tv Power Lunch CNBC May 26, 2022 2:00pm-3:00pm EDT
you've got google. you've got uber that was built in a downturn. they've been through cycles like this before and it could be a great time to build the company if you're disciplined and you cut costs and there are big examples of that that you point to and we're investors in. >> back to how it emerged in the financial crisis kate, thank you very much. our kate rooney reporting. we have a market veteran who doesn't see a recession this year due to one key metric and he'll reveal it on "power lunch" beginning right now. ♪ ♪ kelly, thank you welcome, everybody, to this day's "power lunch." i'm tyler matheson here's what's ahead. we have a rally on wall street the s&p down so far this week. is there value to be found at these levels yes, says one of our guests and he's got crude to consider
brent at about 117, nat gas closing in now on a 14-year high the uk hits oil and gas firms with a windfall profit tax that it says will help ease the pain for consumers, but will it backfire and what are the implications for the global energy market. we have a big hour ahead full of stuff. kelly? >> thank you hi, everybody and the market rally gaining steam this afternoon and the dow 650 points at the high and we're only 60 points off of that right now the s&p reclaims 4,000, 4066 and the nasdaq the biggest gainer just shy of 3% retailer leading the gains today after mace's raised its profit forecast this morning. dollar free, dollar general also predicting stronger profits for the year these stock reactions tell you how much fear was priced in. macy's was up 19% and there are general just behind that it all makes consumer disk
discretionary and we don't always see a sector jump, but we have that today. norwegian cruise line up 10% and marriott, tyler, up 7%. >> despite today's rally, wall street remains divided over the outlook for a recession. today we learned that the economic contraction to start the year was worse than expected first quarter gdp declined at 1.5% on an annual pace and that's the worst quarter since the start of the pandemic, but our next guest says no recession this year in part because the labor market is so strong. let's bring in bob dahl, global investment cio welcome back good to see you. you say the health of the u.s. consumers, lots of cash and the strength of the labor market the u.s. has never entered a labor recession with the market this strong. >> yes so far so good, tyler. i think the recession fears are a bit overdone it doesn't mean we'll have a significant slowdown we're already seeing that, but
the three things you mentioned caused me to think probably not this year, and i know all three are weakening to some degree profit margins and corporate america under some pressure, but we think we'll skirt by. remember, the stimulus in the system operates with a long leg. it will take some time for the tightening to the extent we've seen it to have an effect on the economy. i think stalling the recession until at least next year >> you began your year with predictions with the order of finish for this year will be cash number one, stocks number two? bonds number three are you still sticking with that >> if you let me start from today to the end of the year, i do think stocks will be higher at the end of the year than they are today assuming we don't have that recession, but i don't think we climb above where we started the year so stocks and bonds and it will be down for the year cash is king. >> what do you think about
inflation? >> i -- i divide from my notes that you think it's about to or has started to roll over on what do you base that >> well, there are a lot of reasons why inflation moved, call it two to eight we think it is in the process of moving eight back to call it four to five, still an unsatisfactory level we are solving some of the supply chain problems that caused the inflation the war got in the way of that, however, to some degree. it compare, the base effect as they call it is also a lower inflation rate and it's going to fall and i think that's part of what the bond market is enjoying in its almost 50 basis point rally and ten-year yield call it
2.75 tyler >> in the case of the nasdaq, lots of stocks have fallen much more than that from their highs making some prices interesting where are those interesting prices >> so i'm still, believe it or not, overweight tech and not the tech and i like old tech, cheap tech, low p-e tech and hp, and mastercard and visa, if you let me call them tech stocks where they're officially classified. those sorts of companies had earnings, and they have cash flow and i think they're going to be okay i still like healthcare service companies. the hmos and they've gone down less than the market for good reasons and i've had financials in my portfolio especially on this rally any they got beat up hard, i think unfairly people assumed a recession and brought the prices down. >> it's great always to see you.
bob dahl, you bet. >> plenty of damage has been done to valuations according to the spoke, the single p-e stocks have mostly double at the start of the year. there are 59 here. >> let's go value hunting with sarat sethi and he is in l.a. and a cnbc contributor >> before we get to the names ask you about a valuation reset. is this a healthy thing or what does this tell you >> i do think we've had such a good run over ten years and to get a valuation reset and the fed is raising rates because the economy is too hot and unfortunately, we have these things going on overseas and it's not a straight line up and beyond this, there are real value with these prices. >> xpo is a logistics name, a
transportation space and is this one of the stocks that is in single-digit p-es now? it's trading at nine times earnings and six times cash flow and we have some catalysts coming here and they're getting rid of their freight business and they're spinning it off and they'll sell the european business and it's an asset light business and they're delevering and guess what there's still business out there and it's not like freight totally disappeared and you saw the numbers from the retailers and the consumer is still buying and companies are still shipping so less than the truckload, ltl is a great business and the markets brought the stock down over 30% year to date, it's a cheap stock on cash blow and it's a balance sheet that's improving and too much bad news is counted into xpo. >> and jrp morgan, price to book, price to earnings and why do you think this one is still cheap? so this is almost on the cusp of trading, and it's got a solid
balance sheet and 3% dividend yield and jamie dimon came out just a few days ago and said hey, we're spending their 17 billion to improve our businesses we're improving our technology i like companies that are reinvesting into their business and not just cutting cover thes and if you look across their lines, asset management, investment banking and credit is actually not that bad and they've got credit cards so i think you have a global bank with a solid balance sheet and a great management team and a price to book at 25% kind of where it was and you get the tailwind of interest rates and that's really going to help companies like a j.p. morgan that haven't performed in an environment just like this >> let me take you off into a straight corner if i might, sarat, and that's to ask you your thougail and over the past couple of weeks there have been conflicting profit reports out of different companies whether it's a best buy, target or walmart and yesterday a positive report or
maybe the day before on nordstrom, macy's moving up higher today and where are you on retail, generally speaking? are there any opportunities there that you see i think tyler what happened, and when you look at the targets and the walmarts and the consumer wants the re-opening products, and they want to go out and they wanted to sit at home during covid and that's why you saw macy's and nordstroms like you mentioned and good numbers over there and at dick's not a good number in retail, you have to beware where the consumer wanted to be and they are spending money on apparel and they're spending money on services and the travel and i think if you have the right company in retail and the right company in services and it will be a question of can these companies keep up their margin and will the demand stay
especially at infant prices and you see the costs coming with other types of inflation are there any single-digit valuation businesses that they would stay away from >> i think at this time, yeah. i would look in some of the technology companies that are more single digits on price to sales where we don't really have any earnings, where you have declining earnings that's where i would be kacaref because you can get into the value trap of single-digit multiples and it can get smaller and ironically the p-e expands and that's why we have to look at not just the earnings, but the balance sheet to say as these earnings come out and issue more debt, what is the credit market saying and a lot of the focus has been on the equity market and spreads have been wide sxengning and if i'm g stock, the debt market is pretty
much always ahead of the equity market. >> xbo, j.p. morgan, the two names you would pick up here sarat, thank you very much >> coming up, with bitcoin prices up 35% year to date, how many holders are under water we've got the results of a new survey and stocks with falling multiples, but improving fundamentals lennar, vf corp, adobe, we're on the list and not all of them are buys, says our trader. that person will tell you where he's positioned and as you look toward this break, a look at the biggest percentage gainers on the dow right now. boeing, nike and home depot leading the way today.
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>> welcome back to "power lunch. bitcoin prices lower today and off 35% for the year so far. according to a new survey from mizuho, the average investor's bitcoin cost basis 21,000 a coin, and so as prices near that level is bitcoin approaching a tipping point and what does that bean for names like coinbase joining us now is dan dolev senior analyst at mizuho why don't you tell us the results of the survey and what that cost basis of 21,000 means
for the typical investor >> thanks for -- >> in bitcoin. >> thanks. thank you for having me on the show again. >> sure. >> we did a survey this is the second time we re-visit the survey and the results are remarkably consistent the cost basis for the median or the average coinbase investors is $21,000 those results are consistent across surveys and what it means if you look at the distribution, it means right now about 30% of investors, you know, once it goes below 30 are below water. when you get to 21, 50% of investors are going to be below water. it's sort of that -- i think, the tipping point which people are starting to think, wait, what am i going to do with my bitcoin? am i going to stay or am i going to leave what it means for coinbase, as it goes down it kind of makes people's excitement to continue to invest in this, i think come
down and it reduces the engagement on coinbase as bitcoin comes down >> so coinbase up today by $2.80, and you would expect if bitcoin continues to slide as it has over the past several months that coinbase would slide with it >> exactly it just loses its luster, right? so it becomes a self-fulfilling prophecy a lot of the stuff that's traded on coinbase is not just bitcoin. there's ethereum and dozen, if not more alternative coins and it's the last man standing here once we've seen what happened with the other cryptocurrency. >> what about other exchanges that do business in cryptocurrencies will they be similarly affected and will there be a great consolidation among them >> so i think that's a great
question, and we cover robinhood and i can tell you i'm more bullish on robinhood and the reason for that is because a, they don't charge fees and b, they're more diversified so i think if you're a pure play crypto exchange that the way you make your money on an overpriced retail transaction rate which is kind of what coinbase is, i think you're -- your future isn't as bright as your past so if we have any of these other exchanges and most are private and if that's how they make their money i would be worried about it >> is the decline generally in the cryptocurrencies a reflection of risk off in other words, people don't want to be in assets where they perceive high volatility, high risk or is it something more fundamental existential?
>> i think it's probably the latter people's understanding -- we've always thought about this, and i think warren buffett was the first to say these are not productive assets and so i think fundamental existential and the question of what are we doing here and we're trading all these alternative coins that have no intrinsic value and as this understanding trickles through there's less and less excitement about some of these things and i would go with the latter. >> i have to say, i'm surprised that you go with the latter which is the more sort of -- i guess a sort of extreme case there. we'll have to have you back and debate that, because i know that some of the social media probably lighting up now with that, but dan, thank you very much i appreciate it. >> still ahead, profits over principles well, is it? vanguard says they have no plans to curb investment and fossil
fuels for the sake of climate change is the esg movement losing its influence. plus a taxing time the uk issuing a one-time tax on oil and gas giants to ease pain on consumer energy bills plus during may we're celebrating asian-american and pacific island heritage and highlighting our cnbc contributors and here is jane hun author of "breaking the bamboo ceiling." >> the concept of the bamboo ceiling which i've worked on for the past 20 years continues to be a barrier for asian-american, and it's this myth of asians as a docile group of hard, woing capable people who have overwhen barriers of discrimination i believe that's really false and i've been working in companies where asians are not making it all of the way through the system there's a lot of work to do there. so i believe it's important to include them in that process or to include them in that conversation becauseany mof them are still falling through the cracks
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mission to maximize shareholder returns. kristina partsinevelos has more on this. >> i have more we're talking about an echo of milton friedman's doctrine and the social responsibility of corporations is to increase profits and the world's biggest asset manager, vanguard, told the ft, quote, our duty is to maximize a long term total returns for clients. climate change is a material risk and it is only one factor in an investment decision and continue to say that vanguard does not seek to direct company strategy and suggested that some firms with the large carbon footprint can play a big role in the low-carbon future. vanguard did follow back i asked this morning and they give me a comment, they encourage risk mitigation, effective disclosure so as to not undermine its long term investments. when we are seeing is investment firms want a piece of the money
pie. sometimes, though at the expense of the climate and that's the debate right now and despite the drop in marks, companies like ox dentsal up 137% and bp up 37% and the list continues and the energy sector up on the year today. a new report today says eight oil and gas companies alone are involved in over 200 expansion projects over the next three years. what they say is the equivalent of the lifetime emissions of 77 new coal-p power plants and the downward trend of coal consumption in the united states is continuing to go down since its peak in 2007 nonetheless, the topic that we have right now, milton freedman, profits over planet? which one? they're a great example because they sort of own so many different things and if they had to divest from fossil fuels it would be a big deal. did they offer esg funds and
they don't need to divest from fossil fuels per se, what about other companies that have been other pressure like this >> is it other companies or statements there's been a backlash, the hsbc ahead of responsible business recently said in a presentation that climate risks are overblown, and who cares what happens to miami if it's in a few years. >> because amsterdam said already. >> tesla getting removed from the s&p esg index not because they're getting worse in terms of their e missions and tesla could improve and have a better low-carbon strategy. all of this suggests there's some pushback to the overbroad >> how do you qualify and quantify so much uncertainty >> kristina, thank you so much let's get to frank holland for a cnbc news update >> tyler, here is your news update for this hour the palestinian authority says
investigators have determined an al jazeera television journalist was deliberately killed by israeli forces the funeral procession led to clashes between mourners and police they responded by saying no soldier fired intentionally. they joined a rally for more restrictive gun laws and that includes the democratic senators from connect cut where 24 were shot to deaths more than nine years ago. those senators told the crowd things must change >> we are not going to allow this to become the new normal. [ cheering ] >> we are not prepared to allow our schools to continue as killing fields we are not prepared to allow the gun lobby and the gun industry to continue to run this town and this place >> and today the supreme court
is rejecting a bid by republican-led states to block the biden administration from using a larger cost estimate for the societal impact of greenhouse gasses when agencies draft the new legislations that's the very latest kelly and tyler. back over to you. >> thank you, frank. >> ahead on "power lunch," as the company struggles to keep growing unionization efforts and can cash keep workers around plus even billionaires need some extra cash. elon musk scrambling to finance twits twitter and it could put tesla at risk. tesla's one of them, up 8% to 711 at the latest today. we're back in a moment
welcome back, everybody. just 90 minutes left in the trading day. we want to get you caught up on stocks, bonds commodity and the uk's new effort to bring down energy prices and stocks, we have a five-day rally now going for the dow and we're still near session highs and bob pisani down at the new york stock exchange bob? >> we have a rip your face off rally going on here and it makes
me nervous ahead of important data two key sectors are moving number one, tech, number two, consumer discretionary and nvidia i thought had a fairly muted outlook and give you an idea of how dramatically things were oversold and bringing all of the big-cap names with it and microsoft on the upside and the real moves are on the consumer discretionary group and this is the worst performing sector in the s&p and here is the high-end consumer news has been good. movado, williams-sonoma and macy's and it's lending credence to the idea that the higher end are holding up fairly well and giving some credence to the argument that maybe they're not going to fall apart and maybe they're not going to pull away from their spending. we've seen some wild moves in some of these other growth sectors and i want to show you caesar's how crazy this has been 70, down 40% in the last couple of days it's
rallied 24%. these are crazy numbers and gives you an idea of how confused it is and are we at peak travel and are we not a two or three-day rally and costco will be after the close this is the key story and this is down 25% in the month because the multiples compress 25% and the earnings expectations haven't changed and we're expecting 10% earnings growth. guys, kelly, this is the classic retail growth stock, reliable, con sisterent earnings growths every single year. again, 10% it's not earnings that's coming down and we'll see what they have to say. all i can say is there is a lot riding on costco tonight with the earnings expectations this high >> there certainly is, bob thank you very much. let's turn to the bond market that is helping the conditions as well and a strong auction today, rick. >> yes, a very strong auction which sends the signal that investors as you just described were watching the equity markets
just skrcratching their head thinking time will tell. you can clearly say that yields dropped rather dramatically and opened the chart up to two days and a couple of things you should pay attention to. we held yesterday's 2.70% low which is very important and gave today an upward yield bias and if you open the chart, the reason why, because yesterday we closed basically a one-month low yield and today with equities being up, of course, many are getting brave thinking that yields, well, are they going to turn around because equities have made a bit of a comeback when there was a down side there was buying going on because there was no other place to hide out, and if you look at these fed funds futures and this is important. yesterday, they closed at a five-week high and they're even a little bit higher today after all of the tough talk. we see that everybody who had their hand up being looking for recession, a lot of those hands
have gone down does it change quickly all i know is when the fed funds futures go up, the market is anticipating less fed. tough fed or tough markets we will see. back to you. >> speaking of tough, let's turn to the energy space where natural gas is higher again and pippa stevens with the relentless bad news except for crude. >> crude is approaching 120. both brent and wti are on track for the sixth straight month of gains for the first time since 2011 natural gas remains in focus just now turning negative ahead of the june contracts expiration today. today the july contact is trading at a premium around nine bucks and we focused on that immediately and with these nat gas prices, utility bills are also going up. it varies widely by region, company and depends on factors
like the utility's fuel mix and how far out they buy supplies, but barclays estimates bills will jump 30% to 40% with nat gas between $6 or $7, far above. turning to energy stocks, 15 components hitting multi-year highs, conoco, eog, and pioneer, kelly, at all-time highs back to you. >> that was great stuff you brought to us. when barclays says bills will go up do they mean for households, for businesses both >> for households specifically, if those bills are going up, everyone's bills are going up and this is a headwind going up and since the regulated utilities and unregulated utilities and there are a lot of different factors at play and the bottom line is utility bills are going up >> absolutely. pippa stevens. as crude oil prices continue to surge, the uk taking bold steps.
a 25% windfall tax in oil and gas companies in a last-ditch effort to ease soaring energy prices and they're easing the fund-raising to pay for low-income subsidies for consumers. will it work and be counter effective? let's ask francisco blond at b of a securities. good to see you again. kyle bass this morning told us, he thought it would raise prices and harming consumers in the long run what's your take >> hey, kelly. i can't disagree with that certainly, when you tax excess profits that companies are making at times like this, you're going tos for a reduction in investment which is the only thing that will get us out of this hole and get us into a better position in the long term remember he has a huge supply shortfall going up and into very, very low levels and if you adjust for consumption we had in
decades meaning that we didn't have a buffer to accommodate the next energy supply shock, so i don't know the uk government is using that to appease consumers which are obviously getting hit very hard and i not the policy move, that we focus maying the reit investments so we can prevent further price spike spikes >> it's supposed to, on the one hand, tax profits while on the other hand making sure it doesn't discourage investment. do you think they can put the needle through that thread you know what i'm trying to say? they are potentially allowing for fast depreciation of the investments and so they're
still -- it's still out and they're going to do exactly what the tax went forward and there will be a pushback to the companies in the form of accelerating writedowns. i do think at the end of the day we will take a more serious look at what we are doing on the supply side and remember, this is just before europe goes into yet another debate on how to crack down on russian energy exports. remember, russia supplies a million barrels a day, and energy demand 3.3 this year, and the prices have risen so much. we've lost a good chunk of our demand recovery and oil demand recovery and essentially that means that we're losing our gdp recovery, as well. so we are very concerned about that, because again, we could be hitting a wall here from a
demand standpoint, we may not keep groing that economy, and you talked about the need to focus on the supply side of the equation what does that imply what do you mean there spell out. we need to find out how long the transition is going to take and certainly try to take steps that are reasonable came in for the targets at 2050 and making sure there were enough hydro carbons for the here and now, otherwise we have a disruptive transition in the next six to 18 months and essentially, i'm talking about the potential for supply rationing. i'm talking about the potential for forcing consumers to take a bigger hit remember, we are taking the wrong policy steps and subsidizing consumption in many
places around the world including the u.s. and europe by cutting back taxes and that's doing nothing, but just the demand levels to deliver available supplies so i think we need to first correct the pocy errors on the demand side and then we need to essentially, as i mentioned address all of the supply issues and incorporate companies to help us bridge this gap called russia. >> that's very interesting what you just said that through policy, for example, by cutting state tax on per-gallon tax, you're encouraging consumption and you said in your answer there that we may be looking at supply restrictions. what do you mean by that does that mean i would only be allowed to buy a certain number of gallons per week or what?
>> i'm thinking lower speed limits rather than giving subsidies that stood slow. the u.s. may not have to do this and closer to the point where you're going to have to do this, and supplies are getting very, very tight, and while the u.s. can actually the exporter and europe is a huge energy importer so i do wonder six months from now whether we'll be talking about potentially speed restrictions in parts of europe. >> which is what you had in the '70s, as i recall. i remember waiting in gas lines in '73 and '74 as a result of the war in the middle east, but -- but they cut the speed limits down from 70 to 75 to 55 nationally, and you know, it was
pain and now they've all gone back up. very interesting discussion, francisco. our weekly -- it's usually tuesday, but it's thursday with francisco blanco musk's plan. musk-see tv is his plan to havee twitter purchase tesla is part of the consumer discretionary sector which is now on pace for its best day since march of 2020. every stock in that sector is higher plus you can now listen to "power lunch" on the go. look for us on your favorite podcast app. follow and listen. that's a correction today, now, immediately.
>> yeah. a bit of a relief, tyler relief rally there, tyler. of all of the issues confronting elon musk with the purchase of twitter and the tesla share price that's causing the biggest financial headache and those are over 40% since they announced that stake back in april and the net worth their 70 billion this year and he's barely holding on to the handle with the net worth of $200 million. that $12.5 billion margin loan and that is now gone he needed to pledge more with the loan and he ran the risk of a margin call. he did replace some of that with larry ellison, sequoia and a lot of others earlier this month, but the big question now is where is he going to find this other $6 billion he could sell part of his 55 billion stake in spacex.
he could recruit a lot of billionaire buddies or get private equity to chip in. either way, guys he'll bring in more economic partners which could change the overall strategy and the profit goals for twitter all of which or most of which because of the tesla-shared decline and we'll see it on the way up again. >> do you have a sense of whether he still wants it? >> yeah, look, he keeps harping on this excuse of the bots, but in this filing last night he says i am committed to completing this deal remember, that means his equity in this is going to be $33 billion. not all of it his, of course, but the equity portion, largely him will be by far the bulk of this so he's still in hard to bet against them and on this one he'd be buying, like what a number four player in social media? i mean, where are they ranked? >> yeah.
it's tiny, compared to facebook, tiktok and all of the others. >> facebook, tiktok, youtube. >> yeah. you name it. and whether he's done selling tesla shares he said in april i'm done selling. he said that last year, too and he ended up selling 8.5 million in april questions for twitter shares and tesla shares >> we appreciate it. >> after the break, three stocks, three silver linings and we'll trade names with falling multiples and improving fundamentals there is a preview there is a preview we're back in a moment get decision tech from fidelity. [ cellphone vibrates ] you'll get proactive alerts for market events before they happen... and insights on every buy and sell decision. with zero-commission online u.s. stock and etf trades. for smarter trading decisions,
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all right, welcome back. time for three stock luncheon today's beverage menu. credit suisse out with its own version of the silver linings playbook screening 50 stocks with improving fundamentals but declining prices that could be attractive among the list are lennar, vf corp and adobe. quint, welcome let's start off with lennar in the beleaguered home builders segment. >> thanks for having me. home builders are interesting
because the stocks are obviously extremely well off highs and they're trading as if we are going ahead not just in a housing recession but housing depression we don't think that's the case in fact we think we'll start to see some inflationary pressures come down, could potentially give the fed some pause and, therefore, the interest rate environment may ease off a bit, lennar is now trading 4 times forward earnings and even with relatively modest estimates set to grow those earnings by 10%. they have an exceptional balance sheet and ultimately, again, the stock well off highs, trading in this environment we think it is a great opportunity for investors to pick up for a long-term investment here on a beaten-up play. >> picking up lennar what about vf corp, quint?
>> yeah, this one is not for me. we talked about this a few weeks ago as an earnings preview and we said basically as long as they didn't see anything too surprising, the stock had already baked everything in. so the rebound off the in-line expectations is not all that surprising for us. but let's face it, this is a company selling 12 times forward earnings, growing those earnings less than 12% with a terrible balance sheet. i mean they have a tremendous amount of debt here's the real problem. many would be enticed by a 4% dividend, but they're paying out over 50% of their earnings so it's going to be tough to really, you know, take chunks out of that debt and improve that balance sheet when they have such a high payout ratio. so if you're stuck in this name, i think you use this strength to lighten up or get out altogether it is not for me. >> let's move on to adobe.
>> adobe i would say is our trading name here. this is a beaten-up tech kind of goes along with the pieces that we have a little bit with lennar. the fed pay end up backing off i know that's an unpopular belief and tech could catch a sustained bid. adobe is now selling 25 times forward earnings growing those earnings at roughly the same pace and ultimately has an incredible balance sheet. again, from the standpoint of a trade, a stop at lows on this name, recent may lows i think is exceptional risk/reward here. >> quint, that's an interesting call on adobe, vf and lennar thanks very much, quint tatro. and apple is boosting pay to employees, but with unionization talks heating up, is it too little too late? we have the details right after this
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one way to find workers in today's tight labor market is to pay them more. that only works if you have the money, and apple certainly has plenty of that and it is raising wages for workers, including $22 an hour for the apple store employees. let's bring in steve kovac now for more where does this come from and why do they feel they need to do it now. >> apple tells me this is all about an annual review but it's a coincidence that it happens a week before these first union
votes will start rolling in in atlanta, georgia those workers are asking for something similar to around $22 an hour, so they might be getting what they want before they even have to cast a vote so it's going to be really interesting to see when the voting starts and gets counted if this puts a wet blanket on the effort to youunionize it's across the board globally every apple employee, the budget is going up for salaries. >> we all saw this narrative play out and gain some traction if you go back a couple of months ago with wage gains at amazon and the likes but amazon has been shuttering some of the wafrehouses it adde during the pandemic and apple has held up better than some of the other companies but i guess
it's an encouraging sign that they feel like the labor tightness is a much bigger issue than any labor market. >> exactly they have these two factors working against them, the labor tightness and inflation. what people are talking about, the employees are talking about, we need more money to combat inflation. i was talking to courtney reagan and she was telling me per square foot apple stores make more money than any other retail store, plus we know how much cash apple has on hand if any company can set an example for retail workers, it's going to be apple. >> you go into a mall and lots of stores may well be empty, but apple stores never are empty they're always piled up. do we expect that this is going to be somethg that is going to spread throughout the tech world? >> it has a bit, tyler microsoft, i know today they announced that they're going to pull back or slow down hiring in some segments. they don't have a retail presence like apple does, but
for salaried employees, they're raising prices microsoft shares are down over 20%. apple shares are down 20% this year so that's a good retention thing to keep employees at apple, at microsoft so they don't go elsewhere or start a new startup and disrupt the companies they used to work for. >> steve, thank you very much. we appreciate it. >> we like sitting over here. >> it's nice a new location love it. >> thanks for watching "power lunch. >> "closing bell" right now. stocks building on gains throughout the session near the best levels of the day as we head toward the close. the most important hour of the trading day starts right now welcome to the "closing bell." i'm melissa lee in for sara eisen. we are firmly in the green but off the session highs. s&p 500 just about 11 points off the intraday session highs we're up 2%, 4065 is the level the dow is up 1.9% the nasdaq composite is staging a 2.9% gain. nearly ever sector is higher, but consumer