looking for it to break out further to a new high. >> jm smucker. this trades at 12 times earnings. i like it. >> a lot of these stocks have gotten hit pretty hard. coca cola, smucker. i'll see you on "closing bell." "the exchange" begins now. welcome to "the exchange." i'm kelly evans. here is what is ahead this hour. bond yields are down again today, but stocks are also turning lower. the nasdaq still the outperformer, but shouldn't lower yields do more to boost sentiment? we'll try to figure out why. and house republicans are meeting behind closed doors to investigate a speaker. and conflict in the middle east could materially raise pressure for the u.s. government to return to regular order. we'll get the latest. and we'll look ahead to delta, dominos, and walgreens

reporting before the bell tomorrow, all facing very different headwinds. speaking of headwinds, dom chu has the numbers. >> i think i am a headwind sometimes for these markets. but we started off with a solidly positive day, and now you can see we're mixed at best. i'll start with the largest cap kind of broader s&p 500, which sits at 4354, down about three points. that's not much, considering the fact that we were up 19 points at one point during the highs of the decision. and then down nine towards the low. so we're tilting towards that lower end of the trading range so far today. the dow down about 0.1 of 1%. and the nasdaq still in the green, by only a quarter of 1%, 13,591. one key area of focus is oil and gas. the middle east war between israel and hamas and now hezbollah perhaps creating some waves in lebanon is starting to put a bid to oil prices.

they're pulling back just a little bit in trading so far today. you can see some of the crude futures down about 1% right there. the energy sector spdr down 1.5%. but pioneer resources getting bought by exxonmobil for about $253 a share in stock. biggest acquisition for exxon since it bought mmobil. and then birkenstock, not yet open for trading on the new york stock exchange right now. but if you take a look at some of the moves, the offering price again was $46 a share. the indication from a bid/ask stand point, between $39.41. so not seeing the same exuberance with this trade that we saw with arm holdings or instacart. a little more into the signs of

what this means for the ipo market. we'll see and bring you that opening trade as soon as it happens. back over to you. >> dom, it's unusual that it hasn't happened yesterday, even forearm, instacart, they all opened in the 12:00 hour, and we are still waiting as the end case has fallen throughout the morning. >> the whole idea, kelly, as you know and many of the viewers and listeners know, as well. it is to try to find that price that has the biggest clearing effect, meaning you can match up the most buys and sells. if you couldn't get it done at the ipo price of $46, there might be an effort to get the biggest opening trade possible at lower prices. >> it's unusual to see such a change in sentiment from last night to right now. dom, thank you very much. dom chu. a divergence is shaping up in the treasury market today, where the yields on the short end, like that two-year in green are climbing, over 5%. but the long end is dropping back to levels not seen since

late september, ten-year yield around 4.61. is this all just a technical move or because of the dovish fed speak we have heard. fed governor chris waller saying the fed can watch and see what happens with rates. that follows the dallas fed president lori logan who said rising rates could do some of the work of cooling the economy for us. that same day earlier this week, phillip jefferson warned about balancing the risk of not tightening enough. and last night, san francisco fed president mary daley dismissed the idea of 5% rates being the new normal, saying neutral is between 2.5 and 3. all this while we learned that producer prices did rise more than expected in september. so now what? is there a real chance for a fed pivot? here to discuss are my guests.

welcome to everybody. steve, help us sift through all of this, what's the noise, what's the signal here? >> well, it's hard to figure out what's going on when a big shoe company is coming to market, kelly. they are a shoe company, right? i'm having trouble getting excited about a shoe company. in any event, what's happening here is the fed doesn't quite want to pivot yet. it doesn't want to give up the ghost of potentially hiking again. but it doesn't feel like it's going to do it any time soon. i'll explain to you a couple things. let's look at waller. waller, in early september, told me he thought the fed could wait and see. so the november hike is still on, right? he's saying maybe not. we could still wait and see, which takes november off the table. if you look what happened today,

the market has taken that hike away. the fed has not quite taken away rhetorically. the only one who has definitively is bostic from atlanta who said the fed is sufficiently restrictive. that's the full stop phraseology right there. every reporter in the press room, everybody who looks at the minutes today is going to do a word search on the word "sufficiently." >> we should explain that's why you are there with those nice flags behind you down in washington, waiting for the fed min minutes. greg, what do you think the market is doing here with this big pivot on the long end, is it fundamental, is it technical? >> i think what steve mentioned is correct. we are in an environment where the fed has struggled really hard to commit to its message of higher for longer. now that it has achieved that, there is a desire to avoid markets pricing in rapid rate cuts over the course of the next year. i think what we are seeing in terms of economic data is that

we are in a disinflationary environment. we are seeing ongoing signs that this inflation is proceeding, especially if you exclude some of the bumps like higher energy prices. that should allow the fed to maintain its policy rate in the restrictive range where it is right now. but there is going to be this optionality of still proceeding with further rate hike it is there is the need to do so that will remain part of the fed's communication going forward. >> peter, what do you think is going on with the kind of global financial landscape more broadly right now? >> we definitely pushed the overbought condition to an extreme in terms of yields, the dollar and the price of oil. so all of them sort of leave themselves together. oil came in, the dollar sold off last week, and yields have dropped. i think it's very important that a lot of fed members have also talked about financial conditions. you can't ignore the long end of the yield curve when you try to

figure out where to put the fed rate. mortgage rates and the housing market is probably the most sensitive part of the economy to fed policy. so we've had 100 basis point increase in the 30-year mortgage rate since the july rate hike. so the fed had no choice but to acknowledge and incorporate that in their modeling in how to figure out what to do with the november meeting. that's why a lot of them backed off from committing to another hike. >> yeah. let's pause for a moment. i want to swoosh down. rick santelli tracking the results of the action. rick, what's going on? >> yes. the market always has it right, in my opinion. you look at rates, they moved higher in the last few minutes because we had a lousy ten-year note auction. $35 billion of reopened tens, hit the auction block. the yield 4.61. the problem? the one issue it was hovering around 4.59, two basis points

tail, that's a big tail there, not good. it takes a lot of points away. i gave it d as in dog. but i could have given it a worse grade. there was a couple of bright spots outside of pricing. one of the bright spots was 20.9 on direct. the best since october of '22. but the fly in the ointment, 18% go to dealers, the most they have taken since '22. remember, auctions are like buffet tables, if there's a lot of leftovers, that means the investors didn't like the taste of the ten-year at these levels, and who would not respect that considering the volatility? now, if you look at what's going on, you should be very much on top of the notion of the differences going on in twos. twos yesterday closed at a one-month low. we haven't closed below 5% in a month. but yet, look at this spread over that month. the fact is, long day at the

treasury as everybody is discussing have dropped a lot more precipitously in a flight to quality, and it is reflected quite easily in the fact that just since friday, we're ten basis points more inverted. it was worst, just to demonstrate that dynamic. i'm not sure it's going to be going away any time soon. the fed, well, if the fed is looking at the long end to gauge how they want to treat some of the upcoming meetings, geopolitics has made it a messy proposition. >> everyone is nodding in agreement. peter, what were you saying? >> yeah, i think rick is right, that the geopolitics complicates the messaging that they're trying to glean from the long end of the yield curve. >> in what sense? because it seems like the major move has been people going back into treasuries, flight to safety, whatever you want to call it. do you think that's not legitimate? that it just has to do with the conflict that's erupted?

>> i think it is partly, but again, since the july meeting, the long end of the yield curve, up 100 basis points, regardless of why, it will have a dampening impact on the economy. >> that's a great point. greg, what would you add to that and what further commentary is significant to you from fed officials, whether in the minutes we are about to hear or in their remarks? if they're done, then what? >> i think it's very port to understand the why. why we're seeing this tightening in financial conditions, over the early part of this week, i moderated the conversation with lori logan, the president of the dallas fed. she highlighted that it was important to understand why long-term yields had risen. is it inflation expectations? it doesn't seem like it. is it the sentiment that the economy is more resilient? that doesn't seem to be the case. is it a higher neutral rate? potentially, but that's not a big factor.

is it the fact that we are running larger deficits? and potentially more inflation volatility in this complex geopolitical framework. i think that's the case and more reason for the fed to essentially hold steady where it is right now. >> perfect place to leave it. we have breaking news on the house speaker. steve, we'll come back. thank you both. let's bring in emily will kings. do we have a candidate? >> reporter: we do have a candidate. steve scalise has just hit the majority of the house republicans. they voted for him to be the nominee on the house floor for speaker. now, this does not mean that anything is done yet. scalise has a long road in front of him at this point. now, he won the vote among house republicans. 113-99. that means there is a lot of support in the room for jim jordan. we're hearing some of those members say they will continue to vote for jordan now that this is going to leave the closed room session and go to the house

floor for that vote. remember, back in january, we saw that role call. that's about what we are going into again. it's not clear at this point how long it will take for republicans to co-less behind steve scalise. we were talking to a couple of lawmakers who said look, republicans need to be unified and act together. otherwise, that doesn't send a good signal. listen to what he told me. it doesn't sound like we have the sound right now. basically, he said, americans are tired of chaos and what they need to do is see a government that's actually working and unified. at this point, it's not clear how many rounds we could see for speaker on the floor. but we know at this point, that steve scalise is going to be the nominee for republicans. of course, democrats are going to remain united around their

leader, hakim jefferies. >> remind us when the vote is by the house for the speakership. >> reporter: that could happen as soon as today. republicans decided they just wanted a simple majority to go forward, they didn't want 217 behind closed doors. so really, if republicans want to move quickly, we could see a vote on the house floor within the hour. >> all right. they need is it 221 or so? >> reporter: 217. the math is a little crazy, but it's 217. >> emily, thank you so much. for more on these developments, i'm joined by ed mills, washington policy analyst at raymond james. scalise, what more detail are you looking for and where do we go from here? >> well, 113 is not 217. so what i'm looking for here is how does he chip into the 99 members who voted for jim

jordan? is there a deal to be had? there is an opening in the house leadership if scalise becomes the speaker. you have a majority leader slot open. is that something you give to jim jordan? is this moving up others into the majority leader spot? ultimately, the markets, which we're always focused on, kelly, if it is steve scalise, he's already told his caucus we most likely need a continuing resolution come november. that's a positive for the market. he's more likely to bring forth some defense spending for israel, ukraine, and probably some border funding, as well. >> so if he can become speaker, you think there's lower odds oh of a government shutdown? >> i do, because he's told the caucus that they need to have another continuing resolution. there's no way to get the 12 appropriations bills through both the house and the senate before november 17th. one thing that i have been focusing and telling people at

raymond james to watch, november 15th, joe biden is supposed to sit down with xi of china. do we want this internal squabble on the world stage as those two leaders are meeting? that could be a part of the reason why they would want to punt beyond november 17th, maybe have this fight once again in november. >> what about some of the more conservative parts who were part of ousting kevin mccarthy, they're not satisfied with that. so if they know that's what scalise intends to do, might they prevent him from becoming speaker? >> so if it goes on the floor more than three or four rounds, that's when we have a conversation about is there another candidate that emerges? is it back to a speaker mccarthy? do they choose someone else, like patrick mchenry? do they draft someone? i think that would be a market

positive, because the more the smaller group does not allow you to do anything, the more i think that in the long-term might lose power. and so it is market neutral, if it is scalise, maybe market positive, kelly, if they go around the current two. >> and i'm just trying to connect those dots one more time. it would be a market positive if we saw drama around the speakership why exactly? >> because of what the outcome would be. if you get a speaker who does not necessarily want this, they probably are more in position to negotiate from a period of strength. do you remove the motion to vacate? is there a potential deal with democrats? near term, none of this is good. all of this is dysfunction. but if it's scalise, less likely government shutdown, not guaranteed, just on the margin. or if they go outside this

group, do we have the fight taken out of this group near term or those medium and longer term victories? that's what we saw in january where a lot of fighting at that early period, and then mccarthy was able to get bipartisan bills to the floor. it ultimately cost him his speakership, but during the first half of this year, pretty decent for the market. >> one quick final question, what do you think about timing for this whole house vote now? >> i think it's going to be at least into tomorrow. i think there's going to be a lot of pressure on the house not to leave for the weekend, before they get done, kelly. i always talk about deadlines. members of congress do want to go home. that could be a forcing mechanism. so easily it could spill beyond. but if we do get enough front in this war in israel, that will only add to the pressure to wrap this up sooner rather than later. >> absolutely.

thanks so much. we appreciate it today. now back to the markets. my next guest says he's been pricing risks in all years. mike is a portfolio manager, so welcome to you, michael. >> good afternoon, kelly. >> so the real thing i was going to ask you, we sort of ask what do you mean by defensive? staples, dividend stocks, utilities, these have been some of the hardest hit parts of the market. >> yeah, we're defensive in a number of areas, but we offset that with growth potential, too. so i think defensive would be a broader strategy of diversification, including gains in the equity market that would generally be considered defensive. we like defense names, for example. we like energy, commodity and natural resources. those are generally considered on the more defensive side. we pair that with more

aggressive technology, biotech, and some financials. so it's not a chicken little sky is falling kind of position. and other investments that would be considered defensive would be exposure to precious metals like gold and silver. and in our case, high quality bond treasuries. >> would you be a buyer of exxon today on the 5% decline? >> we own it, and we have a healthy position. so not necessarily. but as an investor, i like the transaction. i think it's an area where, over time, you're going to see synergies and it gives them a stronger position in the permia. exxon itself is a good dividend payer and energy prices will remain high. so a return investor trading below market multiple is interesting. >> do you want to add any

thothorgt d thoughts on what is going on in washington? >> anything that goes on in washington impacts the markets. i think sometimes people underappreciate that. with respect to the previous conversation about the house, i think they -- this could turn from a ho-hum partisan headline thing to something negative if they can't get the house in order, so to speak, and get a speaker and move forward. in the last week or so, we have more threats to the united states. i think the enter mural squabbles, the public has less appetite nor that when you have other things that need attention. whether it's defense, there's a lot of political risk out there. when you have that, when you have big budgetary decisions to make that may impact spending, defense spending for example -- >> right. so that point, you like lockheed martin. a lot of the defense names up

4%, 5% this week. but is it a sure thing that washington will rally here and support more defense spending on a number of different fronts globally? >> no, not at all. that's why investors need to pay attention to what goes on there and adjust portfolios accordingly. >> but you would still be an owner of lockheed despite that? >> yeah, because in the long-term, lockheed is not that expensive. i do think the united states over time is going to have to increase defense spending. when you look at the geopolitical world, you've got hot spots in three major areas right now. whether it's the middle east, russia, ukraine, nato, whether it's china and taiwan. you need to have the resources, the liquidity to fund our national interests in those three areas potentially. that involves a lot more defense spending. i think that is a big decision

for washington going forward. we're not -- the united states is not fiscally as strong financially as it was. we have a lot more debt. 30 something trillion right now. and so we -- financially, we're weaker, and we have to figure out where we will spend our resources. >> $816 billion we just showed the defense budget. it's catching up fast. michael, thank you so much for joining us. appreciate your time today. let's turn now to the mortgage impact on rates. as the 30-year mortgage hits the highest level since 2000, homeowners are trying to find more ways to get around it. diana? >> we saw an interesting dynamic last week in the mortgage applications data. the rate on the popular 30-year fixed north gaj rose sharply, but the rate on adjustable rate loans fell. as a result, a.r.m. demands spiked. the average rate rose to the

highest level since 2000 last week to 7.67%, from 7.53%. but the average contract rate for 5-1 arms decreased. arms usually offer lower rates, but the difference between arm rates a and the 30-year fixed has been narrow. last week, though, it widened. as a result, applications to refinance inched up 20% from the previous week, still down 9% from a year ago. and applications to purchase a home rose 1% for the week. still 189%. again, buyers are looking for any way to reduce that monthly payment going into the more risky arm space. >> although their ability to do so is somewhat limited.

those taking out a.r.m.s face the prospect of a nasty surprise a few years down the road. >> it's nothing like they were 20 years ago, that caused all the problems in the great recession. but buyers are looking for any way to get into a pricey housing market. so that share is now up at 9% of all applications. just a year ago, it was 3% of applications, because why take the risk? >> indeed. diana, thank you. we appreciate it. birkenstock priced at $46 a share last night for its ipo. just around that mid point of that $44-$49 range for a tentative valuation of $8.5 billion. but the indication price for the open has steadily declined today. let's talk more about it with jeff killberg and leslie picker.

leslie, it's still not open? >> sorry, kelly, we're getting much closer to the open here, indications coming in at a much narrower range. they have about 2 million shares paired. so a little less than 10%. but to your point, this one pricing towards the middle of the range, looking like it's going to trade lower as it opens for trading today. we have seen kind of a mixed reaction of recent companies that have gone public. not a resounding demand for some of the recent deals we saw in september. some of that played a role. valuation plays a role talking to investors who looked at this one. perhaps it came out a little hotter than many anticipated. and so all of those things combined with some of the macro

factors made it a tough sell. you know, at least at these levels. so looks to be about a 12% decline if these indications are, indeed, where they open for trading. but that narrowing of the range would suggest that that is what appears to be the case. kell? >> leslie, thank you so much. jeff, let's talk about this, and why we might be seeing this take place. it had been a ho-hum ipo to this point where suddenly it's a head scratcher. if the stock drops below $40, i would be a buyer. so it's not like i've seen a lot of people say thing is crazy overvalued. interesting wrinkle, take a look at what the ceo said this morning when asked about the proceeds, which will largely be used to pay down the debt. listen. >> we fell in love with our

partners. after the first night, we found out they didn't have the money to pay us cash. so the debt we're having is coming purely from this acquisition time. we will pay back a serious amount of this. we don't need money to drive the business, because whatever we do generates money. we have a very cash rich company, we have a few million in our bank account. >> indeed, jeff, crocs, which you could call its nearest competitor, they're down 21%. maybe that's not helping. what do you make of it? >> it's disappointing, kelly. birkenstock is a 250-year-old company at the end of the day. so investment bankers should have had a better measuring stick. this is an actual company that has been making money for a long time. so to see it down 12% speaks louder to the ipo market, which i know is still unfreezing.

it's like austin power trying to find his mojo. but here we are, with some big money coming out. when compared to 2021, it peale in comparison. but here we are, just trying to get over $10 billion in raising money in a small amount of deals for 2023. but i think this is going to hinder the appetite and push some of the bigger ipos from q4 out to q1 next year. investment bankers should have measured all this. this should have priced better, kelly, bottom line. >> i was reading you commentary. we're seeing some of these bifurcations in the market where you have retail stocks pricing at a hard landing, but other parts of the market not necessarily. is it unfortunate timing that birk is a retail name for a challenged space right now? >> great point, but why is arm

down 12% since the ipo? that should be moving higher. so i think the overall -- this is normal, and i don't think we should be too alarmed. i'm not trying to press too hard on birkenstock being down 12%. but this is part of the unthawing process. we saw the doors shut on ipos in 2022. we'll see consumers still have an appetite, but there is a lot of uncertainty with the fed policy that is impactful on ipo investor an ppappetite. >> they each had a barbie effect, leslie. if it goes public at 7 or 8, it's still not a disaster. >> you would be hard pressed to find returns of 80% upside from just two years ago. especially from 2021 to today. so this would absolutely be a

win for them. they're still going to hold 83% of the company, but we spoke with the managing partner there, who ran this deal, who led this deal, had a close relationship with the company, said that their intention is to hold 68% for the foreseeable future. this is going to be a significant partnership for them and almost a two x return on this investment made just a little over two years ago. and their perspective -- i asked him, why now? it's only been two years. he seemed steadfast in bet thing public, given the prospect for a government shutdown, the events in the middle east that created this up certainty in the market. he basically said look, the companies can get out whenever. they believe in the long standing value of this brand, which has been around for over 250 years. >> watching for the inevitable, what will this mean for the ipo

pipeline. whether or not it's just a case of -- it's a german company, it's a retail, private equity backer. most of the stuff in the pipeline is not that. >> that's right. but investors just become more sophisticated. but don't be surprised if you see some big institutions laying in the weeds as they price this. birkenstock, you could see it trade back over $50. so i wouldn't discount the fact. but i think you have to look at a company very differently. >> often it can be the case that a more muted ipo is a better ipo because you don't want to buy something, as the broad public investor wants it's already up. but to your point, it's not like the more muted openings we have seen forearm and instacart have been all that great. leslie, i'm hearing some bells over there. are we open? >> we are officially open. currently around $41.60, down

about 10% at the open. you bring up a good point, kelly. do you want to see a huge pop monday and risk that momentum turning sour or more of a muted open? the challenge is, this isn't a huge, huge decline by any stroke of the word. but a decline of 10% means those that bought in at about $1 billion worth of stock, excluding the corner stone investors, there were three corner stone investors, they're looking at losses of 10%. what does that mean for their future appetite to buy ipos and what does that say about the demand for ipos at this point in time? this is a private equity, very quintessential sponsored back deal. what does that mean for all those portfolio companies that are looking for exits and the opportunity? that's a signal to them that the ipo market is open and looking for business. i couldn't say this is a resounding yes to that answer. >> very well said.

it looks like they're marking $41 as the open price. leslie, what is it next in the pipeline? >> good question. we don't have any major ipos left on the docket for this year. it takes about a month to become public. have that public for about two weeks before launching a week and a half road show. so it takes about a month of time for that to happen. we don't have much in the public pipeline right now. at least of the $1 billion plus deals like we are seeing today. this is definitely a harbinger potentially of the rest of the year. i don't think it's going to be something that has people just running to go public at this point in time. that said, every company has its own needs. every company may look to the market in a different way. so we'll see what happens and the remainder of the year. >> thinking about it, as well. some of those big firms,

increasing in activity. jeff, the dow is down 125 points, the nasdaq turned negative. i don't know what is the tail and what is the dog here, but kind of a mediocre ipo doesn't help on a day like this. what do you think is driving sentiment if >> i think uncertainty in the middle east. investors are looking at the s&p 500 up 12% year-to-date. as we go into earnings system, they're looking for some good news. we have seen rates relent, but i don't know if they have relented for the right reasons. so investors are in a holding pattern. i think this ipo speaks volumes. don't be surprised if you see all of the investors buy some birkenstock here and see it move higher. >> any way. thank you both. we'll see you later on this hour. appreciate it. coming up, debta is kicking

off airline earnings tomorrow as wall street has been slashing earnings estimates. and as we head to break, we have stocks at session lows now. even the nasdaq has turned negative. the ten-year note popped a bit after the poor action that rick santelli told us about. that could have helped put downward pressure on stocks. we're back after this.

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welcome back to "the exchange." i'm tyler mathisen with your cnbc news update. the palestinian ministry of health reported that 1100 people have now been killed in gaza, around 5300 gaza citizens were reported injured. earlier today, the ministry said the death toll in the west bank was 2300. glaza is now in the dark after the power plant ran out of fuel. a spokesman said gaza will halt operations to basic services, hospitals, sewage and water in the coming hours. israel cut off the electricity supply starting on saturday. two congressional officials telling nbc news that the biden administration plans to request an aid package for israel that will include funding for ukraine

and taiwan. those officials saying the request for supplemental funding is aimed at addressing the strain on pentagon stockpiles from providing support to the three countries. the sources say the funds would be used to build more weapons. kelly, back to you. >> wow. tyler, thank you very much. between the israel-hamas war, zaukraine, and rising tensions with china, the world is slipping into disarray and will chill american investment. joining me now are my two guests. wonderful to have you both here. charles, it's not just me. there's this sense of disarray spreading. >> well, we have building tension with china over taiwan, the war in ukraine rages on with the offensive not having gone as well as many hoped for. and now all of a sudden we have a major war in israel on a scale

that we haven't seen in decades. i think this is a sign that we are headed into the post post cold war era. there is a defuse ing power in e world, the digital age is turning everything upside down. so we are seeing a turbulent moment in international politics that could last quite some time. >> chad, how does this translate into companies who may have had leaders who rose to power on the idea of globalism on being large multinationals or having, you know, broad operations across the globe, does that change now? >> i think it doesn't, but it does highlight the need for risk management. i think we just went through the pandemic, we helped a lot of clients map out supply chains to make those more resilient. you know, the world is certainly not becoming a safer place. a lot of the infrastructure and

capabilities that were put in place to deal with the pandemic are now being utilized to look at what could be happening on the cascading effects from the middle east. >> talk a little bit more about that. that's interesting. >> right now, if you look at the three primary things, most of our clients, if they have personnel in the region, they looked to ex-filtrate them. there are some still tranld str there. the second is assets. if you look at business continuity, there are folks that have supply chains, global companies that cross that region. you have to look at the implications around the oil and the disruption there. and lastly, with respect to cyber, which is -- knows no boundaries, is an area where the iranians have demonstrated repeatedly that they will use that as a tool and that is something that has impacted u.s. corporations and others globally. the final point we just touched

on was the supply chain, where you think there is an increasing ability of all major corporations to look at, resiliency, the supply chain, and the responsible actors are refreshing that. >> do you see a -- i see that you think israel is going to be a difficult place for companies to put further investment right now. have you seen that with ukraine? we have seen the companies that pulled out of russia, and there are questions about what to do about china. how would you describe the nature and direction of american investment dollars in 2023 versus maybe 2013? >> the two world leaders are the united states and israel. prior to this, there was a feeling, because of the strong israeli security domestic efforts that there was a perception of relative security. unfortunately, the events that happened in the last few days have destroyed that perception.

i think it's going to take many years for that to be restored. in the short term, there is a tremendous amount of innovation in israel that i think many of us will help support and will, in some cases, help them to find a home here in the united states until that settles down. so be on the lookout. the overall defense sector is someplace where you will see a lot of safe haven investments going towards what we have already seen, the defense and air space etf is up to the tune of about 6% or almost $30 billion. >> right. charles, what would you add to that? is there anything we're mising? things suddenly settle back down to the end of history once again? >> well, i don't think we'll see that any time soon. my guess is that the situation is going to get bumpier in israel. obviously, we're not focused

very much on israel/gaza. but the border with syria and lebanon is a dangerous place. a lot of iranian backed hezbollah fighters. we don't know whether the west bank will remain calm. we don't know whether we may see the return of fighting between israeli jews and israeli arabs. i think t the broader local level, we're still in a scenario in which the main word that comes to mind is de-risking, right? we are trying to redirect our supply chains. we're telling the chinese we're not going to let them get access to high-end semi conductors. we unplugged russia from the western economy, and they rejiggered their own trade routes and their economy is doing okay. i think the $6 million question is, is this geopolitical tension that we see going to build? and if so, will de-risking

become de-globalization? are we going to have a global economy that looks like the fragmented global economy of the cold war? i don't think we're headed there, but we are in a very different environment. here in the united states, israel policy, the "inflation reduction act," these are moves that i think are spooking other countries that are saying what about the world trade organization, what about america leading the next phase of global trade liberalization? so we are entering unchartered waters in terms of where the global economy is headed. >> and a lot of economists who think we may be trading near term gains for long-term productivity. so big implications. we'll continue to follow them. thanks for your time today. we appreciate it. let's get a quick check on the markets. all three averages have given up gains. the nasdaq was the last to turn

negative, even as yields were falling. let's take a check on birkenstock, as well. it opened at $41 a chair, $5 below the ipo price. down 11%. let's go over to diedra bosa nn now. welcome. >> so the direct-to-consumer retail business model that has fallen out of favor with investors. you take a look at some of the golden companies, the darlings of that age, there's blue apron, smile direct club, et cetera, et cetera. many of them have successful ipos, but it turns out their model didn't work well. but for birkenstock, they have a very different way of doing it.

direct-to-consumer made up less than 20% just four years ago. today or last year, it makes up nearly 50%. so there's been a huge shift. but the key here, kelly, is that birkenstock has used a combination of wholesalers to create this engineered distribution model. what this does is it essentially uses both of these methods of saling the products to create scarcity. so that's very different than what sort of the last class of these companies did. they were everywhere, and they used advertising to reach consumers and sell as much as possible. that was flipped on its head when apple's new policy came in place and left them behind. birkenstock is using a very different model. so it is interesting to see if this will have more success. and it's a lot more profitable, as well. >> and it has the name recognition.

diedra, thanks so much. still ahead, delta lowered q3 guidance in september. dominos has beaten topline estimates in only 7 of the past 20 quarters. and walgreen's has a new ceo. will he turn around the health care services business? barngsxcng in eain ehae. ck after this. ♪ ♪ every day, businesses everywhere are asking: is it possible? with comcast business... it is. is it possible to help keep our online platform safe from cyberthreats? absolutely. can we provide health care virtually anywhere? we can help with that. is it possible to use predictive monitoring to address operations issues? we can help with that, too. with the advanced connectivity and intelligence of global secure networking from comcast business. it's not just possible. it's happening. this is spring semester

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♪ welcome back, we've got a crop of earnings before the bell tomorrow. we'll get you the trades into the prints. we're talking about delta, walgreens and dominos in today's earnings exchange. here with your trades, we welcome back kkm financial founder and ceo. thank you. stand by as we talk some delta. it's been in steady decent since july. and recent cancellations of flights are lowering this. are you a buyer here?

>> i'm a buyer. it's been mayday mayday. if you look at the last three months, it's been in a free-for-all. down about 25%. still up about 9%. when i travel going to see advisory groups across the country, i see not one single available seat on the airlines. i think we will see demand come back. yes, the overarching theme is that we are question to consumer. the consumer appetite inside of the high inflation, high gasoline costs you talked about, but i think it has the opportunity to go back up to $41. that's 15% higher. that lines up well with the 50-day moving average. delta is oversold and i want to be a buyer and i am an owner. >> 35 right now. we'll hear from them in the morning. we'll hear from ed bastion talking earnings around

7:00 a.m. eastern time. we move on to domino's which has given upmost of its summer rally. it's holding on to less than a 3% gain this year. they're hoping to inentice customers with the uber partnership. losses should offset by lower cheese costs. so domino's, the stock of the 2010s. would you be buying it here, jeff? >> i'm not a buyer, but i'm a consumer and eater of many pizzas. if you look at this, i just don't want to own domino's. any metric you look at, it's underperformed. i own chipotle. i think it's a lower evaluation for a reason. you look at the range, that's for a reason. until i see some type catalyst, i want to be a seller here of domino's despite the fact that i am a pizza lover. >> you should do your -- go

around and taste pizzas and rate them. we'll make that a thing. >> it would be great. >> who wouldn't want that job? finally to walgreens which has lost a ceo, cfo and 25% in the past three months. they're looking to rebalance their retail and health care arms. bouncing slightly today on the news of an incoming ceo. you like wentworth. would you buy the stock? >> it's 77% off its all-time high. you think -- you know, i have to question my buy rating on this, but that's like signing tom brady. he was at pepsi, mary kay. express scripts. he's a stud. i think you're seeing some investor appetite. if you want to be careful, approach this long you can sell puts here. you can buy upside calls. when you look at historical

valuation, the forward pe ratio has been 5 1/2 up to nearly 12. that's the average. right now it's trading at six times forward p/e. i think it's on the bottom. i want to be a buyer here. tim wentworth is a stud. >> a trifecta in the morning. your two cents on bond yields at this point. we did see them touch lows earlier in the session and move a little bit higher. do you think that's putting pressure on the market? >> you know, we talked about yields about a week ago and i was a believer when it was -- that we would sigh 5% by 4%. we had no idea that we would see the atrocities in the middle east. i think you're seeing people covering their trades. it's the beauty of a big hedge manager covering their position. that was a great trade for him. i think you saw an overcrowded trade as people were selling the

futures which is related to the yields going higher. i think the ten-year note, once we see dust settle in the trading clear, i think you'll see it back under 4.5%. >> wow. jeff, we appreciate it. thanks for all your time today. good to have you. >> thank you. before we go, don't miss cnbc's financial adviser summit tomorrow. i'll be there tomorrow interviewing jay clayton. we're going to try to run through all the hot-button issues. you can skin ign up by scanning qr on your screen. that's it for the exchange. tyler is anxiously awaiting the fed minutes. i'll join him on the other side of this break. all that planning has paid off. looks like you can make this work. we can make this work. and the feeling of confidence that comes from our advice? i can make this work. that seems to be universal. i can make this work. i can make this work. no wonder more than 9 out of 10 clients

are likely to recommend us. because advice worth listening to is advice worth talking about. ameriprise financial. (all) ♪ toooo youuuuu! ♪ (sean) i wish for the amazing new iphone 15 pro! (jason) sean! do you mean this one - the one with titanium? (sean) no way i can trade this busted up thing for one. (jason) maybe stealing wishes from the birthday boy is not your best plan -- switch to verizon and trade in any iphone and get the new iphone 15 pro on them. (sean) what!? (jason) yup, and on an amazing network (sean) and i don't have to ruin anymore birthday parties! (jason) yeah, that ship has sailed... let's go get you the iphone. here we go, come on hon. (vo) it's your last chance to trade in any iphone for a new iphone 15 pro on us. only on verizon.

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week. we are close to session lows. off about a quarter of a percent for the dow. let's get to steve liesman now for the latest news from the fed and that would be the fed minutes from the meeting of just a couple of weeks ago where the fed left rates unchanged. so let's go now to steve liesman with that embargo. steve? >> federal reserve officials in the september meeting judged that one more increase at a future meeting was likely appropriate. a majority pointed to upside inflation risk. for the record, this was back in september. we don't know if this still holds now. some at the time, however, judged that no further increase was warranted. so there's your split on the committee that we're hearing in the rhetoric out there from fed officials. all agreed it was critical for policy to be, quote, sufficiently restrictive. that's the term that chair powell has used to indicate when the fed would be done and all agreed once they got there, it should remai