financial services industry. >> apm for ai development. >> we'll see what happens with this market. i'll take you through the final stretch on "closing bell" with my guests. we are green for the moment. i'll see you in a couple of hours. "the exchange" is now. ♪ ♪ thank you, scott. welcome to "the exchange." i'm kelly evans. here's what's ahead this hour. the major averages are higher after yesterday's rout, but tech sunldz pressure, including the chip names. nvidia managing to eke out a tiny gain, and it might be time to buy. also, the yield curve disinverting for the first time since that august selloff. while it could mean inching towards a recession, a different segment of the bond market might

be offering glimmers of hope. from worst to first, burnstein name thing retailer as their top pick in the second half. it's not dollar tree. we'll reveal it and talk to the analyst behind the call. let's start with dom chu with the market action. dom? >> i'm going to tell you about that dollar tree story in a second, but let's talk about the dow, the s&p, and the nasdaq. each are in the green. it's not a lot, marginal. but after the selloff yesterday, maybe some of the bulls will take that, just maybe, as a small victory. the dow just about up four points. the s&p 500, only up one point. the highs of the session we were up roughly 24 points and the dow maybe 22 points at the low. so, again, it's been a symmetrical session and we're in the middle of it. the level you'll want to watch in the s&p is roughly 5505.

over the last couple of days, that represents the general range of the 50-day average price on a rolling basis or that simple moving average. so we bounced off of those, so we'll see if that holds. the nasdaq up 29 points, about 0.2 of 1%. the mega cap technology trade, we've been talking about the chip stocks. generally speaking, these names were down anywhere from 1% to 9.5% for nvidia's case there. today, we're see more of a mixed picture. they're still down, but nvidia down 9.5% yesterday, up nearly 1% today. we'll see in these mega cap names start to show a little bit more life. and then we mentioned the dollar tree story. among the earnings movers so far today, dick's sporting goods, dollar tree, hor mel foods, all down today because of the outlooks.

dick's raised their forecast, but not by as much as some thought they would. dollar tree and hormel cut their forecast for the full year. again, the consumer picture is decidedly negative with regard to these earnings stories. we'll see whether or not that consumer picture takes more of a shape towards that big fed decision later this month. >> dom, thank you very much. let's dive in a little more on the semiconductors that continued after the smh comes off its worst day since the pandemic, falling 7.5%, up a little more than 1% this afternoon. nvidia dropped 10% this week, shedding a record of $279 billion in market cap, the first time nvidia has lost more than $200 billion in a market cap. the shares are down 20% from their all-time high in june. now the company is getting hit with a subpoena from the notre dame. sema has those details. >> reporter: overnight, a report

claiming that the doj has sent nvidia a subpoena, so a series of kquestions on if the chipmakr is pressuring customers to use their artificial chips over competitors. nvidia saying it wins on merit, as reflected in our benchmark sul results in. they generate these ai models. in second place is amd. and in the private world, there are two startups gaining traction. nvidia rallied about 20% in the three weeks going into its earnings report. it's now given back about 23% from its june high. the two things that will drive the stock in the next six months is not necessarily the subpoena, but the blackwell delay issue and whether gross margins have

weaked. nvidia did acknowledge that gross margins would come down as it ramps up blackwell. and then there's jpmorgan, commentary focused on the hyperscalers and questions whether they'll earn adequate returns on the billions they are putting towards ai, which nvidia is a beneficiary of. there's no price target cuts, no downgrade so far. wall street remains bullish on this name. >> analysts are saying even in the case of this kind of subpoena, maybe it's a 10 to 15-year issue, it's way out when investors would react to anything coming down the regulatory pike, but near term, maybe concerns about the economy slowing a little bit. >> on the doj front, if you look at past cases dealing with the ftc, google for example, can take years to get any type of resolution. so right now, not really something wall street is pricing in at this point. to your point, really seems to

be growth. we'll be looking for new comments from the ceo next wednesday. >> thank you very much. even with that recent dip, nvidia shares have doubled this year and the forward pe is back to 26 times, which is less than coca cola and proctor and gamble, about half of costco. our value investor says he can't think of another large cap stock with that kind of growth. chris is here, chief market strategist at mia capital. for you, you know what i mean, to step into a name like this at a time when it might have further to fall in this kind of correction back towards, i don't know, some semblance of what is going to be normal. >> sure, value investors are happy to see this fall. not just because we get it cheaper, but it's healthy for a stock that's done so well to give back some of the frankly abnormal gains, and then give us a more reasonable entry price. but like you said, kelly, if you

do the math, and forget about -- cross the name nvidia off the chart. here is a stock selling at 26 times, in line with coke or proctor and gamble, but growing at 30% next year and 20% the year after that. those are fairly reasonable assumptions. so that's what makes us interested and checks our boxes, and it's also called nvidia. >> correct me if i'm wrong, they announced a $50 billion buyback. that is a massive support to the name. even those 20% to 30% growth estimates, you think easy to achieve at this point. but what feoff some economic pullback combined with reset after people have been ordering so many chips and think okay, i'm stockpiled. >> i guess i'm not so afraid of that. they're not selling to consumers. this isn't amazon. they're selling to microsoft and amazon aws, because these are businesses that are building out ai infrastructure. >> but they're the ones that are stockpiling it.

>> right, but even if the economy goes south, they have long-term plans and they have the cash to continue to fund it. what i would be worried about is possible competitors. but we don't see that yet, and i also agree that this anti-trust thing, which is driving the stock today, is an opportunity, because it won't with settled -- it will be like talking about the ipod today if there was a case 15 years ago that's what is going to happen. >> on the valuation piece of this, 26 times tells you -- if the stock still is that interesting in terms of growth, why is the market assigning it such a low forward pe? we've been through these ups and downs before, this might be the latest and greatest, but it's not immune from this kind of volatility going forward. >> sure. i think the market has an somewhat antiquated view of the semiconductor business. semiconductors are to the 21st century what oil was to the 20th

century. you have not have a thriving digital economy without them. i think they are less cyclical than 10, 15 years ago. and i think ai is just this huge tailwind that can get nvidia through the next two to three years. >> it's interesting, because their capital spending, the mag seven, not just nvidia, is greater than that of the entire energy sector. so this kind of dynamics we saw here. normally, we would talk to you more about more traditional types like the energy names, value investors have been looking in that space. anything else that is attractive to you in the tech space? >> take two interactive. this is -- if there's ever a one-issued stock, it's this one. they're coming out with "grand theft auto 6," and it's the most popular game franchise ever. it's been delayed, but right now it's due in the fall of '25. we think investors will start

getting excited about it sooner than that. if the economy does start to soften, this game will still come out, folks will still buy it and investors will buy the stock. >> you have four girls. i can't imagine. >> playing grand theft auto. >> airbus i just want to mention, because there was some issues with -- i forget which international airline was struggling with some holdups in the quality of the aircraft this week. nevertheless, they were outpacing boeing. is there anything there that you think gives it -- is it upside rival something like nvidia? >> no, no, but it's also -- it's like nvidia, it has an absolutely necessary product. it's in a field where very few competitors. and in airbus' case, boeing is having an epic fail. so they'll take advantage of that, and that could be long-term potential, because

folks may be nervous to take orders from boeing. airbus has their own supply chain issues, but no why near as complex as boeing. we think they'll straighten those out and this stock can return to highs and be 30% higher. >> what to yodo you make of the september start? >> i do think that a correction here, you know, not a huge correction, but a continued correction through september, which as you know, september is the worst month, would be healthy for the market going into the end of the year. i'm more optimistic on the economy than consensus. we get one fed cut this month, and that's it for this year. third quarter earnings will resuscitate the market, and we'll have a strong end to the year. >> we'll leave it there. chris, we'll talk hershey's the next time. >> halloween is coming. >> chris, thanks for your time.

staying in the ai lane but moving to the private market, generative ai represents the greatest number of entramts on the list of top startups. such darlings as anthropic were all on the list that have raised $29 billion in financing. here to discuss the implications for the ipo pipeline is jeff richards with our deidre bosa. welcome to you both. deidre, set the scene for us and welcome to you both. >> hey, kelly. so basically, and i should let jeff explain this, but these are the top private companies that are basically letting small and medium-sized businesses operate in a different way. technology is enabling them to do things faster, more efficiently. this really tells you how quickly this is moving.

and a question we often ask of public markets, are we going to see the monetization of generative ai. jeff, i wonder if you're seeing them at small and medium-sized businesses, is gen ai increasing their bottom line? >> it's a great question, and no lack of hype around ai and gen ai. one, small businesses, 40% of u.s. gdp. so it's a critical part of the u.s. economy. 60% of job growth over the last decade has been in small business. when you think about an tropic or openai or square or shoppify, those are names that people know and think of associated with a small business economy. what we try to do with our list is i like the private companies that people haven't heard of, companies that will hopefully go public in the next three to five years. many of them are already over $100 million of annual revenue. they have raised quite a bit of

capital. so we have reached out to get them to tell us which are the best companies and have the most promising futures ahead in this sector. >> deidre, go ahead. >> jeff, you said maybe looking for ipos within the next three to five years. this has been a market that's been largely shut for a lot of startups over the last few years already. what is it going to take to get that to open up? >> well, shut is probably being a generous description. we have had almost no ipo market for technology companies in 2024, and '23 was weak, as well. a couple things people point to, there are a number of companies on file. one is valuation. we had a huge amount of capital, valuations got energy, they're way ahead of the public markets. so cloud computing, software, it

was not uncommon to see companies raising money at 20 to 30 times forward sales. the public market is more in the five, six, seven times range. now you've got the duplex and this tail wind with ai as we have chatted about previously. we haven't seen it show up in the revenues yet. i think you'll start to see that in '25 and '26, and that would bode well for the private companies that want to go public with similar stories. >> jeff, who are those private companies to the extent that you can be specific? this does feel like a period of reset for venture capital and for a lot of investors wondering after the big covid boom of the past few years and as the bloom comes off the ai rose, what are going to be the exciting ipos that might be in store? >> well, the two most prominent names are strife and databraick.

there are a whole bunch of companies that you probably haven't heard of between $100 million and $500 million of revenue, some valued at $2 to $20 billion, growing into those valuations and will hopefully become public. they have a lot of public investors on their table, so hedge funds, sovereign wealth funds, are already investors in many of these companies. so i think they'll be ready to be successful public companies, just a matter of the market being receptive. we have a time of, you know, a lot of volatility right now. geopolitical volatility, we have a presidential election, interest rates supposedly coming down. you're seeing that play out in the markets, and the ipo market does not like volatility. hopefully post election season, early '25, we'll see some of these companies wade into the pool and go public. >> even so, but they feel -- the one i'm thinking of, there are

companies from the past, a little more than they are companies giving us a glimpse of the future, are they not? when are those crop of new companies going to come that tell us this is what i heard generative ai or the next business cycle is going to feature. and these are going to be new tools and products and things that will change the world. >> obviously, the most prominent in that category is openai, which, you know, is raising money at very lofty valuations, and certainly wouldn't even be a small cap tech stock, it would be approaching a large cap. some of the companies have yet to generate a lot of revenue in the ai space. so whether it's the internet or cloud computing or mobile, if you go back to the mid '90s in silicon valley, billions went into companies like alta vista and others and we had to work to that to get to the amazons and the salesforces that came out of that. so we're still in many ways in that first or second inning of this wave.

a lot of capital going in. not all of these companies are going to be successful. the ones that are, are going to generate significant returns for investors and make a meaningful impact on our economy, for large enterprises and we think ai will be a huge tail wind for the s&p economy in the united states. >> you're somewhat more patient because you have a longer timeline, which is a little different than what we are currently seeing, this push and pull between roi and cap ex. we spent a lot of time also talking about anti-trust, and that affects how you view access. in the public markets, we're seeing that weigh on stock prices like google and nvidia sold off yesterday on those doj headlines. how are you thinking about it for these companies, especially as the regulators are more aggressive than ever? >> yeah, it's interesting going after obviously some of the titans of our industry in nvidia and google. you know, the private market not

only relies on ipos for liquidity and capital ref reformation. buyers don't know -- a strategic buyer doesn't know if they can get a deal approved, and increased volatility in the capital markets to acquire the companies they like to acquire. so we have both of those playing roles in the private markets and inhibiting a little liquidity. some of that will play out over the next six months as we learn who wins the presidential election, maybe get a little more stability in the rate environment. you know, as it comes to google and nvidia, both of those companies are obviously dominant in their categories. we'll just see how it plays out, but have more market share in their categories than any company did decades ago.

and also have created a ton of benefits through that market share gain. google has lowered the cost with amazon and microsoft. and nvidia is obviously turning out some of the most innovative products in the chip market. >> and where the customer harm is ultimately. jeff, thanks for your time today. appreciate you joining us. still ahead, cnbc's mag seven index is still up 30% this year, despite yesterday's drop, but not all tech is created equal. we'll look at the valuation disconnect. but first, the corporate bond market is flashing a bullish signal for stocks. our strategist will jointous make his contrarian call. that's next. and here's another look at the market. a bit of a mixed picture. dow slightly lower the s&p down one point, while the nasdaq and russell are trying to rebound. the ten-year treasury yield below 3.80.

back after this. >> this is "the exchange" on cnbc.

welcome back to "the exchange." 33 new companies issued debt yesterday with investors snapping up $46 billion in new bonds. both are records for the debt market, but stocks didn't get that optimistic memo, selling

off to start off september on disappointing data. we saw this again last month. remember that selloff in early august? the dow fell more than 1,000 points on august 5th. the s&p and the nasdaq were down 3%. but just two days later, at least 17 companies issued new debt and the dow finished higher by nearly 2%. my next guest says it's buybacks that keep these drops short, and that they might be enough again this time around. joining me is brian reynolds. great to see you again. let's just start with yesterday and what stood out the most to you about this corporate debt activity. >> well, as we mentioned, we set two records yesterday. it was the number of companies coming to market, and it was an all-time record with 33 companies and $46 billion in new debt was the day after labor day. usually, there's a surge issuance, but this was spectacular. same thing happened last month, too. we had this drawdown in stocks, but equity and credit investors

are sometimes in different planes. i know equity investors are worried about a drown draft in a recession, but if there's a bad situation going to happen for equities, it usually starts with credit. this is the on it. i've never seen credit investors more bullish. >> oh in august, we had this short spike, this dramatic but short-lived market move. what did you see taking place in august, the same kind of thing? was there enough to tell you credit investors are optimistic, this will keep the market buoyant? >> two things. one was the amount of money coming from credit funds. pensions are underfunded and ofly optimistic on yields, so they have to put money to work in credit. they did that in august and this month. with the vix, it wasn't just the vix spike, it was an inversion of the vix curve. vix options were higher priced than the longer dated ones.

so equity investors were paying for short-term protection when longer term protection was cheaper. that's an irrational panic and winds down usually within a month. last month, it was shorter than we thought it was -- it would be, but we're seeing the same thing again. it was inverted yesterday, so within a month this panic in equities will be over and buybacks will come back to lift stock prices back up. >> i don't know how to tie this all together, and you've been eloquent about this. it seems like we're still this that stikle, but interest rates are higher this time around. when i look at companies issuing all this debt, why not wait a little bit and see if rates are coming down? does the fed timing tie into this activity at all? >> well, it's not just high rates but rates relative to the expectation. so pensions think yields are

going to be much higher for longer and they're missing out on that. so they're create thing tremendous demand, because they were wrong about rates being higher for longer. companies, while rates are high, they're lower than six months ago, a year or two years ago, and take this money and put it to work buying back their stock at a relative valuation that's not bad. >> exactly. and then that keeps the daisy chain going. are you overall feeling pretty bullish on equities, despite valuations and kind of the top heaviness of the market, and all of the other factors that can be somewhat worrisome? >> over time, yes, i'm bullish. equity investors are scared, they're frightened of a recession. and wall street buybacks will not prevent the drop in stock prices. but once the drop in stock prices runsits course, that's when the buybacks come into work. and they start to bring stock prices back up.

especially when you get moving averages crossing above one another like a ten-day or 50-day moving average. that's when the buybacks make the most money for their clients. when you think the world is ending, you go right back up. that's what happened last month, what happened last spring and what will probably happen this fall. >> a much-needed perspective. maybe this will be a one-day selloff. i know it's typically a bad month. >> can't say that, but the best time to buy, you don't have to catch the bottom, just catch them on the way up. >> brian, thank you very much for your time. still to come, ross stores is lagging behind its off-price peers, but burnstein is make it their top pick in the space. the alt hi tt llanysbendhaca joins us to make her case. "the exchange" is back after this. no. how am i going to do this?

welcome to the mdy mid-cap cup, presented by state street global advisors. today's challenge is to play 9 holes without the middle of your bag. how does that sound? that sounds terrible. ♪♪ ♪♪ ♪♪ ♪♪

♪♪ [inner monologue] in this gig... you get comfortable being uncomfortable. ♪♪ the enemy is always adapting... deepfake: hey handsome. ♪♪ [inner monologue] ...always iterating. ♪♪ welcome back. we're hoping for a gain today to erase those september blues that we started off with the month, but the dow is moving towards session lows, and i'm putting those aspirations throughout the

afternoon, we're down 65 points. the russell is up one point and we saw that job openings data come in worse than expected this morning. the fewest job openings since 2021. some say it should make the case for a 50-basis cut point for the fed. and we also have wti crude falling, dropping below $70 a barrel. there we see the print, $69.38, on track for its lowest close since december of '23. and centene having its worst day of the year. 8% drop in the stock. as utilities rallying today, hitting its highest level in two years. up more than 20%, and you might say it's electrification or even ai play, but we had the news this afternoon from the information that microsoft is

not seeing as great demand as hoped, that would at some point filter back through nvidia and the utilities etf, but we're shaking that off at the moment for a half percent game. now over to pippa stevens for the cnbcs news update. a special prosecutor in mexico asked the judge to reconsider the decision to dismiss an involuntary manslaughter charge against alec shooting for the shooting that took the life of helena hutchens. the prosecution says there were insufficient facts to support the ruling and no violation of due process rights. a pair of commissioners are calling on the agency to investigate shein and temu after deadly baby products were sold on the websites. they want to investigate how the companies comply with u.s. rules and handle relationships with third party sellers. shares of trump media are trading at the lowest level

since the company went public in march. it's down almost 80% from its high on march 26th. the move coming just weeks before trump and other company insiders can cash in. kelly? >> pippa, thank you very much. coming up, a view on the state of tech and ai from a company that was reportedly in biotalks with salesforce earlier this year. the ceo joins us next, after a break.

nate jones... lines things up... checks his fidelity app... looks to outside analysts to get a second opinion. nate likes what he sees... and he places the trade... talk about easier investing.

welcome back to "the exchange." despite the ai hype, it's been a rough go lately for the software names like datadog, down 17%, snow make 21%, and intomatica down 20%, but the ceo says they're well positioned to benefit as customers experiment with ai, and some of the clients include big names like toyota, carnival, and humana to name a few. joining me now is the ceo. welcome to the show. thank you for being here. >> thank you for hosting me. what is a few years honestly. you were just telling me part of

the story, the company goes private, you have this idea for doing cloud, the company goes public again and you build the company from zero to a billion dollars? >> we are on top to be near a billion dollars. we just closed out the first half of the year, we exceeded, beat and raltzed for the second half. >> when you say the cloud business, are you migrating clients? >> the majority of our cloud business, all the stuff going with the cloud, azure, gcp, now databricks, our data business in the cloud, our master data business, all new ways of doing business in the cloud. >> how did you figure out this was a big opportunity? >> this you play out in 2015, 2016, many, many more use cases of data will happen. not just growth of data. which means a bigger camp, many,

many more products. second was the world will go to hybrid, and then go to the cloud. >> and multicloud means different providers. >> and what we saw for us is ours a very fragmented industry. the one that becomes a platform can truly be helpful. so we built out the only platform in our market and that's truly been a game changer. >> so give years, you've been extremely successful in build thing out and salesforce comes calling. was it tempting? i guess a fewresponsibility. >> we partnered with all the different clouds, we basically are a user of saem salesforce, they're users of us. they've taken up part of the

table to create a platform. they have many clouds. we have many clouds on our pla platform. so together, we've been serving our customers and each other. that's what we look at the market and there is tremendous opportunity for data to disrupt this ai space, working with salesforces of the world or many other large companies of the world. >> i don't know if i'm making too much of it, but for data to disrupt the ai space, where most of us think about it the other way around. >> we talk about nvidia a lot, we talk about all the cap ex a lot. you know what? we built the freeways. that's the freeway. but the cars have to run on the freeway. the drivers have to come in the cars to go out to someone. that's what we do. to be honest, i see around the world, i see everybody's ready for ai because of this cap ex -- >> generative a snirvegs >> generative ai. so where we see the work starting now, and that's what we see in our business is that enterprises are not putting to their data to work.

you have to create -- >> exactly. >> you have to clean it up to make sense. govern it. that's where we are seeing the growth in business. >> don't you have tons of competitors trying to do this, to clean up the data and make it accessible? >> we are the number one in terms of innovation. we put up a billion in the last five years. we are the only provider with one single platform with all of those capabilities, so it allows customers to go on one platform, go from a to z, consume it as you go along. if you don't carry the risk. >> i wish i could ask you, when you see valuation of nvidia and whether microsoft has a lot of uptake in corporate clients, what other stock you look at and say, that's a buy, because i see the world is going, and the others that's not the right horse to bet on. you know what i mean? >> i know my business, i know my

customers. i generally believe that we are yet to see all of that stuff playing to us, because we are growing 37%. >> let's say that, you know, we deploy some of these tools and the end customer sit there is in the office and says that's not worth the money, is that going to trigger a pullback of this entire investment and spend on ai that ultimately hurts your business and just makes things look less exciting that be we thought they might have been. >> we're seeing the opposite. customers like west cap credit union, others, they're -- they all have their models. they're using us to bring data, clean it up and put it into the models to understand like reducing insurance processing claims. i see the productivity over there.

and i think in the next couple of quarters, they will start rolling it into production. small-scale production, then large scale. and that's what i see. the second is, because we have consumption based platform, these customers can start small and they don't have to make this big, expensive investment. so it's a huge win. the other is the same platform allows them to do the transformation and do gen ai transformation. the transformation has to happen for gen ai to happen, and so we're helping them xaccelerate that to get the value of gen ai. >> i understand it better than i did before. congratulations on everything that's happened. thanks for joining us to explain it. >> thank you. coming up, back-to-school usually means bargain hunting, and this season might be prime for uni bond investors. where to put money to work in

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welcome back. we take a look at market alert, shares of u.s. steel, which are currently halted after earlier being down about 6%. now, this news come amid reports that the biden administration might seek to halt its takeover by nippon steel. this is an issue we've been hearing about on both sides of the campaign trail, with trump and harris indicating they were against the deal. u.s. stole's ceo indicated if nippon doesn't take over, he may not be able to keep the mills going. we'll bring more more when we have it. the shares were down 6% before being halted. merrill lynch is noting that uni bonds have reached their cheapest of the year. my next guest is finding some back-to-school bargains. here with his criteria for

investing schools is dan close. we're all in this mindset. your kids are back to school, as well. what is the angle for investors here? >> you know, what we're looking at right now is just back-to-school investing. we've had more than $200 billion given to k-12 schools that is just now rolling out. so we're closely watching how different schools spend that money. some spend it very prudently. this is pandemic money just now rolling off. most schools spent that prudently by doing one-time capital projects. others used that more for plug-in deficits. so we're watching how some schools make those difficult decisions. >> so for -- which part of the school system broadly speaking are uni investors exposed to? >> mainly the education sector. it's a $4 trillion market, $550

billion or so are in the education sector. where we have really seen the growth so far is in charter schools. we have seen charter schools, the school choice movement with more higher yielding securities, and the market has started to see more of these securities come online. >> interesting you say that charter schools need some deep pockets to be successful. they're up against entrenched competition. but they all have a high failure rate. which i'm sure explains why they're in that portion of the market. what would you say to investors saying these are big yields and maybe i support the project, but there could be some default risk. >> charter schools, unlike traditional k-12, cannot go in and levy taxes. so even though we've seen declining enrollment from 2019 to 2023, they're backed by local property taxes and those have never been in better shape. charter schools require a lot of special attention, work. we have four analysts that are

just looking at the specific asset class, because you have to go in, take a look at their success factors, because you don't get your debt service on these if you don't have a successful outcome. and you don't get your debt service on these if you don't have those enrollments. >> absolutely. probably not hug records. tactically speaking, people say okay, go ask my adviser, where regionally or in kind of, where do you think are the best specific opportunities? >> we're seeing a lot of opportunities primarily charter schools are in urban areas. we see a lot of different states that are now, and i think we've seen the growth in charter schools because of enabling legislation. there's universal vouchers in ari arizona and florida. we've seen a lot of growth in different urban areas. we think this growth opportunity's going to continue and we anticipate more than 5 billion in issuance in 2025 and this growth in charter school, we've seen a 9% growth in

enrollment from 2019 to 2023, but k-12, about a 3.5% drop. there's clearly a movement towards the school choice. trying to get curriculum choice trying to move into these schools. we are seeing a growth and a need for financing. >> thank you. as people are spending money, trying to make some of it back. appreciate your time. we've got news out of the kamala harris campaign. megan has the story. >> so "wall street journal" is reporting that kamala harris is planning to propose what they're calling a less drastic increase in the top capital gains tax rate. we have asked the campaign and they have not confirmed that to cnbc. that top capital tax gains rate, that's what president biden proposed raising from the roughly 20% level to as high as 39.6%. that's also the level where he wanted to see the top wage rate go. this is a break from vice

president harris from biden and just to note, too, that the journal is not reporting anything on that unrealized capital gains tax. they say there's no development there but that she wants to still see the top rate rise for the top capital gains tax rate but not as drastically as that 39.6% level where president biden had proposed it. >> interesting. thank you very much. let's check out shares of u.s. steel. down about 16, almost 17% on a report the biden administration is preparing to block nippon steel's takeover. the exchange is back after this.

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a dismal week for the dollar stores with dollar tree down today. just days after dollar general's miss last week, but my next guests see some bright spots. i like ross stores as your pick because it's gone you think potentially from least to first here. what's going on? >> yeah.

at the start of the year, we were seeing ross stores be closely valued to tjx and now we're seeing that valuation gap coming down to three turns below tjx. people are concerned about the low income consumer. especially coming out of these dollar store results. really ross is benefitting from this because middle income consumers, the squeezes, they're looking for opportunities for value and tradedown and ross is seeing traffic gains and volume gains as a result of this. that have led to consistent, positive comps for seven quarters in a row. >> and there's something going on here that caught my attention. investing in price quote unquote, cutting price and sacrificing margins as a result. are they doing that? >> they are. and they are doing a combination of better brands in the store so they're going hard after better brands and they're offering them at better prices. so it's a win-win for the consumer because you get a better product and price point. what it means for ross is you

take a hit on gross margins but gain it back on traffic and comp. we're seeing that play out over the last several quarters and they intend to continue it. >> does it work in the long run? how much upside do you see for the stock potentially? >> ross is being very consistent ear ear earnings deliverer. they get it through comp growth, buyback and i think they'll be back at that formula for the next couple of years. it's the consistency people like about this one. it's steady comp. it's positive. it's value. and it continues to deliver. >> and it's vastly outperforming its peers. i used to spend hours at the one in old town alexandria while my dad was at work. thank you so much. we appreciate it. that's it for the exchange today. "power lunch" is next. i'll see you on the other side of this break. it's time to grow your business. create a website.

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and welcome to "power lunch" alongside kitty corner from kelly evans, i'm brian sullivan. good news. stocks are rebounding after yesterday and by the way, nvidia, the most important stock in the world, is slightly higher. not a lot. but coming off the worst day any stock has ever had in terms of market cap lost.