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tv   Power Lunch  CNBC  November 18, 2021 2:00pm-3:00pm EST

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second welcome to "power lunch," i'm tyler mathisen we have a busy who ahead here's what's on the menu. fed watch. jerome powell or lael brainard the president's big decision is coming soon. his pick could have implications for different stocks in some key sectors. we will give you a list of each. and the ev battery economy it will reshape century-old supply chains and it's giving investors a new way to capitalize on the fast-growing electric vehicle industry. and the driver's manual. we will break down the inside of the car, from the seat makers to the dashboard companies, to the electronics makers to find the stocks that could turbo charge your portfolio. >> buckle up, everything the major averages are mixed the dow is down 55 points. er with well off session lows. we were down more than 200 earlier. the s&p is up ten. the nasdaq is up 21. retail is helping stocks today earnings in he can to us after macy's shares are soaring over
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20%. kohl's also higher on strong same store sales growth and digital growth shares of kohl's up 8.5% nvidia higher after the company issued a bullish revenue forecast for the current quarter cited a 55% gain in sales from a year ago shares adding 7% today. we begin today with the fed. president biden's decision on who will lead the central bank is expected soon chairman powell's term is coming to an end in early '22 the stakes are high. whoever it has has to get inflation right. and jerome powell and lael brainard in similar in many ways they are the leading contenders. but their differences are what investors are focused on right now. our next guest has baskets of stocks that could benefit depending on who leads the fed through its next chapter he joins us now. dan, welcome, good to have you
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with us. >> thank you for having me, great to be here today. >> my sense is that lael brainard and chairman powell aren't that far apart on many things they are not radically opposed to one another so why would the portfolios be as different as they are >> yeah. i would agree with you and there is not much of a difference, but the market sees it differently than you and i see it what we started to notice maybe four or five months ago is that there has been a strong relationship between chairman powell's odds of being renominated and the yield curve, the ten-year treasury, inflation expectations, small caps relative to large caps i mean, it was striking. it not only has continued. it has actually gotten stronger in terms of correlation as we get closer to the decision. >> what -- >> the way the market is reading this decision is that while there is not much of a difference between their general
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philosophy, you go they could see that chairman powell will likely raise interest rates more aggressively than lael brainard to stamp out inflation and this is important because if you think about that, you would see a lot of the powell trade looking similar to the way stocks traded while donald trump was raising tariffs in 2018 and 2019 the stocks and sectors that are performing price in a little bit more tightening. with brainard, they see more growth, but they also see more inflation. so that has really led to banks and energy and consumer discretionary benefiting relative to the s&p 500 under brainard and you see the more defensive stocks like communication services in addition to consumer staples benefiting around the odds changing for chairman powell. >> let's go to the question of the odds what do the odds or the betting
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markets say about who is likeliest to win this contest, if there is really a contest >> that's a great question the betting markets had really been about 80, 85% for most of this contest i want to be clear the betting odds are probably not the best predictor of outcomes but they are very good at telling you exactly where the consensus stands at that moment. then we try to say what's different from that? what you have been seeing since september is chairman powell's odds have started to come down today it's about 70% it has been a little volatile over the last few weeks due to press leaks. at one point he went down to 55%. at another point, he was up to 85%. right now, it's settled around 70%. if you actually take the baskets of stocks that we built which we are using as a diagnostic tool to say, how is the market pricing this in this morning the market was giving about a 60% chance for chairman powell to be renominated. i think that's about right
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my sense is that powell will be renominated just based on the sheer math of getting somebody through the senate and the need to get the build back better agenda passed on a separate track. but overall, the market still sees this as somewhat close which i think is important to understand what those outcomes are going to be when that decision is made. >> why is exxon in the brainard portfolio, dan, but the likes of netflix are in the powell one? >> kelly, excellent question think about the irony of this. >> impactly. >> where brainard would be different on this issue, is that she would be for integrating climate change into the bank stress tests we would be more aggressive in the bank stress test yet you have energy and banks siding with her. that's the inflation trade interest rates haven't gone up as much as they should based on inflation rates. if she gets appointed interest rates go higher, inflation goes
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higher i don't think that's bad for stocks in the short run but from a sector allocation perspective, financials and energy benefit. if you then go over to the powell side and you are going the raise interest rates, that really brings back those large multicap stocks. not only do we have netflix in the powell market. we have google, we have facebook, we have those large companies in communication services that just know how to make money in any type of environment. that's what happened when trump was imposing tariffs they were the winners. he was tightening it up on trade policy this is a tightening up on monetary policy. but the market is treating it very similar. >> quick final answer, dan, if i might. that is in the brainard portfolio you have a fair number of financials. i thought brainard was perceived to be a person who would be a tougher regulator of financial companies, the big banks like bank of america, jp morgan, which you have in here >> absolutely. by the way, this isn't a static
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portfolio that we just let run and hold this may change. lael brainard may come in and do yield curve control and hold rates down ask that would change the beneficiaries. same thing on financial regulation we are anticipating, under a brainard fed you would have much tougher stress test fosser the banks itself but for right now, investors are discerning that interest rates are likely to move higher on the margin if brainard gets in and for that to happen, it benefits nearly every single subindustry within the financials, and in particular, both the banks, the large banks, and the regional banks so a little bit contrarian, a little bit counter-intuitive but this has been going on for four months, and i think it is a story that has been underreported. >> we will have you back, dan. thanks a lot, as this discussion heats up meanwhile, the ev competition just got hotter. reports within the past hour that apple is stepping up
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efforts on its electric autonomous vehicle apple shares are going to a new intraday high of 3% today. tesla taking a leg down by two thirds of 1% let's bring in gene munster. you can look at it from a automotive point of view, a technology point of view we have seen time and time again stories of apple getting into this space only to have their head leaving or what have you. now this time line, to have this out by 2025, what are your thoughts >> let me take it in steps 2025 is aggressive where there is smoke, there is fire there has been fire on this topic the last seven years there have been rumors orbiting around it. i want to put some context into the most recent reporting and the rumors around it and the five-year target of when it's going to be available. there has been this persistent
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belief from investors when we hear these rumors that it is just hard to believe that apple is actually going to do it that's what goes on in the back of my mind when i think about apple, and a car -- it makes a ton of sense but imagine actually moving around in an apple car. hard to believe. that is what is notable about today. it is, in my view, the first reporting in the last few years that has some substance around the direction, this full autonomy first approach. that means that the initial apple cars will not have a steering while wheel in it and separately, who it comes from mark german is right, most of the time i would guess that 90% of the time he gets it right. what he is getting right in this case is a renewed energy inside of apple he's not making a prediction whether or not apple is going to actually have a car? right. >> but what he is reporting on is that this renewed energy internally
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to me, that's the bigger story whether it is 2025 or 2030, this is about as big of an addressable market as you can get. and apple wants to be a participant in it. >> you know, i think -- i am taking the report at face value and saying, if apple is now deciding, hey, we are serious about this, we want to go aggressively and autonomous first, i wonder how far behind they are dan ives said he would rather have them partner with an existing player on the production side and not have to worry about that autonomous first makes sense given what they have already done with chips and different things they can obviously take to the table there but there is a huge undertaking, you have cruise, waymo, tesla, what is apple's edge >> their edge is hardware, a.i the head of a.i. from google came over to apple a few years ago. they have caught 70 vehicles that have been moving around the bay area they been doing testing. and maybe just to put a finer
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point on behind, apple is i guess light years behind when it comes to inif i it in years behind when it comes to building cars there is no comparison but a.i., which is really the substance of autonomy -- on that front, they are doing really well and it's hard to gauge where it's at because we haven't -- i haven't been in one of those vehicles but i can say right now the benchmark is tesla i recently was in another tesla that was running full fsd. at moments it was quite scary. most of the time, it was really impressive about where the tech is at. i think that when apple -- and you stack apple against tesla in terms of tech prowess, i think they are probably closer than you think to where tesla is at today. >> that's very interesting i have the same sort of sense of i have never been in anything autonomous or even
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semiautonomous so the fear factor is a big one for me but at any rate, is the stock's reaction today moving up 3% pricing in this too quickly too, soon >> that's debatable. again, there is a wide gap between internal development and actual product i learned that the hard way with apple tv let's put some quick perspective tyler on that up 3%. let's call it 50, $60 billion increase in the market cap if you fast forward and say let's go through the math. understand there is a lot that can go wrong between now and getting to the product let's say they get to the product. they have 20% of phones today. if they have 10% of vehicles, that at a $60,000 asp is a $540 billion a year business.
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you put a six multiple, which is what they get on their current business hardware software services, on an auto business, i mean you are talking about $3 trillion in incremental valley i mean, it's zany. again, i am not endorsing those numbers. but i want to give some perspective that up 3% is not priced -- the opportunity is not priced in. >> it could be a $500 billion business for apple. >> at 10% shares, of 60% of the auto market. >> gene, thanks, as always great to see you, sir. >> thank you. >> coming up, shares of the packaging company more than tripling, fighting offer inflation pressures supply chain squeezes we will have the ceo peaking just ahead of the
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holidays. and morgan stanley calls batteries the new oil. i thought oil was the new oil. >> i thought data -- no, chips. >> chips are the new oil oil is doing pretty well. >> copper is the new oil. >> oil as oil is doing fine. fastest growing market it is creating new opportunities. we have under the radar names. amazon's fight with visa over fees. the latest twist in the payments space. our trading nation team will break it down and share their top picks. we'll be right back.
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the packaging company pan pack has a unique view of inflation and supply chain pressures. the stock is up more than 200% this year. what pressures, ladies and gentlemen, as it battles rising input transportation and labor costs, also positioned to gauge demand from key customers including amazon, wall marlt, eaton, bmw, mercedes does it see inflation peaking? let's talk to omar the chairman and ceo of ranpak. >> pleasure to be on. >> we talk about how supply chain and inflation are both affecting businesses how have you been dealing with it amidst what i can only imagine is robust demand for your products. >> yeah, so in the past year,
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you know w the pandemic, obviously, there has been a big move towards e-commerce and e-commerce fulfillment that's our largest exposexposure throughout the year we have seen very robust demand we frankly early in the year started investing in safety stock, investing in more automated solutions to help our customers who are experiencing labor shortages. and these investments paid off quite a bit as the year progressed and the demand remained elevated. we were able to fulfill that demand franklythrough your better planning and forecast forth underlying market dynamics. >> let me make sure i understand your business as well as i should there is packaging that you produce. but there is also automation solutions and machines that you make and sell to your customers so that they can package on site am i understanding correctly >> you are understanding it
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perfectly. so we are a leader in protective packaging where we help our customers ship items to your doorstep and we provide the production inside the box and we are 100% sustainable. so all of our solutions are paper and fiber based and we have zero exposure to plastic. then the other part, and growing part of our business is automated what we call ends of line solutions >> right. >> so we will help you pick and place, help you customize the size of the box, erect the box, do the lidding, the labeling, all the way to robotic arms that can load the box in the back of a trailer. and that's a big part of our business is that we are looking at some of the machinery amazing things that are going on here did you encounter any -- as so many businesses have, a chip shortage that impeded your ability to deliver machine product to customers >> we really did not encounter, you know, huge shortages
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our business has already, you know, a meaningful lead time and we have certain manufacturing slots for these equipment. so we have good visibility with our backlog, what our customers want and that enables us to plan ahead to be ready to deliver that equipment on time, install it, and service it so we were fortunate in that sense. what we are seeing now is just a lot of growth and the demand from our customers, all of our customers are talking about labor shortages. they want more equipment, and we are starting to invest more in our business globally to have more facilities, more lines of production, so that we can meet that demand over time. >> omar, can you tell us, even though like you said you are more trying to replace the labor input right now, but given the insight you might have about the global supply chain, are things easing somewhat? we heard gxo say they think that things could be a lot better in the first quarter of next year what would you say >> i would agree with that we have been talking about
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supply chain issues throughout this year. so it's no surprise to retailers, to e-commerce players, you know, industrial and manufacturing guys a lot of companies we talk to have been doing better planning. they are trying to get ahead of the curve. there is so much one can do. but the limitations in the ports, with trade, with raw materials, these are all known issues you know, my own assessment is in the next quarter or two, you are going start seeing some easing we are already seeing that and i would suspect the second half of '22 you know we will see a much better sort of supply chain and logistic dynamic and hopefully, with a robust demand story i'm quite optimistic i think we are going to be addressing some of these bottlenecks and log jams that are out there. >> quick final question, and quick answer, please, in five or ten years, what the packaging going to be made of princecally? it going to be paper is it going to be grass? is it going to be bamboo
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what is going to be different in my experience of packaging, or a greshry bag or how my package gets delivered to me >> we are investing heavily in material science i think solutions in the next decade are going to be more ecofriendly solutions. it will be some of the things you mentioned. we are a leader in investing in grass paper. the consumer and employees of companies out there want ecofriendly and sustainable solutions. i think there is a movement in the industry towards doing that. the key to measure that is going to be products that actually get recycled and the ends of life is not damaging to our planet. >> it is great to get to know you, omar, and your company, because you are behind so many of the things that we probably see, but don't know. and we love -- one of the things i know kelly and i enjoy is meeting folks like you who have interesting businesses, and clearly a very successful one, omar asali. >> of ranpak. investors are paying a lot of attention to automakers like
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tesla and lucid these days but there is a whole ecosystem of stocks that could benefit from e boom. we will lay out some of the under the radar plays next (♪ ♪) a fashion first, (♪ ♪) a science first, (♪ ♪) or a first for us all (♪ ♪) whatever you hope to achieve for your business, cloud first helps you get to value...first (♪ ♪) let there be change accenture trading isn't just a hobby. it's your future. so you don't lose sight of the big picture, even when you're focused on what's happening right now. and thinkorswim trading™ is right there with you. to help you become a smarter investor. with an innovative trading platform full of customizable tools. dedicated trade desk pros and a passionate trader community sharing strategies right on the platform.
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welcome back i'm rahel solomon. here's your cnbc news update at this hour. the justice department is charging two iranians with trying to create confusion by intimidating u.s. voters ahead of last year's presidential election the men are accused of an email campaign that appeared to be coming from a far right group threatening democrats if they didn't vote for donald trump the iranians are not in custody but officials hope the sanction also make it harder for them to travel. in memphis, a memorial to a rapper is growing outside the cookie store where he was shot and killed on wednesday. police are looking for suspects but not saying anything about a possible motive. he was visiting his hometown to do charity work after a recent performance at the university of
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tennessee. a judge said that police informed him they pulled over a man connected to msnbc after he was suspected of following a bus carrying the jury. nbc news says the man is a freelancer who never contacted or attempted to contact the jurors cnbc and msnbc are both part of nbc news. a lot of attention has been focus on the makers of electric vehicles number one being tesla, but there is a universe of stocks making the components for ev cars, and batteries, that you may want to know about pippa stevens is here to look at those names. there are a lot of names and you are going to do this in a minute. >> yes, start the clock. there are a lot of names in order to meet electric vehicle goals, entirely new supply chains need to develop, especially around batteries. morgan stanley call the ev battery the quote new oil and
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saying the market could top $500 billion by 2040. the chain is simplified into five groups. mining, batteries require lithium and copper, nickel, and cobalt alba marro and sqm next up, forming the batteries components, the anode, cathode, electrolight and separator basf and quantum escape. once you have those components, they go into the battery cell and eventually the battery pack. these are names like samsung and panasonic. they are also the semiconductors, including analogue devices and nxp then the car companies, tesla, neo, and x pension, and gm and
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ford are shifting into evs as well finally, battery disposal. one approach is to recycle the core materials life cycle, which went public in august is one name in the space. there is also northways and hydro. some of the stocks to watch. >> you did it in a minute. love the enthusiasm. >> a tour deforce. still ahead on "power lunch," president biden taking aim at big oil as prices at the pump remain high but can the administration really impact energy prices? we will debate that next ♪♪ this flag isn't backwards. it's facing this way because it's moving forward. ♪♪ just like the men and women who wear it on their uniforms and the country it represents. they're all only meant to move one direction which is why we fly it this way on the flanks of the all-new grand wagoneer.
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works. victoria's secret first report going public here. excellent numbers as well. bottom line, the most important thing was the most important thing. margins are okay on kohl's, on maszy's, too, it is about pricing power and not losing margin. that's what's going on why we are getting good records. what's going on with the travel stocks every day this week the airlines are down they have been up and down and up and down. but they are in a down cycle right now, surprising considering we are hearing higher traffic reports some people don't agree. about the sweet green ipo. 1:45 in the afternoon. it went at 52 dollars after pricing at 28. that was above expectations. it is moving down, 5:at $50 off of the high. really good volume if you trade 100% of the ipo volume in a day you are doing pretty good.
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right now we are going to hit 200%. let's get out to rick santelli tracking the action at the bond market which we were talking about at the top of the hour hanging on to the president's choice to lead the fed, rick. >> absolutely. now, whether it comes tomorrow or whether it just comes before christmas, it certainly seems as though the actual announcement date is getting murky. but i will tell you this as i look at the markets -- look at a week to date of tens. many people i talk to, investors and source, really think it is going to be announced sooner rather than later. rates are lower on the day but higher on the week the dollar index, lower on the day, definitely up on the week if you look at the difference between tens and bund. keends of a policy ganl, it is widen, which means our policy is a little more aggressive than ecb. that's powell. i look at it this way, less vol means powell you may say there is not a lot
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of difference between both nominees with regard to monetary policy may be true. but changing chairmans or chair females at the height or this close to the covid emergency doesn't seem to make sense i think the markets would be busier if they thought there was a change coming. kelly, back to you. >> very interesting. rick, thank you very much. we will turn maw to oil prices, which are up slightly today, around $78 a barrel but the key number is the change this year. oil up 62%, leading to a lot of pain at the gas pump that's why president biden is jumping in to try to bring prices down. he has asked the ftc to investigate illegal conduct by oil and gas companies. will that work what about releasing barrels from the spr is there anything the administration can really do to bring prices down? let's ask the president of rapid energy group and a former adviser to george w. bush. bob, good to have you with us. what would you think would lower
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energy prices? >> pick up the phone and call saudi arabia and successfully lobby them to increase production that's the only thing that will work when i was with president bush 20 years ago it is the only effective tool any president has. what president biden is learning is that, power over gasoline prices glows through the barrel of spare production capacity and that's mostly in saudi arabia and all of it is in opec plus it's his own real option. >> what about -- a couple of follow-up points on this number one, what about u.s. production can it come on line, especially under this president and especially after burning investors for over a decade? if it can't come on line, what about the idea of suing opec or something like that -- this idea resurfaced from time to time. >> u.s. production can and will grow, but it takes time. it's a matter of quarters to years to deploy the capital and bring it on. it's not like you go into the
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basement, turn a knob and it comes out. that's what saudi arabia can do. u.s. production surging is not an option. we don't have it as you mentioned, president left side say let's dip into the strategic petroleum reserve, our meghan markle resort the president is giving that a hard look. there is a chance he is going to do that, props in conjunction with china that will drop prices by $2 a couple weeks, maybe a nickel at the pump in it may be only thing he can do, but it won't have much of an effect. >> does president biden have the currency to call mbs over in saudi arabia and say open up the spigots? >> there are two issues. one, the president all but said recently at the town hall he doesn't seem to be on speaking terms with the crown prince. there is that. that's awkward secondly, aside from the politics, the opec folks are looking at the oil market and
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saying we are not going to increase the pace at which we are growing production remember, they are increasing by 400,000 barrels every day. the president wants them to go faster they are looking into next year and seeing surpluses and saying no way are we going to risk a price collapse this year just because the president has a political problem now. for those two reasons he hasn't gotten any traction in saudi arabia, and i doubt he would. >> an interesting point. could you say the white house should take relief in the fact that the biggest oil producer, maybe we are still technically the biggest but the swing producer thinks that prices could all the next year start? >> that is right so does the president's energy advisors, in the administration, so do we i expect well down into the 70s in the second quarter. but this is a right now political problem for the president. he wants solutions at thanksgiving, and christmas. he doesn't want the ride this winter out this is unbearable it would be bad enough to have these high gasoline prices in
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normal times but with inflation broadly at 30-year records, this is intolerable. i don't think he can wait for lower prices in the spring. >> there is not marginal production that could be brought out of the u.s. out of shale or permian, or north dakota >> not quickly, no you could invite president trump back into power and put him in charge of all regulations tomorrow and we couldn't get increased shale production next week or next month it doesn't work that way it takes a long time to deploy that capital and grow that production it is just not a quick thing. >> okay. >> fascinating >> interesting. >> bob, thank you for joining us today. we appreciate it >> you bet. >> bob mcnally. up next, we are pulling out the "power lunch" driver's manual, breaking a car down piece by piece to find the best auto investments for you today, we will open the doors, pop the hood, take look at the interior of a car and tell you where to put your money next
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"power lunch" driver's manual to give you investment ideas in the auto mobile areas. beyond just the automakers them themselves this week we look at the companies that build parts for the cars' interiors, car seats and consoles and engine parts. companies including ford warner, autol ayev, leer, and visteon. collin is here to tell us what he likes and what he does. let's start with drive train parts and other engine parts that leads us to borg warner >> most of their business is levered around the internal combustion engine. i think what is underappreciated about the name and makes it a great opportunity is they have made massive pivots toward evs in the last quarter they just
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announced they have $1.3 billion in business for 2025 already that's pure electric vehicle that will likely go up by the end of this year -- ends of next year, actually i think they have done a phenomenal job at pivoting from internal combustion engine to electric vehicle it is not reflected in the valuation. it is trading at five times eabout it de >> you like a couple of the seating makers as well tell us about them. >> addient is one of the best margin expension stories going forward. they only did a 4.5% margin on a core ebitda last year. that could easily go to 8% almost double over the next three or four years as they kind of just simply catch up to where their peers are. just a great multiple-year story. as you expend those margins you
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typically see good cash flow conversions. i see a great margin story and a cash story evolving over the next years leer is in a stronger position their seating business is 70% of the company. it is their cash cow they have actually been leading all the seating peers in profitability. i think the opportunity there is on the e systems side, their electronics business they have made some smart investments in e power train they also do some wiring which benefits for electrification because their more wiring content in an electric vehicle i think that's the part of the company that doesn't get the full valuation from investors and one of the key drivers why we have an overweight on that stock as well. >> why are you cautious on visteon. >> i look at the growth names versus the value names we are at a point now where the growth premium is at record levels and i see much better
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opportunities on those perceived value names, none of them are delivering quite good growth even though they are not perceived as growth names. vistoon is about allvation it is at 12 times ebitda and the value names are at 5.5 i think there are better plays in the space in electronics we are going to see larger displays. but i think that's already reflected in the price. >> collin, always good the see you. >> appreciate it. >> up next, ubs paying it forward. the firm is bup bullish on the payment stocks, upgrading and visa
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[crowd cheering] i'm not a coach, but i invested in invesco qqq. which gives me access to next-gen statistical analysis software. become an agent of innovation with invesco qqq. welcome back to "power lunch," i'm seema mody big movers to watch this the payment space. square named top pick at ubs, saying the shift to digital payments could generate as much as 38% upside for the stock. visa on watch on reports amazon
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could stop accepting payments from its cards in the u.s. because of higher fees just like it plans to in the uk. with consumer spending still strong according to the commerce department's latest data what is the trade? let's ask the trading nation team matt and nancy i know you have become more cautious on the payment stocks. >> yeah. there's no question that they are really the future of payment. but the one thing that concerns me is really twofold one hand i'm worried about the decline in consumer confidence obviously seems to be based on inflation so people have punt-up demand want to have a good holiday season and gets past that i worry that the consumer confidence and demand might start to dwindle we are seeing that already in the charts you look at square it is broken below the trend line
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so when i look, it made a couple minor lower highs and lower lows i look at the 225 level right now. if it breaks below that level it will be a kiloer low and tell us that they should look to buy it on weakness rather than these levels. >> nancy, square seems to be a largest holding. while we talk about the excitement around payment square has underperformed the s&p this year up 7% what do you with this stock? >> it is the best performer in the payments group so there's that but i think the fundamental story is really sound and when you get these stocks that are sort of turbo charged they need to take a break and i rarely disagree with matt but on this one i think the fundamentals are in place so you have square's new partnership with tiktok. 50% of 1 billion tiktok users
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have bought something from -- after seeing it on tiktok. the processing fee is 2. 9% and transaction fee and exciting square photo app improves purchases 94% buy after they see a picture opposed to 11% no picture. opening another $20 million users and apple pay after pay transaction closing in the first quarter. they have been able to drives per day for her chants and then the square invoices segment has done 12 billion in volume this year and grown two times a year ago level so on our work is stock is just barely out
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of the buy range a low way to go to the sell range and we think it's a great place to be for three to five years and the piece on visa is spot on by the way. >> oh! there you go clearly the ceo jack dorsey has the hands full thank you. for more head to the website or follow us on twitter tyler? >> a shout out from nancy means -- >> means you're doing something right. good stuff thank you. still to come, delivery boot camp u.p.s. prepping the drivers. frank holland at the distribution center with a look. >> u.p.s. is forecasting record profits for this holiday season and hiring 100,000 seasonal workers to help it reach that goal take you inside the school for the drivers to deliver your holiday packages. >> and now the latest from
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trading nation.cnbc.com and a word from our sponsor.
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in the high stakes world of
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holiday package delivery time is money and every second counts. that's why u.p.s. has specific training making sure drivers buckle up and aren't shy about using that horp. frank holland has more on the training techniques. >> reporter: u.p.s. delivers 21 million a day and during the holiday season that gets elevated to handle that increase u.p.s. teaches the drivers to keep every box within 30 inches within the front of the truck. throughout the day they push them forward. >> following the methods helps us deliver reliable service for the customers. at the end of the day it impacts the bottom line. >> reporter: i'm at reeves and treemont it is actually one of ten facilities here in the u.s. where trains 12,000 drivers for the busy season. here in tinytown they use the
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tactics. 1 out of 5 won't make it into a brown uniform. u.p.s. expects the average delivery to be made in 90 seconds. u.p.s. is developing simulators to replace the on road training with senior drivers. as u.p.s. looks to hire 100,000 holiday workers, fedex 90,000 and amazon 125,000 the competition for the best employees is intense and can make all the difference with performance and profit. >> this hands-on training service is a big part of helping to be successful and deliver a successful holiday season. >> reporter: getting the most of the drivers in the trucks is crucial to keep residential delivery profitable and keep the better not bigger strategy last quarter u.p.s. saw the average revenue increase by 12%.
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fedex saw it increase by 10% an important number to watch. >> i want to try i want to see if i can do it in 90 seconds. >> reporter: it is a lot of fun. >> how do they load the trucks so that they -- you said they push the product forward within 30 inches of the front of the truck or whatever it was how do they load the truck so on the route this package is going to come out first and then that one? is it random do you know? >> reporter: no. they number each box they basically set up the truck to keep it convenient and enefficient. it is a key part of the training and another big thing they do is try to avoid left-hand turns so they can line up the door the front door of the house or business get the package right there. >> people wonder why they come back and disappear and then on
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the other side. >> now we know. >> the kids always know. >> reporter: just here to share secrets. >> cool. i never would have thought and chart the route according to the most efficient and have the boxes lined up. >> follow a u.p.s. truck or do a giant truck. >> thank you appreciate it. thank you for watching "power lunch." >> "closing bell" starts right now. >> thank you welcome, everyone, to "closing bell." i'm sara eisen here at the new york stock exchange. a premarket pop given way to a choppy session on wall street. major averages are mixed in this final hour of trade. welcome, my friend >> thank you good to be back here at the nyse i'm brian in for wilfred frost today. here's the big money stories i say driving the action cisco sinking. worst performer in the dow lossing money afte

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