we do think that the consumer will continue to be under pressure and be thoughtful about their basket. but there is the opportunity for better margins. >> and halliburton, down 5% year to date. i think the margins have been expanding. >> you tell us if you add that, okay. i'll see you on "closing bell." "the exchange" is now. ♪ ♪ thank you, scott. welcome to "the exchange." i'm kelly evans. here's what's ahead. bond yields are moving decidedly lower today, decemberspite a mi bag. but a key indicator held at hard landing levels. and the richmond fed survey reported a surprise contraction and some dovish remarks from the fed's christopher waller. and the biggest winner from holiday spending so far is the internet and e-commerce.

cyber monday spending soaring 10%, the total dollars bigger than black friday. e-commerce stocks are up as a result. affirm is up 20% in the past two sessions. we'll talk to an analyst who upgraded the shares. indue it, foot locker, we'll give you that story, the action and the trade. let's start with today's market action and dom chu has the latest numbers. green still, dom. >> but we've seen both sides of that line. with this market, we were down at one point today, up so far right now. just in the middle of the trading range so far. the dow up 65 points, about 0.2%. the s&p 500, 4553, up about two points. just about flat on the session, but at the highs, we were up 18 points, down ten points at the lows. so, again, kind of splitting that difference in the middle of that range.

the nasdaq up 1/10th of 1%. now, kelly mentioned some of the drop in yields that we have been seeing. we're also seeing a weaker u.s. dollar. all of that is factoring into the prize of gold that we're seeing, up 1.5%, to $2,042 and change. the reason i point that out, at this point here, we're just at around near six-month highs for gold prices. i put up four-year chart, because it was back in 2020, august of 2020, that we saw record highs for gold prices. that was roughly around $2,089 per troy ounce. so we don't know if we'll get those record highs, but in context of the chart, gold prices are getting a bid these days. we'll see if that continues. and a couple of dow stocks, two of the best performers in the dow so far. boeing, up 1.5%.

that sustained demand for aircraft will help free cash flow trends. shares up 1.5%. and microsoft, i'm throwing out there because with a three quarters of 1% gain at one point today it gets a gold star because it hit another record high from microsoft. so boeing, microsoft on the down side. watch gold prices. kell, back over to you. >> dom, i'll see you next hour. thank you so much. the ten-year yield letting its lowest level in more than two months after dovish comments from the fed. yields were sitting at over 5%. steve liesman is here with more on that story. steve? >> hey, kelly. yeah, fed governor chris waller igniting a bond and stock market rally when he said the quiet part out loud, and that is if inflagsz infl inflation continues to fall, the

fed will lower rates. those were good enough for 15 points on the s&p 500. the market reacted first pretty well to his remarks but shot up during the q and a when he talked about rate cuts. the ten-year fell about four basis points in yield. by way of background, i asked chief fed officials last week about rate cuts. they weren't having it. that followed the lead of jay powell who said recently on november 1st -- >> well, you can see what waller's talking about here when you look at inflation versus the fed fund rate. inflation has come down and the fundslevated. the gap will continue to get

tighter as inflagtion continues to fall. now, it remains to be seen if other fed officials, even the chairman, echo those words. the fed has not wanted to talk about cuts for fear it would hobble its fight against infl inflation, and that is what happened today. >> steve, the significance of waller making these remarks opposed to a different fed official? >> well, you could look at it two ways. one is it's just a trutruism. if inflation continues falling, the fed will be higher than it needs to be through the first half of next year. on the other hand, there was some intent there in the sense that, look, if you didn't think this was going to happen, you wouldn't be talking about it. this has been kind of built in, kelly. we have had a 50% rate cut. it had been down a little lower

in recent days, but it's not all that unusual to be right back here and really the market had built this in. now we wait to see if the inflation numbers come in. does the fed chairman then echo these remarks? >> absolutely. steve, stick around as we turn to the u.s. consumer, doing more and more of their spending online. shoppers spent a record $12.5 billion on cyber monday deals yesterday, up nearly 10% from a year ago and surpassing the initial $12 billion estimate. cyber monday is now bigger than black friday which was about $10 billion. this comes as consumer kfs confidence showed improvement. joining us is steve oddland. we were just talking about fed officials and rate hikes and all the rest of it. from where you sit and what we learned this morning about the consumer, what would you tell us? >> well, you know, after three months of consumer confidence declines, we got the bounce up

here in november that we were expecting. that's really good news. they're still worried about rising prices, especially on food. they're worried about what's happening in the middle east and in ukraine, they're worried about interest rates. but look, gas prize prices are 16%, that's huge. and consumers spend week to week, what they have in their wallet. when they are relieved from having to put the money back in the car, they can spend it on other things. this is what is driving cyber week. cyber week is up nearly 8%. cyber monday was huge, a record level. and season expectations are stronger now, because expectations for gas prices and inflation is more subsubdued. interesting ing stats, though. people are buying on their phones more than ever before, so they're doing this on the run, which is probably a good thing

since sunday was the biggest travel day ever. everybody was stuck in their cars and airports, and no wonder they're buying on their phones. this is a big deal for the holiday season. we weren't sure what would happen, but feeling more bullish here. >> what is the deal with the expectations components here? >> so two components to consumer confidence. how are you feeling right now? people are feeling good about their job situation. but most consumers and 70% of ceos, still say there's going to be a short and mild recession. so you still have that sigtttin out there. nobody is quite sure whether the fed is done, when the rate cuts will happen. you have that uncertainty and the consumers are feeling that, as well. >> steve liesman, so we often follow consumer expectation as a leading indicator. it's still not a great sign that they remain this way. >> yeah, but i think more

important than expectations or assessment of the economy are prices. when consumers are out there shopping and buying, it tells me that prices are moderating. people tend to balk or when it comes to discretionary items, hey, that's too expensive. i was very interested in how competitive it sounded that retailers were going into the shopping season. it told me that prices were at least moderating, and in some cases, in may be good deals out there. i went to a best buy on black friday. not for professional research, kelly, but personal research. and the place was mobbed like they were giving away free tvs. there were lines to buy televisions, and this was not in an upper income neighborhood. it was in a low-to-moderate income neighborhood where i was. i was amazed how many people were there. pricing is the first signal. that determines whether or not you're going to buy or not, and

expectations is a layer on top of that that is not necessarily determinative of the price. >> steve, what do you make of that? >> he's right. it depends on what they have in their wallet. it's amazing how many households live paycheck to paycheck. they've got cash right now, and you have to watch these gas prices. the expectations are, with opec not coming to a conclusion here, that the prices will continue to fall through the balance of december. that's good news, because that frees up more money than ever before. this is not scientific, but if you look what happened to consumer confidence over the past year, it's floated pretty well correlated with gas prices. so can turn on a dime depending on gas prices. it comes down to the cash on hand here. but steve, your one store assessment is born out in the big number. you are seeing electronics fly, i mean, huge double digit

increases, gaming, toys, apparel, televisions, appliances. anything that you can plug in is flying right now. big, big sales. >> can i add to that, kelly. i was very interested to hare the tsa numbers. travel and services are another way that consumers are out there spending. these were record numbers. look, i don't want to be the guy to miss the turn, but i will say that for 12 months now, we have been underestimating the consumer and their spending. there may be a moment when it shuts down, but it does not appear to have been the first week of holiday shopping. >> the only thing i would say to all of that, and i'm not sure which of you to ask this question to, but leaseman, i'll throw it to you. the last time i checked, the jets etf for the airlines was negative year-to-date. hotel stocks have not been doing great. the grocers meh.

if consumers are so excited to spend and travel, i don't think the stocks are reflecting that. >> that could well be. all i know, and you're right, i'm not the perfect guy to answer this question. the tsa numbers were record numbers. the only way they get on a plane, i believe, is to pay for a ticket. >> steve, last word, please. >> everything is packed. every plane is packed. it took eight hours to go from new york to d.c. the roads are packed. people are out there and spending. i think this bodes well. steve liesman called this the gudeaux, we're constantly waiting for this recession. and steve, what's the answer? >> i've ruined the book for kelly. gudeaux never comes. we want a slowdown, we need a slowdown, it's a good thick to have a slowdown and take the

heat off inflation, release the pressure the economy. that's a good thing. keep the unemployment rate relatively low, but we don't have to have a recession. one of the most convincing argumentis i've heard of the presession. companies have been preparing so long for this, they have so long to prepare for it, that maybe we don't have the excesses that creates a sharp changes in the outlook and sharp changes in the cycle. >> i don't know. i don't know. i don't have to read the book. gentlemen, we'll leave it there. we appreciate it. the seven-year notes went up for auction top of the hour. we are seeing a market reaction. rick santelli is tracking the

action. the seven-year doesn't get much attention but the dow is almost negative. >> it didn't get much attention today from investors. i think they were all watching your segment, because few showed up to buy seven-year notes. $39 billion everyone-year notes, and the yield, 4.399. so the problem was, the one issued market was trading significantly different. it was trading right around the 4.379 level, so a two basis point tail, not good. you had a five or six basis point tail on that ugly 30-year auction. seven years is a bit of an outlier. it's been getting more aggressive, at least in figuring into portfolios. but this was a d as in dog auction. there wasn't one metric up to the ten auction average. real quickly, bid to cover since april of this year, the indirect

bidders, weakened since march of this year. the direct bidders was weakest since august. and maybe the biggest comp going back that tells me the most is that dealers took 20.3%, the average is 12%. when dealers take more than the average, it's because investors didn't show up. obviously, you see what's going on there with rates. i'll give you one quick group of statistics. january through november of 2023, so far, this auction represent ed 339 billion seven-years. january through 2019, we were at 352 billion. jan through november of 2013, it was 319 billion, just to give you some numbers. >> again, rick, the fact that the seven-year can move the market this much, what does that tell you? >> it tells me that all the happy talk about the economy and

happy talk that we can continue to control our debt isn't as happy. yes, the focus on the, you know, the third leg of a crooked bar stool maturity, and see this much reaction, lets us know that we're issuing a lot of bet on the buyer's side of the evasion, and it's getting a little rep [ save about showing up. i can't imagine it will get better through time, considering the entire globe is at record debt levels approaching $310 trillion. >> yeah. we were talking about germany trying to pull it in on the fiscal side, as well. consumers, maybe bond investors are concerned about things. but my next guest says we should look forward to a santa claus rally. joining me is chris marange. welcome. thank you for coming. quite the intro, i know. no one ever wants to say hey,

i'm with the consensus. but what informs you view to avoid a hard landing here for the economy? >> we're listening to conference calls, and consensus seems to be that the economy is slowing, but disinflation is setting in, rates have probably peaked. that means we're in what we call a softish landing in 2024, where we get a mild recession, a slowdown in growth. but we can see through that to better times. >> so steve liesman raised the idea whether companies have been in a prerecession, preparing for leaner times and avoiding them. i kind of look at it a little differently and i want your take. if anything, they feel like they've been hoarding labor, they refuse to budge on price, consumers are pushing back, and we see revenues barely growing while earnings were up. so i kind of worry it's all going to get tugged in that direction. >> you've seen a lot of de-stocking. a lot of industrial companies

are clearing out their inventory. that's already taken place and cleared the decks for growth next year. >> so where are you most bullish? >> one of the areas we have liked is media. >> you like media? >> i think you have to look beyond the magnificent seven. they were the perfect safe havens for 2023. they started the year down right cheap. but iffer going to get a soft landing, you have to look beyond that. in general, there's a lot of opportunity we think in small cap, which trades at half the valuation of the broader market. >> a long-time fan of media, certain media and cable stocks, but haven't times changed? it's not 1993 anymore. >> that's true and that's why it's been so painful as we transitioned to on demand all the time.

we are at an inflection point where you are seeing cross rationalizations, price increases with the screening services, and seeing the beginnings of a great rebundling. whether that's content from amc appearing on max or a rebundling by charter, comcast and amc streaming services. that's all to come. that's probably going to be addressed by consolidation. there will be lots of deals in 2024. >> we were supposed to get a lot of deals this year, and it's been fairly quiet. why do you think it won't be big tech that will rebundle everything? >> youtube will be probably the largest distributor of paid tv in the country over the next few years. and you're right, tech will probably rebundle the streaming services. but cable will have a place, as well. that's to the good of those that produce content. >> if we're rebundling, does our

business model have to change much? if we have gone from one customer that needs to pay for channels to another one with deeper pockets, isn't that good for content? >> that is the stabilization we think we'll see going forward. >> what are some of the deals you might expect in 2024? do you bet on the players like the paramounts that are expected to get bid up, but should have some premium reflected in the shares as a result? >> that seemsto be -- well, that's certainly an expectation of many people. a lot of people have april 8th, 2024 circled, that's the two-year anniversary of warner brothers into time warner. so don't know who will do what to whom, but something will happen, whether that's sony, do they want to be in the content business. does espn trade someplace else? >> and where else in the broad landscape of stocks do you think

there might be some decent value? >> following up on the media comments, we are very focused on certain areas, including owners of intellectual property. and live entertainment and sports, the trend of buying things to buying experiences. that was accelerated by covid. some of the ways to do that is owning teams like the atlanta braves, as well as live nation, which is the largest producer of concerts in the world. >> have these sport team equities -- >> they're doing okay. but you're buying the braves for $2 billion. the phillies traded for $2.7 billion. i think the braves are worth at least $3 billion. >> i wasn't expecting this to go, but it all comes back to the macro angle we were discussing. thanks for joining me today.

coming up, shares of affirm are hitting a 15-month high today, up 80% just in move. one analyst is upgrading the stock after two years at a sell rating. plus, stocks, bonds, or alternative assets? our guest says products like collateralized loan obligations will benefit from the fed's higher for longer strategy. the biggest name in that business is here to explain why. as we head to break, the markets have given up their gains. the dow clinging on to a 41-point increase. the nasdaq is negative now, and the ten-year yield is around 4.36. back after this. when you think of investment risk, do you consider climate risk? changing weather patterns are impacting the way we live

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welcome back. by now, pay later usage hit an all-time high on cyber monday, up 42% over last year and almost hit a billion dollars worth of sales. affirm is up 145% over the last year. upgrading shares to hold this morning, citing momentum in bnpl. joining me is john hecht of jefferies. john, it feels like a reluctant

upgrade. >> no, it wasn't reluctant if you go back when we downgraded this 18 months ago, there were two main fafactors. one was higher rates would lead to higher cost of capital. and normalizing credit, so increasing delinquencies would lead to higher cost of credit. and those two factors would crowd out the earnings trajectory. those have largely played out. i think we all know we're near the end of a rate cycle. for the type of consumer that affirm serves, we are seeing a stabilization of credit. now, why today? why are we more confident now to take those factors and also upgrade the stock? i would note a couple things. number one, affirm, their credit is outperforming their peers. non-private consumers still, you know, suffering, have been

really impacted by inflation. that is stabilizing now. in addition, the funding is stabilizing. they have issued wholesale planning to fund their growth four times this year and stabilizing terms. so we thought those two factors along with what you noted about really positive black friday results was enough to make now a good time to think about going from hold to a sell. >> listen, i totally agree. a lot of us had skepticism that this new player on the block has battled, and should show more weakness at the early stages of the cycle but it hasn't. what do you think is going on overall with the people or the consumer and its usage of buy now, pay later? every hot take on social media basically says oh, i rolled the cyber monday spending. if all of that is coming from buy now, pay later, it's almost

like that's cheating or doesn't count. why do you think people have this sense about buy now, pay lateer? >> well, you know, stepping back and thinking about consumers, we're still monitoring all types of consumer credit trends. we're still going through some kind of credit pscycle with the consumer. the prime consumer now is going through some type of exhaustion. so delinquencies are still creeping higher. so part of this demand is likely tied to the fact that a lot of consumers don't have access to other sources of credit. that's still net-net good for a firm, that the value of their service is climbing the polls of the consumers that have lost access to credit elsewhere. and given the increase, a firm can grow but still be selective. so there is a balance that

affirm needs to strike here. it is still a net risky time to be growing rapidly with this type of credit product, but i think they're in a good position to do so. >> do you think -- and we spoke with the ceo yesterday. he says we don't know how it performs through a down cycle. he said yes, we do, we were here during the financial crisis. what you are saying about their relative outperformance of affirm versus peers, do you think buy now, pay later is a better product than what is out there on the market? >> what we know is this, the duration or the length of borrowing terms is much tighter than other products like revolving loans or longer term installment loans. we know that the shorter a duration a product has, the lower losses it has. the less time that transpires between a loan and a loan payment, the less things can happen negatively in a person's life. so short duration helps credit.

affirm has leaned in on that type of lending product, and they have obviously figured out ways to underwrite for that activity. so there is a structural benefit to what affirm offers in terms of credit products and we are seeing some of the benefits of that. >> what is your upside for the shares at this point? >> the stock moved up little today, and it's right in line with our new price target. so we'll have to monitor the market and think and changes to that over time. >> john, thanks for joining me. appreciate it today. >> thank you. coming up, a trio of ai plays are on deck with results, including food locker. we will explain the narratives and the numbers to know. and also workday and intuit. and take a look at gas prices. the national average is down 61 days in a row now, the longest streak in over a year.

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wx welcome back to "the exchange." after dipping towards session lows but not quite going negative, that was after the four seven-year auction top of the hour, dow is up 71, nasdaq and s&p back in the green. and bitcoin moving higher following the dovish comments from the fed. it's now more than doubled since jan 1, having its best year

since 2020. else where, interestingly, going the other way, the semis, sliding for a fifth straight day after the gtf hit a new all-time high. this ties the longest losing streak since february, though still on track to post a positive month. and check out shares of walgreen's, falling to their lowest levels since 1998, under $20 a share today. it's in the dow, and it's the worst performer in the dow over the past year, losing half its value. now to bertha who knows all about this story for the cnbc news update. >> that's right. kelly, americans are not expected to be among the hostages released from gaza today. that according to a senior ursz official and diplomat in the region who tells nbc news the white house is waiting for two american women who fit the hostage release criteria to be freed. officials do not know where the women are being held or by whom.

a current pause in the fighting is set to expire tomorrow. north korean state media claimed today that the country successfully used its spy satellite to take photos of the white house, pentagon, and u.s. aircraft carriers at the norfolk naval base but offered no proof. the country launched its first spy satellite last week. and sandy hook families offered to settle with alex jones in that $1.5 billion debt for $85 million to be paid over the next ten years. families were awarded the money after jones called the 2012 school shooting a hoax. if jones does not accept the offer, bankruptcy judge will determine how much he pays to the families and his krecred to. coming up, we talk about

whether you should be in stocks or bonds. but what about the other options? are securitizeds a sets the place to be? that's next.

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welcome back to "the exchange." it could take "just one thing to trigger a fiduciary crisis. "the market has tripled in size over the past eight years, but as pvt credit is becoming too crowded, where can investors turn? my next guest launched an etf with exposure to various securitized loans. joining me now is john oc kirschner. we should clear up the misconception about whether some of us have whether clos were involved in the financial crisis. >> they were not. cdos collateral'sed debt

obligations, were made up of subprime mortgages, which did not do well, defaulted left and right. because of that, what was create, cdos did not do well. clos, those are corporate loans. they did fine through the global financial crisis. >> they did. >> and there's never been a aaa clo that has ever defaulted in 30 years. >> does it worry you that now might be the time? >> not really. we do a lot of stress testing for our portfolios. what you need is a gfc times three or four x. that would be a severe type of stress and we don't see that. >> we talked about how the credit quality of some companies are better than many countries. what makes clos different -- we mentioned etf you started.

there's an etf for bank loans. what makes clos more attractive as a product? >> actually, there are a lot of etfs for bank loans. but the problem is the bank loan market, the average credit rating is single b. it's very low rated, so you have -- rates have gone up and leverage loans are a floating rate. that interest expense will catch up. clos, you are taking a diversified portfolio, you have a clo managing it, you are purtding a securitization around it, and then you have managers like janice henderson that are picking the best clos out there to put in the etf. so you get cash flows, securitization, extra protection. that's why you have that

protection. >> this is a bit of a depart chur, but the problems you are describing with floating rate loans directly bare on the success that private credit and private equity should have in the next couple of years. do you think we should all and pension funds be cautious about those asset classes? >> i'm not going to speak for other pension funds. why we like securitization, you can still get exposure but at much higher credit quality. given that the economy is doing very well, but could slow down, we think that is imperative that people don't reach for yield right now. you don't have to. our clo etf was positive last year, and when most bond funds were down double digits, and it's up 7.5% this year. most people would agree that's a very attractive return.

>> all of that said, clos are one piece of the securitized assets. you still do a lot with traditional mortgage backed securities. what is going on with thoses a set classes? are they attractive here, something you would stay away from? >> mortgage is very cheap, mostly because of what's gone on with interest rate volatility at signature valley bank. still government gaurn guarante. as rates continue to come down, mortgages will outperform and do very well. other securitized got very cheap last year. people were forecasting a recession. most securitized are loans, credit cards, mortgage loans. they haven't come back -- >> do you think that's a place should people should get e

exp exposure? >> i mean, you just heard steve liesman and your other guest, steve oddland talk about how good the consumer is doing. they have $500 billion in excess savings. unemployment is low, gas prices coming down 61 straight days. $31 trillion in home equity. the consumer is doing well. there's no reason to think that they're going to be doing that much worse in the next few days. >> very interest ing. >> and we just launched jsi, which will invest in these products. >> if people want to do their research, they have given them a project. >> give us a call. we'll walk you through it. >> john, thank you for being here. >> appreciate it. still to come, shares are up 18% today, a 52-week high after a huge earning beat with sales

nearly doubling from last year versus competitor sheehan, whose ipo filing is also giving them a lift. and yunis joins us here onset, next.

welcome back. it is cold and flu season here in the u.s. and the northern hemisphere. but china is seeing a surge in respiratory illnesses drawing global attention. eunice yoon joins me with that onset, thrilled to have you here. wish it were better news. hope it's not covid this time again. >> yeah, so that's one of the rumors that's been going around, but still just a rumor. children's wards are getting so crowded that parents are swapping advice online to bring ca camping equipment to make the wait more comfortable. waiting times are up to half a day. china is battling a wave of respiratory illnesses that have raised fears of a new pathogen. health officials say this is a mix of viruss that are reported and known in other countries. viruses such as rsv.

the w.h.o. said there is no novel pathogen here. instead, they have been arguing that china is coping with what most countries dealt with a year or two ago. schools in some cities have suspended classes. businesses have remained open and the government is advising vaccinations, mask wearing and social distancing. no shutdown so far. officials are warning that theout break could last into the spring. >> we all have familiarity with this. last year was -- every month there was something new going around schools. so i guess the -- in that sense, we should. -- shouldn't be too surprised unless there's something that could become new. >> i think that question is what people are worried about, because in china, there's just been this trauma because of the pandemic, as well as the lockdowns, so people aren't so sure if they should believe whatever the government is saying, especially on health

issues. overseas, this is another big issue. >> half day waiting times, as we heard, there ease this ptsd from how bad the lockdowns were. so to have to go back through that must be tra maddic. i have to wonder if it will have reverberations on the economy. be a really interesting study that will likely never happen about the impact of all of these lockdowns on, even not only the economics but also the mental health toll that's happened in china. but in terms of the economics, it's already such a rough place from an optimism standpoint, from a young person's standpoint. people are always worried about their jobs. they're saying there aren't that many. people don't really feel as though their prospects are great and a lot is because of the three years of lost income. >> do you get the sense anyone is putting off big rebound travel plans or things because of these -- this latest bout of illnesses?

>> that was one sort of bright spot. the travel. we were seeing a big surge in travel, relatively so. but it's still not necessarily something that people feel that they could do because of all these illnesses at the moment. we were talking also about the economy. one other thing is that we have not seen the in-flows of foreign investment as we've had in the past. >> right, right. >> in fact, it's been negative, foreign direct investment has turned negative. >> amazing. >> which was huge. and a lot of it is because the complaints i hear from foreign executives, yes, we have had concerns when we've done our business in china. unfair playing field is a big one. people said it's really rough, but at the same time, now they have to deal with not only the slowing economy but also the fear of detentions, exit bands and all these -- >> absolutely. >> added unknowns. >> yeah. it's a very different period now for china. maybe after the summit we had last week, apec and all that we can turn a corner again, but this won't help. eunice for now, we appreciate

it. eunice yoon here on set. work day has beaten on the top line. intuit shares are up. and with 13% short in foot locker is a sneaker short squeeze ahead? we'll talk about it in earnings exchange next. trading at schwab is now powered by ameritrade, unlocking the power of thinkorswim, the award-winning trading platforms. bring your trades into focus on thinkorswim desktop with robust charting and analysis tools, including over 400 technical studies. tailor the platforms to your unique needs with nearly endless customization. and track market trends with up-to-the-minute news and insights.

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exchange." more earnings under way this week. joining us with our trades today, new street advisers founder and ceo and cnbc contributor. great to see you again. we have sort of ai angles for all three of these. let's walk through one by one starting with work day. 40% higher on the year. d.a. davidson says client interest and ai has something to do with that and also expect their subscription revenue to climb 18% from the previous year. you like this one, would you stick with it? >> yeah. i would stick holding this one and the reason why i'm doing that is it's a question of how much is already priced into the stock. you mentioned a little bit about the subscription revenue and the growth there. the retention was strong last quarter. this is the key metric i'm looking for with the subscription model business. and there's a little bit of what they're doing in the shifting strategy, shifting toward that partner selling which could be potentially higher margin. i think some of that is already priced in.

some things that may not be priced is fortune 500 companies and also financial insurance companies, investor day pitch, that is heavily still on premises when it comes to their i.t. environment which they think may shift to the cloud. that's something that investors should look for long-term if they're planning on holding the stock and that's potentially a positive. >> next one you're more positive, intuit, up 45% for the year and morgan stanley says they're among the best positioned software companies when it comes to incorporating generative ai. the street will watch to see how it deploys and monetizes across things like turbo tax, quickbooks. why are you so bullish here? >> this is again is another long-term trend. you mentioned generative ai and intuit has a robust look at over 100 million customers and how they do things on their tax side, their financials, all those different things they look at. so the reason why i like it is

they're small business and self employed. that shows a lot of growth in the face of what's going on for consumers relatively speaking the macro environment. it's done well for them. if you look at the offsetting portion, that's obviously going to be on the business, the consumer side, the credit card business is starting to slow and i think that continues to slow but i think that's really offset by the growth and the trends when it comes to small business and self employed individuals domestically across the country. >> i like it. what is the ai play with footlocker, shares up 3% but down 40% for the year. citi downgraded them yesterday. talking slowing demand, elevated inventory, challenges with the nike relationship. what do you do here? >> yeah. this is one that will fade for me. if you look at it -- that's the good question what they will do with ai. i was looking at the portfolio business and what they're bringing to the table in stores. as you mentioned, looked like at first the nike partnership would have less than 50% of their portfolio. they actually renewed that

partnership and looks like it will be closer to 50055%. so that's a positive for them. but still a lot lower sthan roughly the 75% they have prior which was a strong point for them when you look at obviously where the shoe market. so i think, you know, they're driving inventory by lowering margins. that's something that could sustain for now but i don't know how much longer they can do that. i think that's more of a fade on my end. >> even if they're using ai to track consumer behavior, which is -- there you go. delano, thanks. we'll check back in soon. appreciate it. that does it for "the exchange." dom chew is in for tyler. i'll see you next hour on e hesi oth bak.h opportunity is using data to create a competitive advantage. ♪ it's raising capital to help companies change the world. ♪ opportunity is making the dream of home ownership a reality. ♪ ...and driving the world forward to a greener energy future. [applause]

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