>> the consumer trade, there's three names. we know lulu lemon, and the last one, costco. they clearly vit. the stock is trading near a high for the year. >> interesting stuff across the board here for our "final trades." that about does it for "halftime" as the markets are continuing to move higher and shrug off the higher bond yields. "the exchange" starts right now. >> thank you very much, courtney. welcome to "the exchange." i'm kelly evans, and ahead this hour, good news is bad news until it's good news again. better than expected retail sales, pushing bond yields above 4 4.8%, and almost back to recent highs. but our strategist is sticking with his 4500 year-end price target and which names he's buying now. and the one big miss this morning, home builder sentiment, sliding to ten-month lows. deutsche bank is staying

positive. their analyst is here to explain why. and a new report shows workers could see the largest salary gains in more than 20 years. what that means for consumers a and the fed. we'll discuss. first, a look at the markets where we fluctuated between earlier declines and stronger gains, which were wading as we speak. the dow up 51 points right now. the s&p, positive by just about a tenth of a percent. the nasdaq in danger of turning negative, and the russells, up 1.5%. the nasdaq treating those bond wielding as a bit of a headwind today. treasury space, lots of action there, as well today. the two-year yield is up 10 basis points from yesterday, while the ten-year is a couple points below its recent highs of 4.88. the climb in yields is why my next guest says the fed will be

sitting on their hands in the next couple of weeks. welcome to both of you. peter, is it you who thinks they will stand pat? some are arguing the latest spate of data should push them towards doing one more hike, even as soon as the next meeting. >> well, the bond market's done it for them. if you look at where -- let's take the most interest rate sensitive part of the economy, that being housing. since the july fed rate hike, the average 30-year mortgage rate has risen additional 100 basis points. if that's not tightening, i don't know what is. so the fed does not need to shift the rate as the impact of the rate rise flows through the economy in terms of impact. >> peter, are you in the camp that thinks we will be range bound here? >> i just -- i'm nervous with the rate rise, the impact on the

economy negatively, and also multiples that i'm just not comfortable with. now, there's parts of the market that are cheap, not to find as bit cap. the smaller cap and mid caps are much more attractive. we're tending to be focused on international markets that are much cheaper and commodity stocks. but big-cap tech is widely overvalued with the rising rates that we have seen. >> jeff, that tees you up nicely. i know in some ways, maybe in this ways you agree, and you're looking towards a slightly different mix of stocks. what are they, exactly, and what is your sense about what we're learning here if >> well, as you know, we were outrageously bullish going into the year, because we thought folks were just uber negative. we were going to have a recession, an earnings implosion, the fed is going to hike to the moon, rates were going to the moon. that just hasn't played out. we have better than shared outcomes, and that's why we were

bullish at that time. now we have this big run, so like peter, after you have had that run, rather than risk being the upside near term, i think not only -- and that is the biggest concern, how high will rates go? i think they're going to calm, because inflation is calming. but if they don't, that's a real problem. in addition to that, you have whether it's a geopolitical conflict you are worried about, you have fears about the government shutdown, the debt, all these things are psychological barriers that can cause pe contraction in the near term. on the good side, you have earnings coming out. i think we'll have a very good earnings season. margins are starting to improve. and that environment, as an active manager, that gets us excited when you're talking about, like peter is, individual stocks. it's not an index, it's not a stock market.

so that's where we're at. >> i definitely want to talk through some of those names. some battleground names and so forth. just to your larger point, would you say the surging bond yields changed your bullishness on the market? >> i think it's just made us more cautious and respectful of risk. you know, while our base case is rates are going to calm, yeah, we're telling people hold your ground, don't buy on the dips yet. because if they do continue to rise further, then, you know, you need to be cautious. i think right now investors overall, the message is, even though we think we're going to be at 5,000 by mid year next year, we could have -- because of this rate rise -- some, you know, nice corrections. and they tend to be violent. and so don't run away, don't run scared because earnings are

improving. but you're going to have to weather some volatility because of these factors. >> i think that makes a lot of sense. a lot of people are wondering if some kind of downward move is lurking around the corner. you sound like you have a buying list now and a list ready. you're buying tesla, royal caribbean. so plenty of scary consumer and retail names in that mix. i could call out others. you have some industrials on here, technology names. you really kind of got them all. is there anything that these companies have in common or are they market leaders? do you think they just have a strong balance sheet? what are you most looking for? >> i think they have a combination of raet earnings profiles, great prospects, and there are relatively -- most of the stocks are attractively valued. it's a blend of growth and value. don't say it's all growth.

peter's right, you have some head winds in tech, but there are some names that we find increased productivity, it's all about, you know, whether you're talking about a.i., whether you're talking about work flow management. they've got businesses that need to buy from. and then within -- there's a capital spending bill underway right now that folks don't recognize. so they are remanufacturing, building up the manufacturing base again in the united states. there's a lot of names, jacob solutions, united rental, vulcan. you want to be there, because that's not going away. >> i always find that's a much more hopeful place to look right now, in spite of all the headwinds. peter, i want to come back to you. you see pressure building on the fed from some corners who see the stronger data and say they can't lose their, you know, their drive here.

that they have to stay tough on inflation and so forth. do you really think that the biggest risk is that they don't hike again or that they do? >> well, i've been of the belief just keeping rates where they are at these levels is itself continuously restrictive. every day somebody's loan is coming due, and it's repricing. so that is a form of tightening that's just going to continue on, just by doing nothing. as i mentioned earlier, the rise in rates is itself another form of tightening. this rise in interest rates is a global phenomenon. just overnight, the jgb yield closed at a ten-year high. this is a global situation affecting not just u.s. companies but businesses and households around the world, which, as it -- as we progress from here, will further slow global growth. >> what would stop the rise in yields then?

>> well, that's the crazy thing here. we're seeing deceleration of inflation and yields continue to go higher at the same time. just the enormous amount of debt supply that we need to absorb. and sovereign bonds are no longer the safety trade. >> gentlemen, we'll leave it there on that note. it gets us to our next segment. appreciate your time today. the first vote for a new house speaker is underway at the moment. emily wilkins is tracking the action for us. >> reporter: the vote is underway as which speak for a speaker. this comes 14 days after kevin mccarthy was ousted, and right now, jim jordan is the republican nominee. the question is, can he get to 217? it's not looking great. the way they do these roll call votes, it's from a to z. looking right now, we're in the

as, and already you have three republicans who voted for someone other than a republican. basically, just a protest vote against jordan. a lot of these are coming from republicans who really helped win the majority for the republican party and allows them to take control of the house after the 2022 election. these are the republicans who need to hold their seats in 2024. otherwise democrats will take control of the chamber. a lot have concerns about jordan. a lot of them worry that he's a little more of a hard liner and extreme than mccarthy and scalise and they wonder what it would mean if he was in the speaker's chair. at this point, it looks like jordan's not going to get to 217 on this round. it's really not clear at this point how long it could take or if republicans will eventually say to jordan, hey, you have to step down and we have to figure out another path forward.

lots of up answered questions here. >> on the wires, they're saying that five republican lawmakers voted against jordan. we know that maybe that could change, but i think he needs 217. they have 221 republicans. they can't lose more than four. so if they have lost five and it stays that way, he will fall short. but i guess there's still a window for some change. >> reporter: you know, kelly, i just checked the count. this is a fast-moving situation. they're voting as we speak. i do see yes, you are at five republicans, and yeah, it's not common to see members go back and change their votes during something like this. you still have most of the members yet to vote. at this point, it does look like jordan will fail to get the 217 needed. of course, we could go for another speaker vote. they could have republicans break and just have a little more discussion. i think the big question is how many votes is jordan going to need to win over? if it's in the single digits,

between 10 and 20, maybe that's something he can work on. but if it's much more than that, it's going to raise real concerns about his ability to pull this off. >> emily, thank you very much. we appreciate it. let's turn to libby cantrell, who joins us here for more exciting times. i like what emily said, that in some way it is this vote was -- let's just say expected to fail, the real question is does he lose by a single digit margin or something bigger than that. what are you watching? >> well, we're only on f, and he's already lost five votes. this is obviously going to go to a second round. he's indicated that he's willing to continue voting until he either gets the votes, that magic 217 number, kelly, as you mentioned. or he capitulates like steve scalise had done. what we are looking for is when allthe roll call votes are

finished, does he get to 210, 2 11? he could then get to that 2017. but if it's around 200, that whet will be much more difficult. they allege that he made promises that he wasn't able to honor. this is not going to be clear cut. it will not be straightforward. the real question is in that total vote count, is he five members short or is he 20 members short? that's a big difference. and one is reconcilable, one is probably not. what is does it mean for investors, libby? >> if jim jordan wins the speakership, he is an unknown leader. he's been much more comfortable in sort of the provocateur seat,

if you will. he really has been, again, more of that agitator, more of the person who has provided oversight to the republican conference. so we can only adhere to what he is saying, and what he is saying should give the market some confidence. he's saying that he wants to fund the government, he wants to avoid a shutdown. there's some speculation that he has committed to bring up at least israeli aid, if not also ukrainian aid. so these are two big questions that may weigh on investors. however, again, we don't really know what -- how he will lead, once he gets into that speakership. of course, it's an open question at this point whether he will get the needed votes to get the speakership all together. >> and another angle i saw this morning is that we could potential be heading for

automatic 1% spending cuts come jan 1. how would that work? >> there's a lot of moving parts here, so it's natural folks are not keeping track here. if you remember that debt limit bill, that was in agreement, both to avoid the breach of the debt ceiling, but also to fund the government for fy-24 and fy-25. however, in order to incentivize congress to reach appropriations levels, there was a 1% sequester that would happen if there was a continuing resolution come january. we probably will be operating under a continuing resolution in january. so that may not be able to be avoided. but something jim jordan has put out there is that he would move that trigger date to april. so if congress were still operating under a continuing resolution come april, then it would be a forced 1 p% sequeste.

the that may be a bridge too far, so a lot of moving parts here. the ultimate takeaway for the markets is one, does the government shut down? and then two, what are the funding levels? i think on the latter, the funding levels are probably going to look very much like the agreement that was hatched out in the debt agreements. i don't think we should really view whoever wins the speakership as really a big inflection point for spending. >> ironically, that might continue to put the bond market in a bad mood when there's not much change. 12 is the count of noes. i'm not sure if we're halfway through the alphabet yet. but it appears to be, you know, a margin he will have to -- a quite large margin he'll have to figure out how to overcome here. >> i think the real question here, just in terms of the speaker fight is whether he capitulates and takes his name out of the race. and then what happens, an open

question is, do folkss coalesce around the idea of giving the speaker pro-tem more authority. right now, he can't bring up legislation, but congress could authorize him to do that. so if we can't get a speaker in place, do they just embolden him and give him more authorities? >> all right. changing by the moment. libby, thanks. appreciate it. now to mortgage rates. look at this, 7.92, nearing 8% on the 30-year pfixed. and it's hitting home builder sentiment. diana has details. >> home builder sentiment in october dropped four points to 40%. this is the third straight month of declines, and the lowest level since january. anything below 50 is negative. builders pointed to the higher mortgage rates, and the 30-year

fixed hit a cyclical high of 7.92%. so to get buyers in, 32% of builders reported cutting home prices, and 62% provided sales incentives, up from 59% in september and tied with a previous high last september. kelly? >> it sounds a little too folks as though the first round of mofr mortgage pressure was bullish for the builders. i know they're trying to resort to a lot of buydowns and other things the market can't do. how is that helping to entice buyers? >> it's helping buyers be able to afford homes at the higher interest rates. so 70% of incentives are mortgage rate buydowns. this is when the builder lowers the rate for the buyer by paying points on a loan. they can do this for the full length or a few years. while they have done this on an

individual base necessary the past, nothing compared to what they are doing now. they said they are doing the full point buydown for the 30-year life of the loan, and it's not something we have done in previous cycles, at least not on the broad, majority basis we are doing so today. why haven't we seen this hitting the cost of this hitting margins yet? they have been able to bury it in the savings they have seen recently from the drop in lumber prices. lumber prices are down by a lot, unlikely to drop more next year. so they said the general view is that margins are going to be under pressure and start compressing in 2024. but still, builders have to continue to do the buydowns to stay competitive and keep volume up, which keeps their trade cost down. >> and regulatory action here. we spoke last week with one guest who was saying that fannie and freddie should do something more in the mortgage market to reduce that spread.

i bet we'll hear more proposals from different corners. i think the home builders themselves were lobbying washington to see more relief on that front. what should we ex-snekt >> they were asking the fed to make it clear how many times they were going to raise rates to bring down the mortgage rates. the idea that they were suggesting there had been some people in the market suggesting that fannie and freddie should step in and buy more mbs, that would take an act of congress. so it's a long road ahead to get that. of course, the industry is pushing to do anything to lower mortgage rates because it's hitting the bottom line. >> i can't imagine congress without a speaker right now, yes, we're releasing fannie and freddie from conservatorship. diana, thank you. our next guest is staying positive on the builders. let me just pick up on the unconventional place. do you expect policy relief or

help from washington on mortgages or anything else for this industry? >> great question. thanks for having me back, kelly. nice to be here. i think it's very obvious to point to the spread versus the ten-year as a real problem, and a big reason why the mortgage rate has gone higher. but we have seen the ten-year itself go much higher. even if we had a more normal spread that would come from less volatility and more activity from the fed, you would still be at something in the 6% range, which is a much higher rate than people are used to. so you will have to see the builders continuing the buydown rates. but i hear you calling out orb zellman calling out the margin hit. margin is just one part of the equation. it is going to help with volumes and hurt margins. it's likely going to hurt operating margins, as well. but in terms of the earnings dollars the producers can

produce, that's what the returns going to be based on. so seeing margins come down is not necessarily on its own a terrible thing. >> explain that again. who is reporting next week? who are going to be the main players that you are watching? >> right. so last month you had a couple of builders report off cycle. d.r. horton is later in the year next month, but you'll have others that you will be looking at next week that will likely to talk about this. the equation here, you could sit on a home for three years and wait for somebody to pay as much as you are wanting to take for it and get a high margin. or sell it at a lower margin today, redeploy it into land several more times from now until three years from now, the builders are more concerned about generating profit dollars versus the returns. they're not concerned so much

about the gross margin that they will get on a home. they can take 30% when times and pricing is good, or they'll take 20% when pricing is bad. the good thing is, when they underwrite land, they assume very little price appreciation, if any. and they're really underwriting that to that return metric, not so much the gross margin metric. >> you know, interestingly enough, i heard plenty of people concerned that we're not going to see any new multifamily supply coming on once we get past the current glut. the banks have just pulled back, under pressure, capital is restrained. maybe if you spin this out two or three years, you will get continued demand coming from households who might see rents start to go back up or not a lot of great options and go back into the builder market, where at least they can do things on incentives that traditional realtors cannot. >> right. when you think about what's happening over the last 18 months with rising rates

attempting to bring inflation down, that is a demand side issue so that you have less of it and less pressure on prices. what is more compelling as a solution on the housing side is increasing supply. and that's not only on the multi-family side but the single family side. so while we also see deliveries of multifamily units ex-pending beyond the weakness that you see here, it is concerning that we are already seeing i guess a pullback on the number of starts on multifamily. again, building is good if you have a supply side constraint that we have had for so many years. that's a big part of what has been pushing rents higher and home prices higher is that supply constraint. >> if you could only pick one home builder, which would it be? the year-to-date gains have broadened. some stocks up 60%, some up 20%. we're starting to see more differentiation. >> for sure.

i'll tell you, it's d.r. horton, one of the most affordability focused buyers. their buyer does depend on making a payment, not necessarily at a toll brothers where we have equity that they bring from the existing home and able to buy the home with balance sheet rather than income. so horton, we still like them. we don't necessarily cover the housing market writ large, but we believe horton has the right mindset here. they're willing to take lower margins. we expect to hear them talk about their fourth quarter call in november whenever giving potentially guidance for volumes into next year. we expect to hear them talk about growth. we expect to hear them talk about starting more homes than they are selling. building an inventory and me pairing for that volume growth next year. that's the type of thing you won't see in the national

housing data, like the nhb index, like the housing starts from the census. those are things that will cover every builder in the country. d.r. horton will be a little different than that. >> very interesting, though. glad you highlighted that. joe, thank you for your time today. >> thanks, kelly. speaking of real estate, it's top of mind for bank investors concerned about that exposure to commercial and office space. especially after the latest results from goldman and bank of america today. let's bring in leslie pick we are -- picker with the details. >> banks have been beneficiaries to the higher rates, with exception to the select real estate exposure. bank of america and goldman sachs reporting today. the latter showed a $728 million hit to earnings from historical on balance sheet investments. much of that stemmed from exposure to commercial real

estate. the cfo said on the conference call today that the firm's office holdings were written down by 50%. the firm started the year with $15 billion of alternative investments, reduced by $5 billion. bank of america has been the biggest lagger over the last year in the stock market, thanks in part to some sizable, unrealized losses in its cash and securities portfolio. and in its earnings today, the presentation showed that the figure is now $131 billion. the ceo said that the firm will never realize those losses, but the valuation in its held-to-maturity book declined 13 fe 13% over the last year as mortgage rates ended the quarter at the highest level in almost 23 years. so we'll get more bank reports in the latter half of the week.

according to jpmorgan, small banks have more than four times the cre exposure than their larger banking peers. so that will be felt much more acutely in the firms still yet to report. >> leslie, thank you very much. coming up, apple's ceo tim cook make a rare visit to china. why now, and what does it mean for tension between the two countries? that, plus why apple stock is on track for the first day losing streak in two months. and tech is the biggest laggard in the market today, after the u.s. announced new restrictions on exports of ai chips to china. and energy and financials are leading the way, as the dow's gain evaporates to 31 points. back after this. for colon cancer.♪ ♪it's time to use my voice,♪ ♪i've got a choice, more than one answer.♪ ♪i sat down with my doc.♪ we had a talk. ♪knew just what to say.♪ ♪i asked for cologuard and did it my way.♪

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welcome back. let's get some show and tell, where we show you a chart and tell the story. wyndham hotels popping today after many brands revealed an offer to buy windham for nearly $8 for cash and stock. they first approached wyndham in april but they pulled out of talks. the ceo says shareholders would benefit since choice has traded at a higher multiple. but the board had concerns about regulatory approval and the value of choices stock, which was down as much as 8% on the news today. wyndham is up more than five fold versus 159% for choice. here's what choice's ceo told

"squawk box" this morning about the deal. >> so by bringing the two companies together, we believe that through direct bookings, lower operating costs and a much more robust rewards program, we have an opportunity to help our owners really improve the value of their assets and return on investment. >> wyndham has rejected choice's offer, saying the proposal presents unacceptable risks to shareholders. wyndham is about 8.5% higher today, but the price is trading way below the $90 deal price. now over to tyler mathisen for a news update. >> thank you very much. a hospital was bombed in gaza this afternoon. the palestinian health ministry reports initial estimates of at least 500 casualties in what they say was an israeli air strike on the baptist hospital in central gaza. the israeli military has not yet commented. nbc news has not independently confirmed the report.

russia's parliament removed towards revoking the ratification of a nuclear test ban treaty. the country says the goal is to mirror the united states, which has signed but never ratified the treaty. and russia stated it would not resume testing unless the u.s. does. india's top court today refused to legalize same-sex marriages in the world's most populous country. however, the chief justice called on parliament to ensure the lbgtq community does not face discrimination, saying it's the government's responsibility, not the courts, to create laws allowing for same-sex marriage. kelly, back to you. >> tailor, thank you so much. coming up, we continue with a closer look at the retail sales number from this morning, boosting names like kohl's, bath and body and others, all in the green today.

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it could translate to better third and fourth quarter gdp according to economists. sales jumped 0.7% in september. 0.6% excluding out oes. the numbers for july and august were revised up. my next guest says he's not surprised because of the surge in salaries this year. joining us is the president and ceo of the conference board and cnbc's steve liesman. welcome to both of you. steve, what are the headlines on thes salary front? >> ceos are telling us, and we polled now at the conference board over 400 firms, they're telling us that this year salaries went up close to 4.5%. next year planning around 4%. that could be good news for consumers. if inflation does, in fact, come below that, then real earnings could grow. the question is, you know, is the consumer on edge or not? the retail sales data suggests they're still strong, even

though you have the balance sheets worked down from the stimulus payments. so you would expect the consumers to start to be towards that edge. yet now we're thinking that the real earnings will grow. our consumer confidence index fell in september. but that was mostly the expectations index. they're feeling good about the current jobs, the current situation, but they're worried about the next six months where we are expecting a recession. so that says what about the holidays? because we're ramping into the next two months. it looks like consumers still have some powder that's dry, and the holidays could be okay. >> and steve liesman, the most fascinating dynamic, everyone telling me retail sales is so strong, and the consumers themselves are telling us they do not feel good about things right now. who do i believe, all the data that tells me things that are

fine or the consumers who say things are not? >> i think there's a famous phrase, kelly, that answers you, which is, watch what i do, not what i say. and i'm reminded, kelly, of the fact that in the wake of the 9/11 -- the tragic 9/11 events, americans found themselves wandering car lots, buying cars like they were going out of style with a massive sentiment from the government. so yes, the consumer confidence data can help us with turning points and things like that. and by the way, the data that we have seen on consumers on the economy are all terrible. but we're just not seeing it in the data. just a couple of quick things, kelly, i want to update you on. first, the fed probabilities now with this report this morning have gotten a lot stronger, not necessarily for november, but january is now in play.

we are now, i think for the first time, above a 51% probability for a rate hike now in january. so that's been pushed forward. i want to read you this quote here from our friend, jan, who is one of the best retail watchers out there. he sent me a note vornthis morn staying -- >> so i'll leave that there. >> steve, maybe you should jump in there and explain the salaries are one place this spending power seems to be coming from. i'm in this mood today, i'm going to say, but it's lagging, right? we often see strong salaries and like a delayed indication of what's going on in the economy. can it keep things going here,

or is it something like the last hoo-ra hoo-rah if >> it's a fed induced recession here, but you have ceos banking talent, people are feeling good about their jobs and not feeling like it's at risk. when that happens, they tend into spend based on their own cash and spend also based on real earnings growth and they're using debt. i think the debt numbers are going to go higher. the consumer credit card numbers are going higher, because they want to do this. you're coming out of a pandemic where everything was shut down, so services are continuing to grow, experiences, travel, restaurants are continuing to grow. all that's happening. one thing to watch out is, they just have this student loan payment come back on this month in october here for about what, over 40 million debtors that need to then fit that into their

budgets, as well. so that's one to watch out. you have ceos saying there's going to be a recession, there's -- 70% of ceos say thing's going to be one more rate hike, that syncs up with the estimate there will be one more rate hike here in the fall. >> so steve liesman, i also watch the markets trying to make sense of it today. we were negative, then positive, now slightly negative again. everyone is just trying to figure out what good news is and looks like. >> yeah, it's tough out there for sure, especially with the forecast of the ceos, which can create a reality. the richmond fed president today pointed out one reason we might have a recession that is less severe is because of this massively long leadup to the recession, so companies have had a chance to prepare for less demand down the road, if we get

there. i want to leave you with a couple quick data points here. the first is that the atlanta fed hiked its gdp forecast this morning to 5.4%. they started off this quarter very strong, they went up from 5.1% just today. they're ahead of the street forecast, but they have been right in forecasting this strong quarter. the other thing i want to tell you, reading the commentary this morning of those with tracking forecast, the way the gdp map works, kelly, is because we're ending the quarter in a strong way, the fourth quarter now appears to be stronger than we thought it was going to be, both as consumer momentum, and the math works in favor of the fourth quarter. so that slowslowdown, what did call it, the gudeaux recession? we need to wait until the fourth

quarter. >> all right. thank you both. appreciate your time today. coming up, apple's ceo tim cook with another trip to china. this time as iphone 15 sales show signs of weakness. and let's check on the flurry of activist moves we are seeing. just this morning, "the wall street journal" pointing that engaged capital has a stake in this corporation. and setting sights on alstate. shares of all three of these jumping the last two days. ♪ ♪ the media business is valued at $4 billion. smith says news corp is "a little insecure" about running a

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welcome back to "the exchange." tim cook making a surprise and relatively rare visit to china amid some uncertainty about how the newest batch of iphones are selling there. diedra bosa joins us with more. what do we know, diedra? >> so the importance of china-to-apple supply chain has received a lot of focus. but cook's recent visit was a surprise that underscores the importance of chinese demand. he went to an apple store, and this is a time when early indications that the iphone 15 may not be selling as well as the 14, and he also brings attention to apple's service economy where the growth is supposed to come from. ten cent is one of the biggest app store earners on the app store itself in china. so it's key to that ecosystem that's trying to go beyond iphone sales.

the timing itself was awkward. it comes as the u.s. ramps up chip sanctions. this is a point that probably wasn't lost on cook, either. he was posting a ton on chin ae's social media platform and careful not to post on x, formally known as twitter. he posts everything on the chinese company, but will not post chinese content on x or twitter. >> diedra, great point. thank you very much. diedra bosa reporting on apple, who is in the midst of a three-day losing streak. stocks are seeing a losing patch. up next, the action, the story, and the trade on united morgan stanley, and proctor and gamble. and the markets are turning lower again, and higher yields aren't helping. today it's pressure on the

two-year note at 5.22, just shy of its 2006 high now. and the ten-year note, 4.85. odds of another fed hike are stronger. back after this.

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♪ welcome back. it's time for earnings exchange. and today we're looking at

flights, finance and pra breeze or better known as united airlines. morgan stanley and proctor & gamble. here with our trades is nancy, ceo and chef investment officer m. nancy, welcome to you. >> thank you, kelly. always good to be with you. >> glad you're on board, today especially. let's start with united airlines part of this tough airline trade. tickets prices are softening across the industry. raymond james warning that united has an advantage in the more resilient, higher margin, you're a flier of united, nancy. but are you a buyer of the stock here? >> yeah. well, i love the airline. i've dangerously close to 2 million life time miles. i fly it all the time. but i don't like the cyclicality of the business. there's no dividends, so investors are not getting paid to sort of suffer through higher energy costs, razor thin

margins, negative free cash flow and then you have spending increasing, not just the pilots contract where labor costs going up 31%, the second time they made a significant order of airplanes and that is going to have long-term profound impacts on cash flow and earnings obviously and margins. so, i think there's better places to be. fly the airline, but don't take a fly on the stock. >> fair enough. only up 6% year to date and could be a tough quarter for them to get through. how about morgan stanley? the bank is on pace for third-straight negative month, in fact. the trading action today will not help. j & p says lower demand for wealth management could pressure net interest income. you're an owner of the stock already, if i'm not mistaken. but would you get in here? >> well, i would wait to see what they report. we saw from goldman today that trading revenues were better than expected. morgan stanley has that in their back pocket, but they also have

the more stable investment income revenues. i don't think you want to chase it here. the stocks have a tremendous run even with the recent pullback since the pandemic. i think you wait for it to come back to you, but you are getting paid a 4. 3% yield and they have been growing the dif dend long-term 25% out of the pandemic. recent year is about 10% annually. so if you own it, i think you keep it. if you get a pullback, i think you definitely can -- there's a place for it in just about every portfolio. >> nancy, we have to run. but, got some washington news. just give me a thumbs up, thumbs down on proctor & gamble. been a tough trade this year. two thumbs up. all right. she'll take it here. nancy, appreciate your time today. thanks for rolling with us. >> thank, kelly. >> really appreciate it. the first vote for a new house speaker has concluded. and it looks like jim jordan is well shy of the votes needed. emily wilkins with the results.

emily? >> reporter: hey, kelly. well, 20 house republicans voted for someone other than jim jordan. that means that he has some work left to do if he wants to get that 217 needed to become speaker. now currently the house is in recress right now while they try to figure out what to do next. you remember back in january, kevin mccarthy on his initial ballot did better and he went for 15 rounds. that is absolutely not what republicans want. you have heard calls from every corner that they want to unify, that they want to come together. but at this point, it's pretty clear that they're still aways off. most of those who did vote against jordan tend to be members -- they're called biden republicans. they're basically republicans who represent districts that also voted for biden in 2020. and these are really the republicans, the fact they won these districts, they're the reasons that republicans have power in the house, that they control that chamber. and so, they're very important for republicans to keep that power past the 2024 election. and of course a lot of them are

concerned jim jordan very hardline, very conservative member, opposed affirming the results of the 2020 election in favor of biden. there's just a lot of concern about what it would mean for him to be controlling the house. so, house is in a recess right now. it's not quite clear what comes next, but at this point we're still no closer to having a speaker. >> so he lost 20 votes. it was interesting to watch the counts come in. couple votes for mccarthy along with a few others that made it through. where do they go from here, em sfli what do you think is most likely we continue to see more rounds, more deal making or they have to go with mchenry and looking for a better path forward there? >> reporter: i think at this point -- one of the numbers that i heard tossed around a lot is numbers between 180 and 190. there were concerns if jordan couldn't get that, then they definitely have to go find someone new. because he was able to get about 200 republicans to vote for him, there is a chance that they'll try and maybe get jordan to see if he can convert some of those no's to a yes during this

recess. >> emily, thank you so much. we appreciate it for now. i'm sure we'll see you again soon. emily wilkins reporting on capitol hill. stocks are lower, perhaps the speak of speaker outcome doesn't help. dow down 78 point. that does it for us. next on "power lunch," with the chip stocks under pressure, we'll get the details on the biden administration's newest plan to further curb china's access to tech. tyler is getting ready. thionheth se oerid ofhis break. [ cars unlocking and honking ] [ engine starting ] [ "dancing in the moonlight" playing ] stand out in the new, restyled volkswagen atlas cross sport. it does life beautifully. (adventurous music) ♪

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♪ explore endless design possibilities. to find your personal style. endless hardie® siding colors. textures and styles. it's possible. with james hardie™. ♪ good afternoon, everyone. welcome to "power lunch." alongside kelly evans, i'm tyler mathis. d.c. drama continuing as the house remains in limbo. a vote for speaker ending a short time ago with jim jordan, a republican nominee, failing to get enough votes. and not by a little. meantime, president biden heads to israel for a high-stakes trip. plus, markets reacting to a stronger than expected retail