♪ good afternoon, everybody. welcome to "power lunch" alongside kelly evans, i'm tyler mathison rally on wall street, cpi coming in flat than previous month and less than expected, markets seem to be declaring victory, spiking the ball in the fight against inflation and thinking this means the fed is really done hiking, kelly. >> that's why we're seeing this big rally in stocks today. take a look at the 500-point

rally on the dow, nearly we're up about 570 at the highest. up 1.3% right now. also strong earnings from home depot helping the performance there and it's the underperforming, s&p up 1.7%, 4489 the nasdaq up better than 2% and the yield on the 10-year note dropped sharply it was 461, down to 445, that's still where we're hovering the rally pretty widespread but the best sectors are those that benefit the most from that drop in interest rates. real estate, utilities and consumer discretionary the real estate sector up 5% today. and as mentioned, home depot adding more than 100 points to the dow on its own after results. there's the stock move the latest is up 6.3%. almost helping it turn positive year to date we'll have more on that in a moment. all right. is this morning's cpi report all clear for the markets. let's bring in greg and cnbc contributor and own steve

liesman also joins us. greg and steve, welcome. greg, i'll begin with you, is the market getting a little too giddy over just one inflation report or what >> i think so. i think so and let me start by saying there are positives in this report the housing component coming in softer than we expect and have seen that's good. that's unique. but by and large, this is not a unique cpi report. yes, it is below consensus yes, it's only 20 bases points of quarter growth month over month. we need to focus on the month other month to exclude the base effect, but it's not unique. we have seen 20 bases points before i had those arguments all summer that we're on a new trend around the 2% inflation level they just didn't turn out to be that so either we needed something unique to justify this market reaction, like 10 bases points or 15 bases points that would have been unique or need to see

that this is the new trend and we can say neither of those based on what we perceived because we have seen it before and the trend is 30 to 40 bases points of the last 12 reports, it has been 20 bases points three times and the other nine times been in that 30 to 40 range. so, i'm not sure how we're spiking the ball here. and more importantly, i think you're going to see the fed come out as they have for the last two weeks. you are not saying what we're saying what we're saying is we don't think that we've done enough to be finished. and they all said the same thing, any near term expectation for rate cuts is not grounded in reality. >> there may be, steve, an argument that many make that we're going to stay higher for longer and there's nothing really here that says we won't in other words, it may -- today the inflation report may suggest that the fed may not increase rates from here, but that doesn't mean necessarily that rates are going to come down or that the fed is going to lever

them lower >> well, there's a whole series of calculations running from this report. i agree with greg. the market is asking the data to be more consistent than it actually can be and believe that the fed takes a consistent message from this. i don't think it does. and i wouldn't be surprised if a string of coming reports that we don't end up having one that goes the other way on us and causes the market to go price in new risk on this, especially the way the market is priced right now. just not the way the data work that's really the problem. but on this issue, the fed -- if the trend does continue and the extrapolation that's coming from this number does come to pass, the fed is going to have to cut rates. that's because obviously the nominal rate is one thing but the fed is ultimately aiming for some form of a real rate here. that's the way the calculations work and today effectively the fed got more tight because it didn't change the nominal rate and the

inflation rate came down, so the real rate went up today. and over time the way the market is priced right now, i don't know what the right number is, but it has 100 bases points of cuts built in for next year. the fed has something like 28 built in but again, that was the september forecast we'll see again it does point to the importance of the december forecast that's coming up. there are the probabilities. you can see there for rate cut probabilities coming up. but i'm more interested in the total the next one, guys, if you have it there, which are the cuts that are built in for next year, 100 for the market and 28 for the fed. i suspect the fed's number will go up, but there's one more inflation report from here and we'll see if that trend or the extrapolation the market is getting from this number turns out to be true, tyler. >> steve, there was one part of the report that is raising plenty of eyebrows the drop in health premiums i forget exactly what they call the category, down 34% year on year. you know what's going on there >> well, we do know that this is

the time of year when the government comes in and it redoes its health insurance inflation forecast there is also, i believe, a change in methodology. it was way more -- i thought that people were baking in a slight increase to the cpi from that number. so i don't exactly know what's going on there i know that you had doctor's visits were down and hospitals were up from a health standpoint and then this health insurance number seems to be kind of out of whack what i don't know, kelly, and i'm sorry i don't know this, is the overall effect on the cpi from that. >> for sure. would you say, steve, that that alone would be reason to discount the lower reading >> i don't think it's enough to discount the lower reading i think there were a variety of things in here when i look at the services x energy and housing, it has come down the housing number came down, kelly. that's the thing and i'll give you the two broader forces that we're

looking for here the first is for lower wages to work their way n lower services inflation, and for lower housing costs to work their way in we know the numbers are out there for lower housing. so that's really been the touch stone here that lower housing number that's really excited the market. >> greg, does the rally -- not necessarily the rally we're seeing today but the rally we have seen today and all month, does it have legs? >> i don't think so. and i think steve said the keyword, he said extrapolation recall this rally was really kicked off by that jobs number, that 150,000 or if you want to adjust for strikes 180,000 i'll make the same argument then and the argument that steve is making we can't take out these singular data points and extrapolate them 150,000 or 180,000 less than what consensus was looking at? yeah, of course. less than september and august mid 220s, sure but it wasn't less than june's

105 or july's 157. and so, the fed doesn't have the luxury of what the market or fed watch does of saying this is the new trend. they just don't have that luxury and history has proven that to be the right approach. kelly just brought up the health care component of cpi. until that's a trend, the heavy work, the heavy lifting has been done by use auto and air fares and that's really been the key areas of disinflation and i think the fed would like to see that as a trend that we're seeing other areas contribute like the housing that steve and i brought up, but until they have evidence of that, until we have a sequence of data points pointing in that direction, they just don't have the liberty to extrapolate the way that apparently the market does. >> greg branch, steve liesman -- >> kelly -- >> final thought. >> i looked it up, kelly i'm sorry not to know this ahead of time. health insurance is 0.53 waiting in the index it's a big change but i don't think it has the ability to

create a big change in the number today. >> now that's going to get people all riled up all over again. .5% of my spending is on health care >> that's what it says relative importance of health insurance, 0.53. >> there we go. >> kelly, i the we feel that every month, kelly we feel that every month. >> especially this time of year. steve liesman, greg branch, really appreciate it thank you both for joining us today. to the bond market and that strong reaction to the cpi print. rick santelli, what do you make of it? >> reporter: well, i think it definitely was good progress, but it's sort of like a pink floyd song, us and them. on the us side, people that really watch the fed, watch the numbers, watch the economic data points or all those fed members what they see is that 0 represents the upward trajectory of cpi inflation is now flat but that does not mean we're rolling back prices. that's the them. the middle class, most people, food and energy and the notion

that prices are still much higher than they were is going to have a political ramification if nothing else. we made big progress, though, except for one area. look at the year over year core. that's x food and energy at 4% haven't been below 4% since may of 2021. and you can see it's on the sticky side. but 2s, 10s, 30s on the chart dropped rather dramatically. we're making progress. you look at since september 1st on the 10 year, on pace for lowest yield close in about seven weeks. mike >> what's going on >> we had a huge number today how do you and traders more attune to volatility and equities >> the market loves it when volatility reseeds when the chance of uncertainty recreeds he had a sell off related to these rates 4.5, up to 5%. bounced against 5% market sold off because the fears we would go to 6%, 7%. we didn't hit anything much

above 5. these inflation numbers tell us that that's not in the cards anymore. so that kind of takes it off the table. the interesting part about that, too, the fed funds rate were predicting about a 15%, not very high, but 15% chance we would have to hike rates in december a lot was based on this report this report obliterated that number we're at 0% chance we will raise rates. we taken out volatility catalyst the marketplace, the market loves when uncertainty recedes. >> the thing that drove us up is turn premium expansion and the notion of servicing the debt have those issues gone away? >> we have not seen anyone react to those ideas i think those are all very valid concerns we haven't seen the market react to the government shutdown issue. so these issues come into play until the market reacts to thel, there's really not much to do. as far as what you're saying, they're all valid things interest rates are still much higher over an 18-month period

that said, we're really just kind of reacting to the short-term news, inflation is lower, market is way, way higher. >> how do you view fed fund futures? is it something you're looking at as painted in permanent marker how do you look at that? >> the next meeting matters. that's an event. when we go further out, 3, 6 months away, lots of events, it's hard to look at those numbers with any kind of make a decision around them that said, in the short term looks like a lot of those interest rate related catalysts are abating. >> reporter: excellent mike, always a pleasure talking to you tyler and the gang, back to you. >> rick, you're the only person who can throw in effortlessly a pink floyd reference into a bond report amen, brother. i love it. >> and discussion about term premiums. >> and term premiums, yeah. coming up, one of the biggest complaints this country's healthcare system is that it deprioritizes patients to benefit the providers now a new investigation from statin news alleges united

health pushed employees to cut off medicare patients rehab care more on that story next. further ahead, tracking travel trends. even with inflation cooling a bit, many prices remain high that and geopolitical tension across the globe is travel facing a slowdown? "power lunch" wi brit cklle gh rylee! from rylee's realty! hi! this listing sounds incredible. let's check it out. says here it gets plenty of light. and this must be the ocean view? of aruba? huh. this listing is misleading. well, when at&t says we give businesses get our best deal, on the iphone 15 pro made with titanium. we mean it. amazing. all my agents want it. says here...“inviting pool”. come on over! too inviting. only at&t gives businesses our best deals on any iphone. get iphone 15 pro on us. (♪♪)

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welcome back to "power lunch. as we continue to look into stocks moving in today's big rally, take a look at the chip the smh semietf hitting an all-time high helped by nvidia christina partsinevelos joins us with more. it's not just nvidia. >> we'll start with lucky number seven. the number of years since nvidia's longest winning streak. right now we're hitting that ten days in a row winning streak stock up 245% year to date best s&p 500 performer and it's approaching its all-time high. intraday high which is 502. 6. at 494 right now all heading into next week's earning print out on tuesday big question is i thought all of the ai hype was priced in. what's driving the stock firstly, yesterday they announced gpu with more memory than the previous version the one elon musk said was harder to get than drugs the only pitfall is that this

new chip the ht 200 has less memory than ai's but overall, there's been a return to the ai trade especially from hyperscalers we have seen demand from microsoft, meta. in 2024, for example, nvidia estimates of a consensus show about 60 to $80 billion in data center revenue that's a huge gap when you compare to the $2 billion expected for amd's data center revenue. lastly, the biggest overhang for the stock is nvidia's export or export controls and restrictions for china. right now, china contributes 20% of nvidia's data center revenue and these expert controls could hinder that but nvidia did just create three new work around chips that fall below that threshold and can be sold to china, which means that revenue stream is somewhat in tact >> impressive. impressive and speaking of nvidia, it's monster run helped fuel wwe

superstar charlotte flair and team woooo to the top of our 2023 stock draft the standings go all week long she took nvidia first and meta second she has a commanding lead over tory dunlap and erica sullivan by more than 30 points wooo. widespread ai adoption has take an lot of decision making out of a lot of hands of u.s. workers. a new investigation alleges one healthcare giant may have been giving the algorithms too much power. united health pressured its medical staff to cut off payments for seriously ill recuperating patients in lock step with a computer algorithm's calculations denying rehabilitation care for older and disabled americans and ultimately leaving patients and employees to deal with the consequences for more, let's bring in one of the names behind that investigation bob herman a health care reporter at stat

news bob, welcome this was a subsidiary, am i correct, of united health, not united health itself per se that was governing payments to rehabilitation facilities and nursing homes, correct >> yeah. that's right thanks for having me the company at issue here is called nava health united health bought them back in 2020 for a couple billion dollars. and so, even though it's a subsidiary of united health, it's still intertwined with united health itself unitedhealth is the largest provider of medicare advantage plans. so anyone who has a united hilt care medicare advantage plan ultimately their care is handled to some degree by nava health and this is the company that was using its algorithm to dictate the care that people got in rehab facilities. >> so boil it down to me in

simple terms in other words, if i have just had let's say major hip surgery, and my doctor thinks i should have ten days in a rehab facility but navihealth says, no, six days is all you get. then you're stuck. you're out after six days or you private pay the rest, right? >> that's right. exactly. i mean, how you laid it out is pretty much how it went along. and the big part of this investigation is we knew that this had been going on we knew that an algorithm was telling patients you only get 16 days in a nursing home, right? what's different is unitedhealth previously said that -- the algorithm is just a guide. we don't make hard decisions, coverage decisions on it but, in fact, employees job performance was based on adhering to the algorithm. so if a doctor or the patient themselves thought they needed more care, too bad

the payment denial came and to your point, they either go home or they spend down their savings to stay in a nursing home. >> bob, the 1% target seems to be the culprit which was that employees were told to keep days within 1% of what was already aloud or what have you so any time -- if they wanted to extend that, they effectively couldn't because they were trying to hit that target. that's not so different from the kinds of targets we have seen pervade the workplace over the past couple of decades, is it not? what makes ai in particular relevant here versus the -- if that target had existed five or ten or 15 years ago? >> well, the issue is -- it's to the point 1% variance on someone's rehabilitation stay basically means that there is no variance the algorithm -- >> that's right, yeah. >> you stay in for this long and 1% basically means that the algorithm is the coverage decision there's no wiggle room

if you're a clinical care manager who is overlooking someone and these are people who they could barely walk ten feet, can't go to the bathroom on their own and they're being told, hey, your care is up at the end of this time period, you know, what are they going to do? so the difference is these clinical care managers they felt pressured -- their job performance basically relied on them adhering to the algorithm are they going to go to other physicians and say, hey, this person needs more care, probably not because they knew their job performance was going to be based on it. >> so human beings were making the ultimate decision but they felt, and your investigation found, that their hands were effectively tied because if they didn't adhere to what the algorithm said they were going to get an adverse performance review, including potential termination? >> that's right. and united and navihealth told us there's always physician

medical reviewers at the end of the line that might be the case and often is, but the people in front of them, these very experienced people doing therapies and rehappens in front of them, they had no incentive to really push for more care. did they want to get fired for extending someone's care no so it was a culture. it was a strategy to try and make sure that the algorithm eventually won out at the end of the day. >> and united dunitedhealthcare subsidiaries said what >> they wouldn't make anyone available for an interview one of their top executives patrick conway used to be a former top official in the federal government was not made available. all of this has happened under his watch. they stood by their navihealth algorithm and the care that they provide. but they wouldn't give us any information about how the algorithm is composed nor would

they really offer any detailed explanations about some of the documents that we've shown and had obtained so it was very minimal response. >> bob herman, thank you very much with stat news. we appreciate your time today. >> thank you for having me appreciate it. further ahead, we have seen multiple warnings in the past week about the consumer this holiday season questions still linger, will shoppers pay up for big ticket products that's one of them "power lunch" will be back in two. ♪ ♪ ♪ be ready for any market with a liquid etf. get in and out with dia.

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welcome back to "power lunch. as stocks rally after this morning's tamer inflation report, pippa stevens with a look at the solar stocks which you have some of these names now up nicely today. >> they're up very sharply today and not just solar, really all of clean energy. the tan is up more than 9% as you can see there, we're also seeping games in names like wind and hydrogen stocks because when rates are higher, this industry gets hit on both sides in the sense that when yields are higher, why would investors stick around in riskier areas of market for future growth and these projects are very capital intensive. when rates rise, their cost of capital goes up especially true in wind. also probably some short covering today given how much

these stocks are still down. i mean, it's amazing that these are all so sharply higher today, but still in the red for the last month which tells you the extent of the fall i did think one thing interesting in the cpi report this morning was that while energy costs overall were down electricity costs were up for a third straight month and up 2.4% year over year longer term that does bode well for the residential side of things because it is those utility bills that ultimately typically prompt consumers to go solar. but it really feels like we're not at a turn around yet i think it's focussing on the utility side of things is probably a little safer bet right now. >> i just look at this and i think to myself, this is -- it's a good thing there's two parts of this rally today. you do have semis up you do have tech up for sure when you look at some of these names up, i don't want to call the dash for trash, that's probably unfair, but there's a little bit of a sense of a second lease on life we learned so much about the fundamentals of these companies unless rates are coming down sharply, you can't imagine they

can turn back the clock here. >> exactly we have seen this before big rises and ultimate down trend. feels like it could still be one of those scenarios also this area is not for the faint of heart they rally and they drop and just these hugely vast price moves. so, yeah, buyer be ware i think for right now. >> pippa, thank you very much. let's go to bertha coombs for a cnbc news update u.s. officials said this afternoon that they're working with humanitarian organizations gaza's biggest hospital. push comes as a doctor at the hospital claimed there were 36 babies in neonatal intensive care trapped there israeli troops have been circling the shifa hospital for days claiming hamas is hiding inside and beneath that facility uk police arrested a man on a suspicion of manslaughter today in connection with the death of an american ice hockey player in england.

adam johnson died after a skate cut his neck mid game. the 29-year-old was a minnesota native who played 13 nhl games with the pittsburgh penguins he was playing for the british knotting ham panthers team at the time of his death. police did not name the man they arrested but said he is in custody. and paris is considering a crackdown on big vehicles in the lead-up to next year's olympic games. city's mayor is going to let voters decide whether to institute a significant hike in parking fees for suvs visiting the city she says the move would make paris friendlier to pedestrians and help the planet. certainly not friendlier to those with big suvs, tyler back to you. >> thank you. ahead on "power lunch," trickle down tensions between the israel-hamas war and on going russia/christie conflict

is this discouraging some from traveling? what does it mean for the industry oravell we'll discuss that and more when "power lunch" returns.

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welcome back to "power lunch. if you're traveling for thanksgiving, brace yourself for potentially record crowds. expected to be one of the busiest travel seasons in over 20 years according to aaa, 55 million people plan to go 50 miles away from home. nearly 5 million plan to fly add in a potential government shutdown and you can only imagine the possible chaos thanksgiving travel could see. the third busiest since 2000 perhaps but in some cases, prices are also being slashed as low as $29 so let's talk a little more about what the impact could be here henry heartvelt, president of a travel industry consulting firm. henry, best of times, worst of times, what do you think >> it's a little bit of both, kelly. it is indeed best of times a lot of people are traveling. that's good for airlines and other parts of the travel industry worst of times if you're stuck in a long line at airport

security or have a zone 99 boarding pass to get on your flight >> so, all told, why -- does this tell us the consumer is still in a fundamental strong position, no matter what discounts we may see with air fares and the like >> yes look, most people book their thanksgiving flights a month or more in advance. our research shows that people are prioritizing travel in their spending travelers like to travel so that's good news for the travel industry. but there has been some short-term softness in demand. we heard about this on some of the third quarter earnings and we're seeing this reflected in some of these promotional fares. as you mentioned, fares starting at $29 in some cases but, overall, i think clearly thanksgiving itself will be a solid time for airlines. and, of course, for hotels and others. >> i do a little research myself, henry. where in the world are the $29 fares? who is flying them

and at what time of day are they going? >> this was a fare that southwest airlines offered for a limited time and you had to either be an early bird or a night owl. the fares were only good on flights departing if i remember correctly for the promotion before 7:00 a.m. on selected days of the week or flights leaving late at night. so clearly southwest was trying to fill in seats that otherwise were going empty. >> were they unlimited roots or system wide? >> i believe they were on a number of routes across the country. but i don't want to say that definitely they were everywhere in the country. >> and so, i just want to put these numbers in context for the viewer, was this a promotion that was native only to southwest? or did otherwise -- other of the so-called discounters, the spirit, the frontiers and others, were they following suit in doing the same thing or something similar? >> well, southwest did this on their own. now, other airlines i have not

seen $29 fares on some of the deep budget airlines like spirit and frontier and this was a limited time promotion. you had only a few days to book your flights, and the fares were available for a very limited window. >> okay. >> which is typical for a promotion of that time so airlines don't delute sales that people would pay more money for. >> is this, henry, maybe telling us something about southwest just last night one of the analysts who covers the space put out a whole note about their struggles and basically how post-pandemic that airline is nowhere near as strong as it was pre-pandemic for a variety of reasons. they might have to do mass layoffs for really the first time in their history. so, is that maybe telling us this is more of a southwest-specific problem as opposed to a weak spot in the consumer or travel market? >> yes look, having worked in airlines before, $29 fares to me now as an industry analyst are alarming because it's clearly a cry for help the airline is not seeing the

bookings materialize quite in the way it wants and it feels that the only way to do it, to get those bookings is basically buy the business. >> and of course, southwest sort of system breakdowns are fresh in many people's minds let's talk about the possibility of a government shutdown next week what would that mean for travelers? tsa employees, would they still be showing up or what? >> yes so, there couldn't be a worse time for potential government shutdown if it happens on the 17th, it all goes into effect this coming weekend. and so, what this would mean is the good news there is that tsa airport security screeners, air traffic controllers are deemed essential. so they show up for work, but the problem is they don't get paid as long as the government is shut down so they get paid retroactively once the government reopens. >> ah-ha.

>> other things, for example, there's roughly 1,000 new air traffic controllers that the faa desperately needs. their training stops immediately. investment in new air traffic control systems and replacement software, that stops immediately. and the ability for people who work overtime, may be severely limited. so, you know, it could be a real problem for travelers during the peak travel week of thanksgiving >> all right well, we thank you for your insights today we really appreciate your being with us. >> thank you >> henry, we thank you. coming up, consumer questions. the latest inflation reading shows prices starting maybe to ease overall and we're going to dive into where they're falling fastest and thesectors that are hit still holding strong "power lunch" will be back in two.

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welcome back the cpi inflation data shows

prices easing up for consumers, but if we dig deeper, electronics in particular have fallen over the past year. let's get out to jane wells for more jane >> reporter: hi, kelly yeah, i'm at a verizon store in stockton, california forget whether or not inflation is cooling, we have had the opposite going on for months in consumer electronics if you look at the latest cpi numbers from october, computer prices were down 6% year over year, tv prices down 9%, smart phone prices down 12%. one reason is that people are holding on to their phones longer, like me. this is an iphone 8. how long have you owned your phone? >> about five years. >> four years. four years >> three years. >> i've had it nine years. >> reporter: what's holding you back from getting a new phone? >> money >> reporter: well, okay. let's talk money because going into the holiday season, service providers are giving devices away like crazy, even more than usual at verizon, bring in an old apple or android phone, get a

free new model and tablet and watch worth about $1,700 but you have to sign up for a service plan that maybe costs $9 a month. >> customers are trading down, boring more store brand, smaller quantities but using that saving to trade up in certain categories. >> reporter: all right well, t mobile has its own give aways like a new top of the line samsung phone if you add a line or notice your netflix bill going up increasingly service providers are bundling things try to make people think they're actually saving money. >> if you have a netflix subscription already or paying for apple tv plus already and you get a phone plan that includes those things for free, that's starting to take costs away from other parts of your life >> reporter: okay. you can take a look at the trend in sales at retail sales and consumer electronics at appliances with the new cnbc nrf

monitors wed bush says computer equipment bought during the pandemic may be due for a new upgrade but he's worried about things like student loan debt, guys and so is key bank key bank thinks student loan repayments this year could be a $55 billion head wind, of course that's assuming people pay back their loans. back to you. >> i wonder, jane, you have a iphone 8, you say there. why people are not trading up as much as they used to is it because the phones have not gotten all that much better, so there's less incentive to do it is it that cases and screen protectors have gotten better so your phone doesn't shatter when you drop it, what? >> reporter: i think -- well, in my case, it's because this phone has been good enough but now it's starting to slow down and i'm embarrassed because i don't have like the three cameras on the back. and then you have to think about, well, gee do i want to go spend $1,200 on a new phone.

that's what makes -- that's why these service providers are just throwing everything at you this year even more than usual to get you in i mean, free tablet on top of it but you do need to pay for a plan. >> i will say, jane, it's so uncan thi we have this report today because just three days ago the husband went in for an upgrade and verizon gave him such a good deal we both stood there for 15 minutes waiting to be like, what's the catch. $700 off for the old trade in. the bill for the new one was -- if he had gotten a slightly lower model we would have walked out with a free upgrade. we were stunned. >> we would have been making money on it. >> we were stunned we couldn't believe it. >> i have spent so much time this morning calculating what my current plan is, what it would be to upgrade through that, should i try this verizon thing, what about going over to t mobile that in itself i feel like i need to get a spreadsheet going. >> jane, treat yourself to a new phone. please it's okay. you need the three cameras, the

lenses you don't want to be -- >> reporter: so embarrassing so old >> treat yourself, jane. jane wells thank you. sticking with the consumer, home depot reporting an earnings beat up 6% following the results. even despite some concerning signs. can home improvement hold strong even as the housing market slows? courtney reagan has the detail hey, court. >> hi, ty. home depot put up the fourth-straight quarter of negative comparable sales but the home improvement retailer called the year 2023 the year of moderation for the american homeowner. it did add $47 billion in sales over the last three years. that's hard to continue in perp perpetuity higher interest rates are keeping more homeowners or would be homeowners from moving. they're also deferring larger, more financing required type of remodelling projects but, other factors are still fueling home depot's business. elevated rates is keeping housing turnover low, but cfo

told me turnover is not usually a main driver of growth for home depot. since a homeowner that moves spends twice as much in a year as when they don't move, it is at least a pressure. but he says, quote, demand for remodelling, that balances out that pressure that you see from lower housing turnover we don't quite know how to quantify that balance. their customers are still doing smaller projects like painting or swapping out back splash rather than renovating an entire kitchen. he told me, quote the consumer and particularly the home owning consumer who is our customer is healthy. they're employed they seen income gains and wealth gains in recent years they have excess savings and remain engaged we'll be able to get in more detail next week when we talk to ceo ted decker of home depot in the 1:00 p.m. hour make sure to tune in for that. also looking forward to what they have to say about christmas, kelly i don't know if you knew this, they are the largest seller of christmas trees in the world. >> i have gone there like two

out of past five years actually. usually in desperation. >> so you do know. >> i didn't realize it was more than just me courtney, thank you. for now. we appreciate it our courtney reagan. still ahead, trading the trillion dollar club we'll ask our trader which of the megatech giants he'suyg bin here and which he's not. "power lunch" will 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,

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time for the day's three-stock lunch. we have a shuffle with apple, and google and microsoft we start with apple. more news out of the antitrust battle with google the witness says google plays 35% of the search revenue and they're confirming it. what's your trade with apple that's had some rough days lately >> sure have thanks for the opportunity this is not going to be popular, but this is the one you sell i think you take your profits in apple. it's been unbelievable, but you're just not getting value anymore. you're paying 26 times forward

earnings for a company that's willing to grow at low single digits they've leveled up their balance sheets on 2-1 equity, and if you take out all of those sharing purchases, apple has been lackluster at best this is the one in an upmarket, you want to take proceeds and re-allocate. >> ouch. what about after fa bet. shares have been resilient they're up 2% today. would you be a buyer here? >> kelly, with those apple proceeds, that's the first spot i'm going to go. you can keep it among the tara caps google is ultimately one that's why it's underperforminging, not doing as well as some of the others, but you're getting the value here. if it does continue to shake on this antitrust, i think it produces an even better opportunity. you're buying this company 20

times forward earnings and the projections are 20% earnings growth over the next five years. hardly any debt. stellar balance sheet. $57 billion in cash. this is the opportunity you want to take the buy shares in google. all right. let's move on to microsoft shares of this mega cap tech stock up 50% what do you think of microsoft >> new 52-week, new all-time highs. tough to get bearish on the market when one of the largest companies is breaking out to blue sky territory exceptional balance sheet. less than half, 0.5 debt to equity $144 billion in cash you're paying 28 times forward earnings those projections are for about 15%. we think they're low for one of the first mover advantages in the ai space microsoft, a buy with the rest of those apple proceeds here. >> kwinlt, thank you very much,

we appreciate it >> thank you. >> quint tato. last month we talked about change makers. the list will be revealed. it features women across all sectors of the economy including philanthropic organizations. the deadline for applications is this friday. scan the qr code or find the application at cnbc.com/changemakers. "power lunch" is back after a quick break. >> announcer: catch the markets on "today" and every day on "closing bell. catch the ee trades by morgan stanley. and its customizable scans with social sentiment help you find and unlock opportunities in the market. e*trade from morgan stanley. with powerful, easy-to-use tools, power e*trade makes complex trading easier. react to fast-moving markets with dynamic charting and a futures ladder that lets you place, flatten,

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welcome back we have a strong market day. the market is high at 545. the s&p is popping 2% at over 4500 as stocks rally on the cpi report we get ppi tomorrow. >> an amazing note was sent around last week where he talked about the long held view that if you miss the best eight days of a rally, you really miss the filet mignon of any gains. here's another example of that you can try to move things around and get cute, but if you miss a day like this where you're up 1.5% on the dow, which has had the worst year of the three major ones, but if you're missing a 2% day on the s&p 500, you're missing a lot. >> by the way, if you move to

the sidelines just a couple of weeks ago, you missed a big move the russell 2000s, watch this as well massive mover. the dispersion has been unusually wide so i guess the question for a lot of traders now, do you play a reversion to the mean trade or is this a one-day move there's an element of that in this market. >> yeah. to borrow the other cliche, the rising tide is lifting all boats today. it's not done that with the russell 2000 for much of the year you do wonder, is the market getting a little too quick on this inflation report in thinking, well, it's all over, the fed is done? but rates may stay up there for a while. >> the only thing i'd caution is usually the end of the hiking cycle is bearish, not bullish. it usually means the cycle is ending it's fine if it's different, but

that has to be your bet. >> you look at the 10-year down 4.43 2 1/2 weeks ago it was at 5. that tells you how much rates have come down. so it's been a busy tuesday here. >> yeah. let's hand it over. >> thanks for watching "power lun lunch..". >> "closing bell" starts right now. >> kelly, thanks so much welcome to "closing bell" right here at the new york stock exchange this make-or-break hour begins with a break for stocks. it got turbocharged with the better than expected cpi report. we're going to ask our experts over the final stretch where your money is likely to head from here. in the meantime your scorecard with 60 minutes to go in regulation. one of the broadest days in months looks like that the s&p hitting 4500 it's traded above that level it's a 2% gain it's only the second