tv Power Lunch CNBC April 8, 2022 2:00pm-3:00pm EDT
fastenal is first to report to give us a better sense of whether a slowdown is, in fact, in the cards seema, thank you very much that does it for us here on "the exchange. everybody. "power lunch" begins right now welcome back recession warning, the dow transportation index is down 6% this week. demand is deteriorating, prices are falling. that could hurt a number of stocks bank of america has a list of those you want to avoid. after ben mckenzie is taking on a new role you may remember him from "the o.c." and "gotham" now he says the market is full of reckless, and why he thinking this is a
bubble that's about to burst. >> and we'll ask him what eamon was like in high school. [ laughter ] the dew is up 241, so an incredible divergence today, but it is keeping in theme we hit 273 earlier. steve liesman, where did they go >> what it means to be a dove on this very hawkish meeting, and in context, it just isn't that dovish clairol evans saying, i'm optimistic i can get to neutral. well, why is that important
here that's where the market is priced you can see there, seeing a 3.1% funds rate by june evan says he thinking surging inflation now up there 8% will decline. he also cautioned, quote now, not to be outdone, his comments were offset by jim bullard, who said he wants to get the rate up to 3 or 3.25 by year end, which is on the hawkish side so the debate is going to 2.4 by yearened oar 3% or higher, which is as you say, the message has
been shockingly consistent i think that's a great question i think we have a couple bad ones in front of us. it's supposed to be up near mid 8% range, but i think toward the end of the year, we start rolling off the balance sheet, i think that's when the debate will become more pronounced. that's where i think the -- >> either way neutral means well above 2%, so still a ways to go from here. >> right, exactly. >> thank you, steve. our next guest has a strategy for everything you just heard steve talking about.
he says there's still plenty of opportunity despite rising rates and short-term volatility. for more welcome in david katz, chief investment officer at matrix asset advisers. the one question i have, if you want to think like a member of the fed, what daughters might you be looking at we think what you're hearing is a lot of sentiment, a lot better to talk hawkish, and quite possibly change the market's ideas than actually having to raise rates we think when all is said and done, inflation will start to look more tame by late summer,
tell me how you figure out where you safely crouch during this environment? >> right now 19, 20 times earnings, a lot of stocks are selling at about 10 to 12 times earnings so we think the banking will be a beneficiaries by a rising rate environment. we don't think we'll be going into a recession we think banks have sold off we don't think that's going to be the case. there are lots and lots of financials they are a direct beneficiary of risings rates. they have hundreds of billions in money markets if they're not getting paid on. and they're going to start to make -- pnc preannounced in the
last week or two, upped the guidance we think there's lo in very good form those are the things up to buy >> we think they'll do very well in the next nine to 12 months. >> that's where you would like to know, whereas you're more cautious that we're witnessing as of late we're much less upbeat about putting new money to work. we're enjoying the ride, utilities are something we think generally don't do well in a rising rate environment.
we do think you can 3u9 money into select -- they have sold off significantly, with a lot of companies that are at good valuations so, again, the economy stays intact, which we think it will, you can buy qualcomm, ge connectivity is also an industrial/technology company, we think is in a great price. >> there's the idea out there that facebook is tired, and social media is moving past
that why do you think it's something to pick up >> it's shockingly cheap it sells at about 13, 14 times next year's earnings. >> half the world is using their product every month. it's not going to be investing, either way, the stock does a lot better they still have a good franchise. they've got they have been pretty savvy in terms of running a great business >> i'm going to post that on my facebook page and see what
reaction it gets thank you for your insights. >> thanks for having me. have a great day. coming up, demand is weakening, prices dropping we'll talk to bank of america's analyst about stocks to avoid. plus goldman sachs says sell robinhood. the stock is falling, but is it a buy on the pullback? da'll discuss the trade in toy's three-stock lunch here, ahead on "power lunch.
welcome back to "power lunch. we want to show you what's happening now with shares of biocrisp pharmaceuticals, which are tanks, losing more than a third of their value, down about 36%. the biggest driver has to do with an experimental drug that it biocryst has been developing. it said it's pausing enrollments while investigating what could be potentially adverse side effects. no new patient enroll metropolitan is happen, but they did say those already enrolled in this clinical trials will continue to receive the experimental drug, at least for now, but it's down 36% on that bit of news, kellie, i'll sell things back over to you.
can you disentangle this they have labor challenges, few headwinds. how much is a good indicator of good old demand. it was hard to get labor so what you have done is taken this incredibly tight network. we have seen loosening up. at the port of long beach, 91 vessels down to 33 in queue. so we're starting to loosen up the supply chain, but this seemed to be more to us demand >> take one step more, if you can. explain what you see in the transportation, one of the
things you told us is you're seeing pricing declining rapidly for this sector. of is an indicator, or is that just sui generis >> that's a great question everything was so tight we saw pricing going up, how labor continued to go up, that we continued to go pressure rates for a while. not too long ago they were talking about labor loosening up, so if you're seeing -- help the supply chain move. when we looked at our survey, the demand came down, but shippers are saying they have see much better access to -- and as you see, truck rates have
fallen about 27% pretty rapidly, that's include fuel charges, obviously. having come down that much >> do those low prices flow through then if they're seeing lower pricing, can they pass those savings on is that a big enough impact? >> you know, i think focusing on pricing is certainly one part of it it's still in terms of the demand side of the equation. we've got through a couple
freight downturns, but this one seems broader. are any sectors holding up better >> when you think about transportation, we don't make anything, we just move it, in terms of the cycle less than a truckload -- that would be a normal cycle, but given we're seeing a broader kind of consumer impact so far, it's ranging from truckload commentary all the way to the air freight in terms of where you're seeing some of that decel deceleration. >> certainly, you know, the fact we're seeing the one concern would be not only are we seeing
inventories creep up, right? we were all concerned, that this will last a long time. if demand comes down, it's okay, because the system has a lot of inventories to rebuild, but the speed with which we're seeing inventory rebuild, it sells you something is going on on the demand side. >> ken, thank you so much. ahead on the show, a meta-course meal restaurant brands heading to the metaverse. can you actually eat anything there? plus our three stock lunch we're opening a tab. our traders are buying or selling. and we're celebrating financial literary month here we have why it is important to invest in latinos. >> they are a massive
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welcome back, everybody. time for our weekly etf tracker. this week, the big tech etfs the sharp rise in interest rates has been weighing on performance, of course supply chain problems still linger for parts like tech look at the performance here, the invesco qqqs are down about 3% and the tech spdr is down about 3.5% that's not stopping people from putting some money to work here.
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welcome back, everybody. 90 minutes left in the trading day. stocks, bonds and commodities, we'll talk to an actor who's become one of bitcoin's most outspoken critics. bob, what is going on out there? >> bottom line, we are still see selling in tech. the cathie woods, this would suffer the most. all down today frankly i'm more concerned interest the semiconductor
space. this is a really big stock, it's $100 today my heavens, this is a real megacap name that makes a lot of money. i'm concerned about that trend now. this is really an indication they're anticipating some more interesting slowdown in the economy. isn't lower oil good for the stock market, good for inflation trade? the overall market doesn't seem to be responding to the good news of lower oil prices
everybody wants to own these names, but guys, this will not put the stock market any close to new highs back to you. thanks, bob. let's get over to the bond market rick santelli is tracking the market it really is unbelievable. 33 basis points, as you look at a one-week chart remember today it's not only our yields going um, but we may be responsible for pressuring everybody's yields up. think ecbs
they were up 15 basis points we're just on the cusp of the widest it's been since early 2020 >> look at 2s to 10s 27 basis points in a week, that's big time. finally we almost lose sight of the fact that the dollar has steadily climbing. it hovered and traded above 100 briefly, hasn't closed above that level since midway of 2020. eamon, back to you, rick, thank us for that. that's right, it's friday. pippa stevens is at the commodity desk. >> hey, eamon, oil climbing
today, but not enough to erase losses earlier in the week oil is on track for a second straight down week the longer-term producers will need to ramp investment. 68 for a gain of 2.1%, now looking at the stock impact, energy is far and away the best sector today a number of stocks -- back to you. hollywood actor ben mckenzie, known for his roles on
"the o.c." and "gotham." now he was recently profiled in "new york times", and now he's attending a major crypto-conference down in miami. ben, welcome to the broadcast. thank you so much for being here >> you and i have had this weird relationship where we talk over e-mails about all kinds of subjects, starting with corporate espionage, now on to cryptocurrency how did you get from hollywood to a crypto-conference today in miami. >> it's a long story, i'll try to keep it short save it for the book we have coming occupy next year, "easy money. i haven't used it much in 20 years, the dismal science is not something you talk around the table at hollywood productions, but over the pandemic i had a
lot of time on my hands. so i took a look i took gary gensler, the head of the s.e.c.'s course on blockchain and cryptocurrency at m.i.t. he made it available for free online, so i took it 24 hours later, i had a lot more questions. you know, i'm somewhat skeptical. it's thought of as a zero-sum game ear not creating value it's an interesting thing to study. we've been talking to a lot of people here. it's been a lot of fun >> the reaction to you must be super weird. you're a critic and there's not a lot of critics in miami right
now. the receipt req is so hot. >> we get a lot of feedback, but yesterday we saw something astonishing from peter thiel he talked about warren buffett, he called him enemy number one i think he's sort of the sociopathic grandpa from omaha how do you react when you see a quote like that? were you in the room when he says that? >> i like my grandparents. i don't know what to make of that, sir. >> what amuses me, most people who spent their time learning about crypto became huge bulls, and in some cases became pretty
wealthy and made money off of it you came to the opposite conclusion they view it as a way to protect their money against inflation. >> i think it's down like 30%. >> down 120% to 30% for the highs. >> listen, i'm just saying -- >> i'm trying to understand the argument it's not your argument, i know >> it's not dead yet >> why do you think it's not
a -- >> sure. history, i would say, mainly you know, the fed is going to raise interest rates here. >> when the fed raises rates, historically speaking, people risk off, crypto is about the riskiest i can think of. i can't predict the future as an inflation hedge, you may have noticed my skepticism we'll see what happens >> you look at the advertising and messaging, everyone is jumping on the bandwagon big, huge hollywood names. you're going in the other direction. why is that?
>> i think of hollywood as the megaphone that is necessary. >> you need more people to enter it, because it doesn't create value. it's zero sum. hollywood is a natural end point for that you need the biggest megaphone out there for that >> takes your pick they're really aiming high they have a lot of money to spend. >> when you have this liquidity that's in the system, extraordinary measures that were taken that liquid, you have to
pull back or inflation gets out of control that historically -- these speculative bubbles tend to burst. i'm looking forward to reporting on it. >> what's your biggest concern that it won't hold the value that it's fraudulent or worse? what is your biggest concern >> my biggest concern is fraud the book i'm writing is about money and lying. there's a lot of lying i noticed what i would call tells in poker, in terms of how they're marketing this stuff first they're not currencies currencies do things they're not an effective medium of exchange. >> i went to the bar behind the
volcano setup. i ordered a budweiser and asked to pay for bitcoin, and it wasn't working and they don't take bitcoin at the bar. >> maybe 15 seconds left in the segment. anything good you can say abou cryptocurrency before we go? >> money is interesting. it's not real. people put a lot of value into it >> ben mckenzie, thank you looking forward to the book. it should be fascinating. >> thanks, eamon great to see you >> you went to high school together >> no, we know each other from my book on corporate espionage he's played all kinds of investigating, and exchanging notes. >> now i have more questions. >> i have a lot of e-mail pen pals you know nothing about. >> i know you do.
a new survey shows a lot of crypto investors don't understand the rules robert frank joins us with more. >> there's one important tax rule, and it's call the disposal crypto is the classified by the i.r.s. as a property, not a currency, so anytime you dispose of it, that's trading it, you pay taxes on your gains. say you bought bit counsel for $10,000, it goes up to $50,000, you trade it for $50,000 worth of ethereum. you would owe capital gains taxes on the $40,000 gain. >> you owe the tax on that appreciated crypto
a survey found that 58% of crypto owners didn't know that it could trigger a tax nearly two thirds of crypto holders didn't know that using crypto to buy something could also trigger attacks. >> good news is the i.r.s. really can't keep track yet. >> there was legislation require those forms to be sent to the government, but that doesn't take effect until at least 2023. >> so, kellie, still a lot of time to investors to learn this, but you've got to know the disposal rule.
welcome back to "power lunch. i'm seema mody with your cnbc news update. in michigan, a mistrial has been declared in the case of two men leading a plot to kidnap governor whitmer two others have been acquitted a top u.s. defense official says they're not buying denials from the kremlin for responsibility for a deadly attack on a train station in ukraine. the official says russia used a short-range missile in the attack that killed at least 50 people. food prices jumping to their highest levels going back to 1990s, according to the united nations. much of the increase was driven by rising costs of grains. and lebron james will miss the last two games of the season the lakers say a sprained ankle
will keep him from playing, almost also certainly end his bid to his second scores title. let's talk metaverse you can do a concert, wear virtual shoes, if you want your avatar to look cute, but now we have virtual food. >> i don't get it. >> kate rogers explains why this is so necessary. the restaurant battleground of the future seems to be taking place in the metaverse, which begs the question how does vr food make it into your symptom aches in real life
then her credits via burrito becomes. >> people take those codes, go online, order on the app and get that chipotle delivered to your house. you're creating that fully immersive experience then the opportunity to actually have food delivered without having to leave that virtual world, or even visit an app like doordash or uber eats. >> when you slide in the fact that people will get hungry and not want to leave what they're doing, that's when the restaurants can come in and have
another avenue of revenue for their companies. >> i am hopeful my parents somehow don't gerenter the universe. >> i understand it a bit better, but i still don't get it thank you so much for that thanks, kate coming up, today the three-sthok lunch. our traderak ting a shot at banks, and groceries don't go anywhere.
welcome back, everybody. it's time for that three-stock lunch of ours. we have three calls that are moving three stocks today, and how to trade them. let's bring in tim seymour, the cio and a cnbc contributor tim, great to have you here for these trades we'll start with robinhood this is a big one with the downgrade at goldman shares down 86% from the all time highs but maybe you take a sip. what do you think about it >> clearly, this was a two martini lunch for people who bought this thing significantly higher the question is at this point, i think that the user base, the demographic, the stickiness, and this profile of this demographic i think is still extremely attractive i think higher rates certainly
equal better interest margins and interest expense every 25 bips higher on fed funds they claim equaled $40 million for them i think they're levered to that. i think their revenues per user are going higher they claim they have a bunch of initiative i think it's silly to invest in the stock based on fluctuations in crypto. at 10 billion, this is an attractive target at some point because of that demographic. >> tim, next up, bank earnings kick off next week bank of america naming fifth/third and regional as two worth buying when you look at interest rates moving north, shouldn't that be good for some of these financials >> they should be, eamon and i think the banks have priced in alot of bad news the good news for banks is we're going into earnings season with banks having sold off into earnings season, unlike the last
couple the way i look at fifth-third is if you believe credit moves sideways so we dont see massive credit deterioration, the stock is a buy if you look at it on a valuation basis, it's about 12 times roughly the $3.80 to $4 a share they're going to earn. not screaming, but those aren't aggressive estimates, and i think in this environment, again, the real call is around credit if you think credit deterioration is far away, you own the stock now. >> all right, so what about kroger, then that's our final name today. they're getting an upgrade to buy at bank of america for being able to handle inflation, expand profit margins, but the shares, maybe this is good, maybe not good, the shares are up 37% this year >> yeah, i'm trying to look at the shape of that martini glass there. it's a little funky. but i do think you have a case where the movement in the stock
obviously far from funky in fact, it's priced in kind of the sweet spot for food retailers where they're benefitting in a higher inflation environment. operational savings as a percentage of sales have really helped margins for this company, and it's not as if it's as good as it gets, but in this environment, i would rather be buying that breakout in walmart where i think they have a much greater ability to push around suppliers and push through some of the higher prices on to their consumers. so kroger had a great run. i think there are better places to allocate capital in this space that are more defensive. >> not quite a teetotaler, but taking it easy this afternoon. >> that graphic is making me thirsty on this friday >> tim, thank you very much. tim seymour. >> meanwhile, mike soft on the front lines of the cyber war, disrupting attacks targeting ukraine. more on that coming up next.
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age before beauty? why not both? visibly diminish wrinkled skin in... crepe corrector lotion... only from gold bond. welcome back to "power lunch. new developments in the russian cyber threat microsoft is taking on a russian hacking unit run by the gru, which is russia's military intelligence organization. microsoft says it obtained a court order on wednesday allowing it to take over internet domains used by the hacking group, which microsoft
calls strontonim, and also known as fancy bear. the russians have been sending phishing emails to ukrainian organizations as well as targeting governments and think tanks in the european union and the united states. the company redirected those domains to a sink hole controlled by microsoft which allowed the company to suppress the russian activity this isn't going to put the gru occupant of the hacking business all together, but it does remove infrastructure that the russians were using in this campaign. microsoft says it's part of an ongoing effort, and they have used this process 15 times before to seize control of more than 100 strontonim controlled domains. this is a sign of the times with american companies going toe to toe against the russian intelligence services. fascinating. >> and fancy bear has been around for some time why didn't microsoft take this step sooner? >> what microsoft said is they have done this before, but this time, they saw this opportunity
and they went after it microsoft has a pretty aggressive security operation and they have been doing this, but this one just highlights the idea you're doing this against a war in ukraine the violence is ongoing, the tensions are ongoing, diplomatic talks are ongoing, and you have american companies going toe to toe with the gru >> i can't recall if it was eric schmidt or one of the silicon valley talkers saying they believe this will change the relationship between big tech companies and washington, where they were previously nemesises because look at what's happened to google in years past where there was a resistance to cooperating with, for instance, the defense department and now we see full cooperation. >> it has gone full circle you saw that resistance also to cooperating with the fbi you think back to the apple case where apple did not want to turn over the contents of a phone, said they could not do that. the fbi complaining that was making them go dark and they weren't able to do surveillance on bad guys around the world
now, everybody is sort of coming together a little bit in this ukraine moment, but you wonder if that's going to last culturally >> absolutely. we have seen people come together only to come apart when the crisis passes. eamon, great having you here >> so great to be here thank you for having me. >> traffic is going to be a nightmare. >> when are you sending the weekend? >> right after this. >> thanks for watching "power lunch. >> "closing bell" starts right now. >> the dow is jumping and the nasdaq is falling again. the most important hour of trading starts now happy friday, and welcome to "closing bell," everyone i'm sara eisen here's where we stand in the market s&p just barely positive nasdaq is underperforming and the dow has been outperforming all day. up about 200 points right now. nasdaq down 100 points is a tale of two markets there underperformance in technology that's been a theme. as treasury yields march higher again. outperformance today in energy, financials, health care, and materials. unh, united health, biggest contributor to the dow gai
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