♪ good afternoon, everybody. and welcome to "power lunch," alongside kelly evans, i'm tyler mathisen glad you could join us on this tuesday. the dow falling while the

broader averages are slightly higher bank stocks the big drag on the dow. jp morgan around goldman sachs coasting 200 points between them bank capital requirements were less strict than feared, but this morning jp morgan saying expectations for net interest income are too high and that turned those stocks lower. >> that wasn't even ceo dimen it was dan pint o bank of america outperforming. tech is getting a boost from oracle, soaring to a new all-time high. up little less than 11%. strong ai demand boosted its earnings more ammo for the camp that ai is real, ty and will add to tech company profits. i did a double take when i saw these results come in last night. broadcom, nvidia, both failing to deliver -- >> not really lighting it up. >> not in the least. >> here comes out of the pack -- >> right. >> horse race. oracle would be the seventh horse coming around the final

turn here it's done a very nice job. >> and just in time because just as the narrative can kind of turn, maybe we could still have that soft landing. have some ai, too, that's a nice setup. stocks some profit taking today but this is bolstering things. then to your point, not only the seventh horse comes out and delivers on the ai front, then the bank comments come out of the blue and say just as things are lining up, we'll pull back on the profitability forecast. >> on the profitability and probability forecast i guess the thing on the capital requirements was kind of a non-starter. >> helpful, yeah. >> but helpful but not transformative. >> nevertheless. >> not transformative. mr. ellison can buy another yacht. that's nice. speaking of the ai boost in big tech, d.a. davidson out with a new note saying that out of the megacap names, meta is the best positioned in the future of tech platforms initiating the stock with a buy target price of $600 i think it's in the 520 area right now. joining us now is the analyst behind that call, senior

software analyst with d.a. davidson gill, what is meta's edge, and why are you so confident it can add $80 to its stock price >> yeah. so if we think about the mag six we now cover all of these stocks, they're all going to benefit a lot from ai. some of them are getting the credit for that. microsoft, nvidia are getting the credit for that apple is getting the credit for that. it's meta and amazon that are not necessarily getting the credit for how well positioned they are specifically for meta, the next two big frontiers for compute are ai compute and spatial computing. and in both of those realms, meta has positioned itself best as the open platform provider. so if you think about pcs and mobile, we have closed provider, which is apple and then we have the open platform which in pcs is microsoft and in mobile is google but if you think about where we're headed in terms of ai

compute, microsoft, amazon, goggle are all fighting for that closed platform for ai compute and only meta has positioned itself to be the leader and open platform same for spatial compute apple has positioned itself as the leader in the closed system, with vision pro and where that's going to progress. and only meta is investing and investing heavily in being the open platform for spatial computing. so, they're doing well now they're not getting credit for it at 20 times earnings. and they're probably as well positioned as anybody for the next two big waves of compute. >> for give me for not knowing this gill. i guess i need a little of a tutorial on what open versus closed compute means, specifically in the ai area. what is the distinction here and why have so many of the others gone to what you describe, like microsoft and so

on and so forth, gone to the closed compute model walk me through and why it's so important. >> yes if you remember -- open ai was supposed to be an open compute platform for foundational models they've gone the other way they closed the model and they and microsoft control it and they control how the model works, what the weights are and sell that as an end product. google is keeping its google gemini as a closed platform and amazon is mostly aligned with anthropic, they know how it works, only they know how it works, only they know what the weights are, only they can control that well, meta has taken a different approach the llama model, you can see how it work. you can use it as you wish and you can control the weights to make it work for you, as opposed to have to pay one of those closed source models to use the model. >> gill, i also wonder how much

of this is meta using ai effectively to optimize advertising which is a lot of these businesses come down to. how important is that in thinking where the stock price could go >> incredibly important. of the group of six, the two that are not getting credit are meta and google. they're both trading at less than market multiples. and the reality is that ai is already helping meta's business. they have already gotten a lot better at delivering ads and getting higher yields using ai they are benefitting from that as a tail wind where on the ore other side, google is using market search to something less than that as ai gets incorporated. so of the two big megacaps that are not getting credit for ai, meta is already getting a tail wind >> where do you -- you just said something very tantalizing, that is that google is not -- it's commanding position in search is

under attack how much smaller will their market share be, do you think, in five years? >> i think that's the biggest debate on google and it's an on going debate. but we know one thing, which is once you're at 90% share and search, you can go higher than that there's only one way to go and the other thing we know is that the department of justice has picked this particular time to come after google search and its monopoly because they're saying as we transition from just search to search plus chat, ai enhancer, don't want google to have a monopoly that's in what they're saying. and therefore google will have to fight uphill from now on. >> thanks very much. i said earlier that facebook -- or meta was in the 520 it's about 500 and your price target is 600 >> maybe that's the eighth horse or whatever the analogy would be. tech stocks have been struggling lately as concerns

over the state of the economy grows. our next guest says the markets are broadening as profit o growths do as well more than 150 s&p 500 companies grew earnings 25% or more and the russell 2000 outperformed the mag seven in the past two months is more broadening ahead let's bring in rich bernstein. it's great to have you here, rich what are your overall thoughts on what's happening in this market, a rotation >> kelly, great to be with you thank you for having me. i think tyler mentioned before the horse race analogy and i think it's time to bet on the field. not even on the numbered horses. right? you should bet on the field here profits growth is broadening, as you pointed out. we highlighted there's now over 150 companies growing earnings 25% or more. the russell 2000 s&p small cap index are both outperformed the mag seven pretty handily in the last two to three months by 15

to 20 percentage points. that makes perfect sense right? if the field is gaining on the leaders, maybe there is a bet to be made on the field. >> maybe -- okay one of the questions is that people have are the russell 2000 -- the mag seven is down the way it is. spin this into year end. what do you think the picture looks like >> oh, i think kelly, we're at the beginning of something here. i don't think we're at the end of something i think that this is a natural rotation that when ever profitability starts accelerating, which it is doing in the united states, counter to what most people belief profitability is starting to accelerate historically what happens is almost literally investors become comparative shoppers. they say if everything is going to grow, why should i pay a high price for growth that's a normal process that appears to be going on in that a

broad range of cheaper assets are outperforming the expensive mag seven. >> so let me go back to something you said at the start. that is the idea that here is to bet the field, not the horse or certainly not the jockey. that sounds like you're saying go into an index fund or a sector etf are you? and if so, which >> right well, remember we're etf model managers, almost everything we do, not everything, almost everything we do involves etfs but i think the story here is that most investors do not have adequate expo sure to mid cap and small cap stocks, let alone they would be overweight mid cap and small cap stocks so from my perspective, you just want exposure to that asset class if you want to get picky, within that, that's another story. people are so underexposed to mid cap and small cap. for that matter, even emerging markets if you take out china.

>> that's getting attention as well people advocating for that you say,rich, the fed is about to cut rates as the profit cycle is accelerating, which it normally obviously they would be raising rates when that happens. but a lot of people would take issue with the idea that the profit cycle is accelerating so, can you speak to both parts of this? and how do you think it should inform what they do next week? should they be more conservative or go just a quarter or not at all? >> kelly, thank you for asking my opinion what the fed should do i can assure you jay powell is not calling me up and asking my opinion on these type of issues. but i think, look, the fed is going to be somewhat out of step i think we could argue about how much but they'll be somewhat out of step and that's because profits -- as profits accelerate, you tend to spur some additional employment, some additional spending and cap-x. again we could argue how much. and with lower rates, you may start stimulating housing which is a high multiplier industry. so, you know, this kind of being out of step is kind of an

interesting phenomena. doesn't happen very often. i think what's going to happen, my personal belief, is that that added liquidity will flow into more cyclical situations because that's where the profits growth is going to be >> all right maybe a double boost then for that area. >> exactly. >> of the market rich, thanks rich bernstein, appreciate it. >> he's getting ready for rangers season back there again. get one step farther next time rich, thank you. coming up, another gop spending plan stymied mike johnson's plan to extend government funding, unraveling after only a couple hours. is a shutdown around the corner with the election around the corner pressure is mounting we'll discuss this as well as tonight's presidential debate when we return

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♪ welcome back current vice president kamala harris and former president donald trump are set to debate tonight. all of this comes as another government shutdown could loom at the end of the month. here to weigh in what to expect in the weeks ahead, head of washington policy research at 22/v kim to great to check in with you again. listen, we know the debate can literally end presidential campaigns. so, the significance is actually, i think -- it sounds like many americans are still tuning in and the 3 in 10 according to one poll said it could influence the way they vote >> i think that's right, kelly and it's, as you say, unlikely to be as catastrophic for either candidate, although, you know, we don't make predictions in any races, certainly not this race but it will reset, at least, the perceptions of some unaffiliated voters and maybe members of the base so, yes, tonight is a significant event for both i would imagine that former

president trump will want to stress the advantages that show up in the polls, economic policy and leadership while vice president harris likely will lean in to her advantages, that include democratic freedoms and broad ranges of social policy, including health care from elder care all the way through to women's reproductive rights. yes, each one will want to protect losing any support among their base >> when you talk about the big take aways, tonight is more about presentation in a way, pers persuasiveness, charisma, perhaps more than policy on the policy proposals, thing a gated polls i see tend to suggest trump with more momentum in the last couple weeks as these policy proposals have been unveiled do you think that's accurate and what do you make of that >> i see that trend in terms of the snapback from the tremendous

momentum that the vice president enjoyed from july 22nd in the four or five weeks after that. most of the data i see show a competitive race at the top. most are within the margin of error. the sub presidential level in the house and the senate, particularly in swing states, harris held on to some advantages she's gained in the last month in some key swing states and in the house in particular election analysts are moving from the surge in republican category or toss-up or leaning to democrats in some of the states such as florida, nevada, arizona, georgia so, we would expect a very competitive race up and down the ticket with close margins regardless of the bhalance of power after november 5th. >> kim, i wonder why you think the democrats and kamala harris in particular have had such a

hard time making the economic performance under the biden/harris administration. growth is higher than it was in the previous administration. jobs have been added at a very high pace. oil price is coming down production of oil is all-time high inflation is falling from a high point and 38 stock market records so far this year why doesn't that message stick >> tyler, from your lips they would say to voters ears but i think it's very straight forward reason americans are facing relative to any time in modern history tougher prices on the household budget and whether or not the biden/harris administration and the vice president deserves blame for that is irrespective incumbents absorb disproportionate amount of

blame. it also represents an opportunity for the harris campaign to stress the points you made. >> does it matter that congress could end up not being on the campaign trail if there's a shutdown fight in sort of the october weeks as the november election date approaches, given what you said the way that fight is looking >> it would matter immensely, i would think, which is one of the reasons we're highly certain there's not going to be a shutdown >> all right >> all right kim, thank you very much kim wallace, we appreciate your time today and still to come. well, let's see what's still to come natural gas on the rise over the past months. the technical trade for that space when we return with our "market navigator. ♪

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welcome back to "power lunch. there's your look at the markets. the dow, the only one of the three major indexes in the red off by about half percent. s&p 500 marginally higher. and the nasdaq up 100 points or .6 of 1%. joining us for today's "market navigator" is dom chu. hi, dom. good to have you here because you understand this stuff.

>> this is an interesting trade. it's not stocks this time around we'll look at the end of summer, but a lot of folks are looking ahead. one technician is seeing several things coming together for the natural gas trade of all things as we head towards the cooler months of the year 75% decline from september of 2022 is what we're doling with in context as you can see here joining us is katie stockton, managing partner of fairly strategies and cnbc contributor. thank you very much for joining us here, katie i guess what we want to talk about is what is the trade on natural gas? i ask because it's been known in the financial circles widow maker type trade very volatile and has the ability to shake a lot of people out. why nat gas and why the trade? >> it's a long-term down trend and there is of course that risk however, we see signs of basing in actual gas now for really a couple of months so just this month natural gas prices have seen their monthly long term momentum gauge flip to

a so-called buy signal for the first time since the beginning of 2023. so, for us that feels like a meaningful shift in long-term momentum that's one case for it we've also seen short-term momentum improve enough to lift natural gas futures above their 50-day movieing average. they're now testing the 200 day moving average as you get through the key moving arches, it tends to catch a bit more off of that once through around resistance around 227, we expect nat gas to see follow-through to secondary resistance which is roughly 257. >> okay. if that's the trade, how tight would you make stops it's not that we're asking you because you're a technician. we understand that but as a trader, if you're looking at this, you target an upside that you talked about what kind of trading strategy would you use to limit your risk in that kind of a scenario >> the support level is around 190. so that's the catch, of course that would be a lot of risk to

take on a position that is directly in natural gas futures. we think futures should use a percentage base loss stop. whatever they're comfortable with in materials of their broader portfolio. we're looking at natural gas in part because equities don't feel like they're offering a great entry point. we're getting creative looking for opportunities some of like nat gas are counter trend. ung and etf, is one. if you look at that chart, ung has continually seen relief rallies within its down trend right up to its down trend 200 day moving arch. there's about 23% upside right now to that 200 day moving average compelling to us combined with this improved momentum. >> all right katie stockton with the trade on natural gas as we head towards the colder months. thank you very much. we appreciate it. >> of course >> amazing how much natural gas has come down over the past two years. there you see it. >> at one point -- >> that's pandemic-related.

>> about two years in august. >> in ukraine. >> in august of 2022, just a little other two years ago, we're talking about over $10 per million british thermal units. we're at 223 to give you an idea what kind of down trend that katie was talking about. but there's -- >> she says your low point would be 190. >> yeah. she was targeting that but again this is crazy. it's often weather related but it's not typically just easy just to say, buy in the summertime and then sell in the wintertime it's been a tough road for a lot of nat gas traders. >> dom, thank you very much. dominic chu. kelly? >> ahead on "power lunch," jp morgan dragging the rest of the big banks lower. weak guidance shaking investors. after the break, we'll here from brian moynihan directly. we'll be right back. (cheerful music) (phone ringing) [narrator] not all multi-millionaires built their wealth the same way,

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feared, but this morning we got some guidance from jp morgan investment banking fees are tracking below the street's forecast the company saying expectations for net interest income in 2025 are also too high. that stock was down 7% at the lows 5% now, but it could be the biggest decline in four years after that update. for more let's send it other to sara isaac live at the conference in new york city, sara, with another major name in banking. with ceo brian hoin man. >> thank you thank you for taking the time here at barclays. >> great to be here and see you again. >> kelly was just running through some of the headlines that were moving some of the bank stocks lower. coming from the conference where a lot of executives are warning that expectations were too high around the business. what about you do you show those sentiments. >> the question of net interest income, we have 14 billion for this quarter and fourth quarter will be higher than that that's a trajectory we set back at earnings and stayed with it

from credit, credit is good in a company. so we were more confirmatory of prior guidance with two pieces interesting, trading revenue is sort of we think will be up low single digits that's kind of counter to what we heard. >> down 10%. >> yeah. in our investment banking ref knew would be softer in our mix of business in this quarter won't be as strong they have done a good job of pushing us up to third or fourth position of business we're fine with that we said 1.2 billion which is basically flat to last year. >> so, on the net interest income question, that's always been a question mark this whole cycle. and now that the outlook for interest rates has changed so much, how does that impact profitability going forward for you? >> well, it's 14 billion plus a quarter. peaked at 14.8 billion and went down to 13.9 last quarter and coming off of is that. we take deposits, make loans and have wealth management fees and we have trading revenue and all kinds of stuff

but it's a big part of our revenue base we have 25 billion revenue a quarter and 14 of it is nii. by the way, it flows through the profitability faster because if you -- if you make more margin off the same deposits, it obviously benefits you >> what are your expectations as far as rate cuts from here >> so our team, the best in the business, they now have three cuts in the fourth quarter, beginning in the september -- >> yep. >> ultimately end up terminal rate or terminal shrt rate or end point 3.75, 3.5. there's a big debate whether it's 3 or 4. the real question is somewhere over the next six, eight quarters you'll get to the end point. our team believes that is 3.25, 3.5. fundamentally higher interest rate environment than anybody has been in the business really since 2006/'07

so think of how long that is where businesses really not had that much of a real rate environment, real nominal rate environment. so that's the real thing to pay attention. not necessarily which happens which quarter, where we'll end up and how that affects the economy and borrowing and business after that. >> so you think we should get used to higher rates ultimately wherever this ends up. what are the implications of that do you think the market is mispricing that. >> that's a good thing that's more normal environment we can't have a low rate structure, you know, it means the economy isn't performing you're not getting enough inflation. i was talking to a forearm central banker and he said, why are they trying to cut off inflation, 15 years to try to get inflation back and we finally get it back. so there's a debate. as you move from down towards the level of 2%, the target, you have to slow down and make sure you stay above it because you can't average 2% unless you're above it sometimes because you know you'll go below it. a higher nominal rate is better

place for u.s. economy than a very low rate structure. we learned that in 40 years in japan. >> jamie dimon warned he is worried about stagflation. sound like you don't agree with that >> our research team says no stagflation right now because they believe that the underlying economy grows at 2% as we move into the end of this year. bottoms out at 1.5 and comes back to 2. that is all sort of trend growth rates. we see that with the unemployment up to 4.4, 4.5 and trends back down and what we see is consumer activity is consistent with low-growth, low-inflation economy and has stabilized that was important because it came from a very fast growth rate in '23 first part versus '22. slowed down as we came through '23, we sort of normalized after covid. but the worry was that we keep slowing down and now stabilize about 4% -- >> consumer is not getting worse right now? >> they're very stable. >> allied at this conference warned that auto and car

delinquentsies were worse than expected. >> we're seeing them come out where we thought they would come out and delinquencies have gone back to where they were more or less in '19. and again, people forget that '19 was a very good credit year for our industry it was like a 50-year credit low to give you a sense that's how good it was. we're only back to around that and in the consumer side and consumers have the money in their accounts they're spending wisely. they're employed getting paid more. inflation is tough on certain income strata. unemployment has kicked up a little bit job market is softer this is why the fed has to get more accommodative the real drag on the economy, the real rate structure is 200 bases points plus and they have to start to normalize that. >> right but it doesn't sound like you're in the growth scare camp >> we don't see it literally for the month of august our consumers spent 4.a 5 more money than they spent last year with gas prices providing a benefit of 7 or 8% year over

year. >> labor market is softening, isn't it >> this is why the fed has to start moving. >> is it late, the fed. >> we'll see we'll see. this will be easier to tell after the fact i worry they could be late the risk is much more to that side. >> should they do a double to catch up >> our team is still at 25 bases point. again, that's not the important thing. it's actually to start doing it instead of talking about it and you saw consumer dip as low as 3% year over year activity in our customer bases you heard about all the travel it was interesting because prices have come down. the number of units spent, number of times people spent on their credit card and travel went up, but the dollar volume is flat. and so you're seeing price pressure come in to the providers bringing prices down to get more volume so i think the economy is normalizing. and that level of spending is where it was in '17, '18, '19, rates come up, inflation was a couple percent. >> not that bad. >> that's where it should be our team has been very consistent they took the recession off the

table, five, six quarters ago. earlier most people but our research team saw it as saying this thing is stabilizing. the danger is they don't start cutting fast enough. they know it they'll do it. they said they're going to do it the question is now you have to really toend the day to day impacts of the economy. >> the fed, the vice chair bar for supervision came out with the highly anticipated reproposed rules for basel three end game are you satisfied with the new rules? >> one of the things i hope is that in the great show you all have and all the things you talk about, you quit talking about banking regulation >> you are talking about you complain a lot about it. >> we do because it's our job. so basically our industry is well capitalized you know, you heard multiple fed chairs say that. vice chair supervision said that after the financial crisis, a set of rules, a set of capitalization got up there. the to-do was to basically adopt the internationalcapital

standard called basel 3. this is a big debate at first they showed us a set of proposal would have been average 20% increase on risk weighted assets and now they're cutting back to 9% based on vice chair barr's comments. it feels a little that old phrase, we'll show them death and they'll take the spare the end of the day -- >> you don't want any of it. >> the question is why at bank of america, we have enough capital. >> safeguard the financial system >> well, it's safe we have gone through ups and downs and covid and out of covid and hyperflation but when you think about europe, the question is, this is a question of normalizing a capital treatment between us and europe we have a whole different bases of gold plating stuff. we'll see the rules and the proposal and how it plays out to our economy. we don't know that yet because it's not published the end of the day we'll figure out what it means us to and the rest of the industry will figure

it out when you look at it overall, our industry is actually the envy of the world. and just had papers put out for the need for yoorp to get more productive. >> look more like the u.s. >> be more like the u.s. when you go over, the banks have not been able to recapitalize and earn money they need the enthusiasm back in the economy. it's not banking technology, it's a lot of different things because their economy pre-financial crisis is relatively the same. ours is almost 1.7 times bigger and that's because we took on the task and got through it. >> you know the political environment. you're sort of talking around it that has a lot to do with what's happening here i do wonder with kamala harris's chances increasing of winning or having increased at least since a few months ago, if you're more willing to accept and embrace these new regulations because it could get worse. >> so, when people ask me about

politics i say our company started in 1784. that election in 1800 was a tough election >> i'll trust you on that. >> the elections go back and forth. so our job is to run the company through all different environments so if you think about it, the new rules coming out at the end of bush administration, the obama administration, the dodd-frank and all that stuff. the industry adapts. when do you want to get the balance right between capital requirements, liquidity requirements and everything and the real economy >> right that was the warning on the previous rules that it would hurt lending, hurt our economy, create all these unintended consequences. >> made a big adjustment to balance that risk/reward and cost and risk and cost toe the economy and risk we don't know what's in it we'll have a speech. see it as an industry and figure out what will go on. but it clearly -- new proposal -- the beliefs they had the balance not correct. by the way, that's the way the vice chair opened his speech we have to get the balance back and here is material proposal changes to make that happen. >> final question about costs.

you mentioned how ai fits in for you for that outlook and whether it will be a game changer for a company whose biggest cost is labor. >> it already is people think of a ii as discree thing. machine learning, digitization, customers doing stuff digitally. you think of it very simply stated in 2010 i became ceo. management team took over and done a fantastic job we had 285,000 people. we went up to 305,000 people today we have 212,000 people the company is bigger. with do a lot more stuff a lot more customers doing a lot more transactions in markets or banking or consumer. yet we have -- that's all through the power of digitization ai just gives you another level of competence in scale our example eric use erica to answer questions. it's a virtual assistant powered by ai. now we have taken that and our

employees use it erica for employees which a lot of the tasks that you might ask about benefits enrollment, we have automated that it's answering the questions. then you go to our cash pro, gps, payment service business, erica is integrated into that, 500,000 units, a lot less number of customers but they use it we believe strongly it's a game changer. you listen to the big providers of software, they're embedding discreet models, large language models and also salesforce, microsoft are embedding this in their basic software that will change software will become ai-enabled overtime that means big purchaser of software, integrator of software, we'll get benefits all over our company. >> it's a whole hour-long discussion for another day it's interesting to hear your enthusiasm thank you so much, brian, for taking the time here at barclays. >> thank you. >> a lot of hot topics brian moynihan, ceo of bank of america, tyler making me feel a little better

actually about the economy for some of the growth scares that we had lately in the markets. >> absolutely. sara, thank you very much and to mr. moynihan, thank you as well. let's go to bertha coombs for a cnbc news update >> tyler, the israeli military says the six hostages found dead in gaza nearly two weeks ago were executed by hamas the night before israeli forces reached the tunnel where they were being held the discovery of their bodies late last month sparked large protests in israel, thousands marched in the streets to demand a cease-fire agreement that includes the return of all remaining hostages in gaza the white house said today the hostage killings could complicate u.s.-backed efforts to secure a deal there are no reports of injuries after a delta plane clipped the tail of another aircraft on a runway in atlanta today. the faa says just after 10 this morning, the delta plane bound for japan struck an endeavor air

regional jet while taxiing the collision appeared to have knocked off the endeavor plane's tail and small businesses are feeling less confident the national federation of independent business says its optimism index slipped in august after surging to its highest level in more than two years in july the group says business owners are feeling more uncertain ahead of the november election and expectations of weaker sales. tyler? >> thank you very much remember, everybody, you can always hear us on our podcast. follow and listen to "power lunch" wherever you go on cnbc podcasts we'll be right back. >> announcer: crypto watch is sponsored by grayscale crypto investing begins with grayscale. ng their clients on track.

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welcome back to "power lunch. the dow is down a third of a percent today following those cautious comments from jp morgan weighing on all the major

financials the s&p and nasdaq are still positive, but it's not just the big banks which are under some pressure today check out ally financial down 17% after the cfo and presentation at the barclays conference was just at this morning, borrowers are struggling to repay their loans. tyler, just to read his direct comments he said over the course of the quarter, credit challenges have intensified. or borrowers are struggling with high inflation, cost of living and more recently weakening employment picture harris campaign might bring up during the debate tonight. >> that's a serious cut in percent. >> yes bond yields meanwhile are slightly lower ahead of tomorrow's cpi report. 2.9% from a year earlier anything back in the 3 or if question continue to drift lower. bond yields down significantly that will be the last major read on inflation before the fed's meeting next week. >> and we will be in washington together for that meeting next week on wednesday. >> i should book that travel, yes. >> i did mine yesterday.

folks, boot barn is higher after the western warrior had same store sales growth for the second quarter we're going to trade the boots in three stock lunch next. quarter. we're going to trade the boots in three stock lunch, next

welcome back let's squeeze in a little three stock lunch here with victoria green, a cnbc contributor, victoria welcome to you. and let's start with bank of america as we just heard from ceo brian moynihan, they raised their minimum wage and commented on buffett saying we didn't ask why he's selling the position. what do you think? >> i think bank of america is a sell they hit peak net interest income they have struggled to grow their loan portfolio you look at that net interest coming down, loans haven't grown as

much he had an optimistic tone but maybe buffett saw something i'm team buffett, it's a sell for me >> let's move on to a stock that's moving higher today oracle, shares soaring strong a.i. one of the reasons demand forming a strategic cloud partnership with aws your trade on oracle >> they're a buy they're the nextgen oracle powering a.i., talking about the t data centers they're building. you can fit boeing 747s in there, they're that massive. they're powering, microsoft, google, they have massive expansion and backlog. i look at this, this trade is alive and well it's expensive but the growth story is there they'll grow

backlogs, revenue and cloud silicone valleys now, it's a shift and a new paradigm and new day at oracle. >> another stock that's jumping is boot barn they announced preliminary same store sales growth of 8% what would you do this with that i mean >> for me it's a hold. i love this stock. most analysts love the stock i think it's expensive here. hard to jump in at this point, 160, 173, a couple of upgrades from jeffries, they're a good stock just expensive i think of the brooks and dunn song boot scooten boogie that's what this is doing are people drinking more when will? consolation brands said it's going to write down the wine and spirits business is this trend a temporary decline or more permanent

problem? joining us to discuss is nadine s s starwatt what's going on here alcohol volume down almost 5% in 2023 who's drinking less and what are they drinking less of? >> we have viewers thinking about their own alcohol consumption at the moment. but per capita consumption was down almost 4% in 2023 this follows a stable period in america of alcohol consumption on a per capita basis leading up to 2019. in covid, that specked a in covid, that spiked and the real question that people are having is is this temporary and cyclical or is it structural when they ask the structural question they're talking about perhaps younger consumers

drinking less, asking about cannabis and glp 1's. >> so is it structural or temporary, what do you think flick in your thoughts about cannabis, glp 1s and younger drinkers. >> absolutely. that's the billion dollar question, isn't it we think the vast majority of the weakness we have seen is temporary cyclical factors, the first half of that was very much normalization from covid that high basis of per capita alcohol consumption during the covid years wasn't sustainable we are coming back down to something that resembles more what we had the past history but also seeing the weak consumer the theme of consumer staples was a challenge, and alcohol is lumped in bmany ways with s staples. there's no private label

penetration which reflects that our brands mean a lot to us and we like to trade up. young americans, there is signs 21 to 22-year-olds are drinking less however it doesn't look like this is permanent once the consumers enter full working adulthood they're r reverting back to the trends and a lot of young americans came of age during covid, hardly normal and cannabis, there are signs if we look at canada and the u.s. where certain states have le legalized cannabis we have seen impacts with beer volumes with wine in the middle and spirits not seeing as much of a hit. cannabis being a huge topic of conversation following former president trump's post saying he supports a rescheduling. and glp-1s, there's an evidence that it cuts your desire to consume alcohol.

but the real question is concentration and the correlation between high alcohol drinkers and that target obese american when it comes to the standard use for glp-1s. unlike full sugar soda we find the overlap is neutral. >> it's interesting because the larger question is whether young adults who are drinking less as they start their careers would potentially be dealt some kind of setback or not be able to fully -- to nadine's point that's not where we're seeing the real weaknesses. the younger age catches up once they get in the workforce. >> is cannabis competing with beer i think the occasions where one drinks versus the occasions where one takes a gummy are different. >> i think you put it very well. all of this is about occasions when you consider the preferred

occasions for alcohol drinkers, two thirds say that's social with friends and family. cannabis tends to be more solo or intimate occasions in the home we're seeing those environments where perhaps beer is your afterwork relaxation of choice or a glass of white wine it's can bah lazing but i think your tailgate is safe. >> thank you very much we appreciate your time today. and your time. >> oil settled at a three year low, by the way. "closing bell" starts right now. welcome to "closing bell" i'm mike santoli in for scott apner. this hour begins with economic slow down concerns setting the tone and restraining the major indexes which haven't been able to build on monday's rally to outrun the hard landing fears. you see the s&p 500 up about one third of a percent, plus or minus around the flat line all day. a few megacaps r