year, but 15% off its highs. hurricane francine takes some production out in the gulf of mexico, which is a tailwind for suncor >> and jim >> i'm going to stay on message with ijr that's profitable small cap. >> thank you very much have a great weekend that does it for us. "the exchange" with kelly evans starts right now ♪ ♪ thank you very much, dom and welcome to "the exchange." i'm kelly evans. here's what's coming up. could we still get 50? loretta mester yesterday telling us it's not out of the question for the fed next week with a strong case to be made and market probabilities for a half point cut are also on the rise we'll have the latest as we set up what could be a big market moving event next week and waymo and uber are expanding their robo taxi partnership. we have the impact to uber and

alphabet and when bank of america says when it comes to building data centers, there's one under the radar name best in class i didn't get it. you're looking at the name, up 25% year-to-date the analyst joins us ahead but first, boeing, the shares are under pressure phil, we're watching that. what's happening >> reporter: a lot of news alerts coming from various areas within the last half hour. let's start off with the white house. they issued a statement regarding the strike here at boeing, saying -- >> reporter: as you take a look at shares of boeing, the reason you see the shares ticking lower in the middle of the day, two credit agencies came out and put basically warnings on boeing's credit rating.

moody's and fitch both issued warnings, and they have cut their credit rating but issued warnings about the impact of the strike fitch saying, if the current strike lasts a week or two, it is unlikely to pressure the rating however, an extended strike could have a meaningful operational and financial impact, increasing the risk of a downgrade. that's what fitch had to say what about the cfo of boeing, who was speaking at an investor conference earlier today here's brian west talking about the need to conserve cash. >> any impact is going to be dictated by the duration of the work stoppage, which i won't address today. but, umm, a strike will impact production and deliveries and operations, and will jeopardize our recovery so, our immediate focus is to be lazor like actions to preserve

cash, and we will. so we have a very complex situation that we're resolving >> it may sake some time to resolve that situation the last strike by machinists at boeing lasted 58 days in 2008. bottom line is this, kelly, this could be a strike that goes on over an extended period of time. as you saw with fitch with what it said, a week or two, boeing can probably make that up rather quickly. but if it goes beyond that, you'll see greater pressure on the company, and we could see a credit rating downgrade. kelly, back to you >> phil, when i see the shares moving like this on something that, you know, the ratings agencies are typically coming in to put the nail in the coffin, so to speak, to confirm what people know and sense, but give it that extra sheen of concern, what would be the next leg for investors to want to hear from the company and the ceo who has taken over just a situation with so many different problems to tackle, is it a strong message

from him is it, you know, a turn of events -- travel demand seems to be -- i can't imagine if that weakened, as well. >> reporter: well, look, there's no issue in terms of the backlog. that's not going to go away or change over the course of this strike, whether the strike lasts a week, three weeks, six weeks that's not going to change the issue is going to be whether or not investors see some type of progress. boeing's management said we would like to get back to the negotiating table, and likely they will with the machinist the question is, how quickly can they bridge the gap between what the rank and file want, which is a 40% raise over four years, and what the company is offering, 25% over four years. can they come to an agreement relatively quickly we'll see. that's going to be what moves the shares next. >> all right, phil, thank you for now. we appreciate it boeing down 4%, the dow hanging on to some gains despite that. we are counting down to the big fed decision on interest rates next week. with some fresh data on the

health of the consumer steve liesman is here with the results of our cnbc nrf retail monitor. what are we learning, steve? >> you know, after a strong july, the retail monitor showing consumer spending ease back in august with some mixed results coming from each of the sectors. if you look at the individual -- if you look at the retail monitor powered with actual credit card spending data, from affinity solutions, we were up 0.5%, compared with 0.7% in july that's right at the one-year average for this number here the stories is up 2.1% year over year core retail, that ticks out restaurants, as well increase 0.2%, down from a strong 1% in july, year over year there ticking up to 1.9 the sector breakdown was mixed 7 of 12 sectors were positive,

compared to 10 of 12 on the plus side in july taking a look at clothing and accessories did well restaurants and bars also did well and non-store retailers but electronics and appliances, building and garden supplies did not keep pace here the nrf economists saying in their commentary that the sector trends allow continued softness in consumer durables due to housing softness from still elevated interest rates. but it shows consumer spending trimming higher in consumables, like food and clothing guys, after running basically at trend, the retail monitor is more down. it's like a lot of other economic data, kelly, the issue being it's simmering down, but where does it end up, does it end up in a place that's worrisome, or if it goes this way, the consumer will be okay

>> those invested in dick's or i guess academy did okay, but what that showed about sporting goods is confirmed by earnings >> it has been i will say that the sporting goods was strong in july and weak in august so we've had this up and down pattern, if you look at the long-term chart here and it's not exactly clear what's motivating it it could be that, you know, when you have gas prices come off at the next month, some of the discretionary does better. i'm going to watch the discretionary. if there's signs with the consumer, it will show up there first, not in the necessity. that's something to watch as time goes by if we see stress on the consumer >> let's talk more about that and what happens next week with former fed officials appearing to be coming around to the idea of going 50. yesterday, former cleveland fed president loretta mester told us on the program that if the fed is making a series of cuts and risks to the labor market are to the down soside, why not cut haa

point? let's bring in my next guest, a chief economist at nationwide mutual cathy, you're undergoing this sort of same evolution that the markets are, and leaning towards a 50 >> yeah, hi, kelly happy to be with you well, we have thought for a while that they actually should start with 50 basis points, and just in general, get back to a more neutral rate as soon as possible there are stresses in the consumer, interest rates are high fed officials' own acknowledgement is that policy is restrictive it was there because they were worried about inflation. and now if concerns have shifted more to the labor market, which i agree, that's more what the risk is, why not i agree with the former fed officials, why not start out with 50? and it's going to be a series of cuts the interesting thing there, as

we have gone from current federal community members is that they're more comfortable going cautious 25. so that's why the markets are divided now, and it's coming down to be an interesting first rate cut >> steve, without putting too much pressure on you as we head into the weekend, many watching this quite closely are saying, okay, if i'm the fed and i'm thinking maybe 50 is what i want to do, i have a couple of days between now and then if i don't want to catch the markets by surprise are you hearing anything out there in the ether that might suggest whether this is something to be expected >> no. and it is kind of interesting that we're going into this without very much guidance on this 25 or 50. i think while the fed was out there talking, the market was pricing in 25. and the fed wasn't doing much to change our opinion of that i think that might be instructive. >> true. >> you know, it's funny, as a journalist, kelly, i've always

lived by the idea if you can think of it today, you better do it today don't leave a story for two days from now if you thought of it today. i wonder if monetary policy ought to run the same way. i think twa's happened here -- well, two things have happened i think these comments from the former fed officials are what's moved the market sense all of them -- by the way, it's a broad spectrum. loretta mesher, maybe a little on the hawkish side. those two folks coming together to make a case for 50. if somebody came to the table and said here's why we should do 50, those people who are on the fence could go either way and side with it i'm still in the 25 camp i think that's where the fed was pointing us to when they were talking, and i also think that it's interesting that the market post cpi got much more confident in the 25, because it was a

little firm. so i'm kind of tempted to go with that feeling yesterday, and maybe fade some of these ex-fed official comments. >> i'm going to go right back at you steve and bring in cathy if i'm the fed and i want my 25 to be a dovish 25, i would never want the possibility of 50 to be out there. if i deliver 25, it's going to be hawkish no matter how you slice it so these hints are interesting the fed also has a way of cleaning up if they think these comments are errant, but they want it to be a dovish cut, especially the first time around so i just don't know why -- >> but there's -- there's multiple ways to guild the lily, i guess is the best way to put it i'm sure cathy has some thoughts on this. you can imagine the language around the 25 that could be a dovish 25, so to speak, or maybe a hard 50. i'm not sure how you want to characterize it. but, but, but here's the thing

you also have the dot plots. the dot plots may not be c cureated, but they could be socialized, in that here's what we're thinking for the rest of this year and next year. there's 100 built in, and i don't know that the market cares so much how you get there. i might take a train or plane, but i'll get there just the same if they get their hundred, and now the key is, this guidance, because the market is super aggressive for a year from now 250 right at and below neutral >> kacathy, what do you think >> i agree with steve, the market doesn't really care how they get to 100 basis points by the end of the year. it could be 25, then 50, 25, or

otherwise. but i think what the bond market is saying to the fed is, we think there's real reason for them to be actually pretty aggressive in cutting rates. and our own forecast, we're looking for 225 basis points, that's by the end of 2025. but i think that's reasonable, just based on the fact that inflation's going to continue to decelerate, that's our baseline forecast, and you do have these vulnerabilities, the stresses in the consumer and labor market. and they're just getting back to neutral. so that's not really becoming accommodative, based on our current, you know, assessment, we think a neutral rate is below 4%, and others do too. so you're sitting well above 5%, you know, they have to get going one way or the other >> last quick thing, do you have it as a fair step -- well, i guess one of the stairs has to be big if they are at a full point by the end of the year

but they cut once a quarter after that i don't know how you get to two if you go with that cadence. >> we basically have a moving and cutting rates every meeting, and for this year, yeah, one of these three meetings, they go 50 basis points in our forecast we just think -- steve said it, it seems as if they want to start cautious so we're baselining 25 basis points next week whether they go 50 in november, december, you know, one of those permentations are likely and in 2025, just cutting 25 basis points per meeting >> we will see what happens, and if we get it any article or hints that -- it can't be fed speak, but anything we can get between now and then will be heightened interest. >> kelly, i'll call you over the weekend if i hear anything >> if you do, i'll tweet it. that's a promise thank you for your time. the debate over a 50 or 25 is the kind of risk my next

guest says could genjeopardize a soft landing joining me is my next guest. so what do you not like about this, michael? welcome. >> good afternoon, kelly well, i think the discussion that was just had was pretty comprehensive, actually. there's a lot of smart people on all sides of this. my view would be fed credibility, and if you look at the rate history the last couple of years, a very aggressive move in '22, and a lot more data dependant, let's watch and wait, read the data over the last year, year and a half or so. i think they've done a good job of building back credibility that maybe they lost in the previous several years i would be careful not to fritter that away by doing too much, too soon when it's not necessary. there's no question that the neutral rate is way lower than we are right now that argues for a cut at some level. the data doesn't yet support an

aggressive move, in my view, and if you move too aggressively, you risk losing credibility. it start cautiously, and continue to watch the data and see what happens keep in mind, you still hit a gdp number that was strong during the summer. you have a divisive election coming out there will be a lot more data coming out, so you don't need to do it all at once. you can start gradually and continue to go from there. >> for what it's worth, ed heiman changed his case from a hard to a soft landing he's been much more concerned about the economy. so to see a data point like that, tells you the evolving outlook is one where you can see the economy doing okay he says he looks at s&p revenue growth and thinks the bottom was five or six quarters ago but i want to ask you, what is the message from gold right now? you must be thrilled seeing it hitting new highs, but what does

it tell us >> we're believers in gold all the time it's very predictable. you have the fed at the top of the rate hike cycle likely coming down. the u.s. dollar has been incredibly strong over the last decade or more that's going to decline. you have an increasing case around the world of an alternative currency to the u.s. dollar which would further reduce the value of the dollar you have inflation that's still somewhat sticky. you know, there's no definitive answer that it might not trend up a it wille from here either that's another thing to be careful of we assume it's coming down, but it's still sticky between that 2.5% -- maybe not so fast. and geopolitical risks and uncertainty. so when you add that all up together, it makes for a very compelling case for gold and if rates do, in fact, get cut, especially aggressively as some people have mentioned

and by the way, i'm not there with those aggressive cuts yet i don't think we've seen enough data to support it then you start getting to a point where real interest rates trend back towards zero and possibly negative again -- >> exactly >> and gold does very well this that environment >> i was pulling that up as you said that, and that yield has gone from 2.5%, call it the real rate at the end of last year, to 1.5% now that's been extremely supportive of gold's outperformance, and some say that is a historical correlation. do you expect real rates to keep falling to support gold prices moving higher? >> i think it's uncertain at this time. so much of that depends on the fed and market conditions. there's so much data going both ways the economy doesn't look like it's falling off a cliff right now, and there's data that supports that. on the other hand, the labor market is slowing. there's some issues with some banks with respect to credit card debt, auto loan debt.

the commercial credit refinancing and a lot of commercial loans and real estate loans is maybe a little uncertain. corporate earnings appear to be decent, but that could change quickly. so i think there's a lot of mixed data out there, which makes predicting the interest rate environment much harder the other thing on gold to keep in mind is that the explosion of the u.s. deficit whether that leads to the creation of more dollars and money is also bullish for gold >> absolutely. i can't disagree there there are a couple of stocks i want to mention, costco, lockheed martin, i think a lot of people are very interested in whether gold or silver are up 25 and 50 will continue to rally. michael, appreciate your time. >> thanks, kelly, any time shares of uber are rallying today after the ride hailing company announced it will bring

driverless waymo rides to austin and atlanta starting next year kate rooney is following that story. what do we know? >> so the race to robo taxis is heating up this is the latest sign that a driverless future might be closer than we think with the already y-- as they try to tend off others in this space, namely elon musk's tesla, which is betting its own future on self-driving cars. their robo taxi event is happening in about a month there's even amazon rolling out its zukes cars later this year or next in las vegas i did take a test drive in one of those, and then waymo is coming for uber's dominance here in san francisco you see them everywhere, but waymo is already making up 2% of all raide sharing here, it's doubled its paid robo taxi rides

have doubled in a week right now, in san francisco and los angeles, get a download and book through a separate waymo app. so a spokesperson saying there are no plans to partner with uber here in california. uber's ceo earlier on "squawkbox" saying it's going to bring safer drivers to the road and hopes people will start ditching their car to have a robot driver and people are warming up to the idea of ditching drivers all together. >> we're seeing actually the percentage of accept rates when offered an autonomous vehicle going up generally there's some people who aren't ready for it the more you see these cars on the street, the more you see how safe and cool they are, the acceptance rate also go higher and higher >> reporter: kelly, as consumers, this means we'll have choices. maybe a driverless buffet.

big tech may compete on price, subsidizing some of these rides that we saw in the early days if you remember the ride hailing battle between uber and lyft >> so uber, i assume, will slap their name on it, but this is -- they have to be paying waymo a pretty penny to have access to this technology. waymo could just go into austin and atlanta on its own, couldn't it >> reporter: that's right. we don't know the details of the economics, but this is waymo white labeling their technology and hardware there's got to be a subscription here and uber is acting as the front end consumer facing side of the app. but the economics right now are unclear. waymo, think of it as they're going to be the hardware provider, they have their own software you have to think uber is paying up to get a slice. and stave off competition. you see these waymos everywhere. i was stuck behind one on the

way to work this morning >> i understand you see them all the time now out in san francisco. kate, thank you very much. let's continue the discussion with my next guest, who says this address is what he sees as the two biggest overhangs for uber, reiterating his outperformance on the stock and joins us now mark, what do you think of this announcement >> well, it's a positive catalyst the stock is kind of telling you that the estimates are what the rise to robo taxis mean for these ride share networks. look, this will take years kate and i are seeing, you know, waymos all the time here in san francisco. we're also seeing ubers, they're just not as clear to see, and it is going to take a long time we're in five cities this will expand, you know, waymo probably has low single digit share in san francisco, but just wait until they offer rides to the airports. that will rise that's good for all the

consumers. i think this will be good for uber so the quick thesis here is that uber is the ultimate demand aggregator they do $160 billion worth of rides every year with 150 million customers worldwide. and i think most consumers at the end of the day want to get from point a to point b quickly and cheaply. i think a lot of them or most will be indifference whether there's a driver in the car or not. so for uber, more supply means better customer experience so uber is a positive derivative off of the rise in autonomous vehicles so it's one of our top picks right now. >> one way to think about this, it's the new windows intel, that they could have a mutually beneficial relationship amidst the rollout of this technology but the other way i wonder about this, couldn't waymo, if it's seeing the success in san francisco, that it's very

quickly going main stream. why couldn't it roll out in other cities why does it need to let uber slap its name on the car if it's going to do that, take away the relationship with the consumer and ride the rails of the technology, unless it's getting a ton of money in exchange for letting uber do so >> well, i'm sure it's getting a ton of money we don't know the economics, but for every dollar that's generated in ride shares, 3 33/4ths goes to the driver to how much of that dollar waymo gets, and they could try to do this on their own, just as any other ab company could so from uber's perspective, the more autonomous vehicle companies there are, tesla, waymo, zukes, cruise, which is available in only a few cities, the more of those, the better for uber and for all of these companies, they have to think, look, they have major fixed costs

these are not inexpensive -- there's few companies that can afford this. waymo can because they're owned by google. but you want to try to maximize utilization of these cars, these vehicles hey, there's a great way to do it ride into the uber network, you'll get paid well and be able to advertise that revenue. that to me is the economic win-win here for a waymo and for some of these other autonomous vehicle companies. some of those economics and share price appreciation should go to uber that's why we like the stock >> waymo, if they did spin out of google, what's the consumer experience with the waymo app? in other words, why wouldn't they just roll that out and say we want to be the touch point? >> no, they could. waymo could do that. that's one plan. hopefully at the end of the day,

waymo will have to figure out what's the best way to monetize these assets should we just try to run it ourselves and compete directly with uber or lyft, or is the easier way to make peace and just plug right into these networks so there's -- that's a political decision, it's a strategic decision, a business model decision there are some scenarios here which they're negative for uber. the probability is that the positive scenarios are more likely what happens. that's what you are seeing with the atlanta and austin deal today, which is that waymo has decided they're going to plug right in i imagine they're going to experiment for a few years the more of these companies out there, the better for uber >> the stock is playing at 18 times with cash flow at 40%. i just have to say in a week when everyone is debating founder mode, they are doing quite a job with this company. it's not the founder, a highly

professional manager came from expedia, but navigating the shares through a rocky time and a lot of excitement about this partnership. mark, thanks for joining us. >> thank you, kelly. coming up, here's a final look at our mystery chart. bank of america upgrading it to a buy, calling it best in class when it comes to building out data centers if you know what it is, make your guess and we'll talk to the analyst behind that call the nasdaq and s&p on pace for their best week since last november small caps are outperforming wildly today, up nearly 2.5% the russell 2,000 on its best week sceulin jy. "the exchange" is back after this

tony, its gone. no. how am i going to do this? welcome to the mdy mid-cap cup, presented by state street global advisors. today's challenge is to play 9 holes without the middle of your bag. how does that sound? that sounds terrible. ♪♪ ♪♪ ♪♪ ♪♪

welcome to the now way to network... they switched to juniper's ai-native network. and now, everything is so reliable... that no one is ever left in the dark. that's the now way to network at work, with real ai—for an experience— that's so lit! ♪♪ welcome back to "the exchange," everybody tyler mathisen here with your cnbc news update the justice department is planning to file criminal charges in former president donald trump's campaign hacking case law enforcement officials tell nbc news doj officials have said iran was

behind last month's hacking effort to spread lies stolen from trump's campaign. iran's mission to the u.n. has yet to respond, but has previously denied involvement. a military court in congo today delivered death sentences to 37 people, including three americans after convicting them on charges of participating in a coup attempt the defendants can appeal the verdict on charges that include terrorism and murder 14 people so far have been acquitted in the trial two men have been charged with burglary for stealing a famous piece from a london gallery. the police there say they recovered the artwork "girl with balloon" which the men allegedly stole sunday night court documents value the work at $355,000. kelly, back to you >> and iconic photo, creation. tyler, thanks. ai infrastructure winners, look at these numbers.

and there's another under the radar name my next guest calls it best in class in this trade. it's johnson controls. they provide components for data centers, and they're in the sweet spot of the ai buildout, up 25% my next guest is here from bank of america a big week for this whole space. why john con controls? >> a bit of a sleeper spoke. people have been -- a, it's a great theme, but specifically, we zeroed in on jci because it's one of the big winners, we think, of the data center trade. >> to be clear, this is heating and air conditioning >> heating, ventilation, air conditioning >> is this the air conditioning way to play the ai story >> that's right. just recognize, ai means data

centers are running a lot hotter, so for example, per rack power density for the latest generation is ten times what it used to be >> wow >> effectively, that means ten times more electricity going in, ten times heat going out, so you have to cool >> utility stocks have got an ton of attention, but all that power is going into cooling these facilities >> that's right. it goes into running the chip. as you run the chip, they become heat and you have to take it out. so there are a couple of ways to take out heat. there is, you know, people hav focused on liquid cooling. but obviously, you still have to cool the facility, and liquid cooling, you have to connect it to existing infrastructure to the chillers, because you need cold water you have to connect it to the chiller and the water system so this is the fastest growing area of the data center expense,

so we just published a report. >> you got quite a bit of interest from it >> we did. i think that's why i'm here. we built this report, who makes the data center. the reason investors are focused on cooling, it's an area called thermal management overall, we forecast for the next three years cap ex is going to bounce 13%. within that actually, the fastest growing area is going to be thermal management, which is heating, ventilation, air conditioning all this infrastructure >> any competitors other than johnson controls that could benefit from this? >> absolutely. vertiv, they do a little bit of everything that is well known, very controversial, but very well known. and obviously, you have -- they

also do ac for the data centers, and you have other established players like train and carrier but what we find is that jci is trading at a material discount to these names part of it has to do with the ceo transition, there was an activist involved, a lot of stuff going on but we feel, a, they have best in class exposure to data centers, because they are the biggest hvc player, and b, we think there's this extra kit potential corporate action >> should they be talking more about this as they get through that corporate journey could this be a catalyst in which they say, we're going to lean all in on this. they probably haven't had this big an opportunity in a long time >> i think we're seeing part of the investor focus, jci, they have this core applied hvc business i think investors want to see more optionalty, and investors think maybe the next ceo will be

more constructive and think there is positive optionalty monetizing the hvc asset what is did you call the report? >> who builds the data centers i think it's the single most popular thing i've ever published. >> i think we just need to go through this piece by piece. any final under the radar plays as a result of it? >> look, i think the big surprise, what people don't quite appreciate is the fastest area of growth is the back end stuff, not the chips nvidia, we know i think the banks says the market will almost more than quadruple people know that i think what people don't appreciate is really the back office this is the stuff that sits in the basement of this building, hvac, water, electricity these are the fastest areas, and it has to do with the fact that

power density is going up a lot. i think that's the big surprise. >> andrew, thank you for joining us to talk about it. still to come, a special "three buys and a bail." berkshire hathaway edition, rounding up all the latest moves. and here's a quick check on ad adobe, giving weak guidance for q4, the share is down. back after this. ah, these bills are crazy. she has no idea she's sitting on a goldmine. well she doesn't know that if she owns a life insurance policy of $100,000 or more she can sell all or part of it to coventry for cash. even a term policy. even

a term policy? even a term policy! find out if you're sitting on a goldmine. call coventry direct today at the number on your screen, or visit coventrydirect.com. (man) these men of means with their silver spoons. what will become of them when they discover robinhood gold allows others to earn their very liberal rates on idle cash? ♪ they would descend into chaos. when it comes to amgen's life-changing medical breakthroughs, every second counts. but without investment, those breakthroughs are often paused. citi's seamlessly connected banking, markets and services businesses, deliver global financial solutions. so our client can keep investing in innovations for patients around the world. without pause. for the love of moving our clients forward. for the love of progress.

why choose a mobile network built for places you'll probably never be... ...instead of for where you are most of the time? xfinity mobile was designed for where you need it most. xfinity internet customers, ask how to get a free 5g phone and a second unlimited line free for a year. stakes be berkshire, which has fell out of the trillion dollar club, jeff killberg is joining us in the interest of time, i'm going to run through some of the buys, which are chubb, oxy and ulta chubb, up 28% year to date >> it's been the top nine

holdings, this is -- we own this in the essential 40 portfolio. if you think about aig, its competitor, it's twice the size. 40% of the revenue is coming from overseas for chubb. so i think we continue to own it here just like we do in the essential 40 >> kind of a different story for occidental, down 13% this year a lot of people think berkshire likes to come in at 60, it's at 51 right now why hasn't the stock done better >> you have to look at crude, down to $65. i feel comfortable here. this is the number six holding of berkshire hathaway. warren really sees upside here it's definite ly correlated with the price of oil the company, you can take this up higher. i think this is something you have to be patient with. if you see any resolve in the

middle east, the gaza strip, if you see that, this is a proxy to own crude oil. >> you always think, yeah, i would go with buffet or berkshire broadly speaking then you buy one of those stocks, it's still hard to have that confidence. >> let's face it, he has some patience >> he's had a lot of patience. what about ulta, down 22%, this is a buy for you, as well? >> it is it's interesting, there's another good investment in ken griffin, who just purchased like $50 million in exposure. but i think it's fascinating to see, there's 1500 stores it hasn't moved anywhere since covid. it's still down about 30%, so i think it's offering value. i like the fact that as a new purchase he's been selling more, sitting on $300 billion in cash. so this is a little eye opening for such a small account

>> one of the places they've been selling is apple. they sold 50% of their position, yeah, it's still a large one, but that's a bail for you too, isn't it >> it's a soft bail. i still own apple. i own it in an eco-weighted manner, not in the typical way most own it. they still own $87 billion exposure the iphone 16 did underwhelm if you look at one of the best names of these four, chubb and apple. but i want to be a soft bail here >> you can't invent something called a soft bail no, you can invent anything you want what about berkshire itself, they're soft bailing on buybacks, which they did few of last quarter, 1.6 times book value. some people say maybe it's more charitable purposes that they sold some, but what about brka

>> i think if you look at brk, we own that. i've own it for some time. we're happy with the performance. but take a step back, the criteria that buffet has used in his 94 years of investing is a very high criteria, it's a high threshold to understand what he wants to buy he sees something coming that maybe others don't we're still sticking with berkshire hathaway we love owning it. >> maybe it's 84 years of investing. >> i think he came out of the gate buying stocks >> i think so, too jeff, thank you. appreciate it. as we head to break, check out shares of viasat, sharply lower after united airlines announced a deal with spacex, elon musk's company, for flight internet service back in a minute both medicare ad

medicaid, i have somere ad 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 medical appointments. you pay nothing for covered prescriptions, all year long. all plans have dental coverage which includes 2 free cleanings a year, fillings, and a yearly exam. they also have vision coverage including vision exams and a yearly allowance towards eyewear such as lenses or contacts. and hearing

coverage, which includes routine hearing tests and coverage for hearing aids. you'll also have a $0 copay for the shingles and other routine vaccines at in-network retail pharmacies. plus, your doctor, hospital and pharmacy may already be part of our large humana networks. so, call the number on your screen now to speak with a licensed humana sales agent. wouldn't you love benefits like a monthly allowance to help pay for eligible groceries, utilities, rent and over-the-counter items? so, if you have medicare and medicaid, call the number on your screen now and speak with a licensed humana sales agent. if you're eligible, they can even help enroll you over the phone in a humana medicare advantage dual-eligible special needs plan. so, call now. humana. a more human way to healthcare.

your shipping manager left to "find themself." leaving you lost. you need to hire. i need indeed. indeed you do. sponsored jobs on indeed are two and a half times faster to first hire. visit indeed.com/hire

it's time to grow your business. create a website. how? godaddy. coding... nah. but all that writing... nope. ai, done, built. let's get to work. create a beautiful website in minutes with godaddy. this is not a drill. subway dropped the price on all their subs. 20% off any sub, any size. subway did what?! any sub? yup! for a limited time.

get 20% off when you order in app. hurry and get this deal before it's gone! the rapid professionalization of

college sports is under way. three years after the ncaa began allowing college athletes to earn money from their name, image and likeness, as a result it's costing colleges a lot more to fund successful sports teams. "the new york times" recently reported that a starting football lineup in the new power four conferences can run upwards of $10 million a year. one way to possibly fund that growing bill, private equity as bruns wick group notes, some colleges may consider selling a stake in their teams to cover the cost of competing for talent how likely is this to come to pass joining me is mike schoenfeld, a partner at brunswick group welcome. >> thank you. >> i don't know if you have a preferred college team that you're keeping an eye on everybody seems to. >> i do, but i will keep it off the air for the moment, but it is -- college sports as you know is one of the most passionate and -- and growing areas of the

sporting landscape and people do have very extreme partisanship for their college teams, for their state teams, for their private university teams and the money that's at stake right now is huge. >> i'm sure you saw the headlines this week, i think based in part on that "new york times" reporting that an sec quarterback makes on average a million dollars a year and that's more than brock purdy because of his rookie contract as a starting quarterback. nevertheless, these amounts are staggering and who is ultimately going to fund them >> well, that's a great question the college and university athletic departments are on the hook not only for nil, but also for funding comprehensive athletic programs and, as a result of the -- of what's known as the house element which allows all college athletes to get paid, current and former, there will be very, very significant financial pressures, much greater than before, on university athletic programs, in addition to facilities, coaching

salaries, all of the things that -- all the resources that it requires to run a major college athletic program who is going to pay for it well, tv deals are huge. for many of the conferences and for the ncaa basketball tournament you are looking at a billion dollars plus a year going to these conference sponsorship agreements. >> wow. >> and then for many institutions there's also funding from the university, so student fees at some places, at some institutions, make up a very significant part of the budget all told, though, it is still -- it will not be enough, particularly when colleges and universities have to -- at the major programs -- have to start paying upwards of $20 million a year to their students. >> wow $20 million a year so could private equity come in? we've talked about how they're already i think up to 30% ownership in the nba, 10% ownership in the nfl we have

seen them open the door. college sports would seem like natural next investment. >> it would seem like a natural next investment. a couple of things and this came out certainly in our survey. one is figuring out where -- how does that money come in? colleges and universities at the moment are not selling their teams, so where does the money come in -- what does the money come into, where does the money go that is obviously a very big question the second, and there is just the public perception, there are college sports fans who feel very, very strongly about their teams, about the connection of the -- of sports to the university, to the academic mission. you have a lot of stakeholders here so people have to figure out -- private equity needs to figure out first how do you make money of on this, and then second, where are the land mines, where are the road blocks >> sure. >> what's the potential for blow back >> when i think about the liquidity i think much like in other areas of investment they could sell to each other if they

allowed at some point. there's so much interest in supporting teams and having access to those games as an investor that i think there would be some inherent interest. we just showed the percentage of those who would be for or against private equity ownership. interestingly in your survey a lot of this breaks down by generation and it seems in some ways like a waiting game. >> yes, very much so the older the fan, the more you want it to be like it used to be, like it always was younger what we -- what we found with younger fans is because this is something that is much more a part of their universe, they are much more open to the engagement of private equity now, again, this is all theoretical at the moment, but it becomes actual when it becomes practical i think you will see another round of conversation and potential blow back as well. >> i think that you asked questions about commercialization, those concerns, disparity, obviously corruption even came up, being beholden to investors, raising

the costs of the games it does seem like there's overwhelmingly people who think this would benefit their teams and athletes and that seems like the ultimate place it's going to kind of come down to. >> that's what we found. look, everybody wants an advantage for their team. >> exactly. >> they want a fair advantage but they still want that advantage. what our survey found is that all of those intangibles that are important for college sports, integrity, connection -- support for the student athletes, support for the academic mission, all of those things are still really, really important and would have to be addressed in any kind of private equity scheme. last thing i will just add is also that the college sports is very, very decentralized, unlike the nfl, unlike the nba, you're talking about in the case of potential private equity investment you are talking about a couple of dozen institutions that have very, very different

structures, governance. >> for now. >> for now but it will get each more complicated in the future. >> mike, thank you so much for joining us we appreciate your time. michael schoenfeld joining us from brunswick group and that's it for "the exchange." tyler is ready for "power lunch. i will see you on the other side this have break. i need indeed. indeed you do. our matching platform lets you spend less time searching and more time connecting with candidates. visit indeed.com/hire ah, these bills are crazy. she has no idea she's sitting on a goldmine. well she doesn't know that if she owns a life insurance policy of $100,000 or more she can sell all or part of it to coventry for cash. even a term policy. even a term policy? even a term policy! find out if you're sitting on a goldmine. call coventry direct today at the number on your screen, or visit coventrydirect.com.

(man) these men of means with their silver spoons. what will become of them when they discover robinhood gold allows others to earn their very liberal rates on idle cash? ♪ they would descend into chaos. welcome to "power lunch" alongside kelly evans i'm tyler