher brackets, but everyone is taking notice. jamie, thanks for your time. >> thank you. meanwhile we just touched on those layoffs over at deere. let's bring in seema mody with more details. >> john deere laying off 225 production employees at its harvester worker plant in illinois. employees were made aware by leadership yesterday at the factory where combines and other crop producing equipment is manufactured. in total, that plant employs about 2300 staff, so 225 employees being cut may not seem like a lot, but wall street analysts say it does feed into this idea that demand is slowing and that agricultural commodity demand is peaking. seeing coin and soybean prices move lower today and deere stock, yes, down today and down about 5.5% this week. we were just looking at the chart now trading at its lowest level since late august.

>> and it is noteworthy what is happening with some of the soft commodities. we saw huge upward pressure after the war in ukraine just with all the global stimulus the last couple years. are we unwinding that now? >> i think it has to do with china. the idea that demand is weakening and how that plays in to china playing a role in imports and exports. they are a big buyer of ouromco. >> a great point. crude oil keeps moving higher though. >> yeah, something that plays into what is happening. >> seema mody, thank you very much. that does it for "the exchange." thanks for your time. for more analysis, sign up for my newsletter at cnbc.com/newsletter. next costco is reporting next week, we'll preview the results.

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alongside kelly evans, i'm tyler mathisen. coming up, two huge stories in media. the writers are close, inching close to a deal with the studios. and the actors may be close behind. so when will hollywood get rolling the other way? plus rupert murdoch stepping down as chairman of fox and news corp. what it all means for his media empire. plus how to get a 3%