Mathisen. We got this close early today, fed chair powells seen as dovish and then hawkish sending yield on a wild ride. Tesla tumbles following results from elon musk and several analysts cutting their price targets an one of the biggest bears on the street. We will. Tyler, lets get a check on the markets. Dow fluctuating all over the place, down 38. Down across the board on the major averages only by a bit. A quarter point for the s p, 4305. Rick santelli saying because the twoyear yield has backed off since we heard from chair powell given room for stocks to initially turn higher although given up the gains now. And the long end might be the culprit for that. The yield on the 10year like tyler said, see the spike around 1 00 p. M. Eastern almost touched 5 , 0. 004 shy. Elsewhere, netflix shares like yields, what yields. Were up 15 . Higher prices, password crackdown seems to have put the company on a growth trajectory. Shares up 16. 5 . Well get more coming up in three stock lunch. All right. Comments from fed chair powell, confusing the markets a bit. Steve liesman joins us to untangle it. Whats your takeaway . Offered a neutral speech to suggest that the fed could be on hold for a while, but he warned that if ultimately the economy doesnt slow, the fed could push rates higher. We see policy working through its usual channels, and it may be that rates havent been high enough for long enough. Its all happening in a context of very strong demand. Powell twice said the fed was still seeking the sufficiently restrictive funds rate a sign he is not sure if the fed has done enough yet, but the fed chair acknowledged risks on both sides, doing too much or too little. A dovish side. He said that following forces could yet keep the fed at bay. There are considerable Monetary Policy lags. He said there are high bond yields out there and geopolitical tensions as well. His main point on the direction of policy not that exciting. Simply the fed would proceed carefully watching the data and the outlook and the balance of risk. So ultimately the market took the fed as more dovish with probabilities for another rate hike falling. You can see here that were below 5 on the november hike. Below 30 on december. Not much even higher for january where that number had been as high as 50 . Whether powell was dovish will be depend on how the data breaks. The fed could be back in the hiking game. Powell made clear he was going to give you a couple months here to let the economy and the outlook sort itself out. Wow. Stay with us as we talk about the surging bond yields weve seen today and in recent weeks. The 10year treasury reaching 4. 9 since 07, almost 5, putting pressure on stocks. Lets bring in brian jacobson, chief economist with an next wealth management. Is this move in yields fundamentally justified . I think it is if you consider one of the fundamental forces in the bond market, the fed, is continuing to do quantitative tightening. Theyre not in there being that priced in sensitive buyer. Foreign demand has diminished. Households have had to step in. Looking at it through that lens as far as the forces based on issuance and the flows i think the move is justified, but i also think it makes it that much more attractive if you can hold the bonds to maturity. We have to get access to bonds through mutual funds and etfs and deal with the mark to market. To the extent you can hold some of these and individual fixed income portfolios can make the ride a little bit more tolerable. The reason i ask is because were all trying to figure out if this is a good rise in yields on Stronger Economic yields or bad rise by kind of this unabated treasury supply that seems to be overwhelming markets. I think it is the supply coming from the treasury as far as that surge in supply, which, you know, now that thats maybe more visible and we also have, perhaps, a congress that isnt going to, you know, continue to blow out the deficit, at least for the next year or so, so youve got gridlock, maybe some of those deficit or spending cuts as part of the debt ceiling lifting agreement can come into play, could do something as far as the surprise to the downside in terms of some of the supply out there. So our Investment Committee here at an next, you know, thankfully were tempering my enthusiasm adding to bonds when we got to 4 or 5 . I wanted to go allin and thankfully their clearer minds kept us at bay. Now that were getting closer to 5 it looks more attractive for the longer term. Next time well invite the other guys on. They dont have as nice of a tie as i do. Or the view that you do. Let me ask you this, for most of the past couple years or during this rate hiking cycle, investors have been paid to stay very short duration. Are we getting to the point now, maybe were two months away, maybe six months away, from the point at which it will make sense to go out duration and lock in the longer term yields if you can hang on to maturity or even if you cant, because you may, if rates start to fall, you would then be able to sell at a capital gain . Yeah. Thats the key question here. Its really what distinguishes this increase in rates from the previous ones that weve seen say postgfc, how high that short end has moved already that theres not a huge incentive to lock in the longer term rates. Youre getting duration risk. You want to lock those in at some point. Yeah. My take is that fed is probably going to be slow to react to a slowing economy, and as a result, say by september of next week or maybe june they will consider starting to cut and then really its around that time that maybe it makes more sense to start locking in the longer term rates. The market will try to move before that, but chair powell, i dont think he has we talk about hawks and doves comes across like a bird instead. Im not sure theres a clear, consistent messaging or world view about how they should conduct Monetary Policy that will keep investors guessing until probably the middle of next year i. I thought it was interesting, i believe it was powell, who was saying that effectively, if it were not for the amount of fiscal stimulus working through the economy, maybe Interest Rates wouldnt have had to go as high as they have. I think you heard correctly. I think theyre starting to nudge a little bit about the fiscal deficit situation. They had previously not said anything, and now theyre starting to talk about the unsustainability of the deficit. Dont want to talk about current spending issues or decisions made or not being made in congress at the moment. They dont want to get involved in that. That was a troubling era or period for the Federal Reserve going back to when greenspan talked about the need for tax cuts in 2000 and other comments that have been made. I think they are trying to put the Fiscal Authority on notice that this is a problem, an issue that theyre going to have to deal with, and theres a thing thats called fiscal dominance when you talk about Monetary Policy. And thats when whats happening on the fiscal side dominates the Monetary Policy authority. We are not there, but who knows what happens, tyler, when the amount of we spend on interest becomes a bigger portion of the budget. Will there be pressure from the political side to the fed to lower Interest Rates . That would be fiscal dominance. Interesting. Steve liesman, thank very much. Brian jacobson, thank you as well. Steve will be speaking with atlanta fed president Raphael Bostic tomorrow morning 7 30 a. M. On squawk box and look forward to that and see what market response is. The take on the traders from Rick Santelli in chicago. Rick . You know, fiscal dominance, i like that steve brought that up. That is a phrase i here ten times a day lately. What i hear it used most is, the way mr. Powell should potentially address the notion that the fed is offsides when they go into the fiscal realm. Fiscal dominance, the word dominance means chair powell you need to pay close attention. Dominance is a significant word. Just like the move in 2s and 10s spread. If you look at intraday of 2s, then twoday of twos you can see whats going on in the short end is different than whats going on on the long end. 10s versus yesterday, well, their yield is going to challenge 5 and probably get closer to it as the session wears on. That 2s to 10s spread hasnt been at minus 21 since september of last year. Lets call it 13 months. Lets find a trader. Hey, paul. Okay. So let me grab the microphone here. Weve seen a lot of action today in the form of volatility. I see what Interest Rates are doing. What do you see in volatility and equities . Well, its kind of been a microcosm of what weve seen the last few months. Bunch of moves up and down and end up in the same place. Volatility is definitely higher than you would expect at this future level looking at the two charted against each other. Would i be wrong, theres plenty of investors watching, say okay, paul just said were going no place quick. Isnt that normally a period where volatility starts to level off but it keeps climbing . Yeah. Because weve been moving. Theres been moves. Theyve been reversing both directions. I got you. When it comes to Interest Rates, like at whats going on and see that many believe that feds key issue is whether they can remain in control because it seems the long dated issues are doing the job of trying to address how much it costs and will cost to service the debt. How will that affect the way that you may approach the equity complex and the relationship between bond portfolios and equities . Thats the interplay were seeing right now and talking today, chairman powell is trying to thread needle a little bit mentioning what you said, but also, acknowledging they might have to do something in the future. Hes trying to probably buy himself some time and see what happens. If rising Interest Rates are a killer for equities do you think that fear is more about what the fed does or more about what the market long end is doing . Your final thoughts . The rates are up a lot in the last 18 months, rick, and they havent tanked equities yet. I dont know if i would agree with that premise that rates are going to kill the equities. You know what, thats a place great place to leave it. I cant tell you how many traders i run into, who think that equities could survive even a semi messy landing. Tyler, kelly, back to you. Thank you. Thank you to the trader guest. Coming up, tesla shares down 9 after reporting results. Were going to talk to one of the biggest bears on the street. His price target is still 100. That would be a cut in half from here. Meantime shares of at t up 7 following its results. Lily will be happy saying the results and reloose of the new iphone encouraged more people to upgrade. Genuine parts having its biggest drop. Sales fell short of analyst system. Well be right back with much more. Welcome back. Tesla shares are sliding. Elon musk shared his concerns about high rates hitting the consumer and tfls music to the ears of our next guest who says it broadly supports his bear thesis. Joining us now is john, google securities export, he has a guggenheim security expert. John, welcome, good to have you with us. It sounded not only was elon musk concerned about Interest Rates and that, but he was very concerned about affordability of his cars and losing market share as a result of their priceyness. Yeah. Its a very real problem globally. If you think about Interest Rates and the price point of tesla vehicles, the average payment on a tesla vehicle right now is north of 800 a month on a model y. The percentage of u. S. Households that can afford a payment like that, there is a good study by cox automotive, suggests its some the 10 to 15 of u. S. Households have enough income to afford that. Thats based on the ability to afford a Monthly Payment let alone the cash balances and things like that. I agree. I think more people buy the payment than buy the price of the car. Absolutely. The two are linked. However, so what hes in the box. How does he get out of it . I think the business is actually doing quite well for a cyclical automotive business where it is. Its really the valuation of the company thats kind of disconnected from the product they sell. Coming into the print, there were three tenants to the thesis at tesla. The first one was pricing and margin stabilization. I dont think we got that this quarter. I think its clear that direction for pricing in margins remains negative. The product cycle, people were bullish ahead of the cyber truck and model three refresh. The cyber truck discussion on the Conference Call was sobering. I think they largely indicated that it would be a diluted product at least for the next 18 months and the model 3 refresh weve highlighted to clients its not a perfect metric but customer deposits fell quite a bit quarter over quarter and dmapts to increase if they were building backlog product and full selfdriving we didnt get the tangible updates that bulls were looking for related to fsd licensing and really kind of these longer term bull narratives. Strike one, strike two, strike three here. Exactly. Thats a fair characterization. Ron, your price target is 125. Do we know what portion of tesla shares are Institutional Ownership here in the sense that this has been a cull stock more about the personality of musk and reminds me of crypto, who has diamond hands and who doesnt here . Yeah. The we dont know the split. We know that on any given day, and it the average day, tesla is the number one traded retail stock by an order of magnitude of 4 to 5 times. In terms of the actual ownership, teslas float turns over more than the average stock. Its really difficult to know. Right. I guess my question would be, how much of the share price is fundamental and how much reflects, you know, just enthusiasm about everything that musk himself has achieved or what tesla may achieve over the next five or ten years . Does that depend on different factors than just, you know, kind of going through the Balance Sheet . Thats a great question. Our price target, 125, has a very good handle on the auto, energy, and even full selfdriving as it exists and charging as well. The what we dont give credit before because we think its far too difficult to have confidence in is things like robo taxis, humanoid robots or things like that. Whether thats retail or Something Else we think theres about 100 of kind of not currently existing businesses getting credit for tesla. How big call it the elon premium. I think hes earned the right to have it called the elon premium. How big a contributor eventually to revenue might the fact that so many other manufacturers are now adapting to the tesla standard charger and then to their ability to build out the charging networks that are going to be needed, presuming people buy into electric cars . How much is that going to help . We have the charging business at tesla including the partnerships worth about 10 per share. The basis for that was a 2035 scenario. Based on the global ev car, primarily in the u. S. Where they become the standard. We think it can add 50 cents a share to earnings in 2035. Not insignificant thats a long way away. Yeah. You think the amount of new vehicle purchases that are electric vehicles are still in the high single digit its in the u. S. About 7 or 8 . It takes a long time for the population to become electric vehicles. Yeah. Thats why we went out to 2035. All right. Thats probably equal to about a nickel now. I dont know. Its about 2 billion quite significant of earnings. Its just that tesla. 800 billion. I guess finally or quickly or what have you, musk did make interesting comments on the call about high Interest Rates weeding out the strong from the weak and do you think they will be a death nail for the ev startups and competitors and to some extent a headwind for the big three in their ambitions to compete. In the u. S. Teslas cost leadership is well established. I think its a fair commentary from elon a lot of Legacy Manufacturers will struggle to compete on costs. There are products out of hyundai and kia, but the real competition for tesla today is in china whether its byd, gca or a handful of manufacturers and if that technology or those brands can examine to the u. S. Ultimately. Absolutely. Ron, thanks for your time today. We appreciate it. Thanks for having me. Coming up, sky high valuations openai reportedly in talks to sell shares at an 86 billion vaatn. Luio well get the details when power lunch returns. when the day that lies ahead of me seems impossible to face a lovely day lovely day lovely day lovely day a bank that knows your business grows your business. Bmo. New projects means new project managers. You need to hire. I need indeed. Indeed you do. When you sponsor a job, you immediately get your shortlist of quality candidates, whose resumes on indeed match your job criteria. Visit indeed. Com hire and get started today. I promise as an independent advisor whose resumes on indeed mato put the financiala. Wellbeing of you and your family first. I promise to serve, not sell. I promise our relationship will be one of partnership and trust. I am a fiduciary, not just some of the time, but all of the time. Charles schwab is proud to support the independent Financial Advisors who are passionately dedicated to helping people achieve their financial goals. Visit findyourindependentadvisor. Com welcome back. Its not a Public Offering but openai is looking to sell shares at a high valuation. Lets goat deirdre bosa for the numbers. Kelly, it actually delays a Public Offering. So this potential 86 billion valuation also makes openai one of the most richly valued startups on earth behind tiktok parent bite dance and elon musks spacex. Openai off ears twist on the startup structure which is worth noting it is a capped Profit Limited Partnership governed by a nonprofit board. That means that profits in excess of 100 times return will be passed on to an overarching Nonprofit Company which will disperse profits after that. Six individuals the board has control of olypenais profitability. Three are from the startups Founding Team and three are tech entrepreneurs working elsewhere in ai. Researchers. Anthropic the other generative ai darling raising money at a higher valuation has similar quirks in its structure. A five Person Committee can hire and fire the companys board. In the way that other tech founders like snap and facebook held on to their control past ipos, the Biggest Ai Companies are ensure they can hold on to control much earlier on in the startups life cycles. Their justification is different. As it moral. They say their few dishry duty is not to shareholders it is to, i quote, from the charter, the duty is to humanity. These unorthodox structures have done nothing however to deter investor interest. Our tech check team did a deep dive into the valuations, putting them in context against the values of ai players like nvidia and google. Thats at cnbc. Com tc weekly. The structures highly unusual. Interesting all in the name of humanity. So clearly generative ai is going to things in a different way. That tells me they havent reached listen, its like google, dont be evil in like 2005. Whatever that was. Give it some time. Exactly. Maybe exactly. Still benefit getting in at this valuation. We appreciate it very much. Two cheers for humanity. To Contessa Brewer for a cnbc news update. Hi, tyler. The state department urging americans to use caution when traveling abroad. It issued a worldwide caution advisory today warning of increased tensions as the United States supports israel in its war with hamas. The state Department Says theres a greater potential for terror attacks, demonstrations, or violence against americans. An american journalist with dual russian citizenship detained in russia. Her employer Radio Free EuropeRadio Liberty says she was taken into custody because she did not register as a Foreign Agent while visiting for a family emergency. Shes the second u. S. Journalist to be detained since the start of the ukraine war. Evan gershkovich remains in russias detention since his arrest for espionage in march. Federal meteorologists think its unlikely we will have a White Christmas because of warm and wet el nino weather. The National Oceanic and Atmospheric Administration predicts a large part of the country including new england and the pacific northwest, will see aboveaverage temperatures for november to january. If its going to be warm might as well book our caribbean cruise. Not you and me together. Im going to take the kids. I got what you meant. Thanks a lot. Ahead on power lunch, crude reality, oil prices turning higher as the war in platnsorhe have far reaching imicio f t Global Supply and well discuss that and more after this quick break. Every day, businesses everywhere are asking is it possible . With comcast business. It is. Is it possible to help keep our Online Platform safe from cyberthreats . Absolutely. Can we provide health care virtually anywhere . We can help with that. Is it possible to use predictive monitoring to address operations issues . We can help with that, too. With the advanced connectivity and intelligence of global secure networking from comcast business. Its not just possible. Its happening. Cmon, were right there. Cmon baby. Its the only we need. Go, go, go, go ah touchdown baby touchdown are your neighbors watching the same game . Yeah, my 5g Home Internet delays the game a bit. But you get used to it. Try these. Theyre noise cancelling earmuffs. I stole them from an airport. Its always something with you, man. Great solid greek salad . Exactly dont delay the game with verizon or tmobile 5g Home Internet. Catch it on the xfinity 10g network. Welcome back to power lunch. Oil prices slightly higher today but up 6 in a week. Knows all about this is pippa stevens. Back from virginia beach. Yes. I know. Cool shots you had. Thank you very much. Really raining on my parade. Yeah. You should have 600 feet but well, let me tell you it was taller than i was and thats how i measure height. Today oil is back in focus. It did reverse earlier losses while chair powell was speaking but this week its about the easing of the sanctions on venezuelan oil. Last night the Treasury Department issued a sixmonth easement on the sanctions in exchange for Venezuela Holding fair and free elections next year. Prior to this round of sanctions imme pented by trump in 2019, venezuela was produce 3 million. Our gulf coast refiners are set up to process their heavy crude. Last month was 800,000 barrels per day. This is one of the options the u. S. Has to turn to if were going to crack down on iranian output and iranian exports. Venezuela starts looking better. Analysts arent that optimistic for a few reasons. Theres been so much under investment in the country. Theres a sixmonth easement on sanctions and theres no clarity beyond that because its dependent on venezuela. They have a lot of natural gas and maybe that could be Something Else they would get in on the european market. We have to tread carefully here. This is a tough one. And also with esg in focus, if youre an oil and gas producer, company, this is not exactly the market you you dont want to be in this market. Chevron has been producing there. For now. Thanks. We appreciate it. Lets drill down, shall we, on a big mover in the energy space. Now Liberty Energy shares up 6. 5 today to a new 52week high and posted strong Third Quarter results after the bell yesterday. The company hiking the Quarterly Dividend starting in the fourth quarter. Here with more plus oil outlook as tensions rise in the middle east is chris wright the chairman and ceo of Liberty Energy, the second largest fracker in north america. Good to see you. Great to see you. Did i get that right . You hiked the dividend by 40 vareble . Thats our fixed dividend. Weve grown the earning power of our shares be and reset the dividend 40 higher. Wow. Talk to us about how sustained the entire energy space has investors who love it and then some tourists who get frustrated by its volatility. Walks through the fundamentals that you see for the next couple years. The last ten years has been highly volatile for our industry for macro conditions and too much over investment, too much erratic behave are. Our industry is consolidated to fewer companies, more disciplined behavior, tight supply and demand in the global scale for oil and natural gas so Business Outlook is solid. I think were going to see its a cyclical commodity but more stable behavior in the next few years than the last few and the outlook for libertys business is strong. How do you see the war in israel between israel and hamas affecting the supply issues, affecting the supply and demand balance . Well, tyler, so far no impact on global flows of oil from the war. There has been a small downturn in global flows of natural gas. The gas shore off israel has been shut. The smaller field shut and sabotage in the baltic sea on a natural gas pipeline have popped Natural Gas Prices in europe 20 . They were in a fragile situation to begin with. So far it hasnt moved oil markets except a little bit of the fear premium. Maybe oil 5 or 8 higher than it would be otherwise. Does iran get more directly involved in the conflict. That would be a game changer. Because that would mean a stiff sanctions on iranian production more than we have today . Absolutely. What we have today we looked the other way the last nine months and exports have grown a lot but, yeah, if iran is directly involved and theres a curtailment of the flow of oil from iran, yeah, oil is certainly well over 100 a barrel. How would you im not familiar enough, maybe you can tell me, where your production comes from and what parts of the country you operate in, how would you characterize Domestic Energy price. High, low, middle, what . So right now u. S. Oil and Gas Production alltime highs, both are at alltime highs. But theres disciplined investing. Were not growing Oil Production as fast as the country could grow and my company, we help other companies produce oil. We frack nearly 20 of all the wells drilled in the u. S. And dan. Work from northeast British Columbia to the mexican border. Were in all the baseps and work with the Company Names you know. The Public Companies are disciplined an careful in their approach, flat to modestly growing production an dont change their plans quickly, at least not anymore. Private companies are different. If Oil Prices Spike up, theyll increase their activity. Youll see a response in american production mostly from the privates to a sudden big rise in prices. Thank you so much. Hopefully we can count on you coming back again some time soon. My pleasure. Chris wright, liberty. Thank you. Some of americas biggest banks have been quietly laying off workers all year long with the deepest cuts yet to come. Details of all of this when power lunch returns. When you need to prepare for unpredictable adventures. gasp you need weathertech. [hot dog splat. ] laser measured floorliners front and rear. [drink slurp and splat. ] scream seat protector to save the seats. [honk ] theyre all yours were here hey, i knew you were comin. So i weatherteched the car can we get ice cream . We can now. Kid proof your vehicle with American Made products at weathertech. Com. Powering Sustainable Growth in a changing world. Powering Financial Solutions that transform industries. Powering innovation with access to capital. Powering critical decisions with precise data and insights. Powering seamless execution in evolving markets. We deliver our entire global bank to power new possibilities for you. Barclays corporate and investment bank. Powering possible. Im so glad we did this. Im so glad we did this. Im so glad we did this. Im so glad we did this. Im so. Glad we did this. [kid plays drums] life is for living. Lets partner for all of it. Im so glad we did this. Edward jones big banks kicking off earnings season. Though the results were mostly strong there is underlying weakness perhaps. Big banks have been quietly cutting jobs and more layoffs could be coming. Hugh is here in the studio. Who is doing it and why . Great to be with you. The headline any bank not led by jamie dimon has been cutting jobs. The big six who have all reported wells fargo is the biggest perpetrator and cut about 11,000 jobs or about 5 of their workforce just this year alone. Look at another one and thats, you know, apart from wells fargo, Goldman Sachs. Both of these institutions have had these, you know, businesses that are hidden into the wall of Interest Rates, whether advisory or trading on Goldman Sachs or wells fargo, they have they had a huge Mortgage Business that sputtered to a standstill. The little stories within the larger story. If you look at these five banks they cut about 20,000 jobs this year. Why has jpmorgan chosen not to go that route apart from jamie dimon . Hes a lot of it. They are in a category of one here. Theyre still growing. They picked up firstp aric that added 5,000 jobs. Really that was just a third of the 15,000 jobs they picked up. Theyre growing. Theyre growing their net interest income, growing dp deposits and revenue and growing their Branch Network as well. Apart from that, they really are firing on all cylinders right now. I may be catching you off guard, but earlier this year ubs took over credit suisse. Whats happened there in. Massive consolidations. When you combine two huge Global Investment banks they do a lot of same things. Youre going to see high, high double digit job cuts to make the whole thing work. What about the midsize or regional banks, are they doing the same thing . Yeah. Theyre about to report. Were still seeing those figures come out whereas the big six reported. I would suspect their employment levels will edge down and the analysts i spoke to have the thesis which is you know, credit has been really good. Youre going to see corporate and consumer loans start to fail next year and when they do, folks have to reign in the expenses and the one way they can do that is to cut jobs. Takes me back to a couple years ago, the famousness that jpm had when on higher expenses and like peak inflation, peak salary pressure in that kind of thing and were in a different environment today and shouldnt be missed. It does tell you theres been something very different taking place in the economy from whatever that was 18 months ago until today. I think thats all valid and fact that, you know, one of the things that surprised me about the story is, you know, everybody from gorman to dimon to other folks, people arent moving. Attrition is low. You remember a couple years ago people were getting peloton bikes and bonuses and raises in a single year just to stay put. Now and now that, you know, the environment is different, these bankers are risk averse and staying in their seats. If these guys are staying in their seats what are they concerned about coming down the pike . Absolutely. Staying in their seat and not selling houses. No. Theyre stuck. Using the peloton bike . I dont know. Exactly. Coat racks now. Lets goat netflix, shares are soaring on the surprise subscriber growth in q3. We will trade it and other members of the day in three stock lunch next look at the shares up 16 . Welcome back, everybody. Shares of netflix higher on the back of better than expected Third Quarter results. Very much better. Julia boorstin has the key numbers fueling those results. Hi, julia. Tyler, look at netflixs stock chart. That stock surging 16 today thanks to better than expected subscriber growth of 8. 8 million new subscribers in the quarter, driven by netflixs successful crackdown on password sharing. Converting what they call borrower households into paying members. The company saying they expect the trend to continue to boost additions for the next several quarters. Morgan stanley raising its estimates and price target and upgrading it to overweight noting the froth in the stock and expectations have come out saying we believe netflix will deliver the objectives it set out a year ago, accelerate growth back to double digits and expand margins. Netflix showing its confidence in demand for the service boosting some of its prices, also showing its interest in driving subscribers to its ad supported tier by keeping that price the lowest and the same. Back to you. Exactly. We were talking about that yesterday. Julia, thanks. And speaking of netflix its time for todays three stock lunch. Here with our take on the stocks we welcome katie stockton, founder and managing partner at fairly strategies and a cnbc contributor. What do you do with netflix now . Well, im a buyer of netflix. It has gapped up through its 50Day Moving Average in response to earnings and that followed a pretty sharp corrective phase. People tell us to buy into weak very hard to do. It would have been the right thing to do with netflix. It did flash some countertrend signals into the downdraft, and now we have uptrends that i find compelling on the daily and weekly charts of netflix. So within the context of the longterm option, i think we probably have an immediateterm entry. The initial resistance is roughly 4. 40, but perhaps it can get up to this years highs. Lets move to another one, sort of a similar category, shares of best buy, slightly higher. Goldman sachs upgrading it, highlighting the potential for an upswing in demand, driving to the upside. So you go home, get your best buy tv and watch your netflix. What do you think of best buy . I think a longterm neutral buy is still appropriate. Within that context, i understand the upgrade, it did get quite oversold and now its reacting to the oversold condition. It doesnt share in any kind of breakout, but it has reacted positively, and it did happen near the support level. So theres at least some room for nearterm upside, but within the context of the longterm range, the 200 Day Moving Average is around 77 and seems like a reasonable upside objective. So maybe 8 or so. What about at t . Its higher after posting a Third Quarter earnings beat, some better subscriber growth, lifted their Free Cash Flow target, and we know the tele companies have been in a tough place earlier this year. Weve gone from a longterm uptrend in netflix to now a longterm downtrend in at t. Yeah, it is a promising shortterm development. Its not a major breakout on the chart, but it does show that theres some renewed momentum after the consolidation phase. It had already shown a loss of intermediate Downside Momentum and its got some room to the first major resistance, above 16 1 2. So if we consider this a countertrend move and higher risk, i think we can feel comfortable that well see momentum continue to improve. But really just in the nearterm as well here. Sorry, at t, for now. Thanks so much. Areatit. Of course. And we will be right back. Power e trades easytouse tools, like dynamic charting and riskreward analysis help make trading feel effortless. 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They really are big amazon competitors and its important to note they deny theyre considering an ipo, but we know its part of their longterm strategy to cap off growth with the market debut. But we have a lot of hurdles they need to overcome. Lawmakers are really concerned about their ties to china, as well as forced labor from the uyghur population and their supply chain. Theyre under investigation with congress for that, exactly. Are they talking about a new york ipo or would this be a hong kong listing . What the suspicions are, the rumors are, a u. S. Opening. Which is why these hurdles are so crucial to overcome. Lawmakers are skeptical of companies founded in china. Shein, i assume, denies they use child labor. Of course, but they have acknowledged that cotton from the region where the uyghur population is ex sfloited is in their clothes. Thats compared to about 13 across the fashion industry, so this is a problem for all of fashion. They have less exposure to this problematic cotton than the rest of the industry . Yes. Thats shocking. The other thing people are trying to sort out, are they using some kind of loophole with cheaper if its from these difficult regions, or is it that they have a better mousetrap . One of the arguments they make is their Inventory Management systems are better, they can turn so that theyre competing on those terms. So shein is absolutely competing on those terms and theyre quick to point out we dont offer cheap clothes because of loopholes or anything like that. Our Business Model is Strong Enough for us to be able to do that. Thats where congress scrutiny is beginning. Because of this loophole, shein ships its products directly to consumers from chinese sfl suppliers. If theyre valued under 800, theyre not subject to the same customs screenings. So theyre concerned that these clothes were made with Uyghur Force Labor and theyre not being found out because of that. What about ip concerns . Ip concerns is another big issue for them. In july they were sued by three designers who alleged their Copyright Infringement was so extreme, it could be considered racketeering. The Company Calls the lawsuit frivolous and theyre going to vigorously defend it, but it is a concern and the executives did note that mistakes do happen. When youre making 60,000 new skus a onth, which is enormous, but small batch, so maybe 100 to 200 of each sku, mistakes do happen. Artists can senate takedown notices if they think theyve been infridged upon. Have they been criticized for environmental issues, that the clothing ends up in landfills . Its almost disposable. When you can buy a shirt for 5, how many times are you going to wear it . They get a lot of criticism, but they are very different from other retailers when it comes to environmental. Most retailers plan to sell through about 60 of all of the inventory they buy. Shein, they have far less waste. So they may have less waste on their end, but the concern is how the consumers are using their clothes. Thats point. Thanks. Continue to follow this for us. Weve got news on the House Speaker drama and Emily Wilkins has it on capitol hill. Reporter tyler, well, House Republicans just spent the last four hours discussing whether or not they should empower speaker pro tem Patrick Mchenry with the ability to pass legislation and they came out and said the proposal is dead. Its now in jim jordans hands. Hes going to be meeting with some of the holdouts and we may or may not get the third vote later tonight. At this point, congressman don bacon told us earlier that he expects the next time jordan goes to the floor hell lose ten more republicans. Its just not clear at this point what path republicans are going to take to actually elect a speaker. What does he think he can do by way of trying to persuade those 20 who voted against him . Reporter that is a really great question. There are a number of things that lawmakers have put out there, a number of asks that they have. But at this point theres not one thing that jordan can do. Its just a lot of distrust at this point, a lot of concerns about how the process has unfolded. Its not clear what he can do to win their support in the next hour. Thank you very much. Emily wilkins following the story in washington for us. Thanks for watching power lunch. As the markets move to session lows, closing bell starts right now. Welcome to closing bell. Im mike santoli. This makeorbreak hour begins with a postpowell puzzle, the stock market wavering since his comments saying policy is restrictive, but expressed uncertainty about how it might perform under higher bond yields. The tenyear treasury has been hesitating all day, keeping indexes off balance. Just about 499 right now. The socalled steepening of the yield curve gett