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tv   Power Lunch  CNBC  April 21, 2022 2:00pm-3:00pm EDT

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repercussions just now starting to understand. >> yeah. if he signs it disney would have to agree to dissolve that. we'll follow the process thank you. that does it for "the exchange" for now. "power lunch" begins right now thank you. welcome to "power lunch. everyone excited for the big travel rebound this is the summer we get back to going places. cruise lines, hotels higher. we'll talk to the ceo of lowe's hotels carl icahn over the pregnant pigs how esg is changing the face of
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investing. how it is impacting companies and corporate firms and the hard hearted people but not carl. he has a soft spot for the pregnant pigs. >> he does fed chair powell says a half-point hike on the table for the may fed meeting. s&p down 32. nasdaq down 157. but still a decent week. the dow up about 2%. netflix still a big driver why sinking another 4.5% lost two thirds of the value here down 64% another streaming cautionary tale wa warner brothers discovery down anything travel is the bright sp spots. united shares soaring. let's go to phil lebeau for
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more phil >> reporter: we have heard from four of the six largest airlines and themes are coming true this is across the industry. not like one is outperforming everybody else record numbers from march going into the second quarter for the airlines all of the airlines with a loss for the first quarter. swinging to profitability in the second quarter strong demand they say the demand will stay like this for several quarters and corporate travel is rebounding here's the ceo of american airlines this morning on corporate travel. >> we are back 90%, 80%. as we get out there people are going to want to get out and visit. i'm a new ceo. people want to come and see me
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it' it's the same in the rest of the economy. >> reporter: let's walk through the earnings starting with american reporting before the bell today posting record march revenue heard from alaska. its first class revenues up 19% in 2022. paying up for premium. united seeing strong transatlantic travel demand. four more next week with southwest, jetblue and spirit and frontier the demand to see right now in the airline industry, everybody across the board and not just talking the book but booking trends that lead them to believe we'll see the demand well into the third quarter, fourth quarter and beyond. >> thank you let's turn to the hotels similarly excited about the
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outlook. also potentially expecting some deal making as we look for the return of business travel. seema? >> the recovery demand prompting a surge in deal making more sales of hotels in the nation $12 billion in transactions this year highest since 2016 the states with the most interest and top dollar are florida and california hotel real estate investment trusts the most active host hotels that sold the sherton in times square. as the private equity led by blackstone now higher deal flow is seen as a positive sign to once again view hotels as a good real estate investment at a time when construction of new hotels is slowing and another reason experts say we'll see more
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activity the more hotels added to the pipeline the more revenue companies like marriott receive. that's why we keep a close eye on the deal flow marriott on track for the sixth consecutive day of positive gains. bullish outlook for airlines is lifting travel names tyler and kelly? >> thank you now the power player to talk about the uptick in travel and check in on the state of the hotel industry in more detail. jonathan tish with lowe's hotels and joins us exclusively you say that the first quarter is excellent can you segment it for me? is it strong across the board or town hotels doing better than resorts or are business oriented
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convention destinations knocking them both away >> thank you it is always great to be on with kelly and you. appreciate the opportunity the last couple reports obviously are very bullish on travel why you heard about the airlines and hotels. we certainly had a terrific first quarter due in large part to the resorts in florida and the property that we have in arlington, texas, with another under construction seema mentioned new construction there is not much of it but we feel so confident that we have gone ahead and started the loews arlington hotel. 888 rooms. meeting space. which says to us that business travel will come back and groups will come back now a caveat, that hotel will not open for two years and you ask about is it an even
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recovery no it is still not even leisure travel is extremely strong very little price sensitivity helping the industry tremendously but business travel is still slow to recover and probably this year 2022 will still be off about 25% from the highs of 2019. and groups are slowly getting back to meeting again. we are seeing inquiries starting to really drive our business and the hotels where we have meeting space. >> i want to come back to the texas project. but one of the areas you say is notably strong is weddings pent-up demand i guess. >> we know so many people. i'm sure everybody they get married but put off the reception so that family and friends can come and the demand for weddings, two, three, four
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weddings a day in some of our properties and makes sense it is all very relateable. it is a big part of the business but there are other areas that we are concerned about international travel is picking up but not what it was international traveler is so important. they spend more. they stay longer we need the what we think of are very strident restrictions, they need to go away. the notion to get vaccinated to be tested to come into the cub is a problem getting a visa many offices are still closed internationally it is a problem. there are things that congress can do and the biden administration can do to help the situation. >> i'm curious about the pat earns you see with good news for
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new york it is looking down and nashville looking strong and santa monica we'll tired of hearing how strong miami is with miami and orlando above 2019 levels. >> it is extraordinary the relationship with the parent company universal orlando. 9,000 rooms we are sold out many nights that's another question that you might have which is labor shortages. they're real the issues that might prevent somebody from coming to work in a lodging industry are real and we as an industry need to understand what we can do to become more attractive to say you can make a good career out of a role in the lodging industry and things that we need to do but on many nights we have many, many, many open positions. >> let's talk a little bit about the move in to arlington, texas.
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is it a bet that arlington and the dallas metroplex is going to become a convention destination? that's what this sounds like to me. >> you have really understood what we are trying to accomplish arlington sits directly in between dallas and fort worth. the heart of the metroplex 15 minutes from the front door of dfw we partnered with the texas rangers to build a 300-room hotel right next to the texas rangers billion-dollar new globe life stadium a parking lot away from at&t and even though twice a year i might not agree with the dallas cowboys 363 days a year we are in sync about the future of arlington, texas when you think about the business model to build an
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888-room hotel with this amount of meeting space because we have a deep belief in arlington we like the business that we are doing. our existing hotel is doing quite well and when you think about the demand generators it is a combination of sports, food, beverage entertainment and creates the ability to build a motel. $540 million project we got a construction loan from a major insurance company showing the faith and belief in what we try to accomplish and with the support of loews corporation we look to do these things we call them immersive destinations with varied demand generators and must say and you teased it which i appreciate, nobody else in the hotel business that's a partner with major sports franchise
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we can talk to anybody trying to increase the value of the ip and the real estate with a stadium or arena and play the games. how can they really increase that value of the real estate? >> we won't spoil this by talking about the giants so we'll just leave it there. >> kelly, i will end on an optimistic note and i think -- >> wait. before you get there a less optimistic thing. about a month ago when recession anxieties in the market peaking people cited the comments from ceo of restoration hardware who cited a litany of challenges and frustrations with the consumer and inflation, the fed you are striking a different tone i wonder if you can explain what you see happening with the consumer and the dynamics of the inflation situation. >> once again based on still business travel not reaching
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pre-pandemic levels, with international travel being down we and other players in the industry are experiencing very good business. so something must be going on. are there headwinds? absolutely is inflation causing us some challenges in bringing the most we can to the bottom line? absolutely energy costs labor issues those are all really here and deal with them every day but the business is there. it may be based on transient demand but we'll take it. >> i will just say you know that my son is a big giants fan a huge giants fan. >> i'm aware of that. >> meefrly look at where the bengals were two years ago and then ended up. that can happen with the giants. >> i agree my point of optimism was the new
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gm joe shane and the new coach who created magic in buffalo now in the me adow lands and we have the faith that they understand the challenges and the giant diaspora is optimistic. >> continued good luck with the hotels and with the giants jonathan, thank you. >> such great information there. so many different windows of the economy. all right. coming up stocks losing steam but the dow up about 2% this week and what's been in a stealth rally. while everyone is worried did earnings steal the show? can that keep going as more reports roll in? carl icahn asking big firms to join him in the fight with mcdonald's what's different is he is not trying to unlockhahoer sreld value but wants to unlock
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pregnant pigs. we'll explain. under budget too! and i get seven days to love it or my money back... i love it! [laughs] we'll drive you happy at carvana.
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welcome back to "power lunch. stocks are losing ground this afternoon. dow still up 2% this week. s&p and nasdaq not as much this is happening in spite of inflation, rising rates, and a war in ukraine are investors focused on earnings can they outweigh the other factors? joining us is mark la sheen. this is impressive resilience
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given the fact the 5 and 7-year treasuries above 3% today. >> no doubt. in spite of the headwinds add more to the list i think the markets are looking at a couple things you have had sentiment readings exceedingly bombed out which is typically a bullish sign so investors have baked in the prospects that things are likely to get worse and leaves room for things to be slightly less dark tomorrow than today and put a bid in equity prices corporate earnings have come in early in the game. 79% which is good but likely to see the evolution of the earnings not only continue to surprise on the upside and perhaps allow managements to talk about that perhaps the positive earnings revisions marked down here may be
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stabilizing or move up on the back of the u.s. financial conditions holding in sturdily than some of the recession risks that were talked about exceedingly a couple of weeks ago started to finally fade. >> where would you have investors be positioned? >> for us it is a couple areas we like cyclical sectors with a supply-demand imbalance in energy and metals and mining falling in the basic materials sector we think this will continue to thrive with modest demand because once again the lack of the ability to get the supply to meet demanld let alone an uptick of demand improve the profitability of stocks in these sectors and think about
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barbelling that approach with defensive growth sectors stand to benefit from still positive macroeconomic conditions but perhaps those that might begin to decelerate over the balance of the year and the headwinds take on robustness relative to higher interest rates. powell talking about raising rates perhaps 50 basis points in may. as we go over the next couple of months if not quarters. >> i think just to follow up i think you are correct that some of the recession fear fever has broken in the past couple of weeks but let's not forget just beginning, just beginning
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the move high every in interest rates and when they begin to hit home might that -- isn't that when the real worry about a recession would kick in? >> ndeniably i think a lot of it was borne out of the fact of the inversion with the yield curve 2-year yield broken above the yield on the 10-year bond and seemed to cat liz talk about the recession and had high predictive value there are other measures that did not corroborate that signal but the fed moving to the neutral rate and something that's estimated in the 2.5% level markets will begin to think about the prospects of going from where we are today which is easy monetary policy t tightening monetary policy to tight.
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that is the point at which the market will proceed by way of reflecting in prices the prospects of a recession whose probability may increase substantially this year if the fed continues to campaign on a very aggressive hiking schedule like market participants believe they will. >> thank you we thank you as always >> thank you. ahead on the program inflation isn't just hitting food and gas prices but health care costs rise. details on that story plus another major shock to the streaming world. cnn plus shutting down just one month after its launch a lot to talk about. we'll get warner brothers discovery in today's three-stock ncluh. full prescription-strengt.
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welcome back to "power lunch. i'm dom chu. check out twitter. moving between gains and losses. you can see there throughout the course of the session. as investors digest the latest developments in musk's potential bid for the social media giant the tesla ceo saying in an
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updated regulatory filing today that he is exploring a tender offer to purchase some or all of the shares and receiving financing commitments over $46 billion to help that potential deal a tender offer is a oms to buy twitter. that stock is volatile in the saga and up more than 20% since the start of the month just a few days before musk's 9% stake revealed and may recall that the floated number is $54.20 from musk twit every shares right now $46.79 back to you. >> very, very interesting. he is a bold guy but you do have to wonder whether this is a quick sodic quest.
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>> it would be if we went after it. >> yes if i took a spear out trying to stick this massive windmill of tesla with a -- whatever it is i think elon musk is richest man in the world has more resource exactly. >> thank you. let's get to seema mody with a news update. >> i think i counted eight that's a cnbc record. >> history right there. at this hour, a busy day for florida's house of representatives. lawmakers approving a congressional map. the vote happened despite a protest by democrats that cleared the house floor. critics say it is designed to diminish the black representation in the u.s. house. florida's house voted for a bill to end disney world's special tax status critics dubbed the "don't say
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gay" bill. it could have huge tax imply kagss and surround counties. britain's lawmakers have approved a probe into alleged lies by prime minister johnson about attending an illegal parties in pandemic lockdowns. the committee will look into whether johnson misled parliament a finding he said would put heavy pressure on him to resign. back to you. >> the effort. >> no. >> punishment. thank you. carl icahn's arch nemesis. a fight with mcdonals erd'ov the treatment of animals the details next
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90 minutes left in the trading day. want to get you caught up across the markets. let's begin with bob pisani at the new york stock exchange. we have given up a more than 300-point rally. >> remember two days ago we were all optimistic maybe breaking the down trend. forget about it.
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we started up 50 points. look at the s&p. we are down 50 points. what's the problem the problem is bond yields kept going up. 2-year is at the highest level since 2018 that's the proxy for concerns about the fed and inflation issues it is up 10% the yield this week because of this tech stocks can't get out of their own way doesn't matter today high quality, low quality cathie wood's stuff down 8%. big semiconductor names like nvidia, amd is not looking that great either all are down right now so tech stocks are hammered. we are losing some of that commodity lift that we had for the market to help it up today freeport is a play on copper they talk about higher costs profit taking.
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mosaic is a leader nucor is up and the commodity, energy complex to the downside at least the airlines are happy! look at american sales hit a record in march. united said things were doing well this group at least everybody's still paying up for airlines, hotel rooms and plates of pasta. ate out last night pasta. $32. >> what kind >> really? cavatelli with pesto i don't know what's going on but it is out of control here. i'm sorry. >> sounds fancy. >> no. >> sounds delicious. >> it is good. >> thank you now to the bond market speaking of expensive or is that the opposite 5 and 7-year yield above 3% and then heard from the fed chair. rick >> expensive is relative
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if you think it's expensive just wait and then it will get more expensive. look at a two day of two 2-year notes. higher two day of 10-year notes trying to catch up short end retaking control of the markets. 2s to 10s. all about steepening not anymore. now it's about flattening. what's changed think about fed speak today and look at this chart this is a 2-day chart of december at the end of year fed futures. log jam's down every month is an individual fed fund contract. it rolls downstream and ends up in december. december's low today was 97.33 100 minus 97.33 implies 276 basis points of tightening right
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about where the 2-year note is shadow boxing the new december fed funds. if you look at a 1-year chart today's the lowest leflt the most tightening packed in. why is that? because fed officials are trying to prepare the market for the fact that they lagged and now they have to be aggressive and needed to ramp up the pressure on the individuals trading the markets. kelly, back to you. >> very good way to put it thank you. oil is higher again today to $104 a barrel. people are bracing for more volatility with markets weighing the possibility of a ban on russian oil. global ban that against a slowdown in demand from china. there's wti up hovering around 104. nat gas gaining today. still below $7 but just by a
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hair. carl icahn is seeking heavy weights to join them over mcdonald's's pregnant pigs leslie picker has the details. >> it is a yeah. putting the pressure on large investors like blackrock in a new letter to mcdonald's shareholders urging them to vote in favor of the two nominees to the board. he is running a proxy fight in an effort to call out what he believes to be an animal welfare issue. he implied today that big wall street firms outspoken on esg related issues but don't plan to vote in favor of the platform. he wrote the reality is that if the esg is more than a market tool the massive manage managers must back up the words with actions.
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the stake about $50,000, small real ty to the previous campaigns but said on cnbc a few weeks ago it is not for returns. >> in this case, i am not doing this to make money for myself. i don't want to be seen as owning the stock i'm not here to say i'll make money on mcdonald's. i think mcdonald's has a lot to answer to people that are fans of esg because i think if you look at mcdonald's, hey, they have great gravitas but on the environment i would say they get a "f." >> blackrock declined to comment. mcdonald's did not immediately respond to the request on comment. >> i have often thought as you may know or may not know that esg to me is a noble concept but i worry as icahn sometimes it is a marketing concept, a way to
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attract assets as much as it is a real call for change because you can make -- you can define socially responsible investing and socially responsible companies in lots of ways. >> that's just it. there is not necessarily at this point in time a quantitative approach to esg with like gap accounting saying this company is undervalued, jovervalued it's not that way with esg and why you see situations extremely slippery slope some metrics you look at with terms of carbon footprint but even that can be a little squishy with the math and the ability to account for that. with the ability to account for animal welfare is not necessarily to look at and say here's the number to attribute
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to that and therefore this makes it relevant enough to vote for a slate. in a proxy fight it is a slippery slope. >> yep thank you. we appreciate it. after the break, record inflation touching every aspect basically of lives and health care the trickle down effect prices could have on the savings and retirement a cn-end shuts down cnn plus barely a month after it started the company stock, new stock, down nearly 10% in the first week of trading. can't like that. "power lunch" will be right back what if you were a global bank who wanted to supercharge your audit system? so you tap ibm to un-silo your data. and start crunching a year's worth of transactions against thousands of compliance controls with the help of ai.
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turned 50 she hit the gym. >> i want to be active as many years as possible. >> reporter: what worries you the most >> not access care when you have to prioritize that's a major problem. >> reporter: martin is in good company whose members work on staying healthy and worry about the future. >> what's going to happen when i get older? how can i pay for the care that i need >> reporter: premiums for medicare part b medical insurance increase nearly 15% this year. almost double the pace of inflation. according to one estimate if health care costs remain this high over two years a healthy 55 year couple retiring at 65 faces additional $267,000 in medical expenses total health care costs for the same couple could exceed $1 million.
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the same in social security benefits in their lifetime. >> affluent or the average person looking at the social security check you pay for health care. >> reporter: regular exercise may keep you healthy but health care costs go up if you're worried experts say the first thing to do is understand what your health insurance will and won't cover. >> you need to look at the coverage in those types of plans to determine what makes the most sense for you. >> reporter: instructor melanie is teaching this class for over a decade. >> i'm here to help them to not have medical costs i'm here to help them to exercise and feel better. >> reporter: yet staying healthy requires planning ahead to afford costs in the future u.s. employers expected group health insurance premiums to
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increase 5% this year. many were shocked to see 15% in premiums for medicare in 2022. that increase is due largely to the pandemic and coverage for a new alzheimer's drug and higher costs for goods and services and higher wages are likely to continue to drive health care inflation. tyler? >> once the price increases are baked in to the cake they rarely go the other way what is a senior guy like me supposed to do what should i do to get ready to pay the higher deductibles, more premiums and drug costs? >> you know you have heard it before save more. what some people may not realize if you are 50 you can put more money away and retirement plans
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up to $27,000 this year in a 401(k) $7,000 if you're single $3650 or $7300 for a family but 55 or older add another $1 to ,000 to put in and then the thing that you have to remember is many companies do not offer employee health coverage to retirees and can't count on that. that was possible in some plans decades ago. it is important to save and plan ahead. >> use the hsas. as always, thank you. >> this retirement thing sounds scary. >> yeah, yeah. carvana, an example of the slowdown in the auto market. look at what the stock is doing. we'll hit that name and two others in three-stock lunch
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[ expletive ] to swerving toward a pole. jesus. watch the bicyclist on the right almost get hit before the driver takes over. sometimes it seems the tesla doesn't want the driver to take over. i'm trying. this driver had to hit the brakes when the tesla didn't understand a detour sign. ok. here it almost hit a truck. obviously, i had to take over. and here it swerves into an oncoming lane. look at that! often, the tesla doesn't know what it wants to do. what is it doing? or just doesn't know how to turn. jesus, oh my god! tesla's full self driving software for drivers and pedestrians, it's unsafe at any speed. tell congress to shut it down. time for today's three-stock
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lunch. drown sorrows or celebrate cnn plus shut down by warner brothers discovery in the first week that the company is trading together down over 8% on the heels of that cancelation tesla the other way, celebrate.. record first quarter earnings. the ev maker up more than 5% and carvana, drown the sorrows down nearly 7% after posting a wider loss than the street expected okay let's bring in lee brunson, cio. you have all the titles, lee welcome. let's start with warner brothers discovery. i know it's not a stock you own. you were ready to talk about at&t let's talk warner brothers discovery. how big a shock is this? and what do i do if i happen to own the shares >> i would own the shares. i would tell them because here's the thing, cnm plus should have
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been obvious i would love if i could just have hbo max as a stand-alone thing. here's what i get, i get hbo max, discovery, and all these legacy cable channels, and you can't just take a legacy cable tv channel and say it's going to be streaming, it's going to be a platform it's never going to work because you have major competition you have netflix which has its own problems you have disney plus, hbo max. i would say i don't think the spin-off is as glorious as people think i think jow the crown jewel in there, which is a top tier streaming service of hbo max i think discovery has put up great numbers with over 20 million subscribers but it's still a second, third rate streaming platform i would not be long this name. i would prefer to own something where you get a disney plus crown jewel and then you get like disney theme parks which is a value investor's treme that's my opinion. >> what do you make of this week we could do a show, john oliver should do a show, for goodness
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sakes. this week in streaming you have netflix crumbling you have this news you have got other streamers who are not exactly lighting it up, my friend. >> no, it's a complete mess. i think the people just need to remember think about the streamers that we all subscribe to and don't think about playing the subscribe this month, take a month off where people are gaming it. it's going to goy to netflix even though they have declining subscribers, going to go to disney plus because being a kid is never out of style, and hulu, because it's a platform for tv watchers and hbo max, they nailed it, but paramount plus is cbs is a weak lineup stiff competition. stay with the big dogs invest accordingly >> i love that peacock i watch those "office" reruns every night. tesla, there were similar concerns about rising competition. if anything, the company tried to show it's benefitting from
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that, even saying after the super bowl with all those ev ads that their stock benefitted. >> well, here's like my big take on it. when you're listening to the earnings call, i like to read them, i don't listen to them, the one thing that musk, where all those tesla bulls, the cult of tesla, they love hearing that tesla is being bought by the rich and the upper middle class who could care less about a 5% or 10% increase in pricing or having a delay there are people who have money and willing to pay a premium to have this car. so elon musk doesn't have a pricing problem. but here's the thing, why has it not made higher highs since november there's probably at least ten tesla bulls out there someplace in the world who started thinking to themselves, where are we going to get the lithium, the copper musk says, i'm going to have a plan for that, but obviously, that plan isn't here i think people don't understand the amount of environmental degradation. and that's a contributing effort of why the stock can't seem to
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push higher, because we have a commodity issue and it's going to come to haunt >> as we turn to carvana, i don't think the world appreciates how many people over the next couple years are going to be underwater on used car loans. let's talk carvana >> i mean, i never thought i would see it just because there's so much government stimulus checks going out to the average joe out here, but we're finally starting to see delinquencies in auto loans start perking up i do not like that it's a creepy feeling, like when banks say their loan books are shrinking. you run to the hills the problem with carvana is it was a great core short position. if you wr short in your hedge fund, it's like i can do no wrong, i would cover it here, but here's the problem if you go on their website, all the cars are sold and the prices keep going higher. carvana is not tesla carvana sells to the average american middle class person and they do not have enough wage increases to pay for the increase in car stuff. we can't get enough cars
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their due diligence on buying cars is not existent i think it's dead many for a while. wait for it to base out, talk to me in six months about carvana we'll see if it's worth looking at i doubt it >> thank you very much, lee. lee munson >> more "power lunch" next trying to net fix the problem? retail buyers are buying up shares of netflix. we have figures after this ur der will help you create a comprehensive wealth plan for your full financial picture. with the right balance of risk and reward. so you can enjoy more of...this. this is the planning effect.
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welcome back no relief rally for netflix today, which is down again after its huge decline yesterday but some investors seem to think the bottom is in domchu putting that under the microscope >> they're nibbling. we're talking about retail investors specifically those who are not categorized of institutional types. interesting numbers coming out of vander research out of europe with regard to just how much trading activity has gone in by the way, netflix shares you can see there, that big plunge erasing more than a third of its value just over the course of the past week, and by the way, with that, we have now pretty much lost about 70% of its value since the record highs we saw just over the course of the last year with that in mind, whether or not retail investors do feel as though this is a place to get in they're kind of putting their money where their mouth is yesterday during that massive drop we saw, we did see a lot of trading activity coming from the retail clients those numbers coming from vander research point to a lot of muchy going in
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roughly $70.5 million worth of stock was purchased net on wednesday by retail oriented investors. that's according to the data, and they also point out that the number of buy transactions and sell transactions over the last year, yesterday had the number one day for buy transactions and the number two day for sell transactions overall over the course of the past year, and by the way, if you look at those in the general context of the overall trade for netflix, you wonder whether or not there is a chance, people talk about the proverbial falling knife in markets, whether there's more downside to go, but it may have reached a level where investors say it's falling 70% from record highs. it might not be worth buying everything i have with it, but it might be worth dipping a toe in, so that's something we're going to watch, whether or not more money from retail flows into names like netflix. >> bun a rough year for retail >> i think it's a long-term
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turnaround, if i had to bet. i don't know where the point is where you get in but it feels like a longer term. >> $300 billion at the market cap peak under $100 now >> dom, good to see you. thank you all for watching "power lunch." >> and "closing bell" starts right now. >> stocks losing early morning gains as fed chair jay powell says a 50 basis point hike could come next month. the most important hour of trading starts now welcome, everyone, to "closing bell." i'm sara eisen here in washington, d.c. more on my conversation with the fed chair and others at the imf debate and what it all means for the markets coming up on the show here's where we stand right now in the markets near session lows. dow failing to hold on to some early gains. we're down more than 200 points right now. s&p 500 losing steam, down 1.3%. only one sector is positive, consumer staples everybody is else in the red technology hurt today, nasdaq down


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