high. >> it is very, very cheap. >> you don't care about the investigation? >> no, i don't. >> he doesn't care. i don't care. i'll care in a few years. >> honey badger. >> palantir, added to the s&p 500 and i've talked about it since the mid teens and it's added to the s&p 5 h00. >> thanks for taking it easy on me. we'll see you tomorrow "the exchange" is next. thank you very much, brian and welcome to "the exchange." i'm kelly, evans. >> clawing back some of last week's losses the major average is all up 1% or more 1.3% for the nasdaq which last week saw its biggest drop in two years, but concerns over the ai trade remain and that brings us to apple. its product event now officially under way now in cupertino. can it convince investors and customers the new iphones will

be a buy because of ai features? technology reporter steve kovac is covering the event live for us. we'll bring him in live now. steve, what should we expect? >> hopefully you can hear me. there's a lot of noise going on right now and it just kicked off this keynote event right behind me in the steve jobs theater. tim tim cook was welcoming all of the guests, reportes and the like. you mentioned it in your intro, the real thing everyone's watching for is what is the pitch around artificial intelligence? we know that you need the more modern phones and devices in order to run these ai features and that's going to include the four models we see today. on top of that, we will be listening for what the rollout of artificial intelligence on these devices looks like. apple three months ago announced what apple intelligence is going to be, what all those features are, but not everything they showed off in june is actually going to show up in the iphones this year. in fact, it's just going to be a

software update with a few of those features and rolling out in the coming months. so the things to pay attention to are when is the chatgpt integration going to happen and apple did say it would happen during the end of the year and any hint beyond other languages and beyond u.s. english and the united states, particularly china which has really strict laws around art fificial intelligence and the government needs to approve ai models. i spoke to tim cook and the ceo of apple a little over a month ago and they are working with china regulators to make that happen, but overall we'll have to wait and see what the pitch is here to get people to buy an iphone which the hardware, kelly, not expecting it to be much different than what we had in the year before. it will be all about the ai. >> chips, as i understand it, that's another stock we can watch here. the glowtime reference last week is how siri now looks when we talk to her and finally, steve,

as i understand it, these features -- the phone will go on sale in september, but the features won't be released until october. >> developers are using it now in a test ergz version of the software and that test version software can summarize your text messages so you can just glance at the notification and get an idea of what's going on there, but the cooler stuff and the new siri that you just referenced and the image generators and the custom emoji generators and things like that, those are going to be a couple of more months off from that initial apple intelligence release and it's a very slow and measured process and that is why it is so important, kelly to get more details today from apple and exactly what that time line or more clarity on what the time line looks like. >> is that a feature or a bug? might the company be waiting until the features are fully

ready to go or why do you think this time line has happened this way? >> it seems to be a feature and quite deliberate, in fact. keep in mind, even when all of this stuff does launch they're still calling it beta, meaning a test version. so if it screws up or doesn't work necessarily as advertised apple has that excuse to fall back on saying it's early software. we're still learning. we're still developing it. so it's going to be a really long, extended rollout here and that's why you hear so many analysts saying this isn't going to be a one and done upgrade cycle and the more bullish analysts sees a years' long upgrade cycle because of the measured rollout. >> we have tim cook under the rainbow. we'll wait to hear more headlines and bring them to us as you get them and we'll see you shortly, steve kovac. >> for more on what to expect and what it means for the stock. he has a $261 price target and also joining us is editor at platform and cnbc contributor casey newton.

welcome to you both. casey, off-the-cuff-remarks and we know apple shares go up after price announcements like this, but where is the focus going to be? >> my focus will be whether we can get clarity around the rollout of these ai features and there's been reporting as steve just said, we're not going to see some of these features hit until october, but also it could be until december or even later until we see something like the chatgpt rollout. there's been so much talk on the leadup to today's event about the iphones driving an ai upgrade cycle and right now it doesn't seem like all of the pieces are in place for that to happen. >> all of the pieces are not in place. so does that, in a way, could we say, well, the bull case as they slowly drip this out and there's more upside, or do they need to do something like a whiz bang to catch the consumers' attention in a sleepy iphone market? >> i do think there has to be

more about whiz bang here. as steve was saying, right now the features that are coming even in october and december, it feels kind of like small potatoes and summarize a web page and summarize a text message it won't make people race out and spend $1,000. on the other hand, these changes haven't been approved in china and also haven't been approved in europe. to the extent there is consumer appetite for them, as those markets start to open up i can't see people going to the store to get the new iphone. >> they do have a little bit of this post announcement sell-off and 261, is that 10 -- 20% upside from here? >> yeah. that's our price target right now, and we do think that this is going to be a smaller buildup. so we have maybe 3% to 4% iphone segment, revenue growth and the september quarter into the december quarter and we have that stepping up to a faster pace approaching double digits

as you exit 25 and get into 26 and you get the next iphone cycle. the interesting thing here is that the ai kind of rant is not just tied to the phones and it's tied to software update. this could be different than any other iphone arc we've seen before which is the functionality improves incrementally during the rollout of this new device. it doesn't have to be just at the launch. so we could see some improvement in growth here near-term and maybe even more acceleration until we get to the next generation of iphone. >> i think that's a great point. tesla has been doing this with full self-driving and other features and barton, is that still a bit confusing to consumers, well do some of the features apply if i have an iphone 15 and there's not the expectation of new phone, brand-new features, one and done. >> i think when the marketing kicks in there will be some

excitement among consumers. if you look back at the 5g upgrade cycle. 5g wasn't a tremendous improvement over 3g initially, arguab arguably even now and people need to have fomo, fear of missing out. you already have a group of people buying iphones because their iphones is basically on its last legs and it's that incremental excitement and i don't think it takes a ton to really give you some excitement around the iphone revenue trajectory over the next several quarters. >> casey, we dwell on the phones because there's still a revenue behemoth. i think we expect two new trends of the air pods 4, so there's more to come. >> yes. absolutely. apple is also taking the chance to refresh some of the accessory items that are a big part of the iphone success. although, as you know, we're not expecting much with the new air pods or the watches aside from a

light refresh and maybe some more software features to come there. >> we'll leave it there for now, gentlemen. the shares are down about a tenth of a percent, up 40% over the next couple of years and we'll circle back as we get some announcement and get your reaction to those. barton crocket and casey newton up next in the hour. tesla is the only mag7 name starting september in positive territory. the recent pullback in tech has the street divided on what it means and what comes next. evercore and ubs writing that the case for artificial intelligence remains intact as there are questions with that trade while piper and barclays, and raymond james shows there's extreme concern and my next guest is not buying the tech dip. it just went overweight utilities and it's time to invest in the tortoise and not the hare. joining me is savita

subramanian. the hare -- no, no, no, the tortoise is handily winning here. utilities as mike santoli pointed out in the weekend column are trouncing the chips and other sectors of the market. >> indeed. yep, yep, and i owe this to my former boss rich bernstein, but he published this chart back in the '80s and the '90s and the 2000s that shows that the total return of the s&p utilities index is almost always neck and neck with the total return of the nasdaq and you don't think of utilities as being this great kind of source of alpha, but the truth is just that reinvestment of dividends is a powerful way to make money, and i think that's going to become much more important in the years to come. so it's interesting because if you look at the market returns over the last 10 to 15 years it's been all about multiple expansion which i would call the hare. it's kind of the fast growth stories, but you've got these -- these compounders that are just

plotting along and they tend to keep up and i think we're at a point where the tortoise can overtake the hare in this derby. >> some of the people were questioning whether utilities were doing well because of the ai narrative because it met such demand for power generation and so forth. so i'm so glad you mentioned this chart for bernstein and this is not a new story and it's a longstanding kind of relationship. >> yeah. there are differences, and i think the power story is fueling some of the strength in the sector, but think about it. if the fed is likely to cut more aggressively on the short end of the curve all those dollars in money market accounts are going to see less of a yield. they will be interested in stocks they can live off of. these are mostly retirees that control the bulk of household net worth and utilities have been a mainstay of retiree

portfolios. they're maybe a lesser weight today because of the excitement around tech, but i think we go back to that sort of old-fashioned dividend yield and dividend growth theme. the other sector they think is very interesting right now is real estate. real estate has had a great run. you don't think of real estate as the tortoise. it used to be this very low quality, risky sector. >> exactly, but the key difference is -- yeah. so today i would venture to say that real estate has grown a lot more high quality and the reason i say this is because if you look at the number of companies and the% am of market cap in the real estate benchmark in the s&p, 70% of it is considered from diktible, low earnings volatility and much higher quality than it used to be back in 2008 when it was only 30% high quality. so lots of shifts have happened since 2008, and i think looking for quality and yield you'll

find it in utility which is ismore obvious, but you will also find it in areas like real estate, like financials and other areas of the market that could surprise you in terms of their adjustment in quality. >> we've had a few people pounding the table lately saying real estate is notthe sector it used to be. it's interesting that maybe it's growing up and maturing and just in time. you're not buying the big tech dip. how much longer do you think the utilities trade -- correct me if i'm wrong, it's up 20% this year and quite profitable. could people who have not been in that can they get in that now and enjoy similar returns and stay in it for quite some time and how does that el overall of where the s&p goes from here? >> yes. our target for year end is 5400 which is essentially a neutral outlook on the overall market, but i think where we go from here is towards quality and income and away from secular growth, kind of cyclicals and

thematic stocks. i think the ai theme is real. it's true. it's the future, but it's priced in. the ev to sales ratio and the enterprise value to sales ratio and for information technology is the highest its ever been and it eclipses the tech bubble. this is not a cheap sector. there are a lot of expectations priced in, and i think until you see some of that valuation taken out, and you see some positioning shifts out of these magnificent seven companies and that are the stealth winners, when people stop asking us, is it time to buy tech, it's probably time to buy tech. >> quality and income to your point, the new growth and p-e expanding, big tech has been in correction since july, and safity a thanks for joining us. i appreciate it today. >> thank you. >> savita subramanian. my next guest says the read

on consumer expectations today is another example of why the fed should not cut at all this week and he's here to make the case ahead and he goes head to head with mark zandi who says fed should cut by half a point or something will break. we'll talk about that next. our market guest is sticking with it and he is buying on the dips. he joins us with that and where else he's seeing opportunity right now. "the exchange" is back after this. ♪ ♪ this is "the exchange" on cnbc. (man) this whale is unaware it's being exploited

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♪ ♪ welcome back to "the exchange." while markets still expect the fed to cut by a quarter-point cut next week, my next guest says that's not the right move. one is a half-point cut to prevent something from breaking, while another thinks it should not cut at all after the fed expected inflation expectations three years from now -- i knew we might see that data point this morning. joining me now is mark zandy and kumar, president of global strategies. shri, i saw that same release and i'm thinking the one year went up to 3% even though gasoline prices have dropped. what do you make of that? >> factually. you have other factors, kelly, which are influencing. ren has been stubbornly high and that's one place it's coming from and various things

contributing to inflation and what i call this is whack a mole inflation fight. you hit one part of the sector and inflation goes up somewhere else and the reason is there is still enormous amount of fiscal stimulus. the monetary base, the fed's balance sheet was doubled from already bloated levels in 2020 to 2022, and we haven't cut back very much since, so why are you surprised that inflation is still remaining high. there's a lot of liquidity and people have to spend it, and you see that in wage costs. the wage costs accelerated month on month as well as year on year. you see initial jobless claims are down for the third week in a row. unemployment rate is down. how can the fed pretend that the economy is weakening and inflation is coming down when you have so many of these danger signals, so i don't think the fed is data dependent, kelly.

i think they make the data say whatever they want the data to say. >> mark zandi, i will let you come in and answer those questions. >> a lot to unpack there. i don't want to be too doigmati about it and the fed will cut rates in a very consistent way. they achieved their objectives. the economy is at full employment at 2.3% unemployment rate and inflation is back to target any way you want to measure it. inflation expectation, at least as measured by most measures, bond market or consumer or well tethered, and the economy feels like it's on the soft side including the labor market. you can see that in last friday's jobs report. so, you know, given all that, i just don't see the argument for not cutting rates and if it's a quarter-point cut or half a point at this point, i'm not sure that makes a whole lot of difference just as long as the

fed gives us a clear path to lower rates to something closer than equilibrium. >> maybe our friends in the back can cue up the break even start to show the market's expectation of inflation over the next five years or the next 10 and it's fallen substantially and it's practically below target and it tracks off cpi and pce runs lower. point being, yes. 3% inflation and the marks ets e seen more like under two. >> you look at the two-year, five-year inflation expectations for the bank of new york that was out today, and you're at 2.5 and 2.8% and that is the last mile of the journey toward 2%, kelly. second, when this is happening, the president of that very same fed, john williams said last week that he hasn't made up his mind how much to cut interest rates on september 18th and he wants to cut them. so there is a discard, there is

a divergence between the fed expectations and what is coming from the fed officials, and lastly, there is still a lot of fiscal stimulus left, and the fed is behaving as if monetary policy should be implemented without taking any heed and that has been the position. that, to me, shows total adherence of economic theory is that's the reason why inflation has remained so sustained with the monetary policy that is insensitive to what's happening on the fiscal side. >> i did notice, and people like nancy lazar who has been trying to track this and jeb polson trying to figure out what is the fiscal impulse. >> nancy, much more cautious on whether it's running out of steam here based on anecdotal evidence. do you get a sense for what is still coming down the pike? >> yeah. it's modest. >> go ahead. >> it's modest, kelly. i think the key way of looking

at this is the change in the budget deficit and it's high. the deficit is high, no doubt about it and it's not changing. if anything it's starting to come in and the fiscal impulse is close to zero, you know? so i don't think it's playing a big role at this point in terms of driving economic activity. and economic activity, particularly from the prism of the labor market, the job market is clearly slowing and you can see it in the average monthly job growth and you can see it in the weaker hours and the decline in unfilled positions and you can see it in the lower hiring rate, and you've got a lot of labor force growth because of the strong immigration. so that's why unemployment has been notching higher and i don't think higher unemployment because the stronger labor force is existential, but at some point that becomes a risk and a significant problem. so the argument for not cutting rates is i think, very tenuous. the argument for cutting rates is very strong. it's really just a question of

how much of a rate cut and probably even more importantly, what's the path for future rate cuts. >> quick last word, sri? >> the problem with cutting it by a quarter-point cut is the market is essentially leading the fed rather than the fed following the markets. so if they have a quarter-point cut only on september 18th, the november meeting, the expectation will be 50 or 75 basis points, and another 50 basis points in december. the problem is it is not going to be a quick end. we've not had forward guidance from the federal reserve and ben bernanke would have described it. what we have today is forward confusion. so the market wanted the increases and the fed doesn't do what it says it's going to do. remember, last december, the interest rate cuts are going to be imminent and there will be several rate cuts during 2024 and inflation perked up again.

why doesn't the fed learn from its repeated forecasting inflation and that would be my last word, kelly. >> all right. forward confusion is the phrase du jour. appreciate it kumar and mark zandi. they expect a quarter-point cut next week. ing come up, google is back in court for the second antitrust fight and this one about online ad dominance. we have more on the potential implications for google and how it could change the way we see ads on the internet. as we head to break, take a look at two stocks on the move dell and palantir, palantir up 13% and all of this on ai-related names will join the s&p 500 replacing american airlines and etsy. palantir has traded compared to 49 million. dell has traded nearly all of its 30-day volume of l 11.8 million shares and citi seeing the inatflion of the

potential catalyst of 50% of the upside from here. we are back in two. hi, my name is damian clark. and if you have both medicare and medicaid, i have some really encouraging news that you'll definitely want to hear. depending on the plans available in your area, you may be eligible to get extra benefits with a humana medicare advantage dual-eligible special needs plan. all these plans include a healthy options allowance. a monthly allowance to help pay for eligible groceries, utilities, rent, and over-the-counter items like vitamins, pain relievers, first-aid supplies and more. the healthy options allowance is loaded onto a prepaid card each month. and whatever you don't spend, carries over from each month. other benefits on these plans include free rides to and from your

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you over the phone in a humana medicare advantage dual-eligible special needs plan. so, call now. humana. a more human way to healthcare. welcome back to "the exchange," everybody. i'm tyler mathisen with your cnbc news update at this hour.

former president donald trump said he will vote yes on a florida ballot measure to legalize recreational marijuana. trump made the announcement on a post on his truth social platform sunday night and it's his clearest stance on the issue so far. existing newborn screenings could identify risks for sudden infant death syndrome or sids according to a study published today by "the journal of the american medical association." a particular group of chemicals called metabolytes could identify it. they're part of the a newborn screening through a blood sample test. and the country music awards were announced today, but one superstar was notably absent from the list. beyonce, the singer's full -- first full-length album cowboy carter was shut out despite its lead single "texas hold ''em" to

top the country charts in february. beyonce's camp has yet to comment. >> they should ask kanye. >> he'll have something to say. >> see you soon, tyler mathisen. google is in court as the tech giant faces another antitrust trial. this time it's over online advertising and it is live outside the courtroom and the shares down fractionally today so far. hi, eamon. >> hi there, kelly. after a busy morning of testimony the judge here has broken for lunch and all sides have skedaddled for the moment. what we saw this morning were opening statements by both sides and we saw the department of justice calling a couple of witnesses and their first witness was tim wohl from gwi ginnett and how tough things have been in the newspaper industry over the past decade or so and also testifying here this morning, andrew cassal and the index exchange to google's

advertising exchange in which they match buyers and sellers of online advertisements instantly. overall, the arguments here are pretty straightforward. the department of justice has been suggesting that google is using a classic monopolist handbook. that is they're doing all of the things that monopolies have done for generations even though this is a more high-tech way of doing that. they're also saying that google hasn't really innovated here. they've acquired their way into market dominance and they're saying that in a 2013 internal email one google executive wrote to another our goal here should be all or nothing and that is ultimately they want to dominate this market entirely. that's the suggestion from the government. the suggestion from google, however is that, look, there are a lot of competitors in the space. the competitors are getting this all wrong and the doj is gerrymandering the market definition and they're including some and not including others based on what suits the government's argument and it doesn't match up with reality in

the competitive landscape. google's market share is going down even as revenue is going up. that is they're making more money even as they have less market share and because the overall pie is growing thanks to the technology innovation and they're saying here that google is if they lose this case, the real winners will be their competitors. folks like meta and amazon and others who are in the space, as well, kelly. >> a lot of technical testimony throughout the course of the morning here and ultimately it's going to come down to whether the judge buys this market definition from the government and then maybe some supreme court precedence at the back end of the case, kly. >> i think steve weiss summed up how investors feel about it, check in in a few years' time to see what fundamental changes will be made to this business model. in the meantime ai and other technologies are as much front and center. for now, we appreciate it. eamon javers tracking that for us and google's tech battle could change the very way we browse the internet.

deidre bosa has more on today's tech check. layer that in for us. >> here's how it can change our own experience on the internet potentially a better browsing experience. let me explain. the government argues that publishers will have to find other ways they currently have to find other ways to make up for hundreds of millions of dollars they would be getting if google didn't allegely destroy competition. to maximize their own revenue they might have to put more ads on their websites, making them more cluttered or they put more content behind pay walls all adding up to a subpar browsing experience for us, the users. imagine a world where they were scrolling through banners you just get the content they were looking for or imagine you didn't have to enter your address, and that's what could be potentially fixed, better monetization and better monitoring websites. google argue that the browsing experience could actually get worse if there were more

alternatives or if google was broken up and it could fragment the tech system and make it less efficient leading toward data privacy and higher ad costs that would be passed on to users maybe just in different ways. kelly, where do you stand at targeting some people and love those well-targeted ads that say they're more relevant. i find them creepy and annoying. this trial, though, could impact how we are followed around the web which would again, make for a different experience. >> that's an area where people want more information about what's going on and there's still a sense that consumers don't fully know. i wanted to know, it started just top of the hour, huawei is holding a product event tonight right after apple and it's a top five cellular device in china. >> it has just been such an incredible reorganization of smartphone vendors in china. as you said, apple is no longer even in the top five. huawei has sort of clawed its

way back up after being essentially left for dead after u.s. sanctions and it's now the number four placement and it is growing faster than anyone else and the top five, by the way, all local companies and i can't remember the last time that ever happened. apple has a lot to lose and it's one of the most important markets and huawei upstage the event with the apple, vent. i don't know if you heard this term, a trifold phone. it's not foldable, it's foldable twice so you get three different screens layered on top of each other and it has on its website a ticker that shows you how many people have pre-ordered this phone. last time i looked it was at 3.2 million preorders and counting. so they're basically saying, you know, we are still going to dominate this market. we'll see, though, because all of this rests on the ai futures. what are we going to get from apple? what are we going to get from huawei? >> do you know if these phones will be available in the past. many of them have been and they're not quite good enough or

don't measure up or what have you, if all of a sudden there was aiw huawei phone that was a the rage, could that be in the u.s. to all of a sudden raise concerns about an area where the iphone has dominated? >> they might be available. i'm not sure there could be some restrictions around making them available, but the key here, though is that it has developed its own software ios ecosystem called harmony. that is in chinese. i don't think it would be useful to an american consumer and the whole pitch is sort of this patriotic value customer in china that wants to use the homegrown fan. so i don't know that they would work very well over here. >> the point is that's been successful enough in china. >> maybe that's all you need. >> deirdre bosa. coming up, bank of america says don't buy the tech dip, you heard from savita earlier this hour. s ubis singing a different tune

for getting a pullback next on "the exchange."

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." earlier in the show, b of a securities savita subramanian laid out her case for why you shouldn't buy tech on this dip. my next guest is adding on the pullbacks. jason dreho from ubs global health management. good to see you. we're experiencing a rebound today and big tech, depending on how you categorize it has been in correction since mid-summer. why would you think this is an entry point and an entry opportunity? >> we like the sector, but acknowledge that the volatility is likely to remain given the concerns about the export controls and ai monetization and there are three factors when there are opportunities to add to some of the exposure. the first is that the earnings are coming through and we're getting the good earnings results and they're not as spectacular as they want, but the earnings are coming through. the ai capex investment story

has a long runway and there's upside risk in the capex story for next year. the third factor is more from a portfolio perspective. these are quality companies with good earnings, strong balance sheets and in an environment where they mack owe uncertainty you don't want to take too much of a cyclical risk and they ride up through the macro uncertainty. >> i think overall i think this is still from the medium to long term perspective from the macro sector. >> you ride out the cyclical volatility and savita says they are cyclical and they should be elsewhere, utilities and real estate to ride out that volatility. >> if you're taking that perspective you're getting defensive on the overall view of the markets. you saw last week some of the sectors are cyclical. this has more of i sea secular y and some of the sell-off for the tech sector specifically wasn't tied to the unemployment issue and the job market data. it was tied to sector-specific

stories and that gives us some confidence that it's going to be somewhat a-cyclical to some extent and more than other big-tech companies and they're not a tech sector. they're communications services, for example. >> it is true that they have morphed over time. so there's the question about cyclicality and there's the question and you alluded to it earlier and you think the investment cycle goes to 2025. others aren't so sure. >> we think part of the story and part of the results coming out of it, for example, for nvidia were questions about supplies and issues that we think will be temporary. the demand still is there. we think it has multiple quarters to run through. will this persist multiple years? that's more of an open question and given the pipeline and what we heard from the companies and the supply constrain is more than the lack of demand. short term, there could be questions about it and we think this has a runway into next year. >> it doesn't have until next year and how much is that runway

already priced in? we're lumping it all together and maybe there's an alphabet or nvidia, and obviously a tesla. if people look and say the generative ai stocks are no longer outperforming the rest of the market and that's a warning sign. would you broadly agree with that versus vis-a-vis going into big tech or mag 7? >> what we like is not big tech or mag 7 and we're talking about the tech sector specifically which concludes microsoft and nvidia. it doesn't include tesla which is a consumer discretionary. it is the tech sector and not necessarily the mag 7 because some of the other stocks will be consumer oriented if they're more advertising based. what we think is the beneficiaries of these generative ai capex story will be concentrated more in the tech sector specifically? right. certainly as the layer and the foundational layer of the investment is taking place. that's where we have the more

confidence with the companies that are doing well specifically. >> quick last question and where do you kind of shake out on apple which is having its launch of it rid now? >> i can't talk specifically on apple. we know that its had a good run recently, like the tech sector in particular given the bounce it's had and given the uncertainties and given some investors looking to rebalance our portfolios and going into a part of the year where there's uncertainty or volatility. i think you can see the sector that can market perform and medium term, we remain constructive on the sector entirely. >> bullish overall and not tilting toward the more defense of plays. >> thanks for joining us to make the case. ? my pleasure. >> jason trej on, ubs. apple is now announcing the iphone 16 and the shares sell off after big announcements and today they're in the green -- i'm sorry, in the red by half a percent and we'll keep an eye on it. keep an eye onhas a

in up 7% from cupertino. we'll have the details next. i'm really just here for the at&t internet, it's super-fast so, any pre-launch concerns? what if nobody buys them? that's mean or, what if everybody buys them? oh, i hadn't thought of that that's probably not gonna happen can we handle that kind of traffic? the network can handle it! i downloaded eight hours of true crime stories just during our last video call i'm learning a lot

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welcome back to "the exchange." apple is revealing the details about the iphone 16. let's get out to steve kovac in cupertino for these headlines. steve, what can you tell us or show us? >> hi there, kelly. can't show you anything quite yet. we just saw the e piphone 16 ane can't discuss all of the features, but the main thing and the main issue they're trying to get across is that it is built for artificial intelligence. a lot of talk here about the processor and the capabilities on the hardware side that is going to enable apple intelligence to run on this device and some new colors are also coming and the new camera button on the side, rather, that controls the camera and there's new stuff on the hardware front and it will all be about apple intelligence and i'm expecting them to dive into that later on

in the program and let mae get you through another couple of announcements that they did get through. this is really interesting, kelly. airpods pro, they'll get a new hearing aid feature. this is because there's new regulations that allow you to sell over the counter hearing aids and it's coming to the air pods pro and they can act as an intelligence hearing aid and picking out people's voices and music and things like that and better noise cancellation and the like. the regular airpods are also getting noise cancellation for the first time and then the apple watch, you can't forget about that and this is the tenth anniversary since the apple watch was first revealed and not a lot going on here and they're calling this the apple watch series 10 and probably like the apple watch and it's thinner and has a bigger screen and you won't notice too much going on and the big feature here does sound like it will be a sleep apnea detection and apple says 80% of the people out there who

have sleep apnea don't know they have it and this new device can help them detect that and for now we're seeing them wrap up the iphone 16 and i imagine they'll get to the pro models and then new features from the apple intelligence. >> only they can make hearing aids and they can make sleep ais and sleep apnea cool, i appreciate that. why are some arm shares popping, steve? >> that was coming from a financial times report earlier today that apple was going to use the latest designs on their future phones. this shouldn't come as any surprise since they have used arm designs since they came out. not a huge surprise, but the "financial times" report seems to be sharing shares, reiterating that apple is going to continue that relationship using the greatest and latest technology. >> apple is down about a third

of a percent. thank you. steve kovach continuing to monitor that for us. our guests are back. gentlemen, barton, i'll let you go first. your thoughts so far? >> i think we're still waiting for the big event in terms of the high-end eye phones. certainly apple is leaning in toward sleep health with its sleep features. that's resonant with some portion of the marketplace. it's interesting to hear them talk so much about artificial intelligence given the kind of, you know, amount of features that we were expecting initially, so they're marketing this hard core, so you've got to believe that they're optimistic that people are going to really be excited about what's coming. and so i think they're taking this leap that the public is willing to look past what's in the initial ios update in october and maybe december and ahead with excitement to what's

coming next year. >> casey? >> look, i think the hearing aid stuff could be kind of a big deal. until very recently, you needed a prescription to get a hearing aid, and now you have something that millions of americans are used to using, which are these airpods. so to the extent you can turn those to something akin to a real hearing aid, i think that unlocks a new earring aid grapple. >> we joke it's not the 17-year-old youth market, per se, but it is probably the much bigger demographic in the long run where the money, the insurance spend, the federal dollars. there's a big prize out there. >> oh, absolutely. you know, right after my new apple watch diagnosis, me with sleep apnea, i can't wait for the apple branded cpap machine i assume is coming in a few years. >> i don't know if there's a tie

between airpod usage and hearing aid -- i won't get into that now, barton, but just a matter of fact-re review about the pro devices. it had two lenses. i have five. there seems to be some innovation at play. >> yeah, look. i think cameras are the core. you know, you're selling your iphones, the first round, the feature -- the hardware feature set, the size, the functionality, the cameras. that's why people have been buying iphones to date. they're continuing to innovate there, and then they're layering ai as a new reason. it's an interesting mix, and i think over time, making the iphone a more software-driven device, not just a hardware update to your camera once every year, but software you're downloading continueually. both a change in the arc and

business model. >> to go back to the test-changing analogy, they had only one. i can't imagine apple wants us to have us hanging onto our iphones longer. they keep seeming to rely on this hardware refresh cycle. >> certainly. your cameras, your new lenses, your buttons, that's why you buy hardware. but, you know, the software, it could be the reason why those who didn't opt in for the camera at the launch are interested a couple of months later because you get the ai summary, intelligence summary of what you're looking for in your emails and on the web. and the ability to do things that are generative and through the bigger loms out there like chatgpt, that's going to be a very different future set that's going to come later. they'll get a set that buys for the cameras, maybe in

anticipation of ai, and then maybe the group that comes in later and sees the ai vision realizes something over time. >> the year-end session higher despite things being lower. maybe investors like the hearing aids and cpap devices. meantime star buck shares are up 18% a since they announced brian niccol as the new ceo. kate rogers is here with many of the uphill battles or sharp battles he's niccol is staring issues. it will have a competitive edge, which is something that chipotle executed well on under his leadership. last quarter starbucks same store sales fell 2% as consumers were discerning with spending

and the company planned to lure them in with rewards. they plan to speed up its service times. its new fall lineup will likely boost sales, but complex beverage orders have slowed down in some locations, frustrating customers willing to spend. in china, same store sales fell 14% as it saw competition from competitors. the company was in early stages of looking at strategic partnerships to accelerate growth on the last earnings call. niccols would remind customers by delighting them every single time, and that's something starbucks needs to recapture. >> he's not going to do the hands-on type of thing. i don't think we should expect

footage of him work behind the bar or something like that. >> that's something the former owner did under howard schultz. he worked in cafes and wore the green apron. he wants to do that to immerse himself in the business. we do know brian has visited cafes and workers to try to understand the challenges. that will be really key. they need to streamline. they need to win back gen z. there are all things he executed well at chipotle, and the company is looking forward to it. >> mine is get better coffee. that could be better said than done. that's it for "the exchange." we'll keep monitoring the ee haven't on ""power lunch"" and i'll join him after a quick break.

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when you work with someone who knows a lot and cares even more... you can do this. ...you're unstoppable. (♪♪) wow... are you kidding me? you can do this. at truist, we believe the same is true for banking. good afternoon, everybody. along with kelly, i'm tyler mathisen. >> apple ties into the question mark we're asking. was last week's selloff about a weak economy or about the undoing of some