>> weiss >> i'm going with leidos phenomenal quarter since new b management >> joe >> crowdstrike i open it personally >> thanks for all the information. i'll see you at 3:00 i'm tyler mathisen in for teltkelly evans. it is the final countdown on interest rates today market probabilities indicate no chance of a cut today, but could what jay powell says move the markets one way or the other plus, three more names on deck to report. it's all about the consumer, inflation, housing our trader will buy two and fade one name into the print. and we'll tell you which are

doing which. and speaking of the consumer, the high end mostly holding up so far so good that's good news for taylor made, the company taking a big swing at athleisure. but we begin with today's markets and dom chu with the numbers. >> it's wait and see and you might suspect on a fed rate decision we are seeing a mixed market, but it's fractional moves and not dramatically so one way or the other. dow outpacing the broader market, up 93 points 37,908 the s&p 500 down 16 points, about 1/3 of 1%. even at the highs, we were down a modest three points and 22 at the lows so a wait and see type trading

rake the nasdaq, 66 points to the downside for the nasdaq composite. 15,591 here's the current state of play for the macro market as we head into the big rate announcement later on, the two-year note still above the 5% mark the ten-year note yield, 4.655% there. comex gold up to $2313 and bitcoin down below the $58,000 mark, down 4.5%. and then the big cap tech trade, very much about earnings and the s&p 500. amazon coming off a better than expected report. the forecast left a little to be desired. super and advanced micros, down 10% to 15%

alphabet and meta, up 1.5 to 1.75%. so that's the current state of lay with about an hour to go until that rate announcement >> dom, thank you very much. as dom just mentioned, less than 60 minutes until the fed's decision on interest rates steve liesman is at the federal reserve with what to expect and watch for. >> the fed meeting, mostly downside risks to investors. the main question, just how sharply the last three months have bad inflation data have altered the fed's policy worst case scenario is powell or the fed has a hike possibility this is just temporary, or is it indefinite they described the inflation spike as just a bump along the way. possible changes to the statement include, marketing down growth being seen as

moderate inflation remains elevated, and the high-risk change would be one if they say the goals of low employment and stable inflation are not moving into better balance. most likely powell and the fed play for time here the two-year yield has increased most of this year and stocks 4.6% off the highs, tightening financial conditions so powell and the fed, their job today might be to just do no harm keep rates hike but don't create a selloff in stocks that may not be needed. here are the probabilities may is off the table june just 9% that was 99% a couple months ago. july, just a 25% chance. september, less than an even chance here you see the market to the extent it has hopes for cuts has moved those cuts into the fall and winter with december at 77%. i think it's best to expect that the most moderate changes the

fed can credibly get away with, there remains a view among a lot of economists that at least some of the inflation we have seen has been seasonal, and the fed will stick to the forecast that its current rate is sufficiently restrictive to cool the economy and bring down inflation >> two questions, steve. number one is whether or not in the statement there is a reference to the possibility of interest rate hikes being brought back on the table. it seems likely that the chair will be asked in the press conference a question about whether rate hikes are a possibility again. what do you expect him to say? >> i don't think hikes get into the statement. there is a kind of lukewarm or back handed bias towards cutting, where they say we don't expect the conditions to cut until we're confident. that could potential come out. i don't think hikes go into the statement. i think powell probably doubles down on this idea that our response to higher inflation is

keeping rates restrictive for longer, not raising rates. i don't think he'll take them off the table but say something along the lines of, it's not what i expect to happen. >> let me come to the question of the market as a predictor of what the fed is going to do. as we entered 2024 or closed 2023, the market was predicting a very different reality than we seem to have encountered here. >> sure. >> so my question is, based on what the market is telling us right now, how much confidence should we have in what it's saying >> so tyler, i think of the question a little differently how you posed it is the market's prediction for the fed the right prediction for what both the fed and the market believe the economy will do? the change that we had in the market's outlook is relative to the surprise in the data both surprisingly strong economic data, as well as

stronger inflation data, or lack of progress in data. that's what caused the change. so the market, i guess the question is not do they have the fed wrong, but have they had the economy wrong? i think the answer is yes, they have, that they had the inflation trajectory wrong they expected more inflation progress, they didn't get it so they backed off. so this is the right call. right now, what i like to say, is anybody -- the market's predictions for the future is 100% correct for what they believe today is going to happen tomorrow >> as we talk about inflation, and the fed's ability to predict what it's doing, you just said that they have been wrong in their prediction of this trajectory of inflation going down they were also wrong with the projection of inflation as it moved up they called it transitory. >> they called it transitory but another place they were wrong, that inflation was going to come down as quickly as it did. everybody was surprised at how much progress there was in 2023.

so what happened is they rolled over that trajectory into 2024 and it turned out, at least for the first three months, not to be right there are people like goldman sachs that said you know what? we're sticking with our call for inflation to come down on the other hand, you have people who say all of this inflation, the strong economic growth tells you that the funds rate is not restrictive enough larry summers is predicting they'll have to raise the funds rate or suggesting that they will have to raise the funds rate further so the story, is everybody has been humbled by this post pandemic economy, by perhaps how much fiscal spending has meant to the economy, how resilient the consumer is, and we're surprised how companies have been resilient, as well. >> steve, thank you very much. while the odds are rising that the fed could be on hold for the rest of the year, two of our next guests still expect interest rate cuts joining us now are my two

guests welcome to all three of you. steve set up the conversation there. i think you'll agree on what could be going on. you're one of the three here who don't expect interest rate hikes this year at all why? >> yeah, i think as steve was talking about inflation, growth, the jobs market, and the general resilience of the consumer leads us to believe that the fed will probably wait until after the elections to cut rates, if they wanted to. you look at the market pricing, as steve was pointing out, the market is not pricing in a cut for mid year, so june and july is out of the question september is a coin toss the earliest the market has priced in for a rate cut is at the november or december meeting. so i think that there's a case

to be made given how strong the data has been that the fed wait at least until after the elections to think about cutting. >> but you don't expect there to be a rate hike, so you would say that the next move the fed is going to make is probably lower. but then the question for me becomes, as we embark on a rate lot lowering cycle, where is that terminal lower rate likely to be in other words, how much higher is it likely to be that we've become accustomed to for interest rates >> as far as the market pricing is concerned, the pendulum has swung the other way. coming into this year, we were expecting perhaps a terminal fed funds rate in and around 2.5%. but the market is saying that funds rate should be perhaps above 4%, maybe 4.5% so that's a very dramatic change in the market's perception of what the terminal effect funds

raid should be our view is that the fed will wait for as long as they can before they start cutting rates. but once they cut rates, the terminal fed funds rate is probably going to be above 3.5% when it's all said and done. we just have to see how the data plays out. >> we'll come back to that and the implications for the economy. let me turn to julia coronado and ask a question i asked steve. it seems unlikely that the federal reserve statement, said steve, will include any reference to the possibility of raising interest rates at this time to combat inflation but it seems very likely, i think you would agree, that the chairman will be asked about that what do you expect him to say, how will he dance on that head of a pin >> i think that what he'll say is that it's not something that they have discussed, and it's

not something that they think will be necessary at this point. so far their strategy of holding rates at what they believe to be a restrictive level for a longer period of time is the right strategy but at the end ofthe day, they'll follow the data. so we'll confirm data dependency and confirm their commitment to restoring price stability. so he's always very forceful and strong in saying we'll do whatever the data dig date in terms of restoring price stability. at at this point, chair powell is not going to want to indicate any degree of panic, giving the firming in inflation in q1 there are a lot of reasons to think that progress will happen as the year unfolds. if the data don't deliver that cooling trend through q2, that conversation might shift but one thing chair powell said

that struck me in a world of global currencies that have been as volatile as they are, he said they understand well their job as keeper of the global reserve currency, and that their job is to be very transparent and communicate their thoughts and their approach as clearly as they can so as not to induce unnecessary volatility we've seen a lot of volatility in the yen, in currencies generally the u.s. as the outperformer of the global economy really sets us up as the save haven for capital flows so all of this says chair powell should be calm, cool, and collected, hold the line on the current strategy but also their commitment to bringing inflation down. >> mike, let me turn to you with a question that is maybe sort of lurking off in the background a little more, maybe than it should be, and that is the runoff of the fed's balance sheet, quantitative tightening,

if you will. what do you expect, if anything, for the fed to say about that and for the pace of the reduction in the balance sheet, which is monetary tightening by another means? >> i think that's going to be the big question for today what we're not expecting today are any major surprises. the focus will be, as you said at the top of the hour, be on the rhetoric, on the language and what that portends for the remainder of the year. the one point is that qu quantitative tightening. we think it's probably in the cards in the near term we've seen that this is a fed chair that really likes to telegraph to be transparent and to get ahead of the trend. so i think that would obviously be positive news for market if we see that today. that will be the one material outcome we're waiting for. >> and you're of what view with respect to the number and

magnitude of interest rate cuts this year, if any, mike? >> we've said all year long that this last mile is going to be choppy, and we are cautioning investors that you really have to not read too much into what's in store for the remainder of the year we're sticking with our guns with a 2.5% inflation target for the end of the year. we think the fed will still have room to cut rates before the end of the year. our base case, believe it or not, our base case is still at 3.25 basis point cuts before the end of the year. >> julia, your view, if i'm characterizing it correctly, and correct me if i'm wrong here, that the fed will start to cut rates and that the rate cutting cycle will be sort of an every other meeting pace into 2026 so where does that bring your terminal rate opposed to subadra's? >> i think ours is probably a

little lower, and the pace that it will ultimately be dig kated by the data, i think they respect going to use words like they did last cycle. but we expect this resilience we're seeing in the economy is going to be with us. if it is, they can afford to calibrate that rate to the economy. and i think there's a number of reasons to think that terminal rates higher than last cycle, we have more fiscal support, and a lot of reasons to think that it will be higher i would probably put it closer to 3 to 3.5 at the end of the day. i think there's a lot of lags in policy that have yet to come through, things like the mortgage lock problem and businesses locked in low rates means that we haven't paid the price of higher rates yet. but we will over time as debt

rolls over >> let me change the spin a little bit sit a political year, so no one should be surprised that the fed has, in recent days, been brought into a political conversation about its own independence stories in "the wall street journal" last week and over the weekend indicating that certainly people in the trump camp have been wondering whether there are ways that the executive could be more influential with respect to monetary decisions on the fed. talk to me a little about your view on fed independence, how important it is, and whether you give much credence to the stories that ran last weekend. >> so, the fed is bound to the congressional mandate of -- >> it reports to congress. >> yes, they do. you hear chair powell doing his system in front of congress. so for the most part, i think that the fed is accountable for

its duo mandate. i just don't see the need, really, for any change in what has worked out really well for of a century the fed has remained independent. the reason is that business cycles and economic cycles don't coincide with the presidential terms. so it's important for the fed to have that in mind and look at sort of the longer term picture for what's good for the economy. so, i don't really see any meaningful change coming through with more perhaps involvement from the executive branch in this particular -- regardless of who gets elected i think independents or the fed's independence is going to be paramount >> and congress would yield its supervisory powers very diligently

we are out of time, but we'll come back to it. i'm sure it will be a topic that will resurface this year and into the future. thank you very much. let's move now to high mortgage rates keeping potential buyers on the sidelines. diana olick has the latest numbers. >> mortgage demand propped again last night as rates hit the highest level, rising to 7.92% for last week, and that's for loans with 20% down. that is 79 basis points higher than it was a year ago that's why applications to refinance a home loan fell 3% for the week and 1% lower than the same week a year ago applications for a mortgage to buy a home fell 2% for the week and 14% lower than the same week one year ago here's the headline, demand for adjustable rate mortgages hit the highest level of the year,

nearly 8%. arms offer lower rates a 5-1 arm fell to 6.6% arms can be fixed up to ten years. the less affordable housing, the more demand we see forearms. in so rates have moved up even further this week, now around 7.5% as of today that's roughly 50 basis points higher than where we were a month ago. to home buyers out in today's market, that's real money on the table. >> you would have to guess that the share of adjustable rate mortgages is going to continue to expand if interest rates stay roughly where they are today and why wouldn't you go for a 5-1 arm on the theory that sometime in that five-year period, rates are going to come

down, you'll get a chance to refinance and maybe lock in what is by today's standard, a more appealing fixed it >> it's what you should do you can even fix up to ten years. adjustable rate mortgages are considered riskier, but the market could be lower than it is today. as you said, if you expect rates to be lower in five years, as long as you're at least 50 base points lower, that's when the refinance makes sense. if we expect rates to go much lower in the coming year, a five in one arm is perfect. >> i've had almost all of the different types, in my long and unsuccessful career in real estate diana, thank you very much coming up, halfway through the busiest week of earnings season we have three of the biggest insurers, plus zillow and door dash on deck

and tiger woods will be sporting something different from his signature red nike shirt we'll give you an inside look at his new apparel line with the ceo of taylor made the company behind tiger's new sunday red brand less than 40 minutes until the decision on rates. "the exchange" is back after this

the treasury department issuing new sanctions. we have this breaking news >> tyler, these sanctions are coming from treasury's office of foreign assets just posted and they're listing now hundreds of entities and individuals who are being sanctioned for support for russia and russia's military industrial base. what's interesting about this list, as we look through it now for the first time in realtime, is that there appear to be dozens or more companies on this list who have been sanctioned who are in china this is the first time we have seen that and it follows on the heels of the secretary of state antony blinken's visit to china last week in which some of these issues were discussed. to give you a sense of the flavor of some of these sanctions that we're seeing,

companies include a wireness technology, a company in sichaun province, china, being sanctioned for support of russia's military base chip space electronics, a hong kong based company, according to the department of treasury, also added. and an engine manufacturing company. so a variety of companies here now, facing sanctions for material support for russia's wartime effort here in ukraine, and the key wrinkle here is that a lot of these companies are in china. >> very interesting, because last week, secretary blinken, when he was with xi, said effectively if you don't clamp down, we will. and this is that "we will" part. >> this is clearly the follow through on that conversation but also clear that the united states telegraphed this to the chinese side this will not be unexpected to the chinese side that this is happening. it gets at this relationship

between the chinese government and the russian federation there's some that argue that the war in ukraine now has effectively become a proxy war for the chinese against the west, using russia as their proxy, in the same way that the united states and russia had proxy wars during the cold war this is a new proxy which russia is the proxy of china. this could be the u.s. effort to get at the root of that, and at least eliminate some of the economic support >> history never fails to give us with lots of surprises. >> always something. time now for our earnings exchange we're going to trade insurance, housing and consumer names today. here with the trades, new street's founder and ceo welcome. good to have you with us let's kick it off with three insurance names that report after the bell, allstate, aflac and metlife, insurers watching

in increases in premiums to offset claims levels and investment income. what do you think of this trio >> it's not too bad. i would buy allstate and hold the other two names. you see auto insurers have a difficult period, and underwriting losses because of those things but i do have optimism pricing will improve, and you'll see during the course of this year allstate, they're able to rein in some of their prices. so it's optimism, you're holding and buying and you're waiting things out >> let's go next to housing, and that would -- we're going to feature zillow, down around 25%, higher mortgage rates not helping, stemming from the national association of realtor's settlement on commissions. do you like zillow here?

>> i just mentioned the ruling that had an effect on a lot of the real estate stocks it's because of the impact on spending budgets can be reduced, but the housing markets that was prior in 2022 has gone a lot of places so there's reasons i would be waiting to see what they do to shift strategy going forward, potentially being able to go back into the stock. >> we will end with a company that my son, i think, single handedly is holding up here, doordash, up more than 30% this year there's no consumer weakness, a strong market share, favorable labor landscapes those are the catalysts for the stock. what do you think of doordash?

>> a lot of us used them during the covid times. they've seen business stick around even after the pandemic so if you look at it, that will continue growing so i like the stock here and i like the international expansion that doordash plans to do, especially in eastern europe they are trying to do the same things across the seas so i like the stock. >> delano, thank you >> thank you, tyler. quick programming note, don't miss the cfo of doordash who will be delivering his thanks to my son in an interview after earnings on "closing bell" today in the 4:00 p.m. hour. still ahead, a look at the mystery chart, the stock having its worst day since the turn of the century. we'll tell you why jim cramer says the company is facing a threat to its very existence >> the problem here is --

[ inaudible i would have called for more of a reconciliation and more of the realization. [ inaudible to start a business, you need an idea. it's a pillow with a speaker in it! that's right craig. a team that's highly competent. i'm just here for the internets. at&t it's super-fast. reliable. you locked us out?! arrggghh! ahhhh! solution-oriented. [jenna screams] and most importantly... is the internet out? don't worry, we have at&t internet back-up. the next level network. i sold a pillow!

(traffic noises) (♪♪) the road to opportunity. is often the road overlooked. (♪♪)

at enterprise mobility, we guide companies to unique solutions, from our team of mobility experts. because we believe the more ways we all have to move forward. the further we'll all go. you founded your kayak company because you love the ocean- not spreadsheets. you need to hire. i need indeed. indeed you do. indeed instant match instantly delivers quality candidates matching your job description. visit indeed.com/hire

welcome back arizona state lawmakers are making a final push to repeal the state's civil war era abortion ban 14 democrats in the state senate are hoping to win over at least two of their republican colleagues to win final approval of the repeal bill, which the state's lower chamber passed if the bill is signed, the 2022 law banning the procedure after 15 weeks will be the prevailing law. a new fbi report finds older americans lost billions of dollars in scams last year according to the agency, financial crimes against people

older than 60 totaled $3.4 billion in 2023, and 11% increase from the year before. the fbi says at least 101,000 people in this age group became victims. the biggest losses were scams involving bitcoin and other cryptocurrencies ford is recalling 240,000 maverick pickups because taillights are not lighting up properly the recall affects trucks from the 2022 to 2024 model years >> pippa, thank you very much. inflation has big brands warning of consumer weakness, saying it islow-end customers. but luxury showing some signs of lower spending but spending in at least one niche area has been climbing over the past five years, and

likely got a boost during the pandemic as everyone went outside and that's golf. global sales of golfing equipment up 40%, apparel up 21% since 2019, and there's a new entree in the space with a big name attached to it. tiger woods launching his sunday red brand today, after ending his 27-year partnership with nike back in january join us now is the ceo of taylor made, the parent company behind sunday red, and dom chu, who is a golfer >> i am an avid golfer, as you are, ty. >> ask david the first question. >> i would like to know why taylor made is getting into the apparel business in a big way, even if i know the reason why is because it's tiger woods, but why taylor made and why so much into apparel >> why not why not? we built an incredible platform at taylormade, most of which you

know well and your audience knows well we have an equipment and golf ball business, which is a core and legacy business for us, doing very well in the global marketplace. we've got investment in entertainment and a concept with tiger woods and pop stroke entertainment, which is 36 holes of synthetic putting but it w lodgealed a jay sen si for us, in athleisure and lifestyle outside of golf to bring an apparel and footwear brand to life. so we have been here in new york over the past couple of days with our partner, tiger, bringing sun day red to market and it's been a wonderful opportunity to expand. >> so the flip side is what took you so long? you have hats, i know that, but the other apparel, you're a late entry here is footwear a part of this

>> sun day red is an apparel and footwear brand we have been working down a multiple pathway to get into the apparel business we do collaboration work around the world, which is a nice business for us. but we don't own those brands, we own the tailor made brand marks. we have looked at other acquisition strategies to determine is there a good fit for us to take a regional brand and nationalize it, but a year ago we had the opportunity to engage with tiger's team and start to think about other concepts tiger's been part of taylormade since 2017 when he became an athlete playing our equipment, which has been wonderful for us. >> nike went out of the business of making equipment. >> they exited in '16, he came to us in '17 and he's been helping us in

thinking about technology and design lines dom, the equipment meets the needs of player profiles in every skill level. so when we had an inclination that tiger was considering other options relative to his future in apparel and footwear, we thought about where we've been and where we want to go to bring a new brand to market, to bring a new option to the taylormade portfolio brands and categories. this was a clear synergy for us, so we got started. >> first of all, taylormade is a private company. we don't know a lot about your inner workings or financials take us through what you can tell us about the structure of this agreement is sun day red part of taylormade or a separate venture? how is it set up >> fair question at this point, we didn't disclose a lot of what our public peers might

the taylormade holding company holds the tiger woods sun day brand, which is a wholly owned subsidiary -- >> it's a brand within a brand >> a brand within a portfolio, with which tiger is partnered into and so sun day red is not based in carlsbad, california, it's based north of us in san clemente and we have the organic golf talent in orange county. so we have separate everything, because we believe this brand should stand alone the categories are different than designing and developing equipment and golf ball. so sun day red is an independent subsidiary of the company. >> so dom asked you about the private equity structure, your ownership structure. the next question is, what about an ipo >> one of the things that sun day red brings to our business,

and the legacy business, which at this point in time is the largest of our portfolio the leadership andequipment that we enjoy around the world and the strength and momentum that we have developed provides op optionalty so we haven't made a determination at this point in time what that will lead to. we follow the compass, not the clock. if we create real value for our customers, other shareholders will benefit from that, and there's no doubt sun day red will be additive to that >> we talked to a lot of golfing ceos as you know one of the thing ms. have told me about is the normalization of golf post covid. tyler mentioned covid before the growth rates are going to be hard to replicate. how exactly are you as a ceo navigating what you think the new normal is for golf post

covid pandemic >> yeah. there's a lot of ways, dom, to answer the question around normalization. if normalization is up 40% from precovid in equipment sales from precovid baselines and 19% in apparel and food wtwear, we'll k it we've seen millions of golfers come into the game over the past several years, and they purchase in different cycles and different stages of their playing development. we talk about your kids, what will they be playing not just today five, ten years from now and the replenishment cycle of those that have come into the game from starters to more advanced players so we are bullish on the state of the industry. for the foreseeable future, we'll see predictable growth, which enables us to drive profitability across our business platforms >> next, i've got to leave it here, but the next big thing in materials is carbon you said >> it is

we believe we are in the carbon era. one of the beautiful things about advanced technologies and inno e vative companies, taylormade is the most innovative of all. we're willing to take on risk for the benefit of golfers of all skill levels to play better. we have entered the carbon age, so we no longer make drivers out of titanium faces. we have carbon in the qi-10 products that nellie and scotty are winning with, rory won last weekend. >> this is where place where the carbon foot print is a good thing. thank you, my friend we've got a quick news alert on google. the tech giant laying off at least 200 employees from its core organization. that's according to a scoop from cnbc.com's jennifer alias. as part of the unit's

reorganization, google will move some of the positions to india and mexico the layoffs happened just ahead of the company's blowout earnings report last week. coming up, this name down about 17% after missing on earnings and slashing guidance, leaving bearish sentiment on the street the name and what has altsanys concerned. we'll be right back.

welcome back to "the exchange," everybody let's get to some show and tell where we show you a chart. shares of starbucks was our mystery chart, getting slammed after the company missed on earnings and revenue, surprising sales slump here the company also slashed guidance here in the u.s., sales decreased 3%, traffic sank 7%. second quarter in a row of struggles in the company's home market the ceo told "squawk on the street" while the occasional customer is cutting back, starbucks has a strategy to win them over. the street is not -- >> it is true we had a tough quarter, but we have an action plan against that, particularly on how we communicate and deliver value to those occasional customers that will see value when they see what we

offer. >> and the street not entirely convinced. william blair and deutsche bank down trading them to a hold. coming up, apple set to sort after the bell tomorrow. sales in china down 13% last quarter. that's next. ♪ (alarm sound) ♪ amelia, turn off alarm. amelia, weather. 70 degrees and sunny today. amelia, unlock the door. i'm afraid i can't do that, jen. ♪ (suspenseful music) ♪ why not? did you forget something? ♪ (suspenseful music) ♪ my protein shake. the future isn't scary. not investing in it is. you're so dramatic amelia. bye jen. nasdaq-100 innovators. one etf. before investing, carefully read and consider fund investment objectives, risks, charges, expenses and more in prospectus at invesco.com.

your record label is taking off. but so is your sound engineer. you need to hire. i need indeed. indeed you do. indeed instant match instantly delivers quality candidates matching your job description. visit indeed.com/hire

if you've ever grilled, you know you can count on propane to make everything great. but did you know propane also powers school buses that produce lower emissions that lead to higher test scores? or that propane can cut your energy costs at home? it powers big jobs and small ones too. from hospitals to hospitality, people rely on propane-an energy source that's affordable, plentiful, and environmentally friendly for everyone. get the facts at propane.com/now.

welcome back everybody. apple set to report after the bell tomorrow. shares are down 14% this year. one of the biggest headwinds there is the china demand there but there could be hope on that horizon. steve kovach joins us now to discuss. what's new in china? >> not good. that's the real answer, tyler perkins after last winter, when we heard apple report that sales were down in the december quarter, 13%, we're getting more troubling data in this current quarter that paints a pretty dark picture ahead of earnings tomorrow. we are seeing someday to come out from the likes of research firms saying iphone sales in china were down. you can see right here, down about 19% from the year ago quarter. at the same time, we are seeing a resurgence in some chinese brands, especially huawei. that was the chinese brand that

was out of the smart phone for a little bit because of some export restrictions in the united states. they weren't making phones for a violated now that they are we are seeing more and more evidence that people in china are choosing those devices over the iphone. but there may be some hope on the horizon here. tony second lobby of bernstein was saying earlier this week that this could perhaps be a cyclical thing, kind of like we saw in china back in 2019, and it will shake out with the next iphone cycle. >> so it's hard to understate, is it not, the importance of china to apple, not just as a manufacturing base but also as a market? how big a percentage of, let's say iphone sales or revenues, is china? >> we can talk about total revenues. last year it was just shy of 19% of apple's total revenue for the entire fiscal year. it's been as high as 22%, 24% for the year as well so 1/5 approximately of apple's business comes out of china.

forget about the manufacturing and so forth out there. this is a huge customer base and in the meantime, we have not seen apple find another growing market that can kind of make up for this downturn that we are seeing in china. we saw tim cook in india last month. he was in southeast asia touring singapore, indonesia, vietnam, these countries that sure, sales are growing there, manufacturing is growing there, but nowhere near close to the level they need to see in order to make up for this downturn in china. >> what's the over/under on the number of times you appear on television tomorrow? >> about 500, i think it's going to be a lot. it's going to be a busy day. >> steve kovach, thanks very much. that will do it for this 'rjuion of the exchange. wee st six minutes away from the fed's decision on interest rates. i will see you on the other side of this quick break. get ready for the countdown to the fed decision.

(torstein hagen) in my simple world, there are only three things that matter in human beings. first, they have to be kind. kind. second, they have to be honest. and third, they have to be hard-working. it's very simple. wherever you are in the world, when you come to a different culture, you meet people of very different backgrounds,

but you find out that they have the same ambitions and the same fears just like yourself. i'm so sure that travel is good for the world. it's really the best to engage with the locals and the destination. and i think travel helps broaden the human mind and makes us kinder. and that's fantastically valuable. your shipping manager left to “find themself.” leaving you lost. you need to hire. i need indeed. indeed you do. indeed instant match instantly delivers quality candidates matching your job description. visit indeed.com/hire

welcome to power lunch on a fed day, everybody. i'm tyler matheson. we are just four minutes away now until the fed's decision on interest rates. let's get a check, meantime, on the markets as we head into it. some big reactions among earnings and other things. there you see the industrials, the loan index that is markedly higher by 113 points but the s&p 500 and the nasdaq composite are roughly flat, let's call it. starbucks meantime falling to a

two-year low. supermicro losing $100 a share. we've been talking a lot about that one. on the upside, however, is pinterest up nearly 18% at 39.35 point let's get right to our all-star panel with the fed's decision just minutes away. joining us r david kelly of j.p. morgan asset management, kristin bitterly of city wealth and jim and karen of morgan stanley investment management. let's talk a little bit. welcome first to all of you. david, let me begin with you and just sort of get your thoughts as we head into this meeting. i know you are sort of in the camp that says there ain't nothing coming but we got to listen to what gets said. >> when it comes to interest rate cuts, the fed is basically ready, set, weight. we're just going to have to wait a while because the last few inflation reports at cpi a little hard, the easier number a little hard, i think the message is going to be we don't

think we're going to have to raise rates again but we're going to take our time about cutting rates and they want to give that sort of generally hawkish message that they just don't have any tolerance for sticking inflation and therefore they are in no mood to cut right now. >> what could be the worst thing the fed could ay in its statement or in the press conference that would the stock and bond markets? what would be the danger word? >> i think the danger actually would be two things. one is that inflation is more entrenched and two, chair powell is going to be asked about whether a rate hike is on the table, so anything that would allude to that, i think you would see a market selloff that being said, i don't think he's going to do that. i think exactly as david mentioned, this is going to be more data dependent. we still see the trends of earl going in the right direction. we didn't have the data that we needed within q1 so we need a more dis-inflationary trend to begin our rate cutting cycle but i don't think there's going to be too many surprises. >> so let's talk a little bit, if we might, about jim, the

idea of slowing down the runoff of the balance sheet. do you expect there to be much commentary on that and how important is that if we do here? >> i think there will be a question on that and that always comes up. it is important but it's also very for castable. i don't think there's going to be any surprises on that. i think really the surprise factors are going to come in, in terms of what i call a crisis of confidence at the fed, meaning there is a crisis of inflation confidence. in terms of what this bumpy path means towards lower inflation, how long are they willing to give it or do they have to reset the inflation clock now and need to see three months in a row at least of low- inflation prints in order for them to regain that confidence? the balance sheet runoff is going to be important but i don't think that's going to carry the day today. i think that's just going to be well break into the news. >> david, let me come back to you very, very quickly with the

question i asked kristin there, which is what would be the scary words that could come out of this? >> hike. if the federal reserve were to say that they are thinking about hiking rates, that would say not only that we could have higher rates but also the fed would be admitting that they somehow have got it wrong. i don't think they're going to do that. i think they desperately want to stay where they are for a while and then cut rates easier so the worst thing they could say i think for markets is that there actually comfortable. >> were going to come back to the panel in just a moment. meantime, let's go to steve leishman for the decision. >> the federal reserve leaving rates on hold and their rates are 5 1/4 to 5 1/2%. it does note a lack of further progress on inflation in recent months. noted that it had been progress. the risk to achieving moved toward better balance in the past year, note that they had said before, we are moving so that's another kind of reference to stalled progress on inflation. it repeats that it does not expect a cut until it is confident inflation is moving towards that 2% target. it reduced the quantitative tightening