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tv   Power Lunch  CNBC  September 1, 2022 2:00pm-3:00pm EDT

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down >> maybe at the low end of the market and on the new market, i don't see it slowing down. we'll see what the economy brings us for the economy. phil lebeau, thanks very much. the markets are still in the red and the dow down by 78 points. that does it for "the exchange." "power lunch" starts right now ♪ ♪ >> and it's great to have you for "power lunch." i'm confessa brewer in for kelly evans. the sector is feeling the heat from an inventory build and a top analyst for what's next on that sector. u.s. oil inventories are dangerously low. that's the call from citi's ed morse. we'll talk to him about the decline in crude prices and the biggest risk to supply, but first to tyler and a check on the markets. >> thank you, contessa >> welcome, everyone stocks are down for the fifth
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straight day and that puts the nasdaq on track for its longest losing streak since february the dow, the s&p, the nasdaq there you see it, there you don't, and .75% for the s&p and 1.7% for the laggard and the nasdaq two-year treasury yield topped 3.5% and its highest level since november of 2007 the dollar index nearing a 20-year high on the back of this morning's solid economic reports. there you see it 109.57 on the dollar oil trading around 86 a barrel and our bob hitting its lowest level and that's before the invasion of ukraine. meantime, the semiconductor sector contributing to today's losses as they find yourself in the center of the cold war between the u.s. and china the sector led lower by nvidia after the government imposed new restrictions on the sale of computer chips to the world's second largest economy that prompted our next guest to
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trim his price target on nvidia from to ten to 180 let's hear it from the analyst behind that cut. stacy rasgon welcome back good to see you twice in one week. >> i figured i'd give cramer one more chance to criticize my fashion sense. >> we're delighted you're here you look good. >> thank you >> what impact are these regulations likely to have to nvidia's revenues? >> so the direct impact they kind of quantify it's $400 million in the current quarter. we kind of know where they were guiding data center and it's 10% and maybe low double-digit percentage of their data center revenue. so that is not trivial, but it is not earth-shattering and devastating, either. >> so 400 million. presumably this quarter and the -- >> yeah. look we took our target and the numbers and i figured it was proven to just take it out now that may be too punitive
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again, they'll be looking to try to get licenses and they'll be looking to try to supply alternative products that may not meet the threshold for the export license requirements and at the same time, look, investors will have to more heavily discount china revenues for nvidia and we can talk about for others, as well, but you're not going to get certainty that whatever it turns out to be that it couldn't just go away that possibility exists. >> that's what i'd like to do and i'd like to turn to others for those investors who don't own nvidia, but maybe do own other names in the chip sector, is this a flag out there saying, hey, if you're in this business, if you're selling to china, if you're selling very advanced artificial-intelligence-related chips and others used in defense applications, this is a warning to you >> yeah. maybe, it really does seem that what they're traying to do here is prevent the eblgsxposure of
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stuff to the chinese military. right now they do seem to be isolated in the high end chips amd apparently got aletter, as well they are not allowed to sell some data center and for them the revenues are very, very small and it doesn't matter, and it doesn't have server cpus where you can argue that risk is there, as well and the government is not coming down on that, so maybe that's a positive, but over time i don't know, i don't know how it will come up with something like that >> in the broader macro sense, is this coming now because we are at a point of heightened economic competition with china, number one number two, because we are concerned that china has an edge on us right now in a.i. development? >> yeah. so the idea of doing something like this is not new in fact, if you go all of the
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way back to the trump administration, the commerce department even back then had been talking about potential export controls on advanced technologies and it was a.i. and other things and biotech and other things and it had gone out for public comment and we didn't hear about it since then until now, but the idea of this has been around for quite a while. in terms of why now, you're right, the geopolitical situation is deteriorating we are seeing china more as a potential adversary, and we don't want to give them the tools to get stronger relative to the u.s. and so that may be some of why now, what's going on right now. it's probably also, i know it's not good for the companies and i'll bet it's popular policy, right? quote, unquote, being tough on china and it helps on the administration on that front, as well. >> coming right before the midterms and who would have thought about the timing there let me ask you, does it put you at a competitive disadvantage and we were talking about taiwan
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semiconductor and how it's really in the position of trying to play neutral ground does it give an advantage to taiwan >> these kinds of bands? i mean, taiwan had an advantage in terms of semiconductor manufacturing and that's what the chip stuff is supposed to do we're trying to reduce our reliance on taiwan as one of the sole sources leading in manufacturing. i don't know if these bands or these kinds of things give an advantage back to taiwan i think they're two separate issues and they're under the umbrella >> i assume nvidia is in decisions right now and are trying, to quote, educate the government on maybe the reason yes they shouldn't be doing what they're doing. what is nvidia's response likely to be here and would they be arguing, for example, that oh, okay, we won't sell them that
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one, but we'll sell them this chip which is less advanced. >> first, they are in discussions and in fact, one of the issues from last night's announcement said it was look they were going to halt the server a lot of that development work happens in china so this morning, they got approval to continue that work so they've been educating without it beyond that, they're doing a few things and they'll be looking to potentially sell other products and lower end stuff that doesn't make the threshold and might need customers' needs and they'll be working on trying to develop china-specific products and they'll try to do that and they are going to get licenses because if the real issue is to stop the military from getting their hands on this, and they've got customers in china and they know what their customers are doing and they'll make the case that there is no military impact and in that case, maybe they can get the licenses and we don't know how long that will take. >> stacy, as always, they will clarify it and stacy rasgon of
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bernstein. >> our next guestsays there is more pain for equities as they'll remain higher. joining us now is mike vogel cap trust cio where he's finding opportunity. here we are, brand-new month, but the trend continues. you are looking at the dow, the s&p, the nasdaq down a percent and a half right now where are you seeing places to invest given the situation with inflation? >> yeah. look, we think in the equity markets we want to stay relatively short and short duration assets with higher quality and not so much pay are for growth out four or ten years. i thought the conversation with staysy is fascinating because that's the point we were making and this is another process or part of the process of deglobalization of the west separating gradually from china and from russia. we've seen the russian and chinese military exercises over the last week or so coming up.
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so this is only going to continue, and the reason we've had deflation over the last 15 years or so since the global financial crisis has been this sort of globalization. you make things and you buy things either where or from which you have the lowest cost of production. that clearly is now becoming a secondary issue and chips are a great example. there are others and we just expect this to continue and the problem is that creates inflation or at least an underpinning of a higher level of basin flagz and that the fed may not be able to control and the markets are not thinking that way they are thinking generally that inflation is mostly cyclical and that the fed will have to be difficult and firm which they will be and it is very clear what jay powell has been saying, but this could lead to exactly more of the same types of issues where the u.s. government doesn't want the chinese military, by the way and vice
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versa to get things going on there's more and more evidence of this deglobalization. >> why do you think that there's going to be more volatility around inflation and the way that the fed is trying to tackle it than there has been historically >> if the place is a cyclical event this time around, and unlike the 1970s, and the federal reserve can simply tighten and let the natural cycle and come off of lower inflation naturally and the fed can take their foot off the brake a bit. the key here is that this inflation feels like it's beginning to develop a different sense about it, and that is that it's not just about covid and sort of the impacts of covid and the boom in the economy and the stimulus and everything we saw this is also about some developing and still relatively early and not quite nascent
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geopolitical dynamics that are very different from what we've seen and that's our concern. >> i couldn't agree with you more on that because i think the fact that russia is clearly weaponizing energy clearly doing it and we're going to see it as we get closer to december when the eu is supposed to wean itself off of russian oil, and the fact that china will almost certainly weaponize strategic minerals and rare earths and those kinds of things as a weapon of economic competition. that builds in an instability and inflation that the fed can do nothing about can the fed do anything about supply chain bottlenecks >> well, i suppose, indirectly, yes, to the extent that it slows the economy, maybe then some of those supply chain pressures abate just a bit, but it all feels to me just what you're saying that this inflation has a different texture and it may have a different cause and it
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may not be subject to the kinds of remedies that have worked in those other periods of more cyclical inflation >> it's absolutely the case and by the way, we like devon energy in case things get worse in a significant way. the whole tenor of inflation is very different, and the fed's going to need to get lucky with a number of things breaking into the favor and expectation. inflation, volatility is just different than high levels of inflation and we've had very, very, very stable and moderate inflation over the last ten years with quantitative easing now we're in a period of quantitative tightening and we have this new geopolitical format that's under way that's simply changing some of the dynamics for sure. we just think it makes some sense to play a little defense in equity investing and not and
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not jump out ahead of the super growth things although at some point they'll cycle back into place, but the things we're looking for right now are pretty conservative and frankly, relatively -- i don't want to say boring, but make you not sleep at night >> the united states is the only country that has multiple billionaires who have made their billions based on the idea that americans just have too much stuff. anyhow, mike, sorry for the speeches i appreciate your time >> i appreciate it contessa, thank you. >> okay. coming up, disney, there you are, reported taking on amazon, and meta is looking for new ways to monetize insta. which will succeed in raising revenue. we'll follow the money okta losing a third of its value despite posting better than expected earnings. is it a buy on the pullback? we'll get the trade in today's three-stock lunch and looking at the cloud computing firm nutanix
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lunch. we have news on several big name media and entertainment companies. here they are, disney, netflix and meta
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it doesn't get much bigger than that julia boorstin here to break it down disney, julia, is considering a membership program in the vein of amazon prime. how so >> i would correct you, tyler, based on my conversations with sources. amazon prime is all about free shipping and e-commerce. disney is trying to do something even more interesting an complex. they're trying to use a membership program and they're trying to develop a membership program that could ultimately help connect the experience that people have in person at say, disney parks with the digital experience people have watching disney plus and this is still very much in the works and they haven't figured out, members of the program that's in the works access to exclusive content and exclusive experiences at the parks and then also potentially exclusive consumer products. so this would be a way to bring togetherall of the different parts of their businesses and get people to pay to be part of
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a loyalty program. you would also probably get some discounts and special deals as part of that, as well, but it could be very interesting and remember, tyler, the more data they have about what you're doing both online and in person the better they can suggest products they may want to buy and different ways you might not to spend money in disney >> we know that aaa does something very similar and does it very well and all they have to do, julia is look at the casino companies that are using those points across platforms now to try to engender loyalty in the customer base and we're getting closer to the launch of the ad-supported service and how do they go about figuring out what that price will be and when are we going to know >> look, there are reports that it can launch as soon as november 1st and the ad-supported service won't launch until next year netflix is working as fast as it can to figure out its
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ad-supported service and they hired jeremy gorman who is responsible for architecting snap's ad business to get this ad business off the ground they're partnering with microsoft, this is an interesting decision while there is a lot that still has to be figured out and i would assume that jeremy gorman and the team of people that she's going to bring in there will have some ideas about how they want to formulate this business. one thing is clear and that is that netflix wants to charge a very premium price for these ads because they only want to have four minutes of ad time per hour that's in line with some of the other streaming services and some have five minutes of ad time per hour and if you think about how many minutes of ads are on television which could be 14 minutes of ads per hour, this is a lot fewer ads and they'll only have them in the beginning and the middle and they want to make sure advertisers are reaching the right consumers the key thing to be able to charge premium prices for ads is
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they need to know they're incredibly, incredibly effective and that's what they want to work with microsoft right now. it will be an evolutionary process. however the ad business starts out they'll get better at delivering the ads and measuring their impact. >> julia, our last topic and this one like the others all about raising revenue. meta looking at possible paid features within facebook, whatsapp and instagram what do you know >> that's right. so i reached out to meta about this they did acknowledge that they have created a group to try to figure out new experiences and products that people will pay for. right now meta, all of their different platforms are free and ad-supported as we've reported over the past several years. not only is meta facing an overall ad slowdown right now. over the past year or so they've been struggling with apple's operating system changes which
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make it harder for them to target ads and measure their impact which was of course, the name of the game and that's what i was mentioning with netflix and it would be great for meta to have more revenue streams and figure out if there are super users if they're willing to pay extra for additional features and this is something that twitter is experimenting with and it will be interesting to see what types of products are worth paying for, but if you can find out more ways to make money, other than advertising and that's certainly a win and i think they're not the only ones and look for all of these different companies and especially falling on what twitter has been doing with some of these paid services to try and figure out how to tap into the value of their super users as they're called and figure out any potential way beyond reliance >> making money is what it's all about. >> julia, thank you. julia boorstin reporting from california >> oil inventories running
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dangerously low. he'll join us to discuss that, plus the challenges facing oil and gas and the development of alternative energies up next, we'll hear about a hot otrming community cooled by geheal "power lunch" will be right back bubbles bubbles bubbles bubbles there are bubbles everywhere! as an expedia member you earn points on top of your airline miles. so you can go see even more of all the world's bubbles. and it's easier than ever to get your projects done right. with angi, you can connect with and see ratings and reviews. and when you book and pay throug you're covered by our happiness check out today. angi... and done.
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california is bracing for a historic heat wave t texas is suffering through what may be the hottest sum or record new technology in housing aims to make homes more weather resilient and more environmentally friendly diana olick joins us from just outside austin with a look at some of those technologies and how they're being implemented. hi, diana. >> hi, contessa. i'm standing on top of the largest-ever residential geothermal grid. every home in this 2,000-acre development will be heated and cooled by the system which is powered by solar >> so if you just travel down below your feet 30 to 40 feet it's a constant temperature all year round 72 to 74 degrees so we want to access that because that makes the heating and cooling equipment all the more efficient. >> eco smart systems, a subsidiary of taurus investment holdings pumps water deep
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underground to access that mild temperature through the water. >> these are the pumps that are used to distribute the water throughout the entire geogrid. >> a geogrid that will eventually heat and cool more than 7,000 homes before any construction, bore holes 300 feet deep are under every lot to circulate the water for each home thurman homes is one of the builders. >> with the investment of a geothermal the day you move in it's going to be saving you money. >> just ask homeowner jennifer abbamonte. >> we generally have no bills at this point >> it is $10,000 more than a comparable home and buyers seem willing to pay and add features like a battery backup. >> it's been really nice even with minor outages without having things continuing to function >> and the recently passed inflation reduction act is a massive windfall for commercial geothermal development, tripling the tax credits and the
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government backing also gives investors that essential certainty that they need to push this technology to a much larger scale. back to you guys >> don't you think, too. thank you, diana i just think it's amazing what it's cost other for natural gas or oil to heat your home how much that drives people to consider new technology that maybe they would have thought was out of reach before. >> and if it's a $10,000 increment to the house price i wonder how it works in all parts of the country and what the substrata is like everywhere. >> it's different if you have to blast it through >> if it's $10,000 in many transactions, of course, that's a lot of money for everybody. >> but over the life of a mortgage -- >> it's not material it really isn't. let's go and welcome back kristina partsinevelos for the cnbc news update kristina >> thank you good afternoon, everyone a judge has just denied senator lindsay graham's attempt to avoid testifying before a georgia grand jury looking at
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efforts to overturn joe biden's 2020 election win in the state, but the judge put restrictions on what graham can be asked about. it goes back to an appellate court. donald trump's request to have an none decision maker review the documents seized by the fbi during its search of mar-a-lago the justice department opposes the motion saying it isn't necessary and would delay its investigation. a supporter of donald trump could be facing up to eight years in prison after pleading guilty today to spraying a chemical irtaritant of capitol hill police officer brian sicknick on january 6th. sicknick died of natural causes soon after, but they played a role in his death. the government investigated properties including a park avenue apartment the doj is looking at allegations of bank fraud. tyler, back over to you. >> kristina, thank you very much here's what's on the menu for
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the rest of the broadcast. our cookbook menu continues to look at delivery names like doordash among them and the big three movers, and meantime, as we head to the break, a look at the dow which is now positive, oh, by a heck of a lot 0.04%. we'll be back in two ♪ icy hot pro. ♪ ice works fast... to freeze your pain and your doubt. ♪ heat makes it last. so you'll never sit this one out. icy hot pro with 2 max-strength pain relievers.
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>> less than 90 minutes left in the trading day. we want to get you caught up on the markets, stocks, bonds, commodities and what would happen next with oil, and let's first start with bob pisani at the new york stock exchange. the dow has turned positive, hallelujah. >> we are not far from the s&p 500 either, contessa, and you can thank basically consumer names that have moved up so let me show you some that are in positive territory. home depot has had a nice run. i can't see the number here, but we moved up $2 or $3 on home depot and we were 289. that was a nice move up. mcdonald's moved up into positive territory and johnson & johnson and consumer names that helped us out in the dow nvidia is impacting and that's the biggest decliner in the dow about the restrictions on the china ai chip from the u.s.
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government there that's bringing that stock down to new low land and amd. micron has gone on positive and that's negative most of the day. a lot of people have been trying to go short the semis and go long software and that's been a big play here and that's not working today and the earnings there coming zscaler and crowd strike so that trade is not going very well and there's a lot of confusion about the messages that are out there look at these energy stocks down again today and that's a down move on that that's happened several times this week, up and down but look at these leading indicators they have oil here now and it's the lowest levels almost since january moving down on oil and crude's down 86 right now and that implies obviously, lore demand or inflation and then they have the two-year breaking out here and what does that imply at this point? you know the fed will keep raising rates and potentially higher inflation and a lot of confusion about the messages
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one fellow said what are we expecting now? locust spot? we'll have boils and frogs we have a lot with the dollar at a high, and i think the problem here, contessa, is the other issue, of course, it's a no-bid market three-quarters of the people we're talking to are out right now. we need more adults back in the room and that will make a difference i'm not trying to gloss over the macro problems, contessa they're very real and this is about as light a volume. >> well, if you're talking historic plagues no one wants to be around for that, bob. thank you. plagues of biblical perspective. let's go to the bond market. you just saw the two year. now we're seeing yields sharply higher and money is coming out of bonds and fresh 15-year high like a two-year and i'm sounding like a broken record here, rick santelli >> that's because jay powell is a bit of a broken record with regard to his inflation fighting
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and the issue is it's been five sessions since his speech on friday and the market investors are believing him a whole lot more you're exactly right let's look at a five-day chart and two-year note yields closed up higher every day and as you pointed out, this will be the highest yield close since november of '07. nearly 15 years. here's what's the only maturity and you can clearly see it hasn't traded around 3.48 yet, and tens, 20s, 30s and none are trading at a mid-june high the two year has broken out. with the euro versus dollar it's all about foreign exchange today. it is on pace for the lowest close in over 20 years look at the dollar versus the yen. it's on pace for its lowest
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close against the greenback in 24 years august of 1998 which means, of course, the dollar index is about ready to close in a fresh, 20-year high. contessa, i'm sorry. i lost your name. >> it's not the first time it's happened to me and probably not the last >> rick santoli. >> rick and i go way back. i know who i'm talking to there. rick, thank you. oil closing lower near levels we haven't seen since russia's invasion of ukraine. pippa stephens joins us now from the commodity desk what are you watching, pippa >> hi, contessa. oil is tumbling as new lockdowns in china hit prices and an unexpected bounceback in chinese demand had been central to the oil case and these new lockdowns are throwing a wrench into that bull case. china is of course, the largest oil importer in the world and the dollar is ufjumping and that
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can lead to soft demand. with that, let's check on prices wti down 3.5% at 86.47 and brent crude with a loss of 3.6%. now meantime, germany's economic minister is saying today that the country should not rely on gas deliveries through the nordstream one contract and take a look at aluminum prices since april 2021 >> thank you for that. let's dive deeper into the energy trade >> u.s. oil inventories are dangerously low and a tough hurricane season could be at the bottom of the barrel. >> it's good to see you today. appreciate you being here. let's talk about why we're in such a dangerous scenario. what numbers are you looking at that maybe you label this dangerously low inventories.
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>> we look at the demand cover and we also look at historical levels and we're down well below the last four years and crude oil and gasoline and diesel is just about that, and we keep depleting our inventories at least through the so-called summer driving season. our demand is way down, by the way. our demand is down 2 million barrels a day and we've become the largest exporter of crude oil and petroleum in the world. >> is that why our reserves are down it's not because demand is up. there hasn't been a summer driving season >> absolutely. it's been a dramatic shift and we've become a 10 million a day, and for a lot of the summer and that contrasts with a significantly lower level and just look at crude oil, january and february, we were exporting
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about 2 million barrels a day. in the last two weeks the prints that we got from the government were 5 million barrels a day and food exports were up last week with the data that came in yesterday. we were at 4 million a day so we're exporting it because europe is moving away from russian supply and they have nowhere else to go the saudis are not delivering them more crude. they have destination cruises on where they sell oil too and no one can resell to europe and surprisingly, asia is also pulling out from the u.s. and we heard from the white house in recent days. we know that they're contemplating ways to shut off those exports or to dramatically reduce them particularly with the inventory level that's right upon us. >> let's talk about what could change the 16 ar wro and this
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tightening supplies in the u.s. and make it worse. you mentioned the hurricane season and we know forecasters have been a quiet season so far, but forecasters are starting to look at a couple of storm systems. september is typicallythe star of hurricane season and what else and whether we have enough to get us through winter >> well, the other factor is really a global factor and that is the palpable probability of a disrungz to supply in iraq which has had no government since last october when the elections took place and we had the leading party pull out of the political system last week or allegedly pulling out. we don't know what's going to happen there the level of violence has subsided, but it's not clear it can stay at that level libya has production up a million levels and military activity has escalated there, as well again so between those two countries we could have a 2 million barrel
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a day drop to disruptions on supply on their own home front and then there are concerns about russia the not all of russia is going well in terms of domestic production certainly russia is gaining a lot in the way of revenue, but they're losing markets and as a result, they have had to sell at a discount to other production we've seen that discount falling down now, but we've got europe saying they're going to cut off all supply of oil by the end of the year and that means where do they go? and that would be a pull on the u.s. so the fourth quarter is not these wild cards that are by no means pulling us out of risk >> ed morse, thank you >> thanks for having me. >> we heard from restaurant owners about diving in since the pandemic and we're taking a look
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welcome back, everybody. we are nearing the end of our power lunch cookbook series where we highlighted overlooked stocks in the restaurant business and related ones. today we talk about the delivery stocks, specifically third-party delivery names like doordash and uber eats. here to help us trade them andrew boone managing director at jmp security, a citizens company. andrew, welcome. good to have you with us. >> which of these two companies do you like more and why >> i think uber is really interesting here there's a path to $5 billion and we talk about 2024 i think both have made clear strides in terms of improvement probability. you've seen that clearly demonstrated in the u.s. and as profits have become important in the market overall both have a clear path to show profitability. in terms of which i favor, doordash is the more innovative of the two companies with
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doordash drive as well as some of their capital programs are just very unique and create challenge in terms of revenue drivers for the business. >> i would say the one thing that i notice, and i have a 16-year-old who with his friends uses these services all the time doordash is the brand in this space. >> yes >> doordash has strong brand association. >> yeah. definitely i think you see that in terms of the consolidation of the restaurant delivery space overall. doordash has 10 million subscriber it has 10 million uber 1 subscribers and that's across seven different countries at this point if you look at overall share, doordash is the leader domestically and it is driving a lot of the profitability for delivery overall >> let's talk about what's happened to these share prices you've got uberdown 33% year t
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date doordash down almost 62% >> if you believe in these companies even in a post-pandemic world, it seems like yoi have a target of their 150 on it. >> yeah. i do think that both uber and doordash concerns over the consumer weakening and in terms it of the number of items placed in the order decreasing, but what you saw across uber and doordash is the frequency of orders continues to go up. one of the key earnings and what we think is a permanent kind of just trend coming out of covid is the fact that the consumer has been hab iituated in a post-covid world >> andrew boone, good to have
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you with us. >> cybersecurity okta down 30% today. we'll hit that and other key movers in today's three stock lunch. ♪ ♪ ♪ ♪ you've put your dreams on hold. remember this? but i spoke to our advisor, and our vanguard investments are on track. “we got this, babe.” so go do what you love. thanks for being our superhero. only at vanguard, you're more than just an investor—you're an owner. giving you flexibility to follow your dreams. that's the value of ownership.
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time for today's three-stock lunch. we're trading three names making outsize moves after earnings okta down 30% after saying it's experiencing problems, instant dprating a recent acquisition. they expect higher input costs to persist and five below higher on a share buyback program and optimism about future store growth. let's bring in steve grass oo, a cnbc contributor, to trade these names. okta believes these are short-term issues but i guess the investors don't buy that. >> not only that, contessa, when you look at the price as far as put in a point of reference, we're back way below the pandemic low around $88. look at where the stock is trading today. so you guys have been covering this
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we're back to late 2018, early 2019 levels. so if this is just a little bump in integration, the market hasn't got that memo yet and there is a learning curve literally when you're training new hires. if you've lost some workers due to attrition, you have to train a new sales force. how do you train that sales force? take some time, take some knowledge, and the markets believing that it's going to be a little bit long-winded obviously the stock was trading below the -- it's trading way below all of its moving averages if you want to bottom fish, which i like to bottom fish, yo have to wait on a three-day rule, contessa so that means it has to hold the low of today last time i checked it was 58.12. it has to hold that low for three days before you put money to work. >> okay. >> and it's back from that 58.12
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now at 62 and change let's move on to hormel. always good to feed new salespeople food from hormel too as part of the training. is it a technical issue or fundamental problem with the business >> that's a good question. i believe that the technicals reflect all of the fundamentals, tyler. so when you look at this, you also have the same issue it was above all of its moving averages now it's below this is also a three-day rule here but more importantly on fundamentals, if you look at the fundamentals, tyler, to your point revenue up 18% year over year nettin sum up just under 15% operating income up 19%. fundamentally it sounds like a great story. when you look at it technically or when you read a little bit deeper into what the ceo said, these could be transitory issues
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that they're dealing with as far as inflationary pressures on the stock. i'm a firm believer in let's wait until those inflationary pressures at least flatten out they don't have to become tailwinds, but let's wait until they flatten out a bit before we dive in. >> our final name of these big movers today, five below what do you think, steve >> yeah, contessa, i think you nailed it on the way that you introed it this one is about expansion. if you look at all the fundamentals on this one, they weren't that great if you look at the expansionary plans, they're trying to add 160 new stores this year, 200 new stores next year they're going to follow a different pattern. it's going to be five and beyond or beyond five, so it gives them a little more cushion to increase their margins this is a name that i think people are looking towards the future, not the presenting right now. i would be a buyer of this one it bounced around the february
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2020 levels as support a couple of months ago. it's above that. it's trading between the 50 and the 100-day moving average the 50 is at $128 and 100-day is $136 so i would look for it to trade between there, breaks above, look for higher gains, breaks below, exit the trade. >> all right. >> steve grasso, thank you, sir. up next, consumers aren't only dealing with sticker shock at the groryce store but also shrinkflation under the microscope on that one, next as an expedia member you earn points on your travels, and that's on top of your airline miles. so you can go and see... or taste or do absolutely nothing with all those bubbles. without ever wondering if you're getting the most out of your trip.
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because you are.
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over the past year we have said the word "inflation" a lot often preceded by the word "transitory. off air we've said it as well and a new term is a different inflation-adjacent trend dom chu joins us now. >> that word is shrinkflation. what exactly is slhrinkflation it's about consumer products actually getting smaller in weight, size or quantity while prices stay the same or increase so it's what some people call the candy bar effect they still charge you $1 for a candy bar but instead of 8 ounces, it becomes 6 ounces or 5 ounces instead so it's something to worry about
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here and the changes can be subtle. the reason why it's important right now is because according to a recent poll and survey from morning consult, roughly two-thirds of americans are worried about shrinkflation. so you may not see it in the price, but you can see it in the actual size. now, where are they seeing it the most half of respondents say they already see it in snack foods. candy bars and things like that. >> not all a bad thing, by the way. >> not for my waistline anyway but you're still paying the same price. that doesn't sit well with some people frozen, meat, bread. what's interesting about this, though, besides where they're actually seeing it, it's actually what they're doing in response to it so if they are charging me the same or more for the similar amount of product or less, here's what i'm going to do. i'm going to try a different brand. half of respondents said that. nearly half said that they're going to buy generic or private label product.
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i can tell yyou our household ha done that with things like staples, o.j., eggs and milk a lot are going to buy bulk, like costco and sam's club sam's is starting to increase prices for membership. >> by the way, this is where the comparison shopping by, say, product ounce is in play because then you don't have had to do the math yourself, the grocery store is doing it for you. dom, thanks. >> it's like a whole "curb your enthusiasm" episode right there. thanks for watching "power lunch. the dow clawing its way back from a 300-point decline the nasdaq and s&p are still in the red. the most important hour of trading starts now welcome, everyone, to "closing bell." i'm sara eisen take a look at where we stand right now in the market. at the lows of the day we were down 290 on the dow. now we're up about 18 points or so s&p 500 is onl


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