tv The Exchange CNBC May 13, 2022 1:00pm-2:00pm EDT
every sing -- >> every single individual name. >> every single individual name. >> i'll see you in overtime in a little bit we'll talk about the latest in twitter. dannives, he called this a generational buying opportunity in tech. so, i'll see it for a few hours. "the exchange" begins right now. thank you very much, scott i'm kelly evans. here's what's ahead. stocks are jumping as we close out a brutal week with everything from big cap tech with to the airlines las vegas fans leading the way today. even with oil and gasoline prices surging again one of our guests says her client inflows are up and out flows are virtually nonexistent. a look at what names she is buying right now and another twist in the twitter saga elon musk says he's still committed to the acquisition the stock is the worst name in the s&p right now.
could it really be ecurtains and a dividend and disast rb those are the three buys in the veil first, we begin with these markets and don chu with the number >> and let's talk about the market this week because it's gone from bailing on stocks to buying stokz in the last 24 hours. broad base, every sector in the green right now. and the leads are being -- the lead is their discretionary in energy the laggards, even on the green, utilities and staples more defensive sector now, with regard to the dow industrials, the s&p and the nasdaq, we're up about 1.5% and 4% gains for the nasdaq. and for those keeping track at home, that means the fall from record highs for the dow now stands at roughly 13%. 16/17% for the s&p and below record highs for the composite index.
over the last week, maybe no surprise the best performing sector is communication services some of those beaten up technology names and what not are help tag move that, at least a little higher, marginally lower. meanwhile, technology and consumer discretionary, two of the worst performers many of the mega cap names are in that particular market. and perhaps the et trk that's been emblematic, arkk. if you look at the chart, from the hays we saw this past year a down to where we are now, this is a fund that's lost two-thirds of its value but being up 12%, this brings it to almost 17/18% and 20% off the low said yesterday and some interesting moves on the dip here cathy wood, this particular fund, kelly, has bought on the
dip, shares of coin base and ya unity software in the last couple of days we'll see how that ark plays out in the next couple of weeks. >> it is a bell weather. and coin-based shares are dipping today. and perhaps it's no surprise as we run through some of the data this week. starting with that consumer sentiment report, which sank five points to a reiding of 59.1 a 10-year low. as gasoline prices hit a fresh record high. and futures suggest they're if wing to get higher as we get the to summer. that has consumer inflation expectations at 5.4% for the coming year. and this after the producer price index surging 11% from a year ago but consumer price index also higher than expected, especially the core, which was up 6/10th of a percent just last month. add it up and wages aren't keeping pace consumer credit is on the rise
again and consumer sentiment is tanking and the debate over recession intensifies. the next guest says the genie is out of the bottle on inflation and getting it back in is going to be painful. joining me is uny school of business professor it's great to have you here. you looked at a lot of the data and you're not feeling that optimistic about the market, would you say? >> i think the market entirely -- here's where we are. we've come off a decade of probably the lowest inflation we've had, 1.5%. if you look at actual inflation, about 8% the market is trying to find its leg. we're not going back to 1.5. i don't think we're going to end up at 8. but i think until we know that, we're going to see the back and forth. in the market. >> let's talk about the possible range of outcomes you think investors need to be cognizant
of you paint scenarios from stocks do pretty well and hunky dory to asset prices could drop another 50% from here. >> the most benign scenario is inflation fades really quickly and we go back to 2%, to 2.5%. i think the probability of the scenario is getting smaller by the day. but that's the only benign scenario and once it's gone, we're going to go back to where we are you truly believe that, then stocks are back. but any other scenario in the middle, there's going to be an adjustment where stock prices have been judge issed and everything you see is metrics. price earnings ratios. whatever monitor you end up using will have to reflect the new reality. >> what would you say to investors right now? how do they proside seed >> don't assume the fed is going
to find a way to control inflation. once the inflation is out, central banksreally cannot control it without putting the economy through recession. almost every aspect of this economy, from earnings to interest rates to whether we're in a recession is going to be driven by what happens to inflation. >> that said, dawe have to sit back and wait or only part of the guessing game, trying to figure out one day verses energy crisis and the next day reading what said or powell did or didn't say about the 75 basis point hike last night. or is it long-term inflation expectations or which break-even measures people are trying to obsess over this trajectory. >> i think rather than think about what the fed is saying those are going to tell you where we're going to end up. the 10-year rate has doubled over the last 4.5 months
that's unheard of in the u.s you don't see that much of a increase in rates. i think that's where you're going to see inflation expectations finally settleal in rather than lack to the fed, look to the treasury market. >> you think the key to this market and inflation is what happens with let's call the 10-year from here? >> think of the 10 year. they're going to end up at 4%. we have a lot more pain in front of us. that's another 1% move in the 10-year rate and that's another 20/25% drop in the s&p 500 and that's why this whole thing is about expected inflation and where we end up at >> if you, as an investor, think you have a good grags -- i gues my point is the hard to forecast rate as it is inflation and any of the other variables and that
leaves a lot of people feeling hopeless do they stay in the market >> the problem with moving to the sidelines is that's always been the cashing out cashing out is the easy part cashing back in is really tough to do. so, i know people who cashed out in 2010 and never got a back in the market you're going to cash out, you need a to have is a trade as to when you cash back in or are you going to stay in cash for a really long time >> if you could quickly, before we go, rank equities in the grand scheme of asset classes including precious metals or crypto or real estate or i'm trying to think of what else you could throw in the basket these days how would you rank thutractiveness of these asset classes? >> i put real estate above equity cryptos, we've discovered, very risky. they're like high tech high tech they're not collectibles
they don't behave like gold. we have to let go of this notion that bitcoin is a collectible because it certain laeisn't behaving like one. i prefer to stay above equities. real estate is not as good a hedge as it is in the 1970s. in a sense, we have to go back to real eassets. but inflation is back. it's really difficult to find a hiding place >> and you wrote a great piece about the other way, goes into a lot of history and examples. thanks for joining us. now, despite stocks tanking and plenty of recession chatter like you heard, my next guest has seen increasing inflows and almost no out flows at all of equities joining moo eis is the ceo and chief investment officer so, nancy, what are you seeing in the real world as a counter point to the concerns he just outlined that we're very much aware of
>> well, if you know, the market's always climbing a wall of worry that's particularly steep and partially self inflicted by washington policy from the fed and fiscal. but i think what we're seeing is that individuals understand and have learned over the years that these kinds of sell offs present an opportunity now, i don't think this is 1999 or 2000 nor the years that followed, which were abysmal i think it's more anal gs to previous bear markets that we've seen this one's a little longer than most in 2020 we have 33 calendar days and 23 trading days. and that was easy to -- easier to digest. this one at 99 and 73 are -- i counted yesterday. but much longer, much more of a grind and it wears investors out. but the smart money -- and i view our clients as smart money -- are starting to come back in to the market.
in the last two weeks, we've seen significant flows from our clients. and we haven't had anyone l liquidate or leave us. and use as a protection policy but mostly because it's going to go less in the market. i understand that. so, it's a surprise to me. it's a turning point of sorts. i don't know exactly what. >> i almost take it as a bad sign if you were saying no one wants to own anything, then we'd go well, no sentiment can't get any worse than this and feel like one of the generational bottoms like in 2009 what you're describing kind of makes sense. feels like people going i know all the problems with equities but you can't just go to the sidelines and go i'll check in on the market in a decade.
>> right and remember stocks are the ultimate hedge against inflation. companies that grow dividends are really important because income is growing in your portfolio if you own the right stocks faster than inflation and they provide a modicum of protection when the market declines i mean, we have growth strategy too. they've done better than nasdaq. but it's a value strategy that's held up very nicely and that launches you from a better place when the market takes off. >> the two sectors are typically treated as trade offs and tandem trade. you see to the key to that is productivity why? >> fewer employees per there produced and in this environment, when there's a labor shortage, margins are at historic highs still in q1. there's go tag be pressure on margins.
you can't raise prices forever and so, we think the next shoe to drop, as they try to protect their margins is we're going to see an acceleration of pay offs. i just mean it's going to increase we've already begun to see it in many of the stay at home names we want companies that are focussed on improving productivity so, it's just emblematic over 50% of their new clients are signing up without ever having human interaction and we sat across sectors. it will allow companies to maintain flexibility unless earnings are slow. >> and examples of two things you like and eog, space out for some individual ideas
we leave it there and check back in soon. nancy tangler with tangler investments. coming up, elon musk pumping the brakes on his twitter deal but he's still committed to making it work. and tesla shares are, meanwhile, down 30%, since musk took a stake in twitter we'll talk about the implications with that and back in the green today. on pace for the worst week since march of 2020. we get to the core of what's happening with these markets and here's a quick look at the major averages the nasdaq's point game is larger than the dow's. nasdaq up 4.8% your record label is taking off. but so is your sound engineer.
you need to hire. i need indeed. indeed you do. indeed instant match instantly delivers quality candidates matching your job description. visit indeed.com/hire for investors who can navigate this landscape, matching your job description. leveraging gold, a strategic and sustainable asset... the path is gilded with the potential for rich returns. cal: we've saved our money, and now we get to spend it our way. val: but we worry if we have enough to last. for retirement planning, investment advice, and more, look for a cfp® professional. cfp® professionals can help you craft a complete financial plan that gives you confidence today and tomorrow. find your cfp® professional at letsmakeaplan.org. cal: our confident forever plan is possible with a cfp® professional. ♪♪ [ sigh ] not gonna happen. with a cfp® professional. that's it. i'm calling kohler about their walk-in bath.
my name is ken. how may i help you? hi, i'm calling about kohler's walk-in bath. excellent! happy to help. huh? hold one moment please... [ finger snaps ] hmm. ♪ ♪ the kohler walk-in bath features an extra-wide opening and a low step-in at three inches, which is 25 to 60% lower than some leading competitors. the bath fills and drains quickly, while the heated seat soothes your back, neck and shoulders. kohler is an expert in bathing, so you can count on a deep soaking experience. are you seeing this? the kohler walk-in bath comes with fully adjustable hydrotherapy jets and our exclusive bubblemassage. everything is installed in as little as a day by a kohler-certified installer. and it's made by kohler- america's leading plumbing brand. we need this bath. yes. yes you do. a kohler walk-in bath provides independence with peace of mind. call... to receive 50% off installation and take advantage of our special offer of no payments for 18 months.
welcome back to "the exchange." elon musk plans to buy twitter for $24 billion. musk tweeting this morning twitter deal temporarily on hold pending details supporting calculation that spam/fake accounts do indeed represent higher representation. and you can see that big decline. two hours later, musk tweeted
again, saying still committed to acquisition. that cut losses pretty much in half the bump around 7:30 a.m. on the chart. currently down about 9%, making the worst stock in the s&p and there's more than a $90 billion gap at what musk agreed to pay for more, i'm joined by axios mead rureporter and also a cnbc contributor. welcome to you both. sarah, i'll start with you can you clarify for us does musk pay the break-up fee or receive it? >> i'msuming he's going to be the one. he's had ample time to ask management for statistics around bots if he's claiming that's the reason he would put a deal on pause, i'd assume he would pay the break-up fee i think more likely what you see
happening is he could be sending a warning shot or trying to renegotiate, keep the price lower than that initial $54 per share bid. >> why should he pay 5$54.20 whe the stock is trading at 40 and we don't see any other suitors >> he shouldn't and if we made a deal, we would try to renegotiate as well. i think the market has to be exactly right. putting twitter shares down 9% so, they're expecting the deal will close but it will be at a discount compared to what elon agreed to. i don't want to play the back and forth game but that was at the end of the 10-year bull run we're at the beginning of what mig might be a bull market i think the market has it right but he's not going to pay now that it dipped below 120 >> really, has to decide
at this point elon musk has said he's willing to budge but the language today says he's willing to move further down it's a determination of what the board is willing to accept at the $54 bid, you did have investors trying to rebuke the deal, saying we were trading at $60 a few months ago i think the board would be very wise to accept the deal, even if took the low 40s and sat high 30s because at this point it doesn't look like they're going to get momentum egoing forward >> can he say never mind >> he can threaten to pay the break-up fee and say the best you're going to get is the discounted price and the board would be hard pressed to turn him down there's not a lot of leeway for companies that have historically poor performance and are trying to get the market it trust them, which is the case with twitter
elon says, listen, i'm willing to pay the break-up fee unless you come down, i think the board would be hard pressed to say no. i expect him to be successful in terms of his quest to take the price down >> and what are the implicationses of the drop in shares of tesla at the same time in the extent to which it sounds likehe's trying to renegotiate financing to make the less credit driven, for a lack of a etbeer word. >> there was concern among investors that they were going to have a part-time ceo, which is ironic because that was the criticism of jack dorsey when he was running twitter. i think they were optimistic that if the field was dropped, they had a ceo that would be paying attention to the company full time. there's also the situation where what happens with tesla stock continues to sink and elon musk keeps pulling out shares i think at this point tesla's investors are kind of on a holding pattern.
i think his follow-up tweet at around 7:40 a.m. saying i take this seriously, thought tesla investors seeing they got their hopes up hours before. >> i also think there's maybe a direct correlation between -- or an inverse correlation between tesla stock going down and the probability of the twitter deal falling apart. you look at the price of tesla right now. it seems like at a lower price, with elon could squeak through the twitter deal what happens if the drops $200 it's hard to see this happening. personally, i'm watching the tesla stock and gauging that fwaji gauging the performance. i still think it's likely to happen but we're in a down turn right now and if that persists, it could take the deal right off the table.
>> could twitter sue him, sarah, if he walks away from it deal, as our alex sherman has reported >> i guess they could but the problem is if elon walks out of the deal, what's next for twitter? i mean, they could try to sue him and try to get him and position him to come back to the table. what's next after that they're going to stave off, likely a bunch of private equity bidders. what they can do is what he did yesterday, which is conduct business as usual. sources tell us the reason he laid off or fired the two executives yesterday, put a hiring freeze in is because he's trying to conduct and operate the company as 23 there's not massive changes going about and the reason he wants to do that is if this bid fails and elon walks or if there's another investment that comes in, he wants to continue to keep positioning the company for the long term. and i think that's probably the best thing they can do right now. >> fascinating
thank you fwboth for all the co text today -- context today. coming up, the stock is up 30% today. one of our guests called it it yesterday. we have the name and why it's moving sharply higher next and americans are spending 125 million there more every day on gasoline than they did last month. gas prices hit a fresh all-time high today a look at what some in congress are going to do to what they say is price gouging a lot of green by nike and sales it is force. boeing has now turned negative we're back in a moment
cash payment. we thought we had planned carefully for our retirement. but we quickly realized we needed a way to supplement our income. if you have $100,000 or more of life insurance, you may qualify to sell your policy. don't cancel or let your policy lapse without finding out what it's worth. visit coventrydirect.com to find out if your policy qualifies. or call the number on your screen. coventry direct, redefining insurance.
welcome back to "the exchange" everybody. we're up 5:45 and it's up 4. -- 3.8% and big cap tech is seeing a nice rebound all with gains of 3% or more and microsoft are 2% and change. apple's trying to avoid its worst week since march 2020. a mystery chart was affirm and saying they've extended their relationship with spotify. our analyst yesterday was very bullish on the name going to results. up 28% to $23 today. coinbase is spiking as bitcoin makes a. >>back the stock is still down 30% this week trading around 72 -- and food names are seeing love in a sharp reversal
both soaring around 25%. and beyond sank. and casinos and hotels higher across the board las vegas sands is the best performer. thank you very much. three passengers on a train in germany over powered a man who injured someone with a knife one of the people was an off-duty police officer. it's a 31-year-old male born in iraq and who had been investigated in the past for possible islamic extremism but they don't know yet the han's motives. and a pawner ponn to bridge -- pontoon bridge was destroyed by the military. they say trying to get across a river in a war zone is always extremely risky and indicated
russian commanders are under a lot of pressure to make progress in eastern ukraine and in almost three months, u.s. defense secretary, lloyd austin has spoke with his russian counterpart. he urged him to accept an immediate ceasefire and stressed the importance of keeping sk communications lines open. and out rage over a nurse convicted of a felony for accidentally killing a patient by giving her the wrong drug >> thank you very much and we'll see you have soon. if it's friday, it's three buys and a bail. dividend, disrupter and diszaser we have the name to buy and the one to avoid next. we celebrate a asian american and pacific islander heritage. here's wall street journal reporter
>> one thing that both my mom and my dad really emphasized while i was fwroeing up was education a. i know that was one of the big reasons they moved to america was to give me and my sister access to the best education possible and i watch them while i was growing up move to a totally new country, not knowing the language, not knowing anyone and having to build up their lives from scratch and i've carried those lessons with me throughout my life th re mind-blowing! they collect hundreds of data points like hrv and rem sleep, so you know all you need for recovery. and you are? i'm an investor...in invesco qqq, a fund that gives me access to... nasdaq 100 innovations like... wearable training optimization tech. uh, how long are you... i'm done. i'm okay.
hey businesses! you all deserve something epic! so we're giving every business, our best deals on every iphone - including the iphone 13 pro with 5g. that's the one with the amazing camera? yep! every business deserves it... like one's that re-opened! hi, we have an appointment. and every new business that just opened! like aromatherapy rugs! i'll take one in blue please! it's not complicated. at&t is giving new and existing business customers our best deals on every iphone. ♪ ♪
welcome back stocks are staging quite a rebound but we're still well lower on the week. what are the bas and what is one trade to avoid what we're calling the four ds joining us now is cnbc contributor, chief market strategist at ledo advisors. your first buy is walmart, which is out pacing the averages with a nearly 2% gain on the year so, why this one >> walmart is a stock that is normally very defensive. but in the pandemic, they have played both sides of it.
they brought up their e commerce game just before the pandemic hit. now they're playing the reopening game and if anybody can handle supply chain problems, it's walmart they have one of the top logistics teams in the world this is a stock we think can madge the risks and still give you defensive turns. >> it's continuing to perform well and play both sides, if you will let's move on to clorox, which is getting more and more love because the shares are on pace for a second straight week of gains, even though they slashed earnings guidance when they reported last week and their yields are a deeper dividend that's what you like here? >> yes so, it's a we own clorox in our dividend strategy. obviously they're growing their dividends and even though they're cutting their earnings, this is a classically defensive stock. the challenge will be that it's a bit over priced relative to its average pe
however, we think over time, that fixes itself. we think it's a price problem, not an earnings problem and not a demand problem to extent they continue to provide great income and right now cash is king cash is what you need in this kind of an environment that's really where you need to be >> quick follow up to that there are obviously a lot of dividend etfs out there. would you recommend a broad-base strategy as opposed to an individual name? >> you to a broad-based strategy but you have to be careful what kind of dividend strategy you're leaning into because there are high yield dividend strategies and they tend tabe very value oriented and then there are dividend growers that participate in growthier names with with higher dividends and robust earnings. we think that just playing the cheap names and buying the
dividend yield is not a great strategy right now, even though value is performing. we think quality is what's going to persist over time, as we get through the rate hike. >> you want topay a good price for a great business right now instead of a great price for a good one let's move along to nvidia, which is up nicely today it's having its best day since november but it's been a tough few months the stock's 50% off the highs. why is this a great entry point? >> so, nvidia is in the semiconductor industry and supporting trends like cloud trends that are not going away and they're getting quite cheap, and just on an absolute basis, invid you is chief relative to the outlook and regardless of whathappens with the fed and demand, the underpinning for almost all demand going forward seems to be in the digital space and that is reliant on the cloud
that's reliant on semiconductors and nvidia is easily the top player in the market we think you want to own quality. this is a kind of name that will make it through the rapids that they're paddling through >> and one of the names leading the nasdaq higher today as the whole sector tries to mount a turn around. let's get to the name you're bailing on and it's a bitcoin why are you bailing on bitcoin here and have you ever been a bull on bit coin curious about the back story here >> i've never been a bull on bitcoin. i understand we will endure, at sp point, a transition to the digital economy and that's going to be composed of other ways of transacting. the problem i see with bitcoin is it was so highly over priced by hype and by excess liquidity
and that's going away and along with it, with the help of momentum, all of the hype. and it makes it extremely vulnerable right now i see it a as the excess receptacles for excess liquidity and it goes away and bitcoin storage goes with it. >> and separately today wrote a client note warning people that gold could fall another $500 an ounce in price because of what he says are rising real rates. and potentially headwind for geld or anything else. and i wonder if you're bearish on precious metals >> i am. they haven't performed the way you would expect a classic inflation hedge to perform in this environment because it's not the kind inflationary environment that would normally protect it and i agree that in negative real yields, and we're in
extremely negative real yields, you want to be in cash and something that's you know, more tangible >> than that good to have you on today, we appreciate it. gina sanchez with today's three buys and a bail. this widely held stalwart is down 7% this week. why everyone should care flexshares etfs are built with advanced modeling. to fill portfolio gaps and target specific goals. strengthening client confidence in you. before investing consider the fund's investment objectives, risks, charges and expenses. go to flexshares.com for a prospectus containing this information. read it carefully.
(vo) everyone knows to get wireless savings, you need to be on a family pla- ...oh... for a prospectus containing this information. (jane) with visible, i get unlimited data for as low as $25 a month. no family needed. (vo) i guess i spoke too soon. visible. single-line, unlimited data as low as $25 a month. in two seconds, eric will realize (laughs) they're gonna need more space... gotta sell the house. oh... open houses. or, skip the hassles and sell directly to opendoor. wow. get your competitive offer at opendoor.com - in the last two years, we quadrupled our team and the pace we're growing, i couldn't keep up without ziprecruiter. they do the legwork and they get my job posting
in front of the right candidates. i love invite to apply. i instantly see great candidates and i can invite them to apply. we have hired across all departments, engineering, marketing, hardware, field techs. you can basically tell ziprecruiter who you need, when you need it, and they deliver. - [narrator] ziprecruiter. rated the number one hiring site. try it for free at ziprecruiter.com try it for free at ziprecruiter.com welcome back shares of apple are back to 146. it's been a really tough week for the tech giant the stock trying to avoid its worst week since march 2020 in fact i don't know if we say it's a surprise in many ways, steve, appleal was supposed to be the tell for the market and maybe the only thing it told us this week is it finally caught up to be as bad as everything else had been and no longer this reliable old
stalwart >> they were having their worst week when covid turned the world upside down and emerging among analysts wait for apple to bottom as a signal the rest of the market is about to follow as well. that's what they're hoping is happening today. bank of america analysts calling the fall, quote the definition of true cupitchilation when they sell a stock they love you have them taking the market down with it and apple isn't just a major dow component. it's wrapped up in etfs and the like it's impacting wealth in all these areas. and since last fall, it was a safe haven and held up relatively well among the big tech fears that change would the big letdown the markets had this week, even when apple gave a lot of reason to be optimistic
and cook costing $8 billion knowing demand for expensive smart phones is through the roof the but company that builds iphones is sighing demand fall because people are still locked in their homes and that's the thing to watch. demand flipping elsewhere in the world where covid restrictions aren't as strict >> i think it was mike from bank of america this morning who said by some definitions, cupitchilation is when people have to sell their favorite stock. >> the one you love. yep. >> and this is his favorite thing. i wonder is it going to be a different market apple was the banner stock of the 2010s. can we, should we take for granted it can repeat that performance this decade? >> look how they handled 2008, the 2010s. we saw them with so much cash
and the demand is still so high for the products just more coming and new kinds of products. the glasses, the developers conference in early june there are a lot of things coming news wise from the company that could be a catalyst. >> when are we going to hear more about the glasses >> we were supposed to hear about them in june if i had to guess based on my informed speculation, unveiling in the fall. >> still coming but a little delayed. and that could certainly put excitement back in the convo >> oh, boy thank you very much. coming up, it's the billion dollar question. if disney's special tax status is revoked, who pays for their debt and take a quick look at the nasdaq right now absolutely flying. it's up 3.5% off session highs that's a 400-point gain. we're back in a moment
(other money manager) different how? you sell high commission investment products, right? (fisher investments) nope. fisher avoids them. (other money manager) well, you must earn commissions on trades. (fisher investments) never at fisher investments. (other money manager) ok, then you probably sneak in some hidden and layered fees. (fisher investments) no. we structure our fees so we do better when clients do better. that might be why most of our clients come from other money managers. at fisher investments, we're clearly different. ♪ ♪ ♪ ♪ ♪ ♪ ♪ ♪
♪ ♪ ♪ ♪ ♪ ♪ xfinity mobile runs on america's most reliable 5g network, but for up to half the price of verizon, so you have more money for more stuff. this phone? fewer groceries. this phone? more groceries! this phone? fewer concert tickets. this phone? more concert tickets. and not just for my shows.
get $400 off an eligible samsung device with xfinity mobile. take the savings challenge at xfinitymobile.com/mysavings or visit your xfinity store and talk to our switch squad today. as a business owner, your bottom line is always top of mind. so start saving by switching to the mobile service designed for small business: comcast business mobile. flexible data plans mean you can get unlimited data or pay by the gig. all on the most reliable 5g network. with no line activation fees or term contracts... saving you up to $500 a year. and it's only available to comcast business internet customers. so boost your bottom line by switching today. comcast business. powering possibilities.™ welcome back to "the exchange." last month florida moved to strip disney of it's special tax privileges they didn't answer one key question
who is responsible now for paying back nearly a billion dollars in debt used to build infrastructure michael, welcome to the show and what is the answer >> first off, hi, kelly. thank you for having me. it's a very good question. dislaugz of a local government is a very uncommon circumstance. and i think adding intrigue to the story is the fact that they have billion theres in bid outstanding and they're a service provider to disney, which owns all the private properties within the district disney, they have a variety of services that they benefit from the existence of and also, when you look at the extension of the debt, the state hasn't really left any tack in terms of who will assume the obligations. this hasn't been perkilating for all that long. first popped up on the radar a couple of weeks back, following
a dispute between governor desantis and disney over an education bill that has no connection lat to the operations of reedy creek or any other in the matter it creates a lot of uncertainty if you're a reedy creek bond holder past the dissolution date >> first of all, what is the status of the dissolution? has it mauvled from threat to reality? >> well, i mean, the state has left itself some time to work out a plan and in our opinion, our baseline expectation is they will do so the idea that the debt would be -- that the state would approve a plan that results in a transfer from the district to the county, that is essentially taxpayers. when you think about the sequence of events and how we got here in the first place, doesn't seem likely to us. there's another path, which the
governor has hinted at, which would result in the establishment of a successor agency to step into the shoes of reedy creek and in fact, the governing board would be appointed, not by disney but by the state. you lose some direct influence over key policy and decision-making that they currently enjoy that situation plays out and if you're a bondholder, the question you have is will the successor agency have the same powers and control that the district does today and will they be able to generate the same property tax and utility revenues that they use to pay off the debt. >> so there are muni debt holders for the existing reedy creek debt that might be moved to this special agency going forward. so is that going to make it a better investment in the future? a worse investment and what are the spillover effects for other muni debt
holders? >> i think this is really an isolated incident. we don't view this as a precursor to the state becoming more involvedin local government affairs in terms of is it a better investment or not, i think it depends on what the state's next step is. as i mentioned, we don't see this debt being transferred to the taxpayers of osceola county. if you are a taxpayer, there's been a lot of speculation about what that will mean for my particular tax bill. state law doesn't really prescribe an allocation. but if you look at the district's tax levy, it equates to 10 to 15% of the combined tax levies of orange and osceola county that's what an additional burden might look like. and many household budgets have certainly been pounded by inflation the last few months. that could be a tough pill for some to swallow. >> it sounds like they're trying to come up with a third way to avoid saddling other agencies
with this debt it will be key to resolving this whole spat going forward michael, thanks for your time today. >> no problem, kelly thanks for having me. if senate democrats get their way, federal, state and local officials could be adding gas price gouging to the list of things they go after after gas hit a fresh all-new high with few signs they're coming down soon we have the details, next.
♪ ♪ connecting to opportunity is just part of the hustle. ♪ ♪ opportunity is using data to create a competitive advantage. ♪ ♪ it's raising capital that helps companies change the world. it's making complicated financial concepts seem simple. opportunity is making the dream of home ownership a reality... ♪ ♪ ...writing new rules and redefining the game... ...and driving the world forward to a greener energy future. (applause) ♪ ♪
opportunity is setting a goal... ...and charting a course to get there. sometimes the only thing standing between you and opportunity... ...is someone who can make the connection. at ice, we connect people to opportunity. welcome back one last thing before we go. it may not be on your radar today, but gasoline prices just hit an all-time high in this country. now congress wants to do something about it with a new bill brian sullivan is here with a look at what is now being proposed
brian? >> you said rbob, that's a dollar in the beer jar there are actually a few of these bills going around congress this one, though, is the consumer fuel price gouging prevention act sounds nice. the law would make it illegal for any person or company to sell fuel at a price that is seen as, quote, unconscionably excessive. it's after a president declares an energy emergency. the priority is to go after companies who sell more than $500 million of fuel per year. so it's possible state authorities, not clear who, could go after single owner gas stations if someone, again, not clear who, determines that that station is charminging too high of prices. who determines too high? i don't know many democrats are using higher oil prices and higher oil
company profits as reasons global demand is higher than supply for gas, just over half the price is oil, the rest taxes, transport and refining by the way, we have a serious refinery shortage in america as well as a shortage of some gasoline refinery ingredients due to russian import bans all of that combines into a toxic combo, kind of like gas, of higher prices so you do wonder and i'm going to stretch a little bit here because it's friday. if this or another bill like it passes, literally, could you have people calling the cops on gas station owners who raise prices because they see it as illegal? if so, that's not going after big oil. because big oil companies only own 1% of gas stations in america. that's not many percent. >> brian, larry summers, who at last check i believe was still a democrat, just commented that this bill was as stupid as using bleach to fight covid. >> yeah. in an interview with bloomberg i guess he called it, quote,
dangerous nonsense summers now vindicated for his inflation call he was right when pretty much everybody else was wrong i'm not sure i'd go so far as to say this is the same as injecting yourself with bleach because that's dangerous and stupid this is just harmful maybe economically you are sending out a message. politicians of both parties have millions of people's ears, kind of like we do. if we're wrong, people call us out and we have to go on the air and issue a correction that's how it's supposed to work i think if politicians tell a story that's not wrong but not all there, you could confuse a lot of people who then get angry. like i said, you don't want people screaming at your local gas station attendant or gas station owner. gas stations are a hard business, the margins are tiny if you don't have any food, you're not going to make any money. if you're mad, go back in the
past and figure out why the number of refineries in the northeast is down by 50% in the last 20 years or so and the number of cars has gone up. >> we got as well the data point on the weekly rate count if you want to talk about what the energy industry can be doing to increase supply and bring prices down, what are we seeing on that front? >> they're up this week. i think the number it's on my computer, 216 i think year over year, i think, so they're trying, kelly. the point is there's no people, there's not enough frac sand, they're running half shifts. maybe they can't get diesel fuel to run some of the generators they need. really it's all in texas texas is trying, you just need people, time and money and you don't have -- you're zero for three pretty much on those. time you'll eventually have of course so output is growing, just not at the pace to bring down prices kelly, it is possible, i'm not going to make some hot take
call, it's not sports tv but there's a possibility there will be gasoline, there definitely will be diesel shortages in parts of the northeast this summer. there's a good chance you can go to the gas station and they just won't have it. i'm not saying it will happen but it's a darn good chance. >> i think people are becoming accustomed to these new realities. thank you, brian sullivan, we appreciate it very much. even as oil is moving higher, we've seen gold, silver and copper registering big declines this week are those a bullish sign for inflation? we'll discuss what all of this means on "power lunch" which begins right now welcome, everybody, to "power lunch." two hours of trading left for the week i'm tyler mathisen, here's what's ahead on this busy hour markets ending a lousy week with a strong bounce-back the nasdaq up 3% is it just a head fake, though, a bear market bounce or the sign that we have hit a bottom and the coast is i