apple? and speaking of apple, the company reportedly canceling john stewart's show over disagreements of potential episodes including one on china. it's the latest example of apple, and apple isn't the only one having to walk a very fine line so it can do business in china. >> and that stock in the middle of a losing streak. so is the market. dow down 110 points, a bit off session lows. s&p is down 5.5, 4253. we're exactly down from the two day moving average. that's a level people will be watching as we head into the close. and of course we're watching that ten-year yield hitting 5% briefly late yesterday. 492 this hour. and bit coin higher today. hopes for that bitcoin etf helping although it's having some trouble holding onto the 30,000 level. still i think people would say

it's exactly didn'tly resilient. >> and that etf on a bitcoin would maybe open a market that hasn't been there before. let's start with the market and the impact of bond yields. the rise in yields has put a damper oron what has been a strong year for equity markets generally. what does it all mean and where do we go from here? also with us the manager partner with the cla, he is our guest host for the hour. welcome both of you. good to have you here. let me begin with, with your thoughts on bonds generally. there's been some talk. i mean lately you've been paid to keep your maturities very short, whether you're in the treasury market or elsewhere. are we getting to the point where it might be time to go out a little farther on the duration curve? >> well, i think people are beginning to realize that the

interest rate regime is now going to be higher for longer, and therefore those people then very, very short can begin to move out just a little bit because yield curves normalize. we're in this situation where we've now gone from very inverted to closely flat. and i think that the realization is that this movement from higher to longer is going to allow people to move out a little bit on the yield curve because quite frankly the idea that we're going to have a massive move down during 2024 is probably certainly off the table. >> what do you think there, are we getting close to the moment where you would think about going out and lengthen maturities if you hold bonds. >> >> i would be careful with how far-out you want to go. i think three to five years would work, but you have to be careful about quality if you're talking about corporate bonds. i think we haven't seen balance

sheets reflect some of the recent comings and higher rates. that's what the end result is going to be with all this tightening. make sure that the credit you're holding is of high quality, cyclicals, if not companies that are going to have to go back to market very shortly but that are depending on advertising. just like when you do stock picking, you've got to be careful on the bond picking, too, and know the difference between your treasury and what you're getting paid for is commensurate to the risk you're taking. >> some people might say or might argue or might think, well, i can't do that work. that's how it would feel as an investor how would i possibly know? so would i be safe buying some kind of broad exposure and hoping i lose 10 or 12% of the margin i still might come out ahead. >> that's when you get a short-term diversified bond fund because of that amount, but you have to be careful of the

volatility. i would prefer owning individuals, or if you don't think the risk is enough buy a short-term treasury fund. >> do you think people should go into their fidelity accounts, just look for apple qcips and load up on that? >> the spread is not commensurate to take the risk. the a-rated, highly b-rated companies over the treasury. just don't go into companies that think i'm getting 9% for two years. a bond market is normally more right than the equity market, seit's telling you something that probably much more risk. >> what do you think of stocks and the so-called earnings recession we may have just exited? >> well, i think the earnings recession is over, and we looked at the magnificent seven the first part of the year. and now we're looking more

towards the 493 because the earnings recession is pretty much over. you're going to see continued growth in earnings throughout the market and into next year. so i think the economy is fairly strong. it's going to continue to be that way. it's going to be supportive, for the rest of the market that 493 will begin to have increase in earnings and we think the recession is over. magnificent session ended their quarters three or four and now the rest of the market is doing that, and we can move forward to a more broadening, more positive, more strengthening value of rises. >> you have three stock picks in my notes. one is amazon, one is raytheon, and the other is exxon. they all end in on, i guess that's the thing. >> it's really more about christmas and conflict. we think christmas is coming up, it's going to be good. and amazon is roughly 40 or 50% of the money that goes into e

commerce, so amazon should do well during the christmas period of time. when you look at congress they're going to continue to support wars that we have in terms of ukraine and israel, so we think raytheon is a very strong company there. they have about 2.6 times their 2023 earnings and just their backlog. so they're part of iron dome, part of the systems -- javelin systems using in ukraine. so congress is going to continue to fund that even though a little dysfunctional right now. and when you look at conflict, it's pushed up oil prices, and because of that we like exxon. if you think about exxon is really the fourth largest producer in the world now that they had the merger. when you think about that, exxon has had tremendous oil protection and the oil in the 85 to $90 billion range makes them a lot of profit. >> we get to have you for the whole hour, so glad about that.

>> big question what other names end in "on." exxon, raytheon, amazon, did we cover them all? >> boxcon. >> let's get more with rick santelli. >> i guess no charge is going to represent this week better than the following chart. here's the rate today with two year yields on top of the ten year note yields. and look how they outdistance the short end. and that is a big deal. another big deal ybw banking index. it's on pace for the lowest close in five months. and when rates are deleveraging or steepening, that's called a bear steepener, and historically it's not a thumbs up for the economy. let's look at some of these. twos to tens, it closed at minus 44 last week and minus 16. that chart starts in july. the last time we were at zero,

look how quickly it went from minus 110 to minus 16. but it isn't the only one. let's look at three years versus 30s. this week alone it moved from negative to positive. it's now positive 14, the steepest in five months. we look at 5s to 30s. it's gotten very close to the most steep -- the least inverted, the steepest it's been in five months, and it's at positive 21. the moral here is to pay very close attention because distances between maturities associated with long end and short end are widening out, and those term premiums as they expand are very difficult to predict. and this week in particular if you're using this in your strategy to say maybe we failed at 5%, geopolitics may argue with that conclusion. best serve to wait and see how markets look next week. >> tyler, kelly, back toyou. >> have a great weekend, rick, thank you. as rates chop around our next

guest short of duration credit is the best way to find returns. and apple's debt yielding 5%, well, let's talk about whether 5% should be scooped up right now. she's a bondbox co-founder and joins us now. well apple is one example. there's a ton of blue chip companies with yields like this and some almost with blue chip cheelds even higher. >> yeah, in the vestment grade getting a yield around 5% for apple, and that's a tried and true stock. if you're looking for performance here, you should be looking at the balance sheet right now because you're looking at bonds. in particular when you can get over 5% in a treasury fund right now with low risk at all, we would say you need to go even further down the credit spectrum and get to high yield because that's the place where you're getting compensated. you're getting paid to take incremental risk. i have to say an investment

grade while you're looking for quality, there's more out there. and with resilience in economy there's a lot of strength down the credit spectrum in corporates. >> i guess one of the questions would be the pros kind of know how to sift through these things, but if i'm sitting at home and spent the last couple of years first figuring out treasury direct and then in i-bonds and then i want qcis, give me some real and tactical ideas. >> don't buy bonds, buy etfs. >> are you serious? you would buy etfs instead of bonds? >> going on the treasury site and trying to buy a 10-year treasury bond and you mention i-bond. and that's a hard process. if you should be using the technology buy a treasury etf, it's much easier. you can buy it in your brokage account and you can buy corporate debt.

it's very specific. you can buy the high yield i'm talking about, and most specifically we loved it last year. we loved it this year, all top performing we say you should buy tr triple c. >> number one, are you getting sufficiently compensated for going out on the risk spectrum, and number two the idea of buying an etf versus buying a bond that you can hold to term and have basically if nothing goes wrong, have basically no wrong of capital loss. >> i think the interesting part there also depends on the asset size and also your ability to devoted to the research. so i think the point here is for the individual investor who doesn't have the bandwidth and time to do it i think using the etf makes a lot of sense. you have to look at two things, and i want to know what are the ones they're recommending

because you want to stay shorter especially if you've got credit risk as we talked about before and also how does the cost factor come in, what are you paying to all this as opposed to doing it yourself? so i think the cost benefit there has got to be and i think what they have is good product for the individual who doesn't have enough capital to diversify. if you've got capital and hard to buy bonds whether you're buying 20,000 or 30,000, i think it works for the individuals but you've got to stay shorter. >> when you say cost, you're talking about the annual charges. >> there's the fix fees they charge as opposed to when you buy your own bonds you're going to be paying those individually, and they're more opaque. so you have to know what you're doing in the individual bond world. >> joanna, final thought quickly. >> two points, it's around three or four years, so it had a lot

less interest rate volatility. that's why we keep recommending it's probably the best kept secret in fixed income is to get out into high yield instead of the triple c because fundamentals are so strong and you can buy the etf up to 30 basis points and very effective and easy to get these trades on than a lot more simpler than trying to wade through it yourself as mentioned. >> joanna, thanks very much. congress now heading home for the weekend but ain't no speaker. no, sir. emily wilkins has details on the latest setback with jim jordan. emily? >> reporter: hey, tyler. well, jim jordan is no longer in the running for speaker. house republicans just met after jordan failed to win the gavel on a third vote on the house floor and lead to a secret ballot with the question do you want jordan to continue to be

the republican nominee for speaker. and the end result was that, no, a majority of republicans did not want to see jordan run again. now republicans are breaking up, going home for the weekend, and going to be coming back monday night for a candidate forum in which we'll see probably a group of members put their names forward to see if they could potentially get to 217 votes to become speaker. we already heard from congressman hurd of oklahoma. we'll get some clarity throughout the weekend on monday on who is actually running, but at this point, again, it is just not clear any of these folks can get to 217 and can actually become speaker. and there's a lot of debate still on the table about empowering patrick mchenry as speaker pro tem. democrats are still pushing to get some sort of bipartisan coalition. i think at this point it remains very unclear on exactly what

this situation is going to play out, but at this point jim jordan is no longer in the running to become speaker. guys? >> what was jordan's fundamental achilles' heel here? >> i think there were a couple different things. number one, you saw a lot of republicans who have really challenging seats. they have seats in kind of what's known as purple districts, ones that biden won, and ones republicans are going to have to win again if they want to keep the house. and a number of them were clearly uncomfortable with jordan as the speaker. can we think there's a lot of concern about this process. people are still very upset kevin mccarthy got ousted as speaker. remember 96% of the conference did support him, and they're not happy with this process and showed that when it came to electing jordan. i think a lot of the folks trying to put their name forward are trying to say, hey, we have less baggage, in leadership. they're hopefully hoping that works in their favor. >> emily, thank you very much.

i know you'll be watching it over the weekend for any developments. and coming up the impact of rising interest rates on banks. and shares of merck higher. while shares of oracle are down on concerns raised of the company's a.i. executive. that is your power check. we'll be right back. in the u.s. we see millions of cyber threats each year.

that rate is increasing as more and more businesses move to the cloud. - so, the question is... - cyber attack! as cyber criminals expand their toolkit, we must expand as well. we need to rethink... next level moments, need the next level network. [speaker continues in the background] the network with 24/7 built-in security. chip? at&t business.

welcome back to "power lunch." as interest rates keep rising we want to take a look at the impact on regional banks. huntington bank shares beating on the top and bottom line in this third quarter, but an 8% drop in profit year over year as its net income dropped. the stock trading a little lower today and down 30% this year. and not all that uncommon with some of the regional banks. here for a "power lunch" exclusive is the chairman, president, and ceo of huntington bank shares. steve, why don't you explain the results today and talk us through how the bank is doing? >> we had a very good third quarter and coming off a record year last year. consensus about 10%, 3 cents, a total of 10% at the core. we had a bit of revenue and otherwise it would have been a

4% beat. top line, bottom line beat, very good quality, through the positives very nicely, continuing to grow the positives i should say. so we feel good about the quarter. >> how is loan growth? is it growing or static? >> loan growth this quarter was off a smidge. the largest part of that was virtual real estate, and we had about a $40 million reduction in that. the second part of that is distribution finance. that distribution finance about $350 million will come back in increments in the fourth quarter. we expect loan growth year over year to be about 5% from what we originally said over we came into the year. >> net income increased about 2% from from the prior quarter but decreased about a year ago. explain that to me. >> the difference is our margin so the cost of funds if you will deposits and other funds have increased, and that's compressed our net interest margin and a

net interest phenomena. it's why the bank stocks have traded off. we're asset sensitive, which means as rates rise or stay high, that's actually good from our balance sheet perspective. that's helpful in terms of driving net interest growth and expanding them in the future, and that's what we share would the analyst, our expectation is fourth quarter plateaus and growing every quarter throughout next year both net interest income, and net interest margins. >> steve, one of the things affecting banks is cash sorting where your clients are saying, hey, we want better yields, we don't want to keep it in money market. do you see that happening and how do you counteract that? >> there's a definite level of interest or yields on savings investors are looking for. because rates are so high, they're also using their cash instead of additional borrowing. many of these companies had very good years, record years

back-to-back, and so they are cash-rich, if you will. and so they have a variety of options. use it in lieu of additional borrowing, invest it, and we help them there. we run about $25 billion of off balance sheet liquidity in the liquidity portal we developed over the years. deposits in total for about about $140 billion. >> steve, can you speak to the fact the market is stomping on regional banks and banks in general? and earnings season started out with a pretty decent tone to it, and seemed like one day we moved through the next and banks are out of the way, it's clear sailing now. what happened? is it rates? give us your thoughts as a veteran banker the equity we're seeing the groups trade at? >> i think the market has side lined in terms of financials generally at this stage, and performance as you said has been generally good and a 10% beat.

but interest rates are up, which means there's risk to the economy slowing down, and banks are cyclical. if there's a slow down in the economy, provisions will be up, losses will be up, things like that. and the market can't quite calibrate around how far rates are going up. where will they calibrate, where will they peak? in addition you have a regulatory overhang for us, for our sector basl 3 capital. so they have expectations increasing at least from the regulators as proposed, that has to go through a process yet, and higher capital means lower returns. you've heard from jamie diamond and others about what that means in terms of relative competitiveness, and those are all overhangs in the market. >> that's tough for sure and almost with an implicit back

stop. >> we really appreciate it. >> my pleasure, thank you. coming up dark times for the solar stocks. you wouldn't think energy transition and the inflation act, at its lowest level since july 2020 after a warning from a key player in thspe.e ac we'll get you the full story when "power lunch" returns. personalized financial advice from ameriprise can do more than help you reach your goals. wow... we can make this work. it can help you reach them with confidence. no wonder more than 9 out of 10 of our clients

are likely to recommend us. ameriprise financial. advice worth talking about. this is american infrastructure, a prime target for cyberattacks. but the same ai-powered security that protects all of google also defends these services for everyone who lives here. ♪ we planned well for retirement, but i wish we had more cash. you think those two have any idea? that they can sell their life insurance policy for cash? so they're basically sitting on a goldmine? i don't think they have a clue. that's crazy! well, not everyone knows coventry's helped thousands of people sell their policies for cash. even term policies. i can't believe they're just sitting up there! sitting on all this cash. if you own a life insurance policy of $100,000 or more, you can sell all or part of it to coventry. even a term policy. for cash, or a combination of cash and coverage, with no future premiums. someone needs to tell them, that they're sitting on a goldmine, and you

have no idea! hey, guys! you're sitting on a goldmine! come on, guys! do you hear that? i don't hear anything anymore. find out if you're sitting on a goldmine. call coventry direct today at the number on your screen, or visit coventrydirect.com.

welcome back. the solar stocks are getting crushed today following a warning from solar edge. pippa, why the huge reaction here? >> solaredge shares are tanking down and on track for the worst day in their record. around 20% lower than previously expected with q4 also taking a hit. this comes amid inventory backlog in europe especially demand has really slow, so distributors aren't buying as they work through their existing stockpiles. and also solaredge gross margins for q3 between 20 and the company didn't elaborate, but that could be signs of priets cuts. and wall street is unimpressed and all downgrading the stock.

we've also seen some dramatic price hike cuts as well including goldman to the new target, and wave been hearing for several quarters now the solar industry isn't so hot as rising rates make residential systems more expensive. the issue here is that the bottom is getting out meaning there's not a lot to like in this space right now. the weakness is also hitting names. >> any thoughts you'd add here on we have energy, we have kind of old energy on a multimonth win streak. we have new energy getting crushed in the face of higher rates. >> so i think the key comes down to what you're seeing across the market are you making money. and if you're not making money and not making cash flow, you're going to get penalized because what is the alternative?

you look at the exxons of the world we talked about before. so i think today and it's not just the solar stocks. you look at other stocks not making money are all getting punished. some of these will survive but the market's also tell you they're going have to go back and refinance. if you talk about high yield at 9, 12%, we always talk about the cost of equity is so high and they don't want to issue equity. well, if they're issuing debt. >> higher than that. >> higher than that, and by the way you're giving away your company when your issuing debt. the markets have all this uncertainty. with row talk about the banks you ask the questions later. high quality companies. so through this you really have to say where do you think we're going to go a year from now, where do you think you'll have

opportunity. we have a friday, people don't want to have any risk gone. >> we're at session lows on the dow and wave seen people stostomping out of things and not wanting to leave their exposure. >> it's playing into this and happened last friday, happening again this friday and we also don't have anybody in the house. >> so there's so much uncertainty and instability in the world let alone the market. >> if you're a long-term investor i think your opportunities are starting to be really good. for short-term if you need the capital, people don't want the risk. >> let's get to bertha coombs for a cnbc news update. american hostages have now been released in gaza. three sources with direct knowledge of the matter tell nbc news that two american hostages held by hamas are now free. and according to reuters, the two whose names have not been confirmed are currently with the international red cross. with the rafah crossing between

egypt and gaza still closed, president biden said this afternoon that we will soon see that he got a commitment that the crossing will be open. the president said that the highway needed to be repaired but that the first installment of u.s. humanitarian aid will arrive in gaza within 48 hours. the judge overseeing former president trump's classified documents case holding a hearing today in florida about a potential conflict of interest with a codefendant's lawyer. prosecutors say the lawyer for trump's valet, walt nauta, previously represented an i.t. director at mar-a-lago. they say retracted false testimony after switching lawyers. very complicated situation. back to you. >> all right, bertha, thank you very much. and coming up, drug makers reportedly exploring weight loss shots for kids as young as 6 years old. we will discuss the ramifications of that and much more with former fda

commissioner dr. scott gottlieb. "power lunch" will be right back.

olukai slippers are so comfortable, you won't want to take them off. and with that outdoor worthy sole, you don't have to. the all around best slippers by olukai.

welcome back to "power lunch." every single day there's a new headline about the impact of the

new class of weight loss drugs. it's drug companies are exploring using treatments of children as young as 6 years old. dr. scott gottlieb former fda commissioner and cnbc contributor. doctor, welcome. which side are you on this now? which phase of the hype cycle are we in? >> look, i think a lot of the market reaction is overblown. people are making very linear assumptions from some of the clinical studies in terms of how that would translate in the real world and the impact it would have on eating packaged foods, things like that. i saw one analyst estimate there'd be a reduction in weight on airplanes. with respect to children specifically i'm not surprised the drug companies would be looking to see whether that would be an effective indication. there's a lot of genetic obesities in children. it's in a small instance of

obesity in children, but it is a driver. certain inheritance is a driver of obesity in children. that's why you see a concordance in twins with weight issues. that could be a real medical advance, so i'm not surprised they would look there. i think it could be a potential public health advancement if in fact they've proven to be safe and effective in that. >> let's talk a bit about those theories, the sort of linear analysis you were describing like, oh, there's going to be less weight on airplanes so airplanes will use less fuel so that would be good for the airlines. there's going to be less baear atric surgery and nesly may not do as well or frito lay may not do as well or whatever. which sort of these extended thoughts make sense to you

intuitively? >> well, intuitively none of them make sense to me. i think they make a little sense on the margin. i think there's going to be some impacts overall on the population. not everyone is going to be able to stay on these drugs, so you're going to see a lot of patients coming off them just using them for short durations of time. and i think quite frankly as more patients recognize that there's ways to lose weight that doctors can offer and more patients present to physicians, it also may increase utilization in certain things. for example, peopleseeking out these drugs to help them lose weight may seek permanent solutions like bariatric surgeries. again, when you look at the clinical studies, the weight loss is profound. but once you get out into the real world, going to be a lot of

variability on people to stay on these drugs. you're not going to be able to read through from clinical studies and assume that's going to be the real world experience. that doesn't mean the drugs opponent have a public health impact in the aggregate, bullet i think trying to read through the studies on individual stocks at least from my estimation appears to be a bit of a blow. that said the announcement from nesly i think they're smart to see whether or not to leverage through the segment, nutrition claims and nutrient content claims they could make in the setting, so there may be in market for foods specifically for the condition of people on these drugs, so i don't think this is going to have an immediate impact on people's purchase of packaged goods, for example. >> just a couple questions. you mention people who come off these drugs. is that more over time you don't want to use this for so long, sore is it more that insurance companies will say, hey, we're

backing off, you've used it for 18 months, so where is that really playing out? >> i think it's both things. i think these drugs have been studied not in perpetuity, so not for lifelong use yet, although there's an assumption people are going to be up for these for a lifetime. i think there are going to be long-term issues being on these drugs for long periods of time. we see, for example, loss in lean muscle for some of these drugs on some patients. and there'll be insurance coverage issues, so i think you'll see patients perhaps cycling on these drugs. some will stay on it. some will stay on it a duration of time, some may go on these drugs and seek a longer term solution like bariatric surgery. i think you're going to see variability in the real world how these drugs get used and you can't assume everyone who's on these drugs is still going to be

on them in the say way we see with statons. >> if you had a patient or relative who asked you about these medications what would you tell tem? >> we don't have experience with these drugs at high doses used for weight loss. the doses used for weight loss or four or five times higher. we have a lot of safety data and generally understand these drugs, so i mind be optimistic for a patient obese and can recognize the health benefits that come with losing weight, and we've seen some profound benefits in terms of cardiovascular production and morbidity from some of the trials done, people looking at impacts from dementia and alzheimer's disease. so the benefits that correlate with relukz in weight with people obese are quite profound. and i certainly wouldn't

discourage anyone from starting one of these drugs as properly indicated including a family member. >> dr. gottlieb, thank you as always. great to see you. very clear. appreciate it. >> thanks a lot. >> you got it. still ahead collateral damage. some firmerize learning the hard way doing business in china can come with a hefty price to pay, not just in dollars and cents. we'll discuss that when "power lunch" returns. d your personal style. endless hardie® siding colors. textures and styles. it's possible. with james hardie™.

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! one for you, one for you. oh, you're a messy one. cool, right? so cool. anyone can become an agent of innovation with invesco qqq, a fund that gives you access to nasdaq-100 innovations. hot dogs! fresh, warm hot dogs! before investing carefully read and consider fund investment objectives, risks, charges, expenses and more in prospectus at invesco.com. that first time you take a step back. i made that. with your very own online store. i sold that. and you can manage it all in one place.

i built this. and it was easy, with a partner that puts you first. godaddy. ♪ upbeat music ♪ upbeat music

♪i'm hearing different ways for me to screen 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.♪ cologuard is a one-of-a kind way to screen for colon cancer that's effective and non-invasive. it's for people 45 plus at average risk, not high risk. false positive and negative results may occur. ask your provider for cologuard. ♪i did it my way!♪

john stewart's apple tv show is ending regarding disagreements of potential show topics that included china, so says "the new york times." this is the latest example of a company and ceo who finds themselves walking a very fine line in trying to continue doing business in china, staying on the right side of xi jinping. and comes as tim cook is wrapping up coincidently a trip there. apple can continue to participate in china's digital development, whatever that means. here to discuss. steve, let's start with you and how -- how lightly apple must tread around the chinese leadership to continue to stay on their good side? >> incredibly lately.

what we see with the john stewart show being canceled or whatever you want to call it is not new to the hollywood world. we've so many times of maybe a villain is of chinese descent or something like that. it's not just an apple problem, but apple does do a lot of business in china, and the first thing that came to my mind 11 months ago when all these covid shutdowns happened and really ruined apple's quarter. we saw protests happen at these factories building iphones basically want to escape and get out, and then security forces came in, there was violence that happened. we didn't hear a peep from apple other than they're monitoring the situation, not even a bare bones we denounce the violence. and i think that incident more so than what we're talking about here with john stewart really shows what's at risk. >> is apple -- we heard about the restrictions on the use of

apple products by chinese government -- where does that stand? how big a threat is that to apple? >> apple says nothing, first of all, at least publicly. and second of all, it's not just threatening to ban iphones. it's also app store licenses. you can't operate your app store unless maybe all the apps have certain approval, so we've seen a lot of concessions from apple even from stated values they have like privacy and so forth, that they have to kind of wiggle around to operate under the law of china do business there again because so much of their production is still tied up there. we know we've been talking for the last year about trying to diversify supply chains and it's not enough to wean themselves off of china, that is why they're in the predicament they are. when john stewart and wants to do a tough story on china, and

he wanted to do an a.i. story, and apple is planning on doing new a.i. stuff next year, and that seemed today rub them the wrong way, too, and sounds like stewart just walked away. >> it seems extremely heavy-handed, dennis. do you think is a popular person would rise to the level of any bigger backlash about it or changes their policy on that front, or what do you think about the business decision? >> kelly, i think the problem is that 20% of the business apple does is with china. and so it's strong economic incentive for them to only do work that makes the chinese happy. i think that's really unfortunate because i think china will continue to put pressure on apple because not only is it 20% of their markets but most of their iphones, even now, are still being made in china. now what apple has done in the last couple of weeks -- i'm

sorry, months, they've started to move some of their manufacturing to india, but it's only a small percentage. so apple made the mistake that i think a lot of companies do is the old joke is if you owe the bank money, the bank owns you. if there's too much money owed, it goes the other way. i think china is in the cat bird seat, and i think it's a real problem for apple. and soon they'll have to make a decision on where they want to go. >> sarat, does it affect investment decisions? the stock is in the middle of a losing streak as well. does the fact they've now lost a popular talent play into a reason for that or does it pose any larger risk? >> i think the larger risk is what does china do next, and if china says, hey, we want more concessions, the other part that apple is going to face is the

cost of moving out of china are very high. so, and you have a stock like apple that everybody looks at margins all the time, right? we know the volume growth is not there. so just imagine if all of a sudden now margin growth is not there, and that's just not apple. it's a whole ecosystem, chip companies and everyone else. right now china is in control. >> dennis, what are the other companies that are in an apple-like predicament? >> well, there's an interesting example if you go to hong kong. there was a man named jimmy who had an apple daily newspaper who was a pro-democracy newspaper. it was shut down. he has been in jail for 1,000 days or more at this point, and his crime was to say that he thought hong kong deserved to have a more democratic process. and so it even goes to a

newspaper there in hong kong, and any other company that makes the mistake of having a sole source supplier out of china, the board of directors have to look at themselves and say, are we in the right position? i think that's a mistake that apple made ten years ago and there are a lot of other companies that have. >> a lot of the other companies with big china exposure are companies like starbucks or yum, food products and consumer types of things, nike, even, which the content and the expression part of apple's business model seems to put it more squarely in a position where this could become an issue. i don't know if you point to any others where this is a real potential risk. >> and i think where companies are selling into the chinese consumer, that will be really hard because not only are you in manufacturing there but you're doing it on tesla manufacturers as well. you have that going and then the whole issue of cars coming from china that are competing with our cars and at what price.

and then that goes to, hey, let's talk about commodities. china just said we're not going to ship certain battery technology or commodities. so there's a whole game going on there. i think the point is you just can't be too dependent on any sole supplier but on the chinese you have to be strategic about it. >> steve what does apple ultimately do here? is this 20% of their business is in china. >> up to. depending on the year. >> what happens over the long term in terms of manufacturing, revenues, et cetera? >> i wish be i had a crystal ball, but i will tell twhu the india conversation started around apple what tim cook said to myself and jim cramer when we talked to him about it, he said he sees india much the same way he saw china decade plus ago when they really started ramping up manufacturing there and ramping up sales there, so maybe we see that and maybe we see this bifurcation of their supply chain and customer base grow there. if, unfortunately, something really bad happens in china, if

there's an attack on taiwan and so forth, they can be kind of okay, but it's hard to game out. >> we talk about 20% of their sales, but what percent of their supply chain? it's 85% or higher, isn't it? >> i wouldn't want to guess. >> india in the realm of 15%. >> that's another thing apple has said, too. they like having china because just logistically getting parts from one place to another is easier when you're assembling it at this giant fox con, the iphone city we saw the protests happen at. >> gentlemen, thank you very much. we appreciate it. steve kovach, thank you. sarat, always good to have you here. >> stocks are ending on a down note with the dow pacing for its fourth week in five. sarat's rtg otwhpainshs en we return in two. at over 13,000 us school districts, which have become top targets for ransomware attacks. but there's never been a reported ransomware attack

on a chromebook. which is why thousands of schools like the fairfield-suisun unified school district switched to google tools for education. so they can focus on teaching and 22,000 students can focus on learning, knowing that their data is secure. ( ♪♪ ) (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? ♪ at ameriprise financial, our advice is personalized, based on your goals, whatever they may be. all that planning has paid off. looks like you can make this work. we can make this work. and the feeling of confidence that comes from our advice?

i can make this work. that seems to be universal. i can make this work. i can make this work. no wonder more than 9 out of 10 clients are likely to recommend us. because advice worth listening to is advice worth talking about. ameriprise financial.

welcome back. the s&p and nasdaq are on pace to close out their worst week in a month, sarat. it feels relentless at this point. >> i'm always the glass half full and i'm still invested. i'm not going to -- >> it's totally full right now. >> it is full. but i do think if you're going to put new capital to work, you can pick your spots. there are opportunities, we were talking about glp-1, consumer staples stocks, even a pepsi that kind of sold off. i think we can look at health care stocks and look at

companies that have sold off. these are just different trends going on within the market that are not caused by the overall uncertainty. and then i think you can pick and choose like some of the financials, the jpmorgan, morgan stanley got unfairly punished yesterday and the day before, so you can put capital to work. i do think given the uncertainty we have in congress, given the uncertainties we have overseas, you should dip and nibble, and if you have an allocation of fixed income, it looks really good now. very different from a couple years ago when we were looking for 2% yields where people with fixed income, you were forcing money into stocks. i think the opportunity to being diversified is much greater. >> for so many years bonds in cash was trash, and now that's not the case anymore. >> and that's not the case and you have private credit and a few other things you can do, that you can actually now be much more diversified. >> are you bullish or bearish on

partial kcredit? >> i think private kred sit trying to force capital into companies that don't want to go to the capital market. you have to be careful about that. the costs are very high. >> great points. >> sarat, have a great weekend. doesn't look so good for golfing. >> i think we'll be inside. >> thanks for watching. >> "closing bell" starts right now. kelly, thanks so much. welcome. i'm scott wapner live from post 9 at the new york stock exchange. this make or break hour begins with a battle inside the unsettled market. on one side rising rates and geo politics versus those looming mega cap earnings next week. the big question, of course, some of the biggest names in the market be enough to get your money back on track for a late year run? we'll ask our many experts that very question this hour. meantime, there's your scorecard with 60 minutes to go this week of regulation. red day overall, yields are a big part of that story. the ten year topping 5%