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tv   The Exchange  CNBC  March 7, 2022 1:00pm-2:00pm EST

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>> cash. not buying anything here >> josh brown? >> chargepoint looking sexy >> liz young >> short-term treasuries. >> joe t.? >> cvs >> all right i appreciate that. stocks in a bit of hurt today. not getting any better over the prior hour, either "the exchange" begins now. thank you so much. i'm kelly evans. we're just off session lows. the dow earlier jumping more than 700 points among reports of more intense fighting in southern ukraine we have the latest on that and we'll also talk about how this plays out for the emerging markets. he likes gold and has several ideas. oil has pulled back after a 14 -year high can u.s. oil companies ramp up production fast enough to keep prices down? especially as bipartisan leaders have just reached a deal on a new bill that could ban russian
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energy imports before we get to all of that, let's start with dom and the latest market numbers. dom? >> you mentioned the numbers down about 700 -some points at the low of the session that happened in the last half hour that gives you idea of where we are in the overall trade so far todd midday session. we're down about 600 points to the dow industrials. similar percentage declines for the s&p 500. 42-39 the last trade the nasdaq composite underperforming. 285 points to the downside 13,027 the last trade there. it's playing out on the macro side of things interest rates in focus. a lot of attention being paid to what's happening with the ten-year treasury note yield and the relationship to shorter term treasury rates it doesn't matter which part of the yield curve you're looking at the idea here is that the gap is narrowing between interest rates on the long end and interest rates on the short end i'm showing you right now the
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two-year versus the ten-year spread 22 basis points is where we are. the reason i'm showing you this three-year chart is we're at the lowest levels in terms of that spread going back a couple years now at this stage, going back to the early part of 2020 this is important. because it signals maybe what could be a slowing economic environment going forward. we know rising fuel costs are part, energy costs and everything else. that also may be playing out in what's happening with the travel and leisure trade. some of the worst performers in the s&p 500 are names associated with travel. united airlines, down 11 % norwegian cruise lines down 8 %. live nation, wynn resorts down 7% and 6 % for bookings holdings that consumer discretionary trade, the travel and leisure, the spend my disposable income trade taking a big hit certainly lately and then one other place to keep an eye on is the outsized mover of the day, and this is all
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driven in the by fundamentals necessarily, but a lot of chatter. bed bath and beyond down the founder of and his venture arm has taken a near 10% stake in the company they're pushing for change they're going to be activists investors and want to unlock value. that's why it's up 30% at the highs of the session, we were up over $30 per share that was good for around an 85 % grain. you can see the 30%, well off the highs. a kind of more fundamental-ish type story in the macro trade that's happening right now >> it's not all macro, but that's most of it. my next guest has worked in emerging markets and seen russia's currency collapsed before and witnessed globalization and the reversal he sees several opportunities and safe havens for investors. joining us is the founder at mobius capital partners.
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what's your knee jerk reaction what are markets telling us about the shape that the u.s. and global growth are about to take >> well, the interesting thing is you've got a number of winners as well as losers. a lot of people think all the markets are down that's not the case. the emerging markets presume is up substantially south africa is up of course, i can explain that because of the raw material prices maybe but generally speaking, it's a great opportunity to pick and choose the winners and losers. there will be winners and losers my guess is as a result of what's happening in europe, china will be the winner because russia will have to trade more with china they'll have to depend on china more and more. so we have to be very careful in looking at these markets, and not becoming too pessimistic about what's happening >> fair enough if i can ask you one more about the u.s. in general. do you think this economy is going to slow? what's going to happen with the
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dollar what does that mean for some of the fun flows you're watching around the world if china is going to hold up relatively well, maybe we can, too. it sounds like that's not necessarily a slowdown story so much as an inflation story we're going to be grappling with in the months to come >> you have to remember just because there's inflation doesn't mean the market has to go down. if you look at history, you see that inflation is not correlated with the s&p 500, for example. of course, it's correlated with fixed income but what you have to do is figure that where are people going to go as a safe haven from europe that's america america is the place to be the u.s. dollar is the place to be so i think the u.s. will do fairly well. the market is not doing well it's down. but i don't think it's going to stay down. i think you're going to see recovery and i think inflation with those companies are able to price their products in the inflationary environment they'll do very well
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and you know a lot of them are like that, in that category. >> yeah. and that's good news for the debt it's going to keep the longer term borrowing costs down. on the dollar, you think those -- that attraction of flows is going to keep the dollar higher? isn't that normally a head wind for the emerging markets >> well, yeah. that is -- in some cases a head wind for some emerging markets i mentioned in dollar terms, brazil and south africa are up that's even accounting the local currencies which are not that strong usually but it's really a mixed picture, but generally speaking in times of stress, people go to the u.s. dollar >> all right fair enough. let's talk about some of the real specifics where you do see opportunities right now. they include some countries, gold which i'm seeing more and more people look at charts and get excited about and so maybe you can give us a sense of where you think the best opportunities are right now. >> as you know, i've been a gold -- for quite some time. i recommend putting all money
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into gold. i'm saying about 10% in gold is fine physical gold, that is, not ctfs or anything like that. the other area, of course equities you've got to be in equities in order to be in inflation otherwise you're in trouble. you have to be diversified what happened in europe teaches us in diversification. the people with money in brazil and south africa are doing fine and not being hurt so much and american stocks, some of the american stocks that have exposure to those countries is -- a place to be. but i would say equities first of all and second of all, companies that have no debt or very little debt with interest rates going up, companies with high debt are going to be in trouble >> good point. because people might think we got inflation, they can inflate that debt away if the borrowing costs go up, not so much. let rerepeat this. you said equities are the place to be. you told us why you think th u.s. is attractive in the u.s.
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market you think china can do pretty well, and their index closed at a six-year low i don't know if you want to add a comment about that or chinese equities >> chinese equities have been bad in the last year because of the property problems. the chinese economy is property oriented and the property companies have been in big trouble because the debt is -- the chinese government is determined to have 5% or of% growth in an economy of that side, it's rema remarkable what they're going to do is put a lot of money into infrastructure and boost up the market generally by having a lower interest rates interesting enough, while the u.s. is raising rates, china is lowering rates in. i think the fair market we've seen in china probably won't last there will be opportunities in china as well. >> okay. final question tell me again about southeast a asia why people are not feeling like they want to really walk on the
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risk ledge right now why should they look at those areas? >> if you look at the performance, skyland is moving sideways it's not been hit by what's happening in europe. if you look at south asia, southeast asia, sort of i don't want to use the word safe haven, but that's probably appropriate given what's happening in europe so it's a place to be diversified in a way from europe and some of the companies in tha thailand, indonesia, vietnam are doing well high profitability in dollar terms. there are great opportunities in some of these countries. >> i'm going to sneak in one more it's the most obvious one. tell me what you would make of russian equities right now and the collapse of the russian ruble that we continue to watch play out >> well, i mean, usually we would be bargain hunters when things like this happen, we want to go in. what's happening is the u.s. and the west, europe, is shutting off the entire financial system
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in russia from the west. so in other words, even if you want to buy russian stocks, who is going to hold it for you? the banks are going to be holding those stocks for you as a custodian. and how are you going to get the money out? the ruble is in big trouble. they don't want to trade with the -- i would say you just got to forget about russia for at least maybe a year it depends on what happens in ukraine. but it doesn't look good it's not a good idea to get into russia now >> that's for sure mark, thank you for your time today and joining us >> thank you joining me with mobius capital partners the third round of talks between russia and ukraine in belarus have concluded with ukraine saying that no significant results on a truce and cease fire have been accomplished let's get to kayla in washington with the latest today. >> reporter: perhaps that's not surprising considering that what russia was asking for in those cease fire talks were all nonstarters for the west expectations are low for any
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future terms that will hold. as senior defense official says 100% of the troop's massed at the border are now inside ukraine as russia continues shelling major cities despite pledges last week to pause that violence to allow civilians to escape the indiscriminate violence drawing new condemnations from world leaders includinging the secretary of state in latvia beginning to call russia's actions war crimes. >> the world is saying to russia, stop these attacks immediately. let the food and medicine in let the people out safely and end this war of choice against ukraine. >> president biden speaking for about 80 minutes this morning with the leaders of the uk, france, and germany as allies debate how to support ukraine which has been imploring the west for aircraft and how to further punish russia. the u.s. is likely to move forward with a ban on russian
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oil with the uk and japan considering similar moves according to skourss the european union heavily reliant on russian energy is not expected to take part, i'm told, as for when that possible ban could be announced, i'm told it's still alive discussion. >> quickly, when you say not expected to take part, i think i saw sprathd separate headlines about europe trying to come to some sort of pushback an accepting russian energy imports obviously. what's the distinction >> the issue is that within the european union any action on sanctions needs to apply to the entire block of 27 countries so if a country like germany cannot get by without russian energy, it's not possible for other individual european nations to announce their own ban on russian energy. so it's either all or nothing for the european union, and that's part of the issue that's really hard for the negotiators to square here that's one of the reasons why
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you've seen canada go it alone you've seen the uk and japan suggest that they are still discussing this. but when i talk to people here inside the u.s., they say that they are willing to go forward on a stand alone basis, although, they acknowledge it would help if there were others on board, too. >> fascinating kayla, thank you my next guest is an expert in international security and negotiations and conflict resolution she warns that things are going to get a lot worse as russian forces move into urban areas of ukraine and that putin has no interest in backing down let's bring in monica, an international policy professor it's great to have you here today. and we're starting to see this, aren't we, in terms of the russian forces moving into urban areas. >> yes, kelly. the intention initially was to basically conquer kharkiv, and as we see, we're many days into the war now, and they haven't even been able to get kharkiv.
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they've gotten kershan, but it's smaller. mariopol, they're threatening od odessa they wanted kharkiv which they expected to roll over, and then kyiv given the russian military's conduct of war when it comes to urban areas and we've seen this in the past, we can talk most recently in syria, but then also in other places. it doesn't have a strategy for going into urban areas it's going to get really bad in the next couple of days. >> do you think that lviv is a key area to watch? my understanding is that's how a lot of the ukrainian population to getting out to poland and how a lot of supplies are coming into the country what should we expect on that front? >> for you, it doesn't appear, if you look at the movement of troops, it doesn't appear as if that's part of it. hour, odessa will allow, if they can get it, to move to the northwest. it would be really bad if putin and company and his military
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move s into lviv that's the heartland o ukraine it seems like they're trying to concentrate the forces by taking kharkiv, continuing their operations in the south through od odessa, and also continuing to try to as we say soften up kyiv so they can move into kyiv and hopefully get the capital city but the ukrainians have shown themselves to be extraordinarily formidable in the fight and have pushed back and repelled a bit it will be a question over the next couple of days if he gets odessa, and if he sort of lands ckharkiv and mariupol. >> putin has no interest in backing down, as people play the energy card, what is he going to do if backed into that corner? what are your thoughts >> well, look, putin is wacced
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into a corner. the question is whether he realizes he's backed into a corner we have never seen a sanctions regime like this before. we have five states that sort of didn't vote against the u.n. resolution one of whom was russia itself and belarus which is basically under president lukashenko in putin's pocket the question is whether putin understands that he has now been backed into a corner in terms of the general sanctions. he does understand about energy, and unfortunately right now energy prices are at their top, the prior program was talking about that, which is helping russia if it can trade out the oil. that's becoming different difficult. even if it doesn't happen, other states don't want to touch or buy russian oil. one of the critical things over the next couple days is getting information to putin and getting information to those who are backing putin that this is a really, really set of serious
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sanctions that are absolutely not going to just harm the russian state, but also him and his interests. and i'm not convinced yet that he knows that. >> all right monica, we'll leave it there for now. check back with you soon thank you for your time today. >> thank you coming up with wti crude oil jumping as high as $130 a barrel overnight, what's the next move for the u.s. oil industry? can it pump more or will we have to hope for more barrels from venezuela, iran and saudi arabia don't forget about the airlines. they're coming off the worst week in two years as jet fuel prices soar. we're going to look at how include undermine the reopening revival next let's get a check on stocks. we are off the lows. dow is down 664. we're back in a moment
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exchange oil prices briefly hit $130 a barrel overnight in fact, we're back up to 120 after coming nearly all the way back earlier this morning. 130 was the highest since 2008 and only $17 off the all-time high we're seeing the effect at the gas pump the u.s. and other nations are exploring options to cut off russia's oil supply with american officials reportedly
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now in talks with venezuela to bring more of the crude to market russian crude accounted for -- a 209,000 barrels a day, that was the highest figure in at least 20 years let's bring in the lead analyst for sankey research. we're trying to turn to iran and biden is trying to patch up his relationship with the saudis how much of this is going to be international diplomacy and how much can the u.s. do to make a meaningful difference here >> god forbid he would approach the canadians, right it's insane. it's incredible to think that this is what we've come to after the administration came and cancelled the keystone xl pipeline, but there it is. in terms of where we go from here, it's about the planning assumption of the oil companies and whether or not they're prepared to go from around 60. they plan on around 60 right
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now. are they prepared to buy into the idea that the dry sis is going to be sustained for more than months. you know and that's a tough question, obviously, at this stage after we've only -- it seems like two years, but it's only been a week >> quick question on keystone. would that actually have -- we said 200,000 barrels a day of russian oil. would keystone have given us that equivalent? how significant would that pipeline have been to the u.s. oil trade and i've seen reports canadian crude is trading at a discount because it can't be moved or are people making too much or too little of the pipeline issue >> i think keystone was more of a signal from the biden administration in so far as it had originally been delayed by the obama administration in 2015 so -- and then trump brought it back it was already kind of a mess. and that's the problem is that what we need is a steady, stable environment that allows these safer, better ways of
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transporting hydrocarbons to be developed which is a pipeline system that's functional as opposed to using trains or having to get as in the case of new england, gas from qatar. so ultimately, it kind of would have made a difference, but it's difficult to start saying when you start counting, at times canadian crude has traded at huge discounts at the moment, it's trading well because the market is so tight and there's such an enormous problem globally >> where do you think -- there's a couple options either we lose the russian barrels and have to fill the gap. if we cannot, then we'd have to rely on the price to go to whatever it is going to be, $200 a barrel to destroy demand, or maybe we don't go that route how likely is it do you think at this point that we end up blockading russian crude imports? >> well, listen, kelly, we already lost the barrels, pretty much right? i mean, obviously there's a glow through. as i was saying on cnbc last night as tokyo opened, you've
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got to remember that oil through pipe pipelines travels at walking pace and tankers do about 25 miles per hour everything moves slowly, but it's a constant chain. as you lose supply, it takes a long time to feed through. that's what we're facing at the moment what was stunning is the sanctions were specifically not to interrupt energy flows. and they haven't for natural gas. but the world oil industry basically just dropped russian oil like a bad habit and for example, i confirmed last week they're not buying any russian crude and haven't been and you've seen one cargo that shell said it bought became a public relations disaster for shell. although it's taken time to feed through, and the sanctions are -- more russian sanctions on oil from the u.s. is -- it's already done >> what do you want the
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companies to do? do you want them to stick with the discipline that they have promised even at the expense of political blowback would you like to see them for almost patriotic reasons do as much as they can to pump and do cap-exnow to meet this objective? i'm curious what's that cost benefit for you? >> yeah. i find it curious the way people treat the oil industry it's like at the lows, they have zero friends and suddenly it's like why aren't you pumping more at the highs and it's not as simple as that as we've said, it's difficult just to add the barrels anyway there's no people in idland, texas available. certainly not any engineers. and if you were to say to them pump more, they would probably go outcompete for next door rigs to buy the guys. there's no one available it's not like we have spare capacity and we're not producing it what we want is for them to be disciplined in their cap-ex, and if there is clear proof we're going to sustain a much higher
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level of oil prices which obviously seems to be the case, then we can start thinking about investing at a higher level and the government should facilitate with the development of pipelines and a stable regulatory environment which they haven't done. it's not that complicated what needs to be done >> and i take your point you want to know if we're going to stay at the prices before they commit to any spending p pro projects would you like to see the price of spending crude lower than today? >> i think it's painful for emerging markets our big concern isn't so much american consumers it's the developing world. what we're talking about here is energy security for the poor of the world. the big elements of this crisis is the wheat price and the effect of hugely high prices on poor people. that also applies within the u.s. it's regressive when the gasoline price gets high it damages the poor more than the rich
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for john kerry to be flying telling us we should use less energy is offensive to me. and what we should be doing here is ensuring energy security for the poor in a way that really means that you need to develop pipelines in oil and gas the moral case for fossil fuels is what we call it >> thank you for your time today. we appreciate it paul joining me from sankey oil research don't miss an exclusive interview with jack fusco next hour the biggest holding is getg getting a holding after being one of the -- >> visa and mastercard down about 20 % in a month after suspending operations in russia. we'll tell you what they're doing and what it means for customers around the world alright, so...cordless headphones,
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for the wireless savings. then, my sister told me about visible. (sister) get unlimited data for as low as $25 a month. no family needed. (vo) visible. try us for free before you switch. we were down 710 points at the lows about an hour ago we're less than 600 points the dow is down 1. % the s&p down 2.2 the nasdaq down 2.5% utilities and energy were the only sectors or still are in the green. consumer discretionary and financials are the worst performers 3% drop for financials drilling down on the financials, the pain is across all areas of the sector am ex, block, wells fargo. with about 6% declines the semi conductors also getting hit today. micron, qualcomm, nvidia,
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showing declines between 4% and 7% all but two components more than 20 % off the highs nvidia down 40% off the record high ralph lauren and pvh, biggest laggards in the s&p today. pvh especially downgraded both to neutral saying demand in europe could fall after russia's invasion of ukraine. pvh as the highest european penetration while ralph lauren's exposure about 28% let's get a news update. here's what's happening at this hour. as russia's invasion of ukraine continues to affect civilian areas, president zelenskyy is telling abc news he will not accept ultimatums from moscow but there are possible solutions to satisfy the demands on nato, 1993 mia and separatist regions
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in ukraine zelenskyy says vladimir putin needs to start a dialogue instead of living in what he calls an informational bubble without oxygen some saying some progress has been made on humanitarian corridors. some ukrainian ref chiefs a -- refugees officials are criticizing moscow's provision of escape routes that lead to russia and belarus. tonight, the growing humanitarian crisis as refugees flood into poland. and as ukrainians are leaving, some foreign volunteer fighters and medics from the u.s., the uk, and canada are arriving add the train station in lviv, a former engineer wants to use his paramedic training to help take a listen. >> i'm nervous i'm going to be honest at the same time, it's about the people suffering there when you see the images, the
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people here right now, you understand you're not suffering. it's more about them >> he says he's been trying to stay positive by thinking about the hopeful contribution he hopes to make. >> i can only imagine. thank you so much. coming up, a look at what impact the ukraine war could have on the u.s. economy and inflation. steve liesman joins us with the latest rapid update. dow down 565 we're back in a moment you can't buy love. happiness. or confidence. but you can invest in them. at t. rowe price our strategic investing approach can help you build the future you imagine. ♪ ♪
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welcome back economists are trying to gauge what impact the ukraine war will have on the u.s. economy and on inflation to figure out which force the fed needs to confront, price pressures or slowing growth steve joins us with a cnbc rapid update steve? >> yeah. how about both that first pass highly contingent on what happens with oil prices shows the u.s. will grow more slowly with higher inflation europe's economy could flirt near recession and russia will plunge into a deep double digit decline. the cnbc rapid update showing u.s. growth accelerating still they're banking onto 3.5%
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from the an estimate of 1.9 as the u.s. recovers from the omicron slowdown the second quarter estimate is down by 1.8 percentage points from the survey in february. second outlook fell in the full year gdp dropping by 3 percentage points. above trend. forecasters caution with oil prices surging to 117 a barrel, risks to the estimates are all tilted to the downside jpmorgan writing the consequences of the 4 .3 million barrels a day of oil exports to the u.s. and europe would be dramatic the cnbc rapid update finding economists marking up their inflation outlook for pc inflation by 1.7 percentage points this quarter to 53 at an annual rate, building in a slower decline than previously thought. and finally for europe, both jpmorgan and baric-- jpmorgan zo
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for euro area growth this quarter, but 3.2 for the year. they say russian growth will drop by 15%. double the drop in the great financial crisis in russia >> that's a huge hit what about the ruble it's continuing to fall before our eyes >> yeah. free fall here for sure. what you see here is a quote right now of 146, but i'm seeing actual quotes out there quite a bit. what's interesting about the trade today, if you look at the line, look to the left and see the other days and the declines that happened during the day that would appear to indicate from my old days in russia, the central bank, perhaps, coming in but that straight up line today tells me maybe they didn't right now it looks like maybe they did 134 it dropped too hard to know. it looks like overall the russian central bank is allowing the ruble to fall and we don't know what would happen if the
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russian stock market opened creating that massive demand that would happen for russian -- for u.s. dollars once the russian stock market opens it is still closed >> great point steve, thank you it's good to see you today steve liesman. >> the fallout from the ukraine war sending stocks lower again it will be tough for the major in indices to get ahead i'm joined by the ceo koceo and senior portfolio manager at essex portfolio management >> we think that we want to continue to focus on those areas of the domestic economy that will benefit from the spending that has already begun and the that should continue i mean the areas of reshoring of manufacturing, factory automation, the use of technology to solve problems
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we want to do that in a way that pays much closer attention to valuation than perhaps we needed to do over the last number of years. >> so that's the key thing for you, valuation right now where are you seeing the best opportunities? >> let me answer the valuation question first we think it's the combination of growth and value that's the most important right now. and we think that the conversation will turn from a pure focus on growth versus value to really looking for growth in unexpected places. one of the areas that we really find the best opportunities is broadly in the area of industrials or industrial tech companies that are providing the products and services that will allow us to rebuild our manufacturing base in the u.s., that will allow us to achieve the goals of factory automation to continue to drive productivity, and margin enhancement, and that are doing that in a way where if they are seeing some raw material and pricing increases, they can pass
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them onto their consumers. their industrial companies without disrupting the inflation front. some of the names would be a company like benchmark electronics which i see on the screen they are an electronic manufacturing services company they focus on health care. they focus on defense. they focus on industrial automation, et cetera. sells at about 16 times earnings solidly profitable that's the kind of company we really like in this environment. >> and the story you're describing is one i think a lot of people would get on board with benchmark is one of the names applied industrials technologies, ait, alpha tech, a-tech, these are not everyday names. is that on purpose >> that is on purpose. again, we think that there is an advantage to be looking for growth that's not already well recognized in the market as i said earlier, valuations are becoming very important in this environment we think that the impact, the longer-term impact of the
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increased geo political conflict could be that overall market multiples compress versus what we've seen as an expansion in market multiples over the last 30 years that means you need to pay attention to much you're paying for growth if you can find companies benefitting from the strong growth we understand, but are not yet discovered by other investors, you can benefit both from the earnings growth as well as the subsequent modest pea expansion they might get as they get discovered >> thank you for key ideas in the industrial space we appreciate it thank you. ahead, just on time for the post pandemic travel season jet fuel prices are now at their highest levels since 2014. what does it mean for profit margins? 52-week lows today united down more than 10%. ba ia meckn mont hey businesses! you all deserve something epic! so we're giving every business,
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welcome back oil prices spiking to a 14 -year high briefly topping $120 a barrel it pushes jet fuel prices higher phil has more on the fallout for the airline sector >> you want to seea chart that gives airline executives heart burn, we're talking about jet fuel in the last year. up 72% and remember, outside of labor, this is the biggest expense for the airlines and now if you look at jet fuel over the last ten years, you've got to go back to 2014 that's last time that we saw jet fuel prices at this level. no surprise as the price has gone up, we've seen the pressure increase on the airline stocks you mentioned about united being down more than 10% today we're looking at 52-week lows for all the majors across the board. they are all under pressure today. an ugly day. and then you've got american
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it was downgraded today by sea port, going from a buy down to a neutral. what can you expect from the airline stocks let's say over the next couple weeks? we're in guidance season i would say within, i wouldn't be surprised, but within the next week, two weeks, we will likely hear from a number of airlines as they get a better sense of what's happening with jet fuel prices in terms of bringing down numbers in the first quarter. >> i can't imagine how frustrated to have them finally come out from the pandemic to face this train. should we expect a raise in ticket prices? >> the consumer will pay up to an extent. and they're already raising fares but it's not going to be enough to offset a 72% increase in jet fuel prices from a year ago. you'll see some higher fares but not enough for them to say yeah, we can make the projections we had out there for the first and second quarter >> well, it's good to have you here to share that news.
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thank you so much. still ahead, with global energy prices rising, this clean energy stock is well positioned to benefit we have the name next. and look at the social names snap, meta, pinterest all lower. all three of the names down more than 35 % this year. stay with us if you invest in the s&p 500 your portfolio may be too concentrated in big companies. this can leave it imbalanced and exposed when performance varies. invesco's s&p 500 equal weight etf, rsp, is spread equally across the s&p 500, which reduces potential concentration risk and helps keep your portfolio in balance. stay in balance with invesco's rsp.
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for the foster kids who need it most— at welcome back to "the exchange". the energy complex is shifting in ways we haven't seen in years. seen in years. gas prices at 2008 highs heating oil at record highs. crude crossing $130 a barrel in the last 24 hours. jumps in solar stocks, too joining me is sophie stark it's good to have you. how do the price hikes feed into the companies that you cover how do they deal with them and/or pass them to consumers? >> thank you for having me it is a good question. it's a multiyear highs i like both renewable names and utility names.
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they are more competitive when the relative basis when the energy marks are strong because renewable electricity gets more price competitive in this type of situation most of the names i cover with robust pipelines are well positioned and justified especially considering the pretty deep sell-off in the space in late 2021, early 2022. >> i know that next era is a favorites. you put it to overweight but the stock is down significantly. why is that? >> i think that it got caught up in the trend of rotating out of growth names and renewable nrg trend and frankly unjustified. with think it's a best stock to
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own. you get the benefit of the utility roughly half of the company and leveraged to the yes newible business and they're positioned to take advantage out strength near term and utility is a rate of escalation to treasuries which is a unique feature in the u.s so with oil prices being where they are there's got to be a real fear of demand destruction building up. in the utility where it's anchored in a stable environment i think is helpful and basically a stable foundation of the utility operation and same time monetizing the upside in the energy markets liquid, clean, arguably a strongest management team in the environment. we think it's unjustified and
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it's the right time to own. >> as we get into the summer people have to pay for ac and cown more of a problem for them but would you say people looking to the utility space that you think they should lean toward those with a reliable pipeline opposed to natgas? >> i think the reliable pipeline and mix helps and the argument of diversity and nuclear energy in the u.s. will regain momentum nat gas is stabilize but elevated and florida has close to 30% of generation from reyo renewables and nuclear. >> thank you for joining us.
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welcome back the list of companies limiting or halting services in russia is growing with the payment players making another move over the weekend. kate rooney has more kate >> the major payment companies had been complying with sanctions but visa, mastercard, amex and paypal suspended all operations in russia cutting off individual russians from making card payments overseas card issued outside of russia won't work locally and a lot of cards in russia are called co-badged and work with visa and mastercard and the
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local payment network and those cards will work using russia's payment network but this is unprecedented. they're seen as apolitical they do get about 4% rickie fowler rev enue from russia it could have big implications in the short term russian banks are already saying that they'll switch to the local network i mentioned or union pay that's the card processing network based in china long term it could boost that growing ecosystem in asia. kelly? >> kate, would crypto be aal term termtive in russia >> it could be you cannot really transact because of sanctions, the exchanges are on high alert and
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can't transport bitcoin off an exchange for a payment so the thought is that if people already own bitcoin they -- it is a way to story and hold on to the werlt and not a way to spend money and russia has been a least friendly area coming to the crypto industry so not looking like an alternative interimly. >> visa and mastercard are down and the exposure is fairly limited. >> one of the open questions a settlement an analyst this morning said it's unclear because this happened so quickly visa and mastercard are a middleman say someone bought a $10,000 watch and the payment was cut off do they have exposure to the
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settlement in between so i think there's still a thought that visa and mastercard could have more exposure and people wait to see if they come out with more in terms of the bottom line and settlement could be an issue investors are worried about. >> great point that does it for "the exchange," everyone "power lunch" starts rite now. ♪ welcome to "power lunch. i'm jon fortt. a sell-off on wall street. stocks dropped oil spikes to a 14-year high investorsfeeling the fallout o concerns of slowing economic growth we look at when's next for the market and for safe places to hide kell sfli. >> thank you the dow down 709 at th


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