>> less is still more? >> i think. >> josh, what's your final. >> don't tell anyone, but paypal has an eight handle, oh, my god. >> all right. we won't. crh. >> very large building products company doing extremely well. >> all right. we'll see you in a couple of hours on "closing bell" "the exchang exchange" begins now. we're tracking hurricane milton as it barrels towards florida's west coast. currently a category 4, expected to make landfall near tampa, it has the potential of being a 1 in 100 year event. 43% of tampa's gas stations are out of gas right now, the city's airport is closed, and wells fargo estimates the losses for some of florida's biggers insurers could total

$145 billion in the tampa area as i alone. let's begin with nbc's dana griffin live on the ground where last minute preparations and evacuations are underway with everyone curious, dana, what these people are going to do if they can't leave on the highways and can't get out of the airports. >> reporter: well, they're going to have to hunker down, which is the worst case scenario, especially for people in evacuation zones like along the coast in naples. officials are warning people to leave now, prepare now, especially if you are in an evacuation zone because this is a life threatening storm. behind me, we have seen several residents show up at the beach. you've got surfers in the water. they say the waves are not usually this good. they are taking advantage. many of them say they are not evacuating because they're in areas where they feel they will be safe. they can hunker down. and they told me that they have a plan if they need to evacuate. so mandatory evacuations started at 6:00 this morning. we've seen several residents move their cars to city parking

garages so that they can move them to higher levels. we're seeing people board up. we're seeing people gather sand to protect their homes, and this is just the very start. we are getting some rain here right now, but this is another system. this is not even milton, so there's already saturated ground here, and so the main concern is the potential for storm surge, which could be several feet high, and that is life threatening storm surge. with the already saturated ground and more rain on the way, as milton barrels toward this coastline, it's going to be a very sticky situation. so, again, people are reminded to prepare now, to evacuate, leave now. once that storm hits, you're not going to be able to do it. the best way to survive storm surge is to not be here when it hits. kelly. >> do you know why they closed the airport already? >> because it's too dangerous. you've got rain coming down. we have heard lightning, thunder in the area. i think they want to keep everyone safe. this also allows workers to go

home and prepare themselves because you've got to have staff to operate the airport and if people can't go home and protect their property and their kids, their pets, then there's no need to have an airport open. this is also going to discourage people from trying to travel into the area. we came in sunday and monday for some of our crew members to get here ahead of the storm. so this is a dangerous situation. you've got the st. pete clear water airport that has shut down operations, or they're going to shut down operations starting today. orlando is also going to be suspending their operations on wednesday. you've also got tampa suspending operations. such a life threatening storm, and that's why they're making sure people drive out of here, and unless you've known in already, you're not going to get a plight into the area before milton hits. >> we appreciate you joining us this afternoon. 14% of florida's gas stations had no gas as of 9:00 a.m. this morning. as residents brace for the

impact of milton, tampa bay is seeing the largest incident of outages at 43%. fort myers and orlando, 47 and 15 percent respectively. hurricane out annuals don't usually peak until one to three days after land fall. joining us is patrick, head of control at gas buddy. on the flip side of what dana was reporting is that the roads are now the only way out of these areas, but we've seen this massive gridlock and reports of people already running out of gas and potentially being stranded. what more can you tell us? >> it's certainly a very stressful situation for those motorists now, who are relegated to the roads. there's the a lot of stations without fuel, north on 75 and i-95. it's a challenging situation. the numbers continue to go up. we're at 15.5% of stations in florida without fuel. up another percentage point in the last hour, and some of the cities are particularly challenging to find fuel, but there are stations that are

still having gasoline, especially if you head north. some of the larger travel stops do have gasoline. it's going to be difficult. the outages may continue to rise. keep in mind, port tampa and manatee are the primary sources of gasoline. as those ports become significantly damaged, it could be challenging. >> i know this would be difficult for you to say, based on reports you're getting about gasoline shortages and problems obtaining fuel, is it more dangerous for people who are trying to leave than those who are staying? >> at this point, with the storm potentially making landfall later today, it may be at this point now where it's more dangerous to hit the road. end up getting stuck or somewhere else where you have no safety nets, and i'm just looking at data now, 16.5% of stations in florida without gasoline. the numbers do continue to go up. it's going to continue becoming more challenging for those on the road to find fuel, not only

now, today, as this event unfolds, and milton makes landfall it's going to become more challenging from where we are now. >> what are the best refueling options? how do stations typically access fuel, and how do you expect them to do so in the next couple of days? is there anything the state or federal government could do to get fuel in the area even in some kind of temporary pop-ups? i can't imagine how that would work. >> it's certainly very challenging. some of the larger travel stops, the stations that you have heard of, that you're familiar with, they had a lot of resources that they can pull in. the problem now is not only gas lines at the gas station, but gas lines for those tanker trucks that are filling up that could be several hours long, and a lot of bigger travel stops probably have more resources, more trucks coming in. some of the truck stops also have massive underground storage for gasoline. those tend to be the best bet. also some of the larger convenience store chains may be able to have more resources like this as well. unfortunately, some of the

single site operators may be more challenged because they may rely on somebody delivering fuel, and that company could be certainly delayed in this type of circumstance. if you're on the interstate, check the big travel stops. the gas buddy app showing where you can find fuel during the disruption. >> does the nature, the size of the coast line, the storm potentially is going to hit make this more difficult than the past, if you try to go north, try to go south, everybody is doing the same thing, everybody is trying to fuel sup? >> exactly. there's two main corridors motorists have to choose from, 75 or 95. it makes it challenging. that's why it's sporadic, stations have more gasoline, heading north, better bets into southern georgia. the gasoline is flowing from other areas. you head north, there's definitely more options. try to hunker down, be as fuel

efficient in driving as possible, get the gasoline extended as far as you can north. there's a lot of stations north in the northern half of florida that still have fuel, and the gas buddy tracker able to help folks find that. not only gasoline, but diesel, and after the storm, also, you can report power outages at gas stations, i know it's going to be challenging but the situation should improve once the storm passes. >> patrick, thanks for joining us. we appreciate it. keep us updated. patrick dehan with gas buddy. shares of generac are giving back gains. we'll hear from aaron jagdfeld at 6:00 p.m. eastern. my next guest says if milton makes landfall as a category 4 storm, losses for insurers in tampa alone could total as much as $175 million. for more, elise greenspan joins, managing director at wells fargo covering the insurance sector. the point isn't to be alarmist

but to understand the scope of what we could be seeing if these weather forecasts are accurate, and who are those losses primarily going to fall on and where? >> yeah, exactly. and obviously a lot depends upon the strength of the storm, and exactly where it makes landfall, but, you know, within florida, you know, the losses would fall. first, you know, there's a bunch of florida domestic companies that would feel a big chunk of the loss, and there are obviously big, you know, national companies that do presences in florida like traditional homeowners insurers like all state and progressive. a lot of the larger companies, even the domestic, where they buy the a lot of reinsurance. this is a loss that would bleed into the reinsurance market, and some of the larger reinsurers, that we cover, arch capital, everest group, they would all, you know, feel a sierrahare of

loss as well. >> just repeating, those people could catch that on the reinsurance side. what are the losses we're looking at so far from helene? >> you know, helene, you know, we view that as a double digit billion dollar loss. our base case estimate for that right now is around $10 billion of insured losses, and you know, could be, you know, even, you know, tripling a bit above that as well as it's still early days relative to that, you know, storm that made landfall a couple of weeks ago. >> and that's because this is all primarily water damage, massive flooding, and those are excluded from most policies. very few people had flood policies in the area. the cost of the storm, the economic cost, i've seen upwards of $150 billion. that could fall on homeowners directly? >> yeah, exactly. so usually, you know, rule of thumb is around economic losses are usually around two to three times insured losses, and that could be higher, to your point,

when flood makes up a greater component of any loss, because, you know, a lot of that, you know, flooding is not covered under traditional homeowners policies. coverage can be bought under national flood program. but that would not fall on, you know, to any of these traditional homeowners insurers with commercial policies. there could be flooding that's purchased with those policies, but with your traditional home policies, you would not see flood coverage included. >> all of this has sparked a lot of conversation about what we should do to make insurance affordable for people who are in these both directly affected zones and also for those who might not have flood nationally. should there be a mandate to get more people in the program, bring down coasts for everybody, as these events become so much more common in areas that never expected to suffer such damage. what are you hearing on the insurer's side? >> look, you know, insurers, you know, that's what they're in business for to, you know,

provide coverage for these instances, but, you know, it's also, they want to, kwyou know, get paid for providing that coverage. that's part of the reason why flood being a total loss with these types of events, if there was going to be anything, you know, any product or coverage that would fall to the traditional companies, you know, they would have to price, you know, price for that risk, to take on, you know, any additional coverage related to flood losses, you know, around hurricanes. >> i see. so in other words, because flood often means you could lose the entire property they don't want to take on, you know, a policy that has that kind of exposure which could, you know, wipe out a lot of capital like you have been talking about. if this event is anywhere close to the estimates that we're just kind of pencilling in terms of damage to tampa bay and the rest, what do you expect to be the knock on effects for the pricing and availability of policies going forward? >> exactly. losses but always leads to pricing power within the insurance industry. i think, you know, a lot depends

upon the ultimate magnitude of the loss. if we're talking about something that's 50, $100 billion plus, i think within the insurance industry, you'll start to see, you know, increased prices furs, you first, you know, by the you know, primary insurers, and that will filter into the reinsurance market and that's something that we could, you know, start to see price increases subsequent to this event, you know, as policies, you know, come up for renewal, you know, over the course of the next year. >> and real quickly because i'm scanning through the history of the storms that have hit florida and how much they cost, this looks like it would be an order of magnitude larger. >> yeah, i mean, but, you know, obviously, you know, insured values have gone up through the years, right, relative to, you know, primary storm systems that have taken place, you know, in florida, but, yes, relative, you know, hurricane ian was the last

big storm that we saw, you know, a couple of years ago with losses just over $50 billion, so, we're talking something that could, you know, parallel or perhaps be right, you know, somewhat of multiplicative of, you know, what we saw with ian. >> thank you so much for joining us, we appreciate your time. elise greenspan from wells fargo. hurricane milton is expected to disrupt this month's labor market data because this is the week for payrolls as diane swank notes, this was affected by hurricane helene in terms of the calculus and the worker strikes. she says to expect a jump in temporary layoffs and pop in unemployment, along with a weak headline payrolls number, adding that hourly workers will be hit the hardest, as boeing strike hits fourth week, that could knock 40 k off the manufacturing payrolls number. all of this will be out in the beginning of november, right ahead of the election as well. still ahead, forecasters are boosting their long-term outlook for the economy in light of

friday's strong jobs report. morgan stanley's head of global market says the fed is ahead of the curve. where he's seeing opportunity, and whether china's rally is here to stay. gm's first investor day is underway. wall street awaiting the auto maker's plans amid growing ev competition. we'll hear from ceo mary barra ahead on "the exchange". >> announcer: this is "the exchange" on cnbc. income suite,me-testedd backed by over 145 years of risk experience, helps investors meet their goals. pgim investments. shaping tomorrow today.

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welcome back, friday's block buster jobs report has forecasters more updbeat about the economic's outlook. steve liesman has more about the rapid outlook. what do we know? >> i want to pick up on your last conversation about the hurricane. the double hits of hurricane helene and possibility milton could have significant impacts over the next three to six months. we'll be watching them. overall, the cnbc wrap it up showing that the recession that never was looks efficiently called off with forecasters boosting their growth outlook in the wake of the strong jobs report and a series of recent economic up sides, surprisingly. here's the number, you can see forecasters upgraded their gdp for the next four quarters by about 4/10 of a percentage

point, more or less. you can see, well, just a little bit, a few tenths below. writing, quote, the widely feared phantom recession is over. the 16 economists that we surveyed see cvp at 2/3 for the year. bounces back to 26. all three are in and around potential growth of 1.8. citi's in the low at 1.3. q1 of '25, have to get them on and see what they're saying. the fed inflation, that's forecast to hit in the 2% target this quarter. core inflation takes longer to get there before it drops. the inflation and growth numbers should allow the fed to keep cutting. bostic saying there's a risk the economy runs too strong, and that could hamper the fed's plans to cut rates, kelly. >> you wonder, and we don't know yet, it's going to take a few more days, but to what extent the running hot concern gets

pushed to the sideline depending on just how bad it is when the storm hits as he alluded to. >> yeah, that's always the case. it's been my experience that the storms tend to have both sides, a negative at the beginning, and then a positive on the other end when it comes to rebuilding, and i'm just talking about the economics of this, not obviously the personal and terrible issues that happen with regards to that. strictly speaking about numbers, especially when they hit big cities, they have the infrastructure to respond, and that's really the key when the aid is there and when the supplies can get in, the people can get in. it takes time. you have effects in the macro data. helene is more of an unknown because it's such a wide area and a remote area that could have negative implications for what seem to be to be years. >> we often see they downgrade near term gdp and upgrade gdp a

quarter away, and a bit inflationary, gas prices are up locally, and certain costs are up, i'm sure that's going to be a head wind. we usually don't worry so much about the inflationary impact. this one could have a little bit of a one. >> i think so. you want to watch it. it is not necessarily, though, from what i can tell, impacting at least immediately the offshore drilling in the gulf of mexico where we get a bunch of oil from. that would have an impact. it's in there. you have a decline in certain -- demand for some products, so you just have to watch it and see how bad it is. and you really just first hope that everybody gets out of harm's way, and does the best they can to stay sacfe. >> as i was watching how many people are moving, this is an economic event of some kind, the massive dislocation. for now, thanks, steve liesman. the fed because of the big 50 basis point rate cut is now

ahead of the curve, and it's keeping stocks and bonds in their trading ranges. and there's more tail winds, let's talk to brian weinstein, head of global markets at morgan stanley investment management. let me cut to the chase on china, which in some ways is a leading indicator for this whole conversation. are you a believer in that story or a skeptic? >> i have been a believer that china would start to really ease into next year. obviously they got ahead of the curve. i think what you see today is they're not going to do it all at once. with the fed easing, a lot of central banks easing, i think china has a longer term oversupply of housing issues and structural issues. they want to ease, not going to fire their bullets at once. i think you'll see a cyclical china recovery. the moves are harder to figure out which each piece means. obviously china watching, they're on the ball, they're not going to do it all at once, and they're going to get tail winds from the fed and other central banks. >> fit's going to help gdp on te

margin. what are you doing in terms of overall positioning right now? the fact that after they cut rates, the long end moved higher. >> i have been in the view that rates have found their bottom, they're ahead of where they should be. if the curve is going to end at 150 or 200 basis points as per normal and neutral is somewhere between 3 and 4, it's hard to rally them more. moving credit spread. we backed up a quick 30 basis points, and credit spreads, there's demand for fixed income. there's demand for risk. that is good for the fed. it means they can ease a bit more slowly. i think you'll see tighter credit spreads. i think you'll see higher rates, meaningfully higher rates, it's going to take a while to work through thedemand for fixed income. >> you're not ruling out that we stay above 4%, we igo to 4 1/2 r 5. if you ask for an aggressive range for the next year, i would say 350, 60 where we saw a week and a half ago, you break the old highs, let's make it a wide

range. get to 5 or 5 1/2, 5 1/2 is a reasonable thing. what amazing, kelly, is when ten-year notes got to 5 and fed at 5 1/2, the economy didn't crater. there's resilience to the economy. i think you'll get more stimulus, once we're through the election. there's a lot going on, and i don't think the economy ever got as weak as people expected it to given where the fed went and that's important to note. >> what is the fed doing in a 5 1/2%, ten-year scenario. i assume at that point they're not cutting, although maybe they are, would they be hiking rates? >> interesting to think about, right, people will say one more qe. i don't think they're going to lose control of rates but i think there's still this positive correlation between stocks and bonds, at the lows of interest rates we were at the highs in equity. you can see at a 5 1/2, ten-year rate, equities would be lower. it would start to hurt. the fed would have to do something or consider an expanded balance sheet again. firstly, you have to stop

shrinking it. it would be interesting depend ongoing what inflation is doing if they would ease or tighten. it's hard to say exactly. we're going to the pain point where yields put pressure on stocks. we're nowhere close but that's a 2025 story. >> i'm coming around to the view that the fed should start aggressively selling securities from its balance sheet because why not. obviously i forget which fed official said this week, no, we're not going back to the balance sheet the size it was before all of this, and that's fine. why not move aggressively in that direction instead of moving rates? >> it's hard to shrink the balance sheet without being disruptive. being aggressive has some merits because it gives you a chance to increase it later, but it's just disruptive. time is on their side until it's not. you have seen repo issues, it's not a free option to continue to let the balance sheet shrink. someone has to take up the slack, and into your end, we'll see funding pressures. it's a complicated story but listen, the balance sheet is a tool. they'll use it and they will try to shrink the balance sheet as

much as they can until they have to use it again, and i could be wrong. maybe they won't have to. i think it's out there in the either somewhere. >> it seems kind of strange that we're stuck here with a $7 trillion balance sheet, the economy is so good, but we can't possibly set that down because the economy, you know, the financial system isn't strong enough. that seems such an odd state of affairs. >> it is an opdd state of affairs. a big number. 7 trillion, it's not easy to unwind that, and i don't think they ever will as the fed says. they want mortgages. the treasury piece is important, and the extra liquidity is needed. >> brian, thank you. appreciate your time this afternoon. brian weinstein, morgan stanley. hiddenburg reported a short position in the stock, and serious accusations about iflated metrics and the safety ofts platform. we have the details and the company's response after this.

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administration rule on ghost gun kits, which let people assemble weapons at home. the biden administration's ghost guns rules are similar to traditional firearms, requiring background checks for gun kits sold online, as well as age verification, and serial numbers marked on each product. new york city's first deputy mayor sheena wright has resigned from her post, two weeks after federal prosecutors unsealed a five-count corruption indictment against mayor eric adams. wright becomes at least the seventh senior adams official to resign in the wake of the multiple federal investigations. and mcafee unveiling its annual celebrity hacker hot list today, topping the list this year, scarlett johansson is the number one celebrity whose likeness has been exploited through ai generated

endorsements without her permission. i didn't make the list, kelly. >> there's always next year. >> we'll be waiting. shares of general motors are moving higher today. we'll take a quick look at the charts, up about 1% as the company holds investor day. phil lebeau is in tennessee, and he has a little more detail, and a special guest, i believe, phil. >> well, we talked to mary barra earlier today. you'll hear from her in a little bit. she's beginning her presentation with analysts and investors where she's going into greater detail regarding where the company stands on a number of key issues, and one of them that a lot of analysts want to hear about, what does general motors plan to do with the challenges it faces in china. we have talked about this for some time. this was once a steady profit driver for general motors, that's not the case anymore. the first half of the year. gm lost $210 million. august sales down 34%, compared to august of last year, and at the end of 2023, this is really kind of outdated market share.

they were at 8.6%. it's lower than that today as sales continue to fall. they are going to be going through a restructuring. not a lot of detail from mary barra earlier today about what that restructuring will include. here's what she had to say. >> there's already tremendous work going on from restructuring perspective. what you'll see is getting inventories down, so we can build to the markets, have the right inventory, which is going to allow us to strengthen pricing, but we're already starting to see an uptick from a sales perspective. we're looking across the business, how do we right size it, restructure it, so we have a going, profitable business as wwe go forward. >> we'll find out more about what general motors will do in terms of concrete steps, job cuts, et cetera, when the company meets with its joint venture partner in the next month. the other story, evs. it's been a bright spot here in the united states, especially in the last six months for general motors as the company has grown

sales. q3 sales up 60% for ev sales here in the u.s. compared to last year, and the company believes mary barra believes that they are moving closer and closer to full profitability. >> we believe with the trajectory we're on right now, we will see variable profit positive still this year, and we're going to go into next year. we still have several initiatives that we're using and leveraging our scale to get to full profitability. that's the goal that we're on. >> as you take a look at shares of general motors, keep in mind in two weeks, you will get the q3 financial results. one last thing, kelly. mary barra is usually fairly measured in her comments when it comes to growing profits. when i talked with her today, it was very clear, and she's usually not like this, but it was very clear in her opinion, the best is yet to come. they're not giving guidance in

terms of the third quarter or the rest of this year, but this idea that they are at peak profitability, she doesn't buy into that at all. she says the steps they're taking, she believes will continue to grow their earnings as they go into 2025. >> the shares are out pacing the s&p. as you mentioned, there seems to be more demand for evs as we might have assumed after the winter we went through post covid. i also would contrast how they're doing over the mess at s stellantis these days. >> night and day. s stel stellantis issues are not regarding electric vehicles. over production that continued and continued and continued, despite the fact that you heard from dealers in the united states who were saying, what are you doing? you're continuing to pump out these vehicles but you're not changing the pricing. that's at the heart of the issues for stellantis. >> so much drama. two very different fates for

these two major car makers. phil lebeau reporting there. and roblox shares are moving lower after a new report from hindenburg research. we have those details next after this. when it comes to investing, we live in uncertain times. some assets can evaporate at the click of a button. others can deflate with a single policy change. savvy investors know that gold has stood the test of time as a reliable real asset. so how do you invest in gold? sandstorm gold royalties is a publicly traded company offering a diversified portfolio of mining royalties in one simple investment. learn more about a brighter way to invest in gold at sandstormgold.com.

welcome back, roblox shares are taking a hit on a report from short filler, hindenburg, shares had been down 9% but have somewhat paired those losses. let's bring in steve kovach. >> big accusations here, coming from short seller hindenburg, a number of allegations against roblox. two big themes in the short position, roblox is lying about the number of people on the platform and fail to go protect underaged users against sexual predators. they say say they reject the claims and highlight the growth in bookings. the statement did not address hindenburg's claim it's lying about user numbers. hiddenburg allegations on the user front. roblox misrepresented the number of people on its platform

because it does not factor in accounts with multiple accounts or bots. also saying roblox has two sets of books, that's their words, one with the number of people and another with the number of daily active accounts that reports to the street. also saying many accounts appear to be bots that inflate the daily user numbers. others are duplicate amounts. many have multiple accounts. hindenburg saying roblox inflating engagement time making the gains are away from the keyboard, still counts as if they're having engagement, and then on the safety side, a lot of what roblox has been accused of before but more details here. hindenburg says roblox has been spending less on trust and safety and making it easy for adults to create accounts and groom children on the platform, and included user names praising j jeffrey epstein, and roblox allows sexually explicit games

and experiences without age restrictions. now, also saying here that roblox said in a safety update earlier this year, it uses ai and human moderators among other tools to keep the platform safe. by the way, this is all happening today, kelly, as a group of bipartisan state attorneys general sued tiktok for safety claims for children as well. we have seen this with meta, another group of state ags, this is not a unique problem to roblox. what is also interesting is these accusations about the user numbers as well. >> i have to imagine, they are going to have to do a lot more moderation, whether the algorithms to take care of that or on staff and employees who are going to do so. >> and that's something hindenburg pointed out saying that i think it was 2% that year over year from '24 to '23, the trust and safety stopped, they also said a lot of moderators are overseas and monitoring this content. again, this is so similar to what we're hearing from facebook

and instagram, the tiktok case today, this is a huge problem for any platform with such a large user base of especially young users, and it's something they are going to have to grapple with. some of the more damming examples of the report. hindenburg said they were able to create an account, pretend they were a 9-year-old kid and go into adult experiences. it doesn't appear that's working all the time. >> frustrated parents will try to hopefully redouble their efforts to make sure they're on this but the company will as well. steve, thanks, steve kovach. signet jewelers is up 26%. they expect fashion jewelry to do materially better in the long-term. we'll dig into the trend with a ceo of a company that's reached half a billion in sales in three years. more on "the exchange" right after this.

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welcome back, some of the

big luxury retail names are taking hit after the chinese markets reopened after the week long holiday, losing steam after the stimulus rally with concerns about the staying power of the efforts, and also, by the way, because china is retaliating against europe for the tariffs on evs, burberry, kering shares are lower today. we want to dive into a retailer that reaches the high and low end onsumer, kendra scott, apparel priced from 40 to $3,000, and plans to open nearly 200 stores in the next three years. here to talk more about that tom nolan, ceo of kendra scott jewelry. she's a familiar face to those who watch shark tank. >> that's right. she's on "shark tank's" third season now. >> the company started in 2022. we're in our second year, which is crazy. >> an age where we're talking about the declining brick and mortar stores, it's not just

spirit halloween opening this time of year. >> we are an experiential brand, retail makes up half of our business. we have had so much success and growth. we did 20,000 events in our stores, 142 stores now, doing upwards of 25,000 events. the experience is important. customers are looking for it, and we like to give it to them. >> what do you mean by experience? i haven't experienced this myself. >> yeah, anytime you go into a retail store, you're looking for something, obviously, and we've been rooted in events from the very beginning, and the large majority of those events are philanthropic by nature. in the local communities, we want to be part of the community. the events draw people in the store to draw people in need, and that was the core of when kendra started the business. in 2002, she said philanthropy is going to be super important. >> social media, how much does that advertising and what do you call it, self-driven posting and

things like that, how much does that drive sales? >> a lot. our constituency of customers spans the range from my 16-year-old to my wife to my mother. social media plays a big role in society today so it's affecting everybody in that range. >> she was until a couple of years ago, private equity owns the company? >> kendra is a large owner of the business. we have a private equity partner but minority partners. >> you have a good window at a time when people are very confused about whether they're stretched too thin or actually doing just fine? >> well, i mean, our consumer we're up 30% this year, up over 30% last year in top line revenue. a tremendous amount of free cash flow. are consumers healthy? we offer high value proposition, we have from the beginning, they're wanting things that have value, and we like to provide that to them. i think the consumer overall from a macro perspective, there's been a lot of pressure, inflationary pressure,

macroeconomic pressure, but our consumer has been there, i think, because we have made them the boss, and we have one of our operatoring principles in the organization, the customer is our boss, and we keep them at the center of what we do. brands that do that have been successful. >> where are your stores located? >> all over the country. we have 142. we're in 32 states across the country. the company was started in austin, texas, and similar to a lot of brands or different from a lot of brands that started on the coast and come in, we started in the middle of the country and went out. the fastest growing region is the northeast, which is where i'm from, so i'm happy about that. >> we're happy the northeast can be fast growing in some ways, and that speaks to, again, what's been going on with the consumer pocketbook. how do you identify what the d customer wants? the steve jobs conundrum, i don't care what the focus groups say, this is what i want to create. >> we listen internally, we're asking the customer questions,

what does she want to see more from us. we have a great relationship with them, and when you have a great relationship with anybody in your life, you have transparency, you get information back. they have told us very loudly and clearly what they want for us, and we're delivering. >> tom, it's great to check in with you. we'll be watching your continued success. 30% top line in this kind of environment, second year in a row, i'm sure people are salivating. tom nolan with kendra scott. the global markets topped $2 trillion according to imf, retailers can access the pie. we will dig tohein t potential risks and reward of doing so next.

nate jones... lines things up... checks his fidelity app... looks to outside analysts to get a second opinion. nate likes what he sees...

and he places the trade... talk about easier investing. exchange." with the likes of blackrock, state street and apollo all launching similar etfs and products. those proposed etfs still have to clear regulatory hurdles and questions remain about risks and liquidity. joining me to answer some of them, is global head of private credit and financial institutions at moody's. ana, great to have you here. >> great to be back.

>> welcome back. this has been a hot space for years now. it's got to be about the size of private equity. what is it? >> it originated with the direct lending market. that's provisioning credit to leverage sponsor finance companies. so we estimate out of the 1.7 trillion, about 080 billion is direct lending. really what made that market so attractive was, after covid, the leverage finance market was close and created a boom of providing alternative source of financing than the bank-owned leverage finance market. that's commoditized and looking for new areas of growth. >> good point. we should also say very plainly, one reason investors loved private credit, it's very high returns. these are effectively bank loans and similar kind of product. when you can get 7, 8, 9% and the fed hikes rates and they go higher, noting rate a lot of times, people feel like it's a gold mine. what might they be missing? what are some of the possible

risks for retail investors who might start to enter the space? >> look, this is a highly leveraged space. you're dpnsing leveraged companies 5 to 7 p ebitda. so, this al teshtive providers of capital found how can we finance the $3 trillion of private equity elsewhere, so this was one source. obviously of funding. but now that the leverage finance market is opened, what happens is the spreads and differential of if you will profitability of this market relative to the broadly market has squeezed. what are the new areas of growth. one of them that we heard is looking into partnerships of banks how to commoditize every asset class out there and put it in the private credit market. so that was one of the announcements occurred over the last few weeks with apollo, for example, and french bank. and now the next one we are

going to go into is regularitization. >> there's a bank loan, etf, is it much more tantalizing. different structures abs are in there, fundamentally, if they wanted access, could they get a version or bank loans just a different kind of animal? >> no, it does not exist today for the retail market. so this is one way to get basically a loan on a private credit abs, which purple will be a very significant strategy of growth as the banks are eliminating some assets from their balance sheets, try to be more capital efficient, this is one way that private credit market will be able to, if you will, originate on the banks but put it in various structures. so this is why this is a unique way to do it, but however it comes with some ricks. >> do you know from the performance of private credit, decade-old asset class, not been through a lot of different testing opportunities, but what

the actual take home yield of some of these investments is, if we have a downturn, another inflation spike, if we have an upward move in rates that puts pressure on them, maybe the investor buys it thinking they'll get 9%. they get 5. do we have any kind of data so far to tell us what the real returns are and not just the advertised y d yield? >> it's hard to portray that -- the asset closet rising interest rate, where will we be with another 100 basis point cut. it has been 100 to 200 spread. one thing should be very clear on this etf proposal, proposal stage with the s.e.c., we don't know if it will be approved. will take prolonged period of time because of liquidity of the asset class that will take time lend if you will both with the regulators and ultimately with the retail investors. there is a liquidity mismatch. at the end of the day, this is supposed to have -- everyday liquidity for asset class that

it was created for, example, pension funds keep longer arm balance sheet. >> true, true, true. there are many different companies for individual investments. what are the fees on each product? what exactly are they? they will all be slightly different. from a macro point of view, a lot of people think the private credit has been a good thing. it gives banks a place to -- the banking system a place to go when there's need for capital and traditional banks can't handle that, but does it also hide maybe risks developing within the financial system that are outside of the regulatory per view? >> look, i think this is very important questions that all regulators are looking into it, including ourselves as monitoring the market risks, if you will. with undertaking various studies, the regulating industries, the insurance industry or banking industry exposure to private credit. so far the research will show $500 billion exposure among the 30 largest banks in the world,

3% of total assets. so it's not significant. but if it continues growing, it's important to provide more transparency of these risks. >> that's absolutely right. thank you for walking us through all of this. we'll see what comes to market. ana from moody's. that's it for "the exchange." tyler and morgan will pick things up on "power lunch" after this break. at ameriprise financial our advice is personalized based on your goals, whatever they may be. all that planning has paid off. looks like you can make this work. we can make this work. and the feeling of confidence that comes from our advice...

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