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tv   Power Lunch  CNBC  April 4, 2022 2:00pm-3:00pm EDT

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going to be raising pay for workers reaching a minimum of about $15 an hour. coming up this summer, the union reacted and said this is about more than money. this is about benefits the culture in the caves, better training for workers i'll be curious to see what they do with this money and what the union actually responds and if they're happy about it in the end. >> absolutely. i think that's one we should all watch closely. thank you. that does it for the exchange. "power lunch" begins right now >> thanks, kelly welcome to "power lunch. here's what's ahead on a busy monday the value of a tweet elon musk taking a 9.2% stake in twitter. that makes him the company's biggest shareholder. the stock is soaring, but what's his end game we'll talk about his motives and his influence. plus, the ceo of vertex
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pharmaceutical the company working on a treatment plan for pain that doesn't rely on addictive opiods >> that is a promising breakthrough, tyler. speaking of breakthroughs, the nasdaq up 1.6% this afternoon to lead the markets higher. the dow up 44 points s&p up 26 and the dow was down more than 200. so we have seen this tone firm up throughout the session. would be the second straight day of gains to kick off april here. and it comes as oil is climbing back above $100 a barrel saudi arabia hiking prices for customers in the region. about a 3% gain. and tyler's favorite, the two ten-year spread. what's the path ahead for stocks april is historically a positive month for the market, but given
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the fed's fight against inflation, this spring could be. mike santoli has more. >> april has also tended to be stronger even than usual when the prior five months have been weak as they have this time. it has not lived up to the strongness that we normally see into april all that is to the good. but they're also riding technical tail winds the 9% rally checked off a lot of the boxes the persistence of it, the speed of the rally that often happens around a reliable mote not every time, but often. i think the message perhaps that we can read into this is that the stock market refused to buckle any further despite the pervasive, challenging news that was out there. and almost all the bad news was anticipatory the yield surging because of what the fed is anticipating to do it was calls for $200 oil.
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all those things that people were extrapolating the friction points of this market to say they're going to continue. i do think that buys the market a little bit of the benefit of the doubt here for having come off those lows earnings estimates, very important. we have not flinched at all. they have managed to stay up for 2022 that's a net positive. one thing that gives pause is a lot of the bellwether groups you'd like to see performing are not. by the way, that also includes the megacap tech stocks which sometimes act as defensive sources of stability in the market >> thank you very much our next guest says with the reality of the fed tightening and profits decelerating, richard bernstein, ceo and cio welcome. good to see you. you say being bullish or bearish isn't like a like switch rather it's like a dimmer switch
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that slowly gets dimmer or brighter are you getting dimmer, and that's not a reflection on your intellectual prowess >> yes, we are getting marginally dimmer. i don't want to make it sound like we're under our desks in the fetal position that's not the case. we still have a great deal of risk, but we are toning down the risk there are many certainsieties, we know profits are going to decelerate and the fed is going to raise rates >> so where do you go to do that or how do you tactically reduce risk in the portfolio? what do you bulk up on? move away from >> we have been heavily weighted in what's called late cycle investments. things like energy, industrials, things like that we are still very overweight those, but we have also been overweight consumer staples and we've recently moved more to
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utilities. those are the traditional kind of spare tires that when things go wrong, they tend to outperform so we've been reducing our weight in these late cycle sectors marginally and increasing weight in staplings and utilities. >> i think you couldn't be more spot on here you've got profits slowing you've got the fed raising rates and tightening in other ways does that mean necessarily that a recession is inevidtable or could the fed engineer the so-called soft landing as hard as it has proven to be historically >> i'm very skeptical the fed can engineer a soft landing. the reason why is if we go back to the late '70s, early '80s, i think the lesson that paul volcker taught everybody was the only way that the fed can truly stymy inflation is by crushing
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the economy. we know all inflation is is demand greater than supply if demand is greater than supply, prices go up don't need a ph.d. to figure that one out if you can't control supply, which the fed cannot do ever, if you want to slow the economy, you have to stymy demand they have a lot of work to do before they're in a contractionary phase >> i appreciate your comments. especially the way you categorize this as looking for late cycle sectors that's where i get confused. you know, where are we in this cycle? is it ending because we're -- if you think we're going into a downturn or what starts it again how can we hit reset explain how this compares with what the market has done in the past recoveries. >> so the key thing you said is
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ending i-n-g. if you think about the yield curve, twos to tens inverted for a nano second, but it did invert the clock has historically been a year, year and a half, until you get bear markets and recessions so what you have to start doing now is looking for corroborating evidence there's no way to spin the yield curve as something good. so now we have to look for corroborating evidence it's hard to find that corroborating evidence that says a recession is imminent and to use the phrase i used before, that we shouldn't get under our desks in a fetal position. >> so we could be late cycle for 18 months? >> we could be one of the interesting things, is if you think about the '70s, inflation went up and by it, it hurt gdp that's not happening this time one of the reasons that inflation is up is because gdp is so strong this is a very different make up than what we saw in the late '70s, even though we have
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inflation being similar. so as long as the labor market remains this tight, as long as household balance sheets remain this strong, as well as consumption can remain healthy, it's hard to see how this is going to end in the near term. so the late cycle could go on longer than people think remember, late cycles end when the fed becomes super aggressive and crushes the economy. this is a very lily livered fan. >> it feels early cycle. >> i'm not sure it's really early cycle because we're not, you're not seeing, you know, early cycle, the autos in housing and retail and things like that. that's the beginning of the cycle. i think we're past that. you know, i think that was coming out of the pandemic we saw a lot of that. now we're somewhere later in the cycle. i guess we could argue that whether it's mid or late or where are we, but i think, unless the fed gets really aggressive here, we should expect the cycle to last longer than people think.
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now, the other side of that would be that inflation is going to be hotter than people think as well. that's probably what people aren't banking on now. >> i feel a little more clarity in this environment. appreciate it. let's move to the big stock mover of the day twitter shares are surging almost 30% after elon musk pu purchased a roughly 9.2% stake his motive, unclear. analysts say he could do almost anything given his corporate influence. joining us now, william cohen. just would love your thoughts on this love hearing everyone's takes and even the analyst community is all over the place in term of what they think could happen here >> with elon musk, he could do anything he wants to do. as you said, he's worth $275 billion so if he wants to you know, use some of his net worth,
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some 40 billion to buy what he doesn't own of twitter, he can do that. if he would rather just rattle the cage, which he's very, very good at doing on twitter, ironically enough, he can continue to do that. he can try to get board seats now that he owns so much of the company and have some real influence. so it's not clear exactly what he wants to do never clear exactly what elon musk wants to do and that's part of his charm, i guess. if he wants to have influence in the debate without owning twitter, i'm not sure why he needs to own twitter if he really wants to have influence in the debate, he can do that more cheaply than buying twitter. he can buy "the new york times" for 7 or 8 billion and have some serious influence in the debate. so you know, i think he's just having fun and he's already made what, 7 or $800 million just buying the stock and holding it. so that's a nice payday for him,
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too. >> he's put in almost $3 billion. how much has he made today it's 800 million for a guy who really doesn't need the money. this is tip money for him, i suppose. he has said in the past that he's, i guess concerned about free speech and whether free speech is allowed to flourish on twitter. what do you think he's talking about there and if he wants to be, and i guess been described as a passive holding, but if he wants to be influential at twitter on that, what would that look like? >> i think he's got plenty of free speech. we have a tremendous amount of free speech in this country. i believe it's the first amendment of the constitution among other places so he's got plenty of free speech i don't think there's much regulation of what he say on twitter or elsewhere >> but others are critical of
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it other people who would generally lean to the right have been critical of twitter for rules that they see ato their free speech >> i get that. and people are removed from twitter because they do things that go against twitter's rules and regulations. >> frankly, we're not allowed to call fire in a crowded theatre, tyler. so i don't know what the equivalent of that is on twitter. but there needs to be some regulation of that and you know, if elon musk is going to talk about taking tesla private at $420 a share fully funded on twitter and you know, he's going to get slapped by the sec because that wasn't really true. i noticed he didn't get slapped by twitter he's got plenty of free speech >> so i'm curious how you would compare this to other kind of media platforms. you mentioned "the new york times. we know jeff bezos bought "the
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washington post. should twitter have done more to defend itself against the fact someone could just snap up the shares in the free market and easily become the largest shareholder or was that supposed to be a good thing that it wasn't run like the old media companies? >> i think it's great that he can buy up what he wants here and rattle the cage. he's become like a bit of an activist investor now that bill ackman has decided not to be so activist in his investing strategy that's the beauty for our free markets, the beauty of public companies. it's almost like you know, in the beauty, too, of when rupert murdoch bought dow jones and "the wall street journal." that was basically a privately held company and he was able to rattle the cage there and get what he wanted with "the new york times," basically a privately held, public company i bet if he put a big enough price out there on "the new york times," he'd get "the new york
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times," too, even though the solisb solisberger family pretty much controls it. you're going to become a public company, then you absolutely either have to anticipate somebody like elon musk coming along and buying up 9.2% of your shares or putting defenses in place to make it much more difficult. but that's not very shareholder friendly so i think what twitter has done is fine and i think if elon musk wants to buy this thing, god bless him. he certainly could pretty much do it in petty cash. i don't know what he'd do with it he certainly can't buy it through tesla, but he could buy it using his tesla ownership >> how profitable is twitter >> depends on various points in time, but it has the potential to be extremely profitable if they do, you know, boost their admini ad revenue and other aspects of their business
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the truth is, i think we know the secret of twitter is, it's not nearly as big a business as it could or should be. it's basically the preserve of a relatively small group of people, most of whom or many of whom are journalists looking for quick information and having fun and being part of the conversation, but most americans and people across the world have pretty much no idea or no participation in twitter it could be much bigger business than it is i don't know that musk has the interest in making it that, but it could be and should be much bigger than it is. >> we'll leave it there. great to have you. thank you. in parting, as much it's true, both twitter and certainly "the new york times" punch way above their market caps. >> yeah. >> the times is clearly more influential than it's less than $10 billion market cap would have you believe >> forgive me for not knowing this telegram is another one which has become very prevalent around ukraine. >> a little bit harder to have
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that public reach. twitter has that unique. >> all right, folks, coming up where are you? there you are. your inversion playbook. didn't know you needed one, but we're going to give you one anyway consumer discretionary stocks sell off post inversion then outperforms later. the winners that could be post winners inversion. plus, a non opioid shows promise in clinical trials the ceo will share the potentially game chainngg but still experimental medicine. ere. ... looking intensely for a print that i never actually printed... ... so i don't have to deal with that terrifying pile of invoices. intuit quickbooks helps you easily send your first invoice in 3 steps. simple. you're a one-man stitchwork master. but your staffing plan needs to go up a size. you need to hire. i need indeed. indeed you do. indeed instant match instantly delivers quality candidates
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much of the focus has been on risk and recession, but what if there was a ses successful way to profit from that inversion? our next guest says leisure stocks tend to outperform six months later he says it's been overly punished this time around with names like harley davidson and winebego down from their highs he says it's a great opportunity to bargain shop. senior research analyst at baird. i think our friend, richard bernstein, would probably disagree with you. he was just on a few minutes ago
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saying avoid what he said were broadly consumer discretionary stocks and go to late stage cyclicals like consumer staples, like utilities, like energy. you take a different tack though maybe it's only in style and not so much substance or in -- not in a definitive way. explain. >> thanks for having me. i did hear that segment and admire his work. we have a very constructive view based on valuation, but it's not always a very good trading signal and when we looked at trading patterns around past yield curve inversions, the pattern is pretty clear. you want to avoid these stocks likely for the next six to eight months as investors digest essentially bad news, but then we tend to rip and fairly early.
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i would consider this more of an early cycle play you want to be invested at that moment fundamentally, we feel good about evaluation, but it's not the best time to get involved in these stocks we want to wait and our signal would suggest we're perhaps six to eight months away from a buy. >> six to eight months away from a buy in the kinds of consumer discretionary stocks did i understand you correctly >> that's right. >> we're not there yet, but we're coming there so don't be head faked away. and the couple you like particularly are a recreation names. one is brunswick the other is winnebego explain why you see them as emerging winners say beginning six months from now. >> yeah, so we like companies that are gaining share the strong balance sheet and an active buyback program it could be a difficult six months as we've just talked about. we want companies that have the
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balance sheet to go ahead and buy stock in their own company brunswick's a very good example. that company has an analyst day about a month ago and i thought they framed the future quite well in 2025, their plan is to earn $16 to 17.50, but they also provided a downside scenario in which they might earn just $6 if the market were to correct by 40% and they were talking about the remarket right now, we're trading at 12, 13 times armageddon in their scenario that's good value. but our signals support you can be patient, build a shopping list and buy as panic sets in. >> as panic sets in. wow. and the other is winnebago explain the buy case for that and when >> it's a similar case again, very high quality company.
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they've had a number of smart acquisitions under its ceo they're taking share i'd say dramatically in the spaces they occupy our cycle neutral earnings power scenario suggests they could earn 7 to $8, which is much below what they're going to do this year. but in that scenario, very inexpensive. tend to get pessimistic in our group because it's such an easy purchase to delay, but they have a buyback in the quality and share gain opportunity that we're looking for in that shopping list. if you've got a ceo whose name is mr. happy, how can you bet against him? >> isn't that right. >> craig, thank you, man some good ideas, maybe not for right now, but for a few months from now as we sweat off this inflationary fever craig, thank you >> thank you still to come, we're doing it even on a monday.
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from chips to coffee to cars, our trader will give his take on each of these stories today. as we head to break, during april, we're celebrating financial literacy month and featuring some of our cnbc contributors here's guy adami with how it affects wall street. >> financial literacy has a huge impact on wall street. why? the great mythology was nobody understands money better than we do they being wall street 2008 and 2009 proved to be the opposite we now can ask questions we never asked wall street before so if you're financially literate, you can ask questions that will make the iusy tterndtr
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the european union is putting together more sanctions against russia sources tell cnbc it's likely to restrict jet fuel, products and luxury goods go to to read more.
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in florida, jury selection has begun for nicholas cruz. last october, he pleaded guilty to 17 counts of murder an accuweather predicts this will be is second straight year of above average hurricanes with winds of at least 111 miles per hour and a sign of hope from kharkiv. a couple getting married and celebrating their new lives together in the bombed out remains in a government building the couple are medics who met while helping treat people kind of a cliche, but love always finds a way >> thank you ahead on "power lunch," we'll speak to the ceo of vertex new data on the company's potentially non addictive pain drug >> plus, nearly real estate. one company building 3-models of
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markets, stocks, bonds, commodities and we'll talk to the ceo of a biotech that's working on a non opioid painkiller let's start with bob as tech stocks firmly lead the way higher today, bob. >> that's correct, kelly growth is back these stocks have come roaring back in the last two weeks and the reason the dow is now firmly in positive territory is because stocks like salesforce, for example, apple as well, microsoft also having a good day. but big cap tech in general having a good day. some of the software names are strong semiconductors like nvidia very much on the upside take a look at some of the software names they've also been on a tear recently service now, oracle, paycom, salesforce also having a very good day on top of that, the more speculative stuff. ark itself, arkk up about 30% is
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dragging up everything not just tesla zillow, block, roku, everybody you normally think of associated with this. spotify, shopify also strong what i'm worried about is the banks. we have 52-week lows today u.s. bankcorp and citigroup, they're at eight month lows. so this sector is having a really hard time with this story as we go into earnings season, which will start next week now, the yield curve might be inverting and there might be wo worries about that, but the vix curve is not further out there, 22, 24, 26. on the futures curve but below 20 on the cash back to you. >> i can't get over those 52-week lows on the banks. thank you very much. let's get to the bond market where the two-year and ten-year
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are inverted today how many inversions do we have today, rick santelli >> you know what, you caught me off guard. i know we had 13 on friday, but the three-year is not the highest yield on the curve anymore. the 20-year is so we're going to have to subtract a few i awill tell you this, we had a three-month bill auction went for 67 basis points here's the year-to-date of three mo three-month bills. the old guy is trading about ten basis points under 57 and what i wanted the show you is that three-month bills year-to-date are up about 53 basis points because they keep up every week, you're going to see that t bill rate move up, up, up problem is two-year note yields even down a bit. the curve steepening twos, threes, and fives are lower in yield, higher in price. they're up 170 basis points for
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the year you have 53 on the bills 170 on twos. now let's look at fed funds for december they're up 160 basis points for the year so twos and fed funds are almost 1-1. year-to-date of tens are right around half, not quite up about 89 basis points on the year you get the picture. listen, i can't tell you we're going to go into a recession or not. larry lind sey did a good job o it, but these inversions are going to last a while. kelly, back to you >> the number doesn't matter so much as that flatness overall that we're seeing. thank you very much. oil prices also moving higher today pippa is here to explain what's driving this action after all those spr releases >> oil prices are on the move and back above 100 bucks amid calls for tougher sanctions against russia as civilian deaths in ukraine rise the european union is working on a new package of sanctions, but remains divided over whether to
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include energy germany's finance minister telling cnbc that the block has to put more pressure on putin, but that's it's not possible to get gas supplies at the moment french president macron said the e.u. should agree on restricting coal while lithuania has cut off russian gas imports. with that, let's get a check on prices wti at 103.15. brent crude at 107.44, up 2.9% also wanted to note in a regulatory filing this morning, exxon said it may be forced to write down $4 billion as it halts russian operations kelly, back to you >> thank you very much vertex pharma last week shared positive data for its experimental painkiller. the drug is not an opioid and not addictive. joining us now, the vertex ceo and meg terrell. >> thanks so much.
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doctor, thank you so much for being with us today. it's our first time to get to talk since you've been in the ceo role really excited to get to talk with you let's start with the new data you reported last week on this potential alternative in treating pain. tell us about the results, what significance they could have in adding a new treatment to the marketplace and next steps >> it's a real pleasure to be here with you today and these results are with our molecule 548, which we shared data last week from two phase two studies. the important thing here is there has been no innovation in the pain space in 30 plus years. and with the devastation of the opioid epidemic that is going across communities in america, it is clear that we need an effective pain medicine that doesn't have the addictive potential of openioids.
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what we showed with the trial is that we have a medicine with high efficacy, a good safety and efficacy profile and it does not have the addictive potential of opioids. with these results, we are working with urgency to move this trial to phase three development, which we hope to do by the end of the year after we have conversations with regulators, but we are very keen to bring this molecule that held so much potential for patients with pain. >> yeah, absolutely. it's a target that's grounded in genetics, which is what vertex does, but its target is similar to others that have failed for other drugmakers different sodium channel has not worked out what do you see in terms of the phase three trials looking like? do you anticipate you'll need to compare with an opioid directly and how much support do you feel there is from the fda given the
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need for new pain drugs? >> you mentioned the human genetics behind this particular class of pain medicines anned t the tale of human genetics at play here is absolutely fascinating. as you may know, there are families of pakistani fire walkers who have a genetic mutation that allows them to feel little or no pain despite walking on hot coals on the flip side, there are families who have another set of genetic mutations that with the slightest bit of stimulation, they feel intense pain the molecule takes advantage of this finding and targets exactly those mutations in certain sodium channels to stop the initiation of propagation of the pain signals and that's how thi class of drugs works with regard to the next steps and path forward, i think that it's very clear we need effective pain medicines that
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are safe and well tolerated and clearly lack the addictive potential of opioids and while we haven't gone through our regulatory interactions, i feel high confidence we're going to be able to move this program into phase three and have this medicine be one of the keys in our arm as we fight the opioid epidemic and bring forward effective medicines. >> alas, the story of a non addictive painkiller is one we've heard before how do you know it's not addictive and for example, as you use the medicine, do you need more of it to retain its effect and does it work as well as an opioid in moderating pain? >> it's such an excellent question and you know, it comes down to the human genetics that we were talking about around the sodiu so sodium channels and here's the
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key point. the receptors for vx548 are only found in the peripheral nervous system so the way this drug class works is it dampens down the initiation in the peripheral nervous system and that's why we have no concerns for addictive potential. obviously drugs like opioids work in the central nervous system >> does it work as well as an opioid the effects as long lasting? >> we just conducted two studies. one in a model of pain after abdominal plasty surgery and another after bunionectomy surgery. it was superior to the placebo group and we had a reference arm in there with opioids there for
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context and the pain relief was efficacious and the safety a profile looked good. >> we look forward to having you back on to join us because we didn't even get to talk about cystic fibrosis. thanks again >> and we will have have her back soon, i hope. coming up, a digital development. thki cpake a look at oneomny reinng urban developing. our clean start series is nerks.
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artificial intelligence, the metaverse often used for entertainment, but they can also have practical purposes. diana olick brings us the story of a startupand climate change >> when we think about the biggest environmental offenders, we think cars and factories, but real estate is right up there. accounting for 40% of global emissions. the race is on to lower those in
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single buildings and entire cities and one company is doing that virtually by creating digital twins. >> digital twins themselves are virtual representations of real things in our case, cities. >> it takes in thousands of data points about their operations and systems in order to create exact replicas of both inside and out. >> they can be used to optimize all aspects of planning, construction, and ultimately regular maintenance. >> using its so-called smart world, it can monitor the interplay of buildings, infrastructure, transportation, and people in order to lower carbon emissions >> where the problems are, which systems to use, what types of chargers to use. how to electrify a building. >> the angalysis shows building owners where their money might
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be best spent. they're working with amazon to decarbonize buildings in phoenix and it's working with several other cities >> our digital twin features an unprecedented level of realtime sustainability data. >> as cities are making laws out there requiring building owners to eliminate emissions for the first time in history. >> they released their first products in 2019 and signed its first commercial contracts by the end of last year its funding so far has been crowd funding. over 6,000 investors from around the world for a total of roughly $13 million. now there is already considerable competition in this space from companies as big as microsoft, cisco, ibm, and ge, as well as several smaller firms, kbut given the size of th space to digitally map the whole world and everything in it, there certainly is a lot to go around >> fascinating the whole series has been. thank you very much. today's three-stock lunch menu has a side car, espresso
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mar martini. starbucks? amd. there you have them, folks >> get no more work done all day. >> we're back in a moment.
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welcome back, everybody. it's time for our three-stock lunch. we're going to quickly take a look through the names driving the news let's brynn in steve grasso and a cnbc contributor and he'll give us our trades on each we'll start with ford when posted a 17% decline in sales in the first quarter, about in line with analyst expectations but the stock is down 20% this year, steve. the started as a little blip and now what do you make of it what would you do with it? >> yeah, so i'm always biased of ford and gm. i always own american cars as well so i always feel like i have an allegiance to them when i look at the stock chart, though, they don't look terrible they don't look great either so that's the world of technical analysis the one tailwind i heard from the vp of sales, the in transit volume, up 74% that means we're coming to an
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end of supply constraints or supply chain constraints, i should say would i be a buyer of it i'm not sure, and i'll tell you why. if you're going to have a twos-ten inversion, that recession is going to happen sooner rather than later, even if is a year out or a half a year out that could impede people's attention span to buy a new vehicle. >> let's go on to stock number two, it is starbucks, which announced today they're going to not do their buybacks anymore. what do you think? >> yeah, so i think he's had his head wrapped around politics of late i think there's a huge bucket of thought that's going into this why? think about what he said he wants to bypass the buyback and when you look at that, i think he wants to have the perception or maybe the reality of spending more money on
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employees rather than on bolstering the stock price so do i think it's 100% political, tyler absolutely not when i look at the chart, it doesn't look constructive to me. the one thing that is constructive, there's a scarcity value in coffee stocks as a matter of fact, i think i read an article that they're going to have a spac on a coffee related stock. so if that doesn't tell you there is a scarcity value to starbucks, nothing else would. >> still, i said it a emmonltd ago. feels like the most underplayed story of the day, a company this big holding its buyback. let's talk amd before you go they're buying the cloud startup for almost $2 billion, and amd is down 25% this year. everyone trying to make heads and tails of the semi cycle. what would you do with it? >> so here's the human nature arm that comes in. this is all cyclical in the semi-conductors, kelly, they're always boom/bust what has happened is you have a
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scarcity in supply of semi-conductors due to the explain chain constraints. what's going to happen in the future, in my humble opinion companies are going to overorder. a company like ford is going to order when they can, not when they have to every other company is going to do the same. so what follows a supply constraint is a supply glut. i think the market is reading that the intelligent way you have to be picky in the semi-conductor space i would rather buy nvidia than amd, but there's going to be a glut versus the supply chain constraint >> that's exactly the concern in the market >> did you notice those drinks are now empty on the wall? >> oh, my gosh >> did you finish all those drinks, steve, that are on the wall there >> you know, i'm doing my best the old shirt had me chopping down trees i feel like this is an up and coming wall streeter, not a guy on wall street for 30 years.
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but i'm looking forward to the next six months. i got to keep it simple stupid >> i like that god is in the details, and we finish the drinks here, all three of them. steve, thanks, man good to see you. >> all right, freight rates finally falling, but could this be a bad sign for the health of the economy? 'll okt atexwelo ath nt.
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let's check out the dow. transports down 6% in a week friday, worst day in nearly two
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years. this comes as freight rate are dropping sharply for more, let's turn to frank holland. >> trucking rates year over year growth, it fell by more than 80% from the start of february to the start of april really a dramatic turnaround that some people see as a recession indicator. trucking rates were 29% higher year over year with demand more than double year over year now, that has fallen down to 6% higher year over year, and that demand, 22% lower year over year that shift is interpreted by some as a leading recession indicator. here's why on paper, and on papeser the key term, u.s. retailer inventories are historically low 23% lower than they were in the average time between the great recession and the pandemic but those numbers are from january. right after the holidays coming up on april 14th, we get a fresh read on retailer inventories from february, which will give a clearer picture of what's actually on shelves and in warehouses. one more key data point coming up on wednesday, we get a look
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at rail volumes. the closest time to real time data on freight, container shipping right now, how most consumers get goods that come into the u.s that container shipping is down 7% year over year. now normally, rising fuel prices push freight off trucks and onto cheaper rails. if these declines continue or they turn around, both of those things being closely watched as an indicator of recession or a freight reset. back over to you >> basically, there's almost a running theme, what you said, what steve just said, what rich bernstein talked about at the top, where are we in the cycle isn't it a good thing the pandemic is ending, but transports are usually a leading indicator. is it a good thing semis are going to come back down to normal or not. >> and corporate profits coming down so you're starting to see sort of, we talked ad nauseam about the yield curve, but these are concurrent indicators that suggest. >> go ahead. >> i think you touched on it a
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lot of times on "power lunch." in every market, somebody is losing money and somebody is making money when these prices go down, it's better for retailers, but freight companies get hurt >> and retailers are struggling because everyone is spending on services now frank, thank you very much >> all right >> thanks for watching "power lunch," everybody. >> "closing bell" starts right now. >> stocks are at session highs the nasdaq is jumping nearly 2%. the most important hour of trading starts now welcome to "closing bell." i'm sara eisen here's where we stand in the market tech heavy nasdaq stands out today, up 1.75%, but everyone is higher and we have recovered from nearly 200 point decline in the dow. s&p up .7% why is tech doing well well, you have the chinese internet names soaring on friendlier moves from chinese regulators twitter carrying the s&p 500, communication services the best performing group tesla doing well on deliveries and technology, consumer


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