tv Power Lunch CNBC November 10, 2022 2:00pm-3:00pm EST
thankfully leb e phil lebeau, appreciate it all right. i'm not done with y'all. "fast money" tonight, melissa, got a well-deserved day off. i will be hosting "fast money" and talk about the rally we have a lot to do. you're welcome, america. "power lunch" starts right now phil lebeau, the manheim steam roller welcome to "power lunch. with froank holland, i'm tyler mathisen a very interesting day inflation nation no more well, stocks are soaring, yields dropping, commodities popping as investors cheer a cooler-than-expected cpi report. is it time to prep your portfolio for a fed pivot? and the crypto fallout we'll speak with the ceo of coinbase about the future of the industry, the collapse in
confidence, and, folks, the ripple effect of the crypto fall hi, frank. >> hi there, tyler welcome to "power lunch. stocks in full rally mode following that cooler-than-expected cpi report, the s&p and nasdaq having their best days since 2020 kristina partsinevelos has a look at the move >> we're talk about a 6% swing on the nasdaq, 4% on the s&p 500, pretty much a sigh of relief after the consumer price index came in, and i want to add this word, slightly cooler than expected and the reason we're seeing the markets bump up higher, you have investors resetting expectations for the pace of rate hikes even if fed chair powell said he needs to see a multimonth string of numbers before shifting policy we have algorithms at play as is short covering, adding to the jump in volume today and the dollar index hitting a seven-year low all of these factors helping markets. the biggest winners, caesars
entertainment, invesco, up double digits, and hersheys, altria, cboe down but only between 1% and 4%. megacap tech, though, adding to the nasdaq you have amazon up over, whoa, 11% right now, apple, alphabet, microsoft all over 6% higher those names helping the rtf with ark, still down 1% over the past five days. chips are seeing a big turnaround on the heels of taiwan semiconductor posting its second highest monthly sales in october. then you have asml, another chip manufacturer, up 13% after upgrading its 2025 forecast and announcing a new buyback program. since we're talking about risk on, zoom, gamestop, peloton, soaring today. peloton 13% higher tyler? >> thank you very much i i'll do an afternoon workout
>> sure. >> i need to hitting hills. now to the bond market, yields are collapsing, the 10-year down 31 basis points, almost a third of a percentage point today. rick santelli has the action yields down, prices up, rick >> a historic day with the intraday moves and it started in my opinion with the year-over-year numbers on sfefkally core cpi it came in at 6.3%, which is below the 6.6%, which was the highest since '82. the reason i'm showing the chart is, listen, i'm not casting duet -- doubt on the rally or the big moves, but it didn't come down that much and we need to be cognizant of that. look at a 2-year note on an interday perspective what a drop. it's on pace for a two-week low close. it doesn't end there
a chart of 10s they're trading currently right around 3.85. we all know it was over 4% before the number came out it's on pace for a one-month low yield close. and finally, how did that affect the recession spread well, in a big way here's three months to 10s currently trading at minus 31 basis points that's the most inverted this spread has been in three years and finally, the dollar index. maybe the most important market to pay attention to of all it has the biggest reach, cheaper dollars are a good thing for economies outside the u.s. maybe not so good if you're within the u.s. with regard to if you're going to be paying slightly higher prices on what we import, but maybe the notion is that the negatives probably are smaller than positives to many, and it's on pace right now for a two-month low close at a
seven-week-low intraday level. back to you. >> rick santelli, than you very much let's move on to stocks, which are rallying on hopes that a cooler-than-expected cpi report means that inflation is peaking and the fed will start, maybe, to take its foot off the brakes. our next guest says not so fast. the fed says more measured hikes are needed but won't stop them from raising rates diane swonk, chief economist at kpmg this was a little bit of a rollover, i suppose, in the rate of price increases, but there's still a long way to go before the fed gets anywhere near to its longtime goal of -- long-term goal of 2% inflation >> exactly several multiples ahead of what that long-term goal is i think that's important to the federal reserve. so they have been -- you know, they've said, listen, we'll have more measured rate hikes going forward, but that doesn't change
the fact we think we still need to go higher on rates than we did just a few months ago. the market is losing sight of that they're wait for the fed to cut rates. we're still a long way from that the fed was counting on the slowdown in goods prices that we saw in declines, things like used car prices that we saw to offset the inflation we're seeing in the service sector >> you still see pocket where is the inflation is anything but kind of turn do you think. >> exactly in fact, in shelter costs we had the highest year-over-year increases in owners equivalent rent and rents than we've had since 1982 and in rents the highest on record. i think that's really important to remember, that these are still very, very elevated rates. i do think they'll come down more rapidly than the fed thinks they'll come down because of the disorderly correction we're seeing in the housing market
that said, this is still not over in terms of a rate-hiking cycle, and the fed is still looking at tightening financial conditions and they'll look at anything that looks like it's easy financial conditions and think they have to double down on the number of rate hikes. >> what about the layoffs in the tech sector and other areas? meta we saw this week, salesforce and a number of other companies. does the fed pay attention to that along with the cpi data >> absolutely, but what's important in terms of the tech sector, first of all, they hired up rapidly they've been on fire on the other side of it, i know many, many firms that are more than happy to snap up those workers. i have very strong doubts that they will be unemployed for any length of time that's the nature of the labor market we're in right now. it's one of the things that the federal reserve is sort of struggling with, is that we still have a demand for workers even though you have pockets
that are weakening, demand for workers outpacing the supply of workers out there by a significant margin so wathey're watching that and also the gap between the demand for workers and the supply of workers, and to narrow it, you have to both hammer demand and ultimately what they've said is some pain, increasing the supply, increase in the unemployment rate. >> you have the federal funds rate between 3.75% and 4%, probably moving another half point higher at the next meet meeting in december. where do you think that number, which is really the number that the fed controls, where do you think -- well, look, there is the federate outlook where do you see the terminal rate and when? we've got it there at 4.83% in may. does that feel right to you? do you think it's got to get above 5.00%? i think it's going to get a little above 5% and the fed will be cutting sooner than they expect at the end of 2023.
it's learning from the mistakes of the past. if they don't eradicate inflation and get it down to a sustainably low level, this time around, they risk a much more corrosive and longer bout of inflation that will require even higher unemployment and a deeper recession. so that's what they're all in on, and that's important to understand on their perspective. that said, i do think that some of the things that come off were bursting a housing bubble, a pandemic-induced housing bubble. as we burst that bubble, that kind of disorderly declines that we'll see is going to follow through and show up in measured and in experienced inflation much sooner i think than the fed expects. >> all right diane, thank you very much always good to see you appreciate it. diane swonk, kpmg. let's go to kate for a "market flash. >> we have news on coinbase, cutting more jobs. this affects two teams, cut about 18% of its workforce
earlier this year. we have a statement from a spokesperson saying this affects the recruiting team. they say that's in connection with lower planned hiring needs, second, the institutional onboarding team as well. they say these are isolated and targeted actions by two teams to help coinbase operate more efficiently and efficiently as possible they're also navigating what they call a difficult cycle as crypto and tech companies in silicon valley look to tighten their belts, show a little more cost discipline. meta this week coinbase up more than 10%. >> kate rooney, thank you. much more on the crypto fallout this hour in "power lunch. so, so silt downs with brian armstrong. stay tuned for that. our next guest says value stocks have outperformed growth in the last year the question is, will that trend continue loreen gilbert, ceo of wealthwise financial thank you for being here
>> thank you >> do you see that trend continuing with everything we're seeing, the cpi report, the fed potentially hiking rates again, a lot of people expecting another 75-point basis hike? >> yeah. the good news today with the cpi number shows that the area that the fed does not really control in food and energy are starting to roll over that is good news because the fed can't really control that and we need to see those numbers come down. when it comes to the markets and where we are, we have the stay-at-home play, the reopening play, and now we have an old economy play that's happening right now. and some of those value names and where we see those value names, we think can outperform the growth names for the sustainable future >> really important to note, looking at the dow, loreen, at session highs, the nasdaq pretty close to session highs as well as the s&p, trading close to its highs of the day i'm going to use a fed word,
premature. are the markets celebrating prematurely? we had a positive cpi report, but this winter has been a lot milder than expected in the united states and over in europe, so we could see a spike in energy prices >> we definitely could there's a lot of what-if scenarios out there, but what i will say is we just had the midterm elections as well and we think we're going to have split congress, and with that it tends to bode well for the markets with cpi numbers coming down, we have a split congress, what does that mean? that means regulatory laws will probably not go into play, things like buyback taxes will not happen so i think there's a lot of positive outlook and optimism that there can be in the market. but it is premature to think that the fed will stop raising rates. we certainly think that will continue >> loreen, i don't know and really nobody knows whether the market has hit a bottom here and is done with what it needs to get through to set the stage for
something moving higher later. i have no idea but i know that today speaks to me of something that's important, and that is the importance of staying in the market and not trying to time it that old fact, and i'll get it wrong, but something like 40% of your return comes in a bull market -- comes on ten days of a bull market. this may be one of those days. talk to me about that. >> you're right. investors get weary, and right now we have a lot of investors that are weary it's been a very difficult year both in equities and fixed incomes. so with that, it is a matter of staying the course and being timed in the markets, not timing the markets, is much more important. and so, with that, those are the conversations we're having with investors, is how to stay in it and how to make the most of it right now. like i said, i do think that value tilt really will help with investors, not just growth stocks >> all right loreen, thank you very much for
your time today. we appreciate it loreen gilbert, thank you so much coming up, shares of ziprecruiter soaring today on the back of strong corporate results, great guidance, a new buyback program. we'll speak with the ceo about the state of the jobs market and why a cooldown isn't necessarily so bad for business, his business and what does the ftx collapse and the huge downturn in the crypto market mean for overall market the ceo of coinbase will join us to tie it all together and talk about the news we just heard regarding layoffs. take a look at some of the names hitting all-time highs today -- raymond james, albemarle, mcdonald's, o'reilly automotive among them
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welcome back to "power lunch. shares of the online jobs site operatoreor ziprecruiter jumpin today. they announced a $200 million increase in its stock buyback program. with more on that and the state of the jobs market, ian single, ceo of ziprecruiter. good to have you with us >> thanks for having me. >> can you do as well corporately in a somewhat slower job market as you have been doing in this very hot one >> i mean, the nature of the job market is it tends to be
cyclical, and we have been in what has effectively been a bull labor market for the last eight years, barring a brief downturn during covid we have seen sub-4% unemployment for a protracted period of time. what you're basically seeing right now is a releveling where instead of it being a highly advantaged market for job seekers, you're starting to see the balance of power shift a little back towards employer honestly, that's healthy for the labor market. >> healthy for the labor market. back to my question, can you make as much money in a slower job market than you have been in this -- as you say, sort of eight-year bull market for labor? >> well, the great thing about ziprecruiter is we run a highly flexible business model, and we've been able to demonstrate that flexibility, so if you go back and look at 2020 when covid hit, we went backwards 3% from what we'd done in 2019
yet we were able to generate 15% adjusted ebitda margins. following that, we grew 77% and were able to maintain those ebitda margins in spite of the fact we were investing so aggressively into it this year you're seeing the labor market ease yet we're still growing 20% and will throw off adjusted ebitda margins of 20%. my answer is unequivocally yes, we can absolutely continue to thrive in a diverse array of macroeconomic environments >> which sectors are you seeing the greatest softening in in terms of labor demand, and which -- i think i know the answer -- and where are you seeing continued or accelerated strength >> it's very clear there were a lot of categories that not only needed to reopen but completely restaff post covid, post the shutdown of the economy. you look at things like hotels and restaurants, and they were
adding i think around 500,000 jobs a s a month. last mow they added 34,000 jobs. they've effectively staffed back up, creating a substantial deceleration in the number of open jobs. we've seen this pattern persist for two quarters now it's something we expect to continue however, that's offset by the fact that s&bs by and large are slowing their hiring much faster than enterprise. enterprise is an area ziprecruiter has made significant inroads with in the past couple years and part of my confidence about how our growth will continue to perform or adjusted ebitda is related to the fact we've been penetrating enterprise and continuing to have success with that >> i want to ask you about the hottest sector in jobs the first was nursing. obviously health care has very stable demand. the other four in that top five list are all levered to consumer or business spending at some level. do you think you can maintain your guidance and the activity on your site if we see a
slowdown in spending and sales, which will impact that software, truck driving and consumers spending. >> yeah. we were able to give guidance in our earnings call yesterday for the fourth quarter, and in that guidance, we were able to modestly raise our top-line guidance as well as raise our bottom-line guidance so the answer is yes we have pretty good line of sight into what's happening inside of the economy. you know, what the future holds is still uncertain certainly the depth of how deeply the trough will go inside of this current labor market, a little unpredictable right now but as far as what we have line of sight to, we feel really confident about the numbers that we have projected for fourth quarter. >> all right, ian. thank you very much for your time we appreciate it continued good luck to you >> thanks for having me. >> you got it. ahead, as the ftx fallout continues, has it created a crisis of confidence in the crypto market? what does it mean for companies in the ecosystem we'll talk with the company's
ceo ahead. and lunch, frank >> a bit of a switch we have stocks to buy if the fed decides to slow down its rate hikes. a look at the markets, trading pretty close to session highs right now, the dow up 3%, the s&p up 4.5%, the nasdaq doing the best with rates declining to about 3.8% the high, 4.2% on the 10-year. this thing, it's making me get an ice bath again.
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welcome back to "power lunch. huge market rally on hopes inflation is finally cooling, the nasdaq having its best day in 2 1/2 years, and big-cap tech, apple, up over 6.5%, microsoft as well. alphabet up over 7%. all having a big day you can also see amazon up more than 11% on a day when everything is soaring. consumer discretionary, that's the best sector, especially the housing stocks let's look at the home builders. double-digit gains across the board. lennar up more than 12%, almost 13%, sanford pulte, nbr up almost 10% as well if you need to buy a new house, you may need to go to least for
carpet, appliances, your pool, big gains there as well. vacation and travel stocks with big gains. casinos, cruise lines, everything jumping today caesars up almost 16%, can value up more than 12%, marriott, a laggard on a day like this, up more than 5%, believe it or not. our "cnbc news update" with bertha coombs. >> washington, d.c., is suing the washington commanders football team and the nfl. the city's attorney general announcing moments ago civil protection lawsuit alleges that d.c. consumers had their rights violated when the team's longtime owner, dan snyder, lied about his knowledge of workplace misconduct and sexual harassment there are a number of ongoing investigations into the team, and snyder took steps last week that indicate he could be looking to sell the franchise. supreme court justice sonia
sotomayor has rejected another challenge to new york city's vaccine mandate. a group representing city firefighters, teachers, police officers and others argue that the mandate violates religious protections. sotomayor has had previous challenges to the mandate in the last year. a new report issued at the international climate summit in egypt saying the energy prices resulting from russia's invasion of ukraine is threatening climate goals. the report warns increased natural gas production and the resulting carbon dioxide release will make it nearly impossible to reach climate goals coming up on "power lunch," from crypto carnage to crypto comeback, bitcoin bouncing back 8%, ether 18%. shares of coinbase on a similar roller coaster ride. we'll talk to the company's ceo about the ftx fallout.
ncian armstrong next on "power luh. stay tuned for that. ♪♪ this... is the planning effect. this is how it feels to know you have a wealth plan that covers everything that's important to you. this is what it's like to have a dedicated fidelity advisor looking at your full financial picture. making sure you have the right balance of risk and reward. and helping you plan for future generations.
lunch. cryptomarket has been marked by the collapse of ftx. it's shaken the confident in crypto, especially bitcoin bitcoin is up today, however we want to ask a lot of questions about cryptocurrency and the investability of it right now. let's bring in zack guzman for more co-founder backed by alameda, owned by sam bankman-fried a great to have you on >> grateful to be here >> first and foremost, why has there been so much -- why is the confidence in cryptocurrency, especially bitcoin, been shaken when in fact the collapse of ftx, that was caused by risky investments, not necessarily the investability of cryptocurrency? >> the entirety of this year has really proven out that you can create new financial systems that tend to help people if they're looking for financial freedom as far as cryptocurrencies are concerned, but oftentimes you can replicate the same problems we're seeing
in traditional finance that's been the big lesson investors have been learning this year, right and it's not just what we're seeing play out with ftx we've seen that with a number of crypto projects. beginning earlier this may, terra luna, from there shifting to celsius and the other exchanges that have run into the same liquidity issues. it goes back to a big topic we've seen play out attached to when it comes to regulations and how many of these crypto exchanges were overlevered a lot of transparency issues, frankly, go back to what we saw in '08, where there is no regulation, so these players are basically extending themselves farther than any users out there know >> as we mentioned, your company is backed by sam bankman-fried have you spoken to him he's take an lot of accountability have you personally spoke on the him about what's going on? >> i haven't had time to speak with sbf himself, but i've been chatting with former employees
of ftx and ftx u.s., describing what the whole industry was experiencing, being blind-sided. given how big ftx was and how quickly they were growing, not just reach in investors in crypto but celebrities and everyone else who had been talking about ftx, tom brady, the larry david super bowl commercial this is a big company. you talk to the people inside those walls saying that, look, a lot of this stuff was going on and we didn't know about it. you can take that at their word or think about, you know, what we've seen at other institutions, again, not to point back to celsius as a prime example but voyager as well, which they stepped in to rescue. crypto is supposed to be more transparent than the old system and that's what we're highlighting, stories that kind of get to the heart of some of this stuff isn't as pure as we once thought >> zakack, i want to understand some things, mostly about alameda, but they were the
investor in your company and investigation and speculating in other companies. where were they getting the money to do that, to put money in companies like yours? >> that's what everyone was trying to figure out the relationships with alameda research, which is different than alameda ventures and different than ftx and ftx is different than ftx.us, all these arms are very infrastructure d and just to show kind of the amount of reach that sam bankman-fried and ftx itself had was, you know, alameda, ventures was an investor in a lot of different companies in the space. ftx investor was an investor in a lot of different companies in the space. >> was it customer money in ftx being used to fund investments, whether it was alameda research or alameda ventures? was it customer money being used >> certainly not in our experience no when we talk about what the "wall street journal" has
reported today, this is what people are trying to figure out, what did ftx do with customer funds. their report is it was used to help function and finance alameda research's trading arm, which would be surprising and frankly something i think, you know, even those employees i talked to at ftx-us, that arm, heavily regulated, were surprised to see because that would seem to vie late their own rules and releg regulations there's a lot changing now and the connection between all these things gets back to the point of why people in decentralized finance, the transparency of where crypto is going and where the industry wants to go and where centralized exchanges were and replicating a lot of these same issues around not having enough transparency, which money is moving where, we got back to the same issues crypto was trying to solve. that's i guess the iron-in of all this seeing it play out is tough to
watch if you've been in crypto as long as people have >> zack guzman, we appreciate your time today. the apparent collapse of ftx has hit the crypto ecosystem hard, and everything from actual cryptocurrency to the names that deal in it, including coinbase, the stock is up today and how it has been falling for three days as this drama has played out they just announced a series of layoffs earlier this hour. so, so join andrew ross sorkin joins was the ceo. >> thank you for joining us, brian armstrong. an avalanche of headlines in the past several days about what appears to be the cloud with ftx and given where you stand in this, it would be great to get your perspective to start with what you're seeing and did you expect this? >> i certainly didn't expect it. and this is a dark day for the customers who have lost funds in
this apparent, you know, trough. we don't know exactly what it is until the facts are in there are a few things as i zoom out to think about ftx is not representative of every company in crypto compared to coinbase, for instance. we've take an different strategy we're based in the united states we're regulated. we have a new york trust company, a license with the cftc, money transition licenses and we went public so we have publicly available audited financial statements we don't own a market maker business, don't invest customer funds without their explicit direction. anyway, i think that's an important thing for people to realize in this environment is not all companies in crypto are like this, and just like traditional finance system occasionally has a company that goes bad, it is not representative of the whole. >> right what do you think happened here? >> it'stough to speculate without being inside the firm,
but what appears to have happened is that customers' funds than deposited in ftx were somehow made available into alameda, their market maker, or more like hedge fund activity and they took some risky positions and the firm appears to be under water. again, i don't have specific knowledge of what's happening and this is what i've been able to gather from a brief couple of phone calls. you know, i spoke with sbf and others in this process and outside participants >> did you see red flags your venture arm took an investment in ftx i believe back in 2021. and of course for many, for the last year or two, it appeared that this was a firm that was shooting to the moon at a time that you were competing with it. you know their numbers you know their numbers >> mm-hmm. you know, this is partly i think why so many people in crypto
feel duped, and i do as well, is i looked back at all the interactions i had with sam and, you know, i felt like he was a very bright and genuine and eager person,perhaps a bit young. you know, he's perhaps a bit reckless in certain moments but not corrupt. and, again, i hate to use that word because we don't know exactly what happened. sometimes people get in over their heads or misunderstanding happen and so we should wait to see what happens when all the facts are in but, you know, the other thing -- you mentioned the numbers. i was aware of our revenue last year we did $7 billion revenue and about $4 billion of positive ebitda and i was aware of their revenue, just as an investor, which was more like around $1 billion. and i was surprised at how much cash that they seemed to have and sam seemed to have to go out and perform various investments in the market, both their ventures arm and, you know,
buying 9% of robinhood and other political organizations. i was thinking where is all this cash coming from you always look back, 20/20 hindsight, but i didn't feel anything enough to speak up so i was as surprised as anybody. >> you said you had spoken briefly to sam and cz during the process. what did sam say to you? >> well, when he reached out, he was in the mode of trying to raise financing, emergency financing, and so we briefly discussed that but, you know, it quickly became apparent to me that this wasn't the type of asset that we would want to invest in if it was actually that far under water, and, you know, if there had actually been either fraud or just, you know, misrepresentation to either customers or investors, you know, at this point, my view was that the firm didn't have value to -- for us to participate in anything even if we could.
so anyway, it was sort of a moot point. at that point, i offered to be helpful in any other way i could, but there was not something for us to do together. >> how concerned were you at that point about fraud, about this idea, the commingling of the funds? >> there were some red flags that had been raised by others, but i'm not at liberty to say exactly what i was concerned at that point, but, again, we didn't go in with forensic accountants and look at the balance sheet, anything like that i was basically reading the room and it felt like a pretty bad situation that we wanted to stay away from. >> at this point, and the company has put out a notice on twitter, literally in the last hour, do you see a possibility of this being salvaged >> you know, from where i'm sitting it seems incredibly unlikely i don't know why investors would put money into this given the allegations. so it's surprising to me that sam is still pursuing that line
of trying to raise money for this venture but, again, without being inside the firm, i couldn't say exactly what is going on in there. and, you know, i guess zooming out for a minute, i think this is a very interesting moment for the united states and the regulatory environment we can talk about that if you want as well i think that, you know, there is clear regulation in the sense that many firms like ours are being relegated in the way t traditional firms are regulated. but we aren't seen clear crypto-specific regulation to help clarify these arguments about what's a commodity, a broker, what sort of rules would you follow in the absence of that clarity, i think we've seen a lot of american investors and the trading volume, 95% of the trading volume has gone offshore this business was not built as much in the u.s. as it could have been. in my view, that was a missed
opportunity by the regulators in the u.s., especially at the s.e.c., you know, chair genz ler who in my view took a more regulation by enforcement approach and had negative commentary about crypto. it was a missed opportunity on their part to create clear regulation in this industry to allow it to flourish safely in the u.s. unfortunately, the americans who went offshore to these exchanges are now being harmed >> brian, talking about regulators, real quick from an interview i did this morning with gary gensler, i asked him about americans who have money in coinbase or binance given those may be the two biggest exchanging still and whether they should feel confident they can get their money out. here's what he said about that >> i'm not going to speak to any one platform, but i would say that you have rescues. the rules and the laws are clear but do not assume that these
firms are complying with the rules and the laws that the new york stock exchange or the biggest brokerage apps are complying with >> brian, should investors worry? >> yeah, so for coinbase, this is a nonissue, and the reason is that we hold customer funds one-to-one backed and you don't have to take our word for it we are a public company and pub accomplish audited financial statement base a big-four accounting firm. when we went public in the united states, we filed and registered an s-1 with the s.e.c. and explained to them exactly how our business works we showed them our audited financials, and they approved for the company to go public so what happened at ftx is not possible to happen at coinbase, and we are a regulated institution in the united states we actually have a broker deal license that's dormant the s.e.c., we've tried to work
with them to make it more active we haven't seen a lot of willingness there. we have a license with the cftc in our derivatives business. so that's what i'll say about that >> all right you've made a number of important points about regulation in the united states and the point about trying to actually create an environment, a driving environment here in the u.s. as opposed to offshore where others have thrived before given what's happened, how concerned are you that that is going to continue, persist you've seen a number of politicians today come out with statements about wanting to look into this, wanting to write laws and the like does this help or hurt the case, do you think >> yeah. i think, look, there's sort of a natural knee-jerk reaction from some that's going to say, hey, this just means we need more regulation and, you know, i think in some ways that's correct. coinbase has been a big advocate and we've worked vard to get
more clear regulation in the u.s. but in a way, that's kind of missing the point in the sense that, you know, ftx.com was not regulated by any u.s. regulator. it was an offshore exchange. and the lack of regulatory clarity in the u.s. is what drove u.s. citizens to kind of -- and the trading volume to go offshore. so that's an issue look, there are signs for -- this is an opportunity for the united states to really be the one to put out more of this regulation frankly, the u.s. is a little behind here. europe and singapore and australia and hong kong have all made positive steps in this direction. we've seen some positive steps in the u.s. with the bill making its way through congress, and this would start to provide some of that regulatory clarity in the u.s. without that, i fear we'll have more of this activity go offshore and it will harm american consumers >> i know you're confident in your own platform.
the other major platform is binance, and that works outside of the united states, a u.s. version. how concerned do you think customers should be about that platform both stability -- there have been reports about investigations into that platform in different ways >> it's not my place to comment on other exchanges out there and i don't know the details even if i wanted to. i have seen some of these reports about different kind of risk about what happened at ftx. ftx, commingling, customer funds, investing in risky as sets, i'm hoping -- i would be surprised if that's happening in other offshore exchanges, but there are other types of risk, aml risks, so i think the net result of this blowout of ftx is that offshore exchanges will get a lot more scrutiny. and, you know, ultimately i think that will be a good thing
if we can see a more level playing field with each regulator not just focused internally in their own jurisdiction or country about who are the regulated actors in their own country but taking a broader lens saying where our our citizens going offshore and how do we make that a more level playing field? >> in terms of value, prices of bitcoin, solana, people talk about a crypto winter, somebody mentioned this morning it might become an ice age of sorts jpmorgan says there will be a cascade of margin calls. what do you think the pressure will be on value and price, and what are you seeing on your own platform right now >> yeah. we have seen the market come down a bit, and i wouldn't be surprised about contagion risk other firms are losing leverage in hedge funds and various firms that may experience pressure in these moments, but i don't think it's all bad you know, again, not every actor
in crypto is the same, and i hate to be opportunistic, but i think for coinbase this is actually validating the strategy in the pursuit of the last ten years and it's our moment to shine and show we can be the most rep yudtable trusted and regulated exchange globally. i think about this crypto winter or how bad it's going to be, you can kind of compare it to other historical events. 2008, lehman brothers, that's a great example. that created a recession but didn't call the entire financial system into question or the dotcom crash in 2001, google amazon made it through that crash and became stronger that's an opportunity coinbase has today and other firms that are trusted and following a regulated approach
so i believe we'll emerge from this stronger. >> that is of course the opportunity. i do want to ask you about this headline about layoffs at the company in part because we're seeing challenges across not just crypto but at silicon valley and the world of technology what's the state of those layoffs, and what are you expecting over the next quarter? or longer? >> yeah. so obviously this environment i think it's important for companies to manage cost, and as a public company, you know, our investors look at those things very closely we did announce some small role eliminations, i think it was about 60 folks there's certainly areas of our business, for instance, we won't be hike a huge amount of people in 2023, so it doesn't make sense to have quite as by a recruiting team. or, for instance, we hired people to work through backlogs on-boarding. we're still see that, but through automation and working through the backlog we don't neat, so there were some role
eliminations of 60 people. i think we'll be prudent in this environment, to make sure that we are managing ebitda, cash flow cautiously. we have a strong balance sheet over $5 billion in cash. we want to make sure we can use that cash for opportunities in these down markets there will be a lot of opportunities. make sure we can be well capitalized. >> brian armstrong, we wish you well we pressure you joining us, especially add mid citi all these headlines. thank you for helping to break some of it down for us tyler? >> thank you, andrew >>. andrew, thank you very much. the words there, frank, lie i field duped, surprised, words like fraud, misrepresentation, reckless, where is the cash coming from? a lot of questions here. it sounds like a story we'll be following for a long time. >> quite some time up today, but obviously well off their highs, and falling pretty
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welcome back the markets turn to rally as the cpi report came in with much less than expected if inflation continues to slow, what do you buy? todd borden, a cnbc contributor with his three pivot plays todd, your first stock is global foundries. why? >> yeah, ty, like semis have showed a lot of relative strength, even to tech, which is making a bit of a comeback here. longer term, we had this whole growth/value battle. technically speaking growth is right at the point where it needs to hold support to continue higher. relative to value, i think it might have a shot. global foundry can break out about 66, it might be to reach prior highs of 79 1/2.
so they beat expectations by about 14%, made 62% a share. last year, one penny got upgrates for bank the america, benefiting from the chips act. the ceo is on track to build a 600,000 square-foot facilities a couple miles away from me here in saratoga. as i said, chips are showing some strength hire i like gfs next a consumer-facing name, lululemon. why that >> i hold -- all three i hold these, i should say that put it in a low in may, and it's already 37% higher here, so you can grau a bit of a technical trend, and a move you had brought that, so this stock is still richly valued, as we've seen the big value compression, so the fact that it doesn't face
value compression in this retail squeeze inflationary environment i think is very good and telling. an upgrade from j.p., raised guyance two weeks ago. got consistent revenue growth, they're executing well inventories are normalize. >> let's go to vail redivsorts. >> i think people are going to go skiing. now that it's mostly contained, this segment is not targeted toward the inflation, sensitive consumer it's a solid stock, again, some technicals in there, a slight downtrend from 250 to 210. we can break above here around 230. earnings were solid. last quarter was a slow season they beat expectations they're looking at season past sales, we're up about 6%, 7%, the real driver for vail
i just paid the increase on the epic pass that allows you to ski all around the country, plus it's a steady play maybe for your dividend portfolio. todd, thanks very much the ten-year taking a shatter turn lower, having an impact on mortgage rates let's bring in diana olick with the numbers on that. >> reporter: no question, the major sell-off is having a huge impact on the housing market the average rate on the 30-year fixed drop over 50 points, taking it down below 7%, according to mortgage news daily. that's the bigger one-day drop since the very start of the pandemic it match that is record. while the rate is still fries what it was, being back in the 6 rain could be an emotional mark. names that have been slammed
since rates started rising, also up about the same, as dr horton missed expectations in the quarterly earnings released yesterday. tyler? >> thank you very much diana olick. frank, what a day. >> what a day. stocks at session highs. the dow up 1100 points the nasdaq the best performer, obviously with rates falling, the nasdaq up almost 6.5%, seeing big gains from high growth/high valuation names with the rate relief. from the doghouse to the penthouse here on some of these names. the technology names, the growth-oriented names, can nasdaq up 6%, probably one of the best days maybe in history >> apparently people are buying grills and lawn mower. a lot of stocks having strong days on confidence that there could be a pause, a pivot.
the other "p" word was premature, maybe this changes the fed's plans. all right. well will leave it there an hand it over to "closing bell," to take it here 1100 points higher thanks for watching "power lunch. "closing bell" starts right now. off to the races, stocks surging. is this the moment to reposition your portfolio this is a make-or-break hour for your money take a look at where we stand, up more 1,000 points, almost 5% on the s&p 500, nats take up more than 6% it's a broad rally, quite strong >> announcer: is the worst-performing secto