this is spring semester at fairfield-suisun unified. they switched to google tools for education because there's never been a reported ransomware attack on a chromebook. now they're focused on learning knowing that their data is secure. ( ♪♪ ) welcome everyone to "power lunch." alongside kelly evans. i'm tyler mathisen. glad you could join us. higher wage contagion. if and when the various labor strikes are resolved, one thing is pretty certain. thousands of workers will have higher pay, but will all those new salaries lead potentially to higher inflation? we'll look at that. plus, carrying debt weight. this higher interest rate environment could pose a risk to overleverage stocks and we're going to take you through some of the name, kelly, that could be impacted.

>> indeed we will. let's get a check on the markets which are looking a little better than they did earlier. we're narrowed the gap trying to turn green again like we were briefly were at the top of the session. the dow is down seven points and the s&p 47. the nasdaq is down 22. shares of gm moving lower this afternoon on reports from "the wall street journal." it's not about the strike. it's that at least 20 million vehicles potentially have dangerous airbag parts. those shares off the lows down 2.5%. on to another automaker in the red, how about rivian down nearly 20% now after announcing $1.5 billion convertible bobbed sale and issuing disappointing guidance. those shares have been steadily moving lower. they are under $20 today, and clorox also lower after weak guidance. much more on this company's woes ahead. 6% drop. this one, tyler, moving a little bit off the session lows. finally, a new study revealing weight loss drugs like wegovy

and o'semi-pick may lead to stomach paralysis. they could benefit the airlines amounts of you can see the trading headlines here but a lot is at stake for the weight loss drugs, tyler. we'll talk more about that. >> stomach paralysis does not sound good. >> all right. let's move on here. two key strikes continuing in the auto and health care areas. on the automobile front negotiators between uaw and ford are seemingly narrowing their differences in some areas. gm making six offers with progress in, quote, key areas. meanwhile, 75,000 kaiser permanente employees continuing their strike today threatening a longer strike in november if demands are not met. even if resolved, these strikes could have lasting consequences in the long term, possibly for inflation. just last week the billionaire investor barry sternwick weighed in with his thoughts.

>> the uaw is on strike. they are asking for 40% wage increases. the union, the democrats, what's wrong with the biden administration and why is he so unpopular? inflation. that's what people say. it's the economy, dummy. that's why people have less in the pocket and now he's backing the union which is putting wages up which is increasing the inflation that he has to call. >> let's bring in jim pethokoukis along with bill sorel who works with unions and workers in their labor relations. bill, let me start with you. are strikes inflationary in and of themselves, number one? number two, are the strikes going on right now in any sense big enough to be in any way inflationary to add a tick or a point or a percentage point or half of one to inflation?

>> no. i think that's smoke and mirrors. it's no mistake that you have a ceo who has millions of dollars telling you oh, inflation because workers are going to make a decent living. for every economist who will tell you oh, higher wages will lead to inflation, you have another economist saying that's not happening in the present economy. the present economy wages are not the reason for inflation, so pick your economist, you know, buy the guy you want to buy and you'll hear the tale you want to hear. it's not about workers' wages. it's about billionaires. they own 40% of our assets. as much of 90% of americans own 40% so they are the folks who are causing inflation from my point of view. >> jim pethokoukis, why don't you respond there and specifically to the idea that it is not rising wages that is behind the current bout of inflation which albeit is declining, but things such as supply chain issues and other issues. >> yeah.

well, first, as far as what the economists are saying, goldman sachs is out with a report today thinking that the wage increases could add, you know, .2 of 5%, .3% to inflation, and if you're trying to get down inflation all those tenths of a percent matter. looking backwards, wages have not been the cause of inflation, but they will be the cause of inflation going forward if we have wage increases which are not matched by productivity gains. that's what drives wages over the long run so they are not inflationary. just look at the uaw, do we -- do we see an auto industry, an american auto industry where there's very few cars like in the top ten for most reliable? very few of their brands are in like the best cars. does it look like that is an industry where high productivity will be rewarded by high wages? if you have a mismatch, you will have wage inflation, and that's bad for the economy. >> bill, you're free to respond there to jim, but i want to ask you a question that i would love to get an answer to.

is the current strike at the uaw mostly about pay, or is it more about job guarantees in the face of electronic vehicles -- electric vehicles that will require many fewer parts and, therefore, many fewer jobs. is it really about job security as opposed to wage increases? >> i would say it's about both, but i -- i agree with those who say, look, they can always make an economic deal. ups showed folks how to do that. good management, good union. they will find a way to come together on the numbers. the truth is they are getting pretty close on the numbers, but there is a major issue about what to do about the advent of electric vehicles. there's no question that the workers who have built, you know, the internal xwulgs engine, they don't want to be thrown on the slag heap of history. go home, be unemployed and be part of rust basin. there needs to be something for

them and when you talk about new battery plants, new clerk vehicle plants, those workers, they want to be part of the new kind of car that's being built, and that will happen. it's just a matter of how long the automakers are going to run this strike against us because the union will agree on things tomorrow, right? unionists don't want to be out on strike. management has to decide now that the cost is north of $4 billion for this strike, that it makes more sense to include these workers in building electric vehicles as opposed to keeping them out on the streets. >> jimmy, the health care strike -- >> i think that -- >> i was going to say they don't want it to become too much about that industry. >> that answer i think suggests the political risk for president biden. the push to asap create an all electric vehicle america, that is a biden initiative and that's creating tension. it is creating conflict. whether or not you think it's a good idea for the long run, i would have to think if i were an

auto worker i'd be thinking that this is a problem that doesn't need to be there, that is being foisted upon us. maybe -- maybe you think it will be great for your kids and the environment, but right now, i think the risk is palpable to the biden administration even if the president shows up on the picket line every now and then. >> and what specifically is that risk? the risk is that -- >> the risk is that they blame the president for -- for the -- we were talking about the risk to jobs, the uncertainty. it's the administration injecting the uncertainty into 9 automakers by pushing electric cars and in some states, you know, where local governance is mandating electric cars by a serb year. >> that's what i was driving at when i asked bill that question about is this -- is this mostly about wages, or is it about the drive which is being pushed by states as you point out, by governments, not just in the united states but around the world, to transform from the old

model which is internal combustion engines into this new paradigm which is electric engines and that that is a job killer writ large. comment? >> if you want an answer to that, i mean, what i'll tell you, no, it's into the job killer. there will be new jobs created by new technology. it's as though you're -- you're talking -- when i hear jimmy talk it sounds like the teamsters at beginning of the 20th century. we've got to stay with horses and wagons. we don't need that. >> i don't think that. i don't think that, but that's the risk. that's the fear. >> let's stick with the horse and buggy because it works so much better. sorry. there's going to be electric vehicles. you can't have one article saying our sum verse become terrible because of fire and heat and we've got do something about the internal xwulgs engine. >> how about hybrids. >> biden has already put $12 billion towards the automakers so that they can make this transition successfully. we're either going to make it or we're going to be left behind.

the most portable car company in the world is bmw and they are managing doing it paying workers god wages, they have a great retirement. they work 35 hours a week. >> it's a great discussion here. i'm going to give one or boast you the opportunity to answer this question. i have no doubt that electric vehicles will create new jobs, but on net will they create more new jobs than will be lost potentially in the transition from ic edgengines? >> fabulous question. no one knows the answer. anybody who says they do is not telling the truth. >> i have no way to dispute that. >> right now you're asking autoworkers to accept two in the bush as you take away the job in the hand potentially so that's a risk. long term great.

as cain said in the long term we're all dead. >> we'll have you both back. a lively conversation, appreciate it the. >> politics and inflation are one key overhang for the markets, but rising rates also remain another for other investors. the ten-year yield hitting a session hi of 4.77% off that level right now. the two-year is still above 5% and 30 up above 4.8. kevin, how focused are you on what's been happening in rates? >> i'm very focused on what is happening in rates because i think that rates drive the world right now, and, you know, earlier this week we saw the ten-year treasury cross over 4.8, and i think that that's an important gauge because ultimately i think the long end of the curve is going anchor itself right around 5% as many investors start to try to lock in these higher rates that we're

experiencing because when you think about most folks that are thinking about taking off -- taking out withdrawals every year, they are thinking about, you know, 4% is what, you know, most financial planners have put in place. >> right. >> and now you're thinking about getting risk-free rates, you know, closer to 5%. >> we were kind of joking about this before. why do you need a 401(k) if you can buy a 30-year treasury at 5%? the problem is that doesn't keep up inflation, right that 5% is -- you know, that's nominal doller as and it's not going to grow with the stock market or anything like that, so, but, yes, it's totally crowding out people from other investments. this is the kind of liquidity whole argument that bridgewater and others have made, that until there's some other major buyer of treasuries or the yields stop rising, it's hard not to draw capital out of other assets. >> you're absolutely right. and, you know, one of the things that i think that is going to be

the big paradigm switch here with interest rates rising higher, is that i think that you're going to see fewer people allocating to equities because when you think about where the equity market is right now, you know, the s&p 500, the dividend yield on the s&p is right at 1.62%, and the equity risk premium, when you think about where it was a year ago. it was 212 basis points. today that sits at about 35 basis points, so it's making it more and more difficult to allocate to equities when yields are getting this high, and that's why i think it's important to start considering fixed income and thinking about that investment going forward. >> so you say we believe the federal will raise once more and then leave rates unchanged through the third quarter, through the third quarter of 2024. so that tells me that you think

we're near the end of this cyclical rise in interest rates. >> yes. >> that would stougt me that this is a very -- we're getting close to a very good time to buy and own bonds, either if you want to buy those bonds and hold them to maturity because the rates aren't likely to go much higher from where they are today, or if you want to buy those bonds and then sell them when rates start to come down and the bond value goes up. >> you're absolutely right, tyler. we believe that we are getting close to the end here. we have had a huge repricing in the fixed income markets over the last two years. you know, a year ago or a little bit more than a year ago we had a ten-year treasury that was at 1.5%. today we're sitting at 4.71%, so we think that a lot of the damage has been done, and now that yields are higher, that

break even, you know, that yield per unit of duration has gone um immensely in the fixed income markets, so it's giving you an opportunity that now with the coupons being so much higher that you're not going to get, you know, these moves up and rates aren't going to hurt nearly to the same degree as they once did. >> let me squeeze in one more quick question and get one more quick answer. >> okay. there is a rate that the fed can control which is basically the fed funds rate at whatever it is, and if they stop that's one thing, but rest of the market is not controlled -- it may be influenced by the fed, but it's not controlled by the fed. it is controlled by private buyers which can include the fed, but generally not. do you see if the fed is done, could the rest of the market nevertheless continue to rise in interest rates because of the fundamentals of the mechanics of that market? in other words, that the

issuance is so high and that the buyers are becoming fewer. >> there's always that possibility. there are, you know, you have -- but there are certain segments of the market that need to buy longer assets because they need to match their assets and liabilities off, you know, such as insurance companies and such, so i think that there's going to be a segment of the market that is going to want to buy bonds at the land end of the curve. obviously there are others that are, you know, don't want to catch a falling knife so they are trying to wait. again, i'll reiterate. i believe that right around 5%, that's the sweet spot, and it's because you're now getting to the point of where an earnings yield is on with stocks, so it's -- you know, you're making that call of, you know, where is the value at, and i think that, you know, mixed income now is getting to the point where it is

more of the value add than equities are because i feel thattic tis will be range-bound at least through the end of the year because there hasn't been a catalyst. >> okay. kevin, thanks. kevin at river front investment group. ketch nicholson. coming up, the next generation consumer. what will the restaurant experience look like in a few years, and what's most important to younger consumers? bernstein out with a new note on the all digital future. we'll speak to the analyst next. plus, the holiday season right around the corner. can you believe it? this year shop remembers back in plastic as nostalgia is drawing attention to barbie, pokemon and super mario brothersoy ts. details on what sales could look like when "power lunch" returns.

welcome back to "power lunch" from digital sales, technology is taking over the restaurant business and why we may not know what the future of food holds exactly but bernstein says better innovation will be the distinguishing mark between restaurant chains and there are even a few names all ready ahead of the curve. let's bring in the senior research analyst for bernstein. danilo, thanks so much for being with us. you say social media is the new real estate and companies with a big digital presence will outpace those who mostly rely on physical stores as a primary form of advertising. i guess what you're saying here

is that the companies that are out front on instagram and tiktok and others will have the more effective connection to consumers, the more effective advertising, but i also wonder if this isn't an opportunity for the smart local non-chain player to make their name and prominence more notable online, digitally as well. >> that's a great question, tyler an thanks for having us. i were say the local players obviously have an advantage into using the digital communities locally to reach faster the consumer on their street or in their local cities to basically get some presence that they wouldn't have otherwise. some additional advertising that they wouldn't have otherwise. the real challenge, and the reason why we believe we're leading more towards chain restaurants in the united states, but the real difference

sheer who is going to be able to afford that level of investment to really bring the consumers on to your restaurants? again, we think that larger companies, you know, companies that have real kind of digital assets already developed as well as more refined ways to get to the consumers were data, can really understand who they can reach in a more cost-efficient way so, therefore, we believe there will be even more concentration in the u.s. >> i will say a diner in my town, a deli, has 50 million views on tiktok and almost half a million followers. >> that's amazing. parkwood, and they are just the local joint and they now draw people from all over. they have a dynamic personality. >> yeah. i'm wondering, danilo, it's fascinating to think about it because little angelo's, my favorite italian restaurant in bloomfield, new jersey, there's the plug, they can't afford to

compete advertising wise with olive garden or anybody else on television. they aren't going to buy a spot on an nfl game, but they can get to me on instagram. >> mm-hmm, yeah, and i think the -- the kind of the key difference is going to be, again, who is able to do it at a scale? the local restaurants might be able to get their local community excited. you look especially at kind of edge cases where they were popular in their local communities. i think the social media expansion as well as in general digital advertising is kind of a more democratic way of getting advertisements to your consumers but we're talking in our view on edge cases, on average. if you think about the global tech capabilities that a local restaurant might be having, but it's a little rarer to see those

types of examples so on average we're expected to see more sophisticated players who will be outpacing the local restaurants, though your point is very valid. you may well see the very special place that is able to really attract the local consumer. >> you liked yum, chipotle and wendy's. i think the trillion dollar question is the stocks have been a little weak in recent weeks. will the weight loss drugs seriously eat away, i forgot the number we heard yesterday, they could lose 30 billion in ref news, just the astronomical numbers and, of course, number two, how consumer spending trends look, but how do fast casual restaurants compete with the fact that people losing weight appear to be eating less than they used to? >> yeah, and i would basically splittur question in two parts. i would say the first part are we going to be seeing a lower number of people, lick a reduction in traffic because people might be eating up less?

that's a potential outcome, but at the same time restaurants will be named the place it's more of an indulgence, more of an affordable luxury type of experience so it's unclear whether people will be cutting off their weekly, you know, discretionary spending and their weekly self-indulgence situations. if they decide actually to go to a restaurant, there's also a question on where are they going to go and what kind of food will they be purchasing, and here is where i think the fast casuals of the world, the chipotles of the world with their customization and even leaning towards leaner meats and more customizable salads could be in a better position to get additional traffic from people who might be just improving and upgrading their quality of their menus. >> yeah. >> it's very interesting. danilo, we didn't even really get to the digitalization of the connection when i'm in the restaurant or pre-ordering online and using my phone or a

kiosk to do it, that's another fascinating area that -- that i'm skeptical of, but that's for another conversation. danilo gargiulo, thank you very much. appreciate it. >> thank you. >> you know, i'm thinking there. i go to a restaurant and i may be a choosey kind of person. i don't want the onions on my hamburger. >> right. >> and i've got to go down to the third level of menu tier on my phone, no, no onions, no special sauce, and by then i'm ready to throw my phone through the window. >> or if you get to the payment. >> the payment. >> yeah. >> i feel your pain, i do. >> bill pay, whatever. >> singaporean authorities seizing 152 properties, 26 luxury cars and thousand of gold bars and jewelry in a money laundering scandal that quickly grows to over $2 billion. we'll explain how this scandal is shining a light on family

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welcome back. we are about to enter a hugely important period for retail, and the sector has been struggling. the xrt retail is flashing a

death cross lately with the 50-day moving below the 2-hyundai moving average. how important is this this holiday season and what are the trends exactly? >> what a holly jolly intro. death cross. >> welcome. >> hey, santa. >> with the teddy bears in the background. >> this season obviously it's always hugely important. it's the biggest quarter for most retailers when it comes to revenue. their inventory has been planned a year in advance, and while black friday isn't as big in stores as it was, it's still predicted tonight biggest shopping store followed by super saturday. the busiest ten days of the season will make up 40% of holiday sales. online sales are expected to grow just under 5% according to adobe's forecast out today and toys could be the second most popular item behind apparel even though toy sales are expected to continue the year's trend of lower sales compared to last year. good news for parents, santa,

toy enven try levels very healthy. prices down 2.9% over last year and discounts averaging about 35% off. that's according to adobe. many of the season's hottest toys ring of nostalgia coming off the heels of the successful movie "barber," the dream house is on many wish list. there's furbies and pokemon trading card games and the virtual pets, those will pop up on many lists. >> i could never keep those alive. >> barbie's cruise ship and surprise magic flyers, those are likely to be hot items too. >> so have supply chain issues basically been ironed out? >> for the most part they really have, yeah. it was a tough couple of years, but for the most part they have been ironed out. everyone i've asked when i was talking about inventories, that's not a problem. >> what's this i hear about toys r us trying to come back in a limited way? >> toys r us as we all knew it did go out of business as a more traditional retailer when you're

looking at the business model so toys r us was purchased, the ip, but whp global so they own the brand, the names. they own givery, and so they partner sort of with operators or i think it's the american dream mall with american dream itself and they are running a store there, for example. they also have a partnership in macy's, so toys r us have pop-up stores in macy sengalese is it like spirit where they might appear certain times of the year, or are they more permanent installations? >> these ones i've been mentioning are more permanent. the macy's pop-up started as a pilot and it went very well and they have continued to stand but they do have a couple of stand-alone stores. >> thanks for that. appreciate it. let's get a check on the wild bond market and let's go to the wild rick santelli for the action. rick? >> tyler not as wild today as it has been. consolidation in front of the jobs, jobs, jobs report. look at intra days of 10s and look at the two-day of 10s.

doing a little bit of work and holding basically yesterday's low yields. that's the same thing with all the longer maturities and even with most of the curve, higher price and lowering yield, we still see what's called a bull steepening today because short rates have dropped even more aggressively today in front of tomorrow's report than longer-dated rates and if you look at a ten-year on a bigger front, many have been writing about how aggressive rates have moved up since the september fed meeting. they have been moving up progressively since may, early may. we were at 3.30 in 10s and i final hi continue to point to the big parking lot filled with 2.5 trillion treasuries in september because it's now at the lowest twelve in more than two years at 1.26 trillion, and do i believe that's part of the equation about the reluctance to be holding certain treasuries. kelly, back to you. >> rick, thank you very much. rick santelli. over to the energy market now. you now crude is only down a cool 13% in ten days or

something like that, pippa. >> the unwind here has been very fast. we saw so many money chasing this market and now we're seeing liquidation of the hedge fund players who said rising rates will kill demand. the gasoline demand is really interesting because we've seen essentially a crack in the gasoline spread. >> it sounds like to could go below $3 nationally and a big change from how bad we thought it would be. >> there are questions about the accuracy of that data. there's a growing camp that really says that doesn't tell the whole story. patrick de haan over at gas buddies says they are measuring from rack to retail and those from the wholesale distributor to the gas station. it's not when mom and pop drive up to the station to fill their tanks. stations are waiting to refill

because they are waiting for the prices to go lower. we do have a little bit more of production here than we would normally. >> pippa, have to leave it there. pippa stevens. let's go to bertha coombs for an update. >> reporter: lawyers for former president donald trump are asking a judge to dismiss his federal election interference case in d.c. they argue he is immune from prosecution for actions they say were taken in his official role as president. the motion is possibly the most pointed attack on the federal case which charges trump with plotting to overturn the results of the 2020 presidential election. a federal court has ordered alabama to adapt a new congressional redistricting map that could lead to the state electing two black representatives for the first time in its history. the map creates a second district with a near majority of black voters of the alabama republicans were ordered to redraw that map after the supreme court and lower courts

ruled that there are other proposals that diluted the power of black voters in this state. and french researchers say western europe europe's highest peak mont bl ha nc has lost more than six feet in the past two years. surveyors measured the mountain aided by a drone they say. it's now up to expert scientists to look at the data and put forward theories to explain the phenomenon. i guess shrinkage happens in nature as well, tyler, i don't know. >> look at that. that's -- that's -- six feet in three years. >> six feet. >> that's amazing. >> bertha, thank you. coming up in today ethree-stock lunch, we'll take a look at stocks that could be debt on arrival in this higher interest rate environment. "power lunch" will be back in "power lunch" will be back in two minutes.ot dogs, i invest in a fund that advances innovations like robotics. fresh, warm hot dogs, straight out of my torso!

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welcome back. time for today's three-stock lunch and today we want to focus on companies that care a lot of debt as we've seen rates surging higher, potentially affecting what they will have to pay and what their earnings will be. cnbc.com compiling a list of names that have a debt to ratio

over 50% and are within 5% of their 52-week lows including general motors among the autoworkers hit with a strike. here with with our trades is bk asset management and a cnbc contributor s.gm our first stock, boris? >> it is our first stock, and it's really my worst stock or the one that i think has the weakest story here because, you know, forget about the uaw strike, forget about the fact of the news today of the 0 millionairebags. the basic underlying business of gm is really existentially threatened. it's much more expensive to finance a car here so it's much harder to sell new vehicles, and their whole investment into ev has yet to pay off. i've yet to hear one single positive review about all their ev investments to get consumers excited so i think the fundamental business alone is going to weigh on top of them on to the of all the interest they

will be facing. >> let's move on to coca-cola. >> coke is a much different story, this is one that i like and my strongest i want to buy. it's organically growing at about 10%. it's actually benefiting i think from the global inflationary spiral because the costs are contained, but it still has pricing power. there are nations across the world like indonesia, malaysia and the middle east where the young population doesn't have access to alcohol so they have a natural organic growth over there. sell the puts to 50 and you'll get a great price of coke with a dividend growing forward. it's just a good long-term hold at this point. >> decent interest coverage but, still, the fact that they have a high debt load is noteworthy. what about dominion energy? >> so dominion energy is definitely a speculative buy but so much the bad news it is already in the stock. the joke on street is "d" stance for dog when it comes to the

dog. they are getting rid of a hunk amount of assets. they are going to reduce their debt load by a third. their interest rate is serviced by $750 million, all very positive and they are trying to stabilize the business and grow it much more with steady, regulatory environment. if they can achieve that given that all the news is baked into the stock there's potential for a upward climb and to me it's an interesting albeit a speculative buy. >> woof. boris schlossberg, thank you so much. >> we're going to take a quick break. i'm tired. we'll be right back. ( ♪ ♪ ) ♪ (when the day that) ♪ ♪ (lies ahead of me) ♪ ♪ ( seems impossible to face) ♪ ♪ (a lovely day) ♪ ♪ (lovely day) ♪ ♪ (lovely day) ♪ ♪ (lovely day) ♪ a bank that knows your business grows your business.

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to healthcare. welcome back. a multi-billion dollar money laundering scandal in singapore could have far-reaching consequences for capital flows in world banks. robert frank is here with the key details of this story. >> tyler, this is a big one. singapore authorities freezing more than $2 billion worth of assets including $152,000 properties and thousands of bottles of expensive liquor, gold bars, jewelry, you name it, they found t.ten people have been charged with laundering proceeds from illegal gambling and other operations. all the suspects are from china. that has cast at spotlight on the massive wealth moving from china to singapore.

in fact, at more than one point $5 trillion poured into singapore just last year, most of that from the chinese wealthy trying to protect their fortunes from the chinese government and tensions in taiwan. also in the spotlight are family offices. singapore officials are investigating whether any of the suspects may have used family offices to have laundered this money. singapore has become a huge global up for family offices thanks to its light regulation-ins taxes and they have tripled in singapore to over 1,000 today. singapore has been flooded with so much chinese wealth it's imposedseveral new taxes on high end real estate, luxury cars, anything that the wealthy guy. >> these are largely chinese nationals. >> chinese nationals. >> that are under investigation here. >> that's right. >> and any -- and it's ex-patriated money? >> right. so chinese officials right now are trying to keep as much capital in china as possible because of what's happening in the economy, and there's a

suspicion that perhaps the chinese authorities told singapore, look, you've got to get these guys. >> do we know if americans move their money to singapore not necessarily to launder move? >> the famous hedge fund officer has his family office in singapore. >> that's what i'm asking. >> doesn't mean they are doing anything wrong, a well-regulated place. family offices, they want the support networks the whole cluster of expertise in singapore, the wealth managers to develop that as an industry in singapore but there's a lot of american money, european money and russian money, saudi money in singapore because that's what they wanted. >> is there potential cooperation with the chinese, a headwind here to, you know, i'm just curious about the geopolitics of this. >> the geopolitics with singapore and china, i used to live in singapore, very sensitive relationship. singapore is tiny compared to

china butp china does not like when $1 trillion it is from china to singapore. singapore likes to say we can manage it. it suggests that at heat in this case controls didn't work. especially people leave singapore. >> scan the qr code on your screen to reg store for the advisor summit. i'll see you trehe, by the way. there's more "power lunch" next. since my citi custom cash® card automatically adjusts to earn me more cash back in my top eligible category... suddenly life's feeling a little more automatic. like doors opening wherever i go... [sound of airplane overhead] even the ground is moving for me! y'all seeing this?

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is. welcome back. take a look at shares of mir ratty therapy picks soaring on a bloomberg report sanofi is exploring an acquisition of the drugmaker. the stock had been halted for volatility on the news, off slightly but up 25, almost 27%. >> weight watchers, jefferies saying airlines could have an ally in weight loss drugs in the companies that make them. lighter passengers means less fuel used to fly them. and more penalotti profit. we'll discuss that and much more after the break.

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welcome back. more stories you need to know. let's get to it starting with newly reported comments from walmart gaining traction. an executive claiming weight loss eating drugs like ozempic and wegovy are dampening up food sales. >> you don't buy it? i buy it. >> i don't know.

i find there to be -- >> ozempic is expensive, man. >> apparently 40 million americans, is it that they're on it or eligible. i thought i read that figure the other day. much higher than i thought. they're expensive but there are some options to entries. >> mounjaro and wegovy. >> i wonder if high income people -- i know it's a correlation, but people who can afford the drugs might have had quite a bit of discretionary income at a place like walmart. >> let's continue this conversation because weight loss drugs impact could stretch into it says right here the airline industry. jefferies using united as a model and claiming if each passenger weighed 10 pounds less, the airlines would save 27 million gal lons of fuel or $87 million. bear in mind some airline

considering passenger weight into fuel costs with new zealand and south korea weighing flyers before boarding. i'm not going on those airlines. i'm just saying. let's bring in sheila, an analyst in airlines at jefferies. welcome, good to have you with us. i get the theory here, but is it -- i mean if you -- it can't be that many passengers on the weight loss drugs losing that much weight and for everyone who is losing weight, they're probably others who are gaining it. >> they weigh our baggage. why not weigh us too to charge extra. we cover air space and airlines are having a tough time. fuel is up 30%. labor costs is up 40%. they have two things out of their control. so what if, you know, weight loss drugs created a tailwind they weren't imagining. united airlines put out a stat in 2018 we extrapolated to get

the ratios you saw. they changed the paper they used for their hemisphere magazine zone and saved an ounce, 10 pounds per flight. took the stat, what if 175 people lost 10 pounds each assuming some didn't gain weight, what would that mean for fuel savings. it would save $80 million a year, 2% of united's fuel cost and fuel is 25% of an airline's cost. lots going on, but what if something went right they weren't counting on. >> if you can prove to me you lost 20 pounds we'll give you a 5% discount. >> they weigh our luggage all the time. constantly removing things out of my baggage. why not step on the scale and motivate us. you know, airline earnings season is upon us so we'll see what happens with pricing. >> very quickly, new zealand and

south korea airlines are weighing flyers before boarding. why are they doing that? are they doing that to make sure the plane isn't overweight or doing it to collect data or what? >> they're probably doing it to move around people on the right side of the plane and put equal weight across the aircraft. one of the things they were doing. if they saw low capacity. i'm not sure behind their rationale. we're going to be a while away before we start weighing people on u.s. carriers. airline season, earnings season is upon us, and we think it's going to be a tough earnings season for these guys given to their cost ratios. >> thank you. fascinating concept and thank you for going to the work. >> appreciate it. >> nor as far as weighing people to benefit. if the average population's weight lessens somewhat, it will help them. the wall street journal is reporting general motors has at least 20 million vehicles built

with a potentially dangerous airbag part, part of a push from safety regulators to recall air bag inflaters made by arc automotive which they claim can explode with too much force sending metal shrapnel. got to watch the stock. shares are down 3.5% at session lows. >> how many recalls have been tied to airbags. >> right. >> the takata airbag some years ago. a story still playing out. >> over and over again. >> yeah. >> it's something. >> and gm shares, how many times have those been in the cross hairs lately between our discussion about debt and the strikes. >> and gm, and its transition to electric vehicles when you think of lech vehicles i'm telling you i don't think of gm. i think of volvo, audi. >> there aren't cheap exact models. >> let's give you one more here. >> oh. give us uber. >> no. >> where is it? i'm going to find it.

>> take your packages to fedex an ups for $5. that's the story we were going to give you. we gave it to them. >> $3 if you're an uber 1 member. >> is that right. >> another subscription as a service. >> thank you for watching "power lunch." once again. >> "closing bell" with the dow down positive starts right now. kelly, thanks. welcome to "closing bell." i'm scott wapner live from post nine and this make or break hour begins with one of the biggest questions in the markets today. have yields moved so far so fast that they've already forced the fed to fold and thus eventually clear the way for a fourth quarter rally. we tackle that as we track the final hour. your scorecard with 60 minutes to go in regulation looks different than one hour ago. every s&p sector was negative. not so much anymore. we're green across the board, even the russell. staples, materials, utilities, that's whe