>> abvie. great pipeline. >> disney. thinking about what streaming profitability next year will be like. i think a lot higher than expectations. >> we had 28 seconds to do that and they thought we couldn't get it in, and now we have time to kill. >> what are you doing this weekend? >> lots of little league and flag football. thanks. see you at 4:00 p.m. "the exchange" starts now. ♪ ♪ >> brian, send it here. we're ready and waiting. welcome to "the exchange." i'm kelly evans. markets were initially cheering the economic data today. the dow climbing to new highs, although the s&p and nasdaq are now lower. but our economist still warns inflation isn't going to fade away completely. he'll talk about why and for how long it could stay volatile. and we'll explore why home prices seem to be falling in parts of the country. and what that means for the home builder trade and also some

stealthy mid cap names that jefferies says could surge next year. and chinese equities having their best week in 16 years after government stimulus measures. but u.s. tariffs, including a 1 h -- 100% on evs, go into effect today. dom has the numbers. >> as you alluded to, kelly, we'll talk about the record highs, the one major index in the u.s. that has received record high levels. dow, 42,405, up about a half percent, outperforming the rest of the market here, up 230 points. the new high water mark is 42,628. so there's your high on an intraday level. we're at 42,402, so off the best levels of the session. the s&p at 5747, just about flat on the session, as well. at the highs, we were up roughly 18 points and down roughly 5 at the lows. that is your intraday trading

range on the broader s&p 500. and the nasdaq underperforming today, down about 0.2 of 1%, 18,155 is the last trade there, 35 points to the downside. one of the reasons there was that nasdaq underperformance today is the same reason there was the nasdaq outperformance in yesterday's trade on a relative basis. that is many of the chip names on the heels oh of that nice, big pop from micron on the computer chip side of things. today, because of that rising tide yesterday for chip stocks, they're giving a little bit of that back today. nvidia, marvell technology, broadcom, micron, among some of the names in the red after seeing a decent gain yesterday. and then the one stock we want to highlight today has been on the news because of a new drug approval. for the first schizophrenia treatment approved in over 70 years. that's why bristol-myers is up about 3% today. off the session highs.

it's been down 11% over the years, but trading above its 200 day and 50-day moving averages. but that's the reason why bristol-myers is in the news, one of the best performers on the s&p 500. so chips, bristol-myers. back over to you. >> my neighbor is going to be a happy lady today. we begin with the fed's pr preferred inflation cage, putting the inflation rate at 2.2%. the core still running hotter, 2.7. but those numbers are not changing my next guest's best case of quarter point cuts for the rest of the year. she says the bar isn't particularly high for bigger ones. join us is julia coronado, and cnbc's very own steve liesman. steve, just set the stage briefly. what is the market's current anticipation, what is priced in for rate cuts? >> okay.

some fresh quotes right here. surprising to me, by the way, kelly. i thought you might get a little more movement, but it's 54% for a 25 -- for a 50, and 46% for a 25. so leaning a little bit more towards a 50. you were at 51% going into the meeting. remember, it's been as high as 65%, but we got some better than expected data. you also had these revisions to income and spending that are generally higher over the past several months and selveral years. and also an upward revision we talked about yesterday to the savings rate. all of that helping to suggest that maybe the economy is a touch stronger than previously believed. maybe the weakness that we might get is from a somewhat higher level. not a big move by the market when it comes to the outlook for the fed here. just a 54% chance of a 50. >> to that point, as the data has been resilient, nancy just

upped her fourth quarter gdp estimate from a minus one or two to a positive. i don't want to say people are throwing in the towel, julia, but this confounds many of the bears. if we go through this quarter, and this quarter, next quarter, it's not going to be a negative. we really are talking about the recession never showed up, at least if it shows up at this point, it's so far delayed it's applied to a different business cycle. >> it's been a good run for those of us in the soft landing camp. what we're seeing is the start of relining. yes, the economy is resilient, but the labor market is cooling, and the inflation is just a few basis points from target. so they've seen enough. they can recalibrate. that's going to provide relief to a lot of the intrasensitive sectors and give us -- what worries me in the labor market is we didn't have an engine of growth. no, there's not mass layoffs,

but there's more caution on hiring, spreading across industries and sectors. we need some industries to turn around and decide it's time to add workers again to keep that feedback loop between hiring and spending on track. i think we have a good shot at it. i think the speed of the rate cuts matter. the fed has told us that they're going to do what it takes to achieve the soft landing, and so, you know, i think that they have had a lot of -- they've built a lot of credibility fighting inflation. now they need to put their money where their mouth is and keep the economy on track. >> what i want to dwell on is this issue more and more people are asking about inflation and whether it could start to look sticky again. i just wanted to mention to your point we need an engine of hiring. great article by former colleague ruth simon in "the wall street journal" yesterday. the lead tells it, a maker of gun safes plans to boost

advertising. a candle maker is looking to take out a $20,000 loan to expand for the holidays. small businesses were hurt the most for rate hikes, and they're feeling the relief that will help on hiring and spending. >> absolutely. i was just talking to a multifamily developer, who was saying the same thing, that they're seeing the light at the end of the tunnel. they've been dealing with the oversupply, but they think they will be building full speed in the next 12 to 18 months, and that's great news for inflation, the stickiest part of inflation is the housing inflation. that's where we're getting to this danger zone, where rate hikes are going to choke off supply. now that we can relieve some of that pressure, hopefully we'll build a pipeline of supply that will keep that inflation in check. and this isn't just about the next few months, over the next year or two is what we're talking about now. >> we're going to speak about that later this hour. steve, don peebles yesterday

said he thinks bigger cut also be more stimulative to housing supply. so if we have pressure coming off of housing, if we look at oil, thank you, saudi arabia. if we have pressure coming off of oil while china is stimulating, that's a pretty good recipe for the u.s. consumer. >> yeah, and i think that housing is sort of the fed's ace in the hole, that these lower market rates we're seeing will show up in the index, helping to bring down inflation towards the 2% target. i want to talk about this change you were talking about with nancy lazar. i have chronicled over the past several years this idea -- you know, there was a song in the 1930s, in the depression era. it was "prosperity is just around the corner, but we still want to know which corner." it's been the opposite with the recession. recession is in the next quarter, but we want to know which quarter. it's been a trend, kelly, that every next quarter was going to be the weak one, until the

quarter comes around and the economist revised it up. so i don't know, i'm not say thing won't be a recession, but this has been an expansion that's had few beliefs and a lot of skeptics. it just keeps rolling on. i appreciate some of julia's concern about where the next engine of growth is going to come from. but if you have higher earnings and decent economic growth, i wouldn't worry too much about that. >> i feel like the grinch at the end of the movie, where this -- for the past year, so worried about a hard landing. my heart is expanding and maybe it's going to be just fine. so then because we have to look around the next corner for the boogeyman, are we going to look back at this, and many market observers cautioned the response. yields are higher, including the two-year since the fed cut rates, which is unbelievable. bitcoin is higher, the dollar is much weaker, that's going to add inflationary pressure. is the fed going to look back

and say we went too far and we'll have to turn around and think about maybe a different -- a less steep rate cutting path? >> you know, i really don't think so. you know, we go so deep in the dynamics of inflation. we do a complete bottoms up in addition to running macro models. i just don't see where it's going to come from. the fact that, okay, china is stimulating, but it's not going to get that commodity intensive growth, so we have this nice, global tailwind from commodities. that super cycle never showed up. and domestically, service disinflation keeps spreading. a number of fed speakers mentioned that. one of the things that gave way in recent months was car insurance. it's just been going up relentlessly. it's still going up, but the pace slowed down to something much more normal. so, i think we're starting to see that spreading dynamic, you know, more modest inflation, more modest price hikes, and it

looked like it's got legs to me. so i don't see the boogeyman in the inflation data. it's probably some geopolitical conflict if there is a boogeyman, or trade war potentially. but i don't think it's going to be inflation. >> thank you both. really appreciate it. while stocks have continued to hit a series of new highs, by next guest says there are some once-in-a-lifetime opportunities out there. he actually sees them in energy and housing. this is the perfect segue for bill smeade. bill, how do you invest as a result? >> well, as a contrarian, i'm hearing music to my ears. everyone forgets -- anybody say anything in that discussion about $12 trillion of federal government borrowed money -- >> nope.

>> -- that's out there sloshing all over the place, helping the congress be much stronger than what the inverted yield curve would have demanded. and none of what they're doing in lowering rates makes that sloshing disappear. in fact, it just reinvigorates the slosh. so, the home building is going to be very strong outside the big metropolitan areas. that's what the weakness they're talking an'ting about, because y will go where it's being treated best. there's a lot of growth in mid market, the smaller than big metropolitan areas -- the metropolitans in indiana and ohio are seeing a lot of home building. the builders are building where it's affordable. the companies are going to move the people where it's affordable, and that's one of the reasons why we stayed so long with that housing stocks, the home builders have done so well for so long. and we still think the next ten

years, there's 180 million people under 40. the average age of a first-time home buyer is 35. so we've got a good path on that. go ahead. >> i was just going to add an addendum to that you also like shares of u-haul. it's up 7%, so some say why bother? >> they need to call southwest airlines and buy their trademark thing they say, you're now tree to move about the country. so, it costs $200 to rent a 7 x 11 trailer to go from phoenix to los angeles and $1199 to go from los angeles to phoenix. so the person taking it from phoenix to los angeles is paying the company to move the equipment back where they need it. so that business is just ideally situated, because they have the storage unit business, which

is -- that might be america's best business, because americans like to shop and buy things. they like to hoard. americans are hoarders, and -- >> there was new construction, a light storage or pure storage or something, but i don't know, maybe it's going to be a different moment. let's talk energy for a second, as well. oil prices have been under pressure now that saudi arabia says they will pump despite whatever chinese demand might look like. you've owned these stocks for a long time. is this a once in a generational opportunity to get in, or are they not going to quite live up toexpectations? >> great question. we like to hold stocks for a long time. if you do, you have to sit through major corrections in the bull markets in the things you're involved in. so if you go back to when the saudis took the price of oil negative on saudi sunday in 2020, that was a 220-year low point for commodities and oil

and gas relative to the stock market. so then you have a big move off that in '21 and '22. now we're going through the first significant correction this that move. and boy, the investors have scattered faster than you can ever imagine, right? we're very lonely in our enthusiasm for oil and gas right now, which is great. that means the sentiment is setting up for the next move. we're kind of in the leon cooperman part of the world here. >> exactly. >> only the only can play. >> oxi in particular is when people always say, what's berkshire going to do? it continues to languish. bank of america you still hold. these are kind of deeply contrarian -- maybe not deeply, but -- >> your point is well taken. if you go back to 1969, which was a major euphoric episode. t. rowe price saw all the money

borrowed to put 500,000 american troops halfway around the world for many years, was very inflationary. at the same time warren buffett sent the cash back out to everyone and closed his partnership. what's buffet doing right now? he's a seller, building a massive cash hoard. you know, warren -- >> why? what is he going to do with that? >> warren buffett not stock picking is like the dodgers calling the other team and asking them to intentionally walk shohei ohtani. he's the greatest stock picker of all time and he's not picking stocks. >> what does that tell you? >> he's bearish, and it's just obvious. he's got almost 30% of the market cap sitting in cash. so this is a time like that, and what's interesting -- this will be my last point on the oil and gas -- 40% of electricity is made with natural gas, people get excited, somebody restarts a nuclear plant and the stock goes

up 20 points, right? but our companies make natural gas, and the price is ridiculously low, and it's only going to go up because it make 40s% of the electricity. that's the most attractive play out there right now, and it's starting to perk up here. >> we have to go, but listen, david teper yesterday implied that the u.s. market is j overvalued and said buy everything in china and it's hard to short the u.s. do you have a quick thought on that? >> that used to be the main negative on the oil and gas stocks is china is not going to buy any. even in the deepest recession in the united states since the depression, there was only a 2% decline in gasoline consumption in 2008. so it's not that -- it's a sticky -- you know, it's a staple. it's an addictive legal drug. >> thank you for your time

today. good to see you again. >> thank you. coming up, speaking of those stimulus measures in beijing, they are pushing chinese stocks toward their best week since 2008. while the fxi large cap etf is tracking for its best week on record. and new u.s. tariffs on $20 billion of chinese goods go into effect today. we'll tell you what's getting hit and the impact on trade with 40 days until the election. but first, hershey is on pace to snap a nine-day losing streak, but still a four-month low. jefferies downgraded the c chocolate maker to underperform. theable abnalyst behind that ca joins us next. >> this is "the exchange" on cnbc.

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welcome back. cocoa prices remain elevated, almost doubling year to date. my next guest says that dynamic mixed with a cautious consumer could spell bad news for hershey, downgrading the stock to jumdunderperform. for more, i'm joined by rob dickerson from jefferies. rob, great to have you, because our friend of the show has been very bullish on hershey. i'm thinking at some point cocoa prices moderate. but you're not persuaded. >> not yet.

you know, clearly i'd say hershey, over a very long period of time, you know, it's always considered one of the most defensive names within u.s. staples and within u.s. food. right now, we have a bit of a different situation. everyone loves chocolate and candy, but it poses a number of problems, at least in the near term. so there is very excessive cost inflation about to hit hershey, because we can see where as it comes up through the year, but a lot of these companies are hedged, so you don't see those until later down the road. that said, big topic of conversation has been higher prices at the grocery store. we have seen much higher prices in chocolate. chocolate does sell at a bit higher of a price point relative to food and snacks.

so it does become a little bit less immediate. consumers feel a little more safer in kind of what they're buying. not discretionary as i will buy anything i want, but i have to be careful how i'm spending my dollars in the store. so right now -- go ahead. >> the cheeky person might say there's not much cocoa this hershey. in other words, how much of your downgrade is about cost pressures, and how much is about the shopper not showing up for these items? and if so, why not and what should the company do about it? >> clear, yeah. the cost of cocoa can be cyclical to some extent. we've never seen an increase like this in my lifetime. that said, you know, on the structural side of hershey, right, we've also, you know, seen a lot of volume pressure. so when you look at the chocolate category over five years, it's underperformed on average and also u.s. snacking

in aggregate. consumers do seem to have shifted, at least somewhat, into the gummy world, right? i mean, i have two kids. they get in the car, they go to 7/eleven, they talk about gummy clusters. >> i thought you meant, you know, cannabis gummies. i'm thinking i hope your kids aren't -- >> no, no, we're not doing cannabis. we're talking straightup candy. >> got it. >> yeah, so if you look back in 2019 to where we are today, the gummy category has taken almost -- approximately 20% of share of that category, right? so chocolate has always been the defensive, and candy can still be defensive, even to some extent at higher price points. now you have other competition within that category that's not chocolate. >> nerds, skittles, sour patch, they have the momentum right now. does hershey need to make some sort of acquisition or product

launch to compete with that or wait for taste to change? >> hershey is giving it a heck of a college try right now. it's very early, but they just launched in august with i would say a big new york presence this week, with shaq, the brand is shaq-a-licious. they have two core skews in the marketplace, and that's not accidental. this is very intentional because of what we have seen within the gummy marketplace. now, we are entering, as you said, an area with very well known brands. i would throw in swedish fish, lifesavers, the list goes on, that if they can do very well with this product, then they will have a place at that table. but at the same time, let's not forget if that does very well, it also night not still bode well for a broader chocolate portfolio. >> i'm looking up the

shaq-a-licious gummies right now. they're extra large shaq heads. now when i'm in the stores and i see people buying this, i have a whole different perspective on the implications. appreciate you joining us. for now, it's $163 price target, an underperform. thank you for your time. still ahead, the major averages are set to end the week higher. the russell 2,000s are trying to join in on the rally. we'll look at where the opportunities are adheing into q-4. "the exchange" is back after this. 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. ♪♪ ♪♪ ♪♪ ♪♪

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human way to healthcare. welcome back to "the exchange." i'm pippa stevens with your cnbc news update. joe biden approved an emergency declaration for five states who will receive federal assistance and federal personnel to help with search and rescue and restoring power. flash flood warnings are in place across georgia, including fulton county, which covers atlanta, as helene makes its way north. three iranian nationals were

indicted after stealing documents from the trump campaign. they were identified as iran's revolutionary guard and targeted other government officials. a senior u.s. defense official says china's newest nuclear submarine sank between may and june. when asked about the sinking at a press conference earlier today, china's foreign ministry did not provide any information. the current status is unknown. kelly, back to you. >> great reporting to reveal that. pippa, thanks. britain's anti-trust watch dog, amazon invested $4 billion into anthropic who agreed to use amazon's chips and data centers. scrutiny still looms for others in the, arvegs space. deidre bosa has more in "tech

check." to what extent is this halting any plans? it feels like people are still powering ahead, so to speak. >> yeah, this will probably only help that, right? remember that these deals in the first place were meant to avoid scrutiny from the regulators, so it worked, more of an open question for some of the other investigations out there. but let's look at what it wanted to do, that is figure out whether large companies are using their investments to influence the future of the generative ai industry. so essentially, are they picking the winners to their benefit? so the cma in the uk cleared the anthropic/amazon deal, in part because anthropic's uk revenue was too small. however, keep in mind that may overlook what is actually happening under the hood. now, as i reported earlier this week, anthropic is telling investors it expects to bring in $1 billion in revenue this year, representing growth of more than 1,000% year over year. a huge part of that growth is due to amazon.

its payment for use of anthropic's ai could make up as much as 75% of the startup's total revenue. so amazon is strengthening anthropic by super charging growth through aws. that could be relevant for the ftc's probe here in the u.s. it's looking not just at amazon and anthropic, but google's deal and microsoft into openai. and the top ai startups are growing their top lines more quickly than past waves of software companies. the orange line shows it took nearly three years on average for the top 100 software companies on strike to reach $5 million in annualized revenue. in 2024, it's taking just two years for the top 100 ai companies to reach that milestone profitability. however, startups that are building foundational models like openai, they have higher cost and lower growth margins.

but if they're growing so quickly, part of that is because of these deals with mega cap companies, and the regulators, known to move fairly slow, they're moving a little faster these days, still have to move faster to keep up with how quickly the space is change and how quickly the mega caps are helping to mint the winners. >> i love that chart. glad we could show that on how ai is accelerating small companies' launches. we'll track it, but that tells you the companies could be leaner and meaner even than we thought, and there is a healthy ecosystem of startups in the ai space. have a great weekend, deidre. deidre bosa. coming up, new tariffs are china are going into effect today. stndl tell you what's on the li a the chances of igniting a trade war after the election. details a of this.

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welcome back to "the exchange." incredible outperformance for chinese equities, including the carmakers, even as a 100% tariff goes into effect today, thanks to the government stimulus

boosting chinese stocks this week. it's not just the evs that face higher taxes. megan, what's happening? >> reporter: hey, kelly. there's a lot happening here. new tariffs are kicking into effect on billions of dollars worth of chinese imports. the duties start at 25% for ev batteries and battery parts, steel and aluminum products, and then oh to 100% on those electric vehicles, as well as syringes and needles. and this is really just the first round. on january 1, 50% tariffs on semiconductors and surgical markets. and 2026, there will be a third round impacting medical goods like facemasks, rubber gloves and ev batteries. the biden administration is considering tariffs for other things, so could be more to come here. remember, kelly, these were tariffs that president trump initially imposed back in 2018 to crack down on china for what at the time were called forced

technology transfer. biden kept those tariffs in place, and they decided it not only hadn't got enbetter, but chinese behavior was worse. so now they're expanding on those tariffs, and the duties will cover $244 billion worth of imports. so kelly, this is obviously far more narrowly targeting than what trump is proposing now, but it highlights how neither party is supporting free trade and it will leave the u.s. vulnerable for retaliation. >> interesting to ponder not just with the u.s., but with mexico if things start to get a bit tense, and then harris tweeted overnight that replacement of nafta, saying she voted against it because it didn't protect our country and workers. what do you make of that? >> yeah, interesting. big day for trade news. this was abinteresting statement from harris, it came out

overnight ahead of president trump's visit to michigan where he will talk about auto workers. she was doing a few things here. she called out stellantis by name, then blaming president trump and the usmca for allowing stellantis and other companies to outsource workers. and she was saying she wants to go and review the issue it is elected president. as you mentioned, she did vote against it and will have the power if elected president to reopen that pact because of something the trump administration baked into it, this sunset clause that will require all three countries by june or july of 2026 to reconfirm their commitment to this pact. otherwise, it's back in limbo. she'll have the power to renegotiate this if she's the next president, and now she's suggesting she wants to use that power and put some more labor protections in there. we don't know what else. the campaign says they couldn't

give us any details. but big implications for businesses that operate across north america that just had to readjust to new rules a few year ago when nafta was put in place, now may have to do that in the next couple of years. >> so many different facets to deal with. megan, thanks. my next guest is wendy cut cutler, did a lot of trade with asia. wendy, welcome. did you work on mexico, as well? >> not directly, but nip at ustr had some input into the process through the years. >> it's all related, and i understand that the campaign trail issue is about china, and we can talk about that more in a minute. but just to stick for what harris is saying with the usmca coming up for review, it's a different political dynamic between mexico and the u.s., because what's happening at the

border, the extent of which mexico is in control of the country, and more people questioning if we should allow free trade with a country that's not guaranteeing that security. so do you see a risk there where it might not have previously existed? >> i do think tensions with mexico on the trade front are heigh heightening. that said, it can be mansaged properly. i think either -- whoever wins the presidency is going to put a big focus on this review of this agreement and request changes, particularly to mexico. but perhaps even to canada to make the agreement more labor friendly and maybe environment friendly for the u.s. and make sure manufacturing doesn't leave the united states for one of the nafta countries. >> right. i saw those comments from trump recently who was talking about john deere, a 200% tariff for moving jobs to mexico.

it seems like it gives us some leverage, the expiring of the agreement with mexico and the tariffs with china that can now be used as an incentive if we are trying to push them on bigger policy issues to say we could lower these in exchange for certain changes. is that what they're meant to do, or is this just about revenue and growing domestic markets? >> i think with mexico, it is more about influencing their behavior. i think with china, the consensus is moving. china is doing what it is doing on the trade front and subsidizing its industries and picking champions. frankly, pumpi dumping all its products around the world. when it comes to china, not only the u.s., but the eu and other countries are putting in place tariffs to get ahead of the curve and to make sure that china isn't unfairly sending their products to our borders. that's what these new targeted tariffs are about.

they're not across the board. the biden administration has spent a lot of time going through all the requests for stake holders and come up with a targeted list of products that megan described, including clean energy products, steel, aluminum, personal protective equipment, and lithium ion batteries and a few other products. >> so what wendy doesn't tell you these stimulus measures, the monetary ones, the fiscal ones, big emphasis on the stock market. even though a few chinese citizens have exposure, something like 10%. what are they trying to do? >> i think china is trying to turn its economy down, and as the end of the year gets closer and it becomes evident that without bolder measures, they're not going to achieve their modest growth target of 5%, that more measures were needed. that's what we saw this week. the immediate response is positive. but i think there's also a view

that the measures announced so far are insufficient, more needs to be done. but that said, they have moved a lot this past week. a lot of folks wish they had done that a year ago, but they've done it now. >> isn't that true. wendy, thanks for joining us today. we appreciate it. >> thank you. let's turn now to small businesses here at home. cnbc and survey monkey are out with the latest read on main vote's sentiment and a pulse check on the election. kate rogers has those details. >> our survey finds that overall owners seem more in alignment with donald trump, but support for candidates is split along party lines. half of owners say trump will have a positive impact on their business, only a third say that for kamala harris. one in five that are undecided, the results are roughly echoing the party affiliations of the polled participants.

independent small business owners less optimistic that either partly will improve their businesses but refer trump over harris. 31% say trump will benefit their business the most, compared to 13% for harris. but the majority are either undecided or do not believe in either candidate. that is interesting, as kamala harris has laid out a small business plan to kater to main street with tax credits for starting up small businesses. overall, small business optimism did increase this quarter to 51 out of 100, up pour points from q-2 of 204. nine points higher than q-3 of last year, the highest level of the biden administration so far. >> the highest level in our survey of the past nearly four years? >> yeah, of the biden term, correct. up nine points from this same time last year. so a lot of eyes on the set, of course. i think the interest rate

expectation that interest rates will be lower also giving a positive boost to sentiment in this quarter. >> a great sign for the soft landing. i know it's consensus at this point, but very important component. kate, thank you. coming up, shares of novo nordisk are slipping. but the shares were at a seven-month low earlier in the sessio n dn,owown about 3.5%. "the exchange" is back after this. 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) your record label is taking off.

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welcome back. keeping an eye on the major averages. the russell is leading the way today, and trying to be positive on the week. it's up 0.8% or better. coming up, this name is on a tear, up nearly 25% over the past month after an earnings beat and strong guidance, and b of a sees more than 12% upside from here.

w it's our mist try chart. see if you can guess it in the break. and cnbc is celebrating hispanic heritage this month. here is carlos gutierrez. ♪ ♪ >> hispanics have made a great contribution to country, and i'm not talking about just low-skilled workers but high-skilled workers and even c-suite. i would urge corporate america to understand the skills of hispanic americans, their history, their experiences have given them skills that they can use in business.

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a lot of these are household names but ones we don't talk a lot about. how have they been doing broadly speaking? i see peloton, rh, zillow. can you make money in these names? are you? >> some, you can, some, we're a little more cautious on. in terms of thinking about the rate exposure, across the board, pretty high sensitivity, particularly for some of the housing names, some of the home furnishing names. so, called out rh. i think that's a really interesting one. reported results a couple weeks ago. came in, you know, kind of in line below the guidance a little bit, but the critical thing was that they said that demand is finally starting to accelerate in a pretty good rate as they're putting new products out, as they are reaccelerating their gallery growth and as they have high exposure to the premium part of the real estate market, unlike some of their competitors, at least their share is higher there.

and also for the first time, they're starting to gain share, which i think is a really important thing in terms of sentiment, in terms of how investors think about this name. so, yeah, really interesting one here. >> you know, it echos what we heard, i think it was anthony who was saying, as we're getting this restart of a consumer cycle, we're going to see it hit home depot and ancillary companies like you mentioned. what do you say to people who don't have the stomach for rh? its volatility is wild. >> it's a wild one for sure in terms of the, certainly, the stock performance, but i guess the view that we take is, look, as i kind of mentioned before, the company's been through a pretty radical product transformation or product reset. they're putting new marketing back into the market through their sourcebooks. they're starting up again their gallery growth, which is, you know, historically been a really important part of how they grow. and in terms of, again, where -- i think you're going to see the most, i guess, leverage from

housing and home furnishings, it's at the higher end of the market. you put all these things together, both market and idiosyncratic factors, you know, and rh, that's why it should continue to work. >> i don't mean to overly dwell on it, because the gist of your thesis here is that after the fed rate cuts, you're updating your price targets, raising them on companies with the highest rate exposure with the best opportunity for revenue and earnings upside in a soft landing scenario, so they're just one example. all of the ones i said earlier, from peloton, a controversial one to red fin on the real estate play. duolingo, there's been an a.i. concern there. zillow, wayfair. ecv auctions is a name we've never discussed, curtis. >> it's an interesting one. so, acb auctions, think of it as, it's basically a digital marketplace for wholesale vehicles. so, dealerships basically trading cars.

and it's a market that hasn't really been digitized. these guys are kind of at the leading edge. and kind of the, i guess, the tricky part of the story, they're gaining lots of share, but the market for vehicles, and particularly wholesale vehicles, has been pretty challenged, down about 25% relative to historic averages,so i guess one thesis or theory you could take or one angle is as rates get better, affordability for cars gets -- improves, you could start to see the market improve, and that, theoretically, would be a good thing for acv. i don't think of it as potentially a sneaky great play that people aren't thinking about. >> it's done quite well, year to date, even in a tougher auto market and still a neutral for you. you are upping your price target, so for those looking for a quick trade. curtis, thanks for joining us, we appreciate it. curtis nagle with b of a. "power lunch" is back. m ifor tyler.

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♪ kelly has strong feelings about a lot of things. anyway, welcome to "power lunch," alongside kelly evans, i'm dominic chu. the nasdaq is slightly lower but higher for the week and with only one trading day left, the month of september is, well, i mean, you can kind of see there. it's been a pretty solid day and