have to take heat for it let's go with alphabet it's easy at this valuation. it's got a valuation and that's the final trade. weiss? >> the stock's still very cheap. we'll continue to act well and i'm not in the mood to add more coverage >> ww granger. >> good stuff. the dow is good for 3.45 and walk you through the final hour. closing bell "the exchange" is now. ♪ thanks, scott. welcome to "the exchange." i'm kelly evans and here's what's ahead fresh signs that the economy is slowing regardless of the stock market rally we're seeing today and hedge fund manager kyle bass says things are about to slow down a whole lot more from here. we'll talk about what he's seeing ahead for the u.s. economy. what is means to fund global allies and the war efforts and his thoughts on japan, gold, the dollar and the marks right now andxpo's logistics soaring on

the back of rivals and macro headwinds and can they keep up the gains from here? the ceo joins us live ahead to answer that question from freight to fright is the consumer beginning to look scary or not? we'll ask the owner of spirit halloween what trends they're seeing this year and how they decide what cities and malls to do business in it's a strong set of criteria and dom chu is here to run through the numbers. >> a little bit of fright in the market with optimism about what's happening with levels that we're seeing with the s&p 500. if you look at the way the markets are shaping up, we are maybe tilting arguably toward the lower end of the trading range so far today the s&p 500 currently sits at 4141 at the highs of the session we were up roughly 46 points and up about 15 at the lows of the session. so that gives you an idea of the trading range and we're still up one-half of a percent and the a level to watch is 4241

100 points higher and that representeds the 200-moving trend line on the moving basis the dow drills, up 33,753 and the nasdaq composite up, and 12,706 for the nasdaq composite index. with regard to one of the lagging sectors so far today, it's health care some earnings related blow off and ripple effects you're still there. align technology, weaker than expected report from last week and remedy shares lowered their forecast take a look at bio-techne, and the health care sector is up 0.2% and in a broad are rally it is the rally check out what's happening with dow component quick service restaurant giant mcdonald's up 1.75%. it's been a rough year so far for mcdonald's as you can see down 1% especially in the last couple of

months or so and a better than expected report and a better than expected sales growth in restaurant locations here in the u.s. and other places, as well, helping to power some gains there and menu price increases helping to voice some of the profits over there and kelly, we'll see if that's a consumer theme that will develop more broadly. i'll send things back over to you. >> dom, thank you very much. dom chu. we are just 48 hours away from the fed's next decision on interest rates and it could mark the first time since early 2022 that the central bank goes consecutive meetings without a hike in the latest survey, some details as to why. let's bring in steve liesman with those results steve? >> kelly, this is an important meeting this week for what the fed is not going to do or is not likely to do which is to hike rates. it would mark the first consecutive two-meeting hold since early 2022 with the fed banking on the forecast for an economic slowdown that brings down inflation despite the strong growth we've had and still elevated

inflation, keeping the fed on hold is for the following, slower growth and lower inflation brought on by monetary policy lags. higher bond yields keeping the fed at bay, as well as the forecast for reduced hiring and lower wage gains nabe reports that 27% of respondents are raising prices now that's down from 45% in the prior survey the lowest level we've seen since january 2021 for the first time in three years more respondents report falling employment than rising and goldman sachs out with a report this morning that sees inflation falling next year by a full percentage point all of this has the market convinced the fed ain't going anywhere any time soon 0% probability for a hike this week in the futures market 24% by december and a still low 33% by january the rate cuts seen as more likely than not by july of 2024.

all of this, of course, presumes that data cooperate. markets will digest the ism this week and the aep data and end up with the october jobs report expected to be weaker than september and still pretty strong at 175,000 at 3.8% unemployment kelly, also we have some treasury data that just this week, it may be more that janet yellen is driving the bus than jay powell and the fed >> i totally, veemehemently agre with that. steve liesman. my, in guest says despite the stronger than expected gdp numbers, joining with more on the markets, geopolitical risk, we'll just cover it all hedge fund manager kyle bass is the founder and chief investment officer of hayman capital management good to see you. welcome. >> good to see you, kelly. thanks >> i guess we should take a step back and think most

significantly investment wise, gold's been up and oil is elevated what does this all come down to? if you're bearish where do you think we're going and what does that mean for how people should be invested right now? >> i mean, it's important just to separate what's real and what's nominal and the difference is whatever inflation that's been reported, if you just look at a few things like the average cost of a soda in the u.s. is up 45% in the last three years. the u.s. fhfa's own housing price index is up 45% in the last three years we expanded our balance sheets at the fed and we created 40% more broad money in the u.s. and exported that not only to u.s. consumers, but to the rest of the world. so i think we've had 40% inflation in the last two and a half, three years. so when we think about what was real and what was, again, what was nominal, those are two different things and that kind of inflation as you just saw in

the prior report talking about mcdonald's moving upbecause they're able to move price. >> yeah. >> the fact that wages haven't moved with the price level is something that we'll be battling now where we'll see wages continuing to move higher as we see in the autoworkers' strike and the ups strike and the others versus trying to catch up to where the price was that's the real problem the administration has and the fed has right now. >> that certainly spells profit margin squeeze with earnings if i said which would you rather, stocks or bonds right now, you can only pick one, would you? which one is it? >> i mean, if it's right now and not for the next ten years i would surely pick bonds. you do look at the u.s. curve whether you're on the front end or the back end of the curve you're plus or minus 20 basis pointses and look, if you move the level 45% in a couple of years, can you get a print that's a year over year print that's down? of course, you can

if you moved it, from, let's say it was at 100 pre-pandemic and now it's 145 and generic at a price level could you get a 143 print? i sure hope so and that's when they would victory lap and we have inflation under control and the new price level is 143 and now we'll look for 2% inflation. that is the -- that's the insidious nature of inflation and the fed and the treasury this year we'll run a 7.5% gdp deficit. another way of saying we have 6 trillion in expenditures and our politicians have lost their mind we've never run a deficit like that that's a non-wartime deficit of nonemployment. >> you're right. we've never run a deficit outside of an emergency that is that large and there's no real prospect for bringing it down and that's what makes the question about bonds so interesting. i didn't specify if you would buy treasurys versus corporates

or that, but there are plenty of people that think the downturn will trump the deficit in other words, as bad as the projections look that the bigger force is really going to be the slowing economy and that's the argument for buying treasurys and the argument for selling them is the fiscal problems will be worse. >> yeah, no. we're the tallest midget in the world in the u.s., whether that's politically correct or not i'm not sure getting 5% on a ten-year 4.80 or 4.90 at 5% close to the 30 year might be interesting here if, in fact, the world's -- i think it's important to look at the world at large and like i said, we created 40% inflation in dollars and cross border settlements and the majority of them is in dollars and so every other country in the world has some convexity,

negative movement to our push. whether we -- say we had 40% inflation. someone in another emerging market country is just going to be some level worse than that and so when you start to study the middle east and you look at non-oil producing country in the middle east they've hyperinflated their currencies away we've had the scenario where the world is a tinderbox because the financial architecture is broken in the areas where there are large, large pockets of youth unemployment and disillusioned youth, and i think you will see more of the social fabric of the wartorn. therefore buying bonds is a better thing for now, a better idea than stocks for now again, not for the long run. stocks will always outperform bonds in my opinion. >> let me ask you one more wonky question the wonky one is about japan i don't know how closely you follow things there and they're raising the cap and there is a sense that that feeds into higher global bond yields and to watch it

it's been at these important levels to the dollar is there anything that you would say there about the significance of these moves or the implications of them >> sure. look, japan is just further along the way of this kind of keynesian dystopia that we sit in today, and you look at what they're doing and you know, their policy rate is still negative ten basis points and they move their ten-year cap higher so the ten year in 2019 was just ten basis points -- sorry, the 30-year and now it's up to 1.8% or something like that sorry, that's the ten-year, jgb, but the point being is japan is trying to normalize the front end. we just pushed 40% of inflation in the world and japan has the approximately see rate and they are dying on the vine over there and the yen has gone from call it 110 to 150 and it's at a soft cap with 150 with the boj

intervening. i think japan is between a rock and a hard place and they're in a difficult spos it's like driving a truck with nitroglycerin down a bumpy road. it's very dangerous. >> as people ponder whether the yield curve control is something the fed will ponder here the last question i want to ask you because of the significance that is happening globally president biden said there are two or three major conflicts developing what are your thoughts about the new speaker and the prospect of the u.s. support of those conflicts and coming at a time when it looks like our economy probably will be slowing into an election year. >> you know, i don't know, i've never met the new speaker and i don't have a great opinion one way or the other and on whether the u.s. should be supporting these things and i thinkit's a existential crisis between democracy and crazy autocrats and a walk through with the cemetery in normandy will remind

you, what one crazy man can do to this world and unfortunately, we've got a handful of them now mostly with putin and xi jinping and lesser behind them just in terms of impact. so i think that the world sits on ancient history and the last 20 years were driven by economics and the next 20 years were driven by geopolitics and how do you respond to those conflicts is vital to both ourselves and the developed west and the democrat see and our allies i think, again, what have we spent on ukraine maybe 110 billion? i think around 65 billion and most of that is going to our defense industrial sector to build the energetics that we need to build. we have a $6 trillion federal budget again, i'm not saying 100 billion is a drop in the bucket, but it is almost nothing to help ukraine fight off the madman putin, to help, you know, israel

defeat the terrorist forces of hamas and probably soon to taiwan to help fight the madman xi jinping himself. >> i'd like to see you and speaker johnson, a debate going. how's that it could be an interesting one for the future of republican policy and policy. last word. >> yeah. >> unless you want to leave it there. if you want to leave it there, too, that's fine >> oh, sorry you know, look, i think those that study history understand how big this crisis is for those who should say we should stop funding i don't think they understand what's at risk here and what's at stake here in the world, and again, if you do a quick round trip around the world, for those people who think the dollar will lose its hegemonic position or its approximately see in the world, yeah it will come down as the world grows, but you look to europe where you have the eu 27 and they still don't have a central

taxing authority or a unified fighting force, but they are mostly all of our friends. you look at nato and you look at what erdogan said this weekend, he's shown his true colors where else will you put your money with brics china in russia? no one will put real money there. so i think we have to steer the world, and i think we have to defend democracy and freedom and everything that we fought for until now which means funding all of these conflicts unfortunately. >> i think that's well said at a time when it's not quite as popular as it once was kyle, thapgnks for joining us ad to all of the concerns that we're discussing i totally take your point. kyle, i appreciate it. kyle bass with hayman capital. let's take a closer look at the impact of the economy, the fed and the geopolitical events are having on energy space because that is a major threat to the

continued availability of affordable energy. brian sullivan has been following that story for us. >> can we start this with a quiz, kelly? >> bring it on >> so indian point, nuclear plant taken offline a couple of years ago. how many natural gas, wind turbine, offshore and solar panels and it's not the beginning of a joke, would it take to replace one indian point? how many big-producing -- >> wind turbines and showing our audience offshore. >> 100 >> 240 >> wow >> 5 million solar panels and three natural gas point plants to replace one large nuclear this is not some promotion for nuclear. >> and was nuclear -- was that plant taken offline because of issues >> yeah. it was old it ran for 60 years and broke a lot of records about continuous operation and this is not some pro-nuclear piece. what we're talking about is what steve liesman opened the show with which is interest rates

what the audience needs to understand is we can take off certain amounts of power like indian point, coal, get rid of it, right? clean the air up, but you need to replace the power with something. over the last 40 years, demand for power, electricity in the united states, kelly, has doubled from 1980 to now and with data centers and ai, what do we think is going to happen so since the fed began raising rates, a lot of promise about new energy, right? solar, wind, batteries since the fed began raising rates on march 17, 2022, solar edge down 78% and siemens energy which needs a bailout of germany or the offshore wind and down 61% with oil and gas here's the real worry. if we're taking off power, will the federal reserve and high are rates crush the new energy revolution that's a huge question >> and to what extent are -- is the state willing to step in and continue tosubsidize it?

because in the low cost of capital era. >> exactly they were often egoer and will willing to do so and you wonder if voters are saying and realizing it's not that these aren't important priorities, but we can't afford to just subsidize going a direction that undermines our ability to have a reasonable standard of living. >> you may have heard a guy in europe talking about this. germany's in dire straits and they've been saved ironically by a mild weather they had a cooler summer in the industrial parts of yuld and a fairly mild winter and they've got enough gas to last this year back to the united states, my point is this. you said the states. new jersey recently gave orstead 2 billion in tax credits that were supposed to go to consumers. new york state said we're not going to pass rate increases on two big offshore wind plants called sunrise and what's the

other one called beacon those are 1.6 million homes because they don't want to pass that cost on to consumers. rhode island in the fight, as well massachusetts with vineyard wind it's not a knock on wind power or solar, but the point is to anyone out there listening and watching and hopefully some politicians, if you're going to take power offline, if you're going to shut down coal, shut down gas and nuclear you better have something to replace it with and the ideas that you'll replace it with the offshoer wind farms, fine 1.6 million home are for indian point and 1.6 million in offshore wind, but now it might not get built because of higher interest rates and continued labor and inflation and the reluctance to pass on extremely higher costs to a consumer so if we have a really cold winter this year or a really hot summer next year and we don't have the power to make it up because we've been warned by the grid operator that it is possible that we'll have power shortages, someone's got to build new power plants.

>> right >> i don't care if they're hamsters on a wheel, windmills, solar, mars, whatever. >> cole, you look at how people have jumped up across europe and that is here and that tells us the desperation level level. >> endian point was replaced by significantly increasing the use of fossil fuels in new york state. new i don't think that was the goal. >> brian sullivan. >> apple getting set for a scary night event. tonight it's expected to unveil a new lineup of macs and the m3. apple shares are up into the keynote presentation coming off a tough stretch, but the unusual timing of the event has caught the eye of investors and analysts alike, including our next guest who says the scheduling is very odd ahead of the q4 results and joining us is needham senior analyst laura martin good to see you. welcome.

a prime time tech show, i'm not sure i've seen this before. >> i'm very scared this is halloween, and a day early. i'm very scared about this event, kelly >> what do you think it is about? are they trying to do something? what is this really all about? >> good question, they just announced nike and a big sustainability push and maybe part of it is that, but also i really think they need a refresh on the mac and so we're hoping they get a new laptop to the mp3 silicon chip and they're still trying to tie it in with halloween so they decided to do it 8:00 or 9:00 your time and keep you working late at night. >> what is the biggest implication for investors? do you think they can come out and dazzle folks and kind of reignite the next move up in the shares >> yeah. i think -- i think we're a little above the street on these laptop and macbook pro laptops and i think probably they'll have a weak quarter on that.

that's my read of why they're doing ittoday, three days before they do earnings is they'll have a very weak sort of tablet sales and in order to allay that they are front running the dazzling new show about what's going to come out and people overlook a weak number from the laptop number when they report on thursday that's my read on the weird timing here. >> all right anything else you would say? i want to ask you about disney, but what else are you listening for for this evening's event for apple and even as we start to turn our attention to earnings >> i'm really listening for anything that has to do with china demand we're seeing channel check saying that chinese demand for the i-phone is down 6% year over year and the government with china is threatening to kick out tiktok is saying apple devices cannot be used in government

tension. chinaa's 20% of apple unit's sales and anything else i would be listening for >> thats any over whatever we're thinking what do you make of that >> so no surprise, right because he backed him last time, too and they both are sort of almost -- i'm going to call it enemies of bob iger, and i think it's a little personal here. in fairness, i think bob iger by committing $60 billion to theme parks has completely sidestepped the issue of what about the core content business and it's not growing, but he's not cutting costs. so shares are up today of disney over 1%. i think that's deserved. i think these activists do the world and do shareholders a service by forcing ceos to focus and the investor timeframe which is a year. what are they going to do to cut costs or prove that they can do this faster in the core media

business >> what do those moves look like and would you bring that into proportion or would you have splany fronts. >> the issue with the revenue line is it's out of his control. we have strikes. he push said off a whole movie for a full year because he thinks he can't market without actors like promoting him. so they're pushing off the content which will hurt their revenue in the near-term so he can't really, it's harder for him to affect the revenue line with cord cutting and with the strikes strong do with movie releases, so he's got to cut costs. that's the only thing bob iger can control in disney and this along with nelson peltz will force him to do that which i think is great for shareholders. >> it may send down a chill down the company's price at this point. laura, thanks for joining us we appreciate it nice to see you again.

>> laura martin with nneedham. how they're navigating this very difficult rate environment and a special commercial real estate edition of "earnings exchange." we heard from empire state realty ceo after their positive results. what about the rest of the space? morgan stanley's head of cre will join us next with what to expect, and as we head to break let's get a quick check on markets as the dow is taking a leg higher up 435 points or 1.3% and the outperformer looked at the gap between the blue chip and the big caps in the dow and the russ will 2000 small caps and the s&p and the nasdaq right in the middle and the ten-year still at 490 we're back after this. ♪ ♪ this is "the exchange" on bc cn

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welcome back to the exchange the company's less than truckload or ltl business seeing a boost from the bankruptcy of rival trucking firm yellow which had accounted for 10% of that market xpo is up 150% since spinning off the brokerage unit about a year ago what is the state of freight right now for the fourth quarter and beyond joining us now is our inhouse expert frank holland along with xpo ceo mario herrick help i appreciate you being here. the earnings and a nice stock move you said, frank, the one-year anniversary of him taking over how are you able to execute during this extremely challenging freight environment? is it just market share gains from the struggles of some competitors? >> kelly, we had a grit quarter in the third quarter and they executed really well so we have

improved our efficiency over time so we would be able to handle more freight for our customers and higher prices and importantly record service quality and we are excited about that for our customers, as well. >> so, mario, kelly just referenced it. a year ago i talked to you as you took over the ceo of this company and i want to dig into in of the numbers and we're showing it, and tonage up 3.4% what was the catalyst for those gains? >> starting first with pricing, the big catalyst for these gains has been our improving service product. we exited the third quarter with the company record and service quality for our customers and when we invest in service our customers are willing to pay a premium for that and we've seen an acceleration in price associated with it on the volume side, a lot of that went through the bankruptcy or seizing operations in the first quarter where they were 10% of the industry capacity and all of this had to go somewhere and we were able to take on more of that freight for our

customers. >> we would benefit from the closure and we'll talk about your customers for a minute and we have the blue chip customers and the dow and general electric and we are able to gain customers. what customers did you gain? we gained thousands of customers through the course of the year and a lot of these were driven by the service improve amments a lot of them were mom and pop shops and we were able to onboard thousands of new customers with the growth volume and the segment of business. you talk about the mom and pop shops. today you made an announcement that flew under the radar and part of where the stock is up and you believe by 2027 you will improve margin by 6% and it's an efficiency metric and lower is better in this case and you believe you have 6% of improvement over the next couple of years how are you going make that happen first you see at least 6% and you get to a higher number and you want the operating ratio in the 70s over time and we will do

it predom minutely through three main levers and we will improve the pricing or yield over time driven by service improvements and the second one is making sure that it is into a higher margin business that we'll be growing and the third areas are cost efficiency and look here in the third quarter, we increase our shipment by 8% on the year on year basis and yet our labor and our head count was flat on a year on year basis and all of that is proprietary technology and improving efficiency as we go along >> rxo has been basically and you guys are up 150% over the past year and i'm not sure that's what people expected over time and that's expected to be the tech piece of this, but can you talk about macro conditions? what is happening with the economy right now? >> it is a fantastic company, but a lot of it is the cycle they are in a different cycle with the industry, but from a macro perspective, we usually survey our customers on a

regular basis, and what we are hearing is that things are soft, but they are not improving drastically and not getting worse either and one of the indices we watched for is the ism manufacturing index. >> of course. >> and they improved in december, and they're getting better. >> i wanted to ask you about news today and there is a private company, jack cooker, i personally haven't heard of them maybe you have yellow was 10% of the market and that's now offline if someone is able to acquire those assets, does that put pressure on your business? >> we'll see where that process leads to overall the assets will take time to get back to ltl is we believe a portion of the assets will get back to the ltl industry and it will be in the hands of the carriers priced at a higher level and we will see the dynamic of rising tide when it comes to the pricing associated with that and we'll see what the sales get to. >> it will be interesting to watch for sure

thank you both so much we appreciate it our frank holland along with xpx ceo and happy one-year anniversary. let's get to breaking news from the sam bankman-fried trial. kate rooney is live outside the courthouse in manhattan. >> hey, kelly. we are in a lunch break. the government side is getting a chance to cross examine sam bankman-fried with the sub hearing next week and he's been giving brief answers, things like yep and things like i don't recall they're presenting him with a layoff his old tweets. we're hearing from old media interviews and transcripts from the congressional testimony he testified in the senate under oath and the senate is seeing e-mails, as well they're attempting to show inconsistencies when he was saying one thing behind closed doors and painting a completely different picture publicly they spent a lot of time talking about his hedge fund alameda

playing by different rules than other customers on the ftx trade and they were able to have a negative account balance and meanwhile, none of this was disclosed and saying quite the opposite publicly. there was also pretty cringeworthy moment, kelly he was asked directly about his private messages with the journalist where he called regulators, i'll pearaphrase this, dumb mother -- where he said "f" regulators while he was traying to get defense passed. the defense wrapped up and they tried to show that he did not have criminal intent they tried to shift the blame to other executives he didn't know that his exchange had a $8 billion hole and we are getting interesting moments inside the courtroom >> haven't we already had so many of them kate for now, thank you very much our kate rooney reporting in manhattan. let's get a quick check on market as they continue to move higher, and the high was 519 and it is the outperformer with the

1.5% gain and the s&p up 1% and the nasdaq shy of that over to tyler matheson for our cnbc news update >> kell, thank you very much israel's military says it has freed a hostage. the idf reports that the soldier was released tonight during a ground operation and has been medically checked, is doing well and has been reunited with her family the private was taken hostage by hamas during the october 7th attack the senior defense official said u.s. targets in iraq and syria have been attacked at least 23 times in the last two weeks. at least four of the attacks happened after the u.s. launched retaliatory strikes on iranian-linked targets last week u.s. military is buying japanese seafood in bulk to offset the impact of china's ban on the food according to a reuters report china issued a ban after tokyo started releasing treated water from the fukushima nuclear plant into the sea the first u.s. purchase included about a metric ton of scallops

these purchases will feed soldiers and will be sold in shops and restaurants on u.s. bases. back to you, kelly >> thank you i'll see you soon. coming up, vored nado and sn optywel ve the numbers next in earnings exchange. don't go anywhere. bringing you an elevated experience, tailor-made for trader minds. go deeper with thinkorswim: our award-wining trading platforms. unlock support from the schwab trade desk, our team of passionate traders who live and breathe trading. and sharpen your skills with an immersive online education crafted just for traders. all so you can trade brilliantly. ( ♪ ♪ ) ( ♪ ♪ ) ♪ (when the day that) ♪ ♪ (lies ahead of me) ♪ ♪ ( seems impossible to face) ♪

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take a quick look at the impact higher rates are having on the real estate sector real estate, the white line down 14% in the past three months while yields have jumped 2 points and amid lingering concerns about commercial real estate, let's dig in to two of the big names reporting after the bell today morgan stanley's ronald camden join us with the action, the story on vornado and simon property good to see you. >> good to be here let's start with vornado, one of new york's biggest landlords you note that expirations of 1290 avenue of the americas will be a key driver for their occupancy outlook. vornado has no unsecured debt maturing until 2025 and they could improve their capital structure against the farley building in midtown, you say what would you do with the stock here

>> yeah. it's a good question so what we've learned so far during the office earnings season is that number one, the return to office has stalled about 50% to 60% you are not seeing any more pickup from there and number two, tenants are still being very deliberate. they're taking their time before committing for space and the first thing we'll look at is leasing activity and as you mentioned, 1290 avenue of the americas is a big one because they have a large expiration there. if they're not able to get new announcements, new tenants signed there, and that will be an active look, a negative outlook for the market and penn 1 and penn 2 and it had been pretty quiet and we would be looking at an update there >> so you have an underweight and a $12 price target before they've had hay toa tough decade

what if anything can turn it around >> we've been concerned about the office space as well as vornado specifically we think investors need to see more progress on delevering and that can come in different ways and that can come with asset sales on reduce leverage which is tough in this environment the other way is if the company is able on grow out of it if people don't come back to the office we'll be watching farley very closely. they talked about being able to add a mortgage or sell a piece of that asset to reduce leverage that can get us more positive if we start to see traction there >> incredible, to see how it was a $75 stork and here we are at 20 not one of your favorite names and the next company is simon property group they also report after the bell and fairly better than vornado and down 7% over the last couple of months. it wants to hear about further

investment in retailers. i didn't realize they had a stake in xi, the chinese retailer and the company in focus after management last quarter said they expected to top 95% and are still hoping to capture more luxury consumers with in-person experiences has the stock been a disappointment to you? is it a definite buy here? >> we think so so this is more of an interesting value opportunities in the entire reit space it's trading at nine times earnings and we are very capflow focused. if you think about simon properties' group business, if they can generate $4 billion or free cash flow every year, that's well able to cover the dividend at $2.6 billion and leave plenty amount of capital to reinvest in the business and the reason we think it's interesting, is i think you're right and the core business is doing better than expected and occupancy is getting back to 95% or higher and releasing spreads

are picking up and they'll have it all back by next year which i think is very interesting. i think the reason the stock has sort of lagged this year is because there's been a lot of noise around their retailer investments. >> so they've owned jc penney and a lot of different brands including eddie bauer and the retail investments that have underperformed this year is only 5%, 6% % of their earnings, but every quarter it's looking like a mess even though the core business is doing well so we'll go into the quarter. >> did they divest that? that's very interesting. >> we think that they've made more than their return on that the equity that they put in and they'll be able to get more on it through equity payments and valuation and we do think over time they will look to monetize that and show the markets that it's been a good deal. so at this point, i don't think they need to divest it i think they just need to continue messaging and being transparent and that's the

retailer investments that are causing the volatility whereas the core business, it's still up 3% plus growing business, trading at nine times earnings and a great dividend that they just raised that's well covered. >> and the other four names that they like, well tower and prologis and gaming and leisure properties in the casino space it's kind of a grab bag. >> yeah, you know, investing in reits is very difficult as you pointed out. the interest cost headwinds are impacting everyone and then you have to make sure you find the reits where the fundamental story is still interesting that's where senior housing really comes in and that's been one of my favorite themes i talked about on her before you have an aging population that are moving into these senior housing facilities and this is one of the few spaces where you can see pricing power. i think prologis and the industrial theme is all about e-commerce infrastructure which is still real. i think you're coming in a very interesting moment as the market is concerned about slowing with

the economy as well as rents so we think it presents a pretty interesting entry point for investors to have a long-term view here. >> ron, always good to pick your brain. we also appreciate it, a high-profile time for the space you covered. thank you. >> thanks so much. >> ron cam ben of morgan stanley and we'll talk to james taylor from brixmor with 65 million feet in retail space and that will be tomorrow on "s exchange." general motors the last of the big three automakers to reach an agreement with the uaw and that was after the union expanded its strike over the weekend and its shares along with stellantis is higher and stellantis announced a deal on saturday phil lebeau, we can't even get a one-day rally. is this it is it done and over? no more strikes? >> it appears to be over, kelly. we expect to hear an announcement and a formal announcement from the uaw and

general motors later on today. neither of them wanted to comment, declined to comment when we reached out to them, but we understand that they have reached an agreement, so what's next >> the workers will be returning to jobs and the picket lines are gone they don't just flip the switch and boom, they're not up to the production rates they had before, and it will take time. for the uaw, this strike worked out better than most people would have expected. 25% of raises over the next four and a half years when you factor in cost of living adjustments and when you look at shares of stellantis before this strike, many people said stellantis will never bring back the plant that it shut down in rockford, illinois, and it's coming back as part of its agreement with the uaw and it's adding a battery plant in terms of that facility if you take a look at shares of gm and ford and much of it will be made up by overtime and that will take time, kelly. it's not like they can make it

up real quick and it takes time to make up for a days' work of product and it will take some time and they expect to make up what they lost in terms of vehicle production over the next six weeks for most being haves. >> what about the larger issue transition to electric vehicles and it was unclear how much of their scrapped plans the last couple of weeks were because of the strike and how much it reflects the more difficult economics of that business going forward? >> i think it's both, and right now they're saying it's because of the economics, but the economics are influenced by what's happening with the strike and the fact that their costs are going up over the next couple of years. so where they haval e allocated certain amount of money in '24, '25 and '26. as the market has slowed down and it's not growing as quickly we will defer some of that and

we'll be more judicious about what plants we invest in and whether or not we're doing the full commitment that we initially laid out a year or two ago. most on wall street look at that decision and what we will likely hear from stellantis if they're more judicious most on wall street will say okay, we can live with that it doesn't mean they're throwing in the towel it just means they'll be a little smarter in term of how they're allocating their dollars. >> all rate. ford stock is in single digits today. thank you very much for the updates. our phil lebeau. >> take a look at on semi, despite being on the top and bottom line, shares is are down 20% for the worst day since 2020 on lighter than expected q4 guidance the shrinking the auto inventory is taking longer than expected as demand slows because of high interest rate, but he said the mega trend of growing easy demand is still intact and should be supportive of the

future demand. coming up, killer clowns, creepy crawlies and commercial real estate we'll talk to the ceo of spirit halloween about the process of starting, staffing and selling more than 1500 pop-up locations across the country that's next. as we head to break, here's a scary stat invesco ten is on track for october on track to post the best month since 2020 and trading near its lowest levels since the summer of last year. they're all among the biggest laggards with declines of 35% to 42%. the exchange will be right back.

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welcome back consumer spending was supposed to spook the street, but the carnage hasn't quite happened yet. the national retail federation projecting halloween spend to crack $12 billion this year, an increase of more than half a billion from last year about $4 billion goes to costumes alone as my next guest knows well. joining me now is steven silverstein, the ceo of spencers and spirit halloween holdings. great to have you here welcome. >> thank you >> you have been ceo there 20 years? >> may of 2003 i started

>> that's probably one of the lawnest tenures i can think of >> a great journey so much fun building the spirit brand. when i started with spirit in 2003, we were a very small company, not well known. and as you mentioned, this year will be over 1500 stores nationwide throughout north america. >> was that a blueprint from day one or one thing after another >> always been in love with brand. halloween has had a magical kind of experience for people to come into the stores and get engaged. i was able to really tap into that from the very first time i laid eyes on spirit. the truth of the matter is we didn't really know what it was the idea of a pop-up store that would become a national chain was impossible to imagine. >> was it opportunistic after the financial crisis as well, buy some vacant real estate and things like that it seems hard to build a business model on we know we'll have vacancies and build a loyal

following around that. >> what's not opportunistic and temporary is halloween halloween comes every year the idea was it was clear that the market was looking for something of this scale and scope. it's just it had never been done before when you talk about the real istate market, that's an interesting question there's always vacancy in the real estate market, even in the best of times. we talk about it as, of course, but the truth of the matter is there's always vacant real estate we have to be flexible, have to be able to be fast that's the secret sauce. >> you're like a permanent temporary chain. >> 24/7/365 halloween. i call us a hybrid retailer because we're physical two months a year but virtual the other ten. >> you're always in the same location how do you know they're not going to lease one of those buildings one day? >> they do certainly, landlords are looking for permanent tent nlts when they can get them. about a third of the time, we're in the same location what we think of as markets.

in your market, we look at multiple locations where we will rea reappear >> we mentioned you have a very specific way of picking those locations. what goes into that? >> first and foremost, as a temporary retailer, a temporary space, we need visibility. the recognition. i was talking to susan just before i came on, and she was telling me when she sees those signs go up, boy, she gets happy. that's really, so i want her to be able to see those signs when she's driving down the street. visibility is probably the key factor size, and then of course, there's other things we look at. we have taken all kinds of different uses >> the other thing i noticed and my main experience was going last year when i couldn't get there this year, but i look around and i notice the inventory seems very carefully curated and selected you don't have everything. you seem to have a couple main things certain reappearing brands, types of costumes. it reminded me of costco a deliberate choice about what you carry and don't.

is it all vertically integrated? how does that piece of the business work? >> that's a great point. the way we look at it is we're a specialty halloween store. we do curate our assortment. the assortment is vast there's hundreds of different styles but we're very thoughtful about it as you mentioned, we have over the years become almost vertical we do all sorts of design manufacturing as well, because this spirit has become such a phenomenon itself, but there is no market that can keep up with it >> when do you have to know what the hot movie or hot costume is going to be? what if you get it wrong or there's something that comes late >> we always have our antenna up this is our 40th year for spirit not only have i been there 20 years but speirit has been aroud for 40 you do a lot of listening, a lot of instinct, and a lot of analysis >> you're here with a barbie costume i can see. is that a paw patrol hat >> this is >> and you have the entire costume. and then what's over there, the

addams family? >> this is wednesday but for your pup >> what's the fastest growing part of the business is it a specific type of halloween costeam orwhat would you point out? >> i would point out the growth of halloween in general. over the past three years in particular, the growth has been phenomenal this sort of escape from what's going on in the world. so we have really experienced growth across the board. people are decorating their houses like they have never done before >> i noticed you're not worried about amazon, temu, shein? >> of course we are, but the way we thing about it, halloween is a very tactical experience i think of it, the antidote to amazon to me is the five senses retail you went to the store and interacted, and your kids are returning around it becomes a social event. so i look at physical retail as

shopping amazon, buy. shop, go into the store, spend time, have an experience >> later we can talk about trunk or treat, this new concept to me no one even goes out on halloween night in my neighborhood >> there's so many different ways to experience halloween trunk or treat, parades. parties. >> almost like a month-long affair next year we'll get better costumes thanks for coming in today steven silverstein of spirit halloween. be sure to catch sheen's donald tang and mar solely slaure tomorrow that does it for the exchange. next on "power lunch," president biden signing an executive order on ai. we'll have the details tyler is getting rdyea built something truly beautiful. it takes years of dedication to get to this milestone. the new york stock exchange is a symbol of what america is all about the potential of an american dream. it is day one. a lot of work has happened to lead to this historic moment.

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