is the internet out? don't worry, we have at&t internet back-up. the next level network for small business. ♪♪ i sold a pillow! welcome to "power lunch." kr

ma m mathesin. jamie dimon is issuing warnings on the global and u.s. economic fronts. he's always worth listening to. >> he's often cautious. we'll talk about that today. we received insights into the consumer. sentiment did flip this month, and coincidentally, ubs is out with a note on walmart, saying essentially its third-party marketplace could be the future of that company. no concerns on the walmart front. still lots of tailwinds. >> i guess walmart trying to grow into a space that amazon has mined very, very profitably. >> yeah. tesla's robo event was yesterday, and it left many analysts disappointed. musk knows how to put on a show. he knows how to jump on stage, bear his belly there. he shared interesting visuals. that was not one of them.

but one of the biggest winners was uber, ironically. the event failed to offer any details on tesla's ride-sharing plans. we're going to trade both of those names in three stock lunch. once again. >> uber shares moving to the high side of the session, up nearly 10% despite analysts' cautions last hour. we'll begin, however, with three market drivers to break down at this hour. one is consumer sentiment and the inflation data, and next is jpmorgan, kicking off earning season and offering insights into the global economic landscape. even more crucial earnings on deck for next week. we have an all-star panel to hit all of these angles on the markets and economy. we have michael arone from state street global advisors. mike santoli is with us. and to tackle the banks, david konrad, analyst at kbw. a stifel company. why don't we, michael arone, start with the economic data out

today? a little squishiness on consumer sentiment. generally, the data has been pretty good, indicating a soft landing, right? >> i would overall say that the soft landing outcome remains in tact. the economy is cooling but not in recession. inflation continues to be on the right trajectory. earnings are going to be great. wells fargo and j ppmorgan got off to a good start. all in all, the soft landing outcome is most probable, and it is constructive for the stock market. >> michael santo kli, what is t dow seeing to make it go up 350 points? >> sometimes the context is the catalyst. every time we get a test, cpi, ppi, weekly jobless claims, and we run it against our premise, which is, i think, that the market is priced for something like a benign soft landing. if we clear the test, i think it does relief to the upside. i don't think there's fixating on a lot of news. the bond market had its move,

mostly in response to payroll data a week ago. it has not really given incremental reason to worry at this point. the s&p at a new high of 5,800 or so. you know, it's slowing down. this is not a huge burst higher for the week, but it is definitely grinding in the right direction. and led by mostly cyclical components. >> david konrad, what is the macro message from the big banks this earning season? the shares seem to be telling us the coast is clear. >> yeah, i think with the economic data that everyone has spoken about, i think people are trying to look through some of the near-term headwinds and seeing improvements going into 2026. that probably wasn't a luxury we had three weeks ago. you know, i thought with this quarter's results, nii this quarter came in a little better than expected for jpmorgan. but did die down largely the first half of next year on nii relative to consensus a little bit.

but does expect that to kind of accelerate and improve in the back half of '25. that's where people are really focused on, is looking through, you know, rather benign credit results here this quarter. with that a little off the table, we can be a little more patient with earnings. >> david, let me ask you a kind of curious question. as you survey the big banks you follow, let's say you had to have one bank that would be your core holding, the one that's going to be your long-term go-to. and another of the big banks that would be your speculative one. the one where you think, okay, i'm swinging for the fences here. i may swing and miss, but if i hit, i'm going to really hit it out of the park. what would those two banks be? >> well, jpmorgan is always the long-term go-to. you look at that stock, and it looks a little expensive near term. if you look at it over five years, it typically does reward you well. it's really the best, well-run bank out there with excess capital. in terms of, you know, sticking with today, wells fargo has been

an underearning franchise. it is well documented with a lot of regulatory risk and the asset cap. that one, you know, the bold-case thesis would be the asset cap was lifted sometime next year. they're close to trough niis, move through the first half of next year. and an unearning franchise could, you know, have much more value out two years. >> shares are up 6%, as well, on some of these -- on the excitement, really, around that. mike santoli, fold this in, give us a preview of your column this weekend. the most bullish commentary i'm seeing from analysts, broadly speaking, is they see both earnings and multiples growing, and even at a moment when the third year of a bull market, which we're entering, is typically a little bit more of a choppy one. so it's just the banks so far. we have a lot more on tap. what's the expectation? >> well, i would argue that earnings growing or at least in

the future quarters accelerating a little bit from this quarter's pace, and holding the multiple is probably the bold case that might seem like it is a little more prudent to bet on, opposed to expanding, you know, the s&p e above 22 times where we are now. unique aspect at this moment, though, fed already in ease mode, at least, you know, removing restrictions into an earnings recovery. that's one of the anomalies of many of this cycle that we're dealing with right now. it does seem like it's all sort of supporting and pushing in the right direction. again, i still think we have to have everything tested against the fact that the market seems already priced for something close to a pretty good scenario. it doesn't necessarily mean we're going to have the element of surprise if things are really good, because we mostly are expecting that. >> michael arone, let me turn to you. couple things in the notes that interested me. one is the three things that investors should look more in the earnings call. confirmation that the gap in earnings growth between the mag 7 and everyone else is

narrowing. what executives say about the impact from hurricanes, middle east tensions, and the election. and, third, here's one that's interesting to me. will a.i. optimism turn into a.i. skepticism? are we starting to see a little of that? >> tyler, i think we got a glimpse of that in the second quarter earnings results. alphabet, microsoft, and nvidia all beat on top and bottom line, yet it wasn't good enough. so it does demonstrate this notion that when you are priced for perfection, if you don't deliver on perfection, your stock gets a bit rerated. now, we have seen a rebound since that a little bit. ultimately, i do think it's a risk heading into this earnings season. if a.i. optimism turns into skepticism, that could pose risk for the top-end of the market which has been a primary driver of returns over the last couple years. thankfully, with lower rates, falling inflation, and the normalization in the yield curve, we have seen other parts of the market be able to participate more fully.

that's kept us afloat. as michael santoli is pointing out, the risks are a little skewed to the downside. a lot is reflected already in prices. >> because of that, mike arone, you're sticking with technology, communication services, financials, consumer staples. explain this blend. >> yeah, it's a little bit of a balance, kelly. i do think that, again, the soft landing outcome is the most probable. the fed has certainly bought into that narrative. the stock market has certainly bought into that narrative, but there are risks out there. when we look at this earning season, there are only two sectors where earnings actually increased from june here, where analysts were increasing the earnings forecast. one was technology. one was communication services. in order -- and the last couple years, you've had to be where the earnings growth is.t that's. in terms of financials, i think david did a good job. they're highly profitable. they're cheap. they return a lot of capital to shareholders. should you get a trump win, you might see regulatory relief.

they're cheaper than the market and off to a good earnings start. we like financials and banks, in particular. staples gives us the defensive name just in case. when we look at defensives, the bond proxy, typically when the yield curve normalizes, which is happening, no longer inverted, bond proxies and defensives rally. that's happened. staples is the best of the bunch within that group. >> look at the financials. dave, i'll give you the last word. you can thank michael arone for the kind words or close up the conversation, one way or the other. go ahead. >> yeah, i think the yield curve is a really important point. a lot of people focused on the twos tens, which is just positively so in the last couple weeks. you know, hopefully, think, if we see the belly of the curve stabilize, the fed moves to the dot plots, that curve will be positively sloped as we enter 22

2026, that is bullish fsht bfor the banks. >> two mikes and a dave, thank you. it's worth noting that raymond james is headquarters in st. petersburg, florida, hit hard by hurricane milton, and we'll get to that. let's start, paul. welcome to you. we appreciate you joining us. kind of, i can imagine wrapping up the quarter, getting ready for earning season with this storm bearing down. what'd we learn? what can you tell us about what is going on in the economy from that period and maybe even now? >> i think the economy is really, as your last guests talked about, in good shape. it is hard to have a recession when there is full employment, and i think there is right now. rates coming down. banks may affect spread earnings over a longer period of time. they were very healthy, as we saw by the reports. rates coming down, m&a, bond financing tends to pick up.

for the general economy, i think it is still all positive. at least for the near term. >> you know, paul, i'm curious, just to get your thoughts on it, there are dm-- i hear people li you, very learned, experienced executives, market forecasters, basically all saying the economy is dog-gone good right now. american voters don't seem to feel that way at all. why do you think that is? >> well, i think a lot of it is what inflation has done to paychecks. you look at the high inflation rates, and the cost of not just general inflation but, you know, staples like eggs and other things have gone up much quicker. so people feel those squeezes. that's really been the impact. the jobs are there. incomes are up. but costs have gone up more. i really think getting the inflation down by the fed was really the most important thing to do. that's what's really put the squeeze on, you know, the average family. >> are you excited about the

yield curve, paul? >> am i excited? no, i don't get excited about yield curves one way or another. people predict them going down or up, and we try to stay neutral with them. we got criticized for not taking bets a few years ago and locking into our portfolio, and we said we're in the long run. that ended up paying off. rates really started coming down. we were still floating, so, yeah, maybe we don't earn as much when we take bets, but, you know, through 240 consecutive quarters, we've been profitable, including every quarter of '09, by just playing the long game. >> tell us what your experience personally and that of your teammates was as you faced down these two recent hurricanes, most especially milton just a day or so ago. >> so being in the area over 60 years certainly was an experience. they say it was a 100 year storm. i hope they're right. but we learned a lot of things. i think that, first, all these storms are idiosyncratic. i live on the beach in st. p

pete petersburg. i got flooding on my first level, lost cars, boats, and all my siblings, some had flooding, some did fine. the second storm, which was supposed to be the killer storm, really we had no flooding, even on the beach. but we did inland in tampa as the water got pushed in the bay. every storm has a different impact. so the impact that we really were worried about is people. the first storm, we were able to contact over 5,000 people individually. they were all okay. in this storm, we've contacted 94%. we've gotten responses for. they've all been okay. but we still have about 6%, yeerks that we do man-on-man to make sure they're okay. certainly, they're physically okay, but a lot of people damaged their homes. some are going to struggle putting that back together. some have lost all their personal things. you know, it's going to be, for them, it is very, very tragic. but on the good news, we've already committed well over $11

million to help our associates and communities. advance the money, have a low rate loan program, and we will help them rebuild. and our offices came through fine. first thing we do in a storm is tell everybody to get out. get safe. we used to fly them places. we learned in covid, you know, we can work remote. just get safe. when the storm is over, we'll redeploy you. also a third of our -- everybody thinks we're in st. pete, but our back office, we're a third in st. pete, a third in memphis, and really a third in southfield, michigan. our servers are in denver and so southfield. the storm doesn't impact that. it does impact, you know, the lives of so many associates that live in the area. >> in terms of the long-term impact, as well, paul martin, allstate was on our air this morning saying they don't insure florida. talking the consumer side. they don't insure california. they've been pulling back. after the damage of the storms, do you think it'll have a longer toll on the economy in terms of the housing market?

the amount of people that moved there, maybe having some second thoughts? >> yeah, you know, i remember in naples when they got hit really bad a few years ago, everybody said that was the end. housing prices are certainly way up. it's still a good place to live. no doubt, insurance has been one of the challenges we've had in the market. our prices went up, as they did all over in florida, and we got more expensive during the covid period. but we're still cheaper to live even with those costs than a lot of the big areas, like new york. we've got beautiful bwater, whih is the pros and cons during a hurricane. i think the area is going to come back. short term, especially for houses that are below the flood plane. if you have a newer house, you're above the flood pane, almost all of those did fine. the older houses that were built, you know, under it, those are the ones prone to flooding. i think at some point, those houses will have to come down.

if you have more than 50% damage, you have to raise your home. that'll be a struggle for some people, but i think longer term with that, it'll be fine. insurance is one of the challenges as more people pull out. the state as a cat sastrophic insurer, it's more the insurer of last resort. we have to figure out how to make the insurance market affordable to people. >> paul, thank you very much. glad to hear your teammates and execs are okay physically and that you're helping them rebuild and come back. thanks so much. have a good one. >> thank you, tyler, kelly. >> you got it. still to come, and sticking with the banks, space -- not blank space, that's a taylor swift song -- i don't know why this stuff pops into my head just out of nowhere like that. we'll look at a financial name outperforming its peers. it won over warren buffett. plus, first ahead, a power

call on wag lmart. why an analyst thinks the third-party marketplace could be a growth game-changer. "power lunch" will be right back. >> announcer: "crypto watch" is sponsored by -- at waystar, our mission to simplify healthcare payments has never been more important. we passionately believe that our software platform has the power to transform healthcare in the united states for providers and their patients. and we're not finished. waystar is purpose-built for this moment and waystar is the future of healthcare payments. now, we look to the horizon and we see the way forward.

craig here pays too much for verizon wireless. so he sublet half his real estate office... [ bird squawks loudly ] to a pet shop. meg's moving company uses t-mobile. so she scaled down her fleet to save money. and don's paying so much for at&t,

he's been waiting to update his equipment! there's a smarter way to save. comcast business mobile. you could save up to 70% on your wireless bill. so you don't have to compromise. powering smarter savings. powering possibilities. welcome back, everybody. wa warren buffett's berkshire hathaway is selling bank of america over three days. buffett began shedding it mid-july. he sold so much, he no longer has to report sales of the stock quite so promptly. bank of america is up, nevertheless, 5% today, at 41.95. but buffett isn't down on the bank sector.

berkshire is investing in a brazilian bank, up 6%. it's not one we usually follow, kate. >> that's right, tyler. i love a good mystery chart. the name is newbank, under the radar winner for berkshire hathaway this year. we don't talk about it every day, but it is outperforming counterparts in north america. it's up three times better than the s&p. jeffries is the runner up in berkshire's portfolio, up 55%. amex in the top five. n newbank has 105 million customers across brazil, mexico, and colombia. the ceo used to be an investor in the u.s. he was a partner at sequoia. they were able to leapfrog incumbent banks in brazil by going fully digital. he was surprised when warren buffett initially got interested. he says the team was able to look past some of the headwinds of operating in latin america,

invested pre-ipo, and doubled their bet. navigating an uncertain market kept them more nimble. >> there is political volatility, interest rates happening. there's scandals all the time. i think what this creates, frankly, is a continuous nare k paranoia you can't get comfortable because things are going to change. it forces a level of speed in how you make decisions inside the organizations. it forces you to be extremely dynamic. >> the street is mostly bullish on this name. over half of analysts have a buy. average price target indicates roughly 8% upside from here, guys. back to you. >> kate, thank you very much. kate rooney reporting on nubank and berkshire. >> they always find them, don't they, before the big runs. >> yeah. speaking of, tech stocks had a big run, but the triple q is 2% away from all-time highs. could earnings season throw a wrench in the rally?

our trader has ways to protect yourself. market navigator is next. employees get the information they need instantly. this is how business goes further with t-mobile for business.

welcome back to" power lunch."

dow up -- are we at session highs, dom? >> just about. >> up 378 points. a third for the nasdaq. the big banks are stealing the attention today. when is the last time we said that? but, dom, we can't overlook our friend, tech, and the triple qs in market navigator. >> i mean, arguably the most important part of the market, rite? let's check this out. the major indexes are at or very near their record highs right now. one of our traders thinks it is prudent with this environment to take out a little bit of downside risk in insurance at this given moment. joining us now with the trade in the recent why is jeff kilburg of kkm financial. also a cnbc contributor. jeff, thank you for being with us right now. a notched record for the s&p 500. notched record for the dow industrials today. we're 2 % or less than away from the all-time highs in the nasdaq composite. this doesn't feel like an environment we should be taking profits. momentum is to the upside. why are you cautious? >> well, it feels like a little

heavy to one side of the boat, dom, and that's why i want to utilize a nasdaq future to book the profits. to hedge. if you look at the nasdaq future, i think there is an opportunity to sell right here. i think it is fascinating. if you can sell at 20,450 in the contract, yes, i am risking. my stock is at the all-time high, about 400 points higher. but i'm looking for a 4% drop. it sounds significant. this is a little different than usual, dom. this is a trade but also a long-term view. we've seen elevation in all u.s. equities and it's in the face of higher ten-year notes, higher vicks, see the elevation over 20? this is a contrarian approach. but if you have exposure, and everyone has exposure to the top five nasdaq 100. nvidia, broadcom, meta. they make up 30% of the nasdaq, so, therefore, it is time to buy

down stock protection. i'm utilizing it in the market. >> the viewers are seeing the sell level right now, again, $20,450. you're targeting a $19,650 level to take profits on there. the stop is very tight. it's only about 400 points above where we are right now. you said the all-time highs. this doesn't seem like a very high conviction type short situation. why are you giving it so liliway to have any kind of a move before it perhaps even goes back to the downside? >> well, no one wants to be a hood ornament, dom. the fact that we have exposure to all these names, if you're managing $1 billion or if you're managing a $500,000 401(k) by yourself, you have exposure to the nasdaq 100. it's been the leader since 2023. every a.i. has gone up. the reason i have a tight leash, a 4% drop is plausible. all the uncertainty, we haven't seen anything. i'm not whistling by the graveyard by any means, dom, but it feels like everyone is

holding their breath right now. why is the market continuing to melt up? that gives me pause. by having this, it is a loose stop, actually. i'm looking for a 2%, which in the nasdaq 100 world, the futures market, is quite wide. i'm looking for a 4% drop which, as you know, can happen in a trading session or two. >> one last question. kelly and i have talked about this in the past. the size of futures contracts are massive. the amount of leverage you use is massive sometimes between the big contracts and the e-minis. there are also micro e-mini contracts on the nasdaq and elsewhere. >> good point. >> why are you using the e-minis versus the micros, and what is the difference? >> my portfolio is larger so i want to utilize thee-mini futures and the nasdaq 100. if you want a tenth of the exposure, use the micro. the micro is a much smaller exposure on hedging. i didn't have to seen institutions utilize futures for decades upon decades.

this is an institutional high horsepower tool. the micro allows people who have maybe under $500,000 to hedge that out. when you do see risk happen, there's nothing better than owning or shorting futures to really have that realized insurance in place. >> all right. jeff kilburg with kkm, thank you very much. have a nice weekend, sir. >> you, too, dom. >> kelly, what's curious about this, whenever you use the futures markets, and a lot of traders who utilize retail trading platform under this, there is a reason their margin and leverage prauoducts. you have to be careful. jeff has a tight leash. >> walking out to short those triple qs. we take it as a sentiment gauge. >> or by options, who knows? >> dom, thank you. "millennial money" takes an inside look at the lives and fie nangs finances of the world's first global generation. find out how much they're earning, where they're spending, how they're investing. the series premieres this sunday at 5:00 p.m. eastern only on

cnbc. don't miss it. as we head to the break, we want to bring your attention to shares of generac, up 3%. this came right after former president trump said on truth social that if he wins the election, he will allow the cost of home generators purchased between september 24th and august of 25th to be tax detude dedu deductible. this is a growing list of tax cut promesrois fm president trump, as well as vice president ha harris. there are few details on how these policies would get through congress. "power lunch" will be right back.

personalized financial advice from ameriprise can do more than help you reach your goals. i can make this work. it can help you reach them with confidence.

no wonder more than 9 out of 10 of our clients are likely to recommend us. ameriprise financial. advice worth talking about. when i step on campus, i know that i have a job to do. there's purpose for me being there.

in contra costa college's spirit program, my job is to work side by side with the individual and let them focus on how resilient they are. whether they're struggling with hardship, mental health and substance abuse, i give them tools that they can use to achieve greatness in their lives. i get to go through these doors and i get to be great. and you can too. at contra costa college, we all can. welcome back to "power lunch." i'm bertha coombs. here's your cnbc update. president biden announced he'll make a request to congress for more money to increase hurricane aid in the wake of hurricane milton in florida. it comes as some experts estimate that milton caused $50 billion worth of damage in the

state. the president plans to travel to impacted areas of florida on sunday. the president also calling for a strengthening of the power grid after millions of people saw their power knocked out by the category 3 storm. according to power outage.us, more than 2.2 million people are still in the dark right now in florida. and the national labor relations board accused apple of interfering with workers rights today. the complaint accuses the tech giant of restricting employees' use of the workplace messaging app, slack, by illegally firing one person who advocated for workplace change on slack. and requiring another worker to delete a social media post. apple did not immediately comment. tyler, back over to you. >> bertha, thank you very much. welcome back, everybody. yields slightly lower today coming off significant economic data. rick santelli has been tracking the action for us from chicago. rick. >> absolutely, tyler.

not all yields are actually lower on the session. short data treasury yields, like 2-year, 3-year, 5-year. once you get to 7, they're virtually unchanged. then 10s, 20s, 30s, whose yields are higher on the day. let's start off with the data. remember yesterday, cpi core was warmer than expected. 3.3%. now, let's look at the two year-over-year cores we have for ppi. there is ex-food and energy and then energy, food, and trade. as you see, one is moving up slightly, one is moving down slightly. that isn't the point. the point is that these are one-year charts, and you can see we've been lower. we're elevated. if you look at the way both those are coming at the right-hand side of the grid, it certainly looks like 3% is where things seem to be panning out. the issue is that they may be well-behaved, but it is not well-behaved at the fed's target. now, we did also see that

university sentiment from michigan, even though it was a preliminary look, we eased off on all the metrics, whether it was current conditions, or expectations. we did see a little bit warmer, a little bit warmer with respect to some of the inflation data on the one year. to summarize, well, let's look at how the markets have responded and all the various areas. if you see 10s and 30s today, their yields are up, as i pointed to, but only 30s traded higher than yesterday's yield. 10s have a double top. yesterday's high yield was 4.11 and today is 4.11. it is breaking the pattern. doesn't look like it'll be an eighth session in a row trading higher than previous highs in 10s, only in 30s. now macro the whole thing. we saw the fed lower interest rates 50 basis points on september 18th. let's do september 17th charts. for 2s, 10s, and 30s. you can clearly see what has happened with respect to interest rates. the only issue isn't the

direction, issue is the reason. there's a variety of reasons. maybe the economy is doing better, although some of the data lately on sentiment today might have been going the other direction. ultimately, we also had auctions this week. 3s, 10s, and 30s. some have said that the market snuck up on long maturities after the jobs report that was stronger than expected, primarily to make room for extra demand in the auctions. that may be true, especially considering that they went pretty well at significantly higher yields and, of course, lower prices. kelly, back to you. >> comprehensive report there, rick. thank you very much. >> rick, let me ask you a question, if i might. how closely does the fed look at the ppi numbers? you zeroed in on those ppi core numbers, which are certainly kind of the feed stock of consumer prices. but is it that that they look at, or do they look more closely at consumer price measures? >> oh, i would think for sure

consumer price measures. as i mentioned yesterday, we did have that outlier on the year-over-year core with cpi, as well. but the preferred gauge, the pce, historically runs about 0.4 to a half a percent under cpi. for my personal pick, and i think many traders, cpi is what they like to look at the most. they're most comfortable with it, but it isn't necessarily a fed's favorite metric. what we're really debating here is their metric is a bit lower, but it is quite not at 2%. the fed is really rolling the dice, that over time, we are going to see their target rate in all of these metrics. yet, every time i look at some of these charts, it just doesn't look like it is going to happen any time soon. >> there's lingering up there in the 3% neighborhood, and so you wonder how quickly2%. rick, thanks. have a great weekend. >> you too.

thank you, tyler. coming up, walmart's answer to amazon. ubs out with a bullish note on walmart, saying its third-party online marketplace could be a game-changer for growth. we'll speak to the analyst hi tt ll wbendhacaith the shares up 52% year-to-date. is it an amazon threat? that's coming up. it all starth a small business idea. it's a pillow with a speaker in it! that's right craig. pulling in the perfect team to get the job done. i'm just here for the internets. at&t, it's super-fast! you locked us out?! and when thrown a curveball... arrggghh! ahhhh! [crashing sounds] we had everything we needed. is the internet out? don't worry, we have at&t internet back-up. the next level network for small business. ♪♪ i sold a pillow!

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. personalized financial advice from ameriprise can do more than help you reach your goals. -you can make this work. -we can make this work. it can help you reach them with confidence. no wonder more than 9 out of 10 of our clients

are likely to recommend us. ameriprise financial. advice worth talking about.

welcome back. consumer confidence may not be on the rise particularly right now, but a new note from ubs shows a lot of confidence in one consumer name, walmart. specifically, the analyst there says the retail giant's third-party marketplace could be a growth engine for the company as a whole. not just a little ripple in the revenue stream. can it stands up to the likes of amazon or ebay? additionally, it has even more competition coming from china and companies like alibaba. here to discuss is the analyst behind the call, ubs' michael lassar. welcome. lay out the thesis here and why you like what walmart seems to be doing in third-party

marketplace. >> thanks for having me, tyler. our thesis is that walmart is an early stage of building this ecosystem that is going to drive considerable sales and earnings growth for the next several years. a key piece of that is going to be its third-party marketplace that, as of last year, did about $70 billion of gmv, collectively through its domestic and international properties. we think that over the next few years, that can grow to $150 billion. as it grows the third-party marketplace, it drives other elements of high-revenue streams, like advertising, logi logistics, data monetization, and others. this is going to be a stock that investors are going to want to own as we move through this very attractive growth cycle. >> it becomes a kind of virtuous cycle, not only creating this revenue river but also having

knock-on effects with advertising and other things. how much does, as a percent, what is walmart's margin? when they sell a third-party item for $25, what do they collect in revenue from that? >> so we think that the profitability right now has improved, but it is still probably losing money. probably in the mid single digit range. call it minus 5%. this is a business about scale. as you get more third-party sellers, more assortment, you get more scale. that should lead to significant improvement in the profitability of this one segment. such that minus 5 this year can go to 15% positive on the margin over the next few years. if that's the case, that can add 8% to the entire profitability of the enterprise. we think that this will be significant, and it is just one factor of many that can drive

target shares higher over time. >> michael, i have not used the walmart app or walmart plus or any of those platforms lately. obviously, shop in the store. but are there a lot of third-party items on the pla platform today? at what point do you expect more items to be available? question, when should i download the app? >> you should download the app. they've made a lot of changes to it over the years. it is very easy to use. there's not a lot of friction in the process. it's a good experience. right now, there is about 500 million items available through walmart.com. that's growing in part because it is adding more third-party sellers. the best we can tell, it's got between 100 and 150,000 third-party sellers through walmart.com. to put that in comparison, amazon has 2 million third-par tirthird-party sellers. >> wow. >> walmart is just scratching the surface, and walmart is a viable alternative.

a lot of the third-partysellers don't want all their eggs in one basket. they want to diversify their business. and they want to tap into the very rapid growth that walmart provides them because it's got a lot of natural traffic. you can sell more products to the very significant traffic that is coming to walmart's website and to its app. >> let me come back to that idea that, right now, the margin is sort of negative. they're losing 5%, you said. by adding scale, they could get to a positive 15. how does that happen? why does sort of more revenue sort of magically turn into profitability, and where does that profitability -- at whose expense does that profitability come, i guess is what i'm asking? >> over the last few years, for quite some time, walmart had to make sizable investments in its infrastructure in systems, people, supply chain, in order to build the bones to be able to

serve this business. >> interesting, okay. >> now that it has the infrastructure in place, the more revenue that it brings in, it will be able to leverage the cost structure. that is what is going to drive the profitability from here. and the key is, we think it's just approaching escape ve velocity, with not only the sales but also the profits that are going to drive a meaningful contribution to walmart over the next few years. >> michael, thank you for the answer. i appreciate it. >> thank you. >> thank you for your time. >> good to see you. >> michael lesser. >> i'll check out the app. tesla is the worst performer on the s&p today, down 8%. wa wall street underwhelmed by the ride rideshare last night. here is ceo and cnbc contributor carlos gutierrez sharing his story.

>> hispanics have made a great contribution to this country. 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. they've given them skills they can use in business.

welcome back. let's get a quick power check with markets near session highs. these are some of the best and worst performing names today. on the positive side is the industrial supplier fastenal. this is looked to as a barometer to the economy. also on the positive side is walgreens. some online chatter on a bullish reddit forum. no other details beyond that but it is set to close its best week since july. it's still down 66% from its 2024 high. and on the negative side is water heating firm ao smith. they reported consumer headwinds on the earnings call.

topical to date given the opdr in consumer confidence. shares down 7%. that's your power check and "power lunch" will be right back. (man) these men of means with their silver spoons. what will become of them when they discover robinhood gold allows others to earn their very liberal rates on idle cash. they would descend into chaos.

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

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

all right, welcome back. time for today's three-stock lunch. here is david wagner, david, welcome. first up, we have shares of tesla down nearly 8% after investors were overwhelmingly disappointed or maybe underwhelmingly appointed to the ev maker's robo taxi event yesterday. jefferies' analysts called it a toothless taxi. so what's your take on tesla, david? >> you know, tyler, it's almost like tesla and uber reinvented the bus over the last two weeks with tesla's robo van and uber's group shuttle to new york airports. with this newfound innovation, if you call it that, it felt like consensus was heading into

the event it probably was going to be long on vision and short on deliverables. really no investors wanted to be short this event heading into it. if they were wrong, they would be really wrong. tesla fashion, it was a sell the news type of event. this puts the stock in the penalty box because there's no tangible catalyst to drive the business higher in the near term, especially if you look at the core business that will have limited growth and no margin expansion until you get the lower cost model 2 that is coming out, say, 2027. given a lack of catalyst and competition, i'm on the sidelines. >> on the sidelines. let's look at the beneficiary, so to speak, which is uber. shares are soaring today. they have continued to move higher. they're up 11% now. they're said to be benefitting from tesla's lack of detail on the imminence of its ridesharing plans. making the event a best case outcome for uber and what would you do with uber shares here? >> you know, i was actually long

on uber before the robotaxi event. last night seemed to be more of a last major hurdle for uber to clear, especially after they had an awesome q2 earnings report. then in august, you had their credit rating improve. i'm long here, but it gets me excited for uber as a whole because they have vuc so many great valuable partnerships that i hope to see expand over the next few quarters as av supply continues to grow. it showed me the defensiveness of uber's platform because it's going to improve utilization and reduce cost of scaling avs into new markets. it was a best case outcome for uber because tesla couldn't provide any verifiable evidence on their progress toward l-3. now i'm really excited because investors can finally focus on the actual fundamental story of uber which definitely merits some type of ownership. >> about a minute left. let's get to the analysts getting more bullish on netflix ahead of earnings next week.

guggenheim raising its price target there. jefferies also binging on a bullish third quarter preview. bar clay's warning streaming ad monetization could be a bumpy ride however. netflix lower today but up nearly 100% in the past year. >> even at this valuation, the market is underestimated the potential for even margin growth over the next few years over licensing agreements, which is another example showing the strength of their business model moving forward. i'm long. >> david, thank you very much. have a great weekend. thank you. and thank you for watching "power lunch." you can have a great weekend, too. >> i think it's happy canadian thanksgiving this weekend. correct me if i'm wrong. >> and yom piper as well. >> thanks for watching "power lunch." "closing bell" starts right now. thank you so much. welcome in to "closing bell." i'm scott wapner live from post nine. and this make or break hour