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tv   The Exchange  CNBC  November 23, 2021 1:00pm-2:01pm EST

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calls. i bought those as well >> sirat >> morgan stanley. i think the stock is going to rerate amongst the financials. watch for this, too. >> in the cramer camp. josh brown >> best chart of all of the financials is still jpmorgan chase. i think we see new highs before year-end >> good stuff, everybody thank you. "the exchange" begins now. ♪ thank you very much, scott hi, everybody. here is what is ahead this hour. tapping the reserves the administration announcing it will release barrels from the strategic pe troet yum reserve in an effort to curb rising gasoline prices. will it work and why are oil prices going up today? we will speak with the energy department's deputy secretary and with goldman sack's jeff curry in a moment. plus, mind the gap the action, the story and the trade on gap and nord strum with their results today. swipe, pay and serve how one company is trying to
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solve the labor shortage in the restaurant industry with a touch of a screen. we have all of that coming up. first today's market looking at red over there, dom chu. >> it is, but in one key part of the market it has been the epicenter for a while. the dow is down flat on the day, but we were roughly up 140 points at the highs, down maybe 76 or so at the lows if you look at the overall picture, it has been the focus on the nasdaq. the nasdaq at one point today was down about 1.6% overall on the session. it is down about 1.33% right now. the s&p 500, 4663, the last trade there, down roughly one half of 1% one of the key themes developing in the last few weeks has been a pivot towards growth and away from it. if you look at some of the etfs that track the growth versus value trade, the russell ticker is the white line. the orange line is the russell 1000 value line, iwd
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over the course of the late summer and early fall they were tracking close to each other suddenly you see here the white line started to outperform over the orange one, but in the last couple of weeks the growth trade has come off it is a trend we will want to watch. it is over value so far this year then two retailers are a key focus right now, not just because it is the holiday shopping season, because their earnings reports came out. i will point out best buy, dick's sporting goods came out with better than expected results, topping expectations, raising forecast and everything else however, there's a concern that supply chain issues could hit companies like best buy with regard to products it can sell for the holiday shopping season. it is taking the stock down 13%. dick's sporting goods, resoundingly good earnings report but concerns about whether or not the supply chain issues will hit it in coming months retailers, yes, positive news but investors taking some of the profits. back to you, kelly >> they've had monster runs up
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to now, dom. thanks president biden is set to speak in just under an hour after announcing release of oil from the strategic petroleum reserve. it is the third time in the past 20 years the u.s. scheduled a release. crude oil is moving higher on the news, about 2.5% the biden administration is responding to rising gasoline prices across the country as the national average sits around $3.40 a gallon according to aaa. some high-tax states like california are seeing gas prices pushing $5 a gallon. states along the coast like texas close to the refineries are a little lower and evenlying up towards the $3 mark after the pandemic-induced commodity collapse, spot prices are higher across the board. crude oil and brent up 60% this year while natural gas prices nearly doubled joining me is the deputy secretary of energy, david turk. thank you for joining me >> thank you, kelly. it is a pleasure to be with you. >> where to begin? you know, i understand the
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frustration about high gasoline prices is there anything more the administrationcan do because this release, judging by today's price action, is already priced in. in other words it doesn't seem gasoline prices will fall much from here. >> well, i think you have to consider the fact, just as you were saying, kelly, in the intro piece that the markets have already reacted in anticipation of us and, of course, other countries as well in parallel fashion releasing stocks so that's a significant data point here what we've now got is tools, both in exchange and a sale, to use over the coming months in order to do what we can from the u.s. side to help protect consumers. that is really what the president is really focused on here, is lowering that gasoline at the pump. >> it is nice to see the u.s. working with other nations to coordinate this release. some are jokingly calling it the anti-opec. could it be the beginning of an effort to work more closely
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going forward on oil supplies, especially if it can help lower the price? >> well, there's a lot of shared interests here, of course, right. high oil prices, high gas at the pump prices impacts not only consumers here in the u.s., it impacts consumers in the countries that we're working with on this so there's certainly some shared interests along these lines. what we've seen is an incredibly dynamic oil market coming out of covid. prices were really low and even negative, if you remember, there for a little while now prices are high. right now we have got demand increasing and supply not keeping up with it so we're trying to do what we can, including with this release, but not solely this release as a tool in the tool belt to be helpful in that context. >> we are about to speak with, you know, some analysts on wall street, but a lot of them think demand will outstrip supply for sometime and could push prices quite considerably higher from here what other tools are under consideration? is banning exports one of them >> well, let me get into at
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least what our independent analysts at our energy information agency look at going into 2022. what they see is demand catching -- supply catching up to demand in 2022, to the point where they forecasted that the oil price would be down to about $62 per barrel by the end of 2022 >> sure. >> so a year from now. >> yeah. >> what we have is a backward-dated market. that's why the tool we have chosen, one of the two tools, this exchange allows us to shave off the top part of that price curve, protecting u.s. consumers, protecting consumers around the world because there's the backward-dated market. that's why we chose the tool that we did on the exchange in particular >> the real question is how high are prices going to spike in the next couple of months before they fall back and you are right, absolutely people are more sanguine about prices going lower into next year, but we're in the high 70s now. we could hit 80, 90, 100, who knows, right it depends on so many different
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factors including what is going on with global natural gas prices even as we are looking to this small effort to try to affect gasoline prices, consumers are about to get sticker shock on heating bills this winter. you guys are up against the challenge. what are you going to do about that and those who say it is all because the biden administration is unfriendly to fossil fuel >> so let's first look at oil. oil and natural gas markets are interrelated to a certain extent by quite distinct as well. on the oil side we were at $85 per barrel and even more, and we've had a significant reduction, 10%, coming down on the expectation of what we're doing right now. so i would say that what we have announced here has had an impact it has just had an impact as the news has been leaked over the past several weeks, not only from the u.s. context but what other countries are doing as well that is a positive sign, that is good for consumers that will get to the retail gasoline side of things.
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there is a delay between oil prices and retail gasoline prices, the price consumers pay at the pump. natural gas is a different market it is not wholly globally interconnected market. while prices are high in the u.s. and we're doing everything we can to especially help consumers on the heating side of things as we enter winter, and i can get into that with our assistance and other things. >> right >> our prices are certainly much, much lower relative to what the price of natural gas is in europe and in asia as well. >> two more questions before i let you go, and i appreciate all of your time today one is that because of all of the supply chain challenges, a lot of people are wondering if it actually is increasing our vul vulnerability to release barrels from the reserve we are literally aware of the supply disruptions we can experience at the gas pump would it not be safer to leave the barrels in reserve in case we needed them in a crisis >> the short answer is no. we have over 600 million barrels in our strategic petroleum
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reserve. it is the largest one in the world. we are talking about a 50 million barrel release over the next several months. the majority of that, 32 million barrels is the exchange where we actually shave off the top part of that price curve, protecting consumers, but the exchange works so that the companies that take this oil in the near term and put it into the market actually replenish not only the same amount of oil, there's actually a premium so they put more into the reserve, not only in 2022 but 2023 and 2024 as well. so overall we are actually increasing the amount of oil in our strategic petroleum reserves using this particular exchange mechanism that really is designed for the current market we're in right now >> my final question goes to the energy transition, which you are very much an expert and spent your career working on the u.s. never did a carbon tax or cap in trade scheme where we
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could use the proceeds to compensate lower income consumers for the higher price of oil and natural gas that is resulting from all of that what happens now i mean there's no prospect of that in the near term. it doesn't cover especially the middle class who is affected by the higher prices. would you acknowledge that this is a consequence of the energy transition or do you think it is a coincidence? >> i think it is exactly the opposite i think we need to move faster on the energy transition in a diverse way. if we had more clean hydrogen in the system right now, if we had more energy storage, ifwe had more offshore wind we would be in a much, much better place, not only in the u.s. but globally so we wouldn't be beholden to one or two commodities we would have a diverse energy supply so we actually need to have more investments in the clean energy side, and that's what we're doing in the bipartisan infrastructure bill that's been passed and then also the reconciliation, the companion piece, the build back better
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legislation. >> is britain's economy not a cautionary tale of that? they have a higher proportion of wind than we do and it resulted in a much higher natural gas price and bankruptcy at their major providers. >> again, we don't -- can't put all of our eggs in one basket. we have to have offshore wind, we have to have storage, we have to have clean hydrogen, we have to have solar, we have to have geothermal if we have diverse supplies and manage the transition and move aggressively with those kind of transitions we will be better off. >> david turk, thank you for your time today and being on the program. we appreciate it >> thank you, kelly. good to be with you. >> david turk, the deputy secretary of energy. we have a news alert on the cybersecurity front. let's bring in eamon jacksjabbers with the details hi. >> reporter: kelly, apple announced it filed a lawsuit against nso group, which is an israeli-based cybersecurity company branded by critics as
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spy wear because they manufacture the pegasus spy wear which allows customers of nso group to get access to apple's iphone apple filing this lawsuit and saying that nso group creates sophisticated state-sponsored technology that allows its spy wear to surveilled its victims apple saying its devices are largely secure, but this software sold by nso group allows clients such as nation states around the world to get access to an iphone's microphone, camera, other data on the iphone. apple is filing a lawsuit here this puts pressure on the israeli-based nso group, which has already come underscrutiny by the united states and has been sanctioned just within the past three weeks by the united states as well so we will look to nso group for a comment from them, and we will bring you more information on the suit as soon as we have it >> a huge deal, eamon, not least because it basically acknowledges their technology works. >> reporter: yeah, absolutely. apple here is saying their press
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release about this is full of caveats saying apple makes the most secure phones on the market, but they also are acknowledging that this pegasus spy wear does work you can get into an iphone using this technology without the user clicking on a malicious link some of the software they sell allows them to get access if they know your phone number. apple says here that they are seeking a permanent injunction to ban nso group from using any apple software services or devices. so this is going to be an interesting business-on-business fight and an interesting diplomatic fight between the united states and the israeli governments over the appropriate role of nso group and the spy ware makers in general >> absolutely. >> who has the right to sell these exploits and who has the right to take advantage of vulnerabilities in other company's software >> apple share is down a little less than 1% thank you for bringing that to us let's turn back to energy. what are the implications of this spr release for the energy market and will it help prices come down or sort of cut off the
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top of that curve the deputy seth was talking about joining me now with more is jeff curry, the head of global commodities research at goldman sachss great to have you here today. >> thanks for having me. >> where do you think the price of oil goes now? >> this in no way derails our view for higher oil prices you know, first, it is not a lot of oil the u.s. releases 50 million barrels, a half day of consumption. the deficits running anywhere week by week, 2 million to 4 million barrels a day. they're persistent, not transitory, one-off event. by the way, a backward dated forward curve is very bullish, not bearish. it doesn't mean prices are going down a backward-dated forward curve tells you that you are out of the stuff today, you don't care about tomorrow you will pay a bringing premium to have oxygen today because you won't live for tomorrow. these are not bearish. they're very bullish it tells you that the market is
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in a significant deficit in the 50, add in another 10 or 20 the rest of the world will do, 70 million barrels at most does not solve the persistent long-term problem facing the market i think the third point to keep in mind is the opec reaction function their goal is to draw down inventories, to normalize them they're likely to adjust their production hike to this action so the ultimate impact is going to be very minuscule at best more importantly, what this does is reduces prices that actually the price signal is needed to solve the long-term problem which is an under investment problem. we like to call it the revenge of the old economy bad returns in the sector saw capital redirected to the new economy. the only thing that will solve that is higher prices. >> so he basically says they've gotten the oil price down from around 85 to 78 because of the coordinated talk i think plenty of people in the market would say, okay, maybe that's true, but do you think
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basically it could spike from here >> you are back to 81 or 82. >> yeah. >> and you haven't soclved the long-term deficits facing the market if you want to solve the problem, get u.s. rig counts up to 500 or higher that's going to solve the problem. tapping a few barrels out of storage is not >> as an analyst last week suggested, the only way it could be truly solved and structurally lower prices would be to cut a deal with the saudis where they would agree to bring more supply on to the market i know it is more of a geopolitical issue than anything, but what would you think about that >> you've got to invest. you know, saudi is investing uae has invested a lot only two countries in the world today that can produce more than what they were producing in january 2020, and that's uae and saudi because of the investment. but i think the key point here is not just one group that needs to invest, you know, being saudi arabia it needs to be the industry. the only thing -- and what we
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know is we are at $85 a barrel and you didn't see a huge surge in cap x nor did you see a big run-up in drilling or anything of that tonignature it is a problem across the commodity spectrum that's why we're arguing we're in the first innings of the commodity super cycle. >> is it fair to say that the biden administration or the trump administration play a big role that played in shale and then destroyed it and had terrible returns in over supply and paid too high prices if it is the industry's fault, should they be the one -- you know, the target of all of the ire? again, this is just how commodities markets work so i don't know how we solve that >> no, the investors let this happen you know, investors call me up and go, hey, what price is going to cause these companies to start drilling i go to the investors, you're the only ones who know that because your the ones to give them the money to open up the purse strings to get them to
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drill. scott sheffield, a pioneer, said oil can go to $100 a barrel. that's not getting me to drill what will get me to drill is my stock price needs to double. that's what needs to happen. you need capital going in here in a way that is much more cautious and much more focused on return to shareholder value than what it was historically. >> that could take a year or two and we don't -- we have esg at the same time. i mean you are talking about a couple of years before we -- if we even see a supply response in the u.s. >> i like to go back to the 2000 super cycle. prices really started to accelerate in 2002 and 2003. we didn't see the surge in energy cap x until 2006, three years later. in metals it didn't occur until '08. by the way, what is interesting about it, it was the decline in prices that got people comfortable about where the equilibrium was in '06 and for metals in '08 that created that surge in investment. right now you go to a contractor, because all raw material prices are going up, the prices they are going to give you for a turn-key contract
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are going to discourage any c sweep. >> so interesting. jeff, thanks for joining us on today especially we appreciate it >> great thanks for having me >> jeff currie from goldman sachs. still ahead, tech stocks lead the decline today as rising rates take center stage. where are the opportunities for investors and what does the threat of higher inflation and higher taxes mean for the markets? we will dive in that next. plus, a pair of retailers reporting after the bell we have the action, the story and trade for gap and norstrom headed into the holidays we are back in a moment. this is "the exchange" on cnbc
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♪ welcome back the prospect of higher rates is putting pressure on stocks, especially tech names. the nasdaq is on track for the first back-to-back losses of 1% or more since march. my next guest says it is inevitable rates will rise but won't go up as much as some think. he is the founder and ceo of destination wealth management. michael, welcome to you. a quick thought on rates and the fed, especially under the reappointment of powell and now with brainard as vice chair? >> well, certainly, obviously the market likes that move but my point here, kelly, is that i think people are very, very concerned about inflation and inflation is going to be higher but inflation from where it was
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to where i think the equilibrium will be sometime next year is, in my view, going to be lower than many people think i think people are going to get the spending out of their system a bit. supply chains are going to ease. strategic reserves will maybe mute, maybe not completely solve the energy problem i think powell is going to be very cautious in terms of raising rates, which is why we don't see the ten-year treasury going much above 2% over the course of the next six months. >> it doesn't necessarily give you a strong view on that aspect of investing i see the names that you like here, and they seem to be, you know, maybe more secular growth stories or names with an interesting entry point like disney right now is that right? >> yeah. well, disney is a special situation. i mean disney plus obviously slowed, but i want to use disney plus as a perfect example. think about what the demand was for disney plus. just use it as a proxy for the overall economy. tremendous demand. people are staying at home they want to spend money they want to watch things, and
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now it is starting to slow that's what i think is going to happen coming out into next year so i think it really is a proxy for what is going to happen to the overall economy. disney itself i think is really suffering because of concerns about streaming, but, you know, we will see what happens with the new show that goes out you will see a bump just in viewers because of that. so i think that these kind of names, even taiwan semiconductor, i think they will be able to take advantage of what the environment looks like going forward. >> why mastercard? you know, i could go real deep right now on the payments and the issues there, especially maybe for visa, but is there an obvious reason that one jumps out to you >> yeah. people should really take a look on about what you have written about visa because you went pretty deep on your thoughts about visa. i think mastercard is a position stock that i think is going to be able to pivot in this
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so-called new economy or really remote financial services. you know, they're a network, they're a duoply, i think they will be fine i think they have been nimble in how they've been handling things and they will be able to adapt to a quicker orld. >> that seems to be the view you see it pomgpping up a littl more than visa these days. what about google, return of advertising travel and the rest of the but it is up 64% year-to-date >> it is up 64% year-to-date, but i think it is still a company that is very, very well position they're not in the kind of problems meta has right now, at least on a regulatory basis. i think it is a company that is really going to benefit from just expanding economic growth as more of the economy grows, the more i think google in a lot of ways is going to benefit. even though they're really considered tech stock, in some ways it is almost a cyclical stock as well, particularly because of the advertising component. as the economy recovers i think
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google will benefit from that. >> quick question on the way out here tell me how taxes are affecting strategy and planning right now when we don't know what is going to happen with the build back better act >> well, here is the whole thing. if you are an investor out there, you have to ask yourself are taxes going up or down if you think they're going up next year, then maybe it is time to take some capital gains for those of you in the planning front that are thinking about maybe roth conversions, this has never been a better time to consider roth conversions, which are a way to really shelter more money later on down the road where you don't have to take minimum distributions. i think you can reposition portfolios, taking capital gains offset with losses it is not the time to sit on your hands if you have a taxable account. there's action you can take now even if we don't knowwhat the final looks like, kelly. >> michael, thank you for joining me good to see you. michael yoshikami with destination wealth management. coming up, a look at
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♪ welcome back to "the exchange." quick check on markets the dow is back in positive territory by 42 points still 100 points off the highs s&p is down 19 now nasdaq is down 222 let's check on the global x cloud computing etf, ticker clou it is on pace for the fifth straight day of losses, down 10% in november for the worst month since inception two and a half years ago. here are the biggest names leading the declines zoom video down nearly 30% this month. fastly, drop box, alibaba and pay com all shedding around 20%.
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there's still a ways to go to rahel solomon for a cnbc news update hi, rahel. >> hi, kelly here is what is happening at this hour. the justice department asked the federal court for an emergency ruling that would allow covid vaccine mandates to take effect. nearly 30 lawsuits have been filed against the workplace mandates issued by the biden administration tips for travelers from flight attendants. what to do when fellow travelers get unruly tonight at 7:00 eastern. british politicians coming together for a mass to mourn the death of slain lawmaker david amess. pope francis sent a message to combat good with evil, praising him for years of progress. another benefit of drinking coffee a new study shows a regular cup of coffee can lower the risk of strokes and dementia
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researchers found a similar risk reduction among tea drinkers after six companies of coffee is when the benefits go downhill. keep it under six. >> then you have a stroke. rahel, thank you very much up next, everybody, shares of gap down nearly 39% from the highs, but banana republic is expected to post strong comps this quarter shares of nordstrom fell 18% on the last earnings release despite a revenue beat and strong guidance. do the shorts have the right idea or not? all of the key numbers to watch and how to position ahead of the results, next. [energetic music throughout] what's strong with me? i know when i'm ready to run. what's strong with me?
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well come back. it is time for earnings exchange where we give you the action, story and trade. we will begin with gab stores. shared pulled back from the 2020 highs, down 20% over the past three months with spending on the rise into the holidays some say gap could
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benefit from the strong portfolio. will the holidays help them out? joining us to break down the story is courtney reagan joined by gina sanchez, here to give us trades today welcome to both. courtney, banana republic, haven't heard about them in a while. >> kelly, you know, i'm not so sure about that one. maybe there's a lot of home there. we will see if it is real and if it pays off. the head of product design actually left just about nine months into the job, so a little bit of concern there i think for the product direction. old navy has really been the shining star of the portfolio, although athleta has grown in response as gap has started to reveal some financial information about that athleisure player. i think there's a lot of growth still to be had there. i would be curious to see expectations there going forward, if they would give us some beyond this fourth quarter. i think that will be important also, i think at old navy they are moving into some plus size clothing, which is a significant opportunity as long as the
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consumer does accept the fashion. hopefully, it won't be a big inventory miss with them, they're stuck with a lot leftover on their hands. that could be a big opportunity too for old navy >> interesting gina, what do you think has been going on with the stock here and what is the trade? >> well, for the stock it is very cheap here. i think a lot of it has been they're late to the game in a lot of sense, but, you know, they have seen their ecommerce grow dramatically the last earnings report and they're leading and communicating a lot of growth in that digital segment, which is a good direction for the stock given how cheap it is. that's interesting the athleisure story doesn't seem to be going away. i figure put away the yoga pants and go back to work, but it seems that it is persevering and the sales show that. i think movement to the plus size is probably a good idea >> but just to make sure i'm following, you are saying you would not be a buyer here, is that right
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>> you know, it is cheap, but they still -- i agree with courtney they still have to show a lot more growth. they've been lagging the entire retail sector and, you know, a lot of that is that they're still sort of getting their digital game together. it is starting to come together, so it is starting to look interesting, but i think you still have to see more to go >> shares are down 2.5% today and we'll see how they react tonight after results. in the meantime turn to nordstrom. the stock is down 3%, but also 1 15% in the past three months the last release, they underwhelmed the street relative to macy's and kohl's and to the 2019 levels. courtney, can nordstrom get back on track here? we have seen a similar pattern l look how strong macy's and kohl's were this quarter, maybe setting a high bar again >> yes, exactly. this one is tougher to figure out. we have seen a bit of a resurgence for some department
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stores, both in ecommerce department data as well as mastercard data for october sales and expectations for mastercard here for the big week to come, really expecting department stores to do well when we heard from macy's, they talked about the strength of their bloomingdale's division and the comparable sales stronger for the higher-end brands and products, which important tend -- portend for nordstrom. but nordstrom has sulged of late so continuing to grow that could be a challenge, but, of course, they're trying to do what everyone is doing and use their stores and their online together with their closer-to-use strategy to be able to get you products faster if you order online, perhaps having it fulfilled from a store or from one of the service locations so this one is a little tougher to figure out. it seems the trend should be going in their favor, but the
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stock really hasn't reacted as if it is >> why do you think it is, gina? it is basically flat on the year >> yes, it is flat on the year when the rest of the market is up -- retail market is up -- and if you look at the comparable, you know, as the sort of comparable stores, i agree with courtney that the trend should be benefitting them but i think the bigger challenge is that that sort of dressier, formal look, which is the type of inventory that nordstrom tends to hold, there's less demand for it. so brand recognition, the ecommerce, all of those stories will play into it. i think they just aren't competing well over time i think the demand should continue to grow as we sort of get out of our yoga pants, get back into dressier clothing because that is the segment that they're really catering to. >> yeah. >> but they're competing against bloomingdale's >> i was thinking you are emblematic of it you told us ab few weeks ago you
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are about to get back on the road, dressed up, hitting the meetings >> i am. >> getting back to pre-pandemic ways of life maybe gina, thank so much. gina sanchez courtney reagan, always appreciate it. still ahead, shares of the recent ipo are up 7% since their debut last month one firm's coverage initiation called it a must-own in the energy space the name and the analyst behind that call, next.
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♪ welcome back shares of fluent energy which provides lithium battery energy storage is rising as a few firms initiate coverage on a bullish note evercore gave it outperform, calling it a must-own in the energy storage sector. shares are up about 4% since the october 28th debut joining me is james west, an analyst at evercore isi. great to have you. >> thanks for having me.
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>> there's more and more battery names to tried, is that right? how many roughly would you say exist and are there more coming? >> there's definitely more coming and there's half a dozen to a dozen that exist today but not many energy storage names fluence is different in that they storage energy. >> is it the same as giant batteries or walk me through this >> it is similar they're battery agnostics. they brought the infrastructure, the software and hardware and they take batteries and power storage in the batteries and release it back to the grid. >> are these utility levels? are they the ones working behind the scenes to make sure when the sun shines and the wind blows it can be stored somewhere to use when it is not happening >> that's right. they do work with utility scale but do smaller scale projects as well on the utility side that's the key because they're the keystone and the three pillars of the energy transition. they're the ones allowing grid
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resiliency >> yes, and they're the ones that would probably solve the price spikes we are solving right now. my understanding is that it is really hard to store a lot of power for a long period of time without it being extremely expensive. >> it is the costs are coming down for batteries. right now lithium ion battery can store power about four hours. we are coming up with newer techniques in the battery side expect 10 to 12 hours in the next couple of years >> the stock, how attractive is it to you and what would you advise investors who want exposure to the space but everyone wants to know what the next tesla is going to be? >> sure. actually, tesla is one of their main competitors here. we think fluence has a ton upside here from, it is our favorite in the battery and battery storm right now. >> how can they compete with tesla in the long run? >> i think long run there still will be a force because nary backed by aes and siemens. they have strong backers and strong demand, and most customers say they have the best
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product on the market. >> your bull case is $62 a share. what would be the key catalyst to anticipate here >> i think if they got to profitability faster than expected we would go from a revenue gross story to a profitable growth story faster around it would drive valuation higher >> you are a great tv guest. very to the point. allowed me to get so many questions in hope to have you back. thank you for joining me james west joining me from evercore isi still ahead, the restaurant industry struggles to find workers aren't gettingbetter, leaving establishments scrambling to serve customers. we will talk next to the ceo of a company helping to get automation tech into struggling businesses for free.
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♪ welcome back according to the national restaurant association, the industry is still almost a million workers shy of pre-pandemic levels and about 80% of restaurant operators say they're understaffed it for some a partial solution could come from order tech its tech is found in more than 1,000 locations including nfl
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stadiums as well as chains like duck doughnuts, blew bottle coffee and soon burgerfi sam, it is great to have you here welcome. >> thank you for having me on the show today >> it seems in many ways it is meant for the fast food industry versus the sit-down space, is that right >> yes it is fast casual, qsr, the primary solutions. >> kiosks, is that mostly what -- is that what is behind you there? >> yes, we -- right behind me we have a couple of our kiosks. we are a leading provider of self-ordering technology that is, you know, a complete ecosystem addressing everything from order channel to distribution of goods. you know, people ask how are orders submitted, you know, kiosks right behind me, mobile ordering, online order or traditional point of sale systems. grubber builds and powers all of these. what happens once the order is
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placed is we customize the operational flow you see behind me us sending the order into the restaurant kitchen display systems as well as on the retail side to retail inventory systems. >> so is being prepared. you're just helping people kind of do it behind the scenes and put it through these channels. >> we don't actually use vending machines, but what we have off screen here is our food lockers so once the food is prepared and ready, you can distribute that food through a traditional pick up or food locker scystem. so that would eliminate the contact that the restaurant cashier or the consumer would have with one another. >> how big do you think this can scale and should we, we've all been at a stadium and waited in long for a long, long, long, long, long time for some food. so this is not it seems just a
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man person play. it's kind of using technology to deliver food more quickly, maybe also through the use of a mobile phone where it can alert me when it's ready and that kind of thing. >> first, to address the question of how large this is. you know, our core belief is really the cashier is obsolete no different than the teller at the bank was replaced by atms and online ordering or the ticketing agent at the airport was replaced by a qr code on your smartphone or you know, a bank of 40 kiosks that have no wait that same thing is going to happen in the restaurant industry as well as a lot of other industries and it's going to be a combination of kiosk, mobile ordering, and online ordering, whether it's through the traditional company website or a third party service >> i can imagine chick-fil-a and others doing this. do they need you to do it or can they build it out themselves
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i'm sure there are others competing to do the same thing >> sure, if you're mcdonald's, who implemented this technology, they spent about a billion dollars. the problem with that, everybody reads the headline great, this technology works does a number of things. solves the labor issues, increases revenue, improves the customer experience, but we don't have a billion dollars we don't even have a million dollars. so what's great by our partnership with samsung is that we've been able to demock ratize the cost of kiosks these go for less than $3,000 and the software, you don't have to spend 10 million or 100 million on it. you can have it for less than $200 a month >> tell me why you're giving some away. i know why people give hardware away it's to get you addicted >> well, you know, we're seeing what everybody else is seeing. restaurants and retailers are struggling to keep their doors
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open and because of the challenges created by the labor shortage, rapidly increasing wages and covid, as a result of the success out of clients have experienced and we've seen it firsthand how impactful our solution is. we want to create awareness that this technology is both accessible and affordable. so for the holiday season, we want to give back. >> we appreciate you joining us, sam, to talk about it and help people understand what it is and all the thought that goes into it and how big it could grow thanks for joining me today. >> thank you, again. >> the ceo of grumer coming up, 80,000. that's how many truckers the u.s. needs to get back on the road to the right supply chain the hiring headwinds facing the industry and take a look at shares of dollar tree surging nearly 9% today. in their earnings this morning, the ceo said they had begun rolling out a higher price
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point, clocking in a buck 25 and customers are still buying he said the hike is not due to inflation. he said they began testing this summer take it for what you will. back in a moment
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it's going to be a long road to recovery for the trucking industry we have a look at what's keeping truckers out of the workforce and how that's affecting the economy. frank? >> one of those issues is pay. they get paid by the mile, not the hour, but they're limited in the hours they can drive and according to new data, truckers lose about 40% of the hours they're allowed to drive due to waiting for loads, stuck in traffic or bad weather that's just one factor creating the record trucker shortage that now stands at 80,000. companies calling that a headwind or saying they're increasing driver pay. but pay, that's really just one
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factor here. quality of life also very important here according to the students at the trucking school. here, they get paid by the hour and not the mile they also drive local routes allowing them to go home every night. >> getting paid by the mile would have been a little bit of an issue for me. that work life balance if you're getting paid by the mile, you're gone you know, for a large stretch of time. that really wasn't my thing. >> the independent trucker association also pushing back on government data that the average trucker makes about $47,000 a year they say that's based on a 40-hour week and doesn't account for other expenses >> too many instances, you're away from home three to four weeks at a time and of course out of that 48 grand is likely going to come $10,000 or more of just living expenses on the road and you're working 80-hour
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weeks. >> and the american trucking association says we need one more more truckers over the next decade just to keep the u.s. supply chain moving at its ku current level. >> sounds like a recipe for much higher wages and also, what about this recent tightening of drug testing that seems to be affecting the worker supply as well >> yeah, absolutely. speaks back to the quality of life or work life balance. if you look at the data on the number of drivers who have been suspended for drug alcohol violations, it's about 75,000. 56% of the violations are for cannabis >> thank you very much thank you everybody for tuning in. that does it for the exchange, but don't go anywhere. we could be hearing from the president momentarily. "power lunch" begins right now
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>> thanks. president biden is to speak on inflation and the economy momentarily. the white house announcing today that it will release 50 million barrels of crude oil from its strategic reserves the move done in coordination with the world's biggest oil consuming countries. an unprecedented step to try to stem some of those very sky high energy prices. now, those prices are just one piece of the overall inflation puzzle, which is a defining issue for the market, the economy, the fed and of course the american consumer. here's why according to the latest consumer price index report, fuel oil prices have increased 60% from the same time last year. it's now at its highest level since september of 2014. now energy prices overall have increased roughly 30% year-over-year that's the largest 12-month increase since the period ending in september of 2005 bu


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