sss. u.s. gold corp, join the golden age. since my citi custom cash® card automatically adjusts to earn me more cash back in my top eligible category... suddenly life's feeling a little more automatic. like doors opening wherever i go... [sound of airplane overhead] even the ground is moving for me! y'all seeing this? wild! and i don't even have to activate anything. oooooohhh... automatic sashimi! earn cash back that automatically adjusts to how you spend with the citi custom cash® card. [mind blown explosion noise] ♪ good afternoon, everybody. welcome to "power lunch." alongside kelly evans, i'm tyler mathisen. glad you could join us. we're 24 hours now from the fed decision on interest rates. the odds are still somewhat split on whether we will get a

quarter point or a half point cut. joining us to discuss that and everything else over the next hour is brent beardall, the ceo of woff ed in the west coast. >> tyler, great to be here. kelly, great to see you. >> when the fed cuts interest rate, it's often a sign the economy is struggling one way or another. how do you see the u.s. economy right now? it doesn't feel like it's struggling particularly hard. and especially in your region of the country. >> you know, i think the economy has been remarkably resilient, especially the consumer. if you look at just the dramatic nature of what the fed had to do to get inflation under control, going from almost 0 interest rates to 5.25%, every one, including myself, no one likes to admit when they're wrong. i was dead wrong. i thought for sure they were going to impact the labor market. >> me too. hand up. i'm right there with you. >> but it certainly looks like they are going to be able to pull off the soft landing, which

is remarkable. so to answer your question specifically, the economy is doing very well. you look at the airports. we went to dinner last night in manhattan. restaurant was packed. there is activity. the consumer has remained remarkably resilient. >> not that they haven't been hurt by inflation. they feel it. >> they feel it, but they feel it in the discretionary spending. the mandatory spending right, the mortgages, we'll talk about our mortgage portfolio. that's where we deal with consumers. you still have delinquencies less than .5 of 1%. the consumer has remained remarkably resilient. >> a lot of people say it's home equity. how many trillions of dollars is that right now to draw upon? >> it is huge. that's exactly right. and, not only can they tap that home equity, but their credit card rates are going to go down. we have seen the move down on

mortgage rates. 7.5%. today they're 6.10 to .25. what very few people are talking about is the spreads that you get on mortgages. >> we were just asking about that. saying shouldn't they be sub 6 if we had normalized conditions. who do you blame for that? >> that is the market being greedy. that is everyone in the market. today the spread on the 30-year mortgage is 2.5. historically it's been about 150 to 200 bases points. >> over the ten-year. >> that's right. because you look at a 30-year mortgage and you think the duration in and out of the cycles is about eight years. so you use the ten-year treasury as the gauge. >> why do you say greedy. you're alluding to this is an arrangement benefits everybody. how do we flip the script? >> it's because of the volatility. when there's volatility everyone eres on the side of the conservatism. if we can get a clear side we're going into lower for longer rates, you'll see that volatility come down, that

spread come down. but we had been in the fearfulness of high orer for longer. that's what we needed to do. there have been a lot of people who have been wrong. it doesn't look like higher for longer. what the fed has done, navigating what looks like a soft landing, to their credit -- >> don't jinx it now. >> how many of us -- just go back two years when the fed had their head fake and they thought inflation was transitory and we were all calling the fed was wrong. the fed is out of control. to jay powell's credit and the entire federal reserve, they have built credibility with the market. who would have thought that they could get inflation to pullback. and one of the other thing is really want to talk about is we are so focussed on what is inflation today. that's what everybody is focussed on. but you talk to consumers and with the election, you talk to the elect rat, what are they worried about, the economy, inflation. why? because over the last four years prices are up and they have not come down. >> they want deflation.

>> that's exactly right. and we are still getting adjusted it to when we go to the grocery store, go to the gas station. it is still shock and awe. i can't believe how much i'm having to pay for this. >> yeah. >> that is what everyone discounts. hey, inflation is in check now. but really look at the last four years in my life time, i've never seen it like this. >> absolutely. it's a perfect place to bring in our next guest. the consensus is a rate cut is a given. the size of it is still up for debate. we asked our cnbc mock fed how they would vote if they were calling the shots tomorrow. business owners and market watchers, four went 50, three went 25. it's almost exactly like the market right now. evenly split. our next guest is part of the latter group, he's in the -- he says the proverbial close call camp. joining us for more is pimco chief economist paul. you're calling for 25? welcome. >> yes, i am. i think 25 is the base case because i think it maximizes the

fed's optionalty. if they go 25, they retain the option to speed up. if you get an unexpected weakness in the labor market. in contrast f they go 50, i think they are de facto locking in at least two more 50s, which would mean that if you get unexpected weakness, then you would put 75 on the table. so i think from an option-adjusted perspective it makes sense for them to do 25. note, i am not pounding the table on that. because i also understand the argument they have a long way to go. they're a long way from neutral. and there is a reasonable, sensible argument for starting with 50, but at the cost of giving up optionalty in my view. >> so let's say they do go 50 or they go 25.

where do we end up a year and a half from now in terms of where interest rates are going to be? because the fed will almost certainly do many more -- well, maybe not many, but several more cuts beyond what they're expected to do tomorrow. >> i think many is the right word, tyler. no question about that. which is why i think that we have to look at the 25, 50 decision tomorrow in the context of the new doc plot. the last dot plot was back in june when they were only looking for one cut this year. and then for a series of cuts down to a little over four, call it 4 1/8 at the end of next year. so the big thing they'll be doing at that meeting is a serious whack to the dot plot. and i think by the end of next year, you're thinking -- we're

thinking in terms of at least 200, if not a little more. and basically moving down to a three -- >> to roughly 3. >> brent, you want to jump in. >> paul, why if neutral is 3%, why should we go on a slow pace? why shouldn't the fed be more aggressive, if we're truly in balance in terms of inflation and employment, why shouldn't they be more aggressive? >> i understand that argument. we always get that argument in at the beginning of a cycle, whether a tightening cycle or easing cycle. if you know you have to go a long way, why the hell wouldn't you just get there as quickly as possible. i understand that argument. that's how the institution tends to go. because the world is uncertain, so essentially in incrementalism is the code at the fed.

i think the standpoint for support for the economy, incrementalism is not all that negative of a thing because the capital markets are going to romance and discount the destination. so you can have both. you can have the capital markets reflecting a lot of the destination out the curb while you can have the fed moving in a careful, judicious measured way in validating what the curve has already done. >> yeah. they have certainly earned that credibility in terms of forecasting. there's no question about that. i would ask you the political question, historically the fed has not acted so close to an election. and so does having the election so close and to have, i think, it was three sitting u.s. senators yesterday to write a letter encouraging the fed to move by 75 bases point.

if you're sitting on the fed open market committee, does that have an impact on you? >> i don't think it makes one damn difference whatsoever. i think that jay powell has said the truth, which is that he's going to make the decision based upon his best judgment. he may make a mistake, but he's going to do it on his best judgment of what the economy needs and that he's not playing politics whatsoever. so i don't think the election matters a damn bit in the decision they make tomorrow. >> but how do you really feel, paul? i love that. so i want to go back and get in touch with my inner nerd and that is talk about the dot plot. if i'm remembering correctly, you went back to the start of this year or late last year, the dot plot would have forecast more interest rate reductions than it did in june when they

scaled back and said, only one this year. now if i'm hearing you correctly, you think their going to pivot back the -- more towards what they were saying in december of last year, say, than what they were saying in june. why the change in june? and why the change back now? >> you got my script right. i think we're back to the future in many respects to where we were back in december when they did the rhetorical pivot, teed up three cuts this year and continuing cuts into next year. and then we got the inflation scare. that was really what changed in the first half of this year. the inflation scare -- and it was unambiguously a scare and getting into the wonky weeds. a lot of it was related to residual, seasonal effects how

you adjust the inflation data that actually inflation it has been this year on the trajectory that they anticipated last december. in june effectively they reflected the inflation scare. and now that it's proven to be a scare that we can get back to the status quo. and i think that's what the dot plot is going to show tomorrow and maybe just a bit more, particularly in '25 than what you had printed back in december of last year. so it's back to the future with a little bit of tabasco, i think. >> the tabasco is good on everything. makes it better. >> yes, it is. >> you're on the record saying you would go a quarter tomorrow in our very closely-split fed panel. coming up for our power house blueprint, we look at what has become more expensive parts

of the home. the garage, whether it's sky high auto loan rates or inflation in insurance costs. "power lunch" will be right back. >> announcer: crypto watch is sponsored by grayscale.

the all new godaddy airo helps you get your business online in minutes with the power of ai... ...with a perfect name, a great logo, and a beautiful website. just start with a domain, a few clicks, and you're in business. make now the future at godaddy.com/airo

welcome back to "power lunch." since the cpi came out last wednesday, we have been examining the different areas you buy, different things and how those prices are changed over the past year. some have fallen, others remain elevated but nothing has risen as much as car insurance, up 16.5%. more if you look back other the past couple years. contessa brewer joins us now. >> that's the upside, investors are seeing a return on their

investment. it's clear americans are getting sticker shock when they're opening their insurance bills. we continue to see car insurance going up, though it's going up at a slightly slower pace. the consumer price index for august shows .6% increase over the previous month. as you said, kelly, 16.5% otver the previous year. they're playing catch up to the spike they saw in 2022 and 2023 in the costs to repair and replace vehicles as well as what it costs to fix someone who gets hurt. property insurance, similar story. moody shows 16% increase in property insurance in some markets over the past few years. where normally it increases 2 or 3%, it's especially troubling moody, says in consumer real estate, where cost and availability is killing deals. i saw that firsthand. you saw it triple in price for a texas multifamily property. he says, hey, that killed my profit margins. march is showing property insurance moderating. just 2% increase in the second

quarter. it also reports that casualty insurance rates increased 7% if you exclude worker's compensation. and then umbrella or excess liability risk, those rates increased for companies 10%. some lines, though, are seeing declining premiums. 83% of companies have seen a reduction in what they pay for directors and officers insurance over the last couple years. according to woodruff sawyer and the trend is beginning to reverse. they say going into 2025, you might see slight increases. cyber insurance, single digit percentage declines, even though ransomware attacks are higher. but companies are learning better how to mitigate the impact. property and casualty remains the pain point. insurers have been unable to raise fast enough to cover their payouts on claim. they leave the market, when that happens. look at california and florida, overall in the second quarter insurance rates, all lines here,

rose just 1%. sure doesn't feel like that when you're opening your own car insurance or home insurance bill. >> contessa, we were just chatting about this around the table. do you know how many people are trying to go, for instance, home insurance? auto, you're not really supposed to. >> look, what happens with your -- if you have a mortgage, the bank demands that you have insurance that's going to cover the cost of repair and replacement. and that can be very expensive. if you don't have a mortgage, you don't have to do that. great opportunities in what's called excess and surplus lines. the california regulator doesn't want to approve the rates that you think you need in order to really cover your risk. you go outside the regulated market and you pay whatever you need to pay for this cadillac of insurance policies and that is for aig, other insurers they have become very valuable. if you own your home outright, you might decide, i'll take it as a loss because i can afford to rebuild. >> brent?

>> contessa, it's very interesting you talk about the insurance company self selecting and pulling out of markets. but i do think you are seeing more and more consumers self selecting and pulling out of the mortgage insurance wells the auto insurance. now, you're not supposed to. if you have a mortgage, the bank is supposed to check on it and catch you eventually. the auto insurance, it's only if you get caught. i think more and more consumers are likely doing that to be discretionary spending and pulling back. >> the system seems to be so automated now, that for instance, if you don't provide the proof of insurance, when you register your car, they will yank your registration. then you get tickets because your car is not registered. there seems to be some sort of automation at the state level now to enforce those insurance and therefore registration claims. you're absolutely right. and a lot of people now are foregoing full coverage and opting just for liability. so they're trying to bring down their price wherever they can. >> all right. contessa, thanks very much.

very complete report, very complicated interesting business. inflation high rates slowly making your garage one of the most expensive parts of your home. that's because of what's inside it. and that's the focus of our final blueprint of our series on the home. according to the latest cpi data, vehicle prices are down slightly year over year. it's everything else that drives up the prices. the interest rate nor for a new vehicle hovering above 9%. auto insurance up 16% or so over the past year and all of this is pushing americans to keep their cars longer. the average age of a car is t12.6 years. joining us now is colin. new vehicle price -- welcome, number one. new vehicle prices down about 1% year over year. used vehicles down 10.4%.

that's quite a change from the growth we saw during the pandemic. but boy, the basic automobile is $50,000 or more. there are plenty of makes or models going for more than 100k. jeep has one. >> yeah. i mean, we have seen since covid record auto pricing. it's been a big tail wind for the detroit three and the traditional automakers. the car since covid is over $10,000 more expensive. yeah, it's down a meager 1 or 2% but on a 6% for many years now. and we'll see more pressure. we see excess industry capacity. and so automakers will have to discount to move volume. but so far it's been a very slow pace so far this year. but it's one of the key risks is i think price normalization off of record pricing over the next few years. >> so you don't think they're going to be able to keep taking price the way they did in 2021, 2022. those salad days are done?

>> well, there were structural things going on. you had covid but the subsequent supply chain industry. the industry was handcuffed. there was a point in the industry if you made the car you sold it because there was nothing on dealer lots. those days are long gone. inventory is back -- the last few months back to supply where it used to be at. you go to a dealer lot and you could find a good selection. the other problem is we added 3 million units of capacity. so we have sales that are actually below pre-covid levels but more industry capacity. historically what happens is if you have too much capacity, such a motivation to discount the car to get that capacity higher. i think that's going to play out over the next few years. >> colin, i would like to ask you about the mix of what the manufacturers are producing in terms of internal combustion versus ev. i think it was recently reported that ford is losing $132,000 per electric vehicle they make.

so, we talk about the prices of cars. even with the higher prices the manufacturers are losing money, some manufacturers on these electric vehicles. are they recognizing did they make a mistake? and are you going to see them retrench a little bit and go back to where they're making money rather than just producing cars for the sake of producing cars? >> well, i don't think to be fair to the industry they've made a mistake. they're in a bit of a dildilemm. they have epa targets. it will be hard to hit those targets. 2032 targets are extremely aggressive. so they have to sell evs. all we have seen so far is them pull back on their ev plans. there's a lot of uncertainty. the election might dictate some of this. the unfortunate reality is they have to sell it. they got overconfident how much they could sell. they have to sell certain evs to hit those regulations. unfortunately this is actually another pain point in addition to pricing is they will be forced to sell evs and unfortunately it doesn't seem like the consumer is that interested which is why we've

seen -- while industry pricing held in, ev pricing collapsed. >> if there's a new administration, if donald trump wins the presidency, won't those epa targets be reduced? i mean, be liberalized or made easier? >> i think that's -- i mean, there's a mixed bag no matter who wins the election here. yeah, i think it's very likely trump given his commentary would actually cut the e -- those targets dramatically. but look, under obama it took him about three years to cut those targets. so, if you're a traditional automaker, those targets will increase through probably 2028 even if he wins. there's also a worse scenario if that he actually removes part of ira, which gives funding to evs, they actually might have this period of actually more unprofitable evs because of the lack of subsidies and being forced to sell more of them to hit those targets until they could actually flatline those targets out in 2028. so it's a pretty tough situation regardless of who wins. but, it's challenge no matter what.

>> have to leave it there. colin, thank you very much. >> by the way, he has to sell on all the automakers, electric or mainstream. gold prices are falling today after soaring to new record highs. up next, our trader is looking at a new way to play gold ahead of tomorrow's fed meeting. that's in "market navigator" next. next. ♪ so they can take their game to a whole new level... ♪♪ because now their network is self-configuring, self-detecting, and self-healing. they even have a virtual assistrvis. so they can simply ask the network... how's the wi-fi today? that's the now way to network at work— with real ai— letting you rise above it all.

♪♪ rising costs. selective coverage. for countless americans, the complex specialty care they need has always felt... just out of reach. ♪♪ at evernorth, we give members unrivaled access to the most complex therapies at the best prices. while providing enhanced support like in—home nursing at no additional cost. that's wonder made possible. evernorth health services.

welcome back to "power lunch." it's a holding pattern ahead of tomorrow's fed decision. one of the closest calls we have had since at least 2015, by the way. the way that bank of america calculates it the odds of a quarter point cut were basically 50/50 three days ahead of the meeting. nasdaq is positive. the russell isn't there but it's the outperformer of the session today. ahead of the fed, gold is continuing to hit new highs this week as the dollar the dollar is getting more attention too, its weakness. is the gold trade getting crowded? those who still want the hedge, tony zhang is chief strategist at options play. tony, great to see you. walk us through your line of thinking here. >> yeah. so really comes down to tomorrow's fed meeting, whether

we're going to get 25 bases points or 50 bases points. i would argue that the fed right now is looking a little bit further towards the labor market, the cooling of the labor market more so than inflation in terms of their decision right now. and if they make only a 25 bases point cut, which traditionally is where they start, they might find themselves quite a bit behind by the next meeting in november, if let's say september and october continues to come in fairly soft in the labor market. so i think for those reasons they may very well have to make a 50 bases point cut in tomorrow's meeting. and i think that's going to be supportive for assets such as gold, which is why i'm taking a bullish position here on gold. >> okay. >> especially now it's broken out to new all-time highs. we can continue on through 27.50. >> you have a whole strategy around that if we get a 50 cut. but what if we only get a 25. what do you do? >> that certainly will be potentially a bearish thesis for

gold. however, that's why i'm using options to play this. the way to do this is to utilize options, protected on both sides. whether this workings out in our favor, we'll collect roughly $2 in premium. doesn't work out, our total risk per contract is maximum of only $300 per contract. i have a risk/reward ratio of a little under 1.5 to 1 in this particular case. no matter what happens even if gold completely collapses outside reasons beyond just the 25 basis point cut decision, the risk is limited using an options strategy like this. >> all right. you feeling still bullish. you said bullish to neutral on gold itself. i'm taking notes. tony, thank you very much for your time today. weappreciate it. tony zhang from market navigator. tyler, over to you. >> breaking news out of the airline industry, phil lebeau has the details. hey, phil. ♪ >> reporter: tyler, take a look at shares of alaska airlines.

the d.o.t. has cleared the way for alaska airlines to close its merger with hawaii airlines. this was announced last december. the doj did not fight it in court. there are some stipulations in terms of consumer protections, things like no expiration of miles, family seating is required, also air service to rural areas, maintaining access to the airport in honolulu, those are not onerous terms. this means that alaska, which was the fifth largest airline, solidifies its position by adding in more market share with alaska airlines -- with hawaiian airlines. hawaiian will continue flying under that brand as will alaska. and tomorrow, we have an exclusive interview with alaska ceo ben minicucci. you don't want to hmiss this. we'll talk with him on "squawk on the street" about closing this merger and a few other things including getting some boeing airplanes. they have a lot of them on order. we'll see what he has to say

tomorrow morning on squawk on the street. >> another seattle company there real neighbor of yours. we'll have more with brent next as we dig into commercial real estate. ow lchwi brit "perun" lle gh back. ♪ ♪ ♪ ♪ ♪

♪ ♪ ♪ ♪ (woman 1) all right, here we go. uggggh. (man 1) oh no, no, no, no, no, no! (man 2) what's my next step? oh! ugh. (girl) dad. (vo) you break it. we take it. (woman 2) we can take it. (vo) trade in any phone, in any condition at verizon for the new google pixel 9 with gemini. (man 2) give me a recipe with these ingredients. (girl) let's do that one. (vo) only on verizon.

ryan t. writes, "moving is stressful. can you help me take one thing off of my to do list?” ugh, moving's the worst. with xfinity, you can transfer your internet in just a few taps. just a few easy moves. did somebody say “easy moves”? ♪ ♪ oh no. no, i was talking about moving your internet. this will move the internet. ♪ ♪ ooh, ooh. -let's keep it professional. professional dancers! -ok! stay connected during your move with the best in home wifi. easily transfer your services in the xfinity app.

bring on the good stuff. ♪ welcome back to "power lunch." let's go a little beyond the fed and talk about the economy with our guest host brent beardall. the ceo of waffed. there's so much to discuss. we were just talking top of the show about how surprise we have been by the resilience of the economy in the face of rate hikes. how about commercial real estate. one area, you said, hey, it's not going to be as bad as feared but the headlines going into this year were all about this massive wall of commercial real estate refinancing looming. it's a cliff. it's a that. it's going to be a disaster and yet here we are. >> thank you for bringing its up. i want to kill chicken little. all the pundits, the sky is falling, the sky is falling stop the madness.

to me, if somebody sed i want to talk about commercial real estate, they're being intellectually lazy. it's way too broad of a category. someone wants to talk office, included in commercial real estate. that's great. our portfolio is only 4%. we don't have a single delinquency. you have to understand what makes it up. multifamily, for example, we were just looking at -- >> apartments. >> we were just looking outside. corporate headquarters right next to the cnbc studio. they're putting in housing. it turns out we have a massive shortage of housing in the united states. in the fact that everyone grouped everything together in this broad category of commercial real estate stop. understand. >> the uniting characteristic was a lot of real estate for the past decade built with super low interest rates and boom the fed jacks up to 5%. look, it hurt private equity and a lot of businesses that depended on cheap financing. why hasn't it been a bigger factor for real estate?

>> well, they were able to with stand it. it was a big factor. but let me ask you a question, why is it just so targeted on commercial real estate and not the same for residential single family? you had the same characteristics there. >> because you're locked in -- so it's fascinating how the government set this up to say we're going to subsidize ohm eners. that's a decision we made as a society and that's why we saw the collapse of banks when rates jacked up and they were on the other side. >> who takes most of the risk? federal government. look at the balance sheet of the fed and how upside down that balance sheet is. but back to the point on commercial real estate. we were all so nervous about oh my goodness, all of these loans are going to come due and they're not going to be able to afford the interest payments. what's happened? we have seen already baked into the ten-year, 3.65%. >> i want to get your thoughts on something that happened yesterday in your town, seattle, that is amazon announcing they expect all of their workers, a lot of office workers, to be

back in office full time in january. were you surprised by that? and obviously if more -- if the big dogs start doing this, the little fry will follow, i would think. and you'll see a return to office. >> all i can say is god bless amazon and jassi. it's needed. it's a fantastic thing for the cultures of the company. >> how much of your work force is in full time? the one in the stores are there. >> in terms of back office, very few. but as an employer, i have very little leverage. you know, i'm not jamie dimon. i can't say, hey, i demand everybody come in. if you don't come in, you don't have a job. i don't want to see 20, 30% turnover. but if the market shifts, i thought yesterday was pivotal. because amazon being the 800 pound gorilla in seattle and frankly in the country, if they say we are better off as a company, it is better for us, it's better for our employees to have you in the office five days

a week, that will be easier for us. now, i do want to put a grain of salt on that because i think thr some jobs that it makes sense to have a hybrid environment. >> it's good for a lot of -- certain career phase when you have families, balancing care for younger and older people, i would love to see some degree of flexibility remain. >> yeah. some degree is good. but, if you're a young person coming into the work force and you want to learn how things are done, how could you do that through a remote-only environment? >> for sure. >> and the other thing we haven't experienced it -- frankly again i was wrong -- i thought the fed increasing interest rates up to 5.25 you would see slack in the labor market and see massive layoffs. if you're a manager, you'll cut, who will you cut next? >> unless that's what this is all about. the attrition they're warning about could be attrition they would welcome. >> people won't come back. i don't want no part of this. >> because they're flattening as well. looking to flant out some of the

middle manager. they still have post-pandemic bloat, i believe, after that hiring spurt. you wonder if it's a bit of right sizing. >> and you have to wonder, though, if the employee says, hey, this is an opportunity to go somewhere else, if no one else is hiring, they're not going to look for that option. >> right. let's go to bertha coombs for a cnbc news update. >> tyler, the hezbollah says pagers belonging to its members exploded across lebanon today, killing nine and injuring more than 2,700 people. the group placed the blame on israel without providing evidence for that claim. israel has not commented on those accusations. the coast guard hearing testimony for a second day into the implosion of a tour submersible headed to the titanic last year. the findings include the first images of the titan wreckage on the sea floor as well as new claims today from a former employee of the company behind the excursion saying owner oceangate was motivated by money

and ignored his safety concerns about the sub. and boston marathon hopefuls will have to train even harder if they want to get to heart break hill. the world's oldest marathon is asking most prospective runners to finish five minutes faster than in recent years in order to qualify. male runners between 18 and 34 will have to clock in at 2:55 or faster. women of that age will have to complete the distance in 3:25. tyler, i think that's how long it takes me to do 26 meters. >> boy, coming in at under three hours in a marathon is a real accomplishment. that's going to narrow the field, i would think, a lot. what do i know about running a marathon. all right. thank you. coming up, exclusive interview with snap ceo evan spiegel announcing big security changes

and new products too. "power lunch" is back in two. do you have a life insurance policy you no longer need? now you can sell your policy - even a term policy - for an immediate cash payment. call coventry direct to learn more. we thought we had planned carefully for our retirement. but we quickly realized we needed a way to supplement our income. our friend sold their policy to help pay their medical bills, and that got me thinking. maybe selling our policy could help with our retirement. i'm skeptical, so i did some

research and called coventry direct. they explained life insurance is a valuable asset that can be sold. we learned we could sell all of our policy, or keep part of it with no future payments. who knew? we sold our policy. now we can relax and enjoy our retirement as we had planned. if you have $100,000 or more of life insurance, you may qualify to sell your policy. don't cancel or let your policy lapse without finding out what it's worth. visit coventrydirect.com to find out if your policy qualifies. or call the number on your screen. coventry direct, redefining insurance.

boom! at&t internet that's why i'm chief technology officer but all you did was plug it in, you didn't do anything neither did you exactly exactly exactly exactly impressed? honestly, a little exactly (slurp) ♪ welcome back to "power

lunch." tens of millions of teenagers may see a major change to their instagram. that's because starting today instagram plans to default all new and existing accounts set up by people who have indicated they are under 18 years old to private mode. basically means only approved followers will have access to their posts. this comes during a time when social media firms are under scrutiny over the impact their platforms have on teenagers. this was not, kel, the only thing that facebook or meta announced today with respect to instagram. they also are going to put a thing on where you're not going to get alerted after 10:00 p.m. at night. so presumably help people sleep more. but the question here is how are they going to ensure that the people who say they are 18 and above are? >> of course. anonymity is going away and you increasingly will have to be who

you. which might help these platforms. apple here, these apps. they just had a big product launch. there's always an opportunity to say, by the way, here is a switch to flip for teen or kid mode. allow people to do it not just for metha's family of apps. >> absolutely. let's get over now to julia boorstin who is joined by a special guest who knows a little about these kinds of things. snap ceo evan spiegel joins julia live. julia? >> thanks so much, tyler. and evan, thank you so much for joining us here from your big partner summit, where you just unveiled really big news. i am going to ask you about that instagram news. but first i want to start off with your news. you just unveiled your next generation of spectacles, they're augmented reality glasses and also operating system for developers. when will consumers be able to buy these devices? and how much are they going to cost? who are you competing with here? >> thank you, julia. we are so excited that you're here with us today at the snap

partner summit. we're even more excited about the snap spectacles the fifth generation is out today featuring our all-new operating system that's based on natural interaction. so you just use your hands and your voice to interact with augmented reality. and what's so exciting about spectacles is it brings us closer to our vision grounded in the real world with their friends and that's something we have been working on for a long time now. >> but so we also have two other giants working on this, which are apple and meta. they have been throwing a ton of money on this. we have yet to see augmented reality go mainstream. why does it make sense to invest so much at this at a time when your stock is down 43% year to date. >> we also have yet to see augmented reality glasses from either of those companies. interesting to see if they follow our lead. the reason why we're so convinced that ar glasses are the path forward is because people are getting tired of screens. and we worked really hard to try to innovate with screens to make them better and more fun to use. at the end of the day, they're just screens. people feel isolated by their

screens. glasses are a way to use computing that actually brings us together and keeps us connected with the real world. >> but give us a sense of the timeline here. these devices maybe pull them up and show them to our viewers. i got to try them out. they're very cool but they're still not being sold to consumers. when can we expect these to be competing with whatever it is that maybe meta will be introducing next week at its summit. >> we initially focus on our developer community. hundreds of thousands of developers already using lens studio to build millions of lenses. and today they can go on spectacles.com, link to studio and sign up for our developer program just $99 a month. we tried to really low ter barrier to folks getting started with this new technology. they'll get spectacles and snap support to bring their imagination to life. >> but explain how this fits in with your overall business. i mentioned the stock is down 43% year to date. explain to informsers what you're doing to help turn the stock around? >> well, we're really excited about the growth of the snapchat

community which now reaches over 850 million people all over the world. and we're on pace for record annual revenue this year, driven by the engagement across the platform and the investments we have been making in our direct response advertising platform, especially for small and medium-sized customers. >> is there a direct connection between thesemedium-sized custo >> is there going to be a direct connection between innovations you're showcasing here, and revenue? how long before we start to see those investments boost your bottom line? >> the key to generate revenue is making products people love and want to use. that's driven the growth in our community, the engagement with products. we're excited with the way people are going to use ai glasses. people are getting fed up with screens and the way they make them feel. and developers are frustrated developing for the smartphone platform. i think we're at the moment, consumers are ready for something new. >> but you haven't announced

what the long-term business implications are other than revenue? other announcements, what is a simplified version of the app. today you demoed it. you're going to start rolling it out. the last time you revamped, you got a huge amount of pushback, how is this time different? how are you going to avoid alienating your users? >> we're excited about simple snapchat. it brings people closer to everything they love about snapchat, snapping with their friends, and of course stories. we have rolled out a mixed feed content series. stories and short video together in a yuunified content experien. the feedback has been positive. we've got more work to do. this will be better received than the last time around? >> you have been testing it. you have a better idea what the response is. >> when we redesigned snapchat a few years ago, it was about our

values. we wanted to bring people closer together with their friends, and so at the time, creators were getting distribution at the top of the stories page, pushing friends lower on the page. we redesigned the service to bring friends to the top. snapchat is built for friend and family, built around relationships, and that did frustrate creators who saw their reach diminish. the growth we have seen since then validates that decision. >> in terms of your business, you referenced you have ad formats. you're going to be putting ads into direct messages and the map. how will we see those impact your revenue and profitability? >> one of the things we know about snapchat is people use it in a lot of different ways. they chat with friend. see what their friends are up to tonight map. they use augmented reality measurements, and most of the ad revenue is based on content. we think there's an opportunity to pioneer new ad-formats that

help partners reach snapchat across the app. >> leading into the conversation, kelly and tyler were talking about this new format of instagram for teens. limiting access to certain types of content that could be inappropriate for teens and also giving parents a chance to keep an eye on who they're messaging with and putting their accounts to default to private mode. do you need to do more with the growing scrutiny and concern of regulators or the surgeon general? >> we're happy to see instagram copying our safety tools. family center allows you to see who teens are messaging. i suppose it's better late than never. >> there's a lot of scrutiny about what can happen on snapchat, investigative articles, the way teens are getting access to drugs via snapchat, do you think you need to be doing more? >> we're focused on protecting our community. we have invested hundreds of

millions of dollars in trust and safety efforts and architected the platform to keep people safe. whether that's making sure you have to opt in communicating with somebody. add each other as a friend before you start talking or defaulting into private settings for their profile. not having a public friends list. these are the sorts of things that can help keep young people safe. we're excited to see instagram copying a few. we hope to come out in support of the kids online safety app. we thought that was the right thing to do. we need rules of the road in tech, and we'd love to see their support as well. >> evan spiegel, we're out of time. i know this is going to be a hot topic, all the efforts you and others are making to protect kids online. thank you for joining us at the partner summit and a sneak peek at the news spectacles. thanks. >> julia and evan, thank you very much. we appreciate it. you can always hear us on our podcast. follow and listen wherever you

want to go. if you want to hear everything our guest said, share this with your friends and we'll getting your final thoughts when "power lunch" returns. 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.

over 90% of cobalt used in batteries comes from china. electra battery materials, awarded $20 million by the u.s. department of defense, is bringing the battery supply chain home, reducing dependance on china and revitalizing our industrial base. electra battery materials.

business. and it's not a nine-to-fiveial proposition. it's all day and into the night. it's all the things that keep this world turning. it's the go-tos that keep us going. the places we cheer. trust. hang out. and check in. they all choose the advanced network solutions and round the clock partnership from comcast business. powering more businesses than anyone. powering possibilities. welcome back, just a couple minutes left with the ceo of wafed bank. before that, let's talk about part of your area in seattle, boeing. this company might have to

furlough workers and executives as it deals with the strike. what have you been the impacts for you or the community? >> i have not met the new ceo kelly ortberg, but i respect him a great deal. it is leadership to say our headquarters are in chicago, and he's going to move to their largest manufacturing base in the seattle area where they've had issues. he is an engineer, i believe, by trade. he's going to get in there. i'm bullish on boeing in what they're doing. that is leadership. they have a huge challenge in terms of the strike. i'm confident they'll get it addressed. . >> let's talk about regional banks and how yours is doing. there was all that trouble a year and a half ago. some of it lingers. your bank is healthy and the stock has risen. >> it's great to be with you and not talk about the health of regional banks. regional banks are incredibly strong, and i think there's pent up demand for regional banks. consumers, small businesses, large businesses, they want a relationship with the banker, and it turns out the largest

bank in the country, you can't have a relationship with the mid-sized bank. >> we have a whole depth of the internet thesis. that in-person touch really does go a long way. >> it does. just like this. i want to close by saying thank you for having me. >> thank you for being with us, brent. always good to see you. you always add so much to the conversation. and thank you all for watching "power lunch." >> "closing bell" starts now. we'll see you tomorrow in washington, d.c. i'm mike santoli in for scot wapner. he just finished with jeffrey gundlag. wall street in suspense, a rare degree of uncertainty on the fed's next move within 24 hours of the decision. hoping to hold the indexes in check, just below record highs. here's the score card with 60 minutes to go in regulation. the s&p 500 touched an intraday record high before the rally leaped