times. >> what is your final trade? >> quanta services, down 22% from its highs it's an industrial, again, and a play on infrastructure stimulus. the numbers have gone up three times. >> josh. >> yesterday, crowdstrike. >> see you on "closing bell. "the exchange" is now. ♪ ♪ thank you very much, scott welcome to "the exchange." i'm kelly evans. coming up, fed chair powell is set to speak in about an hour. we have 30-year notes up for auction at the top of this hour. both of those could be market moving e vevevents we'll check in with our guest about that all is quiet on the ipo front, too quiet this time of year is typically strong for public debuts we'll look at what is going on and a surprising loser from

the energy transition. it could be corn and ethanol and that will have a big knock-on effect on one sector and a few key stocks in particular details coming up. coming off a couple eight-day win streaks for the s&p and nasdaq, let's get to the markets with dom >> we're going to be strugling right now. we have lost some steam in this market we had seen some gains across the major indexes, but we're about flat on the session. the dow industrials, just down three points to 34,109 s&p up to 4385 and the nasdaq up about 14 points, just 0.1 of 1%. now, though, if you look at bitcoin prices, we are seeing some really decently high levels, certainly out of the trading range that we have seen so far this year for a good while, we were trying

to bump around that 28,000 to 30,000 mark. now we are at 36,573 so a lot of move higher in that bitcoin price has been this notion that perhaps there is more of a risk aversion that's being put aside. bitcoin prices up about 121%, currently at 36,564. one of the big stock movers of the day, on a consumer play. affirm holdings, which is up roughly 19% right now. it's been a strong move higher for this so-called buy now, pay later that enables consumers to purchase and pay later so kelly, affirm shares, one of the big stock movers on an otherwise quiet day for the markets, up 19%. could it be a tell on consumers? i'm not sure back to you. >> i'll see you soon, dom.

thank you very much. we're keeping a close eye on yields today with the ten-year up about five basis points watch the 30-year, about 4.799 we'll keep a key auction result in a couple of moments we have fed chair powell's speech today at 2:00 p.m. eastern. and more signs the labor market is cooling, jobless claims at the highest level since april and claims rose to just over 212,000. how should investors balance the data let's bring in mark smith, vice president and portfolio manager at wells fargo and steve liesman. steve, let's start with you as we wait for the 30-year results. how much of the upward pressure on bonds goes back to the deficit? >> a good portion of it. i'm informed by the survey we did of the recent cnbc fed survey it was a third, a third, a thishd a third growth, a third of the issuance, and a third of the fed

hawkishness, or the rhetoric from the federal reserve and their more hawkish outlook in terms of taking away cuts next year what's happened is a couple of those have gotten under control, at least short term. the growth looks like there's a little bit of weakness in some of the data we have had recently the treasury announced a refunding announcement that was more in line with the market's ability to basically stomach, and we'll hear more about that in a few seconds, i assume and then the fed has eased off a little bit the trouble with the issuance question, when you look at the deficit and the numbers announced or made more final by the cbo yesterday, the issuance problem isn't going away you have long-term structural pressure on the federal deficit. you look at how we got to this 1.1 trillion to $2 trillion debt budget there was interest expense a big part of it that's not going away.

i think that's going higher. there was more pressure on social security and cola increases. the biggest part was the decrease in revenues that may come back this year, but long-term higher deficits are in the cards >> mark, a comment from you? >> yeah, listen, when you are looking at where the fed is going to be going, you have to look at one of the most hawkish fed chairs, which is cashkashkai out of indianapolis. they're focused on core cpe, which is at 2.5% it's in a good direction, the best news that they have seen in a while. if that ticking back up, it looks like he will be for higher rates. i think you might have other folks in the fed that agree with him. >> let's turn to rick santelli

right now in chicago to talk about this 30-year bond auction. we are seeing a big move lower in stocks, and a lot of people concerned that we wouldn't get enough demand for this to go well tell us what did we learn? >> first of all, the low is great. i would give it a d minus. they would never allow an auction to go to the end if it isn't -- if all the papers are going to move, they will cancel the auction, trust me on that so i gave this the lowest grade i could give it, a dvs minus the yield was 4.769. today, we are trading 4.75 this thing tailed a mile long. i haven't seen a tail like this in a long time listen to these metrics. the bid to cover was the weak est since '2 1

the direct bids the weakest seasons october of 2020. and dealers took almost 25%. when you look at incorrect bids, the weakest since november of '21, there is another issue that jumps out in my mind, november of 2021. the last time we had an auction of this size we have 24 billion here. you have to go back basically to that date to find a bigger auction. i find that very interesting now, we could argue as to all the reason why is this auction went poorly, and to be fair, the market was selling off, yields rising right through the entire auction process, and it accelerated at the end but is that an excuse? i don't think it is. i think it may be the reason why the markets were selling off, to try to move that bpaper. there was a big story how the

fed is looking at these term premiums that have expanded. they call it dark matter i don't call it that it makes me very nervous to here fed officials call something so important dark matter. you not what matters debt matters, and the market is telling us how much debt mattering right now. back to you. >> rick, it's fas ncinating to e this response that was fairly telegraphed, at least to some bond experts who have been following this let me just quote from brian reynolds he said this is decent if you can get over a 2. 1% these are up-sized auctions, there is still the sense it wasn't a total disaster. but when you start your report by saying it wasn't a failed auction, that's probably not a great sign so it tells you even with demand being somewhat better than maybe the biggest concerning out there

in the marketplace were, the dow is still down 150 points >> we haven't an under bid to cover since 2008 >> no, 212 could have been his kind of, you know, ratio for total disaster versus not. so by that sense, it came in a little bit better than maybe that worst case scenario a worst case scenario would be below 2. >> that bid to cover -- it doesn't matter i've never seen an action where every category was nasty looking. >> now that we have cleared this, this is the last of the big three auctions, all the up-sized auctions after what happened do you think there's something to be said for getting these behind us? >> what is the biggest issue that viewers need to think about hard, we expected a worst case

scenario that the first package in this refunding, 3s, 10s and 30s, would have been 114 billion. but let's look at the history here the $48 billion we had for three years was the biggest since february of '22. yesterday, $40 billion was the biggest since august of '2 1 listen, that's the way you're supposed to look at it a couple billion less than expectations to me, it never made sense so yesterday, when we were challenging 4.5%, i had to back out of that. if i was a trader, i would have sold that all day long >> 4.64 on the ten-year. steve? >> as much as i disagreed with rick yesterday, i strongly agree today. look at the chart, all are

spiking higher i have two concerning. the first is the overall one of volatility in the bond market, where the most liquid security in the world is trading with the volatility of a penny stock. that bothers me. more importantly, though, is this notion that the market was asqsuaged by the broader plan o the freshry treasury to issue t. that sounded good. but the execution is not so good it may require a rethink of these large auctions on the long end. if the market is going to require this, maybe the government has to issue this debt at a higher price, the way it's coming in at a lower price, higher yield, or maybe it's behind us. it gives me kernconcern that the market is having a little digestion problem here >> mark smith, anything you would add to that? >> yeah, listen, you have regular investors who are hearing all this and are getting scared to death about what's

going to happen to them. they're seeing their credit cards at 20% plus. businesses have trepidation about expanding. so this feeds on itself and might create a self-fulfilling prophecy that we are going to go down the question is how far? >> rick, last word here. what do we look ahead to now as we have gotten through this week's slug of issuance and ending on this weaker note >> two things. first of all, i wouldn't use the penny stock analogy. i think the market is doing well, considering term premiums are widening out and we have such large deficits and we're exceeding with any issuer, whether it's on junk bonding, corporate barryrond bonds we're all exceeding for a smaller pool of buyers a penny stock, we're getting big moves in each direction with a lot of follow through, but that's different

i'm pleased that the market is holding together as well as it is the last word, i'll make it three last words we need to pay a whole lot more attention to debt, debt, debt. >> i think we will going forward. gentlemen, thank you all dow is down 117 points, so a little off the session lows. while the rest of the world tries to get inflation to come down, china wants its inflation to go up cpi slipped two basis points, despite the insistence that deflation isn't in the cards this comes ahead of the meeting between secretary yellen and the vice premier of china. this will lead up to the apec forum in san francisco where joe biden and president xi jinping are expected to meet next week. both sides have aired concerns about decoupling and up fair business regulations joining me now is braden

thanks for joining me. you're going to be at this meeting next week, as well >> yeah, heading to san francisco. >> xi jinping will be meeting with business leaders. is that a surprise >> i mean, considering how much business from u.s. multinationals is being done in china, not necessarily certainly a lot of those -- it's not just the apples and nikes and teslas, et cetera, so that tech orientation being right up the road from silicon valley kind of explains you're so close, bring them all in, so the dinner next wednesday night with president xi and u.s. ceos >> is the message intended to be that china is still open for business >> 100%. they're trying to roll back a lot of the negativity that we have seen over the last two years, not just geopolitical between diplomatically, but some of the internet regulation that we have seen that has weighed on

investor sentiment towarding china. >> we were talking about how china puts security over economic -- should we say, over the types of policies that could promote economic zbgrowth down h line has that flipped or is security still paramount are or they trying to thread that needle >> every politician needs a good economy. look at donald trump or even boris johnson. political economic instability are intertwined. china needs the west they need to do a better job managing that relationship that's a progress that, during covid, you had covid babies, but you also had covid divorces. the relationship went through a little bit of a divorce, and now we are in a little bit of therapy. >> the bearishness about the near-term growth might be overzo

overdone now, so tell us what business you do to benefit society. maybe opening up a little bit to this idea of, there's two sides to this, and reining things in too far is having these consequences, deflation being one of them. >> certainly in terms of the cpi, the composition of china is very different from the u.s. food, particular ly pork, is a big, big weight. pork prices in the month of october fell 30% year over year. so the cpi is a little less of a worry. ultimately, chinese households have a loser grocery bill. that's an issue a lot of americans would love to have >> so you don't think this def deflation is a temporary phenomenon >> imports are going to show, that china's economy, as the world factory, is reflective of the global economy slowing at the same time, they have to

raise domestic consumption so it's a two-geared economy export driven mvrmvr manufactur is slowing >> if you had to guess a couple years from now, what do you think the landscape looks like >> china is not going anywhere you've got 1.4 billion in terms of consumption power what we view in the west as a supply chain problem, for chinese companies was a revenue problem. what happened in covid, you know, they couldn't move -- make and move and sell things, that's a problem for chinese corporations so an element of the near-shoring or offshoring is happening from chinese companies, going to vietnam, indonesia, mexico, hopefully here in the united states, to try to prevent another issue again, our supply chain problem is their revenue problem

they want to fix that. >> you think we're going to look back on this where they can turn a corner here? >> going into 2023, they looked in good shape, but the u.s. markets outperformed how many people know that k-web beat spy maybe we're starting to see a little shift in terms of market regime change, way overdue in terms of non-u.s. equity underperforming over the last 14 years. >> we'll leave it there. appreciate it. coming up, stocks are sharply lower, but disney is still on pace for its best day sing 2020 after beating on the top and bottom line. up next, we'll dig into the numbers and what the ceo is suggesting about the future of abc and espn plus, the weeks before

thanksgiving have historically been popular for companies going public but market head winds have put that on hold that's next. and dow off the lows we sold off more than 130 points off that weak auction. the s&p is down a third of a percent, so is the nasdaq. back after this. 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.

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1-800-217-3217. that's 1-800-217-3217. welcome back to "the exchange." shares of disney are still up 7% after the company reported better than expected earnings thank toss a profit at espn and some growth at theme parks, offsetting declines in ad revenue. let's dive deeper into the numbers. joining us now is mark douglas, and barton crockett with julia borston. julia, why such a strong reaction to the quarter? >> there's so much uncertaintiable what disney would be rorleporting

they break out espn from the rest of the entertainment business there are a lot of structural ish i issues the industry is facing. even advertising in our interview, he said that the linear advertising business was better than anticipated. we saw higher than expected average revenue per user at disney plus because it was stronger advertising he said he was bullish about digital advertising. so that was a key piece. and the streaming numbers were much better than anticipated 7 million subads, and they cut costs a lot more than previously sid. >> barton, what do you do with the stock with that in mind? >> i think that disney has a long-term road to deliver value. i think that road has one of two

fos fo forks. you have asset value that will be realized in some type of breakup. so i think the way they get there is in their hands, they have a valuable business that drives most of the cash flow today. you have an iconic film library and historical ability to create new hits that is very valuable then you have these distribution businesses, disney plus and the tv networks that are in transition if you look through that, you can find value they can either figure it out themselves or be forced to do something else >> the streaming business, at least if you're not netflix. mark, you thought it was a bad idea for disney to sell abc. now you're not sure. what changed your mind >> i think the way you see things rapidly evolving is that you have these franchises. you think of espn. if you think of sports, you

immediately think of espn. you think of family entertainment, you think of disney but what do you think when you think of abc so what's kind of happening is i think you're going to see a consolidation under these big tent umbrellas discovery can own documentaries and outdoor showing. they have a strong brand so association. when you have a property like abc, why do i need this, period? what content can i put on this that i couldn't put on these other kind of tent poles and franchises i think that's what will happen here >> so if they go that route of shedding those channels, mark, where do -- what's the future? theme parks, enhanced content for future streaming, montization tunnels? >> the consumers expect a lot of content. the fundamental reason why netflix holds that top spot is

because you have muscle memory to go there first. you turn on the tv and you know there's always something, new comedy, new documentary, new original programming you always go there first. so for people who want these kind of like franchises, you're thinking you just have to have a ton of content for it. so i don't think the investment content diminishes at all. in terms of the properties, i think they get sold off to the libraries, just like back fill content and you can plug into where it's needed. but they don't become original sources of programming anymore, something like abc at all. >> barton, i want to ask you about the comment that disney's problem is they will face escalating sports content cost for espn how do they deal with that and manage that? >> look, i think for all of the big sports focused tv networks, the problem is that amazon says they're getting value out of

thursday night football. they're paying twice what fox paid for it. they don't have the affiliate fees and they're making money from that. that says they have a better model for sports that is really concerning i think for the guys who want to make d-- i think for disney, if they find a partner, like an amazon or an apple, or espn, they have answered that question but if they don't, i think the economics takes sports away from them so i think they're just biding time until the future comes, which is sports on big tech. >> sure. julia, i can understand why investors would be nervous who wants to go up against deep pocketed competitors like appled a amazon >> the nba rights are coming up, obviously the nba is very important to espn.

i said, are you concerned about the big tech buyers pushing up the prices he said remember that espn is also valuable to the nba, and the nba is value an to us. but the other thing to thinkable is they are talking to potential partners, including the leagues for espn to sell a minority stake. so while iger is committed to sports, the question is what kind of partner could come in, help manage not just the costs, but also transitioning those rigs from purely linear to digital, as well so i think there's multiple potential outcomes here for espn, and there's no doubt the tech companies are buyers, the question is how that impacts what types of rights espn getting as it becomes a tech company, as well >> all right such a tough business. this is going to be studied for a long final julia, barton and mark, we appreciate it today. coming up, the so-called wealth effect from the trillions americans accumulated during the

pandemic it's still having an outsized impact on the economy. we'll look at where the spending is going and how it could impact the fed's decision making. hexce"s back after this dow is down 75 the cloud makes it possible to expand your infrastructure. but to make it powerful enough to connect your data wherever it is, you need cdw and netapp. cdw experts will work with you to understand your needs, then customize a netapp cloud services solution to integrate data management for all your clouds, helping you reduce spend, improve security, control data 24/7 and automatically detect anomalies.

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traningdigm announced an acquisition, and shares are up 56%, on pace for the tenth straight day of gains. and becton dickenson giving disappointing guy didance for 2. let's get over to bertha for a cnbc news update the former white house chief strategist steve bannon will appeal his conviction on criminal contemplt of congress charges. he was sentenced to four months b for defying a subpoena the average american is sitting on about $6,000 of

credit card dead, according to a new report from transunion that's the highest number we have seen in ten years, and an increase of about 15% from a year ago the spike shows americans are struggling to afford everyday exz expenses as we deal with inflation. a 1932 portrait of picaso sold for $124 million. but it falls short of the most expensive work ever sold, which went for $179 million in 2015. but it will only set you back maybe $20 to go see one of his famous paintings on view right now at the museum of modern art here in new york so pretty cheap. >> bertha, thank you very much coming up, the nyu professor

will join us with what is inact li on recent ipos ke starand birken stock "the exchange" is back after this

welcome back we're in what's typically the busy season for ipos, but this year it's unushlly quiet, especially avenue some of the big debuts we saw earlier this fall bob is here to talk about what

is tamping down activity >> this is it, kelly the weeks before thanksgiving us usual i bring a spate of ipos eager to go public, but nothing is happening mayor ipo candidates, like reddit orr strike are putting off their ipos into 2024 if at all. first, we have this terrible performance for stocks in o october. we have higher interest rates and the poor after market performance from the recent spate of ipos and the prospects of lower valuation that's causing a lot of candidates to rethink or delay their ipos you contrast that with november, december of 2021 we had the biggest ipo of the

year, livian, hertz, sweetgreen, door dash, you see, there's nothing here after all these big deals. and there was mtsdz n't anything last year, easter. so there is a small window in december something could happen if market conditions improve but if not, the 800 or so tech unicorns have been very unpalatable options. you go public with a substantial haircut. option two, stay private and you hope that your venture capital source will continue to fund you. or three, you merge or go out of business there's a fourth problem here, and that is ai is what is exciting, but the ai companies are still too small to go public a lot of these other companies are sitting out there not in ai, so you have competition now. that's the hot thing, and that's

the reason arm has held up so well >> bob, stay with us let's take a look at how some of the companies that have gone public have performed. instacart down 17%, and the broader market is up let's turn to my next guest, professor at nyu school of business you have done a lot of valuation work on these companies, so do these prices reflect fair value, or are there market head winds that are too formidable? >> i think in a sense you can detect how healthy the ipo market is by the names of the companies going public if you look at the ones that have gone public, instacart, birkenstock, even arm, but you're not seeing no-name companies losing money going

public what you have seen in the after market is scaring people off, which is none of these companies have surged in the after market. in healthy markets, you go public at a price too high and the price goes higher. that's not happening in this market so why is that happening why is the ipo market so -- especially when the overall market doesn't seem to be doing badly. what is it about this year's rise in the market that you -- that is not leading to the ipos that you ushlly see. >> what do you think the answer is >> risk capital, including capital in ipos and investment startups, it's not come back even though the market is up, partly because this has been such an unbalanced market. this is not a market where you see a rise from the bottom

it's those 10, 15 big companies carrying it. so the bullishness is coming from fear, not grade ipos need greed a lot more than fear >> bob, when do we get back to the greed part of the cycle? we had the s&p and nasdaq on a win streak till today. will somebody try to jam things in there >> i like to follow liquidity. how much money is sloshing around in the system we have had a large amount of money sloshing around for the last ten yooears that goes into venture capital and risk mafrkets, and 2022 was terrible so if you use that and indicators of risk capital appetite, we're clearly seeing receding risk capital maybe that's a good idea

it's been pretty excessive the last ten years in terms of the money, do you agree? >> i think it's healthy for risk capital to go back we overcapitalized bad companies run by borderline sociopaths and we pushed the market caps up, and we're still picking up the pieces maybe it's not so bad to have fewer ipos and take a break from this process and let disruption play itself out. i think we have created damage in the name of disruption, and we're not ready to clean up that damage yet >> it does raise questions about what the exit will be for industries like private equity, orb or for those companies that are legit. >> the time will come and at the right price people will buy these companies. if housing prices come down, a lot of people say i can't sell you knock the price down 30%, so something has to give. you can't demand the prizing you

thought you could get two years ago. so if you settle into a reality check, and build business models that people will buy into, i think those companies can go public but sending companies prematurely to markets before they have a business model, which is what we did for a decade >> everyone gives the soeshio paths a hard time, but they are changing the world gentlemen, thank you we appreciate it still to come, inflation still high, interest rates are at record highs. why are constumers still spdi w bk wards session lows you were always so dedicated... ♪ we worked hard to build up the shop, save for college and our retirement. but we got there, thanks to our advisor and vanguard.

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exchange." consumer spending remains resilient, december spite higher prices robert frank has some possible answers for us >> one big possible answer is the wealth effect. americans gained over $37 trillion, adding that to the wealth during covid. the total net worth rising from $117 trillion to 154 inequality declined over that period the median net worth of american households jumped 37%, the fastest since the fed started keep thing data in the '80s. where did that wealth come from? stocks and real estate fueled much of that homes soared by $16 trillion, now a total of $46 trillion in real estate wealth thanks to the rising prices.

the wealth effect could be up to four cents, that meaning every additional dollar of household wealth could translate into four cents of additional spending, implying we could have $ 1.5 trillion in spending hower left. so consumers will tend to spend more, especially now so much of that financial wealth is in bond funds that they can cash out more easily than stocks. >> this is very juicy, because this kind of wealth of let's call it the middle class, if i may, contrasts a bit with what we just heard, which as bertha was reporting, some of the high-end parts of the market aren't looking as strong as they once were. i don't think anyone would cry if there's a redistribution from the super high end to the rest of the public, if that's what is going on here. but it is interesting that

everything you're talking about comes when these auctions this week, they were a little soggy >> if you look at the two economies, the rich and everyone else, the wealthy, they always have mon yieymoney. so when you look at all this, they had an agreement to tell the picture at $120 million. after that, no one was bidding we saw some other big pieces one was estimated $30 million, it sold for $22 million, this total sale was expected t eed t $400 million it did, but just barely. the wealthy right now are holding back and pausing the rest of the economy, because wages are strong and home values are strong and rising, those are the two things that drive

spending for the rest of the population that's why this wealth effect is like a reserve tank for this economy that hasn't been tapped yet and could continue consumer spending well into when unemployment may rise or excess savings are drawn down >> it's a fascinating point. drawn down coming up, bernstein examining the impact the clean energy transition will have across multiple industries and issuing a warning for this ag equipment name can you guess it tweet me we'll see how much more pain could be ahead and why that's next. welcome to ameriprise. i'm sam morrison. my brother max recommended you. so my best friend sophie says you've been a huge help. at ameriprise financial, more than 9 out of 10 of our clients are likely to recommend us. our neighbors, the garcias, love working with you. because the advice we give is personalized, hey, john reese, jr. how's your father doing? to help reach your goals with confidence. my sister has told me so much about you. that's why it's more than advice worth listening to. it's advice worth talking about.

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♪ welcome back to "the exchange." hsbc just initiating tesla with a rare bearish rating overnight, citing certains over delivery capabilities and stock evaluation bernstein is taking a look at the impact of the clean energy transition across multiple different kinds of industries this week. they're actually looking at agriculture, where they're warning key machinery risks could be at risk thanks to reduction in corn ethanol

acreage. joining us is chad dillard chad, i was jumping up and down about this, because when i think of the implications of a bearish turn for corn and ethanol, i'm thinking about iowa caucuses i'm thinking about politics. i'm thinking about -- there's so much that could potentially go into this. tell us what you see looming >> yeah, absolutely. so, over the long term, ev adoptions could be a negative for ag companies ethanol accounts for about 10% of gasoline consumption, and for every ev on the road, you're knocking out about 50 gallons of ethanol. the structural imapartment of ethanol. it also means you probably need less acreage to grow corn. 90 million acres in the u.s., and 40% of all u.s. domestic corn production goes into ethanol. so, if the ev transition plays out as expected, need 10% fewer corn acres and that means you probably need a smaller ag -- freight.

adjustment market, i think, shrinks by about 10% >> so, just want to retstate yor finding. ridge could be down 10%. head wind for companies like deere, that was the mystery chart we teased. why wouldn't that acreage just go to soybeans or go to something elsewhere the ag sector would be indifferent? >> yeah, look, it's absolutely possible there are a couple alternatives. there's renewable diesel that could soak up about 8 million acres. there's bioethylene, and there's also ethanol-based sustainable aviation fuel. but the challenge with a lot of those is that the economics aren't exactly there in some cases, the tax credits aren't available >> so, is it -- i mean, because we could also be talking about a reduction in farm income broadly. literally an ag gdp if it's not offset by something. that's why i'm suspicious or wondering, won't farmers be able to turn -- be innovative and look for other cash crops that

could supplant that, so to speak? >> i think that would be possible i think one potential opportunity to benefit is through decision agriculture, which is actually improved economics with farmers and it would probably go to the much larger farmers. >> let's talk about deere specifically, which is the big name here. shares are down 15% in the past three months why is that primarily do you think? >> we've been cautious on the ag cy cycle. it really comes down the fact that relative to normalized levels, demand is way higher if you look at farm economics, just farmer profitability has come down pretty significantly over this past year. the challenge is this year's profits buy next year's equipment. so it looks like peak ag for deere and the broader cycle. >> why would we be at peak ag? why would we be facing a demand reduction in the next couple of years? >> farmers don't have the cash to buy equipment that's really what it comes down

to they make that decision that way. i think if you're looking at where demand could be for 2024, it'll probably be bad. >> interesting and then finally, we look at deere, but there are other names, agco, for instance. 100% of its revenues are exposed to agriculture who else >> i think the main ag equipment names, obviously there's deere there's agco in the u.s. there's also -- industrial >> and those all would potentially face headwinds a lot to ponder here if you're right about the peak ag and the decline in ethanol that this country could be heading into appreciate you joining us today to explain it. chad dillard, senior analyst for machinery at bernstein that does it frt exchange. jay powell will ke h smaispeech in just a couple minute's time dow's down 130 dom will join me on the other side of this break i'm an investor in a fund that helps advance innovative

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welcome to "power lunch. alongside kelly evans, i'm dom dom dominic chu. you can see the dow industrial is down 135 points, roughly one-half of %. similar percentage decline for the s&p 500, which sits at 4363. and the nasdaq composite down about 54 points, again a similar percentage decline, 13,595 kelly, we're going to get right out to steve liesman with headlines on the fed >> thanks very much, dominic fed chairman jay powell speaking at an imf research conference, will say that -- excuse me one second here. he will say that the -- if it becomes appropriate to tighten policy, that further we will not hesitate to do so. the fed will move carefully, he said, judging