2.3% dividend, growing at a 10% clip. >> jim, jumping on the bandwagon it looks like. >> i am the bandwagon. rjr, profitable small cap. i don't know what you're talking about, frank. >> a lot of people talking about small caps today. that's going to do it for us. the dow and s&p trading at intraday records. "the exchange" starts right now. ♪ ♪ >> frank, thank you very much. i'm kelly evans. welcome to "the exchange." here's what's coming up. stocks are in rally mode in a very big way following the fed's big rate cut, but our market guest says it may be time to slow down and get a little cautious, because this fed is like a car swerving all over the road. here's here with what he means by that and why that doesn't mean there's not an opportunity in the market. he'll tell us where. bank of america crunched the numbers and said one sector is

poised to pop following the rate cuts. that means about the next three months, you're looking at one of them. our mystery chart is up 16%. no way anyone will guess that. the analyst is here to make his case. and perhaps the news you needed today. you can now have olive garden bread sticks on demand. darden striking a deal with uber. just the latest partnership in ride share in an effort to gape market share. uber is up 3%. doordash up 3.5%. airbnb strong. that's all ahead. let's begin with the rally. the dow and s&p hitting record intraday highs, and on track to close at record highs. dom isn't here, so that's my best attempt at a car. the dow is over 42,000. the nasdaq is the best performer, up nearly 3% today. and the small caps, they are up

2%. moving right along, treasury yields. that's been so much of the focus. we saw some of that volatility yesterday, but things have been settling down. but they're shooting higher for the ten-year. that means nearly 3.75% now. the two-year is at 3.60%, so we have a nice normalization of the yield curve here, such that it is steep, changing the earlier trend that has been a big concern for banks and so forth. gold is hitting another all-time high, but you can see a 3/4% gain, over $2600 an ounce for gold. bitcoin is up 5% as the risk on trade resumes. there you can see bitcoin adding 5.5% today. so one of the areas that's really most getting a pop. and let's check on oil, with crude prices also higher, some of this is due to the weaker dollar effect. crude oil up 1.8%.

$72 and change for wti. let's drill down on that fed's half point cut yesterday and the new word we hard from jay powell, recalibration. let's bring in steve liesman for more on that. steve, what's the significance? >> well, i would say senior economics reporter and chief, umm, chief reader of the dictionary, kelly. lots of talk about what the word "recalibrate" means and what it could mean for future policy. fed policy recalibrated because it wasn't in the right place. the fed looks to be recalibrating policy from inflation concern to worry about employment and to be in a position to address further weakness from restrictive policy towards a more neutral one, and to policy that may be less, not at all that data dependent but less. and the fed is recalibrating to

neutral, so it may not be guided by the nuances in the data, only big swings like a return of the inflation threat. also to preclude another 50 basis point cut. >> part of bringing down inflation, though, is cooling off the economy and cooling off the labor market. we have a cooler labor market, in part because of our activity. so what that tells you is, it's time to change our stance. so we did that. the sense of the change in the stance is we're recalibrating our policy, over time, to a stance that will be more neutral. >> here's where the average fed official projects rates are going and how they get there. 4.4 is the number for the end of the year, or 100 lower by the end of the year. another 100 by the end of next year and settling down to 2.9 in 2026 and beyond. that 2.9 is a tick higher. but the break down of the dot

plot was hawkish. seven only seen one more cut, some nine of the 19 forecasters 25 basis points of addition al kutes or less. nine officials see two more cuts or another 50 for a total of 100, and one forecast three for 1.25. the question is whether powell and the fed can or want to control market enthusiasm for more cuts. it's also priced more aggressively, that is the market than the average fed forecast, and futures markets have built in a 50 in december. as one former fed official said to me this morning, if you're recalibrating, why not do another 50? >> why do you think he said that? >> well, because the recalibration says, let's get to where we want to go if we know we're going there, why not get there quickly? >> making sure i track with the argument. steve, thank you. stick around, our next guest wanted a half point cut but expected the fed to either underpromise or underdeliver.

now he says this is surprise good news for small businesses and labor markets. you must have been jubilant. you've been saying they're way behind the curve. >> i'm not sure i would go with jubilant after 40 years of watching this, but yeah, the crux of my argument is that they went about policy tightening all wrong. they eased primarily through using their balance sheet, and they tightened primarily through using rate policy, because the deepest yield curve inversion since the early '80s, something that wiped out the savings and loan industry, or started a chain of events that wiped it out. and it put the burden on floating rate borrowers, small businesses, small banks. and as a consequence, if they hadn't done it that way, if they had been more active with unwinding their balance sheet, even if they didn't want to sell mortgages outright, had they

invested into treasury bills instead of keeping the maturity as long as they had, steve asked rich clarita about this the other day, and i don't think they would have ever had to go beyond four. so to me, to get to four, get that policy rate back to four, somewhat painlessly disinvert the curve, take the pressure off small banks and small businesses. the faster they get there, the higher the probability that we avoid a recession, because to me, it looks like we're in a small business recession that could easily spread to the rest of the economy, given that's the foundation of the labor market. >> exactly. this is one area where a bigger rate cut will have an immediate effect that could lengthen the recovery and help the people it needs to the most. just to go back to this point about the balance sheet. some have argued that the large balance sheet has been a form of stimulus. it's cushioned the blow instead

of the traditional financial system. is it still sort of supporting the economy? is it working against what the fed's been trying to do? does it matter now? >> so there's three forms of stimulus in place, and one form of restriction. the only form of restriction was the policy rate. we've got $3.3 trillion in bank reserves sitting in the system, something that didn't exist prepandemic, or preglobal financial crisis, excuse me. we have the pressure on the back end of the balance sheet, which is holding rates a percent lower than they would be otherwise, and running a 7% budget deficit in government spending and 24% of gdp. so we have a very imbalanced economy. if you own assets, policy is easy. if you're a big, publicly traded home builder that can finance at the curve, policy is easy. if you are a small business that borrows at a floating rate or a small bank, policy is tight. >> i think these are great points. steve, what do you think the fed

would say in response? what are the plans now as it relates to the balance sheet? why has it gone down this path? >> so i need to read barry's writing a little more carefully. i've been reporting this morning this issue of the balance sheet. i keep coming up with balance sheet doesn't matter, bsdm. i've talked to do -- two federal officials and one market analyst who follows the plumbing of the system very carefully, and he just says there susisn't an imp right now. he doesn't think it'sed very much in the beginning, doesn't think it had much impact right now. the story i was trying to report this morning, maybe barry can help me out, was there a knock on the fed, such that lower rates might make quantitative tightening more impactful, but so far it doesn't seem to be

having much impact the qt side of things. i was wondering if it was time to pay attention to the balance sheet while the rates were coming down. i don't know that's the case, but right now, kelly, my reporting, and i need to understand like i said barry's explanation a little bit more, the balance sheet didn't have a big effect on the way up and it's not on the way down. >> which is weird, because it's a tool they have used as a tool of monetary policy. and i'm curious what your response is. >> it tightened the spread of mortgages to treasuries to all-time tights, which caused a lot of private equity money to flow into the residential real estate market and lowered rates to all-time lows, which caused the case schiller 20 city home price index to go up 40%. and when they unwound it, it hasn't had an impact on the way up, because they had been so passive with the way they've done it. chair powell in march said we're going to have a discussion about

the maturity profile of our balance sheet. they never did that. my argument would be any maturing securities should be reinvested in bills, not buying more ten-year notes to keep that maturity profile long. so the kansas city fed, after the discussion at jackson hole, released a note saying we still think it's putting downward pressure on rates to the tune of 1.5%. housing is a great example. you have steve kimmel on all the time. 70% of the supply of residential housing is mom and pop builders. they don't have access to credit, and the price is expensive. dr horton, lennar are selling -- getting longer term financing, doing mortgage buydowns and taking market share. >> he said this would make the market more concentrated, and smaller businesses have to play floating rate debt. the bigger ones can tap the bond market. steve, any follow-on to that? >> barry, i just want to

understand, it sounds like what you're saying if the fed switches from reinvesting in longer term to shorter term, it would buttput more duration bac into the market. i did report that concept authority, barry. what i heard is that at the current pace of the runoff, since the treasury is putting out so much in the way of new supply right now, that it would have only a marginal effect on the total outstanding duration. i want to thank kelly evans and the producers, this is the only show we can get this far down in the weeds talking about the duration and maturity profile of the balance sheet. barry, you would have to -- under your scenario, you would have to increase the runoff pace in order to have a meaningful effect on duration in the market, is that right? >> and barry, in answering that, for all the people at homes who eyes are glossing over, explain

the significance to the economy and what it means for the deficit in the stock market. >> the bottom line here is, the way that they conducted policy put a lot of pressure on small banks in particular who don't have 50% of the revenues in fees. they rely on borrowing short, lending long. that sustainable disinversion of the curve would help the small banking system, help small businesses andhelp them earn their way out of it. >> and the regional bank etf up 2.5% today. >> it's going to take time for those deposit costs to come down. the fed wouldn't have had to go as far as they did had they take an different approach, a more aggressive approach to unwinding their balance sheet. >> you know i love these thought experiments, but here we are, they have chose thnn this path. >> if the recalibration gets to four, in the first -- by early to first quarter let's say, the probability of avoiding that

pressure in small business employment that was evident in the negative 118,000 benchmark revision could start to dissipate somewhat. small business confidence could improve, and we could avoid this broadening out to the entire economy. >> thank you. >> so barry, you say -- i'm going to come right back to this, barry, are you saying 50 is down to four or 50s down to three? why not get to neutral and do it fast? >> that's my suggestion. we need to get to four. i don't think the fed will have to go beyond four if they do it quickly. so i think four, for me, i'm in the camp that the neutral policy rate is significantly higher than it was prepandemic. but they need to get to four and disinvert the yield curve to relieve the pressure on the small business sector and small businesses. by the way, if you want another fed official to talk to, you should probably talk to rob

kaplan about this. he's a former fed official -- >> i will. >> go ahead, steve. >> the guys i talked to, one of them, but one small point that chart i showed earlier of the breakdown of the dots suggests to me that the chair does not, at the moment, he's very capable, obviously, of getting people to go around to one side, but he doesn't have that support for an aggressive move. if you look at the dots for the rest of this year, they look a little on the hawkish side, if you ask me. maybe barry is 100% right, but i'm not sure that's where the committee is at this time. >> i would agree, but the risk around their forecast was symmetrical with respect to inflation but skewed towards higher unemployment. and their forecast is never different this time argument. because as we know, as bill dudley keeps saying, once you

beat the sahm rule threshold, you always go up another point. >> let's get the president's take. joe biden is speaking at the economic club of washington. let's listen in. >> it's good news in my view for the overall economy, because lower borrowing costs will support economic growth. it's an important signal from the federal reserve to the nation that after repeated interest hikes to cool down inflation, inflation has come back down and the fed, the fed is lowering -- switched to lowering rates to keep the country and economy growing. at its peak, as you all know, inflation was 9.1% in the united states. today, it's much closer to 2%. that doesn't mean our work is done, far from it. far from it. no one should confuse why i'm here. i'm not here to take a victory lap. i'm not here to say job well done. i'm not here to say we don't have a hell of a lot more work to do.

we do have more work to do. but what i am here to speak about is how far we've come, how we got here, and most importantly, the foundation that i believe built from our equitable future in america. so let's be clear, the fed lowering interest rates isn't a declaration of victory, but a declaration of progress. a signal we have entered a new phase of our economy and recovery. you know, i believe it's important for the country to recognize this progress, because if we don't, the progress we made will remain locked in the fear of negative mindset that dominated our economic outlook since the pandemic began. instead of seeing the immense opportunities in front of us, this is an opportunity to ex-vest higher and expand. a moment for individuals to feel greater confidence buying a home, a new car, starting a family, starting a new business. we're creating jobs.

employment remains very low. small business creation is at a historic high. the main challenge we've had has been a painful one, but it's been the pandemic. and the inflation it created, causing enormous pain and hardship for families across america. it's not true for us but for every major economy in the world. but now, now inflation is coming down in the united states. the fact is, it's come down faster and lower than almost any other world's advanced economy. so now, instead of looking at interest rates and increased interest rates are going to be coming down, and they are expected to go down further. that's a good place for us to be. [ applause ] a lot of people, as you all know, maybe you know a few, thought we would never get here.

when i came into office, 3,000 people a day were dying of covid. 3,000 a day. millions of americans lost their jobs and businesses and the global economy was in a ta tailspin. four years ago, we inherited the worst pandemic in a century, the worse economic crisis since the depression. my predecessor is one of two presidents in american history who left office with fewer jobs than the day he came to office. the other, herbert hoover. when i came to office, there was no plan to deal with the pandemic. no plan to get the economy back. nothing, virtually nothing. in fact, non-partisan congressional budget office said we wouldn't see a full recovery until the end of my first term. i refused to accept that. i came to office determined not only to deliver immediate economic relief for the american people, but to transform the way our economy works over the

long-term. trade a new economic playbook. grow the economy through the middle out, the bottom up, not just the top down. put workers first, support unions to make sure workers can have a fair price to grow that pie. after all, it's the productivity, they're the productivity baking in that pie. no one leaves no one behind. foster fair competition. invest in all of america and in all americans. we do things for the poor and the middle class do very well and the wealthy continue to do well. we are doing well. working families and the middle class are the center of the recovery. here are the keys from the new playbook in my view. within the first two months in office, i signed the american rescue plan. one of the most significant economic recovery packages in

our history. not a single person on the other team, not a republican voted for it. it delivered shots in the arm for vaccines. in one of the most sophisticated operations in american history. i found it incredibly difficult to plan that. without protecting our nation from economy, our economic recovery would have never taken off. it also delivered immediate economic relief for those that needed it the most. an xhidindividual earning less $75,000 a year received $1400. a family of wooiffive could rec as much as $7,000. that is a game changer. it also prevented a wave of evictions, and delinquencies and defaults. and it left working families

behind. i was determined to avoid what secretary yellen called the economic scarring, scarring hurt so many americans and left them behind in the past. we delivered funding to states and local governments to keep the central services moving, to keep teachers and first responders on the job. to keep small businesses open. and to build more housing. we also expanded a child tax credit to cut child poverty in half. with the butch lewis act, it took the most significant action to take the pensions of millions of retires. before we acted, workers faced cuts to their pensions. now, we're restoring the full amount of the pension, including for workers who previously saw cuts, and so much more. we also know the pandemic led to a surge in inflation all across america and the world, and the country, i should say, and the economy shut down. and then opened back up in an unprecedented manner.

shipping had stalled. factories shut down. inflation grew worse after putin invaded ukraine, which sent food prices skyrocketing and energy prices soaring around the world. so we brought together business and labor to fix the problem of a broken supply chain and unclog our ports. remember those massive cargo ships stick outside the port of los angeles? delaying deliveries and driving up prices during the holiday season, remember that? we remember the shortage of baby formula and the crisis that caused. we got supply chains back to normal, and we did that and inflation began to ease. not solved, but ease. i also rallied our allies to stand against putin's aggression, and in the beginning there wasn't a lot of support for that. i warned them all, i got clearance from the intelligence community and let them know when he was going to invade. they didn't believe it was going

to happen, but he invaded exactly when i said he was and led the world to realize that we're in a real problem. and releasing the oil resteerve- >> that's joe biden wrapping up his remarks about the economy. let's turn to eomon. anything that jumped out to you? >> he says this is not him taking a victory lap, but this is kind of him taking a victory lap. it's clear that he and the people around him feel that they have done heroic work in this term, in terms of shoring up the u.s. economy. and this is his opportunity now, that we saw the fed starting to cut interest rates, they feel like they have gotten their arms around inflation, the interest rates will come down and americans will start to feel that. this is their opportunity to take credit politically for all of that, really. what's striking to me, kelly, as you watch this is how populist the entire political discussion about the economy has become.

you hear him talking about the massive spending on infrastructure and covid and other things that he's done during his term and the impact on the economy. then we heard donald trump campaigning last night, talking about his populist view of the economy. he had a proposal last night to cap credit card interest rates at 10%, saying we can't allow these banks to charge 30% on credit card debt. that sort of thing seems to be where we're going in terms of the political discussion. it's about regulation, politically populist appeals, and big government spending. for both of these candidates in many ways. you know, slice and dice your particular side of it. but that's where we're going, is populism across the economy. >> until the markets force anything like fiscal discipline, there's no reason not to hear more of this on both sides. thank you so much. coming up, bank of america

says consumer staples are poised to outperform for the next 90 days thanks to the first rate cut in four years. but some companies tend to do better than others. this is pepsi versus coke, hershey versus smuckers, and p&g versus clorox. and here's another check on the broad markets with the dow and s&p hitting record highs today. the nasdaq the best performer. we're back after this. >> this is "the exchange" on cnbc. ed

welcome back. stocks may be rallying after that half point rate cut, by my next guest says following this fed is like following a car swerving all over the road, makes you want to slow down and get cautious. joining me now is the vice chair and head of investment group at aerial investment. so glad to get your thoughts on everything that's taken place. i was talking to barry knapp earlier, but he's feeling more positive about things. sounds like you might disagree. >> yeah, honestly this is a complicated topic and not easy to do, but the basic idea is that milton friedman wrote a book called "the monetary

history of the united states" and what he proved is what we needed is slow and steady monetary policy, where the fed would raise the money supply at a predictable rate of roughly 5% to 6% allowing for growth but not cause inflation. the fed tends to look back in history and is slow to adjust its policy, and then the effects of monetary changes are variable and lag. they tend to not show up for 9 to 18 months. so the effect of a change in policy often would have been helpful in the past, but ends up exacerbating the problem going forward. >> of course. >> so we have the fed flood the market with cash during covid, taking the money supply from $15 trillion to $21 trillion, the biggest increase we have ever had. that caused inflation, just as the economy was recovering. then they slam on the brakes and take up interest rates up faster than the fed has ever taken them

up, after inflation was actually coming down, and now they've been slow to adjust the interest rates to what is clearly a weakening job market. and now they see that, and now they're going to overadjust again. so what would be better is if they would act in a slow and steady way and be much more predictable instead of veering all over the road which just makes everybody more cautious. >> i think you're quite right. yesterday claudia sahm was talking about this. i heard others say the same thing, that this wasn't monetary, that it was supply chain predominantly. so even as you say, they took these actions with the monetary base, if they did something too aggressive in the first place, should. that by aggressive in taking it back to make sure -- that's barry's argument, get back to 4% as quickly as you can. >> right. but kelly, if you look at the monetary numbers, they went from

$15 trillion in m-2 to $21 trillion. over the last year, we have had one year decline in the money supply. we've never had a decline in the money supply before. they have already started to take that excess liquidity out of the market. they have succeeded in bringing inflation down, and now they've had interest rates way above the national rate. another thing for listeners to watch is that the natural interest rate is 1 to 1.5% above the inflation rate. so the real interest rate should be 1 to 1.5%. in the world we're in today, that should mean something like 3.5% to 4%. not this crazy 5% to 5.5%. >> that's the argument for cutting by 50. you're making the argument. >> no, i'm saying they've been wrong on your show and others, many of us have been calling for them to begin the process of cutting rates, but do it in a much more modest 25 basis points

approach. so now they're going to admit they were wrong and speed up and go too quickly and watch, they'll go too fast too quickly, just like that drunk going down the road. >> the only way it could be too fast is if you think the economy is okay, and jobless claims this morning were good. >> that's right. that's exactly right. so this is very important. the job market has been softening, but it's going to be okay. and we have built up demand for housing, built up demand for cars. the economy is going to be fine. the threat that we're going to see, this is the first time i've said it, but sit true, we have two new administrations potentially running for president, both of them are going to increase spending. we are going to have bigger deficits. we are going to have tariffs, less globalization. all of those things longer term are threats for more inflation,

not starting right away, but if you look out to 2026, big deficits, tariffs, end of globalization, we'll have a lot of pressure on inflation. >> we've got to talk about oracle, but the only final point is if we have tariffs and any of these upward price pressures and that monetary base is not growing, it's only going to act as a brake -- you can't invent money out of nothing, right? at some point, it's too expensive, if they're contractionary in their policy, then people won't be able to buy things. >> interest rates were too high. they needed to come down. they should have started coming down six months ago. i just want a gradual decline rather than what we are seeing. >> we should talk about some of these names. oracle, i was thinking of you when it was flying the other day. i think you said maybe you weren't adding to it, but i'm

sur curious if you're more aggressive at cutting it. and do you think it's cheap after the valuations that we're talking about? there's a lot of ways -- look, we can argue about the fed all the time, be you in the long run, earnings drive equity prices, not fed policy. >> thank you, that's right. a lot of the cheaper stocks that we're seeing out there are in some interest sensitive areas. so mosaic in fertilizer, but more mohawk in carpets. those are businesses that are going to be helped by lower interest rates, and they're trading as if we're going into a recession, trading at very low mul multiples. auto names, trading as if we're going into a recession. auto should be helped by lower interest rates. and then my favorite, oracle. oracle really just needs to be

thought of as the software company that helps -- the software that helps companies manage their data, they will be very well positioned for ai. ai is all about analyzing your data, and oracle controls a lot of that data. the stock was way too cheap. it's now getting close to fairly valued. >> like it or not, you are leading towards places that will benefit towards lower rates that are at lower multiples right now. >> value stocks are very cheap. we should see a rotation into value stocks now that the prospect of a recession is lower. saz >> that will be a delight to watch. charlie, thank you for your time today. >> thanks, kelly. over to tyler mathisen now for the cnbc news update. tileer? >> thank you very much, kelly. joe biden and kamala harris will meet with ukrainian leader volodymyr zelenskyy on september 26th. the white house said this in a

statement today, that zelenskyy will meet with them separately, where they will discuss the u.s. support for ukraine and its fight against russia, as well as ukraine's strategic plans. the fbi reported wednesday that iranian hackers september unsew unsolicited stolen info from the trump campaign to interfere in the election. the bureau is not suggesting anyone who received the information responded to the outreach. firefighters near los angeles say they are close to containing three huge wildfires that have burned almost 120,000 acres. destroyed nearly 200 buildings and injured more than 20. more than 8,000 firefighters, 8,000 are on the scene of the bridge line and airport fires. cal fire says cooler weather has helped in the battle for more control. >> wow. he was talking about that when they went out for the sports conference, those wildfires. tyler, thank you. stocks arenearing session

highs with the dow up 604 points, a nearly 1.5% gain. and the nasdaq continues to be the outperformer. everybody is doing well. the russells are up 2%. big tech, meta and netflix are hitting all-time highs today. and tesla is the outperformer of the mag seven, up 7%. apple is now turning positive for september with a 4% gain. the semis are up 5%, having their fifth best day of the year. look at this, up to 243. broadcome, nvidia up. so we're seeing a reversal of some of the underperformers after this rate cut. still ahead, from ride sharing and robo taxes to ravioli, we'll look at uber's new delivery partnership with olive garden. more on "the exchange" after this. (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. with gold and copper prices pushing towards all time highs, us gold corp. offers investors leverage to both gold and copper at its project, and mining friendly wyoming. u.s. gold corp has a reserve of almost 1.5 million ounces of gold equivalents. permits to mine zero debt with only 10.73 million shares outstanding and a portfolio of world class american strategic metals assets. u.s. gold corp, join the golden age.

we invent them, we design them, we build them. and one day, we have to let them soar. ♪ i'm always coming home ♪

welcome back. the nasdaq is flying, and

staples are one of the worst performing sectors today, down about a half a percent. but the dip may be short lived if history is any guide. bank of america reports that all staple subsectors generated gains in the 90 days following first-time rate cuts. joining me now is a staples analyst at bank of america. brian, welcome. i think of potato chips every time i see you. >> hey, kelly, good to see you. >> i've been following this. we're down to $6.25. people around me send me the cost of chips in the aisles where they are shopping. >> you know, walmart had them on sale all summer and they flew off the she wilfshelf. >> walmart is down to $2 in some places. we have rate cuts but these questions about which way prices are going and what's happening

with the consumer. you come down on this rather positively but in select areas. what are they? >> we looked at performance in rate cuts that were associated with soft landings specifically, so not just generic rate cuts. you know, the first conclusion was across consumer staples, the stocks just go up. doesn't mean they outperform the market, but in that 90-day period they go up. then we looked at stocks that, you know, relative performer -- one relative to the other, and we selected stocks where the companies have -- or the stocks have been on the market for a long time, so we can go back to the history that we did. and so, you know, what it uncovered was, if you're in household products, proctor and gamble. pepsi has outperformed coke. campbell's has outperformed smuckers. hershey has been an

outperformer, and brown forman, who makes jack daniels, has outperformed coors. when you look at that, some of that is these outperformers are generally high quality companies, stable dividend players. if you're just purely looking at, you know, these stocks as bond proxies or as a place to go for yields as rates come down, it makes sense that these are the stocks you look at. >> i'm curious why we see certain names outperform others. the larger question, does history apply in this case? as so many things in the pandemic have flown in the face of past business cycles, if we go through a disinflationary cycle, are staples less likely to perform well? >> yeah, kelly, that's a great question. maybe if we separate like fundamental drivers from the macro drivers. look, if interest rates come down and consumers have more

purchasing power, given what's happened in our sector, especially in the discretionary impulse channels, like earnings performance sales should benefit. we talked about potato chips. one of the things that treato has struggled with has been the traffic in the convenience impulse channel. so fundamentally, it actually should mean a bit of positive revision or at least support for sales in earnings growth. if we step back, though, and look again at the macro, you know, again, i think a lot of this is going to be dependant upon whether or not we get to a point where the dividend yields in these stocks are attractive or more attractive than bonds. and that part of it, i think the process may have begun. you can see the performance in the tobacco stocks over the mmer. some of that was this anticipation. >> carter worth was calling out tobacco names. what yields are we talking about in some of these names, do you

think that's the differentiator? >> right. i think we're talking about dividend yields that are historically in the 3% to 4% range. we've got a few in our group, like molson coors sits way above that. the yield differentiator, and the other thing is maybe the dividend growth and the consistency of the dividend also play a role. but ultimately the yield is just a function of the stock price and the stocks ought to, you know, kind of level out at the yield. >> they were hoping to have their cake and eat it, too. and maybe some upside if consumers go back to those impulses. brian, thanks for joining us. good to check in with you today. >> kelly, thank you. 23 and me is meanwhile getting a d-listing notice from the nasdaq after its entire board resigned this week. we turn now to deidre bosa with that story and the ripple effects it could have in silicon valley. hi, deidre. >> kelly, all the drama that

could give startup founders one more reason to stay private or reconsider the consequences of founders. especially when you have to answer to a public board and shareholders. the ceo and founder of the dna testing company, she brought the company public just three years ago. it's since lost 99.9% of its value, from $6 billion market cap peak. so he decided that 23 and me should be private and firmly in her control. she proposed buying back all outstanding shares that she didn't already own. the board rejected that proposal, but she still has enough control to block other potential bidders. it's now culminated with all seven members oh of that board resigning, and a notice from the nasdaq threatening to de-list the company by october 3rd. this is the current web page of 23 and me's board of directors. mightily lonely.

previously, it included some of the most important leaders in tech and health care. these are just some of them. they were attracted in the first place to move fast and ship products. this whole saga playing out in public with all is scrutiny that goes along with this. this is something that was popularized, talked about running airbnb. he said he had to take a step back after becoming a public company and go back to founders mode, remove layers of management, run the company the way he wanted to. that notion of founders versus managers have gained a lot of traction with many of these founders arguing over the merits, and this saga with 23 and me, another example of how it can play out to its benefit or stress. >> i think, deidre, the big question, how do you know when you have that superstar founder? >> yeah, and this story still

isn't done, because i don't know, she could, if she can get the financing, take this company private and maybe turn it around. but that's been the problem. it was such a viral sensation, but there hasn't been a sustainable business model. the kind of test that you take once, and she had plans to build it into a larger health care platform with drug development, with a recurring revenue business. that just hasn't happened. whether that's because she's had to do so publicly or because she had a board and shareholders with different priorities, that's still an open debate. >> she's the back story of why she's doing what she is doing is part of the story. deidre, we'll leave it there for now. coming up, darnen is the best performer on the s&p today. their comps were down,

management reaffirmed guidance, though, thanks to positive sales trends and announced a delivery partnership with uber. uber shares up 3%. we'll dig into all of it, next. sup? -who are you? i'm your inner child. get in. ♪ ♪ [ engine revving ] listen. horsepower keeps you going, but torque gets you going. ♪ ♪ [ engine revving ] oh now we're torquin'! the dodge hornet r/t. the totally torqued-out crossover. (♪♪) (♪♪) what took you so long? i'm sorry, there was a long line at the thai place. you get the sauce i like? of course! you're the man! i wish. the future isn't scary. not investing in it is. nasdaq-100 innovators. one etf.

before investing, carefully read and consider fund investment objectives, risks, charges, expenses and more in prospectus at invesco.com

. darden restaurants first quarter comps disappointed but shares are higher by almost 9% after management said sales are improving and announced a delivery partnership with uber. the pilot is set to start later this year. uber and darden shares are higher but not the only headline in the delivery space today. an upgrade for doordash citing near term strength and under appreciated long-term drivers with 20% upside from here. those shares rallying 3.5%. joining me to talk about it is brian covering the internet and ride share space.

uber has been busy. on the one hand rolling out partnerships with waymo and still expanding their delivery partners. is darden going to be a mover on that front? >> thanks for having me and good afternoon. i think just the addition of never ending breadsticks is not a big deal in isolation, but it's just a further extension of how uber is expanding the restaurant availability, the supply, and the options for people who want to get their food delivered through the platform. it's another way, the more volume they can get going through the platform, more driving and utilization of their leading fleet of couriers. it's important for uber to drive more volume across the platform. it's a way to drive more utilization of the courier fleet. for the restaurant side a way to test how much incremental demand can get as food delivery continues to migrate from off line to online, by the way we still think there's a long way to go and a runway for food

delivery where we think only the mid teens percent of the total restaurant spend is currently online and when you think over the next two, three, five, ten years that's only going to go up and to the right. the more restaurants on the platform, the more dollars are going to move online. >> i suppose i'm slightly skeptical for two reasons. one because i've never had a great experience getting food delivered. it takes a while. it doesn't transport that well. but i imagine that's something that can be solved with time. the other darden itself seems to be a little bit more -- i don't want to say experienceal but something like that, right, you're supposed to feel like you're transported into this different place and they come around the breadsticks and share it with large groups of people or am i stuck in 15 years ago. >> don't give up trying. it's a great experience in a lot of cases. some of the keys to driving initial adoption and repeat behavior are factors that you mentioned.

insuring that the delivery times are as quoted. insure that the food comes warm, the fries aren't soggy, the frosty isn't melted, that's part of some of the complexities of this industry. it's why really the two leaders in this industry, uber and doordash, have such an advantage because the complexities of managing all of that demand from consumers, the different through puts of all of the kitchens that process the food at different rates, and matching it with these millions of drivers that have to make sure you get your fries and it's still warm it is complicated. i would say, you know, the service continues to improve. don't give up on it. i think you're going to see more selection. the wait times keep going down and the experience point, it's a good one, but the other counter argument is, you know, people really do value convenience and value their time. in some cases rather than going out eating have people at your house, instead of taking the time to cook, get food delivered in. there is a convenience and

experience factor as well. >> i think the bigger mover in the long run is whatever happens with waymo and driver's license cars. it changes the economics of the business completely. how much of a near term benefit is that? do you know how much they're paying if they're paying at all for this waymo partnership? >> it's still very early. we don't know the exact specifics around the economics. in the near term it's not going to really move the needle as much and the long term, though, we do think that autonomous driving on the ride share side as well as the food delivery, it is going to be an incremental driver to the overall ride share business. right now, waymo has partnered with uber in a handful of cities, some exclusive, some nonexclusive and waymo on its own is continuing to build out its autonomous offering for the ride share industry. pretty small in the near term. growing very quickly. >> yeah. >> it is a real we think long-term unlock. >> uber becoming kind of -- i

don't want to say a consensus favorite stock but shed some of the problems it had a couple years ago as it continues to win over more investors. leave it there for now. thanks for youti. >>r me thanks so much. and that's it for "the exchange" today. tyler is getting ready for "power lunch." i'll join him on the other side of this break. today's challenge is to play 9 holes without the middle of your bag. how does that sound? that sounds terrible. ♪♪ ♪♪ ♪♪ ♪♪

good afternoon, everybody. welcome to "power lunch."