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tv   Power Lunch  CNBC  April 7, 2022 2:00pm-3:00pm EDT

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>> coal is on the outs and no one disagrees and some say this is a double-edged sword because the high prices will fuel transition to other fuel sources because nobody wants to pay the high prices. >> true, there is an alternative. there is every passing year more and more pippa, thank you that does it for "the exchange." "power lunch" picks things up right now. and welcome to "power lunch. i'm eamon javers here is what is ahead. a recession may be necessary to get inflation under control. that is the call from bank of america which says that the risk is real, but the fed that will have to hike include growth drops close to zero. and mortgage rates are up and home prices are too. affordability is falling fast. will you be able to afford a house. the ceo of remax tells us if the red hot market is about to take a turn kelly, over to you.
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>> thank you very much high, everybody. let's get a quick check on the marks. where the dow and the s&phave turned positive. the dow up 30 points after being down more than 300 earlier in the session. the s&p up 8 to around 4489. the nasdaq still lagging, as has been the story all week as rates move higher but even with the ten-year probing around 2.6% this afternoon, the nasdaq is only down 30 points or about .2%. and there is a lot of talk about recession and the yield curve, traps ports not helping that cause. they're down 11% over the past week, below the 200-day moving average and down about 10% and it would be nice to see it turn green. and the financials lower even though the yield curve has steepened by 30 basis points off the lows still you could see the pressure across jpm and bank of america and declined down 1% and even a name like block, which we just heard positive from cathie wood to kate rooney, that is getting hit with a
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decline of about 4%. now on the flip site, hpx is jumping after a stake making it the biggest shareholders in the tech name. this one analysts are saying maybe they're looking for an opportunity like they saw with apple back in 2016 hp trading at just about eight times forward earnings but yields remain the story of the market with the ten-year hitting a high of 2.67%. here we are right down here. we've just off of that level right now. the two-year, 2.46%. so this spread is almost 20 basis points from a low of minus 8. so as the fed hikes rates and bullard said the target should be around 3.a% by the end of year, bank of nerk saying if inflation sticks above 3%, the fed will have to keep hiking until greej reaches zero, in other words risking a recession. mark, it is great to you see and tell you how you kind of
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worry this could play out? >> sure. well first of all, thanks for having me. so we are worried that inflation could remain por persistently elevated that the fed anticipates. right now they think they'll see inflation at 2.5% by the end of next year and if that happens, then the fed could probably get away with a hiking psych thal doesn't really hurt a financial conditions all that much but the risk here is that inflation stays elevated and the fed needs to move underlying real rates, those rate as justed for inflation, into positive territory. and as they do that, there is a risk that it could tighten financial conditions more broadly. thereby risking a more severe economic slowdown. >> let me frame the question this way is the tradeoff, if we could take barely positive growth and in exchange for 3.5% inflation instead of 3%, wouldn't we want to take that trade
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how important is it that the fed gets inflation down to 3% or below versus a little bit above that level if the difference is a recession versus avoiding. >> yes and it is a real balancing act for them we think that ultimately the choice for them comes down to what are inflation expectations do if inflation expectations remain anchored and we see inflation that settles in around 3%, the fed might indicate a slightly higher tolerance for inflation in favor of a recession. but if we do see inflation expectations become unanchored and shift higher, then the fed is going to be favoring and trying to lean against inflation, get the expectations lower, even if that means potentially causing a recession. >> mark, it is eamon javers here and i'm wondering whether the fed has to do it all on its own. last fall everybody was talking about inflation being transitory and all of the factors that meant inflation was going away, and the supply chain coming back
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from covid, all of those things meant inflation would peter out. are those things still in play that is will inflation have some petering out effect on its own ow does the fed have to do all of the heavy lifting to get this thing turned around at this point. >> there is a great phrase in markets and that is the cure for higher prices is higher prices meaning that prices increase, will you eventually see demand destruction. >> at some point you run out of customers, right. >> exactly and there is likely going to be some element of that certainly we've all felt higher prices at pump we've all noticed higher prices in the grocery store and that to some extent will mean that folks just don't have as much disposal income to spend on other things. that will naturally somewhat moderate growth and that could moderate prices but real question is how far does the fed need to go in order to see the economy comes back into e equilibrium and what the fed is
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indicating right now only gets real policy rates, again interest rates adjusted for inflation, back to zero really towards the end of next year and the issue that they could face is that they're going to have to get those real interest rates positive and that could start to bite. that could begin to slow growth more and that could also hurt financial conditions and tighten financial conditions as a means to get the economy back into a better equilibrium. >> backing up for a second is it fair to say that given the steepness in the yield curve, the fact that break evens have come down as the fed has ratcheted up the market rhetoric, that the market is responding well or likes what it is hearing as scary as it kind of sounds. >> yes well i think it is safe to say that the market has repriced real rate expectations higher materially and even as that is happened, what you've seen is that financial conditions have been
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remarkably resilient but will the fed be agile enough to respond to evolving inflation data as we see it. meaning that if inflation doesn't start to decelerate, will the fed dial back a little bit. or is there a risk that the fed could potentially overdo it. that we think is the big risk for markets today. and it is quite likely that the fed is going to have to get real interest rates in to positive territory in order to ensure that demand falls back into a better balance such that prices begin to stabilize. >> yep it is -- it's a tall mountain to climb still. let's put it that way. we'll take the -- what the marjt is giving us this afternoon. mark, thank you very much for joining us mark cabana. >> meanwhile the fed rising rates and a slow down in consumer spending all spooking the markets. you are heard kelly talking about how scary things are out there today and my guest said if you believe any themes are real, there are treatic ways to invest
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to prepare for each of them. from aus concentrated growth, jim, thanks for being here one of the things you were talking to producers is different sectors hit in different ways and whether there should be trading in lockstep or differences in the way all of them have experiencing this inflation threat get us your thoughts on that because i thought it was a fascinating point. >> definitely, i think it is curious that financials are going down on the fear that rates are going up and that doesn't make a whole lot of sense relative to tech companies as well. they shouldn't be going in lockstep quite frankly. >> so explain that though. why shouldn't they, if i'm new to this, i want to know which sectors might be the safe harbor or the more volatility, explain why they shouldn't be going in lockstep so people could understand that. >> if you're investing in
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financials, the higher that rates are, the more money bank will get and the more moneys that companies are lending money will get so higher rates are generally a good thing for financials. whereas if for a tech stock investor, the higher the rate, the higher the discount rate and the lower the p.e. on tech stocks so it is curious that both sectors are going down whereas they should have opposite reactions to each other. >> so the market getting that wrong? >> i think the market is discounting many, many things because there is a lot of fear out there. but as things sort out, as we get more comfortable with what the fed is doing, you're going to start to see some differentiation in individual names and sectors, quite frankly. and that is opportunity. >> i'm going quote you if recession is your worry, what company is better positioned than microsoft so microsoft is a favorite of yours. you also like a bio tech name, you could tell us about. but are these -- is the outcome that binary? does have t have to be recession
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or no recession and you hope microsoft could do well in pretty much all environments. >> absolutely. i don't think we're going into a recession. first of all, we have 7 million more jobs, wages are up, yes i know the kpur is worried about inflation. but there is also a lot of pent up savings so let's go there and say that we do have a recession microsoft is incredibly well positioned from the perspective that their products are not discretionary, as every company has to get more digital in their business as we think about security fears, moving to the cloud is a way to deal with that. so, very strong business and at 30 times earnings, i don't think that is an expensive price. >> you said you don't think we're heading into recession what do you think is priced into the market do you think there will be a recession on the horizon maybe in the next four quarters? >> it is tough but it is probably 50/50 at this point i think the market is taken that fear to an extreme
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>> well that is reassuring jim, thanks so much for being here really appreciate your insight on that and i like ending on a positive, kelly. >> yeah. it is hard sometimes so we'll take it when we get it. coming up, rising rates are making their way through the housing mark as demand for new mortgages and refinancing plunge we still have high price and low inventory. where does that all point. we'll peek speak to the ceo of remax. and plus her talking tables and tumblers and tables and three very underperforming stocks. do you buyhe tse names or stay away "power lunch" is back after this (vo) some bonds last a lifetime.
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welcome back to "power lunch. i'm dominic chu. shares of twitter are pulling back down by roughly 6% as some of the exuberance appears to fade a little bit after elon musk took a stake in the company and then joinedthe board of directors earlier this week but the gains on monday and tuesday, as you could see over here, have still, that stock tracking for best weekly gain since february of 2021. it would also be the longest weekly winning streak since july of 2021 when that stock hit the 52-week high it has since fallen around 35% from the levels back then. so kelly, big week for twitter but still takes a long road to get it back to where it was. back over to you.
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>> and speaking of big weeks mortgage rates have been on a te tear climbing above 5%. it is up 60% just since fed chair powell said a faster wind down of the bond program might be necessary let's bring in nick bailey, president and ceo of remax nick, we know from the mortgage application data apps are down 40% year-over-year but we know there are pent up demand from buyers trying to get in what your experiencing. >> you're exactly right. the industry is highly competitive and there are a couple of things happening right now. there is carry over from last year's buyer demand that people wanted in the market but because it was so competitive, they didn't get in. and we also have right now because of the talk and rates that are rising, we have buyers saying i want to get in now before they even go higher but the third piece is pricing last year was unprecedented.
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nationwide, prices were up around 17.3% other markets even higher. and this year coming into january we saw some stabilization in pricing which is all good news to buyers. >> where is this demand coming from i look in my neighborhood in suburban maryland, it is astonishing what prices have done over the past year or so. and everyone was saying well this is the covid demand, people who lived in smaller apartments in the city wanting to come out into the suburbs but at some point you have to run out of that demand, right and the post covid era has got to come to an end. >> lifestyle has certainly played an important role in the last couple of years of how people live. our consumer study showed last year that the number one feature that buyers wants was a backyard and number two is a home office. so they are using homes in a different way. but we have to look at what the underlying factor is demand. millennials make up 43% of home buyers gen z is just as large and it issest may have theed right now
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we have between 4.5 and 5 million homes that we're short in the u.s new construction can't get off the ground fast enough because of labor and supply chain issues and when you have big population and high demand and we can't fill that shortage, that is part of what is driving the continuation of a hot real estate market. >> is that home office demand sort of a covid fad that is going to end at some point or do you think that is a new permanent thing that buyers are looking for for years to come. >> i think it is here to stay. i think the idea of flexibility of how you work and live combined is something that is going to be the norm of how we move forward. >> it is amazing ab people don't know this. this is kelly's living room that we're working in today so we're doing work from home here as well. >> pretty close. distance wise. but that is the idea there is plenty of people who still want to get into the market and now we're waiting i've talked to friends who were saying, listen, we've been in bidding wars, we've lost out so we're going to wait we're going to wait for the summer and see if inventory goes up and maybe prices come down, what would your advice be to
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them >> i think at the end of day buyers get into the market when their ready to buy and when you look at home prices, yes, they are red hot. the west is leading it billings, montana, 30% year over year increases and phoenix behind it and tampa and coming back to the west las vegas and salt lake city upwards of 27%. but now we're looking at the national association of realtors put out a number of average home price in 2022 is around 5.7% and so that is going to help position buyers in a much better way. and so some folks may be looking at interest rates and that may deter them from entering the market but there are a lot of buyers ow there that are saying, okay, maybe i don't have to bid against 25 people now and it is giving buyers a little bit more of a chance. but buyers at end of the day, it is matching the home that you need and inventory is low and demand is there. >> it is a fascinating spring
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and summer sales season for sure we'll check back in soon thanks. >> thanks. >> breaking news on the supreme court now. elon with the story. >> well the senate has now voted to confirm ketanji brown jackson as a justice of the supreme court. making her the first black woman who will sit on the highest court in the land. vice president kamala harris presided over this vote. a black woman who broke a glass ceiling of her own and giving a standing ovation and applauding at the end of the vote this is one of president biden's key campaign promises getting criticism from republicans today mitch mcconnell accused democrats of judicial vix with this point he vote against jackson but there were three republicans, susan collins, lisa murkowski and mitt romney who joined all
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50 democrats and confirmed her nomination senator romney said she was qualified and tgts and capable and bipt support is critical in installing public confidence in the court. and jackson is a former public defender and a mother as well. she also clerked for justice steven breyer roughly two decades ago now and she will take his place on the bench when he retired this summer the senate confirming 53-47, ketanji brown jackson as the first black woman to sit on the supreme court. back to you. >> a historic moment no doubt. but i wonder as you look at the three republicans who crossed the aisle to vote on this nominee, whether you think they would do the same thing if president biden were to get another supreme court nomination during the court of his term this was not going to change the balance so the conservative
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relevance on the court stayed the say but would republicans break ranks if if was a game-changer in terms of the overall balance conservative and liberal on the court >> yeah, i think what was interesting about their votes is that they were really interested in sort of the process and the institution of the senate. if she is qualified, if she someone whose resume makes her eligible to sit on the court then she should be confirmed interesting that this vote is actually the most bipartisan of the past three supreme court nominee votes that we've seen. amy coney barrett was confirmed 52-48. justice kavanaugh with one democrat voting in favor of him. so you so say that bipartisanship may be growing on capitol hill even though the margins are still very slim. >> a bit, a bit of bipartisanship there growing but not from a hee level to start with. thank you very much for that news and coming up after the break,
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when you think of big gas
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guzzling vehicles, gm's hummer may come to mind remember those but now the company is make a big push behind an electric version which it thinks could be a game-changer so let's bring in phil lebeau for more on the big electric hummer phil >> they started delivering the hummer at end of last year we had a chance just last week in arizona to put the hummer through its paces if you will. and yes, it does deliver what general motors said it would deliver. 1,000 horsepower and zero to 60 in roughly 3 seconds they have more than 65,000 hummer reservations but they're looking to increase production why? well if you order a hummer right now, listen how long it will be before you get it. >> you're probably looking at about middle of '24 at this point in time. but what we're seeing that vehicles are just beginning to get on the road and there is more media activity, we do more rowe motional work like an advertise featuring the crab walk for example we're seeing the reservations on
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an upward trajectory right now. >> and those reservations driven because of the ads feeting lebron james and the ad. you do the crab walk at low speeds people have said can you do that down the highway no, you can't. you do it at low speeds. base model is starting at $79,000 but we won't see those until 2024 gm needs to get in the game in terms of convincing public that it will be a player when it comes to evs i want to show you gm versus ford shares an we're going back to may of last year. that is when ford unveiled the f-150 lightning. look at what happened since then even though the lightning has not yet gone into production in terms of deliveries haven't started, it has outperformed ford meanwhile we're going to show you tesla. kelly, keep an eye on tesla tonight because elon musk will be holding the grand opening of the giga factory down outside of
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austin we'll see if he does a little dance like he did in berlin a week or so ago back to you. >> it is going to be a spectacle. >> his cars are great. his dance moves are terrible that is just a fact. >> let's get to bertha with the cnbc update. >> i always say, the best thing about his dancing is his cars. hi, kelly. so here is what is happening at this hour. the white house said president biden tested negative for covid last night earlier in the day he said next -- he was next to house speaker nancy pelosi who today said that she tested positive. the white house said pelosi is not considered a close contact of the president according to sds guidelines new york state trop prosecutor wants former trump to be held in contempt of court and fined $10,000 a day. she said trump has refused to turn over documents speez subpoenaed for her probe no noaa
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his business practices and has asked a state judge for the contempt ruling and fine and baseball fans could head back to the ballpark chicago cubs organi player opend up against the brewers which is just getting underway. the braves are getting ready to start the season against the cincinnati reds this evening of course here in new york, it was a washout. back to you. >> well we'll just leave on t on that sad note. >> play ball or don't. >> thank you very much. ahead on "power lunch," the man behind sanctions, congress voting to make russia's -- revoke russia's most favorable nation status, we'll bring you comments from the dupe national security adviser in just a moment don't go anywhere.
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and 90 minutes left in the trading day. we want to get you caught up on the markets, stocks and bonds an commodities at this hour, take a look you have a lot of movement going on and let's begin with bob in the markets falling for the third straight day bob, what is going on.
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>> a modest buy came through about half an hour ago to tech and industrials have a lift but it is not enough to change the overall trend. what is the trend? well defensive stocks like consumer staples continue to do well some commodities continue to do well and most everything else, not so well so here you see, look, the leadership board and that is a new high on walmart by the way, $156 and mcdonald's that the leadership board and that is about as defensive as it could get. and no rally from the banks. this is kb and the bank etf, the main basket of bank stocks they're looking terrible going into earnings season new lows, we have banks and goldman sachs and citi group at a new low and some consumer cyclical groups an general motors is a new low and ford is not acting well either and a slew of the home builders have hit new 52-week lows like lennar also another important, probably most important group essentially
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in the last 24 hours at a new low that is iyt, transports wore down 6% in the last six or seven trading sessions and bond etf, you won't be happy when you see the quarterly reports, the vanguard bond market hit a 52-week low in the last 24 hours. muni short-term treasuries all new lows and this is very typical of the whole late cycle stage where cyclicals don't do so well and defensive hold up pretty well. back to you. >> so a tough day for the banks. now let's get over to the bond market where the ten-year yield once again hits a new three-year high rick santelli tracking the action what going on? >> moving higher in yield and not so much. let's call it the catch-up phrase, not the condiment. it seems markets have put the tightening in that it sees now the fed has to deliver
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look at a three day of two-year. this is interesting. notice the high yield there right in the middle yesterday, 2.6% keep that in mind. now think 2.4% why? well because the next chart is fed funds for december at end of the year it is looking for 240 basis points of tightening 240 and 260 close. and now where did the rally for yields start right around 240 the long end is now picking up the ball and it is running with it and curving are steepening all except the one that you want to flatten, three month to two year it is at the flattest in one week as you see on this month to date chart and three months to tens, five years steep and the dollar index, that close to 100. back to you. >> just that close thank you, rick. oil is closing for the day reversing the earlier gains. pippa stevens is at the commodity desk >> well oil swung in a 5% range
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today before settling here modestly lower we're waiting on more clarity around what the next round of european sanctions are with china demand also remaining in focus. the dollar is moving higher which is pressuring crude. wti is down .2% at $96.07 and brent crowd down .6% at $100 and did trade below $100 and nat gas is up 11% on the week. david givens pointing to reshuffling of lng cargoes and said the volatility attracts noncommercial traders which leads to more volatility a bullish call onn occidental an doublinged price target to 88 bucks that is more than 55% up from here. >> and congress today voting to revoke the favorite nation trading at the us for russia and that receivers ties with russia and opens the door to
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more severe economic actions today i spoke with daleep singe and now he's the person leading the charge on sanctioning russia i asked him what impact the sanctions are having on the russian economy. >> first thing to say, is that there should be no doubt we've already landed a debilitating hit on the russian economy, it is expected to wipe out the last 15 years of economic gains andin nation just printed at 17% and interest rates are at 20%. more than 600 companies have left, debit cards aren't working, people can't travel and the shelves are getting empty. it is about to go into default there is no doubt we've had a massive impact on the russian economy but we're never going to run out of options even if we wanted to, we couldn't disconnect the $1.5 trillion economy overnight. so we could broaden the sanctions to seccors an companies that haven't been hit yet. we could deepen the sanctions that we've already placed on institutions and make them more severe and as you referenced
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before, we could broaden the coalition of countries and companies that are following our sanctions. >> and for the first time yesterday, the u.s. also sanctioned vladimir putin's adult daughters, but the russian leader has been extremely cagey about who his family members actually are and where they live so i asked singe how we found them and what the message is from that? >> without going into the details of how we found them and how we followed the money, we have strong indications that putin and his cronies hide wealth with family members, with children and mistresses and wives. and there is no safe haven and there is no ability for him to hide assets with his children under longer two adult children of putins are now sanction, and lavrov's wife is now sanctioned and we sanctioned several members of the russian national security council. >> so much analysis is what message u.s. sanctions send to china as that country contemplates what it might or
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might not do in taiwan but that is an economy that just vastly is larger than russias and much more integrated with the west so i asked if he thinks that china is too big to sanction >> no country is too big to sanction but look, china, it is very different than russia. it is a rising power s it become rich by engaging with the world most of the business is done with the u.s. and with the europeans. by contrast, russia is a declining power. certainly in economic terms. it is playing the active of spoiler. it is isolating itself from the global economy so china is in a very different circumstance and i think china knows it would send a very unfortunate signal about its vision for the world if it were to tacitly or accommodate russia's invasion of a sovereign country. sovereign is a important principal for the china. they believe very much in the words of that charter. so we think china understands where we are coming from and the consequences if they depart from it >> and kelly, that was a fascinating answer because i asked him if china is
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too big to sanction and he said no country is to big to sanction but china is in a different situation and why the reason why it might be super difficult to sanction the chinese in the way that wife done with the russians so you wonder what lessons they are learning as they watch this action here play out because they might be saying sh well, that is a real cautionary tale and a. >> we have much influence or much more intertwined in the global financial system. and the reason why china was to distressed by what russia did with ukraine is it did not consider that situation analogous to the china taiwan situation which it would put in a different box. and one final point, you look at sanctions pads which are responding to the influence china and russia have yielded over their respective and china went the economic route and so china may not have to revert to the means that russia is in
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order to exert that influence. aside from taiwan. i'm talking about other countries in the region. >> and he did duck the question on how we found putin's daughters and identified them and their assets and you wonder if we do have visibility into the family members because they are so cagey and so many are living in the west under assumed name. >> no it was great we appreciate. after the break, we have three stocks and three big calls and three trades our three stock lunch is next. what if you were a gigantic snack food maker? and you had to wrestle a massively complex supply chain to satisfy cravings from tokyo to toledo? so you partner with ibm consulting to bring together data and workflows so that every driver and merchandiser can serve up jalapeño, sesame, and chocolate-covered goodness with real-time, data-driven precision.
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welcome back, everybody. time for today's three stock lunch. we're going to run through three analyst calls on three very underperforming names. and our choice trader will tell you whether to buy or sell he is steve grasso today ceo of grasso global and it is great to have you back, steve. we're going to run through this starting with wayfair, getting a downgrade at wells fargo today, obvious reasons, waning demand and competitive challenges would you take pick it up here >> so, yes, so this is a
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precarious spot right now. so i gauge these things back at pre-pandemic levels. wayfair is trading around that level. would you be a buyer, use a $100 stop just in case i'm wrong. you have a couple of things going against it you have people looking for experience things to do. vacations, going out and going back to the mall that could be an experience right, kelly so that is where a target or those traditional mall centers places probably have an advantage. also they've been ripped through with supply chain issues but i think you're okay taking a stab at this around this level as long as it holds the $100 mark. >> next up that big margarita in the middle, it is yeti bernstein upgrading the cooler makes to buy from hold the firm saying that bearishness on the stock is unwarranted given strong growth and the recent performance presents a buying opportunity grasso, is that right? do you agree
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>> i do agree with that. and i catch support at around, i don't know, let's call it high 40s. so another 10 or 15% lower if you want to be cautious and wait having said that, premium brand, i refuse to drink a cup of coffee and take it out of my house unless it is in the yeti they've already brain washed me, it is a premium brand. >> it stays hot. >> it does for hours premium brand that will brafrnl out to other products. so what is human nature about this is once they branch out, they'll have even better margins because they've already done this dance before. so when they do it it again, they're going to do it even better so i expect this one to be a buy for a longer period of time. but i would wait in case you see the market fail for a high 40s price. >> so you're a little iffy on wayfair. more of a fan of yeti. what about teledoc a major pandemic winner but it
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is a major struggler of late guggenheim had a buy rating today saying health care is mo moving digital would you follow them into that stock? >> this is one that i probably, i know i'll probably regret saying this, but this is out of the three. i like yeti as a steady yeti but i do like teledoc. teledoc long-term, if they could run the company efficiently, i think that teledoc could be looking at 20 to 30% revenue growth per year long-term. nothing wrong with that. kelly, if you look at the chart on this and i'm sure you're showing it right now, this is trading below pre-pandemic levels so i know it got a boost by the pandemic but why on earth should it be trading below the pre-pandemic level. and i don't get it it is a head scratcher agree with guggenheim and i think this could trade at $100
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easily in the near future. >> if it doesn't feel scary when your bullish, your probably doing it wrong steve, we appreciate it. thank you very much. steve grasso >> thanks. now tiger woods at the maskers in case you haven't heard. well his return to create more interest in the sport. retailers may not be able to meet increased demand. we'll discuss that conundrum next hone - including the iphone 13 pro with 5g. 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. ♪ ♪ new projects means new project managers. you need to hire. i need indeed. indeed you do. when you sponsor a job, you immediately get your shortlist of quality candidates, whose resumes on indeed match your job criteria.
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welcome back to "power lunch. tiger woods making his return to the masters today. he's even through 12 holes an just 14 months after he was in a serious car crash. our next guest runs bridgestone golf a company that endorses tiger and makes the balls that he uses and he's out there today with. here to talk about the impact of tiger's return and the supply chain challenges they have been facing is dan murphy, president and ceo of bridgestone golf. thank you for being here exciting day with tiger out there. i'm rooting for the old guy. i always root for the old guys for some reason. that's just what i do. >> you and a lot of other people there's about 50,000 people there. i just came out for this call. thank you for having me on the program. man, the city of augusta is alive right now. >> an amazing thing to watch and an amazing time of year as we get into the springtime and
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everybody thinks about getting back out there what do you think tiger's return, if it is a success, what do you think his return means for the sport? >> he's off to a great start i think it means a lot to had sport. there's things, needle movers in different industries and different sports tiger is the needle for golf he's the guy that drives viewership he drives participation, and therefore, he drives revenue from a business perspective, tiger drives our industry. so to see him back on the golf course, and not only just back, but successfully back. being even par through 12 is a really good start. we'll see him make the cut and we'll see what happens on the weekend. >> that's a lot of pressure on tiger's body to hold up an entire support like that him being the guy who moves the needle is that an indictment of golf that they're not producing that next generation of star behind him. tiger is the one name that really reaches fans across every
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sport, right where is the next one going to come from? >> well, it's true he's sort of our michael jordan. but there are a lot of young stars. bryson dechambeau, for example, is one of our guys and a lot of other young guys coming up and getting a lot of media and a lot of extra attention so i'm not sure i agree totally with you, but tiger is -- he's the best player who has ever walked on green grass. he is the nueedle mover, and he does garner a lot of attention he sucks the oxygen out of the room for the other guys. that is true >> if i watched and felt inspired and wanted to take my son out to learn to swing the club around, would i be able to walk into a store and find inventory we could play with >> i can say you can find bridgbr bridgestone inven eninventory. we survived the pandemic pretty well we make our product in the usa, in covington, georgia, where we
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have a manufacturing facility. that's allowed us to avoid some of the problems of sea freight and los angeles harbor and some of the crazy things we have seen in the news. so we have been able to expand our production in covington. hire and employ new american jobs and that's given us the opportunity to be on the shelf when you go there this weekend look for the b >> how much more expensive might it cost me at a time where kind of every time we turn around, it seems like things cost 10% or 15% more than they used to >> well, that's true there's been some price inflation just like there has in every other industry, and golf products, we're doing our best to keep that to a minimum. we have experienced price increases. it's true. but we haven't done that in five or six years and we did do that this time but we're doing our very best to make sure that our manufacturing process is as efficient as can be we're keeping our cost down
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marketing and player wise, and trying to deliver that to the consumer, that's true. >> dan, during the height of the pandemic, golf, the ultimate pandemic sport, green grass, fresh air. lots of distance between players. are you worried now that everybody can get back to the other sports, bowling or whatever else it might be, that you might see a drop off in participation as people say, well, there's other things i can do >> that's the big question we talk about it in the industry all the time we have seen zero dropoff so far. 2020, we saw a 15% increase in participation. '21, another 5% increase in participation. and so far in '22, we're seeing increases in participation as well so we haven't seen that. and i think there's a lot of things that are causing that golf is a lot of momentum. during the pandemic, we attracted 3 million new -- >> we're having a little audio issue there with dan i think we just lost him there >> how convenient. get back to the fun stuff. >> exactly
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kelly, i'm sure you'll get out there with your kids and increase the take-up of golf over the course of the summer. thank you to dan murphy. >> they're going to need somebody else to learn from if that's the case. >> don't look to me. >> a good lifelong skill >> high prices, long waits we're not talking about the golf course it's used car prices right now but could that be about to change we have more details next. alright, so...cordless headphones, you can watch movies through your phone? and y'all got electric cars? yeah. the future is crunk! (laughs) anything else you wanna know? is the hype too much? am i ready? i can't tell you everything. but if you want to make history, you gotta call your own shots. we going to the league!
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welcome back, everybody. an economics lesson playing out in the used car market and the real question is what it means for the rest of the economy and inflation. domchu has more. >> so it's that intersection of supply and demand. the equilibrium price that gets transactions to happen right now in the used car market, we talked about the fact used car inventories are dwindling, prices are soaring. here's the interesting part. according to data from copilot which is a car research tracking firm, they track prices across dealerships all over america, they're looking at some numbers that say the sales of used cars in the month of march has dropped 27% over the same time last year. maybe no surprise because those prices are so high but what's curious about it, though, is those prices have remained high. they haven't fallen to get some of the sales accelerating. so why is that actually happening? because the supply chain issues that have plagued the car industry both new and used still
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exist right now. if you take a look at one other statistic to watch, what are people actually spending in terms of time before they actually go and look at a car and then buying it well, the amount of time they're spending is up 93% because they're not immediately saying i want to go out and buy a car right away i would like to look a little bit, see if prices fall down, so there's no real panic to go out and buy a car, and by the way, if you're looking at the inventory levels that we're talking about with regard to pricing, according to their data, pre-pandemic, about 76% of used cars were below $25,000 in value pre-pandemic now it's only 35%, and by the way, the number of cars over $40,000 is now 25% on a normal basis, it's closer to 5%, so a very interesting dynamic playing out in the used car market >> i don't know. what do you think it's going to mean here's the thing, i almost feel like this is the cathie wood debate in a nutshell
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if used car prices turn or normalize, does the fed need to hike >> is the cure for high prices high prices? and do the inventories build i have been looking for a car. i have not felt compelled to buy one just yet >> exactly sell it. dom, thank you thanks for watching "power lunch. >> "closing bell" starts, wait for it, right now. >> thank you, we're at session highs after a big afternoon upturn in the market most important hour of trading starts now welcome, everyone, to "closing bell." i'm sara eisen here's where we stand in the market very different picture than where we stood this morning. up .5% on the s&p 500. the nasdaq has gone positive as well it's up .25% the dow is up 133 points we were down 300 earlier today small caps are lagging, still in the red. but boy, what a turnaround just in the last hour or so what's taking us higher? defensive, health care, staples.

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