uber, joe t.? >> interactive brokers. take a look at the chart. it's pulled back nicely toward the 200-day moving average and it gives you point of reference for the stock. >> and rob sechan. the mother ship. >> comcast, trades at 11 times 30% discount to its peers. >> we'll see all of you on "closing bell." "the exchange" is now. thank you, scott. welcome to "the exchange." i'm kelly evans and ahead this hour, new week, new narrative. stocks and yields are both moving higher today. strong earnings helping on that front, but deficit concern remain as the ten-year treasury yield rises. we'll talk to two heavy weights in just a moment about the big issue that investors aren't paying enough attention to and see what can be done to fix it

and bitcoin above 30,000 as the sec may allow a spot in bitcoin etf that conveniently would expand its own authority. is it the right move in a former cftc commissioner weighs. charles schwab leading the s&p after its earnings and we'll preview more results and get the trade from goldman and b of a and that's coming up with earnings exchange. let's get a quick check on the markets where stocks are higher across the board although the dow is 100 points below the session highs and very similar for the s&p, up 46 or so to 4373 and the nasdaq a similar move. the ten-year yield back up to 7% and it's interesting to see that not exert more pressure and 471.6 and the 30-year nearing the 4.9% level witness again. so is this good mood in stocks a positive sign into year end or is it all just a head fake. joining me to make sense of things is hennessy funds chief market strategist and it's good

to have you on set. welcome. >> thank you. a nice rally day for you to be here, as well. you have to be generally pretty bullish on stocks. do you worry at all about the economy? >> no, i'm bullish on stocks. the market's in very good shape. people forget very quickly, but if you look at last year the market was down, all three indexes was down. thisiar year all three are up, if you look behind the curtains eight companies have been driving that success this year and were the drivers of the downside last year. microsoft, netflix, tesla, and nvidia. so eight out of 3,000 stocks are controlling the nasdaq which is 3,000 companies. >> but my understanding has been if you peel that away and certainly if you look at the russell 2000 it's negative on the year and the idea is smaller is where there's more balance sheet risk and maybe less, you

know, market position that they can defend against -- just a variety of factors that make them structurally weaker right now. do you think there's a different tore? >> well, i've always loved the mid-cap arena. i like the mid-cap arena for a couple of dint reasons and number one they can survive an economic tsunami. they're big enough to have a small-cap arena that's accretive this them and also big enough to beaccretive to someone else and if you stay in the hennessy fund $1 to $10 billion market cap which is a great area to be either to be an acquirer or be acquired. >> that's interesting. we'll talk later about some of your favorite names. you like casey's general and a couple of others in here along with casey's, dex and b.j.'s and we'll leave that aside for the time being and you're one of the

rare people in markets who has been through high inflation. people like to run the numbers and say something like 20% of fund managers have been alive during -- when inflation is as high as it is now or something like that. just give me some perspective when we talk about the ten-year at 470 or when we're concerned about high inflation and high rates. how do you find of sift through that based on the your experience? >> well, you're too young to understand so i'll give you a little history lesson, but back in the early '80s we saw interest rates of prime go to 21.5%. inflation was running at 18%. so if you had invested at 30-year 6% bond you were just out of luck. you were just dead, and i remember as a young stockbroker going to talk to people, they wanted to talk to me, but they were eating god awful, as bad as it was dog and cat food because they couldn't keep up with inflation. >> geez. >> in any way, so you look today, inflation's running 3.5%,

inflation is somewhat stagnating a little bit. you have 7% interest rate, 7.5% mortgage. my first mortgage was 14.5 or 15%. the difference was in those markets, in those times we gave up the washing machine. we gave up going out thursday, friday and saturday night. we saved our money and put a roof over the head for the family. in today's market, people get scared because you got used to or the younger generation got used to paying nothing to borrow. >> yeah. which it comes back to hit you in the end. >> and that's why, you know, do you think there's anything investors are missing about how the cycle could play out. in other words, when you are still pretty constructive on stocks and some of these are consumer facing and is that because we will ultimately navigate this period better than most would expect? >> everyone's been talking about a recession, but you don't have a recession if you don't have high unemployment.

we can't even hire for the jobs that we have today. plus, when you have low inflation and wage growth, that's good for the economy. that's good for the consumer, so at the end of the day those two are working together and we just have to be patient. there's a lot of things going on around the world and a lot of headlines, but if you're just talking economics, companies are in very, very good shape with their cash flow, with their profits and their expansion and capex. you name it. they're in really good shape. >> we'll circle back, like i said with detail, and we'll leave it there for now. we appreciate it, neil, thanks 37 neil hennessy from hennessy funds. the house of representatives is in its 13th day without a speaker and it took 13 days to elect one and at least one republican is warning of a potential need for a coalition speaker with a deal with the

democrats if the gop can't elect someone on their own. emily watkins has the latest. good afternoon, emily. >> good afternoon, kelly. yeah, there are some discussions about having some sort of coalition government, but before anything like that gets under way, jim jordan is up at bat and he's racking up support in his bid for speaker ahead of a plan to save the bill on the floor. there are some who say they would never back jordan and they're coming out in support of him after jordan and his allies spent the weekend talking about individual holdouts. members have called on the conference to come together and those members include mike rogers, chairman of the house arms services committee and tweeted he had two cordial, productive conversations over the last two days with jordan and as a result, rogers now supports him. congresswoman ann wagner who was adamant said she couldn't back jordan on friday and said they spoke at length and he has e

l a leyed her concerns of keeping the government open and both israel and ukraine are on the floor for the house of representatives and jordan sent them a letter this afternoon promising to bring the entire conference together. republicans will meet this evening again behind closed doors and tomorrow at noon it's supposed to be all out in the open and you will see what you saa in january and they'll see who does support jordan and who doesn't and basically how much of a climb jordan has left if he want tops get to that 217 to become speaker. >> a high-stakes 24 hours. emily, for now, thank you very much. we appreciate it. emily wilkins reporting. we may not have a speaker yet and the shutdown may still be loom, but treasury secretary janet yellen thinks the u.s. economy is in good shape. she told our wilbert frost that inflation has come down considerably and that we have, quote, we have about the strong

of the labor market we've seen in 50 weyears with 3.8% unemployment. billionaire investor leon cooperman said stocks will struggle to break much higher and he said people aren't taking the u.s. fiscal situation seriously enough. >> i think people on your program are not spending enough time talking about our fiscal situation. they're all focused on inflation, but i think inflation is just one part of the issue. i think focusing on our fiscal deficit would make a lot of sense. >> let's see if my next guest agrees. joining me now is roger ragman and former governor of the reserve bank of india and tom honing, distinguished senior fellow and former president of the kansas city fed. welcome to you both. it's delicious irony having you on together because if i'm not mistaken it was at the jackson

hole, where you issued this warning that was quite prophetic at the time and i'm curious if you have any warnings to issue now or if you think we're going to come through this just fine? >> well, first, it was 2005. >> wow! >> it's hard to, you know, it's hard to get things right all of the time, so i don't have any sense that i would be prescient. i think it's important to worry about a number of things all the time, and certainly we're worrying about inflation and worried about risk in the financial sector and we seem to have calm them with the akds in mark, but they were pretty significant actions and we are effectively insured all uninsured demand deposit ands that's a huge action because you just mentioned the fiscal deficit which has gone from 4 to north of 7% in the course of one year which is a huge expansion for what one might think of as a

normal year, as a peacetime year. you haven't seen these big expansions in the last so many years except perhaps in 2009 and 2020 which were both extraordinary years. >> i'm trying to think do i call you professor, vice chair, president? >> rag is fine. >> and tom honing, as i turn to you, sir, i thought it was interesting as people were concerned about what happened in march that banks in some ways took the bait and took all of the treasurys that they were encouraged to do the way our system works and are left with these losses. so we starteded with concerns about the banks and six months later it's the sustainability of the u.s. fiscal condition that seems could be much more worrisome. >> i think that's right. >> number one, on the securities that the banking industry hold, the fed set up a facility. they're taking securities and against them even though they

will be well below the value numbers and so they've alleviated that part of the crisis, but i think the real issue is the fed has decided wisely, i think, to end quantitative easing and begin to hold their balance sheet constant and reduce it. in that environment where you have the government issuing substantial amounts of new debt every month, we have a huge deficit over 1.7 trillion probably growing and you don't have the federal reserve buying that debt any longer, that means the private sector or foreign interests have to buy all that debt and that's why i think you see interest rates along the yield curve pushing up the ten-year up and i think you'll see more of that because this debt has to be financed and the fed isn't going to take it and the private sector will demand more of a return for the risk they're taking as they go forward, and i think that's very important to keep in mind and

that factor, i think is a warning sign for the future of the economy. we've had a really good growth period, but now we have all this fiscal expansion coming to hopefully an end, and now the higher interest rates, i think there's a lot of pressure coming forward on the economy and on the fed because they'll be pressured to reverse their quantitative tightening if things start to slow very much. >> rag, today we sit here and stocks are higher and earnings look decent and we think it's the economy and that's why bond yields are moving higher. do you think that's why they're moving higher or do you think that has to do with the deficit picture? >> well, i think it has to do first with what tom just said that the buyers are simply not there as they were before. the fed is out of the picture, foreign buyers and japan is slowly backing off from stopping and there is a concern of who's going to buy these long-term

treasuries. also, certainly the treasury has to issue a lot more paper to fund a much larger deficit than last year especially because techs intake hasn't been strong this year, and the second, i think most worrisome aspect is the treasury has issued longer term and who is going to buy this duration and that's partly why interest rates are moving up at the lower end. last point, as the fed takes longer to quell this bout of inflation as it stays higher for longer and clearly longer term rates have to be yet longer to give people the reason to buy them, to give them the necessary premium. so all of this is pushing up rates in the long end and of course, we'll act to slow down the economy. that's what the fed wants, but it's not something the ordinary person likes. >> no. and tom, if i may, the ways to kind stop worrying about this would be if we thought the deficit was going to quickly close, that this was just

someone off. if we thought bond yields would be back to historically low levels and maybe they will if a recession hits. >> well, they will, perhaps, if a recession hits. the demand for credit will decline, number one. if a recession hits there is a likelihood that the fed will re-engage in quantitative easing and not just lower rates and to buy more of these bonds that will be coming and that will bring it down. now the problem with that, of course, is that's going to invite even higher inflation. so they'll lose their objective of getting inflation back to 2% and so that's the tradeoff that the central bank has to deal with, and i think it's one that's theirs to encounter in the not too distant future and things do, in fact, slow as i suspect they will. >> does that present, in a way, rag, that would be the best case scenario because they could meet their objective while bailing

out in some way. if for some reason we can't see bond yields drop and yields continue to move higher the way they have the past couple of weeks, you have to wonder what other good options policymakers have. yield curve control? >> well, i think they've been aggressive enough in these innovative monetary approaches. i think they should stick to the knitting and do the sensible thing. they will have to start cutting interest rates at some point. of course, that assumes that at the same time inflation will fall. i think the key concern also going forward if, in fact, in a recession is we will be entering a recession with a huge fiscal deficit. >> right. >> recessions typically widen the deficit even more, so there is a longer term concern about debt sustainability. it's not a big issue for the u.s. today, but it is something that we should start paying more attention to over time. ? they worsened the deficit and raised the debt levels and that

has lower revenues tom, at this year's kansas city fed runs over all of the possible options to get out of this including inflation and you name it, and it couldn't come up for an answer. it wasn't just for the u.s. it was for a lot of advanced economies. >> that's absolutely right. the most serious effort that should take place today is the congress needs to address this growing debt and deficit problem, because if they don't do that it puts more pressure on the central bank to print money and reinvite inflation or to suffer a very serious recession if the fed decides, no, we're not going to inflate the economy. we're going to keep rates high and that means financing becomes more difficult for the private sector. so i think the real solution lies with congress. we've got to take care of this debt and this deficit in the long run or we are all going to suffer a much slow growing economy in the years to come. >> rag, what would you add to

that. effectively a spending cut or a tax hike, one of the biggest in history. so these are politically unpopular maneuvers and risky ones. >> he said it perfectly, but the only point, if i had to make one would be, you know, we've got a lot of spending also coming down the pipeline. all of these subsidies that are being given to manufacturing whether it's the chip factories or the battery factories. we need to take that into account also as something that will add to the deaf set over the next few years. yes, we have to pay attention to the deficit and we have to bring it into a normal situation sooner rather than later. >> gentlemen, thank you both. appreciate you laying it out today and i'm not sure there are any answers and just laying it out. raghuram rajan and thomas hoenig. this after the sec has appeared

to drop its fight against the spot bitcoin etf. what's the next step for regulators and what does it all mean for investors? we'll ask former cftc chair tim mosset. with higher rates hitting spending from every angle we'll kick things off with credit cards and will consumers keep footing the bill and if not, what are the market's most exposed areas. as we head to break, we are near session highs and the dow is up 349 and the 10-year note a little bit off session highs around 4716. we are back after this. ♪ ♪ this is "the exchange" on cnbc.

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welcome back. bitcoin jumping as much as 8% earlier today, crossing 30,000 as the path to a spot bitcoin etf looks clearer now. it is off the highs and we are just over 28k at the moment and bernstein writes that bitcoin's growing legitimacy and strong value proposition now put it on par with gold as the safe haven trade, but illegitimate and criminal uses continue to plague crypto. the wall street journal saying that hamas, even as the israeli government punishes to freeze accounts. former cftc chair and harvard kennedy school research fellow

timothy massad. great to have you. welcome. >> thank you for having me. >> bring me up to speed on whether you are thrilled, excited or horrified at the idea of having a spot bitcoin etf out there? >> well, i guess it was coming. i had hoped, frankly, a couple of years ago that the sec would take advantage of the position it was in because it had approve the futures etfs, but hadn't approved the cash etfs as long as the prices come from exchanges which meet the following standards and it would have been a back doorway of regulating the platforms by saying you have to prevent fraud and manipulation and have transparency and so forth. so they were in a box after the recent decision. >> think the question is does this bring more people into the market? does it change where people trade, you know? right now they do trade

primarily on the exchanges and very few people trade on chain, right? they go to trading platform. so does it cause people to buy the etf rather than actually buying bitcoin through a trading platform just because maybe they'll be easier to get in and out? we'll see. it's kind of ironic, though because bitcoin was supposed to, limb nate our reliance on large intermediaries and create peer to peer trading and here we have some of the largest intermeadiaries of the world like black rock offering a derivative of bitcoin. >> totally. >> -- on the exchange. >> i'm sure the purists would be rolling their eyes even if they're thrilled if it would make bitcoin prices go higher as it appears to be doing. how much of this is politics and some d.c. observers have made the point that in a back doorway does bring bitcoin bo into the remit because they don't want to lose power and this is a way of

maintaining that. >> well, perhaps that. i think they were in a position after the recent court case where they didn't have any options. you know, they had tried to resist approving the cash etfs because they were concerned about the degree of oversight in the cash market. so i think that's why they did it. i think they'll continue, though, to pursue the enforcement actions, challenging whether a lot of these tokens are securities. obviously, they've acknowledged that bitcoin is not, but we still have that issue which tokens are securities and how do we bring regulatory oversight to these platforms? it remains the same issue. >> right. so does it now kind of sort of say this can move forward and be mainstreamed. all the rest of it tbd and what exactly is the ad hoc regulatory

framework that has now sprung up? >> well, i think we're still in a very muddled area because they don't have general oversight into the platforms even with bitcoin. you have to follow these standards in the trading of bitcoin. former sec chair jay clayton and i advocated just that. we said the fcc and cftc should just get together and develop standards and say these apply to any platform that trades bitcoin or ether. that would have got know you the entire market and just create a baseline of protection. we can fight about which tokens really should be treated as securities. we can continue to fight about that, but we really need some basic investor protection in this market. >> would you have any concerns, so if this opens up -- and again, maybe crypto is an

interesting asset class and not in it yet, and maybe it's not, but say people want to mess around with it and they start dabbling with spot bitcoin etfs and what's the biggest risk? if it were a family member of yours just say make sure you don't do x, y, z or at this point we're all pretty familiar with the market and this is highly efficient liquid way to treat and there will be a handful of providers and there's nothing more to. >> i don't give investment advice and i don't make predictions and i would say two things. one is it's extremely volatile in price -- three things. it's extremely volatile in price. it's a highly unregulated market and therefore you just have to be aware of that. there could be -- there's estimates that say there's a lot of trading where people are pumping up the price, pumping up the volume through transactions with themselves. so it's unregulated and of course, it's an asset that doesn't really have any cash

flows behind it. it's a lot different than investing in stocks or bonds or real estate and other things. >> all right. digital gold. they're still going to make that case and now or soon, i should say. by the way, how soon do you think we'll see a product come to market? are we coming days? >> i don't know. i don't think it will be long, but i can't handicap that. >> timothy massad, thanks. we appreciate it. >> thank you. >> former chair of the cftc. coming up, we have 11% reporting this week and plenty of other financials and we'll look at four companies set to report before the bell in the earnings exchange and the sector heat map as you heard earlier. all 11 sectors are in the green as the ten-year note heads back south toward 470. carter wirth pointing out that the selling pressure is spread across every sector except energy which has held up well this year and outilities,

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♪ be ready for any market with a liquid etf. get in and out with dia. jeffries. jeff ♪ ♪ ♪ ♪ welcome back to "the exchange," everybody. i'm tyler mathisen with your cnbc update. the trump election interference case in d.c. imposed a partial gag order on the former president today. judge tania chutkan ruled that all parties are prohibited from making statements that publicly target special counsel jack smith, his staff, the judge's staff or any other court

personnel. the judge noted that statements about the families of those individuals are also prohibited. the trump campaign called the ruling an absolute abomination. an international red cross spokesperson said that the aid organization is meeting with hamas face to face. the red cross is demand the hostages be released immediately and they're asking for access to check on their well-being. the humanitarian group has not released details of the meeting. >> russia's foreign minister is heading to north korea this week. the visit comes just days after the united states claimed that north korea had delivered a thousand containers of military supplies to russia to support the country's war effort in ukraine. russia's foreign ministry said sergey lavrov will be in north korea thursday and wednesday, kelly. back to you. see you in a bit. >> tyler, thanks. tyler mathisen.

consumer discretionary is the best performing sector, etsy, bath and body works are the biggest gainers. is this a sign of a comeback or a last hoorah, they're waving red flags about some retailers and we'll discuss that next. take a look at shares of news corp. hitting the highest level in a year and a half. jeff smith's starboard value has reportedly built a stake in the company and is pushing for strategic and government changes and he'll join david faber for an exclusive interview tomorrow at 9:45 eastern. i won't miss it, you shouldn't either and we have the dow up 3.06.

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♪ >> welcome back. it's the first installment of our special consumer coverage. the s&p consumer discretionary sector falling nearly 5% since the last fed meeting in september. key bank out with a note warning that higher interest rates could be pointing to more risk ahead for consumer credit. the average credit card rate is now up 21%, the record high. for more i am joined by tedrosman here on set with me along with hennessy fund's neil hennessy. you brought your top consumer pick and welcome to you both.

first of all, give us the landscape. it seems like one day we hear that the consumer is still strong by a variety of metrics and the next day the picture does not sound as good. >> this is the nature of the economy right now. we have all of these ups and downs. i thought bank earnings recently were pretty positive about the state of the consumer and blink witnessies. delinquencies. i feel like normalization is back to levels of delinquencies after being artificially low. no doubt higher rates are squeezing people, but i think people are hanging in there and they've been remarkably resilient. >> although consumer sentiment has been quite poor and the real purchasing power is being eroded and that seems to still be having an impact. why are we seeing it in sentiment? are we going to see it more in the spending data? >> traditionally, it has. i know it's dangerous to say that, but i think the pandemic changed a lot of things.

look at travel and dining and experienceal spending and i think this you only live once sort of attitude that a lot have embraced after the pandemic. >> yolo. >> people are spending elsewhere. >> that, neil, is the perfect segway to talk about your picks because it's not like you're banging the table at live nation, but you're talking about consumer goods and dick's and casey's and companies like that. why? >> because i think that the consumer is in very good shape because if you look at the numbers and what ted was just saying, you're talking about $17 trillion sitting in the federal depository banks of which you're sitting in 4.5 billion than savings and checking accounts and there's a tremendous amount of money out there and a tremendous amount of money on corporate balance sheet. what's essentially affecting the consumer right now, if there's a

problem with consumer sentiment is just the headlines is ai taken over and artificial intelligence and that's all we talk about. when you look at it from my standpoint, it's called artificial for a reason, okay? and people really have the money to spend. that's why i like casey's. it's so simple and so straightforward that they're in approximately eight states and they're making a ton of money and they're selling the largest pizza dealer in the nation. >> when we look at dollar general and dollar tree and target. these are some of the worst stocks in the market this year. is that idiosyncratic or does that have information about how the rest of the names which are smaller and somewhat similar should be doing. >> well, i think, we talked about inflation and food inflation really took off in the last two years, and it's stabilizing now, but it's not going to come down. we can get commodities to come down, but what we buy at the grocery store is here to stay

and hopefully it only goes up a couple of a percent a year and that's why you see the lower-end stores doing much better than a higher end store would do in this marketplace. >> ted, what would you be watching for is a sign that the consumer is cracking or what are some of the companies that may be exposed by being too much out on the credit card limb, for instance, if that's one of the first places people start to pull back? >> they started to tight know a little bit, but not that all much, to be honest and only a 1% drop in originations in the first six months of this year off of last year's record pace. >> i think the job market is a huge indicator and that's the biggest indicator of whether or not people can pay their bills and i think back to that sentiment point, it doesn't feel great because inflation's gobbling up your wage gains, but at least the vast majority are working and making more money. i think that's wherepeople are keeping up. not everybody, sadly, lower incomes and lower credit scores,

the cracks are starting to emerge, but by and large, i think the data is more positive than the sentiment. >> as a final word, neil, is there anything that you would be avoiding in this environment? when you're looking at the stocks and you think this segment of the consumer and the economy is hanging in there. is there anything that you are less certain about? >> i try and stay away from thematic comes. >> artificial intelligence. >> yeah. artificial intelience and you can get into tesla, and you can get into a lot of different ones that get a cult behind them, amc, whatever, gamestop. if you buy real quality and hang onto it, you have to be patient, but you'll be able to play again if something goes wrong. >> gentlemen, we'll leave it there. thank you both, neil hennessy and ted rossmann. a 20% drop from the covid-era peak and savings is one of the

top concerns asccording to new data and what they're trying to do next. here's a look at oil that is now lower after the biden administration has reached an happeneding on venezuela's oil industry in return for a presidential election next year. it was higher and now we're below 87 and driller transocean, and shares are down 4% and it's the worst performer in the ne oervices etf. we are back after this. some things are good to know. like...where to find the cheapest gas in town. and which supermarket gives you the most bang for your buck. something else that's good to know? if you have medicare and medicaid, you may be able to get more healthcare benefits - through a humana medicare advantage dual-eligible special needs plan. call now to

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...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." having enough emergency savings and paying monthly bills, get this, have unseated saving for retirement as the number one concern for workers between the ages of 21 and 64 according to a new survey. sharon epperson is here with more on that. sharon, just like they do with retirement, it sounds like employers are trying to step in here to help out, as well. >> they're trying to expand the financial benefits that they're offering, the wellness survey

asked workers where they would put an extra $600 provided by an employer. well, the respondents said they'd spread the money out if given the options. first funding retirement and emergency savings, then health savings accounts, college savings and student debt repayment. few employers currently offer emergency savings accounts, but more are recognizing the benefit to their own bottom line. >> when you do need that money for an emergency you're not taking withdrawal from your 401(k) plan. you're not missing a student loan payment. you're not getting evicted. you're not having your water shut off so that you can actually come to work without having to worry about all of that. >> the new secure 2.0 legislation will give employers more flexibility to offer emergency savings accounts and other financial benefits in 2024 including matching student loan repages with 401(k) contributions. principal financial ceo dan houston sees achieving financial

well-being as an important goal for workers and employers. >> i can't think of any more satisfying metric to knowing hey, my workforce, not only do they do a great job servicing my customers, but you know what? they're on a path to financial success. >> studies have shown expanding financial benefits also leads to better retention and productivity. kelly? >> wow. so how do these employer-sponsored emergency savings accounts work? we are starting become familiar with hsas and these different structures. is it like that? >> it's similar to that. it's allowing you to put money in up to 3% of your pay into this account up to $2500. you can take that money out monthly, at least and the first four times that you take it out in a year, there are no fees attached to it. now there are still things that need to be worked out and many are saying that employers may not be able to open it for their employees on january 1, 2024, but that is when this goes into effect for them to be able to do

it and it gives the opportunity for small and mid-sized b businesses who have not thought about how to do it? >> it's an interest-bearing account. so it's not like you're putting it in investments that are high risk. it's something to really help you build up your savings. >> fascinating. sharon, thank you for bringing that us to. sharon epperson. coming up, shares of pfizer are higher today after they cut full-year guidance on friday due to the weak covid sales and an upgrade to buy at jefferies who says pfizer has big pharma. shares are up 4% and we'll get another sector look into tomorrow when j & j reports and with goldman and lockheed martin in earnings exchange and before we head to break, check out the insurers hitting all-time highs today, progressive, aflac and arch capital even as area ed seeberg at cowan warns washington is just starting to

te hest cracking down at the raik that we've seen from the insurance group. "the exchange" will be right back.

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but they are back tomorrow. b of a and goldman out with results in the morning and j&j and lockheed martin. let's get the key factors to watch with danielle shay. great to see you. welcome. >> thank you. >> let's start with the banks as we kind of get through that earnings season. the street will be watching for impact of high rates. bank of america in particular biggest unrealized loss. $105 billion. consumer also an area of focus for different reasons. they are reporting a rise in chargeoffs and geedelinquency. what would you do? >> bank of america, i don't think that there is much that they can say that will fix the down trend. it is still down 50% since february of last year and when you look at earnings, they tend to do well. you can see they do generally

gap up, but it doesn't mean it will change the longer term down trend. so i think that you look for a short term move hire. we have resistance about $2 higher. so i think that after earnings, after a nice rally, you can short it at that price point. >> so wait, wait, wait. i see people saying now that we're getting through bank earnings and that is not a risk factor, we can ride it into year end. but you are saying that you would take the opportunity to short them? >> yes, with bank of america in particular because this one is in a long term down trend. however if you look at jpmorgan, jpmorgan is strong. i like thatto the up side. goldman sachs is a little bit different here. goldman sachs is incredibly hit or miss on earnings. over the course of the last seven quarter, we've seen only four beats out of them and half the time up, half the time down. but here is what i'll point out to traders. goldman sachs tends to have big

moves in the week or two post earnings. so what i would rather two is i'd rather wait until the report, see how the market reacts and ride that move. there can be pretty big directional moves. >> and what understand of b and a on the one hand versus jpmorgan, very interesting. and on johnson & johnson, what would you do there? >> this is a neutral range bound stock. it hasn't gone anywhere over the span of the last year and a half. so when you look at the increase in implied volatility we've seen going into the earnings report, i think it makes sense to sell the premium here in the options market. you have about a 3% expected move, but it normally only moves about 2%. so what i will do, i'll sell the premium in the options market and buy it back the next day. >> and let's end on kind of a dire note. lock heheed mar tetinmartin.

maybe there will be commentary on the call. morgan stanley also flagging lockheed lowered fighter jet expectations. what does this stock say to you? >> so i do like the stock and i own the stock. however, i'll point out its loss momentum the course of the last two quarters until the news fof the conflict hit. so if we get a positive move out of lockheed martin, you know, you really need to see it trade up above $14 which is the expected move to see it continue on with this bullish up trend. however, if they can't get up above 460, if has that down side momentum, so i would caution longs. however, i'm going to hold on to the stock and i'll continue to look at this one to the up side in the long term. >> and last couple years we've had some earnings seasons that were clear ones that you were

playing to the down side, others that were strong reflecting the kind of way that markets have traded. although as we heard, 800 days new the s&p is exactly where it was 800 days ago. so this jet sun for third quarter earning, but with a key kind of year end period upon us, what is your overall feel for the market here. >> my overall feel for the market is to focus on trading in a range bound manner especially in the options market. because we have a situation where the vix is up above 17 and we've had these really volatile earnings report, and so what that means is that the implied volatility in the options is a little higher than normal especially when averaging in the last eight quarters. and so that provides an opportunity for trardstraders t in and sell neutral premium. i think that is the best bet with this quarter especially due to the way earnings reacted last quarter. so that is primarily what i'm focusing on. and then the stocks that are truly directional in nature, i

will take some directional picks but for the most part i think neutral is the way to go. >> do i dare ask about bond yields? >> i don't wade into those waters but i to pay attention to it to see what i want to with the overall indexes and how that will impact the market.pay atte it to see what i want to with the overall indexes and how that will impact the market. so i think that things are a little dicey here. we've seen really range bound trade and of course we've seen the high mortgage rates. but when you are looking at that, you can also see that that is pretty extended. so i think that there is a shot for the market to actually continue trading hire here. but we have to see some better than expected results out of netflix this week, tesla, and especially microsoft, google and meta coming up soon. if that happens, we have a short squeeze potential. >> all right. perfect guide book. danielle, thank you so much. really appreciate it. >> thank you. we have a quick update on

the uaw strikes. reuters thousand reporting that all union representative team members at general motors will receive an immediate wage increase after this offer is ratified while ford's executive chairman bill ford warned if the strike continues, it will have a major impact on the economy. the uaw has countered saying in part ford should stop playing games and get a deal done. and seems like the big three are edging up about a percent today. next on po"power lunch," one luxury carmaker is taking crypto. we'll tell you which one. (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

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there are some things that go better... together. burger and fries... soup and salad. like your workplace benefits and retirement savings. with voya, considering all your financial choices together can help you make smarter decisions. voya. well planned. well invested. well protected. good afternoon. welcome to "power lunch." coming up, strong start to the week for stocks. markets are rallying as we begin the first full week of