>> do you miss farmer jim? >> i think i prefer farmer jim. >> jason? >> palo alto networks. the stock keeps going up. >> and reits, they've been up the last couple of days. >> see you in a couple of hours for "closing bell." "the exchange" starts right now. ♪ ♪ >> thank you very much, scott. welcome to "the exchange." i'm kelly evans. here's what is ahead. yields are higher after today's consumer prices came in slightly hotter than expected, and jobless claims continued to show strength last week. are the numbers enough to keep a november fed hike on the table? and would that spoil hopes for a year-end rally? and jpmorgan, wells, citi, pnc, all reporting before the bell tomorrow. how much damage did the third quarter bond novmoves do? plus,how republicans nominating steve scalise for

speaker, but the gavel is far from guaranteed. how this might play out with just over a month until a potential shutdown. but first, the latest on these markets. dom chu has the numbers. a lot of fluctuation today. >> and we just flipped to marginally red on the s&p 500 for marginally green on the s&p 500. but it's been a day of ups and downs. 43.75 the last week for the broader s&p 500. at the highs of the session, the trading range had us up about nine points, down 14 at the low. if we were to tilt positive to close the day, it would be a five-day winning streak for the s&p 500. but a 43.77, that's the state of play. the dow just 0.1 of a 1% decline. and the nasdaq, up about one quarter of 1%. 25 points higher, 13,684. one of the elements of today's trade is the continued onslaught being put against the consumer

staple stocks. hormel foods, gave a projection today, down about 10%. the worst performing stock in the s&p 500, lamb wesston, down 7%. keurig dr pepper down. and kip we areally-clark and cl clorox, you are seeing some upside for kimberly-clark on a marginal basis. and just to give you an idea how much the underperformance has been, this is going all the way back year-to-date. that gap has widened. the s&p 500 up 14 points, the consumer staples etf down 11. and then the stock of the day, we'll give you a check on birkenstock, yesterday's hot ipo. the price was $46 person share, it opened at $41, and currently at $38 right now.

that means from that high down to where we are now, roughly 17% below the ipo price. so keep an eye on that. we'll see whether or not there's any stability to that ipo. not so much in today's trade or yesterday's as well, kell. back over to you. >> dom, thanks. dom chu. consumer prices coming in hotter than expected this morning, raising concerns about more fed tightening. the cpi jumped 0.4 last month, up 3.7% from a year ago. the core, up 0 p.3. my next guest says the stickiness of services inflation keeps the prospects of another hike alive. joining me now are my guests. welcome to both of you. cathy, i'll start with you. i think you're sort of narrowing the street right now. you don't expect another hike but you are watching the services and thinking maybe. >> that's right, kelly. we think they're done and they

don't necessarily need to do more. the backup and long-term yields and tightening of financial conditions overall will do some to have work for the federal reserve. you see these core service numbers and you look at the super core, which strips out rental inflation, it's still quite buoyant and up 0.6 on the month. and year on year, still relatively elevated. so it doesn't give them quite the confidence to declare yes, we're oven our way to 2%. there's still that stickiness there. >> the last time i saw fed funds, they were a little under 50% for maybe november, december for another hike. what do you see? >> i see quite a bit under 50%. i just looked at them and make sure i give you the right quote here. it's one of the things i'm impressed with today is how little the market repriced in a december rate hike.

you're at 11% for november and at 38, call it 39% for december. i would have thought it would have been higher. it's been higher in the past. obviously, that could still go higher yet. but the two-year has been pretty well controlled. i'm not sure that i'm concerned about this report. i was sort of impressed with how the overall core hung in there despite that -- what was in a rise in rents and the owners equivalent rent. i have the three-month annualized -- sorry, i'm going to double-check my numbers here. but i have here the three-month annualized 2.5%, kathy i've got 3.5 or 3.6 for the three-month annualized. i think that's okay for the fed to pause here is my bottom line on it.

>> yeah, i mean, i don't disagree with you. i think it is okay for them to pause, too. i just think that, you know, when i -- what i'm looking out is stripping out the rent. yes, i think there was an anomalous increase, and our model suggests rental inflation should continue to resume a downward trend. but a lot of the reason that core overall was held down is because of core goods prices. when you take out rent, core service is still running quite elevated. so, again, i don't think this tips them and suggests that they have to raise rates. i just think it increases the odds a little bit, and we'll have to see if the pce data particularly. >> let me jump in there. we had a 30-year bond auction at the top of the hour. let's bring in rick santelli with more. what happened, rick? >> yields going higher, heading

in. which means the price was dropping in as investors were running in to try to catch those knives as they were falling. believe me, they weren't very aggressive. i give this a d-minus. the yield, 4.837. here's the quicker, i was monitoring the high yield in one issue market. five minutes before the bidding ended was 4.80%. then it moved to 4.805% and that's where it ended. the yield, 4.837% was out of bounds to the original range, which mean they had to scale it all the way back to fill in enough orders to take down the auction. not good. i'll hit the highlights. the biggest highlight was the dealer community ended up with 18.2% of the auction, the most they have taken since '21. you want the dealers to take

smaller amounts because you want investors to take bigger amounts. you see the intraday 30s, making new high yields go right in. we broke the pattern of staircasing lower, as yields shot up. if you look at 10, same thing. we have broken the pattern so you can talk about flight to safety. i'm not saying it doesn't exist. but we are now seeing other influences that are seen taking precedent in investor's minds. finally, how do i know all of that seems to be true? the dollar index breaking the mold of staircasing lower by shooting up today and breaking the pattern. kelly, back to you. >> look at that dollar index jumping back up towards 107. kathy, i'll turn back to you. the fact that these bond auctions are becoming such an event. i'm looking at the dow now, down 129 points, it shows the concern

that every time we see rates a little bit higher than where we might be comfortable having them. >> yeah, that's right. you know, regardless of whether the fed raises rates one more time or not, it's really -- they're going to be in no hurry to cut rates. the one thing that the data supports is that it's a gradual grind lower and inflation will be bumpy at times. that gives the equity market pause. the discount rate is going higher, and companies are going to have to start to refinance their debt this year. they had a reprieve there for a while. they locked in, and now that debt has to be rolled over, starting next year. so that will be painful. >> i think i'm going to go ahead and put myself squarely in the lags are long or longer. they're not shorter. you know, even just looking at the journal has a great recap of the federal deficit now that we have closed out the year. the average debt that -- the

rate we are paying on the debt is still below 3%. the lags are going to come through the budget, through corporate america and to consumers here. so i think there's still a lot to reckon with. >> i think that's right. i like the way kathy put it. the fed doesn't have to do more here. i think where the fed is, in this zone of letting it ride, you keep hear thing idea of, of, of being patient. i think that being patient is kind of a euphemism for, let's see what kind of destruction we have created here in terms of this incredible surge in rates. all of those things are on their mind. in fact, you and raphael bostic, both of you mentioned corporate debt rollover. i'm just wondering if there's some companies that may have to merm merge with other companies in

order to stave off bankruptcy. of course, nobody wants to take on a terrible company, but maybe there's one at the margin that would do better. so you might see that happening overtime. but ultimately, there are cliffs that happen. they are out in a number of years, '24, '25, '26, when you look at the refinancing needs out there. but certainly, there's going to be a chill put on the kind of expansion that would happen at these current rates. >> we're watching the ten-year as it yields back up to 4.7%, kathy what would you add in terms of, you know, yes, we're going into an earnings season. i think there's still major questions about 2024. >> that's right. it's really going to come down to, i think, a few things. inflation, number one. and then the fed reaction function and what's happening with reits. but also wage costs. and if companies have somehow

found a way to adjust and profit margins withstand all of that, that's really good news and definitely applaud that. but if they start to kneefeel t pressure, that could be a little bit more of a, you know, slowdown signals for next year. >> yeah. and this morning is a perfect illustration of that. companies like walgreen's, even de delta, they are seeing shares rewarded. we'll leave it there. thank you both. dow is down 161. we have updates on the sam bankman-fried trial. kate rooney has more. >> reporter: we're at a launch break. the defense team still coming up pretty slow. we have not had any fireworks so far. they are jumping around a little bit after yesterday where they did not land any of the cross-examination and for other key witnesses, it's a slow

start, kelly. they are jumping around in terms of the timeline here. and there hasn't been a clear line of questioning. so we're watching that. but it does not seem that they have landed any of the questions here. a lot of talk about signals. so these executives sent many of their messages, which is the way they communicated, these encrypted apps to auto delete. so the defense hinting that some of these conversations we don't have evidence of, that it's caroline ellison's word versus sam bankman-fried. we learned about another boyfriend she had. during the cross-examination, she talked about a former employee that she was dating. one notable admission, she said they could have been better leaders, and that sam bankman-fried may not have nobody about certain issues with bank accounts. there was a side bar we just learned about yesterday in the court transcript. the prosecution went up to the

judge and said that sam bankman-flied was reacting to certain comments, laughing at certain points. the judge said you need to speak to your client about that. it could affect the jury and the witness. the judge basically saying top to your client and tell him to stop reacting. we'll bring you updates as we get them. >> kate, thank you very much. a saga indeed. coming up, we're on watch for the white house's next move in the israel-hamas war. and what that all means for the surging deficit. we'll ask one strategist next. a closer look at the health of the consumer. what did we glean from delta's earnings this morning? and the quality companies our trader is looking to buy in this environment. and here is a look at markets, which have just tilted towards session lows. the dow down half a percent,

similar for the s&p. the nasdaq just shy of that. look at the russell 2,000, down almost 2% today. this is a key benchmark for a lot of money managers trying to figure out if there is a weakening signal. not helping is that ten-year note. the 30-year up 15 basis points on the day. that seems to be why the move here has suddenly soured. "the exchange" is back after this.

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welcome back, everybody. the israel-hamas war is entering its sixth day of fighting as the u.s. secretary of state travels to israel offering america's support to benjamin netanyahu. ali velshi is there now with more. what can you tell us? >> reporter: we're a few kilometers from the gaza border behind us. it's been a quiet hour or so. typically what you see is rockets going up from gaza and the iron dome here intercepting them. every now and then you'll hear

thuds, which is missiles hitting gaza. the air assault and sea assault on gaza continues. antony blinken in the region, expressing strong support for israel, but making a few other stops to regional leaders to see how everybody can keep this under control. there is a second message, that's with the ships pulling up, two battle groups are pulling up off the mediterranean, the united kingdom is sending some, too. that's not for this fight in gaza. that's to warn lebanon and syria, the iranians and the russians not to get involved in this fight. let this play out the way it does. how it's going to play out is that there are hundreds of thousands of troops massing on the border behind me, ready to go on, with a ground incursion. one of the problems is that there are between 100 and 150 hostages. once they go in, the families

are worried that the lives of those hostages will be in peril because they may be used as human shields or the resistance to letting them go will increase. so the families are saying, get our people out first, use negotiation if you have to. but the rest of israel is really angry, and really fearful. and they want that ground incursion to start. for the moment, no ground incursion has started, but lots of missiles flying above us. kelly? >> ali, thank you very much. freez please keep us posted. it's a tricky time for congress to be without a speaker. house republicans voted yesterday to nominate majority leader steve scalise to the role, but he's struggled to gather the 217 necessary votes to secure that gavel. let's bring in the founding partner of capital alpha partners. james, thank you very much for joining us. >> great to be here, kelly. love your show. >> thank you. what is the latest that you are

hearing? >> the latest i'm hearing is that speaker mccarthy met with the republican house conference today and outlined some plans, he outlined a possible strategy for getting appropriations bills done. he tried to answer any questions that they had. he said that he wasn't going to make side deals with any of the members, as kevin mccarthy did when mccarthy was running for speaker. but i don't think he moved any significant number of members. he's still got more than a hundred members to go before he can lock up the 217 he needs. so we are expect thing drama to take time. there's been a subjggestion tha some jewish members might support pat mchenry for interim speaker for a couple of months just to make sure the house is no longer paralyzed and we can move forward on a package of aid for israel and also ukraine and

other purposes. >> so it sounds like people are pulling back, maybe looking at keeping mchenry in this temporary position for some time. but how much authority does he or congress have if this remains the status quo? >> he's speaker pro-tem, but the rules are tricky. he's speaker pro-tem under a special 9/11 era succession rule that says if you are on a list the speaker keeps in his desk drawer, you can be speaker for three legislative days. but it's possible for designated speaker for a longer period of time. you can also be voted in as speaker, in which case you have many more powers. so i think it's quite possible that the house will choose to vote for mchenry as speaker pro-tem, with a more complete package and authority to handle appropriations bills and continuing resolutions and other

bills in the usual way. that's not ideal. it doesn't mean he has enormous leverage to move the republican conference. but it certainly means they would be in a position to move expeditiously on these emergency bills. >> what would it mean for keeping the government funded past the november 17th deadline and avoiding a shutdown? >> i'm worried about that. i'm not hearing anything right now about a strategy for a continuing resolution. i think that whatever shutdown we see on november 17th is likely to be a relatively short one, less than a week or two, because there is a discharge petition ready that would be able to take a senate past the continuing resolution and move it to the house floor, where it would almost certainly pass with a pitchbipartisan vote. so this continuing resolution would essentially be a one and done type of thing, and we would have to find some new way to get to the end of the year.

>> and i don't know how much you or folks down there follow bond yields. this is all kind of new in a way. but look at what happened just the top of this hour. they issued 30-year dead. there wasn't as much demand as hoped. this is part of the treasury to fund the deficit. all of this has been much bigger than expected this year, and could persist into 204. so at some point, i do wonder how much pressure the market will put on policymakers, and what that will even accomplish given the dynamics you have described. >> kelly, you have identified a already very important point. this is a huge shock to washington. we have gone on for decades where it never mattered how much we spent or how big the deficit was. the united states was always able to finance that. but with the massive expansion of debt we have seen during covid, a line has been crossed. we don't have the debt coverage ratios we used to have. we don't have the financial

flexibility. suddenly, those credit ratings from the major agencies may be meaningful. and i think that washington is very well aware that the bond markets are paying attention, and washington is also awash that the short-term treasury bills are rolling over in large numbers and we'll have to refinance them at a much higher rate. >> exactly. can't really see a path from here to there, james. we'll bring you back as this plays out. >> you're my favorite, kelly. glad to come back. still to come, negotiations between actors and media studios are breaking down. even as the writers ratified their new contract this week. how the surprising setback will affect the media stocks, that's ahead. here is a look at that 30-year long bond yield at 485 today. we just mentioned they had the highest yield since may of 2007.

15 basis point increase throughout the day now, putting pressure on stocks, which have turned lower. the dow down almost 200 points at the lows. half percent declines across the board. here is a quick look at the map. energy and technology are the only two sectors in the green. a third of those names down 20% or more omfr the recent highs. more on "the exchange" right after this. 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. fresh, warm hot dogs! when i'm not selling hot 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 to "the exchange." i'm contessa brewer with your cnbc news update. the u.s. and qatar have agreed to stop iran from accessing a $6 billion account for humanitarian aid. the treasury department briefed house democrats about it today.

according to three sources for nbc news, when asked, secretary antony blinken said of the funds, we retain the right to freeze them. joe biden has been facing mounting pressure on the hill to stop the iran money transfer amid scrutiny of iran's links to hamas. the white house is negotiating with israel and egypt to arrange safe passage for americans to leave gaza. according to a senior u.s. official who says there are between 500 and 600 palestinian-americans living there. new jersey democratic senator robert menendez is facing more charges in a superseding indictment. he's accused of accepting bribes on behalf of a foreign government and acting as a foreign agent. menendez allegedly provided sensitive information to egypt and took other secret steps to aid its government. he pled not guilty to corruption charges last month, kelly. >> indeed. contessa, thank you very much. contessa brewer. coming up, credit card

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welcome back to "the exchange." we're getting multiple reads on the consumer front tooth. delta, dominos, walgreens all without with earnings. shares of delta down 2% after they revised down. dominos, they see a turn around

in urs comp sales, and walgreens gaining 6%. target also slightly higher after an upgrade to buy. they're bullish on improving traffic and some new products. let's take a deeper dive, starting with phil lebeau. and kim forest joins with us her trades today. she's sticking with names that create consumer delight over and over again. and with less than three months to go until christmas, courtney reagan, we'll see what we can glean from holiday hiring trends. phil, what did we learn today? >> well, kelly, what we learned is that delta is still very optimistic about where they are seeing the consumer as we head towards the end of the year. let's talk first about this narrowing of the guidance in terms of full-year earnings expectations and free cash flow. delta did narrow its expectation after increasing it. now expected to earn between $6 and $6.25 per year.

so a little bit of a narrowing there. $2 billion for the full year, was expecting to bring in $3 billion. the reason for the changes, higher jet fuel cost, they'll really see that in the fourth quarter. in terms of bookings, delta likes what they are seeing in terms of domestic and international travel. there is still robust demand there. corporate travel bookings are increasing. so we asked ed bastion, do you see the consumer slowing down at all? here's what he told us. >> in the industry, we do see it in certain parts of our industry, on the lower fare side of the business. but we're a very different carrier. we have premium, continuing to drive the strength of the business. we have international. >> and if you take a look at shares of delta, keep in mind that the other story that we asked him about that is not getting a lot of attention today

is the changes that have been made to the sky miles, frequent flyer program. they announced these changes to make it more restrictive, kelly. that was three, four weeks ago. immediate backlash, and he said okay, we'll make changes. we'll tweak it again. he said we're not quite ready. we'll hear about that over the weeks to come. >> because we have you, i have to ask about this surprise expansion. the uaw doing this midweek at this kentucky ford plant. what is the significance? >> this is the uaw keeping the automakers guessing about when there may be strikes and where. and in this case, this is a gut punch to ford, because this is a huge and extremely profitable plant for ford. the kentucky truck plant is where they build the super duty f-series tracks, the f-250 to 550. those are huge profit drivers with the expedition and lincoln navigator. the company's 8700 workers at

this plant walked off the job last night. this plant is responsible for just under 20% of ford's u.s. production. and in terms of overall strikes by the uaw now in the united states, there are 33,000 big three uaw members who are on strike. all of these plants, by the way, as you take a look at this, up to 44 plants, most are parts and distribution centers for stellantis and general motors. but there are six plants in there, including three that are operated by ford. the ripple effect of this, as you look at shares of ford, stellantis, and gm, we have seen more than 5,000 workers at other facilities that are not on strike, that the automakers have had to lay off, because either stampings aren't needed, parts aren't needed. the work is not happening because certain plants are on strike. i suspect we will see those layoffs increase over the next couple of weeks. >> phil, thank you. airlines, autos, phil lebeau.

let's dig in on the consumer and how to trade this challenged retail space. my next guest says this retailer has more room to run. joining me now is kim forest. welcome to you. go ahead and reveal the name and maybe this will be a bellwether of how to play the consumer right now. >> sure. this is always for the longer term investor. but we believe that a company like urban outfitters knows what they're doing, because they have been around a long time. they have been improving themselves over and over again, and then adding more brands and more slices of the pie. but what they really do is regardless of if you are an urban outfitter shopper or a home buyer, they delight you. when you walk into their stores

or look at their online presence, you discover things you didn't even know you needed, and you buy them. that's what i'm looking for in companies is that they can have a product management or in this case a merchandising formula where they can over and over again regardless of when times are changing or tastes are changing, that they either keep up with it or they're ahead of those changes and they have the product that people want and buy it. >> that's a perfect segue to talk about cola cola, which is one of the other names here, i'm a little surprised. listen, i'm one of the believers in this whole glp phenomenon. maybe they're less exposed, but it looks like sugary drinks are one of the places people cut back the most. so between that and consumer trends, why stick with this stock? >> sure, they are more than carbonated beverages and super

sweet carbonated beverages. they're a global retailer that modifies their product for each country they're in, so they know they can dlielight those customers. but they're expanding into coffee and alcoholic beverages. if you had looked at coca cola ten years ago, you would have bet they would have never have done that. but they are delighting shareholders at the same time by applying their know-how of how to bring products to market, that people want to buy over and over again. and they're doing it in adjacent areas, not just carbonated beverages. >> all right, all right. down 17% year-to-date. the last name brings us back into the more tradition alter to -- traditional territory. is amg a consumer play or as we look to bolster strategies, just a place investors should be looking? >> you should always be looking

in sell us and tech, because those are the items that actually bring technology to east effort a company or a person. all technology is delivered on a semiconductor, just that easy. i was including amd in this group, because they too have the customer delight, although it's a different customer. it's the designer of a data center or maybe it's the designer of a pc regardless. this company knows how to make a product that its customers want. and that's really why i picked amd. and they have changed from kind of being a second tier pc provider or even -- i think they were one of the first ones that did graphic chips, as well. and they have really upped their game, and it shows that they can do it over and over again. lisa sue really is a rock star there. >> and they are often second

fiddle to netflix in the broad discourse, but you make the case for sticking with this name. having a nice year already. kim, we'll leave it there. thank you for your time there. let's look ahead to the key holiday season for retailers with amazon looking to hire the most workers of any company in more than a decade. it's not the only one on the hunt either, but there are some major challenges. courtney reagan joins us with the details. >> so it can be a tricky holiday for a number of reasons. store employees are asked to helpful fill online orders and given the higher theft and violence associated with that. thousands of seasonal workers are being hired, but many aren't looking for as mr. as they were last year. the total number is expected to fall to 410,000, versus 680,000 just last year, this is according to estimates from challenger gray in christmas.

target is looking to hire 100,000. u.p.s. is hiring less than half of last year. macy's, 38,000, 3,000 less than last year. dick's sporting goods, about the same. amazon looking for 250,000 seasonal workers. that's 100,000 more than last year. total unemployment is 3 p.8%, b there are 4.1 million americans that are part-time. still, it's unclear if retailers can find the workers they need that are willing to deal with much more than they have in the past, without a lot of extra compensation sweeteners that i have seen in past holiday seasons with higher wages or additional gift certificates or bonus opportunities. i'm not seeing a lot of that in the hiring announcements. >> great point. indicative of how the labor market has cooled. courtney, thank you. still to come, the actors

are nowhere near a deal, as negotiations between sag-aftra and the hollywood studios were suspended. we have the details, next. before we go, let's take a look across the markets. all 11 sectors of the s&p are in the red. energy and tech giving up earlier gains, as the dow dives 260 points and yields climb still throughout the hour. the 30-year now at 4.876. back in a moment. (sfx: stone wheel crafting) ♪ the biggest ideas inspire new ones. 30 years ago, state street created an etf that inspired the world to invest differently. it still does. what can you do with spy? ♪

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is it possible to fall in love with your home... ...before you even step inside? ♪ discover the magnolia home james hardie collection. available now in siding colors, styles and textures. curated by joanna gaines. welcome back to "the exchange." talks breaking down between hollywood actors and the studios last night after the writers just sealed their own deal. julia borsen has the latest as the actors' strike enters its fourth month. >> that's right, kelly. negotiations collapsed last night. information, netflix co-ceo said in an interview while netflix agrees with giving success based bonuses on streaming, he says what sag demanded was a bridge too far. now, the association that netflix is part of, saying --

>> the ampdp saying sag is demanding a viewership bonus that would cost more than $800 million per year, which they say would "create an untenable economic burden. q the actor's guild saying they overstated the cost of the prose pollal by 60%, adding -- >> now, actors are returning to the picket lines today as hollywood's labor issues have cost the economy more than $5 billion according to an estimate. this news of putting pressure on warners brothers, discovery and paramount in particular, warn herb brothers down 3%, paramount

down 3%. cinemark and imax shares are lower amid concerns of an ongoing strike, delaying film releases. >> another surprising twist in a year that's been full of them. julia, thank you. coming up, the xlf ticking lower as rates rise. also, want to draw your attention to the s&p 600 small-cap index. bank of america's michael harden flagging 1100 last weekend as a key level saying if we break below it, he considers that the credit crunch recession trade. 22 points above that right now. we're back in a moment.

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♪ welcome back to "the exchange." big banks and superregionals like pnc start reporting before the bell tomorrow. let's get the numbers to watch and the trades. we're joined by chris kri sanity, chief equity strategist. great to have you back, chris. let's dive in. let's start with pnc. regional banks remain a worry spot for the market. investors are watching divisions, balance sheet impacted higher rates, maybe if

they have an efficiency plan to keep expense growth in plan, as some analysts speculate. chris, are you optimistic? what would you do with the stock here? >> it's good to be with you. hi. there's two things i'm looking for in these banks. one is net interest income and how they're handling it. and everybody is looking at that. and the other is credit issues, which nobody is looking at. so, let's look at pnc first. first, net interest income should be on the weak side, but they've already telegraphed that. and i think it's only going to be off 2 to 3%. a number like that would be well received by the street. so, we're pretty confident there that it should be a clean report. on the credit side, we're going to be looking, as it's saying, as you mentioned, the superregional. we're going to be looking at the commercial real estate book. we're not too afraid, but we're going to be listening for that on the call. it's setting up for a nice pnc report tomorrow. i like it. >> down 23% year to date.

the action today is not helping sentiment into these results. the march crisis practically a blip for them. up over 40% from the market bottom a year ago. the bank is best positioned for higher for longer. they have strength for buy backs. i have to imagine you would be at least holding this one. >> yeah. we like this one. but of course you're saying all those good things, but tell us something we don't know. the problem with jpmorgan is that they're the market leader and expectations get set real high. back to my two factors, the net interest income there should be quite strong. they have so many levers at jpmorgan to pull to keep depositors there, even if they don't offer them the absolutely top rates. so, we're, kind of, confident on net interest income. the interesting thing about jpmorgan, even if you don't own the stock, you should listen to the call because they touch on

so many parts of the macroeconomy. they have one of the largest credit card books, real estate. we're thinking things are still benign there but we're listening for the commentary for next year. still, i'm happy owning the stock in front of the report. things look pretty good right now. >> i'm getting people saying they're looking forward to hearing from jamie diamond. maybe he can calm jitters after the treasury auctions. that brings us to wells fargo. they clawed back march losses, been in decline since july though. they're in the midst of a reset. focusing on wealth management, capital markets, credit cards, but net interest income could continue to decline while expenses grow. that's not the picture investors are looking for at the moment. >> that's right. this is -- of the three, this is the one i'm, kind of, most afraid of for tomorrow's report. i wouldn't if i had a choice. so, it's one of the better performing banks since a year ago, even though it's been

struggling in the last month or two. the bad news coming into earnings is that expectations are pretty high, that they've managed their net interest income probably better than a lot of the other banks, and they've been rewarded for that. the problem is looking towards 2024, i think it's going to be a much more difficult job to do. so, i think that the earnings will be okay, but i'm a little afraid of the commentary looking forward for wells fargo. so, for that, i would take a little step back. also their west coast exposure is obviously large, and i really want to hear about their loan book and whether there are starting to be the slightest hint of problems there. we'll be listening carefully for the commentary on the call. >> elsewhere, the home builders, i so wanted to get you on a week or two ago when you first said, maybe i'm bailing on this trade. they just look worse and worse. i didn't even check since 1:00 p.m. when yields really started to pop.

they're down 5% this morning. are you out of them now? what do you think is going on here? >> we're out of almost all of them. we still own one home builder that we really like and we probably will carry it through. kelly, what we're talking about here is an industry that the demographics are just horrific. not enough folks own homes really for the last 15 years. kids have been staying with their parents and they're finally leaving the nest, they're finally buying starter homes. it's a good place to be. having said that, that's okay at 6.5% mortgage rates. but when you start talking about 8 or god forbid even 9% mortgage rates, that's a problem. and so we've done awfully well, as you know in the stocks. wet liked them a year ago when mortgage rates started to go up. i think it's time to take profits and discretion is the better part of valor and live to fight another day. >> absolutely. wanted to make sure we mentioned that on a day they are down more than 4% as those rate concerns

intensify. chris, thanks for your time. it's good to see you again. mai capital management. that does it for us. coming up on "power lunch," our fun week continues and we are talking fixed income. dom is getting ready. he's in for tyler. i'll join him on the other side of this break. ♪ it's raising capital to help companies change the world. ♪ opportunity is making the dream of home ownership a reality. ♪ ...and driving the world forward to a greener energy future. [applause] sometimes the only thing standing between you and opportunity is someone who can make the connection. at ice, we connect people to opportunity.

you founded your kayak company because you love the ocean- not spreadsheets. you need to hire. i need indeed. indeed you do. indeed instant match instantly delivers quality candidates matching your job description. visit indeed.com/hire ♪ welcome to "power lunch," along side kelly evans, i'm dominic chu. the latest report showing no slowdown in inflation from the previous months and higher than expectations. so, will that change the fed's plan? and how is the fed's higher for longer approach going to affect the bank stocks, as they start reporting those results tomorrow morning? plus, a top donor lashes out at the university of pennsylvania over perceived