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earnings start to roll in. the big report weighing on stocks this morning. united health down $45 a share a drag of more than 250 points on the dow. some shortages here involving medical products and the like. you just dropped all your papers. that's okay. >> sometimes that happens. energy is the worst performing sector as oil falls nearly 5%. israel telling the u.s. it's not planning to hit iran's oil facilities. we saw that big spike when we saw the missile attack on israel from iran. and then oil came back down some, but clearly the geopolitical concerns are weighing on the energy sector. >> yeah. but the idea that maybe oil facilities will not be hit. that is obviously putting -- causing oil price to slide a bit. it is the season, fall into winter, lots of kids getting sick. people getting their flu shot. we'll talk to dr. scott gottlieb about pneumonia, bird flu and much, much more. there's a lot of illness going

around. i came down with something a couple weeks ago myself. and so it is the time of the year. >> but shockingly, then the pediatric pneumonia, we'll talk with dr. gottlieb as well. i have been diving in. we'll begin with the bank earnings. stocks moving a different directions. leslie picker has all the details. >> three beats driving the stocks higher when those numbers crossed, but once the market opened and investors got more information on the conference calls the reactions became more mixed. a lot of trepidation surrounding various outlooks, b of a shares in the green because net interest income, the profitability metric for loan making, bottomed in the prior quarter. in 2q. >> we disclose our sensitivity beyond the curve, but given the kufb that we see, the one in the market, we don't make it up, we take the market's curve. we see growth in nii for the fourth quarter and beyond. so, we feel good. it's a very complex things.

you have fixed rate assets don't get hurt, deposits which squeeze a little bit, reduce the commercial loans come down but some are hedged out to longer periods of time. >> goldman sachs relatively flat today despite a sizable bottom line beat and profit jump. ceo david solomon says he believes they still have, quote, tail wind dynamics around investment banking activity. solomon added that even though banking revenue has improved, they are still below 10-year averages. citi group facing the steepest declines of today's bank reporters. you can see down 4.5% right now. on the conference call, executives shared that fourth quarter net interest income would be sequentially flat to q3, although noninterest income at the firm, that's banking and markets and services to name a few, pulling their weight in the quarter, guys. >> leslie, stay with us here for a second. we want to get the shareholder's take on the big banks. portfolio manager, fund owned shares of citi group, goldman

sachs and bank of america. mccray, good to talk to you today. is there a theme that you're seeing with the banks that you particularly like that's particularly optimistic for you as an investor? >> i think overall for the banking sector, we're seeing a troughing of nii and acceleration towards earnings gains for next year. and so i think that's a good setup for the whole industry. obviously we have a couple idiosyncratic components of that, citi group, jp morgan will see head winds which they mentioned on friday. we have a little movement between the different entities. in general, the industry is moving towards a more beneficial cycle. fed easing. and bank of america is one example of that today in terms of it rating kind of positive nii as we track through '25. >> why is citi the outlier today? >> i think citi had a couple idiosyncratic opponents to it. they talked about the expense head wind going forward. they delayed their ipo of the mexican operations. so i think that was a

disappointment. and then they have this regulatory overhang which there was a number of questions on the call about that. in terms of what's the ultimate cost and what is potential penalties, itself. i think that uncertainty will weigh on those shares for the time being. >> leslie, how much of a factor is it that they set aside more money against potential losses? >> caused a 9% hit to net income. it was sizable. a lot has to do with credit cards. both the fact that people are using more credit cards and also that they have to set aside more allowances for those credit cards. and they were seeing some lower fico band customers struggling a little bit more in this higher interest rate environment. although, the dynamic changed toward the end of the quarter, it's still impacting people. credit card rates do take some time to really come down as the fed cuts rates. >> think never come down that much, to be honest with you. >> when you look at them, the average is 21% or 22%. it's very high. >> maybe they'll come all the way down to 19. >> one could be so lucky.

>> as you look forward to an interest rate regime where rates are likely to decline, whether by another half point this year and then how much next year, who knows. what is that going to do to these big banks? >> i think you really have to go and dissect it balance sheet by balance sheet. today on the call at bank of america they talked about some of the hcm that's rolling off, 10 to 20 billion a quarter. that's on there pretty low rates. so that will be reenvested. as the fed brings down rates the forward expectations still reinvest that with an improvement in nim which will affect nii obviously. then you also have growing deposits. this is the fifth quarter they had added deposits. we hope to get more loan growth going forward, too. that will also affect the outlook for nii. and so you had a similar situation with wells fargo on friday and that outlook. but on the contrary, you know, jp morgan is little more asset sensitive and to the extent that loans are coming down in terms

of that impact, they're going to see some head winds. so they expect to inflect potentially by the end of '25, maybe before then, but a little behind in terms of the other banks. they are earning much more than the other banks. nim closer to 3 and bank of america closer to 2. >> i'm curious your belief in this capital markets recovery. because we saw in the numbers today and on friday that there are sizable jumps in investment banking fees, for example, but a lot has to do with debt capital markets. some mna advisory, late in the quarter closures. but the commentary around it is a little mixed and obviously last year was a pretty low base by which they're increasing from. so i'm curious where you see the revival and kind of how you're modelling that in terms of what types of stocks within the banking community you're assigning more weight to. >> so i think david solomon expressed that in terms of the numbers. so this quarter, you know, mna

is down 13% from the peak. it had been low as 25% from the peak in the first nine months of '23. and so, we're operating in this environment where we're still kind of underutilized in terms of that capital market activity, realizations, et cetera. and my colleague and i had the chance to meet with a couple alternative investment managers in the last couple of weeks. and you can tell that there are some urgency to get out there and monetize those assets with the markets opening up. in terms of the elections getting done and the fed easing policy. so there's a couple of catalysts, i think that will weigh into '25 and provide a better environment. and the banks, as facilitators of those transactions, both advisory and capital markets are well positioned to take advantage of those trends. >> mccray, thank you very much for being with us today. leslie picker, always good to see you. thank you. former president donald trump speaking in chicago today. that discussion wrapping up. it was at the economics club of

chicago. an event collaborated with by bloomberg. give us the details. >> yeah, that's right, tyler. it was bloomberg editor in chief at the economic club of chicago sitting down with the former president here just over an hour of conversation. in it, a number of economic items i want to bring to you, including the fact that the former presidenttalked about tariff. former president called for tariffs as high as 10% across the board. now in this interview, he thinks those need to go much higher than that to entice former manufacturers to bring manufacturering back into the united states. he said those tariffs could have to go as high as 50% to really incentivize manufacturing to come back quickly to the united states. he also said that he wouldn't commit one way or the otwhetherr not he would remove jay powell. he believes a president should be able to call up the fed chair

and say to the fed chair what he thinks should happen on interest rates. he doesn't say that he thinks he should be able to order interest rates to go up or down. but he does say presidents should have the ability to sort of jawbone the fed chair over the phone directly, something that presidents have really avoided doing in order to preserve the independence of the fed in recent years. he also was asked whether or not he would want to break up google. he said i would do something about google. he said they have too much power, but he declined to say specifically that they should be broken up because he also said that the united states has an interest in having big powerful, strong tech companies that can compete with chinese competitors and asked about tiktok. he sees tiktok as a threat. he sees a lot of things as a threat. he said but he declined to say that tiktok needs to be banned in the united states. and one more thing, tyler, fairly contentious interview asked him about the reporting in bob woodward's recent book that he has been speaking with

president putin of russia. former president trump saying here that he's not going to say whether or not he has had phone calls with vladimir putin. he said, i don't comment on that, but if i did do it, it's a good thing. tyler, back other to you. >> it was, as you say, contentious conversation. and i thought the back and forth on tariffs was especially so because the former president talked about raising tariffs to 100%, 200, 300%, even more on certain categories of goods, most notably automobiles and he doubled down on his comments about detroit being effectively a third world kind of environment, comments that he made in detroit earlier this week. >> yeah. this is the former president, y you know, really coming up against the business and economic establishment on tariffs. trump saying here, look, you guys got it wrong. "the wall street journal" got it wrong. john, you personally got it wrong. he was very aggressive on this point. saying, tariffs are actually a good thing.

tariffs will give the united states the ability to force the trade imbalances back the way i want them to go. it was pushed back to some degree, hey, wait a second, you'll cause prices to go up, costs to go up for businesses. a lot of businesses in this room won't necessarily like that. trump said, you and the establishment in effect have simply been wrong on this for 25 years. >> i believe he said tariff is the most beautiful word in the dictionary among other notable things. eamon javers, thanks very much. appreciate it. oil prices slipping 5% amid growing fears of a supply surplus. details and unlikely bedfellows in the energy industry. plus, power rundown with former fda commissioner scott gottlieb. we'll talk about medical supply shortages, the fda-u-turn and france versus the bird flu. "power lunch" is back after this.

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welcome back, everybody to "power lunch." oil prices taking its on the chin today. look at that, down 4.74% for wti, the first time we have seen that since the end of september. pippa stevens joins us now to tell us why we're seeing such a decline. >> heavy losses today, contessa. that's because it looks like israel will not target iranian oil infrastructure with three senior administration officials telling nbc news that israel plans to limit its retaliation to military targets. oil was bid up as the market waited to see how israel would respond, fearing that israel might destroy iranian oil facilities. but traders are now unwinding the risk trade and are back to focussing on the fundamentals and the global market is still oversupplied and potentially facing even more barrels coming back on the market from opec beginning in december. still, cibc told me the market is being shortsighted it might not be a target this time that

we're in the clear moving forward. if there are more tit for tat responses, oil facilities could once again be in focus. wti all but given up its gains since iran fired ballistic missiles at october 1st at israel. >> let's talk about nuclear power and technology. big tech getting involved in it. nuclear power has sort of gotten back into the conversation? >> yeah. this has been a really big trade over the last year and it comes because tech companies are in a little bit of a bind because of ai's energy demands. they made these commitments to transition to zero emissions. now they all need more power than anyone imagine to compete in the ai race. by 2026, global electricity use by data sernts are expected to double, consuming the same amount of power as japan. the solution is nuclear power that can generate electricity without any pollution but is expensive to get a plant up and running. some also faced project delays

and ballooning costs. but with big tech buying the power even if it's at a higher price that could jump start new bills. google's deal is just the latest example. we also had microsoft teaming up with constellation energy to bring three mile island back online and amazon bought a data center that's powered by the nuclear power plant. prominent tech players are also backing nuclear, both bill gates and sam altman are chairman of nuclear companies. jeff bezos funded a fusion company and nvidia jensen huang called nuclear critical to the future. >> is not in my backyard lessening? >> there's two factors. on the front, nuclear power is now at the highest level in more than a decade. a lot of that is coming from millennials and gen z. you look on tiktok and instagram a lot of prominent backers

because they don't have necessarily the same association of what can happen with a meltdown. on the regulatory front, that still is a question because these smrs the future of the small modular reactors still have to get the permits from nrc. they have a demonstration project they're building in tennessee but not the full scale project yet. >> like a proof of concept project or more than that? >> it's more than that. so they're building it and the nrc approved it and nrc approved bill gates company, the construction permit but not their nuclear reactor permit yet. so this is a long timeline, 2030 at the earliest. >> you have ai fuelling the need for more power but you also have electric vehicles, which certainly are going to be a part of the future. and to rely on electric power to power a third of the auto fleet in this country, that will take a lot. >> yeah. >> and bitcoin mining, by the way. >> and also reshoring. data centers are the latest and kind of the grabbiest headline in terms of power consumption.

but utilities forecast their load growth, facilities a decade in advance. now all of a sudden it's kind of wait, every single day there's a new forecast of just how much power ai is going to use. and so, that's why these companies are now going directly to some of the nuclear companies. >> pippa, thank you. still ahead, our trader says investors are starting to rotate out of oil and into a different commodity. this one trading near all-time highs. we will reveal it next. at t. rowe price, we help advisors move forward by building agile etfs designed to outperform the index. that's the power of curiosity. better questions can lead to better solutions. t. rowe price. invest with confidence. 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

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and more in prospectus at invesco.com quick check here on the markets. you can see dow off by half a percent. the s&p 500 the same, the exact same, half a percent. and nasdaq composite down by .8%. dom chu, let's get to today's market navigator. does all that shines brightly indicate gold? >> well, we're going to kind of link the last segment you guys just talked about with pippa stevens on the oil trade and link it with gold. so what we're looking at is the crude oil trade, right? prices are slipping. traders continue to keep an eye on the mid east tensions. gold is climbing to new highs,

at the same time. our next guest says the two are connected. and he's here to help us navigate the flow between those two commodities. join us is the chief market strategist at blue line futures. phil, let's talk about the oil trade. we just dove into it a bit more in depth in the last segment. i would like to hear your take why your seeing the decline in prices and whether or not that rotation, many if you will, is going from gold into commodities elsewhere or is it going from oil into gold? >> yeah. i believe that the selloff in crude oil could boost gold up to new all-time highs. there's two take aways, the inflation expectations in the rotation. there's an interesting dynamic between the price of crude oil, inflation expectations, the strength of the dollar and fed policy, the correlation between crude oil and the dollar index is a positive 85% since the recent escalation the middle east. we have seen crude oil prices have collapsed over the last 48 hours. opec cut the demand forecast for

2024 and 2025. israel's walking back from its escalation in proposing of striking some of the oil and nuclear facilities. how does it benefit gold? over the past few weeks we have seen little reaction in the gold market with any kind of escalation. and now with inflation pressures relieved, the fed can focus on the fragile labor market and take a dovish stand. the dollar will weaken and 54% inverse correlation to the dollar, gold futures benefit. so where the rotation takes place is that money managers, they've cut their bullish bets on the gold market and the lowest level in eight weeks and chased inflation and they chased crude oil prices higher. now, that crude oil prices are coming off and the fed looks like they're going to shift more dovish, they want to rotate back into those asset classes. so if you look today, you have the russell 2000pushing up, up about 1%. bonds up other a handle and gold futures marching higher. the cme's fed watch tool

shifting 90% the fed will cut 25 bases points in november. we think central banks will continue to purchase as well. >> then what's the trade? how do you capitalize on that? how do you take that macro view and translate into an actual event or trade? >> so, you look at the consolidation that we recently had in the swing low that we had. it's been about $50 range, 26.50 on the downside. 2700 on the upside. we believe you buy the micro gold futures contract at 2650. you put your stop loss just below that recent swing low of 2620. so you're risking $300. dwoent belief this thing will make new all time highs. we believe we will march up to 2850 to the end of the year. so that would be a $2,000 gain and $300 risk, giving you an optimal risk/reward. >> there's the trade. minimal amount relatively of risk for that bigger reward if gold prices keep going higher. phil streeble, blue line. thank you very much. we appreciate it.

>> dom, sounds like, you know, those would be great odds if we were at the roulette table in las vegas. >> i figured talking to the gaming correspondent, you kind of like that risk/reward. >> i like it a lot. >> a lot of o people using those micro futures as well. gives people a little more ability to get on some of the trades and contracts without having to put up so much money as collateral, as margin to make those bets happen. >> thank you, dom. >> you got it. tyler? >> hurricane damage is disrupting the medical supply chain of all things. hurting hospitals and dialysis centers across the country. up next, we'll look at one manufacturer bearing the brunt of the impact and speak with former fda commissioner dr. scott gottlieb about some potential solutions to strengthen the supply chain. "power lunch" is back after this.

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nation's supply of iv fluid. as a result, some hospitals are having to postpone, nonemergency procedures to safeguard their stock. we reached out to backster that gave us a statement saying a temporary bridge to transport product off side has been installed but does not yet have a timeline on when production will be fully restored. here to weigh in on the impact and more, dr. scott gottlieb, cnbc contributor. welcome back. good to have you with us. certainly covid showed us about the fragility of lots of supply chains. but here comes a natural event coming in and disrupting a critical supply chain. 60% of the nation's iv fluid coming out of one facility. is that smart strategically. >> this represents a much more systemic challenge when it comes to the production of these iv stashl injectable drugs and mostly injectable drugs. iv fluids in that category of the generic drugs. the problem is that manufacturing these things aren't trivial.

you need specialized facilities, done under sterile conditions and reimbursement has been driven down. mostly by medicare. so they are sold with very slim margins. what you have seen industry do, a lot of industry players get out of this segment in recent years. the ones remained in, they have consolidated manufacturing small number of facilities because the only way to do this at profit to do it profitably, is to do it very large scale. so now you have consolidated manufacturing for essential medicines in a small number of large manufacturing facilities. when those go down, you take out a very large percentage of the market. >> so, it sounds to me like what you're saying is that unintended consequence of a pricing mechanism in part that is causing the consolidation of manufacturing, which is in turn then a vulnerability? >> well, two ends. on the one hand we have seen increased regulation when it comes to the manufacturie ing

sterile injectable drugs because of historic problems. the fda has been prudent in what it done, greater regulation, greater greater scrutiny, and now the other hend you have seen reimbursement come down. rather than reimbursement rising for medicare programs it has gone down. a lot of drugs are produced unprofitably. they lose money on a lot of these drugs. these are the iv cheem therapeutics. the drugs you hear about going in and out of shortage, the same list of drugs all the time. the iv fluids are in that. >> just in 2017, when i was covering hurricane maria in puerto rico, we saw the same problem with baxter, big manufacturing facilities there, when the hurricane goes down and takes out not just the power, not just the building, but you're damaging the homes and the ways that people get to work, it disrupts the supply

chain there. so this time it was baxter and helene. but, what you saw with helene is that the breakdown was so widespread and we saw something similar in texas with the winter storms there that if there's kobs trags geographically in any area, then you're prone to the climate risk as well. >> with maya, i was at the fda at the time, that was a facility that manufactured the plastic bags. you don't want to fill the bags far away, it costs a lot of money to ship iv solutions in an airplane. they made the bags down in puerto rico. when that was disrupted they didn't have them to fill in the u.s. facilities. that was a major disruption. >> let's move on to weight loss drugs here. the fda made a decision on compounding drugs that because of a shortage or whether there's a shortage, tell us where we are with these compounding drugs and whether -- patients like it because they can get it for far less money than it would cost to buy the eli lilly brand. >> yeah, look.

compounders are allowed to enter the market when there's a declared shortage of drugs. there was a declared shortage of ingredients. lilly increased manufacturing and the shortage was subsequently lifted. i first of all have a lot of concerns about the compounded drugs. not that i think some of the ingredients are problematic in these drugs and we have seen. the efficacy derives from the fact that you deliver a very constant exposure of the active ingredient. you don't get big peaks and troughs of the drugs. i'm skeptical the compounders are achieving that. the fda said the shortage was over. they said the compounders had to exit the market. the compounding association sued. and the fda backed away from that on friday night. i'm surprised by it because i thought this lawsuit was weak. i thought maybe they had done that to try to extinguish the litigation but the litigation itself wasn't a real threat to the agency. so, i'm concerned that the

agency did this as a policy decision because there was a lot of consternation about the compounders coming out of the market because the patients were accessing lower cost alternatives. >> if you are an individual who wanted to take one of these medications, and you had a prescription for it, would you get it filled at a compounding pharmacy or not? >> i certainly wouldn't get it filled at a compounding pharmacy. now, you know, i have access to branded drugs. some patients i recognize it's difficult for them to afford the branded alternative. i would say that the cost of the branded drugs have come down sub stan shally and patients can access it at a fraction of what the actual list prices are. still higher than what some of the compounders are being sold for, but a lot less than what the initial launch prices were. some of these drugs with the coupon can be accessed for $500 a month. still very expense i have but the compounders are selling their drugs for2, $300 a month as well. the delta what you're getting in terms of safety and efficacy favors use of the branded drug if you can get access to it.

i think the fda made a mistake here. if in fact, they allowed these compounders to stay in the market as a policy decision because of the cost considerations. lit make it hard for them to enforce the compounding regulations going forward if they pick and choose where they enforce it. >> and finally, we want to ask you about some states reporting an increase in pediatric pneumonia, indiana, central virginia says hospitalizations for pediatric pneumonia are up 30%. is there something unusual going on with pneumonia and children? >> yeah. i don't think it's unusual yet. so we see typically late summer, early fall, pneumonia, these cases reported to b we have seen epidemics in the past. you see an epidemic every three to seven years of this pneumonia. i don't think this is necessarily an epidemic. these are regional outbreaks. we have to see which way this goes. since covid, the epidemiology of this bacteria has changed. we are seeing larger outbreaks

now. this is a difficult to diagnose pneumonia, difficult to treat because you need specialized antibiotics. you typically need class of antibiotics, drugs like -- so this is something that you need to be aware of and alert to to get diagnosed. that said, most children, self limiting infection. for children who have persistent cough and other signs and symptoms of infection, certainly they should be looked at and be alert for this at this time of the year. >> dr. gottlieb, thank you very much. let's get to pippa stevens for cnbc news update. >> the biden administration is warning israel to improve the humanitarian situation in gaza or it could risk losing u.s. weapons funding. secretary of state antony blinken and defense secretary lloyd austin sent a letter to demand israel take action within the next 30 days. it calls on israel in part to

let 350 aid trucks into gaza each day. north carolina's governor says at least 92 people are still unaccounted for after hurricane helene brought widespread flooding to the state nearly three weeks ago. he said the numbers could fluctuate as north carolina's national guard continues its search and rescue work. so far 118 deaths have been reported in the state. accounting for nearly half of the 243 killed by the storm. and the country's largest retail trade group says it expects americans to spend more this holiday season. the group estimates 979 and $989 billion in november and december. however, the national retail foundation forecasts a slowdown in the pace of sales growth when compared to previous years. tyler, contessa? >> pippa, thank you for that. coming up, wolf speed shares surging 20% after the chip maker landed a major grand from the commerce department. we'll tell you how much, what the money is for and whether

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welcome back to "power lunch." quick check here on the markets. as you can see the dow industrials are off by about a little more than half a percent and the s&p 500 the same. the nasdaq composite off by a percent. the russell to 00 up by half a%. the bond market back up after a day off yesterday. let's get to rick santelli in chicago for more. hi, rick. >> hi. indeed. the market might have been closed yesterday but something important is happening on a back-to-back basis. long dated treasury yields have been leading rates higher for the last five weeks. and, maybe the catalyst was either the fed lowering rates or it may be debt and deficits or much stronger jobs report or all of the above. but the 30-year bond is the last maturity look at a two-day chart going back to friday.

on the long end that didn't trade above yesterday's high yields. it was the last one. it had eight consecutive sessions. the streak ended last friday for 10s and today, well, it's not going to be the nine session as you see. why is that so important? well, it's important because it might be giving us an early warning that momentum is breaking. as you look at 10s and 30s on one chart together, going back to the end of july, basically last time rates were at these levels based on yesterday's closes. well, maybe that event may be done. so we want to monitor that. another area we should pay close attention to is the fact that since the fed cut rates, if you look at the september 17th difference between 10s and boons, it was around 150 bases points. today, it's over 180 bases points. so, over 30 bases points wider. the widest in nearly three months. and that's after our central bank cut rates.

so we want to monitor these. it has a big effect on a variety of markets including foreign exchange and maybe one of the reasons, of course, that the dollar is doing so much better against the euro and other currencies. tyler, back to you. >> mr. santelli, thank you very much. i appreciate it. coming up, the united health weighing on the dow after giving lackluster guidance. we will break down the numbers and the trade in your favorite segment "three stock lunch." daughter: hey, dad. dad: hey, sweetheart. daughter: what are you doing? dad: i'm gonna clean the fence. daughter: it's a lot of fence. dad: you wanna help me? dad: aim at the wall, but get closer. daughter: (gasps) what the?! daughter: alright. dad: side to side. when you work with someone who knows a lot and cares even more... you can do this. ...you're unstoppable. (♪♪) wow... are you kidding me? you can do this.

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♪ all right. welcome back to "power lunch." time for deluxe throw stock lunch edition. we'll get the stories on three stocks in the news and get trading advice on each one. our trader today is jay hatfield, cio and ceo of intracap. he oversees the infracap equity etf. first up, the stock causing all of the dow's losses today, is united health. let's bring in bertha coombs for what's going on there. >> raising concerns today, despite a beat on the third quarter. the company lowered the top end

of guidance for the full year 2024 in part on higher costs associated with the change health care hack earlier this year. but more concerning to investors higher costs in medicare advantage. the company called out a couple of factors. they're seeing higher than expected in-patient costs. they attribute that to aggressive up coding by hospitals. that is health systems making patients seem sicker with billing codes that get higher reimbursement. hospitals will counter that united health denies care more than other insurers. on the medicare prescription side, they say the inflation reduction act limits on out of pocket drug costs on patients is already having an impact. once customers hit their limits, they no longer have co-pays. they're using higher cost brand name drugs as a result and that limit will be even lower next year. they see the trend continuing and now conservatively see

full-year 2025 earnings of about $30 a share versus the estimate from analysts over $31, all of which to say that's weighing on the medicare peers as well today, tyler. >> thank you very much. that's the news behind the big drop. jay, is this a time to buy the stock at a discount? it is, after all, a vast and good company. >> thanks for having me on, tyler. well, we have actually owned unh in i cap our large cap dividend fund. we did trim it as it got towards 600. that is our target now. with the revised guidance of $30, we have$30, we have a 20 multiple. the company does grow much -- hire level than the market -- higher level as the market and an attractive dividend, we use the ratio. that's the pe to the growth plus the yield. and so we're using a discounted

ratio because of the things you just currently described with regard to pressure on reimbursements. >> okay. jay, we're going to move on next to johnson & johnson, up slightly after earnings. we have angelica with more. >> that's right. j & j beating on the top and bottom lines. pharma was the star of the quarter while med tech struggled. cancer drugs a particular bright spot. things like multiple myeloma drugs topping estimates. immunology another thing to look at in the quarter. stelara now facing bio similar competition in europe and will see it in the u.s. next year. j&j executives saying they can manage that decline and try to turn attention to their newer autoimmune drug tremfaya. in weak economies, a few examples. in japan j&j the leading

supplier of contacts there. saying that people might refrain from ordering more expensive daily disposable contacts or they might extend their prescription. there's also a physicians strike in canada and anti-krucorruptio campaign in china. there's a short of iv fluid that started here after hurricane helene. j&j executive today say figure that drags on -- saying if that drags on it could affect surgical procedures across the ploer portfolios. >> thank you. jay, what's your trade on j&j? >> thanks, contessa. we have a hold on j&z because of our 17 -- j&j because of our 170 target. they have the momentum you described on cancer drugs. this is a gigantic market company, $400 billion mark cap, we're expecting a 6% growth rate, 3% yield, nine total return. we believe it will trade at the

same growth plus yield that the market does. so that's a 170 or 16 times earnings. so that's just showing only 3.5% upside. we have a small position in icap who we've been trimming it in the low 60s. we do generally prefer riskier stocks like financials, reits, and tech because we are more bullish about the market than most people. >> all righty. thank you very much. let's move to our final stock, wolfspeed. stock secured $2.5 million in new funding including $750 million from the chips act. seema? >> wolfspeed's ceo says the funding will accelerate production of silicon carbide at plant in north carolina and new york. this say type of silicon used by heavily -- the electric vehicle industry. lowe believes the new capital

will help wolf business -- wolfspeed better compete with china. >> the chinese are going toward electric vehicles. 40% of the new car registrations in china are electric. they are absolutely moving in that direction at full speed. and they are also trying to become completely independent of the west in everything semiconductor. silicon, silicon carbide, et cetera. they are funding all kinds of companies in both silicon and silicon carbide. there's no doubt about it that we face that kind of competition now. >> now competition from china is one of the reasons wolfspeed shares have underperformed weaker than expected financial performance tied to delays at its north carolina plant. also haven't helped. shares about 70% this year. but the stock is popping. this investment announced to a mix of public and private capital is seen as a vote of confidence in wolfspeed that is sitting on a lot of debt. keep in mind, though, short interest is high in this name,

games. >> thank you so much. let's move into your pick on this one, jay. is wolfspeed an opportunity? >> well, if you adopt our conservative -- methodology, this is a pretty easy call. we would avoid wolfspeed. it has a 31% short interest, that accounts for the rally as you mentioned, they had operational issues. more importantly, they lose money, they're not projected to turn profitable until '27. we're not as investment banker a long time ago. we had a rule, we didn't take any companies public that weren't profitable. we apply that rule to all of our investments and all of our funds. i would recommend that rule for most investors, unless you have some special insight or are on the board or -- for some reason want to be an amateur venture capitalist. >> show me the money. thank you so much. we appreciate it. remember, you can always hear us on the podcast, be sure to follow and listen to "power lunch" wherever you go.

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let's give you a check on the markets now. the nasdaq, the worst performer today, as chips are lower after asml earnings were released early and accident an leak. asml's orders were well short of expectations, saying there are strong developments in some areas of the market including a.i. other segments still weak. that stock down $150 per share. and obviously other chip stocks that like the ones you see

there, down in many cases by double digits. nvidia getting hit as a result along with other chip names. trump media taking a sharp leg lower this afternoon after the former president's interview at the economic club of chicago. the stock was briefly halted for volatility which you could have characterized the interview as because it was pretty volatile. it has since reopened, but down about 5%. and here shares of sphere entertainment. the coming up's entertainment venue in las vegas has caught a lot of attention, boosted business in las vegas. today the company announces the next sphere, number two, will be built in abu dhabi in partnership with the department of culture and tourism. lot of news around the uae. it's spectacular. >> so cool. great to have you with us. thanks for watching "power lunch." hi, thank you so much. welcome to "closing bell." i'm scott wopner. we're live -