medicare supplement plan from a company like humana just might be the answer. good afternoon, everyone and welcome to "power lunch. alongside kelly evans, who's actually across the studio, i'm tyler mathisen stocks are lower across the board right now and falling even more we have an accelerating decline for the major equity indexes the dow and s&p 500 down more than 1%. the nasdaq now down by more than 2%, kelly. >> bring it over here so i can show you some of what's going on today as we await details from the fed's beige book any moment now. we're continuing to watch yields as the ten-year has risen back up to 4 1/4 this afternoon almost feels like this rise in yields has been welcomed, welcomed, welcomed by stocks and then suddenly today perhaps stocks are a little bit like wait, maybe we're not so sure about this

gold is also pulling back. but it has been on an incredible run. up 32% year to date. it's also been rising along with the dollar we don't usually see that pattern. those who are in and benefiting from portfolio diversification especially, tyler, on a down day. >> a lot of people talking about this story and that is that mcdonald's is a big drag on the dow. a fresh e. coli outbreak in ten states has been linked to the quarter pounder. one person has died, dozens of others sickened. mcdonald's thinks the cause, thinks the cause may be slivered onions that were sourced from a single supplier. but we've been down this road before and it does nothing good for a stock at least certainly in the short run the most famous episode here was probably jack in the box some 30 years ago. and then of course there was a chipotle outbreak about a decade ago. >> the chipotle one went on and on and on. so investors, if they think this could have multiple chapters want to be first to sell the shares before this is a continued kind of slog if it's not, though, if this is a one-time situation, they can

remedy it, rectify it and move on and we've shrugged it off in a few days or a week then others would call this a buying opportunity. again, mcdonald's down 5% on this news. apple is also a big drag on the dow today and on the nasdaq. an influential apple analyst is lowering his estimates for iphone 16 orders now, this comes as at&t ceo john stankey said customer upgrades are slightly slower and apple shares have been a bellwether in the sell-off down about 3.3%, now session lows >> uptake on the iphone 16 has been slower than i think anticipated. there have been some order cutbacks i think the decline in the uptake in percentage terms that was referenced by at&t was really rather minimal. it was significant but minimal it was 3% or 3.4%. not 3.7% or something like that. >> and bear in mind at&t shares at a 52-week high earlier today. apple shares were at an all-time high yesterday >> right. >> so even with this you know, kind of game we're playing of

are they a little bit better, are they a little bit worse, the stocks are able to shrug this off and show investors they have other stories still and other levers to pull. >> >> all righty one of the things we're going to follow today of course is the beige book is this the beige book or the notes? it's the beige book. i can't keep them straight whether it's the beige books or the minutes from the meeting they excite me so much i can't stand it but we've got steve liesman standing by with those reports steve. >> detecting a little sar kaz nm your voice there, tyler but we'll talk about that later. economic activity according to the latest beige book. the collection of economic from the 12 federal reserve districts was little changed interesting contrast with the data showing an accelerating economy. only two districts reported modest growth, which is pretty interesting and a little bit on the downbeat side. there was declining manufacturing in most districts. consumer spending was reported to have been mixed with consumers shifting toward less expensive items in some districts.

the housing market generally held up with a lot of uncertainty about mortgage rates. there were only minor disruptions from the dock workers strike but more widespread in the southeast disruptions from hurricane damage including to crops and other businesses the context were more optimistic than they appear to have been in the september beige book employment increased only slightly a little contradicting the data which recently showed stronger job growth. the districts reported low worker turnover and limited layoffs, which is an important part of keeping the job market relatively stable. on the inflation issue selling prices increasing were only slight and increasing at a modest pace. home prices did edge up and rents reported to be slightly steady or down slightly. that's important for the way that we calculate inflation in the cpi. districts reported increasing pricing sensitivity among consumers. there's that pushback we've been talking about.

and profit margins compressed because of higher input prices and then not passing them along. interesting developments here. we'll see if this tends to take some of the edge off the concern about an accelerating economy that has pushed down the dow as well as pushing up interest rates since the federal reserve cut them back in september >> going back to that point you made at the top of the report on manufacturing, that it seems to be slowing >> yes declining manufacturing in most districts. this is along the lines of some of the data we've seen, though i must say some of the regional federal reserve manufacturing surveys have been a little bit robust you know, tyler, sometimes this beige book, and it's the reason why i do think it's a very important report, it does lead the way and maybe sometimes it's a little behind the data if it's in front of the data here, then it's telling you the strength we saw in the third quarter might be waning as the quarter comes to a close, which means that it's not going to

continue into the fourth quarter and the fed has less to worry about. same thing is true with what you singled out there, the manufacturing decline. if indeed things are waning and getting a little bit softer towards the end of the quarter, then again, that inflation concern and that growth concern that seems to be embedded both in the dow and in the bond market, well, there's reason for that to ease and we'll have to just check in when we get this october data beginning in november as to whether or not this beige book is indeed leading the way. and by the way, in this time of uncertainty when we're not 100% sure what's going on in this economy i've seen fed officials lean more on this anecdotal data about figuring out what to do than the hard data >> i would almost argue, steve, that that bad beige bhoorks was it, a month ago or six weeks ago preceded that 50 basis point cut. but is this tone as bad as that one was? >> well, kelly, you don't have to argue that with me. i agree with that completely no, this is not as bad as it

was. i fully expected, i want to tell you my expectation going into this, i thought this beige book was going to reflect some of the better economic data that we've seen and i was surprised that it has not done so. so i think it's important in that respect it can do a good job when we don't know -- and by the way, we also know the data's going to be distorted by the hurricanes, it's going to be distorted by some of the seasonal things that are out there at this time of year again, i wouldn't say that the survey data or the anecdotal data is more important than the hard data. but i would put it on an equal footing at this time with the actual data that we're getting >> all right, steve, thank you so much. we appreciate that and the analysis we appreciate it the dow is down 564 points that's 1 1/3%. let's bring in nancy tengler now for her view on the recent market action. she is the ceo at laffer tengler investments. nancy, always great to see you we thank you for rolling with

what is a very busy day. there are lots of stocks in the news some of themunfavorably regarded including mcdonald's, apple, i guess you'd say starbucks has been weak. developments at boeing earnings coming out later today at tesla the market has been accelerating in its decline is this related to individual shares, or is this the beginning of something unwelcome >> well thanks good to be with you, tyler and kelly. i think a couple of things one is that in the face of expectations that the market would decline in september it actually rallied then the expectation was we'd see weakness in october. this is part and parcel of a bull market. you need to have corrections you need to have consolidation so when you get a flurry of bad news -- and i would say the mcdonald news is bad news. we got some weak chip numbers although texas instruments is rallying you've got the starbucks guidance pulled, although i

think brian nichols did exactly the right thing. but it weighs on investors and it kind of accumulates and so there's no reason to be a buyer in some of these names >> i guess what my sense is is that a lot of investors were waiting for some reason to sell and today there's a constellation of reasons to sell i'm not saying it's related to the election, but i'm not saying it's not either. >> yeah. and i would call them traders rather than investors because those of us that invest use these volatile periods as opportunities. we say in our firm volatility is the friend of the long-term investor but the election continues to weigh. i think it's the black cloud hanging over many have argued that the rally has been a republican favor, it has moved in republicans' favor, that's why the markets rallied i don't think anybody knows that so when you get an opportunity to sell in this kind of environment that's what traders

do at the margins. i'm not concerned. i don't think it's the beginning of a bear market >> okay. >> have we, nancy, finally reached the point of freaking out about interest rates >> i don't know. you know, our head fixed income byron anderson has been calling for higher interest rates. it was very lonely for about three months he's been right. i think they can go a little bit higher in the '90s you had the ten-year at or above 5% for the entire decade the fed funds rate was at 5% robust stock performance and higher interest rates can co-exist if you've got productivity, and we've got productivity in spades >> the only problem i have with the '90s analogy is because of what's going on with the deficit where you say okay, 6% in the '90s and we were practically running a surplus is one thing but 4 1/2% when they have a deficit and 900 billion of that is interest payments means we're going to have to keep making those interest payments and the deficit's going to get worse i wonder if this math is what is

sort of discom-fitting the market >> exponentially worse, kelly. you're absolutely right. we were also globalizing i think to your point it only matters when the bond market cares. and i don't think rates are going up because people are worried about the deficit. i think they're seeing that the economy is stronger than expected and that's better for stocks than it is for bonds on the long end and we're likely to see the fed slow down. remember, the market got way ahead of itself as it often does, the bond market, after the 50 basis point cut so i think there's just a confluence of eh, you know, kind of meh, and that's what drives momentum in the near term. but i think it's an opportunity still not forever but still. >> i was at a kind of eclectic dinner last night and one of the guests was a jeweler and she was complaining about inflation. i said inflation's coming down she said not for gold. gold is going up, up, up and it is impacting what i have to charge for the pieces that i

make talk to us a little about gold and why it is as hot as it is. >> well, i do think that is a deficit and geopolitical kind of safe haven you know, will it continue at these levels i mean, to appreciate at these levels i don't think so i think what you're going to see once we get through the election is people are going to once again focus on policy, corporate tax rate, earnings and x any geopolitical crisis i think we'll continue along in this bull market. i'll just point out one thing. that jobs revision, the non-farm payrolls from march to march of 818,000 overstated jobs, that actually means that productivity was that much better than was recorded so i'm pretty optimistic about the u.s. economy i do think inflation will probably rise some and you know, only on wall street do we say it's coming down when it's still going up. the rate of change is coming

down but it is still rising >> indeed. and maybe even that rate is accelerating but let me just ask you before you go, tesla reports tonight. i know you've liked the stock for a long time. what are your highest conviction investments, you know, top three or five? >> outside of tesla? service now of course. i think even if they disappoint or if they just meet expectations you want to be in this stock for the long term we still like carrier. they report on thursday. and one of the names -- first time an electric utility in 35 years. next tera energy i think that was a good report i think you want to be in the ai fringes and then in the picks and shovels that are really driving the infrastructure and so those three names all play a role. >> is this then an entree point for you for tesla or is this i've got it so i stick with it >> i think if it sells off you let it settle because once it starts selling this stock continues to decline i was at werobot

it was kind of a bust, kelly it was long on wow and short on details. if we don't get details today, the stock will go down further >> you've been constructive for some time. coming from you in particular, that is something people should take note of nancy, really appreciate it today. thank you. good to have you here. >> thanks so much. >> nancy tengler with laffer tang tengler still to come we will continue to track the markets and this sell-off and dive into some of the specific stock stories you need to know at this hour like mcdonald's health scare, starbucks suspending guidance, boeing's massive loss and those tesla results. we'll get to all of it when "power lunch" returns.

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hospitalizations and one fatality there have been a total of 49 cases reported so far in ten states gregory frankfurt is lead restaurant analyst at guggenheim partners he just downgraded mcdonald's to neutral from buy this morning and cut his price target to 285 from 290 kate rogers is our restaurant correspondent. why don't, kate, i begin with you and you give us the background on this story involving mcdonald's what's going on? how was it discovered? how long has it been going on, et cetera? >> yeah, sure, tyler the company -- the cdc rather came out yesterday late afternoon with this warning. as you said, there were 49 cases, one death and this was spread across ten states now, out of an abundance of caution mcdonald's has essentially pulled the quarter pounder from restaurants in 12 states the majority of them being in mountain west states, colorado the first named state, seems to be the majority of cases are

isolated there company spokespeople kind of walking the media through some of the developments including what they're focusing in on, sl slivered onions seem to be the most likely source of contamination, which is good news only in that they come from a single supplier with several distribution centers they're also not ruling out the idea that it could have come from the actual beef patties in the quarter pounders although that's less likely because they come from several suppliers across several states meaning that there would have to be multiple layers of contamination there, which seems like a less likely scenario. you can see the stock down more than 5% -- >> how quickly did they come to this knowledge in other words, how long has this been going on i'm fascinated it seems like it was a very quick response >> yeah, very quick. they have found out within the last two weeks i believe the first reported case was in late september this is new information to mcdonald's, and as they learn

more from the cdc they immediately pulled that item from the menus oust an abundance of caution but again, zeroing in on the slivered onions and not ruling out the potential that it could be tied to beef patty although less likely. >> gregory, does your change in rating and target today or at least in target suggest that you think this is a very concerning issue or one where you just have to move to the sidelines until we know more >> it's very difficult to know when we look back at different examples of e. coli and food safety issues in the restaurant space, there's a wide variety of scenarios. you look at jack in the box in 1993 where there were four fatalities and sales were down 20%, 25% the first quarter, 8% to 10% the next three quarters took several years to recover. chipotle in 2015 sales were down 20% to 30% for a full year but you also have an example two years ago with wendy's where there was an e. coli outbreak

and it was relatively contained and we didn't even see a material impact to sales there's a lot of differences between these scenarios and there's a wide array of possibilities and we think the uncertainty was not baked into a 25 times multiple for shares >> the timing, gregory, of this comes as well, how would you describe sentiment around the name in general? is this one where it's pretty positive and so it's an opportunity to take a breath, pretty negative? just kind of put it in context >> what happened is in the first half of this year u.s. same-store sales had gone negative the stock which had historically traded at 23, 24 times earnings had slowed to under 20 times earnings now with earnings not really being revised materially the stock's up 24% in the last four months the multiple had gone to 25 times and there was a lot of enthusiasm and a lost that's been the u.s. business improving over the last three or four months so it was warranted but we see it as a lot of optimism baked in

just as you got into the kind of 315, $320 a share stock price. >> that makes sense. let's leave it there at least with mcdonald's for the time being. >> going to move on to starbucks as shares there slide after the coffee chain pulled guidance for next year after sales plunged for a third straight quarter kate, why don't you bring us up to date on what's going on obviously we have a new ceo at starbucks who is trying aggressively to tackle some of the sort of fundamental issues that that business is facing >> yes, certainly. this is a real change in tone in my opinion in having covered the company for years. with brian nichol as its new ceo coming out with these preliminary results yesterday, missed across the board, global same-store sales fell 7% that was nearly double what they had anticipated. also saw major drops in both the u.s. and china businesses at 6% and down 14% respectively there so i think brian nichol looking to get ahead of this news cycle in releasing this and saying we need to fundamentally change what we're doing, what we've been doing has not been working.

he had an open letter posted about two weeks ago kind of laying out his priorities in this new role, saying that they're really going to focus first on getting the u.s. business on track. that's something former ceo howard schultz had been saying in several open letters that he's posted in recent months so it seems that's going to be a really key area of focus i think we can expect more changes in marketing starbucks is bringing on new marketing team members it's starting to air commercials. and also slimming down the menu. getting the menu right and getting the morning right as he has said as that's such a key demo for starbucks they've been losing the occasional customer. we kind of know what to expect next week but it will be interesting to hear more from him on that earnings call. >> this stock has, greg, been flat for the year so far it's up in recent months but flat for the year. what does nichol need to do first, second, and third to turn the business around? and how quickly do you think the stock can turn around and reflect that >> i think the first thing, he

just did it. he separated poor results from his messaging that he's going to give next wednesday. this disclosure allows him to focus the earnings call primarily on his goals of turning around the business and put this quarter in the rearview mirror he very effectively did that i think the first thing we're looking at is this is the period last year where sales slowed the end of october they had a protest that came into the brand and you are now likely going to see near-term sales start to inflect from very negative to maybe slightly negative. and that's going to be kind of the first step i think what we're looking for is we're looking for the plan to actually improve sales kelly, i think you and i spoke maybe a month ago about the need to pull back on u.s. unit growth and u.s. development we will see if he does that and if that's part of the plan that's something we've been emphasizing. >> i'm also curious, greg, how he speeds up the experience there, if that's part of one of his goals, just kind of get in, get out like you do at chipotle, and then kind of in conjunction

with that make those who are trying to linger have a better time as well >> yeah, i think he's trying to address all that simplification is the name of the game a lot of that is sort of what howard schultz has been trying to emphasize in some of his letters as well, is getting back to the core coffee product and the coffee experience and driving operations at the store. he did a very good job at chipotle with marketing and operations this is a bigger lift. this is a different animal but some of his strengths should play through >> kate, final thoughts on what needs to be done and how quickly it can get done at starbucks and whether price cutting may be part of the recipe here. >> so i think they are moving away, as we've reported, from some of those discounts, and those discounts that they had been rolling out weighed on this upcoming quarter, right? that we're going to hear more about next week. so i think you'll see a walk back from that more of a focus on starbucks as a premium offering because that is at its core what the company

is and people have been for years willing to pay for that. and the only other thing i'd add to the list that greg had just kind of laid out there is china. what happens with the china business because that has also been such a drag on sales. they're talking about more competition there and a consumer that's kind of pulling back. and there's talks about a potential spinoff. you know, a potential joint venture. so what does brian nichol want to do with china and starbucks china? but i think very first and foremost will be focusing on the u.s. >> greg, i'm going to ask you the final question if i might. kate used the phrase a premium product. it's going to be priced as a premium product. my argument would be okay, you can have a premium product but if you're not delivering a premium experience people are going to get ticked off and not come back. and i think that's where in many ways they've fallen down >> that's definitely one of the things we've been hearing. and i think what's also challenging in this environment as we look for which restaurant brands are winning and which restaurant brands are maybe

slowing a bit right now, if you are an aspirational purchaser, if you're a little bit more of a premium purchase and that's your brand, your sales are under a lot more pressure in the restaurant industry. that's a theme across the board for the restaurant space >> all right, folks, have a double shot number one number two, hold the onions. thanks appreciate it. gregory frankfurt and kate rogers >> still to come, the payment space has had its share of weakness but this name could be making a comeback hitting a new 52-week igh. up 30% this year we'll reveal it in "market navigator," next

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♪♪ welcome back to "power lunch. on a tough session for markets after the six-week win streak it looks like rising bond yields are finally taking their toll with the three-day losing stretch now and the dow down almost 600 points, a 2% drop for the nasdaq as well shares of paypal hit a new 52-week high, though, as the stock has had a solid year, up more than 30% so far our next guest sees even more upside amaepd it's slated to report quarterly results on tuesday. joining us is tony zeng, chief strategist at options play

what do you like about paypal? >> paypal's really been on a multiyear turnaround story here. you look at the chart here it's been bottoming for almost a year now below that $70 level and we finally broke out above that level a couple of months ago and since then it's been on this huge tear. it's been outperforming the s&p 500. we're trading just around the $80 market right now but the outside target i have here is well into the $100 level. especially if you look at valuations things still look quite cheap for paypal trade's only 16, 17 times forward earnings >> so you could just buy the shares outright or i'm guessing you have an options play >> yeah. that's exactly right i think this is a long-term investment for investors and the options strategy that i want to take here is to sell a cash-secured put, which is the type of options strategy that is actually suitable for long-term investors and in my opinion is actually the most underutilized options strategy for long-term investors. by selling that november 77 1/2

put collecting a little over 2 1/2 dollars earlier today you're going to be able to collect roughly 3% of the stock's value in less than one month's time you before the november expiration to potentially acquire the shares if the stock is below 77 1/2 by that november expiration and if it stays above that 77 1/2 dollar level by that november expiration what you do is you keep the roughly 2 1/2 bucks that you earned on this cash-secured put and you can roll that into selling a new cash-secured put but here what you're doing is trying to collect some income here collecting nearly 3%, in just a little over three weeks' time. which is a high amount of yield for a stock like paypal. >> probate fik the shares go down significantly as that chart shows. if it works you want to keep deploying it it could be a tricky couple of weeks. is this a trade you feel comfortable going into now with earnings, with the election and everything coming up >> well, specifically around earnings this is why you're able to collect this amount of yield. and the trade structure here

allows me to effectively own the stock around 75. like i said, i showed you that technical breakout that was around that $70 level. i'm really comfortable owning between 70 and 75. and that's really what this strategy allows me to do >> tony zhang, appreciate your time today thank you so much. tyler, back to you >> all right, kel. up next, another major stock story on our radar boeing posting a huge loss continuing its streak of weakness worsened by strikes aircraft failures, leadership challenges the whole kit and caboodle as they say the stock down 40% this year the company's ceo sitting down with cnbc. we'll wrap the key headlines next and tell you the full story.

it's our son, he is always up in our business. it's the verizon 5g home internet i got us. oh... he used to be a competitive gamer but with the higher lag, he can't keep up with his squad. so now we're his “squad”. what are kevin's plans for the fall? he's going to college. out of state, yeah. -yeah in the fall. change of plans, i've decided to stay local. oh excellent! oh that's great! why would i ever leave this? -aw! we will do anything to get him gaming again. you and kevin need to fix this internet situation. heard my name!

i swear to god, kevin! -we told you to wait in the car. everyone in my old squad has xfinity. less lag, better gaming! i'm gonna need to charge you for three people. welcome back to "power lunch. i'm kate rogers with your cnbc news update. nbc news has learned vice president kamala harris will deliver a closing arguments speech next tuesday on the national mall in washington, d.c. it will be a final case for her presidency one week before

americans go to the polls. meanwhile, former president donald trump is holding a large rally at madison square garden in new york city on sunday, kicking off an arena tour in the election's final push. oscar-winning director roman polanski will no longer go on trial in los angeles in an alleged 1973 rape of an underaged girl the plaintiff's lawyer, gloria allred, said the two sides have settled. her client was seeking unspecified damages, but the terms of the settlement were not immediately disclosed. and new york's attorney general is investigating whether capital one's proposed takeover of discover violates the state's antitrust law. court filings show new york a.g. wil letitia james wants to subpoena capital one in connection with the probe. she says a potential merger could have a significant impact on new yorkers particularly those with lower credit scores tyler, back over to you. >> all right, kate, thank you very much. meantime, stocks sliding throughout the session, and that slide had been, had been accelerating now coming back a little bit off the lows of the day with the dow

industrials now down 475, a little more than 1%. nasdaq had been down about 2.1%. i think i recall seeing. now down about 1.9 boeing a drag on the dow today after its results came out let's bring in phil lebeau now as phil, you spoke with the ceo of boeing in his first televised interview since he took the job. what did he tell you >> it's going to be a long turnaround that's basically what he had to say when we had a chance to talk to kelly ortberg the stock is under pressure today. remember these results for the third quarter were preannounced more than a week ago, more than $6 billion loss. so there's no numbers within the numbers that were released that put the stock under further pressure though there was some commentary during the conference call, we'll talk about that in just a little bit. in terms of kelly ortberg and what he told us and his game plan for getting boeing back on track, it's pretty straightforward, though not big on details at this point stabilize operations, improve the corporate culture, and

rebuild key programs here's kelly talking with us this morning on "squawk on the street." >> i've said there's no silver bullet, this isn't going to be fixed in one fell swoop. we've got a lot of issues here that we're dealing with. the first thing we've got to do is stabilize the business. and obviously getting through the i.m. strike is the first big step in doing that then we've also got to shore up our balance sheet so that we have a solid balance sheet to manage the realities of our business going forward >> you heard kelly ortberg mention the i..a m. strike 30,000 machinists mainly out in the puget sound area they will vote a majority are needed to approve the latest contract offer. remember, just 4% approved the previous offer back in september. but this is a far richer offer that is on the table right now we'll get the results late tonight. and then with regard to the stock being under a little bit more pressure today, during the conference call with analysts boeing's cfo said look, the cash

burn is going to be there in the fourth quarter and the company is probably going to have negative free cash flow in '25 put those two together and not a whole lot of reasons to buy this stock at this point, tyler this is going to be a long slog here for boeing to turn things around step number one, they've got to get a contract with their machinists and get production restarted. >> all right, phil, thanks very much phil lebeau reporting. >> for more on the next steps for the stock let's bring in richard safrin senior analyst at seaport research partners. richard, bring us up to speed. how do you rate the shares right now and what would be the most bullish thing the company could do to make you and investors excited again? >> good afternoon. so i still rank the -- i still rank boeing a very enthusiastic buy right now. i think that there were two catalysts that investors were waiting for, the equity raise of course and an end to the strike. now, we haven't had an end to the strike, but of course as you just mentioned a moment ago we did have the charges taken

already. right now i think the main thing that boeing could do to answer you right now, to get even more investors interested is show some tangible results on the plan that you just discussed show how they're going to rebalance the culture there, get more definitive on how they're going to stabilize the business, come out specifically talk about how much equity they're going to raise, et cetera and most importantly, have a couple of quarters under their belt where you see solid execution. >> how long are you going to have to wait for this stock to turn around as you expect it to? >> well, there's an old phrase in aerospace and defense that says nothing in aerospace and defense moves quickly except the product. and in my view right now to answer you i think what we're looking at is 2025 as a

transition year. the latter part of 2025. so obviously we have to have an end to the strike, et cetera and i think 2025 is a transition year where we get more clarity on the points i just made including some solid execution so in answer to you and i think where you were going here, is i think once investors get far better visibility into what 2026 looks like in addition to 2025, and i think that's going to happen in the latter part of 2025, i think that's about the time frame you're looking at here remember, it's always about expectations and what you're looking for is better visibility. >> quick final question. if i buy your thesis that this is a strong buy and there's going to be a transition year and then maybe a year of clarity and comeback in '26, are you expecting that there will be better points of entry if i am inclined to go along with your thesis and say this is a stock i want to own? or is this the point where i

might buy it >> i think this is the point where you might buy it and the reason is i think a great amount of bad news is already in the stock now, the risk of course is that there's another execution issue. but if i know kelly ortberg, right? he's the 800-pound gorilla in the room and i just think that's far less likely to happen than we've seen before so i think that if you say like the equity raise is in, we have an end to the strike, execution improves, et cetera, i think you have a good case for the bad news being in the stock. >> all right richard, thank you so much richard safran, we appreciate it >> sure. pleasure pleasure being on again. >> you bet >> now check out shares of winnebago. on pace for their worst day in two years. down almost 11%. the motor homemaker missing q4 earnings estimates by 61 cents per share. we'll highlight some more individual stocks making big moves still ahead. but first a check on the bond market

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welcome back the dow's down 424 points. believe it or not, that's about 100 points off the session lows on what's been a tough tape here on a wednesday the nasdaq down almost 2%. we're tracking some individual headlines as well with earnings season in full swing coca-cola, for instance, beat third quarter estimates. higher prices offset sluggish demand despite that shares are moving lower today. at&t going the other way and moving to a 52-week high after third quarter earnings surpassed analyst estimates. and the company gained more wireless subscribers than expected those shares are up about 30% this year now. and we're also watching service now. expected to report q3 results after the close. you just heard nancy tengler talk about how much she loves the stock, and it's trading near all-time highs with all that said let's get a check on the bond market rick santelli is tracking the action it's the bugaboo today, rick

>> well, you know, sometimes markets give you clues and with so many questioning why yields are moving up so aggressively, to look at stocks today i would say that you can't necessarily only stick with the economy's doing better labor market not as weak as the fed may have thought i think it's more of an issue of debt and deficits because the equity markets certainly aren't liking higher rates but there have been many times in the past where rates go up arm in arm with equities because rates are going up, because companies are doing so well and stocks are going higher not the case today we had a 20-year bond auction. and even though the 20-year is not the most liquid maturity on the yield curve it's the highest yield on the yield curve and today's auction was lousy. it tailed. everything about the auction was weak and if you look at a two-day of 10s a couple things should jump out at you we're above yesterday's highs. a lot of the rise, recent rise was after that 20-year auction

result came out. and if you think about all treasuries, everything 2s through 30s has a higher yield at some point today than yesterday and most maturities have been trading above yesterday's high yields most of the session, like short maturities leading the way today. today is the fifth consecutive day ten-year yields have surpassed their previous day's highs. as you see on that chart starting on the 16th and finally, canada lowered rates today. the fourth consecutive ease. today was 50 basis points from 4 1/4 to 3.75. and what did the market do same thing it's doing all around the world where central banks are lowering rates look at that 10-year since october 1st. it continues to move higher in yield. today's close is a two-week high and it underscores how currency markets of course are sending much stronger messages on the dollar index considering that it's been july since we've seen some of these yields on long

maturities it's the same comp for the dollar index tyler, back to you >> rick, thank you very much rick santelli. well, tesla shares edging lower ahead of earnings later today. it's down about 15% over the past month the poorly received robo taxi event causing much of the decline there. there's the musk it also, worries growing as the controversial ceo dives deeper and deeper into politics bear in mind the stock is still up nearly 50% over the past six months we will dive into what's next for tesla when we get right back it all started with 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!

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(grandpa) i'm the richest guy in the world. (man 1) i have time to give. (man 2) i have people i can count on. (grandma) and a million stories to share. (vo) the key to being rich is knowing what counts. welcome back to "power lunch. tesla down just over 1% as the street awaits the ev maker's q3 results after the bell joining us now is tom norian

welcome. good to see you. tesla has been the stock lots of people have liked to beat up on. do you think it deserves it? >> well, i mean, to some extent it does. you have a lot of hype going into the robo taxi event by the company itself and for most investors and analysts it did under-deliver. it was short on actual numbers so from that standpoint, you know, we totally understand why the stock performed the way they did, but we have to remember the company doesn't look at itself the way that we all look at it, right, very short sided, how is the stock going to trade next month. they are looking at a very long-term horizon and so i kind of understand why the stock is trading the way that it does but i don't know that the company necessarily cares how it trades. >> you said something very interesting there. one, take us through what you expect the numbers to show for this quarter and then go out, widen the lens and take us through that long game that

tesla is playing and whether you buy their thesis that they can come out on top. >> yeah, this is exactly the debate i've been having with folks over the past few months or since the robo taxi event actually this month. that is everyone seems to be focusing on the automotive gross margin x credit, the consensus number is like a 14.5% number, i'm at 13.5%, so they could miss there, but what i think folks should focus on is the total gross profit margin, which includes regulatory credits, which were huge last quarter and i think will be strong this quarter. and energy storage, something that keeps getting ignored and it's a bigger and bigger business, utility companies are spending a lot more money, a lot more energy because of data centers, et cetera, and you need energy storage to make renewables affordable. there's a lot of long-term things that folks seem to -- they look at tesla how we all

used to years ago as just a car company and they look at this auto gross margin x credit but if folks look at the total gross profit there is a better chance that they could beat today it all depends on what folks are paying attention on. are they kind of looking at it from a past lens as a car company or are they going to give credit for the other businesses and leg la tore credits are important to look at because they're here and here to stay and they will be here next year as well. >> what are you looking for in the numbers today very quickly do you think they're going to beat the estimate or what? >> i think on total gross profit i think they will beat on automotive gross margin x credit, i think there is a chance they could miss. >> right. >> but, remember, this stock will also trade on commentary during the earnings call one thing we didn't hear a lot about during robo taxi day that people thought we may hear about is the affordable car next year.

supposed to come out in h 1 '25. i would expect somebody to ask about it in the q&a and if that comes out that will definitely be a positive. >> tom, we have to leave it there. i'm looking for a model refresh on their line. i think this he need that desperately as well. that's just my opinion thanks for watching "power lunch," everybody. >> everyone has been waiting, give us the small car, give us something. "closing bell" starts right now. welcome to "closing bell" scott wapner here at the new york stock exchange. we begin with the selloff and the selloff in the nasdaq today as this final stretch begins the major averages across the board are lower, but the nasdaq is our standout, it's down near 2% very weak today. apple a big culprit as an influential analyst in asia slashes his iphone production numbers by 10 million units. nvidia, amazon, meta also lower on the session they are dragging. tesla is, too, ahead of its own