Skip to main content

tv   Power Lunch  CNBC  July 6, 2022 2:00pm-3:00pm EDT

2:00 pm
minutes, the major averages just about flat and we'll see where we can go from here. that does it for the exchange. "power lunch" starts right now ♪ ♪ and welcome to "power lunch. i'm dom chu in for tyler matheson with courtney reagan this afternoon we are moments away from the fed's interest rate meeting. you can see there just about hovering near fractionally down territory. we'll see what happens let's get right out to ylan mui with the latest there. ylan >> the minutes of the latest fed meeting show that officials agreed that another rate hike of 50 to 75 basis points would likely be appropriate at its meeting later this month officials also acknowledge that there could be an even more restrictive stance that could be appropriate if inflation remains high the minutes show that fed
2:01 pm
officials will worry about inflation becoming entrenched and that was debated several times in this document many participants view that as a significant risk officials believe that the fed's cred usuality can shift market expectations toward a policy stance and they view raising rates as the legislative mandate. fed officials repeatedly highlighted the disparate impact that inflation is having on low and moderate income households and officials also noted that there could be some clouds on the horizon, as well some pointed out that the pressure for additional wage increases appears to be receding and there were anecdotal reports of consumer sales starting to slow and businesses delaying investments because of rising costs. now officials said that low and moderate-income households are spending more of their budgets on food, energy, housing and all sectors that have been strongly impacted by those rising prices, but they also stress that
2:02 pm
persistently high inflation could stand in the way of achieving their maximum employment mandate and higher rates could result in slower economic growth and dampen the labor market and that is yet fed removed language in the statement that indicated that it would return 2% or deliver a strong job market. so, guys, that's just a sign that fed officials are acknowledging that the soft landing could be very difficult to pull off. >> ylan, please stay right there. let's get reaction analysis from our panel of market experts. we have ethan harris, b of a global economist and emily rowland is chief strategist at john hancock management. thank you for joining us ethan, maybe we'll start with you, first of all. we kind of understood the backdrop with the 0.75% hike went into effect for june. is there anything here that suggests that the fed is still
2:03 pm
trying to play catch-up right now or do you feel like they have a good handle on just the kind of macro picture that we are all dealing with right now >> well, i think this is a watershed meeting and this is where the fed does the big capitulation they say, you know what? we're behind the curve and we can't play around with 25-basis-point cuts and do a hike, we have to move in chunky 50 or 75 basis point moves i think it was the right thing for the fed to do. in the last year they were slipping behind the curve and it puts them on track and it's a sensible approach to a very serious inflation problem. you can't cure inflation without risking the recession. >> so that recession, that possibility is coming much more into the discussion, emily, certainly over the last maybe two to three months' worth of time in large part because of things arguably outside of the
2:04 pm
fed's control, wars in ukraine and russia and everything else. >> does it feel like the markets have been adequately repaired for this this idea of a rate hike has been going for full steam months now and perhaps in subsequent times that same level of rate hike as well that had markets a little bit scared and are they as scared now in your opinion than they were three or six months ago >> it depends on the market that you're talking about so as the head of the technical recession increases here and the negative 1.5% gdp growth and the atlanta fed has the second quarter tracking it and negative 2%, but we have to think about where is it priced in? the equity market, think, has f fallen into bear market territory and the typical bear market sees a decline of 34% and we could be two-thirds of the way there in terms of equity prices and when you look at the bond market it's simply not
2:05 pm
pricing in a global economic slowdown or a recession. typically what happens in an economic slowdown is that bond yields actually come down and what we've seen over the course of this year has been this relentless backup in bond yields across the curve so we're looking opportunistically right now at treasury yields close to 3%. the aggregate bond is 3.7% and we haven't been able to say that since 2010 and we think this is an attractive opportunity to add to quality within fixed income positions and frankly to pick up quality on the equity side in areas that have been thrown out with the bathwater >> ylan, i'm wondering if there's any indication in the minutes about lou the fed is feeling about balancing their two items on the dual mandate. you mentioned that they removed the language about hitting the 2% inflation goal with full employment it does seem as if the employment picture has not markedly deteriorated while we
2:06 pm
are facing stubbornly high inflation. so how is the fed managing through that inflation while keeping employment levels high i mean, can we have a recession with high employment rates >> yeah. i think that is giving the fed a little bit of breathing room here and the confidence that it can continue to raise rights for the time being they realize the impact is risky here broadly, what stood out to me in the minutes is the fed repeatedly pointed to china, ukraine and russia as other factors that are impacting inflation and there were minutes where raising rates is just one tool to combat inflation and there are other tools that can happen including seeing supply check bottlenecks change and seeing that pandemic fiscal stimulus starting to wear off, but in the minutes, the fed said
2:07 pm
that the timing and the magnitude of those effects are uncertain. what they can control is raising rates and right now the argument that the fed is making is to sustain the labor market over the long run is by reining in inflation and addressing it with the tool they have which is higher rates >> so the market is maybe cooperating and this is a chicken and egg discussion you have the idea that the fed supports money supply. there is more talk of a recession and the economic date at and surveys, can we be talking ourselves bo a resessions and we have coppers prices and everything else commodity related or is this a scenario where this is just a blip and we get back toward that inflationary pressure that we've seen over the course of the next three to five months >> no, where it could have kull
2:08 pm
minetaed into a resessions no question in that kofrn con fid epts past the graveyard when they say oergs, we'll have a strong labor market and we'll get inflation back to target i'm sorry, but that's not true they have to raise the unemployment rate. they don't have to raise it to 10% or something, so you will still have an okay labor market, but it has to be much weaker than it is right now, and they can't blame it all on ukraine or supply chains. the fed allowed a record tight labor market to come in and they waited too long and now they're coming to play catch-up. so you blame inflation on a lot of different groups here the fed, the biden administration and too much fiscal stimulus and then all of these supply chain issues and they all are part of it and they all have to be a part of the solution. >> emily, we'll give the last
2:09 pm
word to you here there's been a big discussion with regard to this recessionary narrative. what does better is it large caps or large caps which one has more exposure. at the same time we haven't even talked about the strength of the dollar and how it weighs on multinational profits. what's the best way to position from a stock perspective in your mind >> for all it's about qualit and defense and staying away from unprofitable growth companies, higher typical, my beta word is an underweight which is freight balance sheet and good return on equity and lot of earnings, we are going to find that in the u.s. frankly, in the more traditional parts of the technology sector. so again, not those companies that are overly relying on the capital markets that are able to grow the higher quality tech companies and we like areas like health care and we want to get defensive here we look to parts of the market like utilities that are focused
2:10 pm
on the things that consumers need versus the things that we want and that is a lot based on the discussion that we just had about how consumers are feeling the pinch right now. the utilities, health care and traditional technology stocks in the u.s. >> going on defense. >> emily rowlands and ethan and our own ylan mui, thank you. as investors debate over inflation, we are seeing deflation in retail. promotions are growing and costs are starting to come down and that's making it tough tore invest in the sector let's welcome in simeon siegel from capital markets give us some examples, where are you seeing deflation in retail when so many of these retailers talked about their higher freight costs. target put a big number value on it to just drive that point home of how much more it's costing them to run their business
2:11 pm
you're seeing this reverse >> yeah. so great to see you. great to be here. >> isn't it interesting when you use macro terms they scare you and microterms seem to make more common sense when there was an incredible amount of demand during the pandemic and there were no products or promotions and promotions are deflationary. so you have this back and forth where the logical course of events are retailers over inventory because they tried chasing levels of demand and certain ones did better than others and now we're seeing the other side of that and to your point the prior guest just made and so the faster your replenishment and i.e., the box of serial or gas the more you have inflationary element because people are chasing the level of demand. a lot of people bought a lot of sneakers last year the further that discretionary is, the more we'll see promotions come back >> are some of these promotions
2:12 pm
are unplanned? victoria's secret often have the semiannual sales and that's about the timeyear seeing right now. are you talking about the level of promotion or the fact that they exist at all. >> the semiannual sale victoria's secret tracks now versus last year and they'vaa added more than last year. the question is are they more than 2019. so the same thing happens with deflation. i think it's very important to remember that retail led the way up with inflation. in 2020, companies decided that they could pull back on promotions and not that they had to, so because of supply chain, you and i talked about it. the reason retail did so well the last two years is because they had phenomenally higher prices and didn't have the cost element and two years later we were calling it inflation and two years earlier we're calling
2:13 pm
it promotion and so i can't speak to the broader economy and if you look at apparel is a small percentage and it is very interesting that when you call something a from motion or call something inflation it carries a different connotation, think about it anecdotally are you buying more or less clothes right now? >> the answer is probably less >> i've been thinking a lot about pricing and retail and exactly to your point, we saw this pullback on promotions when we saw the consumer maintain strength and decide to buy at least in certain categories and it seems as if we've all been accepting these higher levels of inflation. we somewhat understand as consumers that businesses are having to pay more to get us those goods, and so i guess my big question is as we see inflation peak i don't know if it has yet or not, will we actually see a permanent level of pullback in pricing or will it just continue as the promotions that we use to
2:14 pm
see meaning. if you're used to paying a certain amount for a certain type of sweater and a retailer can convince you to do that, are they really going to knock that price back down once the cost of getting you that sweater, making that sweater actually comes down for them >> so for better or worse, the unfortunate answer right now is yes, they are. we can see that they are chasing that and that should be a surprise not everyone is, but a lot of them are >> court you and i talked about this and you make up a term to describe it and we made up this term, reverse inflation and the way that we look back at what happened looks very different than normal inflation and i'm not an economist, and normally the way we think about it is the cost goes up and then the consumers pay for it the cpi is when the consumer pays and not when the cost goes up two years ago everyone raised a price and now cost is coming to meet them. the problem is they've already
2:15 pm
raised that price. so i think there's going to be this element where if we look at things in tiny snapshots in this monthly or yearly point of view, versus the prior year, promotions will be up and deflations will be up and we'll see demand is down if we look back a year from now, i think we'll look back and say prices went up and now the question is who's healthier pre-pandemic because i don't think we should take for granted that the pandemic did cost for two years people talked about silver linings and what you alluded to is the fact that you found consumers that will pay more >> sell products that you think they'll want and it's just a hard thing to do in the heat of the moment >> got it. simeon segal, we'll have to let you go and think, we can cover this much more for much longer and we have more to cover. good to see you. coming up in the show the
2:16 pm
energy sector hit a record just less than a month ago. it's now about 25% off its 52-week high and nearly every stock in the sector is trading below its $50-day moving sector, plus the battle for sports rotses, it's disney, apple and will amazon and we are in sun valley talking to a power player about the future of that business, sports and streaming and all that's at stake. keep it right here we're back after this. that's the one with the amazing camera? yep! every business deserves it... like one's that re-opened! hi, we have an appointment. and every new business that just opened! like aromatherapy rugs! i'll take one in blue please! it's not complicated. at&t is giving new and existing business customers our best deals on every iphone. ♪ ♪
2:17 pm
at fidelity, your dedicated advisor will work with you on a comprehensive wealth plan across your full financial picture. a plan with tax-smart investing strategies designed to help you keep more of what you earn. this is the planning effect.
2:18 pm
2:19 pm
>> welcome back. baseball fans on twitter have expressed real frustrationhis season about finding their favorite team's games whether it's on apple tv or peacock or some other platform, but they better get used to it because streaming sports is likely to get more common and rights fees are getting bigger by the month, it seems julia boorstin is live in sun valley, idaho, with one of the heavy hitters in that space. julia, we'll send things over to you. >> thanks, dom i am joined by casey wasserman, ceo of wasserman who owns the largest sports legacy and repres representing billie eilish and coldplay i want to talk sports. all of the sports commissionerses are here and a particular attention right now is being paid to the nfl rights and nfl sunday ticket is up for
2:20 pm
grabs. what does it mean if those nfl rights go to a buyer like apple? >> i think it's the beginning of a transition to what people think the future media will be like and what's amazing about the nfl is by far the biggest sport in our country the audience is so significant the sunday ticket is the precursor to streaming given that it's on directv or subscription and it gives someone like an apple or amazon might buy it, hundreds of games a year to deliver to their fans in a very meaningful way and ways to experiment around the broadcast and it's a powerful platform in the country. >> do you think it will end up going to the tech company? do you think apple is the buyer? >> i do think it will go to a tech company because that's the next generation of monetization for the fans and given the 100 million+ fans of the nfl to
2:21 pm
direct the focus to those fans is a powerful plat form. >> so what does that mean for athletes and for your clients and for the tv business? is this going to drive more cord cutting? >> i'm not sure it drives more cord cutting it will certainly drive more revenue for sports leagues and our client that are participants in the revenue stream and it's a powerful opportunity for the next ten years and what sports is predictable and unique in a world where almost nothing else is. >> the power and value of live sports and there's been a lot of attention to that in the past couple of years as we've seen the big deals. i'm learning how this fall into of the major broadcasters of the nfl games and nbc with peacock and they'll be putting those games on streaming do you think that's going to change the kind of viewing numbers we get which could accelerate cord cutting. if their profit participants in
2:22 pm
the success of this woel industry and if we see a drop-off in the revenue of the tv bundle that will make an impact. >> the games will be simulcast on abc and nbc and what they realiza broadcasters and the league is that providing to fans where they are, whether it's on traditional broadcast channels like nbc or cbs or on the services makes them bigger and my guess is obviously the nfl and the rights holders aren't going to allow the transition to happen if it will increase the revenue. >> with the health of the consumer, you have insight into that in terms of the purchasing of ticket ands consumer products around your clients, both musicians and athletes what are you seeing right now? >> today we've seen no drop-off. concerts are full. ticket prices are frankly where they were pre-covid and she was excited to be back in person experiencing what they saw live and the two things that matter live are sports and music.
2:23 pm
it doesn't mean it's not going to change in the fall, but traditionally sports and music have been recession resistant and nothing is recession-proof and recession resistant because people crave those experiences and crave those opportunities to be together and crave those opportunities to see the artists and athletes they love. >> speaking of that relationship with athletes, some of your athletes and golfers, and a number of golfers are getting a lot of blowback for leaving the pga to go to saudi arabia's new tour, the live tour. what's your sense of what the long term implications of this will be and if those golfers are going to see potentially a damage down the line or if they're going to do this for the money? >> right now they're clearly making monetary decisions and they're entitled to and some of our clientses have and the pga tour is the largest in america and those golf tournaments every week around the country are donating tens and thousands to the local community based on the
2:24 pm
golf tournament and that participation and it's also a powerful platform and they're the platform that developed the golfers that are now leaving the pga is here to stay and they have the best golfers in the world today and they're making the adjustment and in the end golf is a healthy sport and i think you will see the pga tour continue to thrive. >> fascinating times for your industry we'll see where all of those sports rates go. casey wasserman, thanks for joining us >> dom, i'll throw it back to you. i know you're watching all of those golf tournaments. >> my wife and mother and law are looking forward to the kenny chesney concert later this fall. julia boorstin, thank you very much and casey wasserman. they're cutting big tech and why they're taking aim at apple, netflix and google plus highlighting key issues, crypto, energy and consumer spending "power lunch" approxwill be rig back
2:25 pm
♪ ♪ wow, we're crunching tons of polygons here! what's going on? where's regina? hi, i'm ladonna. i invest in invesco qqq, a fund that gives me access to the nasdaq-100 innovations, like real time cgi. okay... yeah... oh. don't worry i got it! become an agent of innovation with invesco qqq
2:26 pm
like any family, yeah... oh. the auburns all have... individual priorities.
2:27 pm
some like strategic diversification. some like a little comfort, to balance out the risk. others want immediate gratification... and long-term gratification,too. they have their own interests, but at the end of the day there's nothing like being... a gold-owner. visit to see why gold is everyone's asset. >> welcome back to "power lunch. let's get a check on some of the markets post-fed minutes they haven't shifted all that much we are still showing fractional declines the dow is down a quarter of 1% and 0.1%, and the nasdaq still
2:28 pm
down, and a wait and see mentality. two of the worst performing sectors so far are energy and financials and the biggest laggards in seech sector for energy, eog and also diamondback energy, as well and the laggards in financials and check out what's happening with invesco and wells fargo and those are the biggest losers in the financial sector so far. >> let's go to seema mody for a cnbc news update. >> here is your news update at this hour. a jury found a man guilty of killing nipsey hussle in 2019. a former acquaintance of hussle's is convicted of shooting him outside a clothing to are. >> peloton is increasing incentives for its workers with one-time cash bonuses and changes to the stock compensation plan as it fights to hold on to employees and fit its struggling business. the changes come a little more than five months since their new
2:29 pm
ceo took over amid financial turmoil. >> the number of confirmed monkeypox cases in new york city has doubled in the past week from 55 to 111 starting today labcorp will begin testing for monkeypacks as health officials in new york city received a fresh batch of monkeypox vaccines netflix announcing it will be developing a spin-off of the science fiction series "stranger things." no details on the story, but it will come from the brothers and the creators of that show, "stranger things." back to you. >> i have to get into that >> i've watched some of the seasons and i'm not all of the way caught up on it. >> not for me, court. ahead on "power lunch. call it ev street and electric vehicles sales are climbing and soaring gasoline prices fuelling that demand and will the fast-growing sector a cell rate even more? >> plus those sky-high commodity
2:30 pm
prices are rising and soybeans and copper and we'll break down each of those groups that's coming up next.
2:31 pm
lemons. lemons, lemons, lemons. look how nice they are. the moment you become an expedia member, you can instantly start saving on your travels. so you can go and see all those, lovely, lemony, lemons. ♪ and never wonder if you got a good deal. because you did. ♪
2:32 pm
as a business owner, your bottom line is always top of mind. so start saving by switching to the mobile service designed for small business: comcast business mobile. flexible data plans mean you can get unlimited data or pay by the gig. all on the most reliable 5g network with no line activation fees or term contracts... saving you up to $500 a year. and it's only available to comcast business internet customers. so boost your bottom line by switching today. comcast business. powering possibilities.
2:33 pm
>> commodity collapse after months of surging crisis, commodities across the board from energy to grains to metals are lower. we'll run you through each part to find out why and what happens next, of course. let's start with the energy space and pippa stephens hi, pippa. >> courtney, oil dropping again today after falling below 100 bucks yesterday for the first time since may the main driver here is recession concerns and what that means on the demand side we've also got the stronger dollar and an uptick in covid cases in china, but a number ever analysts including ubs and goldman saying yesterday's drop was overdone they said oil's responding to a
2:34 pm
deteriorating economic outlook rather than fundamentals which points to a tight market and to put this move in perspective, we've seen a lot of volatility in march, brent crude hit 140 and it was 97. so things like this have been happening. wti is still above its 200-day moving average of 92.50 which is also the intraday low for march and april. so that is a key level to watch. let's check on prices here wti down .75% and brent crude down 2% at 79 don'ts and the energy stocks, once again the worst sector down more than 2% apa marathon oil and devon, among the biggest losers all below their recent highs in june, kcourtney, those number have had a fast fall >> those have been eye-popping
2:35 pm
to see those moves thank you. let's focus crude prices and energy stocks which are off their highs. with us is paul sankey there are a number fundamental factors and we have the strong dollar, of course, and recession fears and everything going on with the russian oil supply and goldman sachs, though, still saying they believe that the sell-off has been overdone what do you think? how do you weigh all of these factors against each other and where we are for oil prices now and what you think we're going to see here in the short term? >> yeah. you're quite right the first concern we always have is the dollar and the dollar is implying oil prices and we've sort of rationalized that because historically the u.s. was such a huge importer and a much smaller producer of oil and gas and now we're a net exporter so we put the dollar to one side the second is we ran out of refining capacity and think, refining capacity is the primary
2:36 pm
demand for crude oil and then at the same time, as you mentioned, russia kept supplying oil and supplied more crude oil post-ukraine invasion than before, believe it or not. you didn't mention and i'm sure you're fully aware and the strategic petroleum reserve is being released at a rate of a million barrels a day which is an awful lot of oil and that's added to the pressure. when we add it all up we were looking at $150 brent through summer and we've broken 100 today. i think we still think the back half of the year will be very bullish especially when the strategic petroleum reserve stops being pulled down which will be in october right when we go into winter when we can see a major energy crisis particularly in europe. >> so you're talking about a bullish forecast going forward you're talking mainly here about the commodity and you are looking at equity plays that we can potentially benefit from as investors.
2:37 pm
can you go through how the theories based on itself and what ends up happening to the players in the industry? >> we got home on our own argument we argued from 2020 onward that inflation would be -- that if the fed wanted inflation that would be inflation and if you look at the collapse in the oil sector it coincides with what could be the peak inflation which would be june 8th and ever since they collapsed >> shocked us is that the companies have made big buybacks and a huge company like marathon oil has been destroyed like everything else. we like refining the refining margins are still around $50 a barrel which is all-time historic highs and yet that group has gotten absolutely blacked and finally exxon had outrageously profited profit guidance for q2 and they got whacked. so everything has been whacked,
2:38 pm
but broadly speaking we like refining and the lng gas plays and we're sticking with this play because we think the long-term mega plays all remain in place. >> it's dom. if you look at the structure for the futures market for oil there was a case made that there was a so-called carry trade and prices in the future are less than what they are in the spot market. if there is that scenario, do you feel there's a constructive reason to just buy crude and hold it for some of that carry and what does that tell you about where we are for crude prices say six, nine, 12 months down the line? >> yeah. i agree and what people also forget is the futures price for crude is nominal that is to say it's not inflation adjusted so to me there's almost a bubble carry and the spr release ending in october and a very tough winter ahead for europe i think if you were buying, say, for example, the december,
2:39 pm
january crude and holding it, that would be a good trade and there's real value in the big oil and these things will come back strongly. basically, we proved the oil demand was not going away and not withstanding what you were mentioning along with ev vehicles and in the meantime we are fundamentally short oil supply and that's a major issue and as demand holds up a hundred is the right amount and discounting 60 to 07 and how long the runway could be before we transition to full clean energy paul sankey, we appreciate it. >> thank you, sir. >> now over to the metals and grain space. wheat and in theals, they're down and fueling the recession fears and we used to call it dr. copper for a reason. let's bring in bill varuk,
2:40 pm
president of blue line futures and we'll start with the metals trade. does copper still have a ph.d in economics? >> it absolutely does. you're seeing it here right now exuding those recession fears. what this market i think it's down about 8% to 12% on the week depending on when you looked at it it's a great way to get a pulse on the economy and copper is an electrical conductor it's used in construction. so houses are being built, infrastructure is being done and copper is going to be used and that demand is there and it's a proxy through the green space a bit, as well and a lot of untradable metals that might be used and it's a great way to keep pulse on the economy and right now it's telling us that those recession fears are very relevant however, i want to shift the conversation because in the west the u.s. and europe, those are the relevant recession fears,
2:41 pm
but for china, they're arguably coming out of a recession in the second half of last year and we're watching the credit impulse very closely and that bottomed in q4 and copper tends to lag that and we've got a strong dollar right now and recession fears in the west and i think copper because china consumes 50%, more than 50% of the world's copper they're going to be a leading indicator right now for the move in copper to come. so i think there's a lot of support down here, but yes, dr. copper is in the economy >> it's interesting. it's a divergent view between the world's second economy at this point and let's shift to the green side of things and the soft commodities can we expect any kind of relief in the grocery store based on what you're seeing in the grains prices >> that's one of the things that we are curious how long it's going to take because cpi
2:42 pm
numbers, the thehot trend for m and june, and i believe we'll see the numbers come in a bit. jelt shelter is the big question and even though the cpi has come in at 5.6% right now for june, the headline number, that's core, but the headline number is still hanging at 8.6 which includes food and energy. so the question is when will these food and energy prices have an impact on cpi? at some point it's going to and it will probably take a little longer than one would expect the stores can keep it up there for a bit and once they move gasoline prices, right now they've had a big move down and the market will digest it and you will not see it in the grocery store very soon. this is a liquidation as it is across all commodities and crude oil and the energy space and down to the ags and the metals and a lot of this can happen due
2:43 pm
to, there's the fed and the there are and also july contract rolloffs are having an impact and it's a cleansing in the market and wheat has a lot of support as you move into the seven bucks and the planting season is starting and early on in the planting season the weather was wet and cold and then we had these days ever really hot, dry weather. >> right >> so it became very, very opportune for planting and that's where we are right now, but i think it will continue to be volatile and this cleansing from what i hear will be a bottom i'm not calling it here today, but we are close to. >> you see the fed mondays today and the fixed income spending. >> sure. >> and it's falling back a little bit and that will pave the way for them to lift their foot off the pedal sooner than people may think. >> that was commodity telling you a big story. bill baruch, blue line we appreciate it. >> thank you.
2:44 pm
electric vehicle popularity climbing and will the streak end when gasoline prices come back down look at the indexes which are at session highs and this following the release of the fed minutes and the dow higher in 0.6%nd a higher by .7%. "power lunch" will be right back or more of life insurance, you may qualify to sell your policy. don't cancel or let your policy lapse without finding out what it's worth. visit to find out if your policy qualifies. or call the number on your screen. coventry direct, redefining insurance. if you have this... and you get this... you could end up with this... unexpected out-of-pocket costs. so if you're on medicare, or soon to be, consider this.
2:45 pm
an aarp medicare supplement insurance plan from unitedhealthcare. medicare alone doesn't pay for everything. and what it doesn't pay for, like deductibles and copays, could add up to thousands of dollars. medicare supplement plans help by paying some of what medicare doesn't... and making your out-of-pocket costs a lot more predictable. call unitedhealthcare now and ask for your free decision guide. medicare supplement plans also let you see any doctor. any specialist. anywhere in the u.s. who accepts medicare patients. take charge of your health care today. consider adding this. call unitedhealthcare today about an aarp medicare supplement plan.
2:46 pm
2:47 pm
shares of rivian soaring more than 10% after reporting strong sales numbers let's go to phil lebeau for more details. hi, phil >> hello how are you? the real thing that you want to watch, courtney, is the production numbers from rivian the deliveries were a nice improvement, but the production is what people are focused on. starting in the first quarter when they were lackluster and what can you do for the year and nice trajectory up to 44.01, and they reaffirmed guidance for 25,000 vehiclesbeing built thi year in the -- if you take a look at rivian and the three-month chart of this stock, the key thing to keep in mind is that ceo r.j. said they see the supply chain and the production cadence improving and that's exactly what rivian investors want to see. this comes at a time when we're seeing ev demand continue to grow j.d. power's initial assessment
2:48 pm
of the second quarter shows that evs are now 5.8% of the market ice still dominates and gasoline-powered vehicles 80% of the market and take a look at ev sales and the trajectory in 2025 keep in mind that the industry is in the midst of a major investment and th$56 billion wil be invested into the ev space over the next couple of years and that's why you're expecting ev sales to top 2.2 million vehicles being sold in the u.s. by the end of 2025 take a look at the auto stocks and we're showing you tesla, ford, gm and toyota. it has not been a good chart to look at, guys over the last couple of month because people are saying, all right. people are rotating into evs and when do we sense that we'll see the real transition into electric vehicles take place >> it does surprise me that it's a ways off and we would have been a higher percent than the
2:49 pm
5.8 that you cited and rivian higher today by 11%, but it and the rest of the ev makers are well off their highs and what's it going to take to recharge those stocks higher again? >> when will they be able to turn a profit? consistently tesla does it and what about the start-ups? we're a ways this from that happening. >> profitability in business >> is it though? >> just saying >> phil lebeau, thank you. >> crypto voyage digital filing for bankruptcy what does this mean for stocks like coinbase? we'll hit that and other names in today's three-stock lunch keep it here
2:50 pm
2:51 pm
2:52 pm
welcome back to "power lunch. three big movers, coinbase downgraded to neutral citing crypto price volatility and a collapse in volumes for trading. doordash shares are lower after amazon struck that big partnership and possible stake with grubhub and shares with crude oil. let's bring in now david treanor and i guess maybe we'll talk about this, david, first with
2:53 pm
coin base and crypto that 20,000 area for bitcoin has been key for a lot of folks out there the same note pointed to some problems attracting and retaining in the future. is coin base after its precipitous fall a stock you would be buying? >> not at all. the business is headed in the wrong direction. it's become terribly unprofitable and management has guided down on every single kpi so we'll be going from unprofitable to even more unprofitable so we think the stock has another 50% plus down side, $17 a share, and that even assumes that margins stay positive and the company grows at consensus rates. we think there's a lot of down side from here. >> speaking of down side the price of oil, the base commodity has fallen sharply we're talking more about an
2:54 pm
equity play so shell is our next name on our three stock lunch. what do you think, can we dive into this one? >> this is a buy one of the things we love about this stock it's trading at a price and implies profits will decline by 50% a big contrast to coin base an enormous amount of revenue growth and margin expansion or improvement. shell is the opposite. what most people don't understand about the energy companies is even iea and its best case estimates is assuming fossil fuel demand only drops by 18% over the next 20 or 30 years. so fossil fuel demand is not going away it's used in all kinds of things other than cars. the idea this green washing has led people to believe these traditional energy production companies are going to be basically going out of business is just a false scenario
2:55 pm
shell is very well ininvestininvestigat invested >> all right, and let's talk about the final name on our "three stock lunch," david that's doordash this is a stock that maybe hit its heyday in the pandemic when everybody was getting takeout. is there a future? is this a buy? >> we don't think there's any future amazon went with a big competitor at a price that's not very attractive otherwise you would see dash going up on a day a competitor got a big hit for it look, this is a food delivery service. tell me what the competitive advantage is margins are negative own like 40% of the entire delivery market. the valuation is absurd.
2:56 pm
it was even more absurd in 2020 when we called it the most ridiculous ipo >> all right two sells and a buy. david trainer, thanks very much for joining us for "three stock lunch. coming up, wall street ettech key price targets coming up next we'll talk about the big names
2:57 pm
2:58 pm
some big tech names that you probably own, let's go to steve kovac with the details
2:59 pm
>> three big triple whammy apple cutting their 12-month ta target they lay out this ultimate bear case saying demand will fall off a cliff if we hit a recession. when the new macbook comes out alphabet cut from $3,000 it was well over $3,300 from now saying head winds, tough pandemic comes, the russia situation and, of course, foreign exchange also there's going to be trouble with youtube any signs of weakness or consumer demand. and finally we got barclays cutting for netflix to $170 a share.
3:00 pm
a slew of factors including losing subscribers in the u.s. and competition, tons of things working against netflix. >> maybe the fed minutes helped some of the big names. >> thanks for watching "power lunch. "closing bell" with sara eisen starts right now >> thank you, dom and courtney a late day rally here. the most important hour of trading starts now welcome, everyone, to "closing bell." i'm sara eisen where we stand in the market, not too far off session highs. we got as far as 200 on the dow, up about 150 or so most sectors are working the nasdaq up


info Stream Only

Uploaded by TV Archive on