tv Power Lunch CNBC October 13, 2022 2:00pm-3:00pm EDT
invideo warned of the same $400 million impact, and kla and lam research have started to pull employees from chinese chip hubs so clearly these exports rules a downturn for the sector. >> also, important, i reviewed the tape you said shift >> let's hope we have viewers who watch every day and know what your joke is about. >> "power lunch" starts right now. >> brian, thank you very much. welcome, everybody, to "power lunch" on a wild day in the stock market i'm tyler mathisen joined by my friend frank holland, a massive, massive turnaround on wall street. we haven't seen this kind of action in months very rare kind of day. stocks falling hard on hotter than expected cpi numbers. that didn't last a turnaround, sharp, steep, this hour we're going to look at what's driving it, as you see that massive turnaround taking hold
how to invest in it, and we'll speak to a market veteran getting ready for an even more powerful rally first, though, to frank for a check on the market. >> stocks are bouncing back this afternoon after levels not seen this 2020. the dow had a wild ride. 13-point swing from the bottom to where we're at about now. almost 1800 points higher. you see the dow now up more than 2.5% the s&p, it was down almost 2.5% at the lows. now you can see it's up almost 2.5% this is the widest trading range for the s&p since march of 2020, hit the lowest levels we have seen since november of 2020. the nasdaq as well rebounding, up more than 2%. financials today leading the turnaround jpmorgan, bank of americas and wells fargo rallying jpmorgan up almost 5.5%. bank of america up about the same levels. so are the regional banks, names like pnc, key bank, and fifth third all up even more than the big banks now. big tech also reversing course apple and microsoft leading the
way along with meta. all of them reversing earlier declined tesla also bouncing back from a 4% decline, now up more than 1.5% right now let's get more on the market turnaround and what's driving it mike santoli is at the new york stock exchange a bit of a surprise rally at the cpi number >> yeah, absolutely. i don't think anybody could have been perfectlypositioned for something like this, but you can piece together perhaps why we did see such a violent reversal to the upside, which is how far down the market had come in a short period of time and the levels that we have reached. at this morning's lows, the s&p 500 was down 15% in a month. 27% from the highs and it had fully unwound half of the entire rally from the post-covid low to the january 2022 high. that was a level a lot of traders were stalking for quite a while. the 27% loss is basically the median bear market decline if you get -- if you go through history. it seemed as if it was an enough for now type calculation
also with the rally, we're still trading below where the market opened one week ago. hats how much distance was traveled in a short period of time also, the c ppi number, not welcome, did not confirm expectations of a rapid deceleration, but we should be moving that direction and we're so steeped in fed hawkishness for two weeks that this number isn't out of line with what they told us what they're expected and didn't change expectations for the next fed loop in the next few weeks >> thank you >> our next guest says the market is setting itself up for a powerful rally if this isn't it we'll explore that with michael, a chief economist and strategist at mkm is this the rally you talk about or is it not >> well, it might be thanks for having me on. you know, we have fallen very hard over a short period of time so when that tends to happen, you get into overshooting, and then it really doesn't take much
to start rallying the market i wouldn't be honest with you if i was coming on here saying i could tell you exactly what rallied the market because the inflation data this morning was not good and the futures tanked on that so something else must have happened here to start turning things around. and you can still see the equity market very, very connected to what's happening with interest rates. and they shot up and then started to level off and pull back a bit, and that's helped to stoke the rally off the lows >> so even though you can't -- i'm with you, i don't think, i have heard a lot of people talking on our air today trying to explain what's going on i think it's impossible to do. i don't think it sort of defied explanation. i appreciate all the men and women who have gamely tried. do you think that this -- if we're in a rallying phase, that it lasts or do we have more downward direction to go here >> yeah, that's really the
critical question. i think we're setting up for a short term rally i'm not super confident that the rally is going to last and the reason for that is it seems fairly probable at this point that we're probably headed for some kind of recession as we move into 2023 in the last 100 years it would literally be unprecedented for the market to bottom and start recovering even before the recession started. typically, markets are bottoming and sort of halfway or two-thirds of the way through a recession. and this one has yet to begin. so assuming that a soft landing is out of the question, then we might be looking at more of a temporary rally here we have come down very significantly. valuations have compressed with a dramatic fashion over the last year as that unfolds, the bar really goes lower and lower in terms of what could catalyze at least a short term bounce. >> michael, this is frank here obviously, a big surprise rally here
nobody was really expecting what we saw today, but you believe we may have actually hit peak inflation. if we have hit peak inflation, where do you expect to see the numbers decline? it's hard to believe it could be in energy. we're seeing production cut from opec that's expected to raise oil prices when it comes to wages, the labor market is still tight and we saw a move in rent. where do you expect to see the softness that will give the market a chance to take a breath and believe we could see a pause or pivot that will lead to a rally. >> a dangerous exercise this year to be calling peak inflation or peak bond yields for that matter but i think we're very close if we're not there now. the reason i say that is typically these slower moving measures of inflation, you mentioned rental inflation, but essentially everything that makes up the core index, will follow business cycle momentum by about five quarters and business cycle momentum was peaking exactly five quarters ago. we also have some measures of apartment tightness conditions
in the rental market that were peaking exactly a year ago, and they tend to lead rental inflation by about a year. so the numbers should be hot right now. but over the next, say, three to six to nine months i think these numbers are going to cool. it doesn't mean inflation falls like a stone but as i mentioned before, it may not take much. we may just need to see evidence of a decisive peak and a move to the downside if that pulls bond yields down and cools off the fed tightening expectations it could put a temporary floor under equity markets. >> i heard many people earlier today, it seems to me this is the worst possible time to be selling heavily. it may not be the best possible moment to buy. but i heard earlier, jim lebenthal say if you miss out on days like this where so much of a market, of a bull market's gains occur, and i'm not saying this is a bull market, believe me, i'm not, but if you miss out on these days where it's up 600,
800 points, you are really missing out. do you agree that this is a holder's atmosphere or a buyer's -- a nibbler's atmosphere, not a seller's >> yeah, i think in the near term, for sure if one had been short the market, i would be looking to cover here if you have been long and you have gone down with the market, then i would say you can be a little bit patient in terms of unwinding those long positions if that's the intent what we don't want is a situation that happened in june where some investors sort of realized, right, as we were down just over 20%, the markets are way down and they sold and we ripped 17% from there. and obviously, that was given back as the interest rate structure started to come up again. that's really the key, is trying not to get run over by these moves. and typically, what happens with these markets, whether they're going up or down, is they encourage investors to do the wrong thing at the wrong time,
to be overly optimistic at the highs and overly pessimistic at the lows >> it's temping do the wrong thing at the wrong time. i'm a personal example of that michael, thank you very much we appreciate your time today. >> thank you >> you're doing the right thing now. >> i'm doing it with you >> the next guest is looking at the charts, isn't quite just yet the trust this move higher with us is todd from strategas >> this to be here with you. >> i know a week ago you might have had a different answer. today, we tested new lows. do you have a new support level for the s&p and what do the technicals tell us about potential moves going forward? >> a great question. 3491 is the tactical player's line in the sand, but i think the next level we're going to revisit assuming the bear market continues is around 3300 that's because that's where the pre-covid crashlines up with you have already seen a handful of stocks start to revisit those levels and even below in real
estate, communications, some tech names so as evidence builds that more and more stocks are retesting their post-covid highs, pre-covid highs and even some of the lows, the market likely has to go there, too, structurally in the near term, you have a good fourth quarter season you can get the s&p to 4,000, perhaps even a little higher that's in line with typical bear market rallies i would not overstate the trends domestically and abroad are still very much negative and a headwind >> so seeing a lot of negativity potentially in the future when it comes to technicals let's talk about bond yields they briefly tested 4% earlier today after the hot cpi report what do you see as the resistance level for the yield on the ten-year? again, we hit 4% earlier >> 4% seems to be a magic number the last couple weeks. the way we're looking at this is the structure, the regime of yields has changed and yields have been much stickier than the consensus has expected this
year yes, maybe they're extended in the short term we continue to believe the trajectory is higher i would not be terribly surprised if you start to see 4.5 or a 5 handle on yields as we head into 2023. the way that tech stocks have acted, the way some of the growth stocks continue to act. they're not leaders. that would suggest that the trajectory for yields is still higher, conversely, you see energy continuing to act well. the financials have shown some signs of life. the industrials are showing signs of life. that's consistent with what we believe are going to be higher rates over the course as we head into the next year >> let's talk a little more about inflation. it is obviously a backward looking number that we're pondering. and stewing over here this afternoon. and the fed really only started to tighten, let's say, six months ago, in march, thereabouts. some of the tightening on the balance sheet has been sort of de minimis so far. do you think that inflation is about to fall? because it seems at least on
those backward looking year oveo month, it's not falling much >> yeah, this is a great question this is the question i think everyone wants to know the most important takeaway i can offer is that wherever inflation settles, whether it's at 5%, 4%, or even 6%, you have to get the fed funds rate above that number before we're done hiking >> i think that's what summers says, that's the summers point, right? >> our chief economist has pointed it out, that's the biggest takeaway from the market that you need to get fed funds above the cpi before it's all said and done. this could go back to the 3300 number on the s&p. we're more bearish than the reversal today would suggest >> i want to talk about currency too. how much does the move in currency play a part in your thesis, especially when it comes to the moves for the s&p
obviously, higher dollar weighs on a laupt of these companies and their revenues when it comes to overseas markets. we have seen the dollar soften a bit but still off 17% year to date >> the dollar has been a mack truck driving through risk assets this year the consensus believe we're in for a weaker dollar earlier this year, and the total opposite it's amazing the bank of japan tried to intervene in the yen market a acouple weeks ago and we're already above those levels before you can get the boil off the dollar, maybe back to at least $1.09 was the first test of support on the dxy, that keeps pressure on the global markets. if you see a real durable move higher in equities, you have to get the dollar lower that's going to give a boost to risk assets abroad but again, 109 in the near term support, that doesn't change the overall trend for the dollar, but at least brings off the boil here for perhaps a fourth quarter rally in the near term again, yen still weakening
huan still weakening the dollar is a persistent headache >> dyx at 112. you're saying 109 is the key level. we appreciate it not bringing a lot of sunshine, but we appreciate it >> we like the light if not sunshine, we like the light. we're going to continue to track today's rally. snapback rally, if ever there was one. netflix detailing its ad-tier strategy, but with recession calls growing, is this the best time to rely on ad spending? >> plus, a real time read on inflation, consumer, and business spending with the ceo of forward air they're tell us which parts of the economy are working, which are not, but as we head to break, let's look at shares of kroger and albertson's, which are moving on a report that the two grocers are in talks to merge. there's action, frank, in aisle six. keep it right here
welcome back to "power lunch. netflix off its lows along with the rest of the market the company details its ad strategy it will cost $6.99 a month commercials will be 15 to 30 seconds. it will average four to five minutes per hour with the stock down 63% this year, it is enough to kickstart growth and win investors back? to answer this question, let's bring in janice min.
thanks for being here. >> thanks for having me. >> first and foremost, what's your take on this? it seems like an odd time to add an ad tier is there enough ad money out there to support it, and are people willing to keep netflix in a potentially inflationary environment, especially with ads? >> i think you saw some announcements today that indicated the state of play here that they are coming in, the ad tier is going to be a dollar less than disney plus and hulu ad supported and that's no coincidence. the bigger pressure on the marketplace ahead of their q3 earnings is that with the subscription growth may not be great. we saw in the second quarter that they had their biggest show ever, stranger things season four, and they still lost subscribers. so what was before this year a subscriber arms race is now really becoming, i would call it an arpu arms race, where these
companies are desperately trying to figure out how do we drive revenue into this company because we have hit the domestic ceiling, the north american ceiling, art faster than we were expecting. and netflix, just to remind everyone, is the sole major that's is reliant on streaming not disney, not warning brothers itdoesn't have some flywheel o theme parks and consumer products that can feed the beast. they're reliant on one revenue stream >> netflix also has one other thing, they're also reliant on content. streamers have sports like the nfl. you look at paramount plus, peacock has nfl. prime has nfl. and also, it seems like and correct me if i'm wrong, netflix is very adventure. you mentioned stranger things. a lot of women are watching bridgerton, but when the shows end, it seems like people are unsubscriber to netflix. >> this is what you're seeing with for example, the hbo max discovery strategy they're trying to do, which is bring
people in who love discovery who keep it on as background tv for the tent pole programming that they're used to on hbo. next flix needs to get out of in some ways the only event programming that they currently are in and so yes, you're absolutely right. you see sports and live coming into all the other streamers and this is what i say about netflix all the time they're the never say never company. they said never theatrical, never advertising and they said never news and sports. i'm going to guess that never eventually becomes a possibly. >> you raised something, and janice, nice to see you. janice, by the way, is one of the legendary magazine editors of our generation. congratulations on your many accomplishments. i mean it. >> thank you >> i mean it, no, i really mean it you raise something that was interesting there.
and that was that here is this streamer that has one stream and that is streaming. they do not have theme parks they do not have cable subscription revenues. they do not have merch and so forth. so i follow that thought and i go, does that mean they either need to buy that to have multiple diversified revenue streams or do they need to sell so that they're inside of a company that has diversified revenue streams? >> i think one of the things people should start thinking about is who's on the board of directors of netflix and what kind of defensive mechanisms do they have to hold off an acquisition? the price is so low now that it has become possible that someone could acquire them and i think word around town here in l.a. is that boy, what would have happened if reed hastings back in a time machine of 2019 had thought to buy a
library, had thought to do what amazon did when they acquired mgm, maybe buy a lion's gate, a sony, someone with intellectual property so they don't have to sit there every year and spin up a franchise that costs $200 million that people didn't really love. and i think when you look at a movie they have launched recently like blond, which is more than two hours, had a lot of buzz, and c-17, about marilyn mo monroe, it had like a 36% on rotten tomatoes and a very, very low audience score so you can come for these tent poles but if nothing is making you stick around, the cancellation problem in streaming is it's one button cancellation that's really tough to compete with >> janice, i am so hooked on oz ozark, i'm in season three don't tell me what happens i don't want to know but it is a really good one. it's as good as the americans was. >> wait, as good as the
americans? >> it's right there. so tense janice, great to see you >> great to see you. thanks for having me >> we want to bring your attention from jpmorgan's jamie dimon. people listen to him when he talks. he says inflation will curb consumer spending in nine months he doesn't think there's going to be a soft landing he says the fed rate will be higher than 4% to 4.5% that's the fed funds rate, and also says central bankers are doing the right thing. we're going to continue to monitor what he's saying from the iif conference that's jamie dimon, inflation will curb consumer spending in nine months. >> up next, core inflation may still be climbing. but new data show record rents are finally easing this comes as mortgage rates tick higher. we're going to discuss housing and more plus, a look at the state of the global freight industry. how is demand holding up the ceo of forward air weighs in with his view of the economy on "power lunch" when we come right back buying your first car.
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your shipping manager left to “find themself.” leaving you lost. you need to hire. i need indeed. indeed you do. indeed instant match instantly delivers quality candidates matching your job description. visit indeed.com/hire all right, folks welcome back to "power lunch." stocks seeing a huge rebound up 750 points.
2.5% on the dow industrials. way up from today's lows and right now the s&p real estate sector is up more than 1.5%. looking at the housing component of this morning's inflation report, rents are still rising but this report was for september. a lot can change in two weeks. and diana olick is looking at the even fresher data. >> hey, ty yeah, the cpi numbers still show rent growth accelerating but those numbers are lagging by several months due to the way the bls calculates more recent reports show rent growth easing significantly. rent in september cooled to the slowest annual pace in 16 months that according to realtor.com. up 7.8% from september of last year it also posted its second month over month decline in eight months, down further from the july peak. that said, rent is still rising at twice the pace it was in march of 2020 when the pandemic started. redfin is also showing a similar slowdown and notes the record high number of apartments
currently under construction all that new supply could cool rents further. this comes after a report last week showing apartment demand has evaporated in much of the country due to a freeze in household formation. inflation may be keeping new renters from being able to afford to move out on their own. the third quarter is historically a seasonally strong leasing period, but demand fell this year. that's the first time it's seen a third quarter drop in the 30 years it has been tracking apartments and finally, single family rents are also coming down off their record highs from last april they're still rising more than apartment rents because there's so much demand for single family rentals and not as much supply >> quick question. number one, this is a point that jeremy siegel made with scott about an hour ago, that the fed's numbers on rents are so backward looking, not as fresh as the numbers you just gave us. why doesn't the fed look at these newer numbers? >> ask the fed i can't answer that question but look, we do have the latest
data that's why we're here. we have to take some of these government numbers into account when we're looking at the bigger picture. because we are getting newer data from other sources. >> let's talk about mortgage rates. where are they now, where are they headed? >> we're over 7% the good news is that the expectation when we saw bond yields go up so high this morning, we thought they were going to be much higher today. they did not rise as much as we thought, but they're still well over 7% and it doesn't look like we're coming back down we had seen mortgage rates come down in august doesn't seem like they're headed that way now >> look for housing maybe to slow diana, thank you >> still ahead here on "power lunch," getting into the swing of things. the dow bouncing back significantly today despite a worse than expected inflation report is the worst priced in and could we be hitting a bottom we'll break down the dramatic market volatility. >> plus, we'll dig into names that continue to grow margins despite rising costs "power lunch" back after the break. flexshares are carefully constructed.
obtob obtained an email saying former president trump was pissed the supreme court had denied his challenge to biden's win an aide to mark meadows described chump's reaction >> he said something to the effect of, i don't want people to know we lost. figure it out. i don't want people to know we lost >> the panel also showed documentary footage of roger stone before election day urging violence if trump didn't win re-election. >> i suspect it will be up in the air. when that happens, the key thing to do is to claim victory. possession is nine-tenths of the law. no, we won, [ bleep ] you. >> representative luria added new evidence of trump personally trying to overturn his election losses in multiple swing states. she said trump knew he was telling lies and ignored evidence that his voting claims were wrong tyler, back over to you.
>> thank you very much >> we have less than 90 minutes left in the trading day and as we have seen today, a lot can change in 90 minutes so let's look at where stocks, bonds, commodities, and all the rest are trading now and what we should make of today's inflation number and the market reaction let's begin with kristina partsinevelos at nasdaq where tech stocks are having a huge turnaround from this morning's low. >> the nasdaq is on pace to break six straight days of declines in a race that 3.2% drop from earlier this morning it's a guessing game for the catalyst and sentiment repositioning is a go-to excuse. let's talk about the mixed group of winners in the nasdaq 100 walgreens up over 5% biogen, and charter communications, all of those stocks up above 5% but the semi-conductor firms really leading the turnaround. you have lam, applied materials, micron, intel, all part of the biggest movers to the upside, 3% or higher. however, when you take a step back and look at the entire semi-conductor index on the
nasdaq, all constituents are still negative on the year speaking of negative, chinese e-commerce names like jd.com, pinduoduo, zscaler, still negative those names have sold off over the past few days because of biden's new export restrictions to china and fear that further restrictions will continue to weigh on this group. then software names, now i can say zscaler and data dog, negative despite today's rebound, and lastly, match group, the worst performer right now in the nasdaq 100. down over 4.5% trading at all-time lows dating back to its ipo back in 2015 it did get a downgrade this morning from evercore. maybe people aren't using dating apps as much no, i'm just guessing right now, b but the stock is down. >> thank you now to the bond market where the ten-year yield once again popping over 4% today, but can it, will it stay there rick santelli tracking the action hi, rick >> hi, tyler indeed, whether it's the
ten-year, the hurt-year, or the cpi number, there's been a lot of action today. cpi, 6.6 with year over year core that was the highest since 1982. a fresh high, i should say and remember, we can go all the way up to 9.3%, because in 1982, that's where it peaked so we still will probably continue to come to this, but everybody is like, wow, what a reversal and that reversal in stocks, everybody can see that but in treasuries as well. look at a two-day of two-year note yields. look at the complexion of the chart, how flat everything it and how close to the highs we still are in two-year notes on pace for a fresh close, a high yield close going back to august of 2007. now, let's look at a two-day of tens their high was 4.07. as tyler pointed out, we have been above 4%. exactly three times. the 28th of september, the 11th of this month, and today three times. if you're a technician, three times is always something to pay
attention to if we don't close above 4% on the third intraday try, that will mean momentum to the downside and yield upside in price, vice versa if we get momentum in close, above 4%. the dollar index did not like these numbers. initially, they did, and then look what happened the big reversal down almost a cent, and we have given up all of the gains for the week the moral of the story here is it's about what the markets have priced in, not necessarily what the fed keeps telling us is around the next corner tyler, back to you >> all right, rick santelli, thank you. wisdom there let's talk about oil closing for the day, and along with stocks, it is headed higher by about 2%. pippa stevens at the commodity desk >> oil is catching a bid after three days of selling. the latest inventory report from the eia is stoking optimism after distillate stockpiles fell to their lowest level since may, and that is offsetting a build
in both oil and gasoline stocks. meantime, the united states and saudi arabia trading barbs following the 2 million barrel per day cut from opec and its allies which does include russia saudi arabia said it was purely economic the white house dismissed this, calling it spin. national security council's dawn kirby added the kingdom knew an output would increase russian revenues and blunt the effectiveness of sanctions and the iaea said in its closely watched monthly report, the cut is exacerbating market volatility and heightening security concerns. the agency added it could be the tipping point for a global economy already on the brink of recession. tyler. >> thank you very much, pippa stevens. >> let's get back to the remarkable turnaround in equities and whether it can hold margy patel is from all spring global investments good to have you with us
>> good to be here >> fantastic what do you make of today's numbers, first and today's turnaround in the market >> i think it shows you short term trading can be very hazardous to your health and secondly, i think it shows the market is sinking well, the rates were up for inflation, but maybe that means we're at peak and therefore they'll come down. i think that reflects a feeling that everything is on what the fed thinks and does. and if the fed looks at these and says, oh, we don't need to raise 75 basis points in november, the market will feel very good about that and i think that's really what the volatility in the market is from, not so much fundamentals but trying to make a bet on what the fed is doing or thinking about the outlook to the economy and inflation. >> frank holland here. so much volatility in the markets in q4. i know we're only about two weeks in, but a lot of ups and downs. how much more attractive are bonds right now? i'm looking at the two-year
yield at 4.4%. are you moving more of your clients' portfolios towards bonds? >> will, i still feel a little lukewarm on bonds because frankly the fed's been pretty clear that they still want to raise interest rates and by the things they're looking at, they will continue on this path so it seems to me although bonds will contract if compared to where they have been for some years, we still could have more upside in bond yields or treasuries the ten-year treasury has a negative performance this year of almost 20%, so it hasn't really been a good place to be and even high yield, the yields are pretty attractive. but no reason in the world if the economy slows down and the fed continues to raise rates, that we couldn't see some growth we would rather look at the equity side, figuring one day earnings will come through, the fed will be done, and there will be better returns on the equity side >> i think everybody is looking at the equity side thank you so much for being here >> all right, up next here on "power lunch," state of freight.
the dow transports higher this month by just about 5% but they're still down about 22% for the year up next, we take a look at one stock that's outperforming the broader space. stay with us mu me ow lchafr the break." te ♪ in any business, you ride the line between numbers and people. what's right for the business and what's best for everyone who depends on it. solving today's challenges while creating future opportunities. it takes balance. cla - cpas, consultants, and wealth advisors. we'll get you there.
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let's give you a quick market check welcome back to "power lunch." all 30 stocks are higher that's what you call a wall of green. something about a sea of green it's a wall right now. led higher by walgreens. up more than 6% as you see there in the upper left-hand corner. mcdonald's, goldman sachs and united health care account for about 200 points of the dow's now 830-point gain >> wall of green, but a sea of optimism >> turn our attention to the dow transports they're higher today as well down sharply for the year, about 30% off their highs. fedex warning of weakening demand that stock tumbling, but forward air releasing a strong midquarter outlook and its stock has outperformed its rivals.
stock up almost 10% this quarter. joining us is tom schmidt, chairman and ceo of forward air. >> good to be here >> the fedex ceo issued what i have to call a dire warning about the freight environment. you released your update and shows revenue growth up 16%, shipments per day up 6% some of your customers include home depot and transportation expe expediters >> we see the same thing everyone else is seeing. there's a softening in consumer demand all over the world, but certainly here in north america and the u.s. we do see the same things. having said that, frank, we are focusing on what we can control. and i learned a long time ago from one of my mentors, luck is when preparedness meets opportunity. we're prepared we didn't know there would be covid or possibly a recession or softening demand, but we have a strong grow forward program. we focus on higher value freight
and a clean operating environment. compensated and paid for the right way. so we execute what we control. >> higher value freight. that's something we have heard fedex and u.p.s. talk about as well about 16% of your business is industrial business to business. 30% is consumer spending related. you mentioned that softening talk to us about the business spending environment when it comes to your business are we seeing businesses continue to send things out and continue to spend money in those areas? >> as a company, we have become more resilient and more robust with that high value freight focus. three or four years ago we possibly couldn't spell medical equipment correctly. we can now we're focusing with our customers to go after the high value freight shipments and those tend to be more resilient, more essential, less peaky we at the same time have become more robust, more strong, and more predictable >> you mentioned more business to business shipping also medical, also defense
shipping has been up in general, do you see that sustainable through the fourth quarter? your business not as reliant on holiday peak, but what's your outlook going into q1 of next year do you expect the business spending environment to remain the same, at least in relation to your business >> i do believe there's going to be consistency again, if you cannot win a size of high gain because of the high may not become bigger, you win a slice of pie game. that's the playbook we're executing, and we said on the earnings call that you may have referred to before the mid-quarter update, that we believe this year obviously will be a record year, top line and bottom line, and we also based on our models today believe despite the headwinds that with more high value freight, more events coming back, preinveprecision exec execution, next year will be another record year for us top line and bottom line >> do you have the people you need to do the job how hard is it for you to find truckers, and how much more are
you having to pay them to find them, attract them, and keep them >> so, great question. so we are winning the war for talent two decades ago, we probably talked about people like the three of us here when we talked about the war for talent now we're talking about that too. we talk about truck drivers. there's a shortage today, perhaps 100,000 across the u.s that shortage will be twice as much five years from now but we are winning that war for talent we have a super creative talent attraction and retention crew. we're doing creative programs like dock to driver programs we also have a driver board where we listen to their concerns every quarter, i sit there with drivers and representatives and we blast out what we're doing to make sure predictable home times are in place. that also their wait times or dispatches are going down. we're making this a hugely desirable professional home for our drivers. this is a war for talent across
the board and we're winning that war for talent with better retention rates and better attraction rates than the industry >> we have to wrap it, but it's interesting, it's not just money and pay that counts here it's how you listen to your drivers and employees and what you do in response >> the best professional home, and you're correct compensation is necessary but not sufficient >> thanks. >> up next, we'll take a look at the cloud stocks one of the few groups not keeping up with today's rebound. >> speaking of, check out shares of etsy, still the worst performer in the s&p 500 you don't want to be that, frank. you don't want to be the worst performer. >> i don't think you do. >> we'll be right back lcome to . i'm sam morrison, my brother max recommended you. so my best friend sophie says you've been a huge help. at ameriprise financial, more than 9 out of 10 of our clients are likely to recommend us. our neighbors the garcia's, love working with you. because the advice we give is personalized. hey john reese, jr. how's your father doing? to help reach your goals with confidence. my sister told me so much about you.
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welcome back, cloud enterprise stocks haven't rallied with the rest of the market a bit of a turn around in some of these names, rate pressure with the ten-year yield crossing 4% continues to weigh on these names. high growth and high valuation names continue to get punished one of the biggest drags on the wcld etf, cloud flare over
1,000. that stock down 2.5% the 4% yield really continues to be a catalyst for these stocks to sell off. these names are getting some relief from the dollar softening at least a bit up only a quarter of a percent this month the green back up 17% year-to-date a big headwind flagged by salesforce, box, and many other names. still to come here on "power lunch," pricing power, trade some names holding strong even amid this high inflation "power lunch" will be right back >> announcer: catch the market zone today and every day on "closing bell," sponsored by rtut with powerful, easy-to-use tools power e*trade makes complex trading easier react to fast-moving markets with dynamic charting and a futures ladder that lets you place, flatten, or reverse orders so you won't miss an opportunity
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910 points, that is how high the dow is right now shrugging off more hot inflation day, cnbc pro highlighting inflation busting stocks that have held up in this fractious economy. criteria includes increasing gross margins, anticipated earnings growth 10% or more and bucking the broader down trend posting gains as a stock for the year here to help us trade several of those choices, nancy tengler, ceo of lafler teng letter investments. we can refer to that a little bit later. what is our first stock here i think our first stock is supposed to be cotara energy >> yeah, tyler, good to see you and thanks for having me on on a day when the market's actually --
>> you're welcome. we're always glad to have you on >> so we still like the energy trade. at the margin we've been shifting our focus away from the upstream names we still own some, but we're really interested in the downstream and midstream this is a company that is a diversified energy company, trading at eight times, yield of 8.7 and a five-year dividend growth of 70% because they're obviously paying special dividends. what i really love about it is they get 100% of their revenues in the u.s., so this -- your screens identified some great names, and this is one that i would be buying. >> all right, shall we mauve on to the next stock, which would be exxon mobil there's a theme going here, nancy. >> same, same reason 3.6% yield, much slower dividend growth, but 78 to 76% of the revenues are in the downstream part of the oil market, and we think that's probably where you want to spend the next year or two in this trade.
>> i want to stick ahead to your fourth pick, cal main food. have we hit peak egg prices? eggs have doubled in price over the last year, so how is this stock inflation proof? it's hard to believe people will pay even more for eggs. >> you're right, frank, but i do think it has been inflation proof, and so my response on this stock is it's up almost 60% year-to-date it does have a robust dividend policy, and that's very important to us. i've been running dividend growth strategies since the mid-1980s. this is exactly the time you want to own these kinds of stocks this one's pricey. it's kind of at peak earnings. that could equate to peak egg prices i think if you own it, you hang on for a little bit longer if you don't own it, i wouldn't chase it here. >> you might have egg on your, you know, face if you did. >> let's talk about the market more pbroadly here
what are your impressions of this rally is there a reason for it is it algorithmic trading which is what i suspect? >> i think so. i was sitting at my desk at my home office with my head in my hands when the futures were down yet another 500 points this feels like just a knee jerk bounce it is probably algo driven, but i will say that i think earnings are surprising many investors, though i don't think the market's trading on earnings until we get clarity on inflation and a fed that at least seems like they're going to listen to financial markets and/or listen to the financial conditions tightening, i think we're going to continue to see this kind of volatility. >> so nancy, one other question, these stock aren't on your list, but when we look at grocery stocks and names like walmart, amazon, certainly not recession proof. are these stocks that you would ride out during the recession? they sell out of essentials. >> absolutely. walmart's in our 12 best ideas
portfolio. we also own a big chunk of target in our equity strategy. these are the two best retailers, i think, in the world, and they're going drawing down inventories by christmas. >> nancy, thanks very much, nancy tengler, we appreciate it. frank, great to be with you. >> always great to be with you >> that'll do it thanks for watching "power lunch." "closing bell" starts right now. >> stocks are staging quite a dramatic comeback today after a hot inflation trend initially sent the market tumbling, but a major mid session reversal has the s&p 500 on track to smash a six six-day losing streak. we are at session highs up 3%, this is the make or break hour for your money welcome, everyone, to "closing bell." i'm sara eisen take a look at where we stand right now in the market in a very different place than where we stood this morning after that pretty disappointing hot inflation rate the dow up more than 3%, every sector higher in the s&p 500 righ