switch to shopify so you can build it better, scale it faster and sell more. much more. take your business to the next stage when you switch to shopify. good day, everybody. welcome to "power lunch. glad you could join us there's lots of b's on the menu. star starting with burgers as mcdonald's extends its $5 meal promotion. i guess i would say why not.

it looks like it's improved guest counts, improving sales and the competition is doing the same we look inside your home it will talk about home fur furnishings as people are talking about inflation. some of the categories are where it has, but how do you invest around it. >> also watching biotech, moderna has been a problem child. down more than 10% after it cut its 2025 rev guidance. this company hadn't been below $60 since 2020 or october 2020,

and now it's obviously struggling they are cutting r&d >> there's more focus now not on anything covid related, not even on the flu combo vaccine, it's about the cancer franchise that they say can pay off you're seeing the stock today which needs a bigger reprice basketball billions will also be on the menu today. the milwaukee bucks are now dealing with a new valuation of around $4 billion. i think we're going to talk about this a little later on >> there's a new television contract that's going to really help the nba it's still under some dispute, but a new partner has been brought into the management or the ownership group with the bucks. a very successful entrepreneur has coca cola bottling plants and other things that he's going to have. >> i always think about the

sellers. it's like why are they selling why did mark cuban pair back >> they made their money they got in. >> will the next generation? >> you think about what jerry jones, like $200 million for the cowboys. now it's worth $11 billion boeing the latest company to deal with labor unrest the ceo of warning of consequences of a strike even though the union representing workers said on sunday they have struck a deal with the company that maybe the best deal that the union has ever made. workers are still sore over a deal that the union made a couple years ago under which they lost pensions and had to pay more for health care benefits >> it's a good point about the ramification, even when you get it, it could be as soon as friday boeing doesn't need another headache let's take a broader look at the markets, which have been improving throughout the session.

some would say "the wall street journal"'s report about an hour ago saying that there could be a close call between 25 and 50, maybe rekindling hopes of the bigger rate hike the dow is up half a percent the nasdaq up 1.2% inflation data a little hot, but also the core pci implied measures so again, is it 25 or 50 is kind of the overarch ing question >> my guess is it will be 25 it will be more incremental than and 25 now, 25 in november, maybe 25 in december but what do i know >> that's what they said last hour let's start with today's special on the consumer. mcdonald's announced they are extending the $5 value meal into december one of our next guests says this will keep the fast food va valuerers raging our other guest says another group could be winning in terms of stock value joining us are jonathan mays and

andrew charles welcome to both of you jonathan, starting with you, to tyler's point earlier, is this an offering that's worked well all around or any who will be hurt by the franchise name >> you're going to have franchise in high cost markets that could have some issues with this particular deal but it's kind of the reality that we're in right now. restaurant operators probably have to donate some margin over the next year or so because consumers need this value. you could see some certainly some franchisees in california that could be hurt by something like this, for sure. >> what do you think of mcdonald's the stock >> we think that with mcdonald's stock, there's better opportunities elsewhere in the sector the call is really that as we

look at the value environment that jonathan was touching on, frankly, we view it as noise we think this is going to drive market share gains, but not really lead to trade down in the industry so it really comes down to how much can they pump out the innovation we had the collectors cups going back over the brand's success from 2020 through 2023, they were just a machine pumping out famous orders. the adult happy meals, we need more of those. so on tap, we have chick big mac comes down to how much marketing they can put on these to really help drive and overpower the softness and quick service they are not immune from. >> i take your point broadly speaking the poster image of the inflation. a lot of consumers have experienced in recent years was the $9.19 mcnugget meal.

nobody wants to pay almost $10 nor chicken nuggets, fries and a soda mcdonald's, to me, clearly has to dial that way back if they want to just be perceive d as a place people can go for that everyday meal. >> i agree within quick service, it's always about a three-legged stool between value and operations our concern is mcdonald's is going too teep on value while ignoring the big things out there. we're most excited about chicken strips that are going to be coming in the middle of 2025 we think that's certainly on brand and something that competitors said they could use more of. they are going too deep on value to solve this problem that is more debtment the for profitability. we think the fran chiez profitability not boding well for their narrative. >> takes through the discussion of quick serve versus fast casual and who is winning there and why?

>> it's a pretty fine line between quick serve and casual what we would be considered casual is without any question you've got wing stop is doing 45% sales on a 2-year basis. to put that in perspective, that is higher than the 2-year number that popeyes did in a fourth quarter of 2019, which you recall was the quarter they introduced their chicken sandwich you've got chipotle, which despite all of this noise about its serving sizes, still did 11%. the privately held raising cane. i hadn't heard of it two years ago. >> they are ridiculous

they do $6 million per store in all they do is cell chicken fingers. >> there are a lot of concepts, i come back to the price why would i pay $10 for chicken nuggets, fries and a soda when i can pay $15 for chipotle >> i think that's exactly what's happening. a lot of customers are saying, well, i'm not going to pay these prices i'm not going to eat at fast food i'm going to go to a convenience store or i'm going to eat at home with food i bought from walmart, which is definitely happening. they are going to go to chip polt lay they are going to go to chiles they did $14.8% by essentially

telling customers that they are a better value than fast food. >> react to what jonathan just said you see it the way he does the trade amongst lower consumers to food at home, we're seeing amongst middle income consumers their value consumers better than what it is in quick service. said differently, while it maybe more extensive to go to a fast casual restaurant, the value of what you get there, the high quality experience is something that consumers are placing emphasis on now. we think this will continue. we think fast casual is the the place to be as we have cava and wing stop. we think this is going to qu continue while they continue the race to the bottom, fast casual is on

this island that will persist. >> i take point both of your points here. you can mimic a really good, your wife is amazing she can make a really good bowl with chicken and the whole thing. thank you as well. >> i'm going to her kitchen any time >> name and place. a meet ing of top ai executives in the administration officials at the white house among them open ai ultimate. and the biggest name in ai, nvidia's genesis wong. we grabbed wong for an exclusive interview. >> that's right. this was a meeting between biden cabinet officials and ai leaders, including those you mentioned, to talk about building out ai infrastructure they were discussing specifically how to meet the energy needs for ai and the

focus was really on building a public/private partnership on this front and finding ways to ensure they are addressing the technical issues, things like workforce and permitting so it can remain a global leader on ai when we caught up with wong, he told us everyone is grapple thing with the the size of the task at hand he said he absolutely sees a role for federal investment to work alongside private investment in building out this infrastructure take a listen. >> the new industrial rev revolution, this industry is going to be producing intelligence what it takes is energy and a lot of great computer science and large computing systems. so we've got to make sure that everybody understands the needs coming, the opportunities of it, the challenges of it, and doing the most efficient and scaleable way we can >> wong told us he believes the biden administration is determined in his words to meet the needs at hand. when i asked whether there was enough money behind the effort

at this point, he told me if the u.s. doesn't have the money, he doesn't see any other country that could take advantage of the ai industry. >> megan, thank you very much. we appreciate it let's talk a little bit about his response to a corporate tax rate >> absolutely. i asked him about the various proposals between the two candidates what he said was that nvidia is happy to support whatever the tax policy is in the u.s he said that the company had really benefitted from u.s. infrastructure, from the intellectual capital here in the country. they are happy to pay it back through taxes. he didn't want to commit to one candidate or another i tried to get him to talk about that, but on taxes specifically, he said whatever it is, we'll support it >> probably wise not to commit because i suspect that republicans and democrats by nvidia's chips thank you very much. appreciate it. coming up, how close to home is inflation hitting we looked at the cost of lumber and material used for construction

today we look at what fills the home out, furnishings. our power house blueprint continues, when we return. ♪ ♪ ♪ ♪ ♪ ♪ ♪ ♪ ♪ (alarm sound) ♪ amelia, turn off alarm. amelia, weather. 70 degrees and sunny today. amelia, unlock the door. i'm afraid i can't do that, jen. ♪ (suspenseful music) ♪ why not? did you forget something? ♪ (suspenseful music) ♪ my protein shake. the future isn't scary. not investing in it is. you're so dramatic amelia. bye jen.

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switch to reliable comcast business internet with security and get started for $49.99 a month. plus ask how to get up to a $500 prepaid card. call today! welcome back to "power lunch. inflation data continues to roll in we have producer prices, which shows slowing inflation, but still hot in some areas. over the next few days, we're going to zoom into each part of your home breaking down how inflation has impacted each particular section of the house and laying out the potential stocks to play today we look at furnishings companies like rh, willia williams-sonoma. it reports that prices for bedroom and living room furniture are down 3 and 6% respectively anthony is managing director and

senior analyst at loop capital markets. i assume that this decline in prices is that housing turnover has slowed >> that is certainly a big part of it. housing turnover has been quite weak we got a bit of a head fake. we thought numbers were going to get significantly better that has not happened. the other thing that i think is reflecting those numbers is i think that the home furnishings retailers got a little too greedy during the pandemic when they just couldn't keep items on the shelves. they probably raised prices a little too high. now they are having to kind of roll those back. because demand has weakened so much >> i'm curious because it's come up in the context of the campaign of price gauging. and i'm frankly suspicious that many companies literally engaged

in price gauging but during the pandemic, you had two things happening you had supply chain issues that were constricting the supply of goods on the one hand, and you had money flowing into the economy in the form of stimulus packages and lower interest rates. so more dollars chasing a restricted number of goods or constricted number of goods is an obvious recipe for inflation. i guess companies just took advantage of that cover after years where they had no pricing power whatsoever really. >> i think you're 100% right my freshman year economics professor would be very proud of what you just said supply and demand basically dictates price when supply is constrained, as it was, and demand is elevated, as it was, prices are going to go up. i'm not sure if that's necessarily true

>> i'm just envisioning elizabeth warren going after rh because they raised furniture prices 43% instead of 20%. when we're talking about something that's not a grocery item, how do you know the right price? they are still in the process of finding out. sometimes the answer is it depends. >> that's 100% right you talked about rh. rh is hard to gauge what the right price is because they don't sell the commodity price to find it at other retailers. the right price is what someone is willing to pay for it rh has talked about the fact they probably the took too much price and they are in the process of bringing prices down because once again, supply and demand has kind of gone the other way. there's plenty of supply and demand >> this is an interesting echo of the discussion. the question on the furniture piece of things would be can you own companies, which are cutting

prices that's a tough thing to do to raise revenues and to increase earnings when your top line numbers are potentially coming down because your prices are falling and your sales are falling. >> certainly, if the demand is there, in other words, if the volume more than offsets the price declines, that can still work we're not seeing that right now. that's for sure. so not only is there pressure on prices, there's pressure on just unit volume. >> that leaves you where on positive across the board, a couple favored names, just real quickly. >> on the sidelines, if i had to pick one, williams sonoma has done a great job at maintaining margins. if demand gets better, i can't mohow much money they are goingo earn >> we have been through a lot of kind of 101 here of stock picking and macro. this is a good case study.

thank you for your time. >> i'll just observe that there are a couple of furnishing retailers like ethan allen, i see their stores closing >> absolutely. there's pressure on them >> we do two years ago, it was the best of times and how quickly that can change >> people were nesting people were using money from the stimulus packages that went into their pockets and outspending and refreshing their homes because that's where they were gold prices are a different story. getting close to $2600 an ounce. is there more upside to colt market navigator is next at t. rowe price, we help advisors move forward by building agile etfs designed to outperform the index. that's the power of curiosity. better questions can lead to better solutions. t. rowe price. invest with confidence.

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welcome back to "power lunch. with a quick check on the markets turning higher, perhaps on rekindled hopes of a rate cut after some reporting in "the wall street journal. the nasdaq is up 1%. the navigator, we're focusing on gold futures and the bullish case for this commodity, which continues to make new highs. chief market strategist, gold's

run up 25% this year, has caught many people's attention who are wondering is it too late to get in >> i don't believe so at all i think that gold futures, being one of the best performing commodity classes, it has strong buying we expect this trend to continue it's a great hedge against geopolitical risk. they occur unexpectedly. it's backed near four-year highs. any correction should be shall t low in nature. the current economic environment is ideal for owning an asset class like gold. the economy, we have a soft landing. there's no signs of recession. inflation is trending towards the fed's 2% target. it's not crashing. and powell said it's time to adjust policy. gold is the asset class you want to own >> any risk that retailers start piling in at the moment banks purchasing declines? that's been a huge source of

demand over the past couple years. >> that has happened china has taken a step back on the central bank purchases they tend to revamp and repurchase again we think that central banks broadly are going to continue to divest themselves from other currencies and focus on hard assets so we think this is more of a long-term trend that will take place. >> what is the trading range that you have received if you wanted to get super spisk specific about that. how would you play it? >> if you look since 180, gold futures rallied 6% within the first 30 days of an interest rate cut second ly, we have seasonal strength where 13 of the last 15 years, gold futures rallied from september 30th to october 25th we really believe that any kind of pullback on the gold market should be shallow. so we're looking at purchasing at 2540 an ounce

and then we would target 2750 by year end we prefer to have a stop loss. just a simple thing which is $60 range and 2 times the volatility purposes >> you think you keep that tight, maybe hope for more upside as you continue to ride this out to year end thank you for joining us we appreciate your time today. still to come, a miami market is crashing on the other hand, new luxury builds are on fire so what's working and what isn't? we'll discuss that, next

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would require the bank to enhance antimoney laundering practice it does not include a monetary penalty, so it's a type of enforcement action, not a concept order. out with a statement today saying, quote, we have been working to address a substantial portion of what's required in a formal agreement and are committed to completing the work with the same sense of urgency as our other commitments the occ saying the agreement requires the bank to now take comprehensive corrective actions to enhance bank secrecy and act in u.s. sanctions compliance program. you can see shares down sharply >> interesting drop there. thank you very much. condo craziness is taking place in miami while the bottom end of the market is struggling, luxury is holding in just fine the condo building going up in fisher island and just broke ground and the two penthouses already sold for stung numbers

let's bring in dianna with all the details. >> hold on to your wallet. they just broke ground, they sold for $150 million the and that's cash. the ten-story building will have 50 residences from 3 to 8 bedrooms with an indoor and outdoor spaces all of the amenities come with the building is now nearly 60% sold and should be delivered in 2026 i spoke with the developer george perez, the ceo of related group, also known as a condo king of miami about the current state of the market. >> look, i'm paid to worry in 45 years, i have seen many ups and downs. i think the south florida economy, in particular, will continue to have ups and downs those people that tell you it's going to go straight ahead up and up, it doesn't and why doesn't it because developers are a little

bit of cowboys they overreact to the increases in demand. the demand is still there, but the competition, i think, is going to be brutal >> luxury condos are selling, but older buildings are facing big new expenses following the collapse of the surf side. that's creating a huge divide. take a look. sales of miami condos prices below $300,000 were down 9% annually in august with new listings up 83%. both of those are older condos the sale priced above $5 million, mostly new product, were up 100% new listings up 37%. i asked perez what he thinks will happen to those older buildings. >> we're going to be seeing more and more of the older buildings being demolished and new buildings probably more high-rises being built in south

florida. >> related group is breaking ground on five new luxury buildings in just the next three months back to you guys >> so part of this is driven by, az understand it, we're going to talk about this more, part of this is driven by revisions to building codes following that collapse in surf side where older build vgs to bring their products up to newer code. >> yes, exactly. that can cost millions of dollars. so you have the owners of these condos who are looking at higher fees to con doe associations trying to unload these properties i spoke with another expert who said if you have an older condo pre2000, you can't unload it those were his words people are trying to when you see that inventory so high it's the new fees that are costing the condo board, the condo owners that really want them get ting out >> thank you very much

let's pick up where dianna left off on the miami condo market and turn to someone with firsthand knowledge and experience in luxury real estate in miami back with us is the real estate agent at ancona real estate. let's address that question. you have older buildings, lower market prices that may now be hit with very high -- the owners may be hit with very high assessments to bring those buildings up to the current code and avoid a tragedy like we had in surf side in 2021 are those going to be able to do that or ultimately are many of them going to go into receivership, get bought by opportunistic investors, that's a nice way to put it, and demolished and replaced by luxury high-rises? >> that's the big dilemma. for happening. condos are selling around

$120,000 with an hoa so it's not sustainable. the buildings have to keep up with the new recertification law that came about after the collapse and they don't have enough capacity to put the building structurally sound and up to code the homeowners either have to cope with the expenses, which is very unrealistic for a person that can afford $300,000 condo, how are they going to be able to pay that a month on top of insu insurance. >> so what will happen many of these people have been in condos since they were built in the 1990s or 1980s or earlier. where do they go as they are forced now to sell into a depressed market where buyers are going to say, hey, i don't any part of one of these buildings where i can't get it

insured. i maybe subject to rising hoa costs. >> they have a few alternatives. either sell at a loss and hopefully somebody can cope with these expenses or leaving the property and see what happened the bank may take it back. if they don't have the funds, there's not much they can do there's nobody willing to cope with these extensesthere's not much you can do. >> what does that mean for the housing market in miami more broadly? >> sellers don't have the upper hand we are up 60 to 70% increase in inventory compared to last year. they maybe willing to pay the empire assessment before closing, depending on how much

the assess the is. they may walk away with zero dollars. if that's what's happening in the condo market, they need to be flexible. on the buyer side, i urge buyers to not only look at the floor plan, but check what is the financial state of each condo, of each building so buildings that are 40 years are handling that. so prepare for that. ideally, it's a condo with enough financial research, that's a new law that is requiring condos to have a certain amount of financial reserve. and they have more options >> if you wouldn't mind, indulge

my con speartorial side. the new buildings are partly, but only partly being driven by an effort on the part of municipal officials to protect the public but that they may also be driven by very wealthy developers, who would like nothing more than to be able the to snap up these buildings at low prices, tear them down and build new luxury condos displacing people who have been residents of these buildings for a long time. am i all wet on that you are free to say yes. >> i won't say anything in regards to a conspiracy because i don't have the facts i will say if this is happening, this is definitely an opportunity for people with wealthier pockets to come in and demolish and redo the buildings. i don't know about conspiracy. it's a sad, sad situation for a lot of homeowners that don't have the capacity to cope with

this this is the only property that they ever had in their lifetime. some of them are actually p planning to retire in these condo units. what do they do now? that's the big question. >> it's a very unfrpt situation. >> we'll leave it there. i was just thinkingwhere's motive where's the motive here? >> why not provide subsidies if it's that urgent, you throw people on a ledge. >> the buildings were not up to any code and needed to be maintained better. thank you so much. we'll have you back soon we appreciate it >> you're welcome. thank you. let's get over to julia for a cnbc news update >> the top court upheld a gag order on donald trump today in his criminal hush money case trump's attorneys argued the restrictions violated his right for free speech. the new york court of appeals

did not agree. the court dismissed it and said no substantial constitutional question is involved trump, who was convicted on 34 felony counts in the case is scheduled to be sentenced at the end of november. a north dakota judge struck down the ban on abortion the law violates the state constitution because it's too vague. even though the ruling clears the way for abortions to become legal in the state, north dakota currently has no clinics performing them. an appeal is expected. american airlines flight attendants approved a 5-year labor deal ending one of the industry's most contentious contract negotiations. it comes with a more than 20% raise at the start of october. 87% of the workers voted to rad rath if i the contract, which represents 28,000 cabin crew members. back to you. >> so many labor deals, we mention ed the boeing one, it could be an issue. join the cnbc ai opportunity event on october 1st you can hear from leaders of a multitude of industries about how ai is changing their

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welcome back to "power lunch. stocks are higher across the board this afternoon by between half a percent and more than 1% for the nasdaq bond yields are also higher after the ppi report and some others indicating that maybe a half point interest rate cut might still be on the table at next week's fed meeting where we will be. let's get to rick in chicago hi, rick >> i don't know that i would be placing any serious money, but that's just me look at bpi. this is year over year ex trade services at 3.3%. it remains warm. out of the six components today for ppi, after last month's

revisions, only 1 out of 6 was sequentially lower and that was headline year over year. all the other metrics definitely warm if we look at a two-day of 30s, we had a 30-year option, it was not the strongest of the three it came in rather average. but every maturity today has traded above yesterday's yields, below the low prices some momentum as tooiler just pointed out. now if you look at the 30-year bond in plarks it's hovering at the highest yield and finally it isn't only the spread that's had a lot. here's the 30 spread 52 pbasis point is the steepest in two and a half years. back to you. >> sazales reported better resut and a rebound in engagements we have a wedding here next weekend.

but that was probably a long time ago we'll trade next in three stock lunch.

♪ ♪ ♪ ♪ ♪ ♪ ♪ ♪

it's time for today's three-stock lunch. first shares of moderna under pressure the ceo joining squawk this morning to discuss plans for the covid combination shot >> we are on six times higher than the average of the bio pharma industry. phase one to phase three success and this is leading us to two new positive phase three data this morning we are not seeing we are going to find up to three new products before the fda before the end of the year the covid combo as the 18 to 59 and next gen covid so the platform is working

extremely well thanks to the science that we have s >> here with us is ava otto. your trade on moderna after hearing what he said >> so, we have it as a sell. unfortunately, the company went from a boom to bust. once the covid darling, the stock has now dropped by 85% as we mentioned, they're cutting rnd budget by 1.1 billion and their sales have come down from 80 billion to 5 billion in just three years so the profits have gone from 30 billion to negative to a loss of 4.2 billion they might at some point turn things around but we don't see light at the end of the tunnel based on the data we have. >> leto delta which addressed te crowdstrike outage from july the shares had moved higher in the session.

hanging on to a slight gain. what would you do with this one? >> another sell. in generally, the industry has been losing money to investors for years. there are many problems. crashes, lawsuits, regulations so there are many things that can go wrong in this sector and they usually do. the price to earnings ratio, the average of the sector is only five and that's a very low ratio compared to other sectors. it shows that people are not very enthusiastic with the sector we don't think there are many, many more places to put your money and generate better returns. >> shares of signet jewelers upbeat good outlook rebounding engagement sales. what do you think? >> so, unfortunately, diamonds are not forever when it comes to signet and i think there's a new trend coming up with lab grown diamonds we do see today 18% up the

stock, but that's because of better than expected news. however to us, it's a long-term sales. the stories of lab grown diamonds are taking away market share from classic providers and the reason is that diamond prices have dropped by 30% in the last years that's a significant drop in the market share of lab grown diamonds have increased from zero to 40% in the same period of time. so we think that's going to be furtrend in theute. >> very interesting. thank you very much and we will be right back. power e*trade's easy-to-use tools, like dynamic charting and risk-reward analysis, help make trading feel effortless. and its customizable scans with social sentiment help you find and unlock opportunities in the market. e*trade from morgan stanley with powerful, easy-to-use tools, power e*trade makes complex trading easier.

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franchise to a former player junior bridgeman if that's what the bucks would go for, just imagine what the celtics might command as they shop a stake in their team cnbc's senior sports reporter joins us now these franchise values just keep rising and rising. >> yeah, and i think this deal in particular speaks to the nba's new tv deal which is going to kick in for the '25, '26. $76 billion over 11 years. you look at what the haslems paid when they came in as about a 25% ownership group in april of 2023. that was a $3.2 billion valuation. >> a year ago. >> it's up 25% just in that short period i think it has to do with the league's new media deal. >> let's talk about what private equity may mean now that it has sort of been welcomed into the nfl for the first time

how much is that going to give a lift to those prices >> i factored in when we were doing valuations, although private equity had not been approved yet, roughly speaking, 5% or so because it's mostly going to be funding the limited partnership. all limited partnership money because no private equity could have a controlling ownership stake. private equity has been in the nba for a few years now. it's been a significant part of, they've had big interest there it's helped boost valuations but again, it's limited partnership stakes >> what is the sort of philosophy or rules about foreign ownership of nba teams >> they allow foreign ownership but i think the key is with the bucks in particular what we're seeing, because the big, controlled stake sale was the suns at 4 billion. then right after that last year was the mavs at about 3.6 billion. the suns and bucks have something in common. they control the arena economics.

>> i was wondering after we talked about the nfl part of that >> and the bucks have a dynamite team >> but they're in the hole because of the salary cap. >> they're losing money because of that. they can opt out, they're free, high priced stars, but they're going for the title. >> takes money to make money "closing bell" starts right now. thanks very much and welcome to "closing bell." live today from san francisco. this hour begins with a continued rebound for stocks which are tracking for their fourth straight day of gains led by a big bounce for tech 60 minutes to go in regulation major averages are all higher today. you see the gains here nicely up for the nasdaq and the russell leads the way today and that is following that in line ppi report today a big day for big tech nvidia is higher once again. it's now up more than 15% this week alone several other chip names