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tv   The Exchange  CNBC  August 15, 2022 1:00pm-2:00pm EDT

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xlv is the way to track it. >> always a pleasure to be with you today. even steve weis. i'll see you later on "fast money. we'll be joined by the former president of advertising for the fox network group. 5:00 p.m. eastern time do not go anywhere "the exchange" begins right now. >> thank you melissa hi everybody here's what's ahead. a not so happy monday for the markets though it looks better over there by dom. stocks pausing a little today after a huge rally off the june lows as china and u.s. data weaken more than expected. is the rebound durable or not? jpmorgan and morgan stanley have differing views. so do our desk we'll get their takes. plus we'll look at signs of weakness in the chinese economy. retail sales and industrial production all missing estimates just to name a few an unexpected rate cut we'll talk about the impact here and globally and ask steven
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roche who is bear ib on their growth these days. two retail names report results in the morning and have been huge movers since the pandemic walmart and home depot we will get you set in earnings exchange first, the latest numbers, dom. >> they're in the green, solidly so didn't look that way in the beginning but it's been a while since we've referred to this as the kind of taylor swift shake it off market. that's what you're getting today. the weaker than expected economic data out of china, some weaker data on our own shores here had provided some of the down draft in markets early on but is not that way now tilting toward the highs of the session. the dow industrials up 185 points half of 1%. 33,945 just a hair below 4300 for the s&p 500, 15 points, similar percentage gaens for the nasdaq composite 13,108 reversing losses we saw earlier in the session one place where the losses are still there though off the session lows is on some of that
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stuff tied to the slowdown in china. industrial production over there and otherwise. that's commodities specifically oil costs wti crude still below 90 bucks off 3% $89.20 copper prices down 1.5%. apa corp, deven energy on the energy side. freeport on industrial metals some of the biggest percentage decliners in the s&p 500 watch commodities. one place showing real relative strength check out tesla shares up about 4% right now. that brings the move off the lows to roughly 50% in terms of gains. we're still about 24% below the highs we've seen over the course of the last year still though with elon musk and the company saying they've now made roughly 3 million vehicles, 1 million of which were produced in china at their shanghai giga factory giving some catalyst there and many momentum indicators to the upside whether it be relative strength or statistical measures or showing that tesla is showing some real
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signs of life here so we'll see how long that can keep up before things start to slow down. a big move off the low: let's get to the double dose of bad u.s. economic data as the markets are making a come back a couple big misses this morning a dismal empire state that means new york state manufacturing number second lowest on record. then the nahb housing index for the nation showed huge declines with the lowest print since may of 2020. let's get right to the details steve, let's begin with you. >> yeah. thanks, kelly. if you're looking for proof we are in a recession you don't have to look further than the new york state empire manufacturing survey it gained attention today because of the eye-popping drop. the index falling 42 points to minus 31 the lowest since the pandemic the second lowest for the series which dates back to
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2001 new orders and shipments plunged and while employment was up the net percentage planning to hire did decline. the work week was down but in one good development so were prices paid. this survey is not the most followed or important but is the first of the fed manufacturing surveys for august and generally in the month so it can lead the way. other regional indices fell in july but not nearly as much as the new york feds did in august. friday's philly fed will be watched closely to see if it confirms the plunge. if it does it may mean manufacturing may have stopped on a dime in august. >> it is not like we usually say okay empire fed is a top level survey but these are all inputs into the ism which had been better than expected lately. now people will wonder about that print next month and what else this week we got past cpi last week but there is more coming down the pike. >> the fed minutes on wednesday give us an idea whether the fed might do 75 september.
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the parameters or information on that are out two other pieces of data i'll follow and just separate them quickly. the national retail sales data which comes out from the census bureau we'll follow that. we also have to listen to the retail sales reports coming out. there's a lot of retailers coming out and that is another way to figure out what the consumer is doing to listen to these reports. >> these earnings reports, reporting from our very own courtney reagan. we have a running debate going back many years now about who has the better bead on what's happening with the consumer. her reporting on retail and mine on the macro, you put it all together and you get a better picture this week of what's going on with the consumer you know how critical that is to the economy. >> a great point housing, too we'll move on to that. thank you. on the housing front the sentiment is seen as a bellwether and it's been dropping eight months straight now. >> that's right. i would argue with steve it is housing beating retail and the macro but that said home builder sentiment in the single family
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market dropped into the negative territory for the first time since a very brief plunge the start of the pandemic. before that it hadn't been negative since 2014. it's also the eighth straight month of declines after hitting a high of 90 less than two years ago. the nah b's chief economist said tighter monetary policy from the federal reserve and persistently elevated construction costs have brought on a housing recession they blame higher mortgage rates and ongoing inflation in construction costs 1 in 5 builders reported lowering prices in august to try to boost sales and slow cancellations. of the index's three components current sales conditions fell the most but buyer traffic is now at the lowest overall level and sales expectations in the next six months are solidly negative >> well, is it a sign that the sort of key question out there is still whether home prices are going to fall or all of this just keeps them kind of parked at this high level but with less
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activity >> i think it is the latter. we say builders are maybe dropping prices 5% but they're up well over 30% since the start of the pandemic and for existing homes those prices are up close to 40% since the start of the pandemic you will see prices moderate, the gains shrink maybe they flat line for a little while i do not think you're going to see really considerable price drops in this market because demand is still so high and supply is so low. >> for now, thank you. our diana olick. so does this data mean the stock market's rebound is running out of steam big debate over that morgan stanley saying the sharp rally since june is just a pause in the bear market predicting share prices will slide the second half jpmorgan says the rally could run through the end of the year. who's right? let's ask my next guest, the ceo of zoe financial and it's great to see you both. how are you feeling about the market these days?
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>> if you look at two different perspectives you might get different answers. is the recent rally justified? i think the answer is yes. we had better economic data when it comes to inflation and jobs which is what market has cared about especially on the inflation front. on the earnings front if you look at this past earnings season on average stocks that under performed their earnings expectations did not fall. that is the first time in over five years that happened which tells you the market expected a dire scenario it did not get. looking forward i think you need to see inflation significantly come down before you can justify the multiples we were seeing in stocks back in 2021. >> all right you still think we're over valued >> i don't think necessarily over valued but to get back to the highs, one is earnings growth and the other is multiple expansion. to see multiples expand back to 2021 levels you need to see inflation come down.
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earnings growth of 7% to 10% is not going to get you back to alltime highs. >> fair enough i know we've been talking a lot and i've been reading your work about inflation and it remains a persistent concern for you how does that translate back into your view on equities here? >> i think it is valued in comparison with what the macro tells us and a lot more of fed tightening needs to take place it may or may not actually happen with the very dovish chairman we have in chairman powell and if he does not, it doesn't mean equities are off to the races. it just means they get a reprieve it goes up once again it is more of a bad market rally because before it settles down the equity prices have to be a lot lower than where they are today and the bond yield is much higher than where they are today what does the fed have to do next it doesn't matter to me whether
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the september increase is 50 basis points or 75 they are going to have a combination of both rate hikes and quantitative tightening take place. keep in place september 1st quantitative tightening doubles to $95 billion per month and that is going to put the crimp on the economy as well it is far from being done in terms of economic tightening. >> is it fair to say you both have, the morgan stanley view per se, always a little bit cautious on the market where do you think this is going in the longer term would you like to see a much more hawkish fed feel confident, then you'd feel more bullish on equities >> great question. i would like to see a fed which really thinks it has two mandates namely economic growth and inflation rather than behave
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as it has done so far that economic growth is the one that it cares about as soon as the growth takes a tic down when the stock market takes a hit the fed pivots the fed has lost credibility and i want to see a fed which behaves as if it has a twin mandate. that is what i'm looking for. >> would you tell investors to be most listening or watching for in the coming weeks and months >> inflation, right? you could see a scenario where the market rallies because inflation gets back to a three handle which gives back the tools to the fed to lower interest rates without affecting inflation. so i think inflation is the key word here >> i don't think inflation will get to the 3% handle any time in the next three years or so if somebody is looking for a 3% inflation rate they'll have a
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very long wait you have come down from 9.1 down but we may settle down about 6 or 5.5 but we are not going to go down much further so the fed has a lot more work to do. >> that makes sense to me yet we've had people come on and argue base their reading of the data that we'll be in the 2% range by early next year i'll let you answer that but what is the most ellis tick path from here? every time we see, especially looking at oil, look at oil dropping and we think inflation will fall much more than people expected even if the job market hit a well today i don't know if the wage numbers could let us get there >> i think it is -- one thing is what we want to see and the other is what is likely to occur. i think 2% by the beginning of next year is a very far stretch considering the sticky part of inflation such as housing is still there, even if oil prices come down for instance or wage
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inflation as well. so 3% handled. not even in the time frame but some point the later half of next year and i think it would be optimistic. >> all right makes sense to me. i don't know i'm not the expert but i appreciate it coming on and talking inflation and equity debate meantime we've got some developments on the third point stake in disney. i believe we've heard from the company now. julia boorstin, what is happening? >> disney responding to that letter from dan loeb and his recommendations that the company spin out espn, buy out comcast' stake in hulu, do cost cutting, and refreshing its board the company pointing to its third quarter result and saying it is delivering strong financial saying, quote, under the leadership of bob chapek the company has delivered this strong performance while navigating the covid-19 pandemic and its aftermath including reopening of our parks where we have seen strong revenue and profit growth in our domestic parks business
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our independent and experienced board has significant expertise in branded, consumer-facing and technology businesses as well as talent-driven enterprises. the board has also benefited from continuous refreshment with an average tenure of four years. the last comment indicates disney doesn't see any need to address what loeb called talent and experience gaps on the board. we'll see if they consider his specific recommendations that he has for new directors as board seats do come up kelly certainly interesting to watch how this plays out. >> the one that grabs most people's attention is the spin-off of espn because that is the cash cow how would that work? i'm surprised frankly that they would push that i can see the share holder value potentially but would it undermine disney ex espn >> dan loeb is not the first to suggest disney spin-off espn it is something analysts and bankers have speculated and
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talked about the question is how disney is using espn, a as part of the television bundle and, b, how they transition some of the espn assets into the digital streaming bundle they've been pushing consumers toward of course they have disney plus but also are pushing consumers toward thisbundle and disney plus, espn+, and hulu. so i think it is a big piece of the puzzle right now bob chapek has said they like the assets they have and has talked about how they are evaluating which content will go where going forward but it is not the first time anyone suggested the idea. >> he had just shaken off a little bit of the doubters here comes the fresh distraction i guess we could call it thank you very much for reporting on this. julia boorstin we'll continue to follow it. coming up china reporting a surprise slowdown in its economy forcing the central bank to unexpectedly cut two key lending rates for the first time since january. what happens next? we'll ask morgan stanley's
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former asian chairman steven roche. plus, both key gauges of the consumer we'll get the action, story, and trade on walmart and home depot on earnings exchange, back in a moment at fidelity, your dedicated advisor will work with you on a comprehensive wealth plan across your full financial picture. a plan with tax-smart investing strategies
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welcome back to "the exchange" saying china is in the midst of an economic slowdown might be an under statement. today the country released a slough of data that painted a much weaker picture of the economy. retail sales, industrial output, investment all slowed and missed estimates. home sales falling more than 28% year over year joining us now the senior fellow with the china center at the yale law school. great to see you again you are warning this is a pretty severe slowing, right? >> well, kelly, the government at the start of the year had announced a 5.5% growth target there is no way they'll come close. it will be a miracle if they hit four the china economy has been on a slow trajectory for a number of years post 2011 if my memory is right the number around 7% so it
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could be falling to about half of that post 2011 trend. it is worrisome especially with the very important policy meeting at the end of the year with pressures in taiwan and ongoing repercussions of this ridiculous zero covid policy that the government continues to insist upon. it is just not great. >> what is your best guess as to what the next six months look like >> i think it is going to be maybe a little bit better because you mate hope some of the lockdowns will subside they seem to be easing off some of the restrictions, but certainly not all of them. they remain committed to de leveraging in the property sector which is probably a good thing considering the excesses of recent years. but there is a down side coming from what is likely to be a
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sharp slowing of global trade, which hasn't hit yet, but with central banks around the world tightening to address inflation that is inevitable so the economy is sort of moving sideways at a low growth rate for china which is unsatisfactory, given the point you just made on high youth unemployment >> there is a glimmer, sort of bright spot here for the globe, which is if that takes the boil off of their energy demand we could desperately need those oil barrels and all the rest of it sort of reallocated elsewhere right now. i don't know if we are talking about that severe a slowdown but maybe the oil market is one of the few places we can get a clean read on what people think in real time about growth prospects. it's been down. >> well, it's possible you know, the chinese economy never came back. and with the vigor we thought it would so the oil markets have done their own thing even in the face of this ongoing sluggishness of china.
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obviously if china were to bounce back very, very sharply it would be a different matter for global oil prices. that seems unlikely to be the case. >> is there anything they can do what is xi jinping's goal? even while we've known for years about property sector problems he still has gone off with the tech giants the one obvious growth spot in the country sometimes people come on and say he's lessening up or reaching the end of that now perhaps. what kind of growth is he trying to engineer if any right now >> he'd obviously like stronger growth especially heading into this 20th party congress in most likely november, which he is widely thought and i would agree with this, to be reappointed for an unprecedented fifth year term he wants to do it on his terms and not on defensive terms with growth weak, that is a risk look, he's unwilling as most
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autocrats are to back off from his headline policies that you correctly pointed out of de leveraging the property sector, regulatory crackdown on internet platform companies, and there are things beyond his control like the coming slowdown of global trade so he is not about to change his basic philosophy for more ideology, tighter discipline and control over the more dynamic pieces of the chinese economy, and so growth is going to be difficult. add to that the demographic head winds which he has no control over and there's a lot of challenge that a leader angling for his third term is going to be faced with. >> sort of put it bluntly. would you invest in the chinese stock market right now or what would you say to those who are interested in poking around in either specific companies and sectors or just the whole thing?
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>> i think you got to be more granular than that i know it's popular with some outside observers to say china is not investable, but there's a lot of aspects of the chinese economy that still present opportunities like infrastructure, like health care services, like some segments of e-commerce but, you know, nevertheless, some of the open ended opportunities that were once presenting itself was these internet platform and dynamic entrepreneurial driven tech sectors. those are certainly worrisome going forward and it's correct to be cautious about them. >> quick final question. if their growth keeps slowing this way what other rabbits can you pull out of the hat? what other policy moves should we expect? >> i think the playbook is pretty well defined. you know, when push comes to shove, kelly, they just do infrastructure and more
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infrastructure they still have a rural urban migration trend that supports further movement from the countryside to the city which will require more infrastructure you know, even that has its limits ultimately. i don't think those limits are now in hand. >> steven roach, good to have you today. thanks for your time. >> thank you. still ahead the ipo etf is riding its longest weekly winning streak in nearly a year. which names are driving the comeback and which are buys at this point our trader weighs in ahead plus a new twist in the battle between starbucks and its workers the coffee chain now making serious accusations against labor organizers we have the details ahead. as we go to break here is a look at the dow heat map all 30 components about 2-1 gainers versus decliners today and a check on apple the stock is now just 5% away from its all time highs. if you can believe it. how closely we watched those movements when it was in the
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so you know all you need for recovery. and you are? i'm an 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. welcome back everybody markets fighting back into the green today 160 points about a half percent gain for all three major averages we've had a lot of activist activity not just getting activist investor attention "the wall street journal" reporting elliott management has taken a large position in cardinal health and is seeking a handful of seats on its board. interestingly enough cardinal health shares are only up 1% elliott nominated five directors to the 11-person board roughly two weeks ago before cardinal
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abruptly replaced its ceo last week meantime, shares of second hand retailer posh mark sharply higher today up more than 15% after an upgrade to buy over at barclays which sees a 40% rally following sticky behavior and social media like engagement and the meme trade is back on the table as bed, bath, & beyond is adding 12% today almost a $15 stock up 181% this month all righty there you go good afternoon everybody here is your cnbc news update at this hour. a train de railed after colliding with a truck this morning in north lawrence, ohio. no injuries according to ohio highway patrol investigators but the local fire department urged people to avoid the area the two remaining officers awaiting trial on state charges in the killing of george floyd rejected a plea deal today
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paving the way for their trial to begin on october 24th an oatly oat milk distributor has expanded a voluntary recall of products and added 18 count, 11 fluid-ounce cartons of regular and chocolate oatly milk as well as items of oatly barista to the list in response to fears of microbial contamination. tonight on the news with shep smith, a judge ruling that senator lindsey graham must testify in the georgia 2020 election investigation we'll have the latest on that and much, much more at 7:00 eastern time kelly back to you. >> looking forward to it still ahead a fresh read on the consumer home depot and walmart reported in the morning is there another shoe to drop? earnings exchange explores that next
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welcome back everybody today kicks off a huge week of retail earnings that are going
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to give us a clearer picture where the consumer stands. tomorrow we get one of the biggies of them all walmart then home depot both in the morning before the bell. let's get the action, the story, and the trade in today's earnings exchange. we'll start with walmart shares are slightly up today but down 11% since reporting q1 results in may they missed estimates back then due to higher costs and supply chain struggles. last month they cut their profit outlook warning of slower consumer spending. cnbc has the story here on walmart and the manager and head of technical analysis at oppenheimer has our trades today. melissa kick things off. >> walmart is expected to give an update tomorrow on overall just how the consumer is spending in this very fast changing environment last month as you mentioned we got a sneak peek when the company said it was already seeing consumers pull back on buying discretionary merchandise like apparel as they spent more
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on necessities the real question is whether walmart can offset that by getting the consumer to come to its stores for more dproes ric and essentials and lean into new businesses like it its growing ad business to offset some of the losses of discretionary merchandise. >> all right drum roll please what do you do with the stock? >> i think it is telling that the stock rallied after cutting that profit outlook last month after the initial negative reaction shares were quickly picked up in the trading session. there does indicate some resilience in the share price. i think you can squeeze out some more upside because of it. the level i'm watching is the gap in the share price caused by the last, when they reported in may. it comes in around 344 the 200-day moving average is also there there is some formidible upside, resistance on the upside i think generally it is more of
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a market performer i think the market is going to be moving away from a lot of these safety stocks but it could participate for now and as long as it maintains above the oo-day average which currently comes in at 126 not a sell right now but i think we can get there over the coming weeks. >> you almost sound like you are range bound like it is a 126-140. is that right? would neutral be the best word to describe your thoughts on it, here >> that's great. thank you for correcting on that level, that 140 mark in the gap in the 200-day average market performer range bound just doesn't get us excited. i think it has the tail end of a strong market here but there's more conviction high ideals as it stands. >> you said you don't think names like this will do as well in this market what do you mean by that >> i think macro trends support a growth led recovery as interest rates have topped and we've seen a lot of high growth
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areas find footing against the back drop of long duration bond yields still moderating and yield curves that are flattening i think this is going to be growth here, technology, and health care pockets of the market should continue to leave markets higher while safety not necessarily at risk to break down but i think the other areas more likely to catch up. >> all right very interesting walmart, 2 #it times forward pe. a lot hanging on this report as we've learned the last couple quarters let's turn to home depot now which also reports in the morning. slightly lower today but up 4% get this home depot performance up 4% this month fourth positive month in five. it's beaten earnings 19 of the past 20 quarters last quarter actually raised the profit outlook what am i missing? >> home depot of course has seen a huge boom in business from the pandemic and the real question now is can the demand keep going in this much more challenging environment where consumers are feeling pinched in some ways from inflation but also spending
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in different ways. might be going on vacation rather than painting the house or redoing the kitchen home depot is somewhat insulated from shifting consumer spending because it has a strong, professional business. about 45% of its sales come from home pros like electricians and contractors and that may help it in this environment because those people tend to be steadier customers so if there is still demand for home projects then it could hold up just by consumers maybe not tackling the do it yourself projects like months ago >> i noticed last week lumber prices were soaring 2 #it% but they're still well off their highs. i don't know if you've seen any sort of hints from the broader supplier landscape about what might be going on here >> definitely one to watch but with the pro business they are able to pass on those costs sometimes to consumers because if you're doing a home renovation you may not see how much more that lumber is costing you. because you're not buying it yourself you're doing these projects very
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sporadically rather than doing them, buying them every day. with walmart you're buying milk and eggs all the time but when talking a home project and the contractor is giving you a quote you may not think as much about the inflated price. >> great point what do you do with home depot here >> here is another stock i think should be traded higher. it does exemplify the recovery that we're seeing, i like home deport don't think i necessarily love it but it should trade higher i think what is notable in the stock prices that moved above its 50 day average in july for the first time since collapsing below it in january. that is indicative of the incremental positives that we're seeing develop in the stock's trend. the level i'm watching on the upside is 344. again, this marked a gap in the share price from february. fell below it very often those gaps become resistant on the way
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back up but again with support at the 50-day average at 293 again i think the recovery continues to play out in this stock price, too. >> so we see the year-to-date chart so telling on this one kind of like a straight line down to early summer and you think that rally can remain intact for the near six-month term let's call it >> consider that really the key negative here was that the entire market was falling apart in the first half of the year. so that top down headwind has been removed i think the overall market is basing and with that you do have stronger market conditions that should support a stock like home depot and you're seeing it in the stock price as well now starting to reverse higher some hurdles still in the way in terms of resistance but the development is that recovery is slowly starting to be shown in the stock prices. >> all right i feel ready for these reports in the morning thank you both
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that does it for this edition of "earnings exchange. still ahead president biden is set to sign the inflation reduction act into law this week the old energy names have been rallying since the bill was introduced but can the gains continue some warning siegns coming up. lily! welcome to our third bark-ery. oh, i can tell business is going through the “woof”. but seriously we need a reliable way to help keep everyone connected from wherever we go. well at at&t we'll help you find the right wireless plan for you. so, you can stay connected to all your drivers and stores on america's most reliable 5g network. that sounds just paw-fect. terrier-iffic i labra-dore you round of a-paws at&t 5g is fast, reliable and secure for your business.
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welcome back to "the exchange." clean tech stocks a mixed bag today but moving largely lower after everything from solar to lithium had monster runs this past month on passage of the inflation reduction act. but is this a case of buy the rumor sell the news? we have a look now >> you said it right monster gains for renewable energy stocks in recent weeks. thanks to the climate bill that is on its way to president biden's desk it comes as a surprise to wall street with many investors not factoring any type of federal support into valuations.
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many stocks are now up 50% in just the last month begging the question of whether they can hold those levels. let's run through the numbers. enovix, array technologies, stem, tpi composites and maceon solar doubling in the last month. names like piedmont lithium, plug power, fluence energy, bloom energy, first solar gaining more than 80%. looking forward the managing director said some weakness is to be expected but long term the ira is a major catalyst for the rerating the sector needed adding, the i.r.a. removed the uncertainty around clean energy incentives boosting the long-term investment and growth outlook for the sector with this type of gain it is kind of look out below. >> fair enough we lump all of this together but do you think there is any one area in particular that should be a focal point now >> i think energy storage is really interesting because the
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ira includes a 30% itc for stand alone storage for the first time ever. >> for utilities >> for utility and residential all types of energy storage. so previously that incentive was only available if it was co-located with solar. now it is for anything meaning you can go back and add energy storage and capture the 30% tax credit it is a game changer for companies like fluence and stem who are laser focused on the battery storage sector. >> that is really interesting. you know the personal hypothesis experiment we're running at home all the time is the economics of this transition. does it mean something like a tesla power wall i could go back and buy that and get it 30% off? >> exactly this is a key thing to remember. if you only have solar panels and the grid goes down you won't have power so if you are getting renewable energy as a way for independence from an increasingly faltering grid, then you have to have that on side storage as well. that does tack on quite a bit of money. >> oh, yeah. >> now if you can have that 30%
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credit you can go back and add it if you want. >> this is getting more interesting. >> yep >> the next few months just on this project pippa, thank you very much coming up check out this chart up 30% over the past month but still about 80% off its 52-week high and not the only recently public company that is on the comeback trail. whether you should chase these rallies is next. we now find that 85% of individual investors are interested in sustainable investing. among millennials, the interest is even stronger. ♪♪ one of the big trends in sustainable investing is data, and the ability to understand how sustainable your investments are. by taking that information into account, investors can make better decisions for the long term. sustainability is not about one number. it's about variables like water usage, data privacy,
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consumer trust, diversity, land use and conservation. all types of investors are now considering this in their investment decisions. this is not niche. one in four dollars globally is following some form of sustainable investing. with sustainable investing at this scale, there's power to change the markets and have an impact on the issues investors care about most. i am courtney thompson and we are morgan stanley.
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welcome back we know it's been a brutal year for recent ipos but the past month has been a different story. the renaissance ipo etf while down 50% from the highs is up 17% over the past month. take a look at a firm robin hood our mystery chart, they're all down more than 70% from all time highs but also climbed at least 30% over the last four weeks should you chase them or not let's ask the sanctuary wealth cio and cnbc contributor, good to have you. we'll walk through these one by one. let's start with affirm which is
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up 71% over the past month. >> no doubt. amazing to see a user of affirm because they work with peloton and peloton holds a lot of my dry cleaning i don't really use the peloton but affirm has taken a dramatic hair cut $47 billion valuation valuation and you're right you are seeing a little bit of investor gravitation here. this ipo is at $49 so when you talk about the ability for this modern layaway buy now and pay later and their ceo talked about the fact whenever you do see recession whatever year that recession may come, kelly. three of these is a buy for you and you have constructed these ipos which people have had as a category. >> this is a trade opportunity
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and this is not a long term investment and some of these names, and there's a longer term hold so this trade is longer term in nature. >> you like war b. parker. it is up 26% >> i have a couple of glasses from them. i like the client experience and yes, it's in oversold conditions, but it does have a little bit of nervousness when you talked about the last messaging from their ceo is that they're very concerned about the uncertain macro environment. obviously then shared across the s&p 500, i think there is an opportunity to buy war b. parker. >> affirm and war b. what about unity software and this is a contentious stock and rejecting the buyout offer and the shares are down 7% today why do you like it >> unity is really interesting ticker u this is $2 above its ipo and it's up 47% in the last month and to your point, kelly, it's still down 61% and i would
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preface that that unity feels like my wife as well as you, kelly, the prettiest girl in the room they're getting the offers and they had to reject the recent proposals and this is all in the wake of the apple privacy issues and $210 and yes, we're a long way away from that and we're trying to navigate and understand the metaverse you saw facebook and the way changes and they worry about their bottom line and it absolutely happened and unity is positioned quite well if you use the analogy about building a house you need unity and it's not just gaming and there's a creative content play and now that they'll take iron source at $4.4 billion merger they've played on and there's a potential piece of the puzzle down the road and remember, unity is bigger from the market cap perspective and this is a much longer hold as we figure
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out what this metaverse shakes out for the rest of 2022 >> it's a helpful explanation because it's the companies i watch and i know they're up to something. you know what i mean i can't always quite figure out what it is and unity is a buy for you and let's move on to a name you're not as attracted to, robinhood and this is a terrible 2021 and it has found traction lately, though why are you staying away >> when i first came on cnbc to talk about this ipo for robinhood. i was a seller then. it's a flawed business model 80%of their revenue is predicated on selling their order flow i know it's commission free and i know it's costing the trade on it and the fact of the matter is there's an 08% model and predicated on collecting order flow monies and that goes away and the sec is trying to crack down on that to a certain extent and be more considerate and i think when you talk about robinhood and look at bank of america, they're not going to be profitable until 2025.
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i'm surprised it's in double digits right now i want to stay away from robinhood, sell, sell, sell. even if you thought that business model wasn't intact they're still not making money on it. >> you're right. the longevity and the efficacy of that model, they're not diversified. i can change my mind and right here, right now with 80% leaning and the order flow selling. >> that's why they call you the killer thanks so much >> still ahead, starbucks lobbying serious accusations of both the burgeoning union and the national labor relations board. we've got those details after this quick break
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welcome back to "the exchange." before we go, one more story to mention. the organized labor fight at starbucks is getting
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increasingly tense with the coffee giant now accusing the national labor relations board and the union of tampering with elections. the shares hanging on to about a half a percent gain today. let's get to kate rogers with the very latest. kate >> that's right. starbucks sent a letter to the chairman and general counsel alleging misconduct. they want to immediately suspend ballots nationwide until there's been a thorough investigation. the coffee giant says it's been made aware that its region 14 which is located in kansas and elsewhere have engaged in improper and systemic miscondumisconduct involving workers united the misconduct was reported by a career nlrb worker that is specifically outlining a concerted effort to tip the scales in favor of the union in a kansas city election starbucks indicates this has occurred other regions and cases as well. this effort included
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coordinating with mlrb agents to take place in offerses during mail-in ballot elections and giving union agents confidential non-public information in realtime on both counts. the nlrb does not comment in open cases quote, ultimately, this is starbucks latest attempt to manipulate the process for its own means and preventing workers from exercising their fundamental right to organize. >> is this from howard schultz himself? >> there is pushing back against the union and this career nlrb wo w worker acted as a whistleblower and they want to suspend the mail-in ballots nationwide and this can impact 35 elections so far that have been ordered or in progress and there are seven more stores waiting to schedule elections and that's a fair amount of stores that could unionize in this time if the
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nlrb moves ahead to investigate this. >> fascinating it will hopefully be a netflix series at some point thank you, our kate rogers following our story. unionization may not matter as much to investors as the once red-hot trend shows further signs of cooling and we'll talk to the cio of sustainable investing of blackrock on "power lunch" which begins right now. ♪ ♪ kelly, thank you welcome, everybody, to "power lunch. i'm tyler math soeson and here' what's ahead on monday walmart versus target. both report earnings this week and both coming off warnings about the impact of inflation and which company has a better handle on inventory and margins. we'll have a couple of experts and one who says target and the other favors walmart, an


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