♪ welcome to "power lunch," everybody, alongside kelly evans respect i'm tyler mathisen. good to have you with us. one big driver has chip stops following taiwan emi results. >> a monster move there. another factor contributing to the sentiment, jobless claims fell last week even with the storms. retail sales were strong as well, up 0.4%. that has people cheering about maybe no landing. >> the unemployment numbers which seemed to wobble a bit a couple months ago seemed to have stabilize. an interesting tie-up that

uber has explored some kind of combination with expedia, though through or reporting talks are not currently ongoing. this could be a major game changer. i'm not sure how i see the two fit together. >> what i do see is expedia a $20 million and uber over 100. taiwan semiconductor higher, as by almost 12% following results and bringing other chip names along with us. seema mody has the details on taiwan semi's report and its guidance heading into the future. >> tyler, with samsung and intel facing their own set of troubles, taiwan remains the go-to for chips, raising outlook, profits also coming in higher than consensus. morgan stanley reiterating the

tom pick in the space. the bullish forecast is raising hopes that spending on artificial intelligence will remain strong beyond this year, so a welcome sign for tech investors. nvidia seeing an all-time hide today, and saying it made up nearly 70% of quarterly sales, references conversations including with the hyper scalers. they did not weigh in on the threat of china, but the build-out of fabs outside of taiwan, europe, japan, arizona, specifically the u.s., are making progress. he expects production to ramp in 2025. however, he did caution the overseas fabs will have lower profitable than in taiwan due to the initial ramp. shares are up over 100% this

year. >> how many factories are they expecting to build? >> three in arizona, a couple in japan, germany, and they are looking beyond germany across europe. this remains a priority for the company. >> seema, thanks very much. seema mody reporting. as taiwan semi thrives, the u.s. chip companies doing business in china are facing obstacle. >> reporter: they warnedof increasing security risks as it describes a struggle over cyberspace. this caught the attention after a group accused intel of various issues. the association accused the chip giant of having frequent vulnerabilities, high failure rates and harming china's interests and national security.

china accounts for about a quarter of intel's revenues. the government had already introduced new gripes late last year to delete intel and amd chips as well as other american tech from government serve es. it comes as the merit industry had broadened the list of action that could land companies on to a chinese security blacklist, including steps that make it much more complicated for companies to abide by u.s. laws or they're regarding china, such as the weeder force labor prevention act. intel on its part posted on social media here it strictly abides by local laws and would cooperate authorities to clarify any chi any concerns. guys? >> the question is whether there's been a fundamental change in the way these companies do business.

>> reporter: i think that is a big question. intel is seen here as a ompany, at least within the international business community, seen as a company that really did try to do whatever it could to stay in the china market. it's been here for decades, it's done whatever it can to try to maintain that very important business, and so there have been a lot of questions among american business people as to whether or not it really makes a whole lot of sense for america companies to be here. >> are china's issues mostly with intel or mobile i, a company that intel owns? >> reporter: that is another rumor that has been going along, because the ministry of state security had also accused a foreign company of illegally mapping -- using intelligent technology. there isn't any name yet as to

which company that issic, but there's a lot of specation it could be mobile i, a company that intel has a large stake in. so mobile eye that is distancing itself from that, saying it does abide by all laws. they don't know if it's a rumor, but people are worried it's a coordinated effort against intel. >> eunice yoon, thank you. tmc expects to start producing chips in its first plant in arizona by the start of 2025. here's what citi analyst chris danely said yet about that. >> number one foundry out there is tsmc. they literal le gain share every year. what the u.s. government should do is just give it all to tsmc, counter them build fabs,

otherwise, you're just spinning wheels, wasting money. of course, tsmc is in no way a chinese company. it's a taiwan-based company. joining us is to discuss is dewardrick, welcome. how do you respond to what mr. danely said there, just take the money and give it to tsmc. they're the ones who know how to build fabs, how to operate them, and why not just do that rather than try to reinvent the wheel with u.s. companies that are neither as good or as able to create the way tsmc is. in. >> first, i want to echo your

sent sentiments. this is a company from taiwan, not china. there's no question that tsmc is a leader in the space. we cannot deny that, but when we talk about the u.s. government, i think we have to understand this is not just a look at this space from the commercial lens, right? there's a large national security piece that goes into the chips and science act. i don't think we'll be give it all to tsmc and letting it ride. i think what the chips act is looking to do is focus more on just fabs, but to build out a more secure and resilient ecosystem, total ecosystem. research, development and design, fab, distribution. while, yes, it's been slow, and we've seen some success with tsmc, let so with companies like intel, i think for now, what's going to govern u.s. funding and

action will be a broader ecosystem to include, tyler, leaning on some allies to help do this. this is a bit challenging, given the commercial competition, but that's the goal. not to be dependent on one company as much as we love tsmc. >> let me pivot just a bit and question, why is china causing trouble -- that's my phrasing. why are they doing what they're doing now. is it related directly or by inference to the idea that the u.s. has not made it terribly easy for chinese companies to get involved here in anything have had to do with autonomous mobility, self-driving cars, that kind of work? are they retaliating for what we have done? >> this is a very good question, tyler. when i first saw they records -- again to eunice's point, we

don't know the company. they do have some issues with intel, but in washington, this action will be viewed as calculated and reciprocal, and to strike back on what the chinese view as an increased regulatory environment on connected vehicles, as you'll note, tyler, the u.s. just released their notice of proposal rulemaking on connected vehicles. they will say this was also retaliation on intel's side for making it more difficult for china to access semiconductor chips. here's what i will say. that is, both countries have a concern that connected vehicles pose a national security challenge. the irony for me is, the ministry of state security and the u.s. national security establishment both agree that these vehicle that can connect to the critical infrastructure,

collecting data on its users, geomapping, both sides fear that these vehicles will pose a national security threat. one final point, because there's irony in this as well. there are some chinese companies who have been conducting tests on u.s. roads, california in particular, which has a permissive environment. this action will likely increase calls here in washington to have a reciprocal action against the chinese companies doing the same thing that the ministry is accusing a former company of doing. there are no requirements for a important here in the u.s., tyler, so this is going to get ugly before it gets better, in my view. >> one quick button on that, dewardric, what would you say to investors who are trying to think about in what's becoming the autonomous driving space.

what's the fundamental takeaway? >> that the competition around the space, kelly is just not settled. i've been trying to figure out just how small the yard is, how big the yard will get, how high the fence is. as we see, this is a moving target. each side is acting and reacting, so i think we're still at a space where it's different to advise clients or investors how to play this space. i will say that it's important not to just think about the commercial aspects, because the national security aspects, as we're seeing, is playing heavily in how both countries engage. >> well said. dewardric, thanks for the time today. >> thank you, kelly. meantime, retail sales rose 0.4% in september, a strong record that it held up better than expecting. is the consumer flexing its might just ahead of holiday

shopping. gen xers are the likely cohort to have maxed out a credit card, despite being some of the highest income earners. we'll dig into the data and get the conclusion when powell powell returns.

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welcome back to "power lunch," everybody. shares of deere taking a turn lower moments ago on reports it's the latest company to be investigated by ftc over ape trust concerns. eamon javers has more. >> this investigation was revealed in a filing earlier today. in that filing, a

minnesota-based data broker says it has received a demand for information from the ftc regard deere, say the ftc's investigation is to determine whether deere and company or any other person is engaging in anticompetitive practices affecting commerce, related to the repair of agricultural equipment in the united states. this is a long-going dispute involving john deere tractor equipment and the right of repair by the owners and farmers who operate that equipment, whether they're allowed to repair or able to repair of equipment themselves. sneer elizabeth warren sent a her about two weeks ago, asking if deere was wholing information about how to repair the equipment, and therefore driving up the costs of roe pairing the quiismt, because it can only be done by authorized personnel.

the idea is tractors have become more complicated because of software they use, and by denying information, deere could be unfairly denying the people who own the equipment the right to repair their own stuff. we'll reach out to deere and ask them about this investigation, but this is the first now we are learning in this filing of some of the details of some of the information that the ftc is asking, including information about market share, and other data of how much deere had penetration into this industry. tyler, back over to you. >> thank you very much, 'em everyafter. retail sales were better than expected, un0.4%. as we coup down to the holiday season, the national retail federation is forecasting record spending once again. matt shay is president and ceo of the nrf.

matt, great to see you. >> his, kelly. >> the holidays projections seem muted. >> that's a good question. what we saw today from census, we did our numbers were a bit moor muted, but our interpretation of the census numbers is actually 2.4%. the nrf monitor from last week was up about 1%, so the numbers are good. consumers are still spending. there's a lot of firepower. we know the savings rate is way down. the pandemic payments have been substantially whittled away, but it's come down stampally and we're seal real wage growth, and the unemployment rate from its

lows earlier this year, still very low by historic standards. that doesn't translate into consumer sentiment necessarily. we have the ability to have another kind of action, so the attitudes are still muted, but the real actions when they're engaged in commerce have been pretty substantial. >> the retail sales numbers you report adjusted for inflation in any way? in other words, if you basically had the same level of sales and prices rose 2.5% from one year to the next, would you see 2.5 growth in retail sales? >> tyler, that's a question we got earlier this week when we did our release. over the years a couple of your colleagues have asked the same question. there is an adjustment in there for inflation. so we're talking, you know 2.5 to 3.5%.

goods inflation is actually down about a half percent over the course of the last year. what we will see this holiday season, we believe, is increased unit sales, more units in the basket, because these dollars will go further. you know, because you watch this, a number of retailers have reduced prices on thousands and thousands of items. on the good side, there are real opportunities. there's still lingers -- we know that's a problem, somewhat about housing, somewhat about auto insurance, rent, things like that, but in general inflation is down, very much on the good side. that's a great opportunity for the holiday season. >> matt, in anticipation of the conversation, if i told people were a bit tapped out in terms of their credit cards, maybe older american should be better off financially, what do you say

to that? does that ring true to you? >> revolving credit as a percentage of household debt is about 6.5%, that's really in line what with what we have seen in the years before the pandemic, which it was about 7%. the revolving credit is pretty good. overall household debt is about 11%, much lower than we saw, for example, during the recession 15 years ago when it was 15%. and it's pretty consistent with where we would be normally, 11% or 12% leading up to the pandemic. while the numbers are a bit higher in absolute terms, they're not higher relatively speaking in historic terms. they're certainly nowhere near the levels where there ought to be great concern. i think it's something to keep an eye on, but not something that as of yet has shown up in consumer spending patterns. savings rate are back to about 5%.

we no some countries save more, some less, but they're back to what is considered normal for a u.s. household. there's a couple uncertainties out there, one will happen in early november, of course. you're paying a lot of attention to what that's doing to the market, how consumers will behave remains to be seen. right now, consumers look pretty good. >> matt, thank you for your time today. >> thank, kell,. the american consumer remains song, but a lot is being fueled by debt. a new survey shows gen xers are more likely to have maxed out a credit card or come close. sharon epperson is with us with the data. >> a new survey found overall one in five, or 20% had spend up to the credit limit they had on a cart at some point between march 2022 when the fed started raising interest rates and the

second week of september this year before they began lowering rates. the percentage of gen xers, 44 to 59 who maxed on the their credit cards was far higher, 27%. being a caregiver is also contributing to gen x being tapped out. nearly half of parents with children under 18 have maxed out their credit cards or come close. 39% of parents with children 18 or older have done the same. while the lowest earners are most likely to -- more than a quarter of cardholders with six-figure incomes have maxed out as well. people have said inflation was the main reason and their financial stress is showing up in missed or late payments, too. maxed-out borrowers are more likely to be delinquent, compared to less than a quarter the year before the pandemic,

according to the new york fed. some of the experts we talked to said being maxed out and delinquent with payments could be a headwind for the economy going into the holiday shopping and spending season. >> this evidence really confirming once again to me how close to the edge american households with their money. they don't have -- they could -- they acorn survive $is,000 unexpected expense. they're up against the wall in terms of credit card use. they're probably not saving enough. >> medical debt is another factor. job or income loss is another factor. then there's too much discretionary spending. some add hit they're overspending, but there's a lot of reasons why people are doing this, and you're right, we always talk about the emergency fund. people don't want to think about. they want to make sure they're invested and all that. that's important, but that emergency fund is key. when you don't have it, what do you do? you go to the credit card.

>> and the fact that to compare it pre-pandemic is interesting. rates are so much higher now. if you're carrying a balance, it's way more punitive than five years ago. >> what you need to do is try to call your credit card company and negotiate a lower rate. they mesa no, but at least you've tried, look around for a lower rate card, or get a zero% interest transfer cost. you may have to pay a fee, but it may be worth it to get lower rates. or even a personal loan you could get out at 7% or 10% would be better than 22% interest on a credit card. and then talk to get someone. sometimes people don't want to admit where they are, but a nonprofit credit counselor, that's someone that can help you figure out what's the best plan. >> i love those also

disclaimers, where you have a balance and they say, if you pay the minimum a each month, it would take you 62 years to pay down this balance. that brings it home. >> but if you adopt have emergency savings, there's no way they're paying more than the minimum balance. that's why actually carly a balance is another one of the main factors why they're maxed out. they have the balance and just paying the minimum and keep charging. >> and they're not getting cut off, as long as they're paying the minimum. and the advice of stop using your card, what does that mean as we go into holiday spending? >> you have all these ways to pay. it's too easy. join us on october 24th for "your money" event. you'll hear from financial experts on how to achieve your investment goals, maybe build that emergency fund. scan the qr code down there, or

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welcome back to "power lunch." we've seen the dow take a bit of a dive at the start of the hour, but it's climbing back up 137 points. the s&p is almost flat, though, up three points. the nasdaq is hanging on to a 3 is-point game. that brings us to today ace market navigatnavigator. dom whicchu, what are we watchi? >> these transportation type of stocks are giving back gains after hitting highs yesterday. our next guest is taking a deeper dive into one name, and sees nor down side. joining us is mike khouw, thank you for joining us. maybe it's not out of realm of reason that we're giving back a

bit today. do you think there's nor down side, and there's weighing to play it coming up? >> its think it's a bifurcated story. the results came out better than expected, and the airline space was generally trading as a very cheap multiple. it's not as cheap now. if you have a tock trading half the time earnings, you have some up side. the transports are not just the airlines, and delta and united are probably the best two, but we're also talking about the logistics companies, the truckers and the rails. i always look at csx, which also reported earns, and has also suffered some consequences as a result of the hurricanes we have seen in florida and in the carolinas. specifically looking to the carolinas, it's their blue ridge subdivision, the line that goes

through tennessee and the carolinas that was impacted. they have about 200 million worth of repairs they have to put in, but they're not just thinking about the cost of those repairs, you're thinking how it would impact their operations going forward. florida looks like it's coming back on, but the interesting thing about csx is this company will have an investor day on november 7th. i suspect that is what fueled a lot of the unusual options toffee we saw today. >> what kind of options activity are you seeing, that unusual activity, is it tilted more toward forecasting down side or up side? >> it's down side. we're seeing more than -- actually it's traded more than four times the average daily items. the most active contract is actually looking out to the regular way november expiration, that's november 15. it's the 32 1/2 puts that are

most active. buyer are paying about 47 cents a contract for that. there's two big catalysts we could think of that could potentially justify looking out that far, and the options are only about 1.5% of the current stock price. we have the november 7th investor day, obviously an important catalyst, and the same week we have the election. the downside break-even is only about 40% lower. if people think that operational disruptions are going to last longer, if they think that the headwinds, which includes lower cold costs, thing like that, which hurts that side of the revenue picture, those are all potential impact. we're going to learn all about that. >> so you're saying buying of this 32 1/2 strike price put option, with a roughly 50 cent premium that you pay to get it, so you have to have the stock go

down to at least 32 to break even on that trade, and make money when it goes below 32. is that something you think will be a situation that unfolds by that november expiration? >> look, a 4% move in any stock over the course of almost a month is certainly plausible, particularly when you have a couple important catalysts, like the election, like investor day. you could have a general market pullback, that could impact it a bit, and we want a better sense of the operational disruptions that the companywill be facing. i think they're trying to do their best and manage through, but, you know, 4% isn't a big move for any stock, especially if you have several weeks for that to take place. >> mike khouw, we'll see you again seen, sir. in the past two hours you've heard both sides of this trade. bill stone was say adobe, dollar

general and csx. >> but if you see that unusual activity, it might be that tea leaf about where people are trying to place those bets. >> dom, thank you very much. as we head to a break, a quick power check on the positive side of s&p 500. snap-on surging on earnings. the best day in 14 years. it's the best performing in the s&p 500. on the negative side, walgreens boots, giving back some of yesterday's gains when it announced plans to closed 400 stores by 2027 as part of cost cutting plans. continuing a salary here that saw it rov femedrom the dow. the shares have lost more than half their values here. that's your "power check." we'll be right back.

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welcome back to "power lunch." i'm indicate rogers with your cnbc news update.

a georgia teen and his father were formally indicted following last month's deadly shooting at the school. there were 22 counts of aggravated assaults and cruelty to children. israeli prime minister benjamin netanyahu cautioned today the war with hamas is not over even with the killing of the political leader yana sinwar. he said they settled the score, but will continue until all hostages are returned. ferrari unveiled a car worst about $3. million. it incorporates features from endurance competition and formula one. the model is already sold out.

kelly, because over to you. >> wow. kate, thank you very much. the autonomous driving start up pony ai has filed to go on to the nasdaq. bloomberg earlier reported today the company is looking to raise as much as $300 million from the lists. in the s-1 filing it reports a fleet of more than 250 robo-taxis and robo-trucks. meantime stocks are hovering higher, and the s&p hitting yet another intraday record earlier in the session. with today's moving, the din exes are each up about 30%, but the next guest says there's even less room to disappointments. joining us is carl farmer, at rockland trust. carl, you're concerned that the market has risen 40% or so since

early 2023 but earnings have not? >> correct. thanks for having me on. as you stated, the market is up a little over 40% since its lows, but projected earnings haven't moved up as much. so we're trading at 21 times earnings we've seen some of the results from not only the second quarter, but from the beginnings of q3, if you're not coming through as projected, it may be tough to keep pushing things higher. >> so that leaving the market more vulnerable to a short-term, i guess i would say, a short-term hiccup. there it sits at a high level. if something spooks it, whether it's a piece of data, something the fed says or doesn't say, whether it's some event in the world, it's vulnerable? >> certainly. one thing, as you mentioned in

terms of vulnerability, you mentioned all-time highs. we've had almost 50 all-time high this is year, which normally might give people paw, but it's not so much we're hitting highs. that's usually a sigh of optimism, but the valuations at 21, 22 times next year's earnings, you need to do a lot of good results coming through to sustain where we are and keep pushing hire. >> do you have a pin on csx? wield heard the bulls case, the bear case. >> not csx pacific. actually, union pacific is one of our favorites, in terms of the exposure across borders, and opening up a lot of different things. the rails have had great moving. i can certainly understand the volatility around that. one thing you touched on earlier, one thing to remember is a fed pause historically could work better for equity

performance than cuts. though we're excited to see the fed's victor over inflation, i wouldn't expect another 40 percent. >> let's look at three stocks you like. one that stands out is nike. they do have a new ceo coming on board that could be a catalyst, but the business and the stock has been done for some time. >> oh, absolutely. in terms of the highlights here, certainly having elliott hill come back is a great plus, but we might be early here in terms of a multi-year turnaround. they withdrew guidance as they tried to right the ship. that may mean rough quarters ahead. long-term picture, it's about half the price it was about three three years ago. we think this is a good opportunities. >> second one is pepsi, which

has, you know not really set anybody on fire lately, but tell us the case for it. >> sure. that's fair. a lot of these names are not where people are arguing about the effects of artificial intelligence or what it means. pepsi, we know what they do. recent results have let to low sentiment in the discounted multiple. i think there's only so high you can raise prices before people push back, but they have productivity savings and they still have good flexibility to make adjustments. it hasn't part pate as much in the 2024 rally, but we think it's a good long-term play. place some catch up, and outperform. carl, for now, thanks. the search is on you for 2025 cnbc change makers, our list recognizing women changing

business. philanthropy, go to cnbc.com and search for change makers. we'll be right back.

welcome back to "power lunch." we are seeing green arrows today, but they're slight, not quite back to the session highs we hit right around the open. better than expected data helping, and we bring in rick santelli for more. >> arm in arm, we're looking at yields moving up, stocks having a green day, and everybody is debating. i have never in all my years monitoring or trading, or talking about markets seen so much debate as to seasonal adjustments versus non-seasonal adjustments with regard to data, especially retail cooler event. but if you are looking ate on the surface up 7/10 on core, the retail sales were strong, and ooh looking at the 2s and 10s, you can see the chart, and you can see the skyrocketing yields there around 8:30 eastern, but

the left side is yesterday, and right side today, and we are jumping over the session high yields and the matures of the 2z through the 30s, and looking at the 10s specifically, this chart starts on the day before the fed cut interest rates 50 basis points the 17th of september. what i want to point out is the 10s are the closest maturity that close to taking out the high yield on that move so far. it is the high yield that is closing 4.10, and anything above that, really, you can see the momentum building going into the next weekend and the next week's data point, and you can see the ecb had the third rate cut, and the distance between the two yields is fast approach pg 190 bay csis points basically four-month wide, and we want to continue to monitor that, because it is of course going to affect capitol flows. back to you. >> thank you, rick santelli.

and travelers insurance hitting an all-time high, and higher underwriting gains and investment income offsetting the catastrophe losses. we will trade nit three stock lunch next.

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welcome back. it is time for our three-stock lunch. today let's trade some of the big movers. jerry has the honor from castle rock management. and today, it is lower after uber tech discussed a acquisition of travel giant expedia. it is in the early stage, so it is unclear if any deal would

take place here, and investors are thumbs down here on the news, and would you pick up the shares here?el -- >> well, we own the shares and this is taking the core they have and applying it throughout the economy, but it is scaring us to find synergys in a $20 billion business like expedia, and it is not matching what they gave us what the outlook is for, and we would sell if they announce it. >> so if you have it now, and if they announce it, you are dumping the shares? >> well, there is a lot of stories, and you so the wait and see what happens. >> and how about, netflix, jerry, the prochts after the b -- the profits after the bell, and the effects of the password crac crackdowns and the stocks nearly doubled in the past year, and doing pretty well?

yes, >> yes, and it has been quiet, because we are going to be getting the last bump from the password crackdown, and it is going to be interesting to see how quickly they pick up on the ad side, and it is a big market for them, and something that we are attracted to, and hopefully, that will give us some signs of the uptick for it, because it would be a game changer for the business. >> jerry, we have to go, but would you buy, sell, hold travelers insurance here? >> buy it. you love it when the catastrophes happen to the insurers and they are buying back the stock. >> i think that the polite term is hard market. and the shares are up 28%. thank you, jerry castellini. >> that is all for "power lunch" and "closing bell s" starts now >> i'm scott wapner, and we start "closing bell right now,