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%

mortgage as rates are 7.5%. we'll talk to the head of a company with an interesting plan to let you buy the house and the mortgage interest rate. >> looking forward to that. markets are looking better than they did earlier this morning. still in the red with the dow down about half a%. s&p down 1% below $4400. and nasdaq under the most pressure down 1.1% call it. and i'll cite the higher interest rates obviously we'll have more on that in a little while with thenearing 4.5%. and you can see amazon, alphabet dragging down the market. a s adob eflt down a similar amount. so not a lot of relief. elsewhere fedex raising guidance.

it is up more than 80% since the bottom last year. tyler, fedex now at 262. >> thank you very much, kelly. with every end there is a new beginning. after 140 days of stoppage in hollywood, we are finally apparently getting movement between the studios and the writers guild. a deal would mean some return to normalcy in the media world especially if movement can be made on the actors front as well. but at the same time, the industry is losing one of its most infamous or famous executives. rupert murdoch announced that he will step down as chairman of fox corp oig and news corp. after more than 70 years in the media industry. and here to break down the news is janice min. she is form e. co-president of the hollywood reporter bill board entertainment group. as well as our own alex sherman media reporter. let's start with the strike.

what is the buzz that you are hearing in hollywood about how close the parties may be and how soon the actors might follow suit and settle? >> people feel good today. this is the first sign of optimism since the whole thing began in may. and there was a huge breakthrough yesterday with the studios and wga released a joint statement. and remember these two sides have been in a standoff, they have been releasing dueling memos and for the first time it seemed like progress was getting made. i would be surprised sf there is a deal today, but i think that we are within spitting distance now. i would say the appetite for this to go on any further, you know, people thought that it would wrap up by labor day. and every single day it keeps going on, so just more and more pain in the industry. so much anxiety, so much stress.

people want it done. >> what about the s.a.g. side of it, is that likely to follow along in fairly closed on or no indication that that could happen? >> well, you know, i think we've seen with fran drescher, s.a.g. president, i think that she's like the shawn fain at the uaw of hollywood. she has come out very stridently against the ceos particularly against bob iger. she has really rallied and mobilized the voters there in s.a.g. 160,000 members. about the size of the uaw. and i think that she will be tough. i think that group is going to be tough. and remember, the whole reason for this strike is that people thought that they had nothing to lose. the economics for workers in hollywood had gotten that dire. so there is going to be a lot of rhetoric to unwind. it will all come down to both with the writers and s.a.g., data trabs data transparency, and s.a.g. is asking for revenue sharing.

and you know that went out of fashion when netflix entered the marketplace. >> alex, anything that you would like to add or move on to rupert murdoch? >> i think both sides want to get something done. you've seen some cracks. some saying that we have to get things moving here. and then rhetoric more on the sides of executives, particularly warner bros. discovery saying, you know -- their cfo saying that we're taking a hit, we have to get this movingalong. so you can see the runway toward something getting done, and that is why it is lasting so long. both sides need to feel the pain and that is the gateway toward a deal. >> so let's talk about rupert murdoch stepping away. how is loachlan murdock likely o be different than his father? how he runs the, quote, empire?

i view rupertas the builder of the empire and now i think rome broadly speaking is in decline. and that laock land oig willhri. >> i agree. we've seen the shrinking of it when rupert sold assets to disney. and that was most of fox. and so now part "a" is done, or part one. part two now is, okay, so rupert murdoch no longer chairman. lachlan murdock will run it formally. so he is in charge for the time being. but the question is what happens when rupert murdoch dies. because then voting control is split among four of his children equally. so that is where the succession aspect of this begins.

even if lachlan is running the company, there is no clearance that he will be the person that runs fox going forward. and we know that there has been a split between james and lachlan. so where the other kids fall and where they support will likely cement the future of fox whether it is sold, whether the tone of it changes, but i do think that you are absolutely right that the rupert murdoch stage of this is coming to an end. >> yeah, i remember being in that newsroom at the "wall street journal" when he came back in the day after buying the paper and mattde the big announcement. so much hype and interest back then. and in a way it hazars fizzled over the years. and we focus so much on bob iger and what he's done or not done at disney. what do you think the sort of not final verdict but at this point the verdict is at how rupert murdoch is handling the paper or digital assets during this period of transition?

>> history will look fondly on his decision to sell to disney. i mean, he now looks like other executives that sold at the top. so clearly when people hook back on that deal, i think that they will have to give rue heart murdoch credit to say you know what, you saw this empire of linear media declining and you got out. and now that is bob iger's problem and of all of the deals that bob iger has done, the one deal that sticks out is the fox deal which now looks like an overwhelming overpayment. >> janice, why don't you comment on what we've talked about with murdoch. i would just observe that there will never be another rupert murdoch. >> oh, my gosh, there will never be another rupert murdoch. we live in a land now especially in entertainment of sort of the nba is in charge, you know, not the sort of wild brash creative executives. and so rupert, what is interesting about rupert is that he built up this studio out here

where you can see the lineage from the studio everywhere. you have dana walden at disney, tom rothman at sony pictures. peter rice also recently at disney. he knows how to pick leaders. and everybody in town still talks about working with rupert with fondness. however in his recent year, fox news overwhelmed the narrative of rupert murdoch and he lost control of it. and not only did he lose control of it, you also have a business nouts out of control with fox where to alex's point, it is in such staggering secular decline, i think that they shed 11 million viewers in the last three years. and so lachlan is being handed this not great package to manage. and so regarding the succession point, i mean, this is going to be the fifth season of succession that everybody wanted. i mean, i think that the animus

between the kids is so well documented. i think many of us though both of them and it is not great. so you will see an empire that is already in the process of dismantling probably the further and further dismantled. and around the digital assets, the digital assets, fox nation is such a nonentity, it hasn't worked. i mean, or worked in such a small sense that it is not even on the earnings calls. >> all right. thank you very much. janice, alex, thank you. and we have the rollout of the latest covid booster shots hitting some bumps. angelica peoples has some details. >> finds the latest vaccines hasn't been easy. moderna and pfizer say they have shipped million, but some lucky enough to snag an appointment are receiving cancellation

notices or showing up to learn that there is not a dose available for them. some are being told that they will need to pay almost $200 out of pocket because their insurance isn't yet covering the shots. it is even harder to find covid vaccines for children. cvs says it expects to stat receiving those shots late this week. walmart anticipates that they will arrive after adult vaccines come in. and walgreen's says appointments for children under 12 won't start until next friday. well, it might feel like 2021 when a vaccine appointment was hard to lock down, now it is happening for a different reason. in 2021, the government bought and distributed all the vaccines. these latest covid shots are the first to be introduced since the government stopped playing leading role. and now vaccine providers are buying the doses from distributors and manufacturers and ensurers are paying the priors to administer the shots. two independent pharmacy owners i spoke to say this is the usual lag between the approval of a

new vaccine and the va availability. americans were shielded from this reality before and the transition has been a bumpy one so far. back to you, kelly. >> thank you. i tried to get a shot through my medical prior earlier today and they don't have them. and they have no idea when they will get the latest version. didn't know anything about cvs. neither do i. coming up, chairman powell playing a very delicate balancing act declining to hike yesterday but implying higher rates for longer. and making no promises about a soft land. we'll discuss what we learned with bond yield on the rides. and plus home buyers realize that an 8% 30 year could be around the corner. but one company has a way for people to get their hands on 3%

mortgages. we'll explai n. (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.

stocks are under pressure with the dow heading for its third straight down session. and treasury yields are jumping. the ten year back to 2007 highs at nearly 4.5% after the fed put a pause on rate hikes for now but signals fewer rate cuts next year. let's bring in brian jake cobso

and also kevin wong. what do you think is going on here? >> i believe that july markeded the end of this rate hike cycle because if the fed raises interest rates by just take basis points more this year, that will potentially push us into a recessionary period during the first half of next year. why is iis that? because it will put more of a burden on the u.s. consumer that is overleveraged, new has over a trillion on their credit card, a u.s. consumer that put over $43 billion on to those credit carts cards in the second quarter alone. and now they are facing interest rates above 24% before another potential rate hike. and delinquencies rose to highest level in more than a decade in the last quarter. so if the intended consequence is to push the economy into a recessionary period, then raise

another 25 basis points. if they want to navigate the soft landing, let the july hike being the end. >> and do you sgle. >> in a way. i think the fed has done too much. it is 1.4% up to 2.4%. and so that is consistent with the historical average. but to get an average, you have to have herds of pipe when it is above and below and that i think it will just keep marching higher. so i would actually probably just say that the fed has already done a little bit too much here and the effects of that are going to start at the bottom of the economy. lowest income individuals who are more heavily indebted also as far as the markets, lowest quality stocks, typically it is the smallest ones as well. those will probably be starting to feel the pain first the most. and probably as early as the fourth quarter. so i really wouldn't wait until

next year to say that we'll experience the beginnings of a recession. and remember, recession starts at a peak of economic activity. not at a trough. >> like 200,000 jobless claims just to close the data point out there. we're making it sound like if they do more, that would be worse. but if you are right that they are not going to hike anymore, on average stocks decline about 25% from that point. and here we are with the selloff. >> but i would like a little further ahead. right? i'd look out three years. i know that is a really long time in the history of investing, right? but everyone focused on the two rate cuts next year, only 50 basis points next year. but guess what, they are forecasting that they will cut by another 120 basis points in 2025 and another 120 in 2026. that is nearly 3% in interest rate cuts the next three years. they don't cut rates if the economy is doing well.

if in fact they will be cutting rates to that extent over the next three years, that opens up opportunities in both stocks and bonds for investors to consider. it will be choppy the next six months. data dependency, an upcoming presidential election, shutdown, strike and of course student loans. but i do believe better days are ahead when the fed starts cutting rates. >> there is action and then there is action. i think the talk yesterday was to reinforce the idea that the fed believes that it work on combatting inflation is not over yet. they wanted to send that hawkish pause message as we described it yesterday. but there is a growing number of people who feel as both of you seem to and that is that enough has been -- enough is enough. and that we're getting into a dangerous point. what if the fed doesn't cut interest rates as heavily as some people thought? have they taken -- as kevin said, they have taken two cuts

off the table. >> yeah, we've talked about that this morning as far as what is explaining some of the market moves. you see the big moves in the ten year treasury, the 20, 30 as well, kind of the parallel shift when you go out there. seems like the market is buying in to the idea that the fed does want to hold rates where they are longer. i thought that it was interesting how chair powell reiterated a few times about the importance of real rates and then also he brought up the quantitative tightening. kind of reminding people that they do have the three tools. and in a way, is he suggesting that they could be cutting next year not necessarily because they think that the economy is going to hit the skids, but mainly because they think that inflation will keep falling and they just want to mark the nominal rate to the real rate to follow it lower. and if necessary, they can throttle back quantitative tightening. and so i would think that actually quantitative tightening they will wait for something to break. we know in 2019 you had the repo madness. this time if you me unruliness on the longer end of the curve,

that might be the first thing that they do is start throttling that back. >> gentlemen, thank you very much. always good to have you in the house. and yields are rising today following tfed's pause. rick santelli has more in chicago. please unpack all of this for us and how does global government debt issue affect it. >> you know, listening to our two guests, all i could think about is that one of the biggest reasons why interest rates are going up is because the government spends ambitiously and they continue to spend ambitiously. i think that this is a big deal and we need to pay attention. and you can look at the fed and the rorschach and try to figure out where rates will go or just pay attention to the data and the fixed income treasury market. it has been telling you what to do. let's look at continuing claims. today we're at ten month lows going back -- excuse me, nine month lows going back to

january. and if you look at twos, fives and tens on one chart, it says it all. twos are basically slightly lower yields on the day like the three year is. if you look at fives, they are up a couple basis points. tens are up about a half a dozen. and 30s are up about 11 basis points. and if you consider right now them all on one chart, back to '07, you can see back to '09. 20 year started in 2020. and so it is at the highest yields since 2020. and the 30 is at the highest yields on closing cycle basis since 2011. it has been very clear. for a month. these long dated treasuries were the underpinnings of investment activity. and so the fed can say what they want and you can try to mine their crystal ball, but i think that they are watching the markets closer than many think and it is very difficult in the end to understand what the dots

truly mean or to say that we'll have all this easing in the future. the only thing that matters in the here and now is that the market has gone soft on rates and even though the uk didn't raise rates, it doesn't matter at this point because they didn't raise rates because their rate fell, what, a couple tenths to around 6.5%. still too high globally. spending, inflation, energy and the prime minister of england, what did he do? he pushed back five years, forced transition to evs and embedded in that is one of the biggest inflation problems the globe has. >> thank you very much, rick santelli. coming up, come for the hot dogs stay for the catalyst. bullish on costco saying it has a long list of reasons to bite stock. welcome to ameriprise. i'm sam morrison.

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pippa stevens has more. >> and so there is one notable exception and that is the refiners. that is on the heels of big news out of russia which is that they are banning diesel and gasoline exports indefinitely. so they are a major player in the global energy market here. so before the invasion, they exare the forred about 2.8 million peribarrels per day. so sizable. and of course they are a key supplier to europe. in europe we saw gas oil futures jump above the $1,000 per ton level. here in the u.s. heating oil futures are higher. and so russia says that this is all about stabilizing prices domestically. but you know, we have to look at the country's prior actions and it was just about a year ago when they started slowly cutting off supplies of nat gas before the pipeline was then blown up. and so as one person said, naive

to think that putin wouldn't be trying to inflict pain on the west ahead of winter. so this is one of the levers that they still have to pull since they are still a global player in diesel. >> so they are stopping the export, but let's talk about the u.s. production and where it stands today. as i understand it, we are as at high a point as maybe we've been and that imports of foreign forced soil are low. >> yeah, so we're approaching that 13 million barrel ter day level. a little bit deceiving to look at just the rate count because production is down. but i think what sometimes is lost on the market is that refining capacity is very strained. these are billions of dollars in capex spend. would nt get a meaningful new project in the u.s. global projects face delays.

so we export 1 million barrels per day and the fear is if there are higher prices abroad, we could start exporting more of our products as we have in the past. >> all right, thank you. and now the cnbc news update. >> we're getting be a update n the fighter plane that went missing. it crashed in south carolina after the pilot ejected. and now a new report from the government accountability office says that maintenance issues with the fighter jet means they are only mission capable. 55% of the time. tiktok reportedly teaming up with google for a partnership on search. insider reports that tiktok and google confirm that they are testing the integration but would not comment further. taylor swift is turning her midas touch to the democratic process. vote.org registered more than

35,000 new voters on national voter registration day, that is a 23% increase over last year. if all of these new voters actually show up on election day, maybe they put their hands on their hips and say look what you made me do, look what you made me -- >> is she on the ballot? >> no, she went out and did a post saying hey, you should register to vote. she was promoting registering to vote. and she has a lot of young previously unregistered people who went apparently listened to what she had to say. >> and in an off election year. so go vote for your local board. con contessa, thank you. and ahead, the nearly 8% fixed mortgage continues to wreak havoc. home sales on a seven month low. more on that when "power lunch"

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we've talked about rising interest rates. mortgage rates also heading a bit hire having an impact on the housing market. diana olick has the latest numbers. >> yeah, rates have been on a tear following the fed meeting yesterday. average rate on the 30 year fixed mortgage shot higher this morning hitting 7.47%, that according to mortgage news daily. and that is up from 6.85% on june 1. and i'm using june 1 because we got the read on existing home sales in august this morning which is based on closings. so those were contracts signed in june and july. sales mixed expectations, and were actually the second slowest sales pace on record second only to during the financial crisis. but now prices are $407,000, hice august price on record. so if you are buying a $400,000 house today, it will cost you $134 a month more than it would have on june 1.

the realtor's chief economist said on a call this morning that we could see 8% on the 30 year fixed before rates potentially start to come down next spring and he said if that happens, we will see another leg down on existing home sales. new construction seems to be faring better but only because builders are hoping to buy down the high mortgage rates. >> and on that note, home ownership has become even more difficult for many. but real estate startup rome is trying to change that. did you just tell me about that? assumable mortgages. so when you buy a house, you get to take over the mortgage from sellers as well. their interest rate could be as low as 4%, maybe even 2%. you still have to cover the rest the purchase price of course. and here to talk about this is founder and ceo of realm.

>> thank you for having me. >> and this used to be much more common but has gone by the wayside? >> yeah. so right now, we're focused on loans that are fully assumable. so those are government backed loans. now, you know, roam helps buyers purchase a home with the low rate with the assumable mortgage. for buyers, they get to reduce their monthly mortgage payment by up to half. >> and so ironically they benefit the most if the mortgage that they are buying is very large. >> yes. >> so if someone only has 300 k left on the mortgage and you need a new mort annual for the other 300, it still helps but -- >> yeah, we focus on the homes that the loan to value ratio is often, you know, above 75% which means that the down payment the buyer would need to make is very similar to that 6 a conventional mortgage. but the value is that their

monthly payment would be about half of what it would be at today's prevailing rate. >> so loan to value based on current value or the value of the property when the loan was originally taken out? because houses have actually gone up quite considerably, sometimes 20%, 30% since then. so i may have an outstanding mortgage of $300,000 on a house that i paid $380,000 for, but now that house is worth $500,000. and so i've got to come up with $200,000 in cash. where do i do that? >> so what would happen, we work with you as a buyer around what your preferences are. so if you are able to come up with the full amount in cash, we'll help you with that. but if you need support, we can refer you to a second leanien learned. and they help ensure that your blend the rate is still way below the market rate. >> so i'm reading in "wall street journal" that the fha has

processed 3349 assumptions in the fiscal year that ends september 30th. there might be tens of millions of mortgages that would qualify for assumption. why have only 3400 of them been done? >> yeah. so this is actually a large part of the prisooblem we set out to solve. most don't know that this is a benefit given to them by law. >> really? >> yes. i watched this segment yesterday and i think you had a guest on who mentioned only certain kinds of fha and v.a. loans might be eligible or it could be an isolated incident. but this is a large part of what we're trying to correct the record on. it is actually all government backed loans are fully eligible for the assumption and this is an opportunity for most -- >> so is a question of people just not asking is your loan an fha or v.a. backed loan? the buyer not asking or the real estate agent not asking? so that that can be listed on the writeup of the property so

that you can immediately see that it has a 3% loan assumable? >> i entirely agree. so there are two key issues that prevent there from being more traction that we solve with our product. it has been difficult to discover these homes. let's say that you were shopping for a home in atlanta, you'd probably go to zillow and use the search word function to find assumable mortgages. and maybe find three or four. but -- >> because it is not on there. nobody out to put that as a data point. >> because of the lack of awareness, people don't know that they should be advertising the affordability benefit. so when you are a seller or listing agent and you hope on roam, we work with you, we help frame it in the right way to the buyer so they know that your home is the only one in the neighborhood that they can afford because it comes with the 2% mortgage included. >> and you get paid what to do this? >> we charge 1 p% of the sales

price. so we say our incentives are aligned with your. if you save money, we help you make money. so for them, closing costs are still much closer than a traditional mortgage. there is no appraisal required in an assumption because the loan is already originated. >> unless they need a new loan. >> you got it. if they need the second lien. >> i wish sellers wish they could take the mortgages with them. >> so you have a first lien. how hard are the second liens to acquire and what are the rates on them? are they higher than even the 7.75% that diana just cited? >> a bit higher but we'd only encourage to you use a second lien if it will still save you as a blended basis compared to the market. >> all right. thank you very much. appreciate it. >> do you think this will ever be extended to fannie, freddie, the mainstream loans? >> right now job number one is increase awareness of the loans

fully assumable today and that we would love to bring this benefit to every american in every home. >> all right. we'll see. thank you for joining us. coming up, shares of broad com falling on reports that google could drop it as its ai chip supplier. and as we head to break, cnbc is celebrating hispanic heritage month sharing stories of influential business leaders. here is all minds count founder. >> i find that many latinx grow up in america trying to fit in. and fitting this is very different from having a sense of belonging. this country is what it is in part because of our contributions. and so owning that, being proud of that, and looking up to those who have achieved their dreams, it is a big part of leveraging

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breaking news out of washington. emily wilkins is joining us with the story.

emily. >> hi tyler. well, initially house speaker kevin mccarthy said that lawmakers were going to be staying in d.c. until they got the continuing stopgap funding done. but at this point it sounds like members are actually going to be heading home. this comes after a number of very difficult votes this week including one today where republicans for the second time tried to pass a procedural motion to get to a funding bill for the department of defense and again that bill failed to pass on the floor. a small group of republicans holding it back over a wide variety of concerns about the process for government being funded, about potential funding for ukraine, and at this point it is just very difficult to see what a potential path forward in the house would be. there are bipartisan bills that were put ford lastward last nig. you have about 60 endorsing that proposal. and of course you have the senate, funding bills have to renlg nature in the house, but there are different loopholes and things that the senate could

do to move. but that the point it is not clear what congress' next step is here. and with less than ten days before government funding runs out, a shutdown seems more likely than ever before. >> absolutely. emily, thank you very much. and ever core billullish on st.p wel eak to the analyst behind the call when power lunch returns. (sirens) [due at target in 5!] copy that. make a hard left down the alley.

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welcome back. shares of splunk are soaring after the company is selling itself to cisco in a cash deal worth $28 billion. dom chu is here with more. >> it is a big deal. biggest one in their history. so if you take a look at this tech sector deal overall, computer networking equipment giant cisco inking this deal to take over a cloud computing and cybersecurity firm in splunk for that $28 billion that kelly mentioned. that is by the way 157 bucks a share in cash. so you can kind of see where the deal arbitrage is. and cisco oig wants splunk to ed its products suite.

and this deal will help give cisco another stream of recurring revenues. their ceo joined "squawk on the street" earlier this morning alongside the splunk ceo is he spoke about demand for protection against the growing cyber >> customers today, they are rebuilding their entire i.t. infrastructure to deal with a multicloud environment. they are dealing with hybrid work, the home office has become a branch now. they are rebuilding all their applications. they are running them in a distributed way. data at the edge, workers everywhere. and so the threats and the dynamic nature of the technology architecture has changed significantly. >> so we mentioned the biggest deal had this history of cisco, guys. the previous one got to go all the way back to 2006 when they paid roughly $7 billion for a firm, you guys remember? scientific atlanta.

>> cisco has done hundreds and hundreds of deals over its lifetime. >> of deals. but not this size, right. and remember -- >> how much of a premium is this? >> a huge premium. seven times forward sales at this point. so they are paying a lot of money for this company. and by the way, remember the flip cams, remember those things? and then scientific atlanta, that was a preeminent company back in the day. ef set top box for tv was that. >> stick around. we know you have a special expertise in this next topic. costco shares up 3% for the quarter, 22% for the year. set it reporting earnings results next week. our next guest names two catalysts that could lift the shares to $600 from 556 today. greg covers broad line and hard line retail for evercore isi. why do you like costco so much?

not that we don't all. >> it's a great business. it's been that way for a while. i think what makes it interesting now, even though it's done well this year, there are a couple of things in the plate in the next year that we think could be catalysts. one the fee hike, which they haven't done well over five years. we think it will come the end of this calendar year, probably december. and then another thing is that they are generating enough cash flow that despite the investments that they are making to grow clubs and the member value proposition, we think they are going to be up to probably close to 14 billion of cash the next four quarters. the last time they got above 13 they did a special dividend of $10 a share in 2020. two things out there the market may not appreciate with costco, the stock, rather than tretaile. >> are they compensating for same-store sales slowing by increasing the membership fee? what is it masking, if anything? >> well, i think there is a lot

of costs for all retailers. so i think they have held off on hiking the fee because they have been able to still grow traffic very nice consistent, 3, 4%. they are gaining plenty of share. so they have got through the disinflation of 2023. we got disinflation, it will start to ebb. as long as te can keep traffic at 3 or four 4%, renewals up above 92, we think they can do it. they can hike the fee. it's what they can do to really, you know, to keep building omt business. >> you know what's interesting? there are two costcos that are roughly equidistant from where i live. i go to one more than the other. viewers who see me there, they know where it is. i am not going to divulge where it is. >> it's a secret costco. >> an interesting thing to me,

talking about this membership fee hike, right, they have now started to check membership cards. they check them when you go in, curry, right? now when you are waiting in line they are actually coming through and checking to see if you are the person on that card that is buying the stuff, playing, perhaps, there has been this shared -- >> yes. >> netflix phenomenon happening at costco. when i was asked i was surprised. maybe that many people really are sharing each other's memberships and whatnot. it implies also that there is a demand for costco, even a cult-like following. if you are a member there, you go there pretty consistently. so maybe this is the time perhaps when costco can actually do this membership hike and not have a lot of pushback. >> i think that's a great point. i think there is also a channel of demand through instacart. you don't need to be a member at all. i am not sure if they feel a need to turn that off. >> no, i think the instacart partnerships work well for them.

we think maybe 2% of their sales at this point. but the key is it's giving another option to the member to be able to access those products without having to go to the club. i think that's where that has worked for them. but at the end of the day, what makes costco work as a membership models is that shocking value proposition to the point that -- i think it's a great one that the reality is, it's -- we find in our survey work there are some members, not a majority, but there are some that actually hope they hike the fee because they think it will be less crowded when they go to their local costco. i am not sure it will play that way. but you get that from some of our surveys. >> what is your favorite thing about costco, greg, when you go there? >> i think as a consumer it's knowing that they have already self-selected for me 4,000 skus of the highest quality, best

price product in the world. so i don't have to do the shopping. they have already decided. you know what? this is the best paper towel, this is the best pistachio, this is a great camera package with a couple of lenses on it, and they have effectively -- >> that's a good point. >> bought that best thing. >> i was going to say, to that point, this is the final point i make, other than i like the $5 rotisserie chickens, is that the brands i buy have been dictated to me by costco. meaning the laundry detergent that i use, i might have said one brand or the other before because it was a consumer preference. now it's these are the items available at costco. these are the items i buy. >> what do you think of the golf balls? >> the kirkland signature golf balls i have played and they are pretty good especially at the price point. >> i like the trash bags. you get boxes of 7,000 trash bags. >> scented or not?

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see there. closing in on a 1.5% decline. down 190 points after yesterday's fed -- >> and morgan stanley says a hawkish fed has shaken the market. significant, that is getting closer. >> thanks for joining us today. >> "closing bell" starts right now. welcome to "closing bell." i'm scott wapner. this make or breakout begins with the outlook for stocks. 24 hours after the fed signaled interest rates could be higher for far longer than the markets thought, that surprise sending interest rates higher, stocks lower. that dynamic continues today. there is the scorecard with 60 minutes to go in regulation. stocks in the red throughout. not significant losses. nonetheless, weaker across the board. the dow dragged by cisco after they announced they would buy splunk for almost $28 billion. speaking o