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tv   Power Lunch  CNBC  May 12, 2022 2:00pm-3:00pm EDT

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in some of those cases, the ipos, but we really don't know what the employees may have sold, as well because it's only the insiders and the top holders that we get disclosures on employers might have sold, as well they have good information as executives and not as good and certainly not the information that everyday investors have >> robert frank. one of the things a few of those insiders have in common is the high, short interest in their stocks caravana is nearly 30% short interest and we'll talk about more names with big short interest that could pop in "power lunch" which begins right tyler? ♪ ♪ kelly, thank you so much we'll see you in just a few seconds. welcome, everybody i am tyler matheson. the market sell-off intensifying this afternoon and here is what we have in the hour ahead. apple down 20% from its january peak off 7% just this week
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the sell-off spreading from speculative names to tech stalwarts and having implications for the broader market plus, wells fargo souring and i mean souring on electric vehicles, questioning when ford and gm will actually make money selling them we'll talk to the analyst behind the bearish call and his decision to slap both stocks, kelly, with sell ratings >> tyler, thank you very much. hi, everybody. stocks are right around session lows right now the dow is briefly down more than 500 points and it's down 1.4% and so is the s&p to 38.81 s and the nasdaq is down.5%. the yield on the ten-year edging down for a fourth straight session 2.84 and we've been even lower that that at times throughout the day and this is after the producer price index, 11% year over year gain for april and despite high inflation and efforts to control it, legendary investor bill miller told me last hour, he says we're not near a recession.
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>> the fed is going to be data dependent as they should be and they're going to get inflation down one way or another, but i think they've also got to be alert to the fact that they're trying to avoid a recession. we're not close to that now, but the market is certainly worried about recession in the way that the economically sensitive stocks are behaving. >> miller also told me he thinks the market is near an intermediate low and gm, tyler, was a stock he cites favorably. >> all right, kelly. thank you. for years, the so-called faang stocks were the pillar and the bull work of the stock market on many occasions contributing to most of the index's gains, but this year it's different every faang stock is now down 20% or more from 52-week highs netflix, facebook, amazon. they've seen the biggest declines, alphabet down 20% and now mighty apple has joined the others and apple is a stock that's particularly important to
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the broader market let's bring in ari wald and head of technical analysis with oppenheimer and company. why is apple a tell, william >> well, and unfortunately, that list of stocks down 20% from its peak and much broader than just those five names and it's really a market issue that we have going on here, and i think there is a lot of attention paid on apple for the simple reason of its market cap it's 13% of the nasdaq 100 composition. 7% of the s&p 500, so we can quantify how important it is to the overall market and it has been the next to surrender lower. looking at the chart of apple, it has fallen below its 200-day average. the support level i'm watching, $138 you have to go back to the stocks late 2020 peak, very
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often, former resistance becomes support even though we're touching it pretty close to it right here, right now again, again, given the damage and the trend the stock needs to stabilize. apple, you say, ari, less bad than the nasdaq generally and less bad than some of its compatriots. does anything in apple's activity suggest that we're near that capitulation point, if not in the market generally, in the market for these big bull work tech stocks. this is such a great point, tyler. this isn't again, we're arguing it's not an apple issue. this is a market issue most of the stocks look like this that they're breaking down lower. in fact, apple has fallen less than the nasdaq and it's outperforming this very difficult market and it's coming off a relative high versus the nasdaq and so to look for, and again, that's our take that we're at the capitulation stage
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of this drawdown, that even the stocks and the prior leaders are now selling off, as well if you look at the chart that we're showing on the screen is how far below apple's bid from the 2 hun-day moving average and it's 12% below the 200-day moving average it could get more extreme. it's gotten more extreme, december 18, the example there, but these points by the time apple breaks down, you're usually closer to a bottom than the top. that's based on history, ari, correct? in other words, when apple goes down say, 15% or more below its 2 hun-day moving average, that can signal that sort of fulcrum point in the market.-day moving signal that sort of fulcrum point in the market.0-day movinn signal that sort of fulcrum point in the market.0-day movinn signal that sort of fulcrum point in the market. >> we lined it up with the nasdaq and what you'll find, yes, by the time when apple gets this far below its 2 hun-day average, 10%, 15% typically those signals occur typically
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closer to a market bottom than the market top. >> what is the s&p saying to you right now, ari >> we're getting close, but we're not there yet i've been o the show discussing the capitulation and one of the indicators is the nyse stocks above their 200-day average it fell 22% as of yesterday's close, and looking at the past decade, it has risen when the indicator's fallen 18% so we're getting close there i marked 3815 and that's a common retracement of the prior bull market and bearish cycles have that much if we assume the secular bull is still there which we are so we're getting close to that capitulation you still need the base and it will be a tough summer, but we
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think for patient investors, at least 12 months this does ultimately create the next big opportunity. >> ari wall. always great, you are clear and concise. we appreciate it >> let's key off of what he just said, despite the collapse in some of the major big tech names our next guest says they sort through the rubble and have companies that are beating earnings expectations. with us now is mike bailey, director of research with fbb capital partners good to see you. it's not apple that you're singling out it's alphabet and google why? >> we are looking at the faang survivors and you went through a laundry list of names that have blown up most of them have already and we are fundamental investors and so we are looking at what are the earnings doing and we are seeing frankly, three survivors at the moment. apple earnings are up year to date and microsoft, the same thing and google, basically the same thing, so we have three faang stocks continuing to grow.
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fundamentals look good and what about valuation? all three of them are starting to get cheaper and google is outrageously cheap the last time the peak valuation was cheap, we're talking about the tantrum and this was nine years ago. i do think if you take a look at what the business is doing and then you're back to high teens earnings growth, for us it's pretty compelling. we are sort of concentrating into the robust ideas and they're looking compelling here. >> before i move away from tech to other picks, what are other faang survivors that you think are compelling here? >> if i had to start at the top of the list, google is seeing the best fundamentals and the next stop would be microsoft fundamentals are looking good and sort of well below average apple is getting there and it's not quite dirt cheap yet it's trading a little more like a hard wear company and oh, by the way, there is a massive
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software that keeps growing. of the three of those, the businesses are in good shape google, the valuation jumping out is a good opportunity. >> some of the other places that are jumping are big tech and we are talking about danaher and clorox, really why these two? >> diversification is the name of the game for us generally, we do like growth our theme is businesses that can exceed expectations over a number of years. we're seeing that with some of the big tech stocks. danaher and not exactly household name, but they're really the picks and shovels behind the covid vaccines and some of the drugs out there really crushing it in terms of growth again, similar to these banks, the fundamentals were in good shape and we've not seen earnings come down yet and oh, by the way, the multiple is way down and a company that can by the and raise and you're getting it on sale and that's the case here. >> that's the case with danaher which is fractionally lower and it is down for the month and the
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year in what's been a tough take what about clorox? >> clorox, going back to diversification. we're not small enough to call that this is the bottom and we want to make sure we have diversification. clorox, good business in staples. they really got crushed in the last six to nine months and inflation was a problem for them they just started to figure that out and figured out their manufacturing and we're starting to see fundamentals bottom out and you're getting a deep discount for a good business if we're wrong and if markets do want to have defensive stocks around, clorox is a good one >> as you say that, the dow is down 512 thank you very much, mike bailey. >> i want to point out that it is baseball season and that mothers and fathers who are doing laundry are using a lot more clorox. a lot. >> listen -- >> every night i or my wife is
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washing max's baseball uniform because he likes to play dirty and he comes in. we almost got through a whole game and he was clean and he dives into third base. >> the rest of the crowd is cheering and you're just distraught. >> i don't know, but whoever you are, i love you and clorox, we like you, as well. >> nothing would surprise me that the company that was the one-time pandemic beneficiary. >> all is back to normal mack is sliding again. your kids will get there >> you'll say i love you, shout. >> coming up, gm hitting a 52-week low in today's session after a rare double downgrade. ford also hit with a double downgrade. we'll speak to the analyst behind the bearish call and why he questions -- excuse me, their ev strategy. rvs, evs could the u.s. and europe create a new opec what we know, what we don't know and how the dynamic could be on
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the verge of a massive change. "power lunch" is bacin tk wo minutes. the dow is down 515. and knew there was going to be a situation. ♪ ♪ ms. hogan's class? yeah, it's atlantis. nice. i don't think they had camels in atlantis. really? today she's a teammate at truist, the bank that starts with care when you start with care, you get a different kind of bank.
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welcome back to "power
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lunch. i'm dominic chu. as you saw there we're at session lows, and it's been a tough slog for the auto stocks following a string of bearish comments from analysts at wells fargo. wells lowered earnings estimates on tesla for the next three years citing higher abbattery cl costs and they've risen 50% over the last year and they note that tesla does have the pricing power to pass along some of those costs to the consumer, but expect underlying inflation to eventually catch up with some of those margins. you can see tesla shares are up 3% in trading today. along the same vein, a double downgrade for ford and general motors at play, as well and analysts lowering both the names from an overweight or buy to an underweight or sell saying 2022 could see profits peaking with the automakers with a shift towards battery powered evs placing two greater strain on the margins in the coming year a lead and both down 4.25% to 5.5%
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for general motors kelly, tyler, i'll send them back over to you >> the man behind the bearish market call moving ford and gm today. carl langan, senior equity analyst at wells fargo the reason you're downgrading them is because the untold electric vehicle crisis coming what do you mean by that >> we did, we've actually done some proprietary research, and we were able to get from the engineers detailed and cost information. it's exciting that we'll be doing more evs for the next few weeks and this is just the first in a series of reports the most shocking thing, the tesla is a pretty well known car and the cost spiked much more than we were expecting if you go back to 2021 you're talking about a $112 per kilowatt hour that is now 168 that puts cost parity at least
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another ten years out. >> there are a lot of people who would be angry for tearing apart a tesla model y, like someone over here. >> i guess my point is are buyers really that price sensitive in the case of tesla especially although in fairness, i don't know if that was part of your downgrade today so, in other words, why do you think the higher costs for tesla are bad news for gm, ford and the rest of the space? >> so, i mean, the teardown is just the first step of the research report we put out today. we found out that the raw material costs were high so what we did was dug into the supply chain and really understand whether that would stay sustainably high and it's a temporary blip and it was concerning as we go out to 2030. six of the seven key raw materials, copper, nickel, lithium all will be very tight on supply at that point. so it's really hard to see an opportunity for these to
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sustainably correct downward and that is the big challenge because the economics of the nickel-based chemistry that everyone is moving toward really just doesn't work. we talked about $100 per kilowatt hour, and the raw materials in that battery went from 62 to 119 so it's just impossible unless the costs come down and the problem is it doesn't look like they're going to and then you layer on that and that's the driver of the downgrades for gm and ford, the regulatory framework which has been completely ignored by the market the epa issued some very, very challenging standards and it basically forces the automakers to sell these vehicles and at this point, because of the sudden change in economics they'll lose money and this is reminiscent of old compliance rules where the automakers might actually be forced to sell money to hit the products to make the standards and i think tesla is in a little bit of a different position because they don't have
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to share and have to balance in the transition by the next six months after you ramp all of these volumes to compensate for these cost increases they'll have to raise price and that will change the addressable market for them. >> that's what i want to ask you, because of the regulations they're going to have to sell at money-losing prices. why? why can't they sell the price to make a decent profit on the car? i get the idea that if you raise the price you are reducing the addressable market by some -- by some level, but i've got to think that a lot of the manufacturers do have pricing power. ford talking about their f-150 and tesla which certainly seems to be selling plenty of cars >> well, so the cost parity right now is $10,000, if you go around the world cars are around 40,000 and the best margin of $20,000 and we're nowhere close to being
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profitable how do you get a customer to pay that price difference when you're on the lot choosing between an ice f-150 and the ford lightning and you're competing around your internal combustion vehicles and that will keep the ev price down and there is a question of how much are people willing to pay for these products how much premium are people willing to pay and i don't think it will be $10,000 >> you're probably right, but i have a big gas-guzzling car whose branch shall remain nameless there and i'll tell you what drives you to the more expensive car. i'm a lucky guy, and i can afford the more expensive car and it's having to pay $90 twis a week to fill the thing let me ask you one thing i've been thinking a bit about what -- what elon musk should do with his money and i thought what he should do with his money
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is invest in nickel. invest in nickel mining and ways to get those minerals that are critical out of the ground in an environmentally responsible way because if he controlled that and not twitter he'd be able to sell to everybody. >> there are two points there. one, you did mention your gas prices and be clear. the biggest cost to the vehicle is depreciation. so the total cost of ownership is not clear and it helps evs when gas prices go up because you don't notice the fact that your car is deproosh yating more and in terms of whether he should buy nickel, the problem i have in the wort report is it takes ten years to put between fines the suits and getting all of the permits and getting the mine and extracting it and refining it so it's a
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conservative estimate. by 20 it's too late. even if we start taking action today it's too late for 2030, but maybe 2035 will be the issue. >> can you put the model y and sell it to me, colin >> it was an older model >> colin langan, we appreciate it as always wells fargo securities. still after months of anticipation along with a big valuation cut, food delivery service instacart filing for an ipo. these delivery names have struggled over the past month and we have the three-stock lunch shortlist and we ask our trader whether they can make a turnaround and congress taking aim at opec and threatening to spark a price war with saudi arabia. during may, we celebrate asian-american and pacific islander heritage month featuring some of our cnbc
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>> welcome back to "power lunch. instacart taking the first step toward going public. the grocery company filing with an ipo the company was a pandemic darling seeing its valuation soar to $39 billion in 2021, but in march the company cut its valuation by nearly 40% to 24 billion. it's been a rough road lately for recent ipos especially in the food delivery area doordash jumping today, but down
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73% from its 52-week high and just eat takeaway, the parent of grubhub is 90% off its yearly high let's get to kristina partsinevelos for a cnbc news update. >> thank you, tyler. here is our cnbc news update at this hour. north korea declaring a first national emergency as the first-ever case of covid is identified within the country according to state media leader kim jong-un is ordering lockdown pleasures in all cities and directing the distribution of medical supplies. the supreme court's nine justices are gathering in private since the leak of the draft opinion which would overturn the landmark roe v. wade case. protests continue outside the supreme court and across the country. >> nearly 2,400 people needed medical treatment following the travis scott astroworld. over 700 of those victims sought
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extensive treatment from their injuries when the crowd of 50,000 attendees began pushing toward the stage last november the federal aviation administration is suspending the licenses of two red bull stunt pilots who tried to swap planes mid-flight according to the faa the licenses were revoked if are their careless and reckless conduct last month in arizona. how do they even think to do that kelly, back over to you. yeah i wonder for how long or if it's permanent, but they had to do something. >> my goodness >> what a stunt to even think of that >> they're crazy anyway, kristina, thanks >> ahead on "power lunch," the new business battleground when political debates hit the public forum, some companies speak out and some stick to the sidelines rpatamicl discuss the role of coore era and the pressure coming from employees when "power lunch" returns ig pi, even when you're focused on what's happening
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welcome back, everybody. 90 minutes left in the trading day and we've seen more selling pressure this afternoon. we've got the s&p nearing a 20% decline from its all-time highs. apple just dipped below 140. let's get right to dom chu for the very latest. dom?
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>> so what we have right now is the market and you've been watching just like i have, kelly, that's drifting at or near session lows and it's a story that we've seen play out in the past as that selling pressure tends to accelerate heading towards the closing bell if you look at the way the s&p 500, nasdaq and dow have all traded out, was there a point today when the nasdaq was outperforming on the sessions and now you're talking about similar percentage losses for those three major indices. the one thing i would say was the bright spot earlier on was a decent move higher in small-cap stocks, however that trade is now faded and we are moving toward that marginal negative territory for the russell 2000 index. from a sector perspective it is very much about tech and financials today on the down side and tech is the worst performing sector in the s&p 500. meanwhile, you have more defensively oriented sectors like health care also real estate they're among the outperformers and at least for the time being the only two sectors in the
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green. stockwise, you have to keep a close eye on the mega-cap names, kelly. apple dipping below that mark in the their 140 level. it is keen to put a perspective on what we are seeing. it was a 5% loss yesterday it could be a 5% loss today. that's something we haven't seen in quite some time the notable outperformer in the mega-cap techtrade is amazon right now which is fractionally in the green and we'll keep an eye on that and on the heels of earnings earlier today, tapestry, the parent company of coach, kate spade and other brands is a big gainer out there in the s&p 500 the outlook not so much, but still, a decent sized performer on the day >> amazon turning negative and back-to-back declines for apple and that's a drop for two days thanks for highlighting it for us can't argue yields have driven this one, rick unless they're driving it to the down side.
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>> yeah. i don't know, i think this is stagflation part two you have high interest rates and you have dropping equity prices. now we have maybe a slowing economy maybe due to the consumer so rates are going down they're buying treasurys and selling stocks i think that's a stagflation trade and why? maybe the clue was friday and consumer credit leaked to $52 billion month over month friday and we certainly hope that consumers aren't using plastic to take the sting out of inflation for lifestyles because that is not a good thing we have an option of 30-year bonds and it went very well and the best of breed with 103 billion in supplies and you can see at 1:00 eastern and here's a two-year going back to the fourth where they have a 285 irnt interhigh, and 320 intraday high and they're hovering just barely
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above twait 0 and 15 basis points from a close yesterday at 99 bases points to today's close at 84 basis points and if you look at september of 2020, onshore and offshore making 20-month lows and finally it looks like a 20-year fresh low on the euro currency versus the dollar big moves, kelly back to you. >> $1.03 for europe and rick, thank you for highlighting all those moves. over in the commodity market, in metals, for instance, where gold continues to fall. silver is down 4% to its lowest level since july 2020 and dr. copy, the metal with the ph.d is well off its year to date highs and palladium down 5% all being hit on concerns about a china's slowdown in particular but on the other hand, let's check in on oil. this one's been uncomfortably higher it's still hanging on to a two-thirds percent gain and 106
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a barrel and we are seeing more creative efforts by politicians to deal with that reality. so on that note, could the new crude cartel be back reports are surfacing that talks between countries like the u.s. and italy are creating what they call an opec for buyers. brian sullivan is here to explain. brian? >> well, that's kind of what i call it, kelly we'll see. by the way, we have this new bill going around the senate i want to talk to you about, too and i'll blast you this and then hit me on that you have buyers agents and sellers' agents. italy's prime minister and former ecb head mario draghi, well-known name, telling that he and president biden discussed creating opec which stands for organization of petroleum exporting countries is made up of primarily oil sellers and whether this is being discussed
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or used as a form of political hammer scare tactic, i don't know it's not clear it is also not clear if this moves forward what nations would be in it or if it would even work to lower prices the problem right now is about global supplies and the founder said, quote, creating a cartel is useless if the commodity just is not fair. that is the issue and there's not a lot of spare capacity out there right now especially with russian oil offline. oh, by the way, more russian oil because on sunday it's when eu restricting firms that have probably right now are still buying russian oil, will stop on sunday the iaea thinks it will take another 2 billion russian barrels of oil off line and the no-opec bill is floating around congress and this price gouging bill that i was e-mailing you
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about right now. there is a heck of a lot going on in oil and gas. it ripped my tie right off i was so frustrated. >> we'll get to more of the details. for now, brian sullivan. >> after the break, the growing debate of corporate america. should state get involved in political issues disney found itself front and center of a atheed political debate we will discuss next (vo) every business, big or small, coast to coast, needs internet that can keep up with its demands. verizon has fast, reliable internet solutions nationwide. so you can power your business to do more. find the perfect solution for your business. ♪ ♪ ♪ ♪ ♪ ♪
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welcome back a key news alert jerome powell has been confirmed by the senate for a second term. here's the vote, 80-19 to give powell a second-year run at the central bank's helm in the midst of a historic fight against inflation. ty >> thanks, kelly welcome back to "power lunch," everybody. disney shares are trading lower this afternoon following its earnings report late yesterday at its earnings call the company discussed streaming and there was no mention of the ongoing conflict with florida over what critics have called the state's don't say gay bill now as the future of roe v. wade
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hangs in the balance in the supreme court, pressure is on for companies to take a stand and that pressure is likely to grow for instance, levi's, apple, microsoft, citi and amazon say they will cover the cost associated with traveling to a states and working where abortion is outlawed need to travel for that medical process. disney has not made a statement on the issue nor has walmart, the largest private employer in the country. so what is the role of corporate america when it comes to social issues let's bring in kate kelly, new york times reporter and america's wharton school business professor and both cnbc contributors kate, let me start with you. you talked to ceos and board members and going back to charlottesville in 2017 and then the north carolina so-called bathroom bill a couple of years later and then so-called don't y
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bill and now along comes the possibility that roe v. wade will be overturned what is the discussion like in boardrooms and in executive suites about how companies should take a stand, whether they should take a stand or whether they should stay silent? >> tyler, thanks for asking. these are all such important questions right now. i think abortion is probably an issue that most corporate ceos would love to not have to address in a perfect world, but with the changing legal framework in the united states that we are likely to see based on the leak of the alito opinion, they feel that they're having to act at least in some cases. it's interesting that citi was the first to say they would cover the services for a woman or an employee, i should say to travel out of the state to obtain an abortion if they needed to. this was the first bank to be
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run ever by a woman and this is interesting and you will see other companies considering it and i think there could be still more and this is a time having covered wall street for years and now cover money and politics in washington where employees are expecting more from their companies. they're expecting mission. they're expecting values they're expecting actions that they can stand behind and it is a very difficult calculous as you are alluding to for ceos because employees are not a monolithic group. >> correct >> they live in all sorts of different places and they have all sorts of different value sets and the millennial generation leans lfts. they are pushing their bosses to do more to take stands in many of these issues including the ones you mentioned in your intro. >> it is going to be -- obviously, the abortion debate is as divisive an issue socially as it is, but look at companies
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like walmart operates nationwide, worldwide, based in arkansas, where if roh vfrment wade there will likely be a strict restriction if not an outright ban on them i think kay makes a very important point. the people who are driving these issues are really no longer customers or shareholders. it's coming from employees from the inside out, from the bottom up they want to feel like their company, like they are working for a company that shares their values and here is an issue where the split is quite sharp >> this is 100% correct, tyler it's fascinating to me because as kate has mentioned, as well that, you know, this is something that's incredibly, emotionally intense and it's deeply rooted because we're
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talking about morality and all these things and it isgoing to be the case that companies and the folks making decisions, we're post-pandemic so people are thinking about what's important in their lives, number one and coming back to work in a sort of normative way that we've seen things getting back to normal and they're questioning everything and a lot of consumers are basically saying to themselves, where do i want to be? where do i want to work? where do i want to thrive and answer that question in the context of joining a firm with an organizational culture that fits the values that you share that align with what you believe are important with respect to who you are is incredible and it creates a kind of loyalty to the company that you just can't dismiss, and so 60% of this country are pro-abortion in terms of the latest data that i've seen from pugh research and recent polls and this is a decision that companies have to
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make am i going to go out there and alienate essentially 40% of this country by taking a stance on the issue and am i willing to do that there is a calculous of protecting the brand >> the busy market day and we'll switch back there. america reads thank you, as well. >> the the dow is down 567 points and the declines are even across the major averages and the dow, the nasdaq all down 1.8% and the nasdaq now down 8% just since monday. coming up, a new short squeeze, the highly shorted meme stock amc has been surging again today. we'll discuss the name and others in today's three-stock lunch next (vo) everyone knows to get wireless savings, you need to be on a family pla- ...oh... (jane) with visible, i get unlimited data for as low as $25 a month. no family needed. (vo) i guess i spoke too soon.
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welcome back to "power lunch" everybody we want to show you the s&p. it is nearly 20% off its 52-week high which would mean it would cross into bear market territory. the nasdaq already down 31% from its 52-week high and right now the dow is off 600 or nearly 2%
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one area of the market that has the potential to see pops on the back of any rally are the names with big short interests cnbc pro ran a screen searching for companies with a market cap of more than a billion dollars, 50% off their highs and had the shortest as a percentage of their float. here are three let's trade jeff mills is a cnbc contributor. jeff, welcome. we're going to start with a stock not on that list and one popping earlier today and that is amc what do you make of it >> yeah, look, amc, these stocks are trading down 10% one day, up 10% the next day so not indicative of any companies trading on any fundamentals. it's very hard to be long and also very hard to be short they're dangerous, quite frankly. i would not touch a name like that with a 10-foot pole, especially from a fundamental
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perspective. it's trading at ten times it's precovid price to sales ararati. it's still unprofitable, not for this market. >> the gap is nearly 70% off its highs, 15% short interest. this has been a crippled stock for a long time. >> yeah, a more traditional name there and certainly cheap. if you have a very long time horizon, maybe this is the time. i just think for the next 12 months this is not a particularly good stock. it's a company that tends to rely on promotions it didn't during covid it's starting to do that again and now it's dealing with higher costs. margins are getting squeezed at a time when incomes are getting squeezed in this market i'd rather a lulu and the stock has re-rated quite a bit. more interesting would be a dollar general or walmart. i don't know if we have the chart but i did send in a chart with walmart charted up against the ism manufacturing pmi and
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you can see as economic growth starts to slow, walmart usually outperforms. i think that's a good place to be. >> walmart against the pmi, i love that. let's switch gears and talk about sunrun, solar power maker, 70% off the highs, 14% interest. what do you think? >> i guess this is three strikes you're out for me. it's a similar stock that's not for this market. its negative eps even in the out years. there's still a lot of unknowns. 40% of their customers are concentrated in california there's a lot going on with regulation that could hurt their customers. maybe you could play for a trade here, sub 20, but i would be selling it into strength. >> so let's go back to walmart which you think is better for the macro environment that we're in, jeff are there a couple of other names you would add to that list >> yeah, dollar general would be one too. i've been talking about these
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names like walmart, dollar general, sort of away from the staples. the clorox, the procter & gambles, the traditional names that would do well in an economic recession trading at particularly high multiples. i think you want to play for an economic slowdown, not a full-blown recession so i think those middle of the road names like a walmart, like a dollar general or dollar tree, those are places to go right now. >> all right, jeff we will leave it there thank you so much for all your thoughts today jeff mills for more on the stocks that could pop on a market rebound, visit cnbc.com/pro. up next, tech companies getting crushed in this sell-off we'll tell you how that sldoowwn impacts silicon valley we've got the details, next.
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verizon has fast, reliable internet solutions nationwide. so you can power your business to do more. find the perfect solution for your business. the s&p within points of being off its 54-week high. >> if you take a look at what's happening right now, this is pretty much about 19% year to date but if you look at the intraday levels, we're probably within a quarter of a percent at this point from being down 20%. now, that's not some magic line in the sand, some magic number out there. what it does represent is a level that if you were a trader or if you were an investor on the retail or institutional side looking to put some money to work, that level has been seen as some as maybe a level that you could look at because it does represent that so-called bear market territory that some
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traders like to look at, a pullback to 20% or more. if you look at the overall picture for the s&p versus the nasdaq, the nasdaq is down some 30%, almost a third of its value from the record highs we saw last year in this move lower with that tech trade being a huge focus, facebook, meta, one of those hardest hit now among some of these big technology type firms by the way, meta platform is down 1.5%, down 45% year to date is just one of the many technology and tech adjacent type companies and industries that are cutting back on hiring. just take a look at some of these companies anecdotally as an example of those cutting back on their hiring practices. in by the way what's supposed to be a red-hot job market. meta platforms is slowing recruitment in light of expense guidance you've also got amazon
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warehouses are overstaffed during lockdowns robinhood is cutting 9% of its full-time workforce. and uber will cut down on costs and treat hiring as a, quote, unquote, privilege this is supposed to be a market that's geared towards workers. a lot more supply out there in terms of people who can work but are looking for those people who want to work and by the way, technology has been a hot part of the market. maybe it's a disturbing sign, guys, that if you see technology companies start to pull in their horns, what does it mean for the rest of the economy? >> i get cutting workers i don't know what they mean by hiring as a privilege. >> they're going to be more selective is what they're talking about. >> carvana as well moving liquidity and crashing stock prices can have real world macro effects. >> the fed has made it very clear this is the policy going forward. pending any real economic change, interest rates are going higher cash will be removed from the
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system and the brakes will be tapped on the economy. the recession will be the real variable, whether or not that happens. >> don't fight the fed on the way up or on the way down. >> dom, thank you very much. thanks, everybody, for watching "power lunch" with the dow down 574 points. >> "closing bell" will take it across the finish line right now. thank you, tyler and kelly welcome, everyone. major averages falling once again in another choppy day of trading. welcome, everyone, to "closing bell." i'm sara eisen we stand at about session lows with the dow down 500 points, s&p 500 down 1.75% every sector is lower. it's being led down by technology a lot of those chip names especially mega cap stocks like apple falling hard today the nasdaq composite down 2% 1.8% adding to losses for the week and for the week now it is down a few percentage points, about

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