welcome to "power lunch." alongside kelly evans, i'm tyler mathisen. hollywood writers reaching a tentative deal with studios to end their strike after 150 days but nothing is finalized yet. the ink is not dry. we're hitting the road kicking off our latest "power

lunch" house road trip. five cities in five days. are home prices still through the roof? what does a million dollar budget get you in the markets we are looking at? we'll find out. >> that's always a fun question to answer. maybe now more than ever. a mixed day to kick things off in the last trading week of september. the dow is trying and right now succeeding to avoid a fifth straight down day. we erased earlier declines. up 12 on the s&p 500. up 43 on the nasdaq. the s&p and nasdaq are coming off a three-week losing streak and pacing for the worst month since december. dozens of names are also hitting the new 52-week low list. we're talking target, dollar tree, dollar general. dg, dollar general, hitting the lowest level since january of 2019. alaska air and southwest have been part of a challenge for the airlines. they are both back to 2020 lows.

>> we begin with that tentative labor agreement between hollywood writers and the studios that could end the ongoing writers strike that's lasted nearly 150 days. while it's not finalized yet, the wga reportedly calling it an exceptional deal with meaningful gains and protections for writers. for more, let's bring in lane lowe. good to have you with us. while the writers seem to be cheering this deal, we don't know much about what's in it, do we? >> we don't. the contract language has not been fully sorted out yet. like you said, the writers guild called it exceptional, said there are meaningful gains and protections for all sectors of the writers membership. that was cause for celebration. i was out covering some of the festivities last night. there were parties all across l.a. a couple hundred people up at a bar in north hollywood. when i was talking to people,

they were relieved, elated and thrilled a deal had gotten done tentatively on day 146 of this strike. it's been a long 4 1/2 months for these folks. sag-aftra is still on strike. they're on day 74 today. >> what would happy making protections on ai look like for the writers? >> that's a good question. it's an emerging technology and something that's moving quickly. hard to say what that contract language will be finalized into. there's concern about studios being able to use their words and materials in the future without compensation or adequate compensation. there's a whole host of issues with any kind of emerging technology. in the same way there were questions around new media, which is just steaming as we know it today back in the 2007/2008 strike. there are issues writers are hoping to resolve with

residuals, pay increases, staffing minimums. i'll be very interested to see in the final language of that contract. >> are we talking 8%, 12%, 16%, 20%, 24%? some kind of ball mpark here. this revenue sharing piece seems incredibly important. >> i wish i could tell you. i was talking to some writers last night. they -- streaming residuals is high on the list. they've seen the way the streaming economy has impacted their work over the last 5 to 10 years. this is something that sag-aftra will be taking a close look at. obviously the writers and the performers have different issues, but there are some things that overlap, including ai, including streaming residuals. i think there's a chance that this sets something of a template for those issues once the studios go back into talks with sag-aftra. >> is there any sign of movement on the sag-aftra agreement? >> you know, the studios have

been dealing with one guild at a time. now that they've come to a tentative deal with the writers guild, they'll turn their attention back to sag-aftra. as far as i know, there's no talks on the books yet. i imagine that has to happen soon. >> we hear a lot about the particular members of the -- who are negotiating on the studio side. it included warner brothers discovery's david zaslow. bob iger, donna langley, ted serandos. is there one of those four folks who is more influential in that group than others? is netflix the driver here? are they all equal players? >> those conversations all took place behind closed doors. each of those players has different things at stake. we've seen how netflix impacted the streaming world.

how all of these other streaming players have tried to come to the fore in the wake of their dominance of the streaming landscape. we've also seen how, you know, disney has caught up with disney plus and how they've been trying to reshape their business around this new world where there's a secular decline in cable viewership and a rise in streaming that is still notoriously a fair low-margin business. >> elaine, good to see you. >> thanks for having me. strikes continue for workers at america's big three automakers. ford warning "significant gaps remain in contract talks." and it was having the easiest time so far. phil lebeau has the latest on negotiations. >> i'm not sure easiest would apply to the ford/uaw negotiations. they clearly are moving along faster than the gm and stellantis ones. there were very active talks, according to those familiar with

the negotiations over the weekend, active talks between uaw and ford. ford came out last night saying, yes, significant gaps remain especially on key economic issues -- percentage pay raise, wage tiers, cost of living adjustments. gm and stellantis, the talks continue there. it's not as though it's only uaw and ford where talks are happening. it's also continuing with gm and stellantis. right now, about 12% of the uaw membership for the big three are on strike. even though this is getting a ton of attention and it's significant, especially at the plants where they shut down production or at the parts and distribution centers, keep in mind you have 88% of the, aw members who continue to work and 85% of the production for the big three, it continues. it has not stopped. one other thing, as you look at shares of gm, ford and stellantis. ford got good news that the rank and file north of the border, the uaw counterpart up there, they approved a new contract.

now those negotiations move forward. that's good because it perhaps gives a template in terms of what we might expect when it comes to the uaw negotiations. it's a separate situation up there than it is here in the united states, but i think they got a 24%, 25% pay raise ultimately. a lot of people believe that's in the ballpark of what we might ultimately see when these contracts are finalized between the uaw, gm, ford, and stellantis. president biden is in chicago tomorrow, we're working to find out how long he'll be there and if he'll meet with strikers. >> is there a ticking time bomb in here where at least from the ford talks it appears they were going to give them the authority to strike in the future over plant closures, which was the very thing they did against gm for that long strike several years back. given that there's probably going to be more plant closures

to come, stellantis and others, are we just going to end up creating the seeds of another strike in the future over plant closures instead of over pay? >> keep in mind, this contract is only through may 1, 2028. once it's finalized. ford would not agree to that if it didn't believe that it's pretty confident it will to the have to close any u.s. plants between now and may of 2028. sure things can change within the marketplace. that is always something -- you want to give yourself as much flexibility as possible. general motors made it clear they have committed to having product at every plant where there is a uaw membership right now. to a certain extent, those guarantees are baked in. the issuebecomes if you flat out say we will never close any of these plants and that's just the way it is. things will change. we know that.

that's the nature of this industry. through may 1, 2028, i think ford is fairly comfortable and gm as well that they know what they need in terms of production facilities. >> makes a lot of sense. phil, thank you very much. appreciate your reporting. in washington, no sign that congress will be able to fund the government before saturday night's deadline setting up a shutdown that could last for weeks. there's a real logjam in washington right now and emily wilkins is all over it for us. hi, emily. >> hi. a lot happening in d.c. this week, but so far nothing that would actually lead for the government to not shut down come midnight on october 1st. that could have some serious implications. you're talking about 2 million federal workers plus military who are not going to be receiving a paycheck for the duration of the shutdown. billions of impact to the economy. the credit agencies have started to take note. moody's coming out this afternoon with a warning to the

u.s. government that shutting down would be credit negative. the u.s. has a triple a rating from moody's. in a statement they warned that if the u.s. comes out with a shutdown that could have some negative impacts. it could demonstrate significant constraints that intensifying political polarization driven by widening fiscal deficits and deteriorating affordability could lead to a negative credit rating. basically the fact that things are so partisan now that the house can't get anything done. you saw them try and fail to move last week on multiple spending bills. at this point they're not even considering a stopgap funding, they're working on the long-time bills. while speaker kevin mccarthy expressed some confidence this reporters this morning that they would be able to avert a shutdown, he had strong criticism from members holding up the process saying it doesn't seem like they have a strategy. listen to what he said today.

>> we have to keep the government. if people want to close the government, it only makes it weaker. why would they want to stop paying the troops, the border agents and the coast guard? i don't understand who that makes you stronger or what point you're trying to make. >> the senate is also working on a stopgap spending measure but it's not clear if that will be done or passed by the time that saturday night rolls around. the white house is already ringing the alarm telling agencies to get plans in place for a government shutdown. in d.c., the question is from if to how long the government could be shut down. the longer it is, the worse of an impact on the economy. >> emily, how much does the vulnerability of the speaker play into the negotiations that are going on? >> it's an immense amount. if mccarthy put a bipartisan bill on the floor, they estimate that about 300 members would vote to pass it.

a mix of democrats and republicans, kind of like what you saw for the debt limit. the fact is that members like matt gaetz have told mccarthy if he brings a bipartisan bill to the floor they will vote to remove him. it's not clear if he would survive that vote. regardless of what happens in the next week, that's eventually a choice that mccarthy will have to make. >> thank you very much. appreciate the reporting. coming up, following the money. it's been a tough go for startups depending on venture capital, but one sector is still seeing big bucks flow in thanks in part to government spending. could that dry up if the government shuts down for a while? we'll get a live report when "power lunch" returns.

here in s and all of our stuff where we want to go. but, our cars can't take us e with unpaid tolls. vehicles with overdue, unpaid tolls may not be able to renew their registration until outstanding balances are paid.

payment assistance is available. visit bayareafastrak.org/ase so go pay your unpaid tolls y and keep your wheels on the ! welcome back. markets are starting the last trading week of september with a whimper. the s&p 500 and nasdaq are pacing for their worst month since december of 2022 and things could get worse before they get better between the labor strikes, the looming government shutdown and the likelihood of rates staying higher for longer. where should investors return? let's ask stephanie link from hightower and a cnbc contributor. does the recent stock slide have you drooling or concerned? >> we are getting some opportunities. i know we'll get to that in a bit. september basically is a very volatile month. it's living up to its billing

this year. we're down about 6% from the highs. the vix is up 34% in two weeks' time. you just cited a lot of the reasons. there's a multiple of issues. we have the unknowns of the fed. the labor strikes. you have oil prices up 32% from the june lows. you have the government shutdown, which is a big looming situation. i think it will be short-lived, but another uncertainty. and the biggest thing is you have the ten-year yields inching higher at 4.6%. you're at new cycle highs. as rates go higher, that's competition for stocks. i'm not surprised we've seen this kind of choppiness and this trade down. i think better things are ahead. i think the economy is hanging in there much better than most people expected. >> the economy looks good. the consumer is reasonably healthy. those high and rising and higher for longer interest rates, what does that spell out for stocks over the next 6 to 12 months? >> i think it's a challenge.

for the last ten years there was no alternative to stocks. now you have all kinds of alternatives not only in fixed income but cash. the good news is is that over the long-term stocks actually -- the total return outperformed bonds handily. 7.7% total average long-term over the term. that is compared to 3.5% fixed income. i'm not saying you don't want to have diversification or cash, you want all three. i think stocks follow profits, and i think we've seen a trough in profits and companies can handle the higher prices and also able to price increase as well as cut costs and the demand side of the equation is better than expected. >> can i ask you about nike? i love that in your note it says gulp. i was thinking about this this morning. we used to talk about starbucks

all the time. i think of both of them now and really ponder what their earnings power looks like in whatever this new normal world is. >> i still think nike's earning power is close to $6, $6.50 in the next two years. a lot of that is predicated on them getting back to high teens ebit margins, from 11% today. how will they do that? a lot has to do with lower freight costs, lower input costs. currency is a wildcard. most importantly inventories. then you also mentioned china. i think china, the consumer in china is actually doing better than expected. we got really good industrial production and retail sales in china two weeks ago. the consumer is doing better. that's 13% of nike's revenues. i like the dtc movement. it's choppy, dicey now. it's not super cheap at 23 times

forward. certainly down from 28 times forwards ten years average. i'm hanging with it. >> it's a week for nike, a week for micron. we'll hear more about china and more about a lot of these factors, i love the way you explained the challenge nike has ahead. stephanie, thank you very much for your time today. >> thanks. all right. treasury yields higher to start the week. the ten-year above 4.5%, trading at levels not seen since 2007. let's check in with rick santelli in chicago. hi, rick. >> a month to date chart shows us everything we need to know. we continue to see the 10s and 30s leading to higher rates. it's been that way off and on since the middle of july. that doesn't mean two-year note yields are longing, they're moving higher as well but just

not leading the pack. we call this a bear market when the markets go up and today it's a bear market steepening trade, we're under minus 60 basis points in twos to tens, that's the least inverted in four months. open the chart up to 2006. the reason i'm doing this, the ten-year note yields in 2007 had a high close of 5.29. we won't be comping to '06 for quite awhile. and all of this continues to be a big positive for the dollar in addition to other central banks basically moving to a different tune than our central bank and we're now on pace for yet another fresh ten-month high close in the greenback. back to you. >> thank you very much. we are just days away from our delivering alpha summit. please join us in new york city this thursday. we'll convene business leaders

to provide insights to help you make your investing dreams come true. tickets are still available. scan the qr code on the screen or visit cnbc.com/deliveringalpha. in the u.s. we see millions of cyber threats each year. that rate is increasing as more and more businesses move to the cloud. - so, the question is... - cyber attack! as cyber criminals expand their toolkit, we must expand as well. we need to rethink... next level moments, need the next level network. [speaker continues in the background] the network with 24/7 built-in security. chip? at&t business.

welcome back to "power lunch." it's been tough sledding this year for startups that depend on venture capital. there's one bright spot and investors say it's thanks to the inflation reduction act. kate rooney is following the money trail for us. hi, kate. >> hi there. it's not ai, believe it or not. clean energy startups are emerging as a bright spot in venture capital. founders and investors point to the inflation reduction act which promotes clean energy production and clean tech. that includes things like wind, solar, evs. that group just had its best quarter in two years. it brought in $5.4 billion in venture funding. this is at a time when most venture capitalists are tightening their belts amid

higher interest rates. i.r.a. tax credits incentivized investors to invest in clean energy but startups may not have the revenue to tax. if they don't, they can sell the tax credits. that improves the math and economics for some of their backers. >> if you are a vc investor looking at novel technology, if you're looking to capitalize solar projects, if you're a large bank thinking about what the payback period will be and the viability of various projects, you're looking at the value of the tax credits as a fundamental input into that. the ceo of electric hydrogen tells me that he scrapped manufacturing projects abroad because of the i.r.a. and moved some of those onshore as well. >> that's incentivized to build a factory in the u.s.

we announced we're building a factory in northern massachusetts, in devins, massachusetts. it's also incentivized us to do things like what you see behind us, our pilot plant in san jose, california. it's absolutely pulled the market into the u.s.and it's refocused u.s. companies like ours on the domestic opportunity. >> the white house says companies have now spent $110 billion on clean energy manufacturing in the last year or so. 170,000 jobs meanwhile have been created in the space. some startups are still waiting on more clarity from treasury on the tax credits. that's expected by the end of this year. back to you. >> kate, thank you very much. let's get to eamon javers for a cnbc news update. former president trump donald trump's attorneys issued a challenge to one of the lawsuits trying to get him off of the 2024 ballot. it's just one of dozens of lawsuits filed that claim trump is ineligible to run under a rarely used 14th amendment

clause that bars candidates who have supported an insurrection. but in the filing today, trump's attorneys said that clause only applies to someone who engaged in an insurrection, not a person who allegedly incitystigated it. uk police say they're looking into a number of allegations of sexual offenses against comedian russell brand. they say all of the allegations are "non-recent." the probe began after reports came out of four women accusing brand of rape or assault. a tornado-stricken north carolina pfizer plant is mostly back up and running. but the company could have supply issues until the middle of next year. the plant produces nearly 10% of the sterile injectable supply inside the united states. kelly, back over to you. >> eamon, thank you very much. still to come, we are

kicking off our latest powerhouse road trip. five cities in five days. there's the rv. each giving us a glimpse into the health of the housing market. how are near 8% mortgages taking a toll? how far does a mliilon dollars go these days? find out after this break.

welcome back to "power lunch." today we begin another edition of our powerhouse road trip across the country. we'll be doing in-depth looks at what's happening in the housing markets around the country, showing you how far a million dollars can go and how interest rates are affecting buyers and sellers. we start just up the road in the hudson valley, poughkeepsie, new york. one of the hottest housing markets in the country, clocking in at number 87 in zillow's top 100 metro areas with prices up 56% from last year and 54% are selling above the listing price. let's welcome in doug wilford with brown, harris, stevens. he calls the area home, too. >> absolutely. >> good to see you. >> good to be here.

>> why is poughkeepsie so hot. it's got maris college, it's a nice town. but who is buying and why are prices driven up? >> it has two things going for it. value and location, which is what consumers are looking for today. value, it's -- if you look at the price you would pay in west chester, just to the south and closer to the city, you'll be paying about twice the amount per square foot than in poughkeepsie. you're an hour and a half from new york city. if you're a commuter, before 2020, that may not have been attractive to you. if you're working remotely or a hybrid position, maybe three days a week with that commute, if you can save money, is not a bad deal. it's a great town. ibm just committed $20 billion

into the hudson valley including po kiughkeepsie poughkeepsie. you have cultural diversity. you have great education. marist. a great education system because of that. you have great health care. it has everything going for it. >> i've done that bridge. it's cool. it's cool. >> it's gorgeous. >> you go across, you're going over the train tracks. it's a little unnerving but fun. >> it's high. >> i don't mean to skip ahead to the big reveal here, i would love to know what a million dollars gets you in poughkeepsie, it's still very close to one of the most expensive real estate parts of the country. are we talking about four-bed and three bath or hopefully more than that. >> i think we have an example of one that sold for about 749,000. four beds, three baths. this is a great example of

what's happening in the hudson valley and the poughkeepsie area. when interest rates are high and inflation rates are going up, people still need to buy and want a home, but they will be risk adverse. you have to have a place to live. you want to understand what the costs are. in this case, you get new development. everything is done, everything is finished. you just move your things in. put the key in the door and you're ready to move in. new development is not the only place it can happen. if you're a seller, you just need to understand when you put this house on the market, get it ready for the market. consumers need to understand what they're buying and understand there will be no hidden costs there. >> let me ask you about this property or a row house in poughkeepsie sold for 1.6 million over the summer. for sales in this range, an 8% mortgage is what monthly payment and how many people are taking out those mortgages? how many are using cash and other alternatives? >> we're seeing 51% are still

financing. you know, at 8% for this, your monthly payments -- that's going to be at least $6,000 or so. >> wow. >> that's not cheap for this house. to think about the fact if you built the same home in west chester, we love west chester, don't get me wrong, you'll pay twice that per square foot. for someone who wants this home and wants to have a certain lifestyle and get to new york city or to albany or to enjoy the hudson valley, this is the way to enjoy that at a lower price than you would get someplace else. >> beautiful part of the country. i sense that what you're saying is buyers don't want any part of a house that they're going to have to fix up. you have to have that house letter perfect. >> i just think -- yeah, that's true. people want to know -- not that there aren't people out there looking for fixer uppers, but if you're concerned about what just

happened to your lifestyle in the past 12 months, then you'll want a place you understand what you're getting yourself into. i think done, finished, no deferred maintenance is what people are looking for. >> why is it that across the country there's the business of staging homes. people are so fanatic about having the occupants -- the current owners clear out all their stuff. it's incentive to me to put my house on the market. i have coats in the closet. >> that's fair enough. there's two reasons for this that are both valid. first of all, you want to be sure you can live there. the way we live in our homes is the way we live inin our homes. if we have all the kids toys out and every appliance out so i can reach it, great. if i walk into a house and the

sofa doesn't fit and the chair doesn't fit and the bed takes up all of the bedroom, it looks like a small house because there's not enough room for my stuff. that's one reason. the second reason is to see themselves in the house, they need to see you out of the house. you need to walk into the house and say this works well for these people who have been here for 20 years and have three kids and two dogs. here's a graduation picture. that works for them. but i need to see myself there. if i can create more of a blank slate and i can see a lifestyle. so i can see that there's the right coffeemaker in the kitchen but barely anything else. and i can see the furniture fits and the closets are edited out so they're not overstuffed, i can see miyself there. >> the ideal version of yourself. you want to think you're the person who has the edited closet and the only coffeemaker on the shelves. >> oh, my. my wife and i were talking about this last week, and i was saying

why do you have to clear out all your stuff? i'm just not going to sell. thank you very much, doug. >> great. thank you. our powerhouse road trip continues all week long. tomorrow, kelly and i are driving -- there we go. >> we need a jacket if you're going to ohio. >> we're going to dayton, ohio, home to another hot housing market and home of courtney reagan. houses staying on the market there for only five days. that's on "power lunch" at 2:00 p.m. come with us to dayton. >> this is always my favorite series. coming up, china's property crisis intensifying as evergrand suffers another setback. what it means for companies doing business there next. as we head to break, cnbc is celebrating hispanic heritage with stories of influential business leaders. >> as somebody who immigrated from latin america, one of the things i'm most proud of is the

values i could bring from my hispanic heritage. my family is from argentina, peru, also from mexico. be yourself. embrace who you are. knowing where you come from is critical to set the path to success.

welcome back. evergrand taking yet another hit this morning after the company said it would delay a debt restructuring meeting set for later today. their hong kong-listed shares falling as much as 25% on the news which comes a month after the company filed for chapter 15 bankruptcy protection in a u.s. court. let's bring in dennis. good to see you again. this was a deal that had reassured a lot of international investors, now it's fallen apart. >> it not only fell apart but the hong kong dollar to the u.s. dollar is like 13 cents. today on the hong kong exchange it's 41 hong kong cents equals one of their shares. it's really been a devastating blow, not just for evergrande but for the overall market.

>> and talk about why that is. a lot of people want to understand, if this is telling us more about the struggles of the chinese property sector, which i don't want to say you can put to one side, but are there larger implications for the business community? >> in asia, they have the real estate investment trust, the wreaths. they've been taking a big -- they've been really taking a big hurt because a lot of what they've invested has been put into chinese real estate, which is now down so much. as 30% of the economy in china is now based upon real estate, i don't think this situation has been as bad as it is today since 2021 whenevergrande first went into the tank. >> let's talk about this company, evergrande. is it a risk to the banking system or the property system there or is it something less

than that? >> itself will not bring down the chinese economy, but they have to figure out will i bail out private companies who have overborrowed their money or am i going to let them go down? on the one hand they'll say i won't do that because the cost may be a trillion dollars. the problem with bailing out -- this is the chinese view, not mine -- if i bail them out, the chinese people will bet more in the future and say well, if my investment doesn't work, then the government will bail me out. that's the box that the chinese are in. i think the chinese have decided to sit back and wait and see what happens. >> there's a question here of moral hazard like we went through during the financial crisis. is evergrande potentially the lehman brothers as opposed to the other banks that the u.s.

did cash infuse or capital infuse back in the financial crisis? >> that's a great question. i think that evergrande is the canary in the coal mine. i think if it goes down, i don't think the chinese are going to have any option but ultimately to start bailing out, if not these companies, the people who have invested their money. the problem in china is the chinese people have given these companies money in advance to build up a house or a condo or whatever they're going to buy, now those companies are so much in debt that they can't pay it back. at least the chinese government has to protect its own citizens if not these particular banks. it's a tough question. >> do these property developers have enough people to move into the buildings they've built? >> no. i could give you a longer answer but i think the answer is no. there's several million properties in china are empty

now. one of the problems is we know about the big cities in china, shanghai and the rest. the third and fourth tier cities where a lot of this building has gone on have been damaged. those properties are empty now. because the chinese economy is in such bad shape, the people who worked -- who were going to live in those areas are not doing it anymore. this is really very serious. >> dennis, always good to see you. thank you. >> thank you. still ahead, rtx, formerly known as ratheon technologies hovering at its lowest level in three years. is our trader dropping this defense name yet? we'll ask michael farr next. ♪ (when the day that) ♪

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time for the three stock lunch. cnbc pro launching a new screening stock this week letting investors look at stocks with more than 50 criteria. we put it to the test for this edition of our three stock lunch. here with our trades is michael farr from hightower advisers.

you chose large cap stocks with a forward pe ratio of 50 or above that are up 20% or more for the year. your first stock bubbled up is shopify. what do you think of it? >> you know, i started with that, looking for sells. i started playing with this tool. i've been a long-time cnbc pro subscriber. i really wanted to get into the screening tools. you go through these metrics to see which of your boxes get checked. shopify up over 50% this year. price to earnings ratio, just looking for an expensive stock is there anything out there i should think about selling? shopify came up. 95 times earnings. it's been a great run, but every so often you have to say wait a minute, let's take our profits and it's time to sell this stock. no dividend at all.

you know, you can have a good company when the stock price just doesn't make sense. when you go through the screening tool on cnbc, shopify says sell. >> i figured when i saw the 50 be these weren't going to be buys. the next pick is microsoft. people would say if there ever was one to buy at this valuation. >> i used some different criteria for microsoft, kelly. i said i want to look at something now up 20%, and i wanted a price to earnings ratio maybe more on the expensive side, up 25%, so 30 times earnings for microsoft with a 15% growth rate. average growth rate for the s&p 500, average stock is 8%. i have almost twice the growth rate. i don't have quite twice the pe ratio. of course we have a diversified company. going with the numbers here, i think microsoft is certainly a hold when you use the cnbc

screener, which i think, you know, you do this on pro. it was fun. and i think for me you get the right answers. you still have to impose your judgment as an investor and your discipline. it's a name i own. owned it for a long time. i would probably add to it, but it screens okay as a hold. >> you're moving some -- you're moving the goalpost here, changing the screening parameters for these stocks. tell us about your third screen, what bubbled up and what do you do with it? >> so, on -- for my third screen i looked for companies bigger than $50 billion and that were down more than 10% year to date. i started with one up 50%, now down 10%. i like to buy stocks that, you know, are down, not when they're making new highs. 10 to 16 times earnings. i wanted something cheaper. ratheon was a name that came up. ratheon is down about 30% this

year. it's 13.5 times earnings, 3.3% dividend. this is a stock i've owned for a long time but screened really well and made a new year low today. this stock is expensive. it could have a difficult time but they have good technology that long-term is able to save a lot of the airlines money. there's been a part that's failed. they got to replace it. this is not a fatal flaw in my opinion for ratheon. this says ratheon would be a buy down low. by the way, that was a great interview you did earlier with willie walker from walker and dunlap. i taught him in high school. he was brilliant then and brilliant now. >> you were teaching high school? >> i taught high school english, yes, 11th and 12th great english. willie was a senior in my english glass. it was great. we were great friends then. stayed great friends for 35 years now.

something like that. i taught shakespeare. i did the whole thing. >> you have to teach mac. get him ready for the s.a.t. >> mac is such a great young man. he's the best. >> ratheon is now rtx, but with x in it, you have to think it has to do with elon musk. just rtx. >> it doesn't but i bet musk would buy it at this price. >> maybe he would. >> a challenge out there, elon. and to try our new stock screening tool visit cnbc.com/pro. that's where you'll find it. still ahead, mcdonald's franchisees arnoe t loving the higher amounts charged by corporate. find out what the backlash could be next. the changing landscape to stay ahead. when you partner with barclays, every change leads to a bold possibility. you have the vision.

we have the insights, financial solutions and global perspectives to help you make it real. barclays corporate and investment bank powering possible.

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next level moments, need the next level network. [speaker continues in the background] the network with 24/7 built-in security. chip? at&t business. . welcome back. two minutes left in the show. let's get to it. mcdonald's is facing backlash from franchisees over raising its royalty fees for the first time in 30 years. let's bring in kate rogers with the latest. we talked about this last week and it sounds like it didn't sit well. >> the national owners association, an independent advocacy group, spoke out on the fee changes in a letter to its membership last week. mcdonald's did announce friday it would raise franchising service fees in the u.s. from 4% to 5% and changing the name to royalties. the noa says the change in nomenclature is significant and will remove the company's duty

to provide vital services. it's imploring owners to review new agreements with the company along with a franchise attorney. reinvestment decisions should be cons considered as reopening a new restaurant. adding it's time for every owner to begin focusing on protecting their business and their family. joe erlinger said we're not changing services but we're trying to change the mindset to see what you buy into when you buy the mcdonald's brand and system. even when accounting for inflation, 2023 is expected to be one of the highest franchisee years in history. >> quick question. it sounds like it's not so much the raise in the rate, the royalty rate from 4% to 5%, it's material, but the franchises say its services but mcdonald's says

it's not services, we're not cutting back oservices. >> they're changing the name to royalties, that's what the noa says, if you change this name does it change what's expected to provide us? >> got time for that ten-year? >> we have to make time. 4.54 was the last print. interest rates are moving higher today. stocks are trying to shake it off. we're still talking about 12-year highs. >> "closing bell" is right now. welcome to "closing bell," i'm mike santoli in for scott wapner at post 9 at the new york stock exchange. stocks treading gingerly into a new week. the ten-year treasury yield ticking above 4.5%. the dollar index making a new ten-month high. big tech and energy trying to prop up the s&p 500. coming up, elizabeth burto