♪ welcome, everybody, to "power lunch." alongside kelly evans, i'm tyler math sen. glad you could join us. we're 24 hours from the fed's decision on interest rates. we've created our own version of the fed to discuss what they would do on rates. not what they think the fed is going to do, what they would do. more on that coming up. >> looking forward to it. but first a check on the market. about 24 hours away from that fed decision and the dow, while it's down by half a percent, apple is helping it by 70

points. the s&p, by the way, down 3. the nasdaq in the green right now. and look at shares of apple up 6% on a delayed -- it's like the fed meeting. sometimes it takes 24 hours for the big reaction. apple shares up 6% to a record high. now, ahead of the fed decision, financials are dragging the broader averages lower. goldman and jp morgan having the most negative impact on the dow. the fed decision on interest rates is less than a day away, as we mentioned. when the year started, we had some investors expecting, more like hoping maybe, for several rate cuts this year. and now, we may not get even one. one criticism of the fed is that it is run only or largely by economists. what if business owners, market investors, economists all had a say in monetary policy. we'll answer that question right here, right now today. we have put together our own mock fed consisting of market experts, former fed officials, economists and a realize giant.

don peebls, roger ferguson, claudia sahm and paul mccully. and we asked them to vote as a mock fed governor would and decide whether to cut, to hold or hike base on their areas of expertise and how they see the economy. and here is their decision. with the exception of one person, don peebles the mock fed overwhelming voted to keep rates right where they are right now. let's bring in some of the members of our mock fed panel now to get them to share on why they voted the way they did. don peebles i'm going to start with you as the outlier, you say cut rates. don't just lee them where they are. explain your reasoning and get the conversation going. >> well, great. the first two reasons why is the consumers, who make two major purchases in their life time, and that's a home and it's a car. they do it with debt. so, up until 1983, the cost of

capital interest rates were included in the calculation of inflation. and since then, they haven't. and as a result, we've used interest rates to kind of manipulate inflation. now, let's think, for example, also what's happening is that the commercial real estate industry has hit an unanticipated snag, which was the impact of covid. people working remotely. and so it is decimated the office building market and the commercial real estate market. and as a result, it is having a devastating impact on local and regional banks. and so by keeping these rates high, as they are, the fed is creating a banking crisis that is going to percolate until the big money center banks as well. >> bill lee, why don't you answer -- let's pretend that you're in the room discussing what to do with interest rates right now. why don't you respond to what don just said in his argument. sectors he mentioned. i agree with him that a lot of the hurt is in the consumers and commercial real estate sector.

but, i am going to remind don, we have to worry about the overall economy. the overall economy is doing very well, inflation unfortunately stays stubbornly high, service sector inflation stays stubbornly high at 4%. if we let up now, one of the bad things about policy is that it's asymmetric. it's very hard to get inflation to come down, as we see. but it's easier for us to quickly lower rates if there's something that really goes wrong. so, given the asymmetric risk, the best decision now is to hold tight until we're clear that inflation is going down to 2% on a decidedly downward point. it takes three to five data points to be sure whether or not we're going on that right path. and as i said, with the rate below 4%, the economy is doing quite well. >> don, i want to come back quickly to you. i don't mean to put words in your mouth, but you seem to come very close to saying that rising interest rates were -- are, were inflationary in and of themselves because they pushed

prices on certain things higher than they otherwise would be. am i understanding you correctly? and that you believe, therefore, that cutting rates might be deflationary or disinflationary? >> yes, exactly. americans -- the two biggest purchases are homes and cars. and both of them -- now the cost of them in the last three years has doubled. and so as a result their buying power has been diminished significantly. groceries and other things like that are important. but also, we're talking about jobs too. jobs are beginning to get cut. corporations and banks are cutting financial services businesses are cutting and we're going to see more of it. but to destabilize our banking industry for the sake of protecting against inflation is a mistake. we have seen this in the early '90s. and jamie dimon was comparing where we are with the junk bond crisis. >> i love that point, don. it's definitely worth reflecting on. julia, are we doing the dots here? i know your dots might be more

dovish than some other members. explain. >> well, so i agree that the bar should not be excessively high to move forward with a sequence of adjustments. i think we're now nearing the territory where we're going to have to decide about if you start earlier, you can have the luxury of going slower, versus waiting for real signs of weakness in the labor market when you might have to play catch-up and cut more aggressively. so, i think i would like to see a few more prints on inflation and my baseline i would be writing down probably two cuts, but maybe three depending on the cp-i on wednesday. if we see a step down in housing inflation in the cpi and get a low .2 print on core inflation, then i think that's pretty good indication that that key element of inflation is moving into a lower range. and we can have that elusive confidence that inflation is moving in the right direction. in that case i might even write

down three cuts just as a way of injecting some diversity of opinion on the committee and making sure that we keep those trade-offs firmly in mind and not just follow the most lagging indicator that we have. the unemployment rate in hitting 4% for me is significant. >> significantly high, worrisome. >> yeah. it's a big change from the low. it's nothitting the sahm rule yet, but the direction of travel is pretty consistent. it's not just about one month of noise. there is definitely some loosening in labor market conditions. >> sounds like you're not far off in joining don peebles in the cut camp. >> not terribly far. june is prudent to hold. we should be making good on the promise. keep rates high and move it down with inflation and so far they keep sort of shifting the bar because the labor market has been strong. but again, nearing tougher

trade-offs. >> we have the sahm rule herself on the mock fed. we heard this rule about eight times. the last time we spoke you didn't want to listen to your own rule. where are you on that now? >> but at any point in time we should look at the totality of data as chair powell says over and other again. i would not want to use one indicator even if it has my name attached to assess the economy. we have seen moderation if we look over several months, look over labor market, inflation, as the world moderates, the fed should be moderating as well. and so it's setting up that path. and it would be too disruptive to cut interest rates tomorrow, even if i think that might be the right thing to do. it's important for the fed to shift the rhetoric and embrace. we're on the path to moderate and make sure we get if nothing else a verbal easing of interest rates before the fed starts to act. >> paul mccully, it sounds like -- who is going to jump in

there? >> this is don peeble-s, i want to say something about labor. let's think about the impact immigration had on labor. our country needs an influx of immigration, legal immigration, but we need them to come in to expand as our economy continues to expand. i think a big issue here we haven't looked at and the fed is not looking at that the impact that these difficult immigration policies have had on the work force. and i think that's what is making unemployment a bit more stubborn. >> paul, it sounds like claudia and julia are a couple of steps away from don peebles who is forging ahead in the cut rates area. what do you think? how do you respond to what you've heard so far? and if you were on the inside of the fomc, having this very debate, what would you be saying we should do? and if you wouldn't mind, react to this idea, i'm hearing some of the folks say, hey, we're at

the point where the economy is starting to show some signs of softening. and that that may be where we get that last tick down in inflation comes from. >> i think you're going to hear a lot of amen from me from the standpoint of what we've heard so far. i think two cuts in the dot plot is where i would come out. and i think that's where the fomc will come out. down from three in march to reflect essentially the bad inflation data that we've had in the context of a sturdy labor market. but i would not move down from three to one on the year end dot because i think that the economy is moderating. it's coming in to better balance. and very much agree with the motion that inflation is coming down and we're hung up on the

oer, so i would want to have -- lean on the dovish side, looking at december. so two looks about right for me. and i actually agree with don that the rate is too high for a longer period of time than the immediate weeks ahead, predominantly because the yield curve is inverted, which i look at as a tax on credit creation by the banking system. so, i think we're broadly in alignment here so far. we're looking forward to what the rest of the panel is saying. but i don't think we're slowing precipitously. i think we're in a soft landing. and i think they can sand pack tomorrow, move the year-end dot from three to two and then let

chair powell, wonderful story teller, manage the market at the pr pr press concerns. >> this is the perfect moment to turn to david. i know what you love, normally you say to me, i don't want to tell you what they should do, what they're going to do. clarify what you're trying to do here. listen, i feel like you're the opposite of don peebles. don wanted the cut. i thought you were going to say a hike. you've been more optimistic about the economy saying, qt -- any way. go ahead. tell us your thoughts. >> kelly, you took away my line. i was going to make that statement up front that this is not what i normally do. so, i like to tell people i think how they're going to be a good fiduciary and knowing what i think they should do isn't going to help them be a better fiduciary. knowing what i think the fed is going to do might help them be, hopefully be a good fiduciary. you put me in a different role.

i promise to act out in that role accordingly and move toward what i think they should do, which is a role actually i spent time doing in the past as i was a fed employee during 2009 and in the early 1990s for three years. so, here i gave a hold. and i will give a surprisingly to me a more hawkish bent on it. i think the economy has surprise for eight quarters now. we've had eight quarters of on average above 2% growth. the last quarter was the first one below 2, after some extremely strong acceleration into the end of 2023. most economic forecasters, including the fed, but outside private sector as well and the markets were forecasting recession and cuts all through '23 and they were just wrong. i think the humbling has to be why and being careful about not being wrong again for the same reasons. so, to me the story is really one about being humble with what's happened in the last

eight quarters. rampant disinflation, very strong growth, supply side drivers for economic activity dominating demand side drivers and really trying to maybe not spend so much time on that demand side because it didn't matter as much. i think a lot of the arguments for why you cut our demand side arguments had very little to do with the strength that we've had on the supply side or the potential for diminishing strength which would be why cuts might be interesting. i will say in countering to don, there are lots of sectors that actually really do enjoy higher interest rates and have enjoyed higher interest rates. the pension funds are loving this. i think the corporate pension plans in the united states have been underfunded for three decades are now fully funded for the first time. insurance companies, many banks that didn't overinvest in bad commercial real estate are actually kind of enjoying a lot of this higher rate, higher margin world that they live in. the financials have generally enjoyed it and done well. many of these financial stocks are near their record highs.

elderly people that have savings are certainly enjoying it. there's a lot of folks that actually win in a higher rate environment. and i just -- i think we should all be very humble sitting on a committee like this. first of all, thanks for having us on here. but second, humbled by what's happened. 525 bases points of rate hikes since march of '22 and really nothing has broken. if anything, everything has accelerated and inflation has come down. it hasn't fit the story line that many thought was the right story line, which is that unemployment was going to have to go to 6 or 7% to get inflation down to 2. so i think staying pat and staying a little more concerned about inflation for longer is the right story line. i think that's what jay will be. >> we're close to out of time, david. i want to turn back to don because you addressed him specifically on a couple of points. don, last word to you.

>> well, look, there's a quiet before the storm. these banks and many of these pension funds are looking down the barrel of massive losses in commercial real estate. the good news is that they have diversified. but any public employee pension system and most of them have invested in real estate, any one of them that has has got some big losses coming and have already experienced losses and will try to get it back from the opportunistic investment of making investments during the carnage that's getting ready to happen. >> all right. don peebles, thank you very much. thank you to our mock panel. that was great. >> thank you all. >> we'll continue to hear from all of you around future fed meetings. this is the first of many meetings to see how your opinions and votes change. >> yep. be sure to tune into our coverage of the federal reserve interest rate decision tomorrow at 1:00 p.m. eastern with the decision live at 2 and presser at 2:30 as well. coming up, snore or store. is apple's ai offering good enough to sell more iphones?

we'll discuss in "tech check" when we return. ♪

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welcome back to "power lunch." and check out shares of apple today. they are up 6% to a new all-time high on all of this optimism now after the ai announcements yesterday. seemed sleepy at the time, but not today. sitting at $3.1 trillion at the market cap. steve kovach is joining us now. steve, why the delayed reaction? >> reporter: yeah, kelly. well, what a difference a day makes. apple shares up, like you said, about 6% today after falling 2% yesterday immediately after that long-anticipated ai reveal. so the question is, like you said what changed overnight? well, a slew of bullish wall street commentary this morning about how all those apple ai features will drive hardware sales later this year because if folks want to use the new ai features they need last year's

apple iphone 15 pro or the next coming in a few months. the ai iphone fomo effect. here is a taste of some of the street's more bullish commentary of what we heard at wwdc. goldman analysts said the ai features, quote, should help to drive demand for products. also raise their price target, implying a 23% upside over the next 12 months. morgan stanley echoed that in their note this morning, saying the hardware requirements will speed up iphone upgrades. and that's really just the thesis for now, though. but this is not going to be put to a test for a few more months when we're expecting the next iphone model. most iphone owners in the install base right now of more than 1 million devices will not have access to apple's ai, so we'll have to wait to see if they spring for an upgrade earlier than planned just for the ai, guys. >> and now we have elon musk kind of reacting quite strongly to suggest maybe he's not going to let the new iphone come into

his offices if he thinks it might let out trade secrets to open ai. >> here is the shocker, kelly. elon musk probably doesn't know what he's talking about here and just tweeting through it. i don't know what he was watching yesterday but it was not the same presentation i was at in person and it's not -- doesn't jive with what apple executives told me yesterday following the events. the chatgpt slice of this is an optional feature. it's sometimes if you have apple intelligence on your device and you asked siri a question, it may prompt you and say, hey, do you want to try and use chatgpt for this query. you don't have to do that. most of what was announced yesterday, the vast, vast, vast majority of what we saw is running on apple's proprietary ai technology. now, you can be skeptical and say you don't believe apple's privacy things -- >> here is the thing. just to jump in for a moment. we spoke to david kennedy last hour about this. he thought it was legitimate concern and pointed specifically

to when you ask siri a question and she asks do you want a answer on chatgpt, taken the spoken or written command feeding back to openai and get it outside of -- >> it doesn't do that unless you tell it you want it to do that. that's the -- it's not just sending it willy nilly, kelly. >> sure. what if an employee is -- the employee is in the cafeteria. and he says, what was the score of the basketball game? >> for some reason siri can't answer it. sure. what then? >> yeah. then the data goes -- so that in that case, first of all, you're giving permission to do that. and it's being very clear, this is not apple's technology doing it. it's just like using the chatgpt app on your iphone. but skinned differently on the interface built natively in ios. this is not everything you do on your iphone going off to openai so they can analyze it and train their data on your data and so

forth. that's not what happened here. >> you would have to ask something more specific to your company's trade secrets, i suppose. siri seems to be listening all the time. >> yeah, exactly. >> can apple assure us she's not going to auto back end something to -- >> sure. >> openai or chatgpt we don't send. >> i can totally guarantee you the researchers are eager and some commenting on this, kelly. cybersecurity researchers like the one you had on last hour and so many more are dying to get their hands on this to see if that -- what you just described is happening. again, you have to put a little trust and faith in apple to believe it. and you're totally right to be skeptical because this is unproven technology. and so forth. but, you know, my read into the musk situation was, you know, first of all, his tweets were wrong about the way this product works. and second of all, you know, it comes off as sour grape. let's be honest. he does not like openai. he is suing the company over the

fact that they're not fulfilling their nonprofit mission or whatever. we've since seen in emails and so forth that he actually wanted openai to become a profitable business and have a bigger stake and all that stuff and raise more money and so forth. it's hard to take him seriously when he says stuff like this. maybe he will. maybe he will follow through, but i don't take it seriously. >> i think you sort of given the last word but i'll let you give another last word and that is this. wouldn't a similar problem exist if i were using my iphone, i got an insufficient answer from siri and i went to google and asked the same -- asked it. isn't then the data metastasizing over to google. >> and that's happening on your iphone right now. >> yes, that's my point. >> yeah. so google is the default search engine, you can make it bing or whatever you like to use. yes. if siri can't answer the question, it kicks you over to a traditional web search. this is a different version of that. this is an ai version of that. it's not necessarily for search

inquiries, by the way. it's for other tasks to the ai that apple made. it's similar. >> if i use bing, isn't there a partnership between bing and openai. >> microsoft and openai. that's the other part of this partnership that's super interesting. when you use chatgpt within the ios ecosystem, optional, i confirmed yesterday with apple, it's not going to apple servers, private servers i talked about, it's going to the microsoft cloud. you can trust the microsoft cloud or not, that's your choice. but it's the same experience or similar experience to what you get with the plain chatgpt app or web, tyler. >> thank you very much. further ahead, the treasury formally launching the process to implement the 1% excised tax on stock buybacks coming during a time when some critics claim corporate stock repurchases have gotten out of control. "power lunch" will be right

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♪ stocks were mostly lower right now, eight of the 11 s&p 500 sectors are down. i think the s&p is actually a little higher right now. no matter. that includes, among those sectors, energy even though oil and natural gas are higher today. let's turn to pippa stevens now for an explanation. why, why, why. >> they're bucking the trend with both oil in the green. thanks part to bush industry reports including from the eia now released short-term energy outlook, revised up demand outlook andry vised down the supply outlook so that's lifting oil. nat gas is up 7% last i checked. that's as the u.s. embraces for extreme temperatures. the cooling degree days that's an indication of how much a c is going to be used set to surge next week and stay at record levels through the end of next month. of course, temperature forecasts are notoriously fickle. if that comes to fruition, that

could reduce the inventory, still about 25% above the five-year energy. not lifting energy stocks, worst group over the last month. wolf research said they think the overbought consolidation is going to reverse and they had little contrarian call. they said to fade tech and buy energy. >> oh, come, a little contrarian call. >> they had a funny call. yeah, we know, but it's the trades that cause you to roll your eyes that end up being the most profitable. >> isn't that true, though. >> they are aware. >> yes, it's true. you know, you want to buy when everyone hates it and all the rest of it. better buying point for energy. commodities are still good on three out of four-year basis. pippa stevens, thank you. con stes is a brewer for the cnbc update. >> special counsel david weiss who led the investigation and brought charges against hunter biden says today's guilty verdict shows no one in this country is above the law. biden's attorney also issued a statement saying that he and his client respect the jury process

but will pursue all the legal challenges available. manufacturing and chemical industry groups are suing to block the new federal rule announced this year to set a standard to protect drinking water from so-called forever chemicals. named that because they don't easily break down in people or the environment. the group say the rules exceed the authority of the environmental protection agency. the epa has not commented. and disney today gave a sneak peek at the new attraction coming to its florida and california parks. inspired by disney's first black princess, tianna's bayou adventure based on the princess and the frog will open june 28th. it replaces splash mountain. it was themed to a song of the south, a disney song criticized for racist cliches. kelly, back to you. >> one of the towns affected by that drinking water rule. that's interesting. contessa brewer. a quick power check on the plus side, big way is apple. leading the s&p, helping the dow

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welcome back to "power lunch." stocks are kind of flattish, a little lower on the industrials, but a little tiny bit higher on the s&p and the nasdaq. bond yields have been falling ahead of the fed meeting. rick santelli is in chicago with more. hi, rick. >> hi, tyler. indeed. as you look at intraday chart of 10s, you can clearly see that even though we've been mostly higher in price, lower in yield prior to that big drop, rates were climbing a bit. the results of 39 billion reopened 10s hit the screens and it was a solid auction. inf investors were pleased to take down 10 year notes at a pace that surprised the market. you see the big drop. that drop put us under

yesterday's low yields. you see on the next chart, not only in 10s, all maturities 2 tluz 30s are trading under yesterday's yields. here is where it gets interesting. if i now look at another day to make it a three-day chart, looking at yesterday's jobs, jobs, jobs report, we see we're elevated. we're not elevated on 10s, all maturities look like on that chart. even though rates have come down a bit and hovering right around 440 and a 10, the low yield before the jobs report came out was under 430. so we want to pay close attention to that move. and with tomorrow's big decision day with the fed, nobody expecting much, which is probably why the dollar index looks the way it does. on pace for one-month high close. remember, the ecb and other central banks have eased on a relative basis, the dollar should gain some ground and it really is nothing but buyers today. kelly, back to you. >> anticipating a hold like our mock fed. rick, thank you.

the fed kicking off its two-day meeting today actually. our next guest feels that what the fed does this week won't be quite as important as what they say. it's been a common theme lately. let's bring in scott clemens. scott, good to see you. are you talking about powell specifically at his presser tomorrow? >> well, it's not only the presser conference tomorrow, it's the release of the statement and of course this is one of those meetings which the fed is going to release some new forecast and outlook the so-called dot plot. so there's a lot of information. i think it's universally assumed that fed won't actually take any action, but how they balance out observation of economic progress and inflation progress might give us some indication of if or when the fed is likely to begin lowering interest rates low they are year. >> i think the market settled for december for the first cut, maybe september. is that roughly how you expect this to shake out? what will you be listening for specifically on that? >> it is. i think the fed is kind of in

central bank purgatory, which there's not enough progress on inflation yet to allow them to lower interest rates but not enough economic challenges yet to require them to do so. keep in mind as well this is an election year. there's no hard and fast rule about this, but the fed historically has been reluctant to alter monetary policy too close to an election. fortunately there are only three meetings left between now and the election, including the one this week, which is hard to believe. the fed has a free shot i think to wait until december. our anticipation is 25 bases point cut in december. no sooner. probably with more to follow in 2025. >> do you believe that a slowing of consumer or a slowing economy will do the work of the fed? >> tyler, it could bring that rate cut forward. right now, what's really motivating the fed i think is seeing inflation come back down into their range. but i think there are some cracks in the facade of this consumer-driven economy. and i'll be reading between the

lines and of the lines of the fed statement tomorrow to see if they're seeing some of those same things. rising debt levels, rising delinquency rates, falling savings rate. there's nothing to worry about at present. the job market is still healthy. still adding a lot of jobs. wages are growing in advance of inflation. but looking forward six months, nine months down the road, there's probably a bit more consumer part of the sector to come. >> so, when do you think the fed might be inclined to cut interest rates? it felt like, as we talked to our mock fed panel, it was probably one or two cuts late in the year. is that where you are? >> that's where the fed funds futures market is. i tend to think -- this is a supposition the fed will ere on the side of conservatism and probably wait until december to put the first rate cut on the table. but whether it comes in september or december, the important thing is the debate is not which the direction -- the next direction is in the fed rate but when the next cut will happen. that's pretty supportive of

financial markets in the economy in general. >> all right, scott, thank you for your time today. we appreciate it. >> any time. >> scott clemens. coming up, stock buybacks have helped drive some big market gains, but a new tax could threaten their existence as we know it. we'll get the key details when we return. we'll be right back.

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♪ welcome back to "power lunch." let's talk byebacks. shares of general motors are hitting a two-year high in part because the company is buying back $6 billion worth of stock. buybacks have certainly helped shareholders and contributed to the market's big rally and come under fire because they enrich shareholders. here is a look at the push to implement attacks on buybacks. megan? >> kelly that tax bill is one step closer to coming due for the 1% stock buyback tax that was passed as part of the inflation reduction act back in 2022. so the treasury department's rule is just now in its final stages. and it says the tax will apply to u.s. public companies who bought back stock valued at $1 million or more.

importantly, it's also going to be back dated applying to all repurchases made since the start of last year. the public period on the proposed rule ends today. once that final rule is published i'm told could be within a month or so the tax payment will be due by the end of the following quarter. i want to emphasize that companies have known this was coming but treasury tells me today that no companies have yet paid this tax. it's on track to kick into effect as buybacks have been rising. data shows just over a trillion dollars in repurchases have been made from the start of 2023 through the first quarter of 2024. q1 of 2024 was the busiest speerd in that window with companies spending $242 billion on buybacks. some spending the most in that period include apple, meta, disney, chevron, all of them will have to pay that tax on net buybacks as soon as later this year. and the goal here, guys, is to slow the pace of these repurchases. the numbers might sound big in absolute terms, s&p analysis

shows it would have reduced operating earnings for 2023 by less that be half a percent. kelly? >> are there any legal challenges to this? >> there aren't. there haven't been. i talked with someone this morning who told me he doesn't expect in. this is already law. it's a quirk in the process that this one isn't in effect yet. i was talking with this analyst who said companies may have been keeping their fingers crossed and really hoping that as with so much else in government this might have been slowed down, red tape, maybe they change their mind and maybe it wouldn't kick into effect. what we can see now is the process is moving forward. they will have to pay before too long. >> would a trump administration try to undo this? is this seen as potentially getting caught in the election result? >> it's definitely possible. this is part of the inflation reduction act and we do know that former president trump has really railed against that program. at the same time, though, clearly this isn't having much of an impact on companies. if biden wins, he's already pledged he wants to actually

quadruple this tax. he is talking moving up to 4%. it would have to hit something like 2 or 2.5% to really start to have an impact on companies. so it is possible that if trump is elected he might like the revenue it raises, realize it doesn't hurt business so much and says maybe we'll just leave it be. >> interesting, megan. >> megan, thank you. coming up, a fresh three stock lunch. we'll trade big movers of the day after lunch. we'll be right back.

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time for today's pre-stock lunch. here with our trades is new construct ceo, david treanor. welcome. first up, let's welcome goldman sachs, down nearly 2% today. concerns about a slowing economy leave goldman and other financial stocks lower. your trade here on goldman sachs, sir? >> we like goldman sachs. we've liked it for a long time. it's the top-tier investment bank.

it has been for decades. it's got tremendous cash flow. it's still cheap. and we think moving on from marcus is a bullish sign. look, they tried the retail product. it didn't work. goldman is -- it's a premiere brand. i don't think it was ever really a good fit for retail, so i think it's a positive that they've put that in the rearview mirror. and we think it will continue to make a lot of money, of all the wall street firms, if you asked me which one will be the last one standing, it's goldman sachs. generally, the investment banking business has been in a longer term decline but goldman is the best of breed, and the stock is still relatively cheap. >> that's a ringing endorsement. we'll move along to general motors. the board just approved a $6 billion buyback. the stock is rising to a 52-week high. you like it? >> i do. and you usually give me a hard time for being negative on stocks, but i'll give you two buys in a row. >> i'm surprised. >> general motors, has been one

of our favorite stocks for a long time. we think it's been unduly punished because of the whole ev fad and craze. that's starting to unwind now. we're seeing ev sales slow dramatically. and we're shifting more toward hybrids. and at the end of the day, we think that sort of this tesla phenomenon that has dominated the automobile industry for so long is going to be in the rearview mirror in the not-too-distant future. obviously, negative on tesla, but that means we could be positive on the incumbents, who have got distribution and other long-term competitive advantages that tesla has really proven now they can't overcome. and so we feel like ge will be just fine when it comes to evs. they can make them, too. they can sell high-priced evs, but sell lower-priced evs than i think, tesla, and so i think long-term, we think gm is a great play. they've got a focus on return on invested capital and their

executive compensation plan. so we're big fans of gm. >> all right, let's move on to vf corp., where the ceo expanded his stake in the company, buying about 997,000 worth of the company's stock. shares of vf corp. higher by about 4% today. is the ceo a positive sign nor particular stock, often it can be. sometimes, not so much. >> tyler, you know, i'm going to go back to trend here and say, yeah, this is one to hold, possibly sell. i just don't think global apparel businesses have any competitive advantages, sustainable competitive advantages anymore. right? it's, everything is super cheap to make, nobody has a distribution advantage. really, i think to own a stock like this, i think you have to hope that they get lucky, and one of their brands comes up with something that catches fire, it becomes a new fad, and they sell more than expected. otherwise, you know, clothes, abarrel, once you've got some really premium brand that allows

you to exact big premium prices, which vf corp. does not, i don't see a way that they can keep margins up. we think this business is in long-term decline. it's great for the ceo to step in and buy some shares. i don't know if that's window dressing or not. but i think the business itself and the stock price -- the business is in decline, the stock price is expensive. we would recommend hold to sell here. >> david, thanks very much. appreciate your time today. david treanor. >> two out of three ain't bad. remember, you can always hear our podcast by checking out "power lunch" on any podcast platform wherever you go. we'll be right back after a break.

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other major averages adds well. 17192 for the nasdaq. >> a little more than two minutes left before we hand it off. several more stories we want to tell you about. apple pay users will soon be able to taken into buy now pay later loans from affirm. that's the leading brand in that space. both companies confirming the option will arrive for u.s. apple pay users on iphones and ipads later this year. while apple already offers its own buy now, pay later loans, this will offer users more payment options, including longer term payment plans. >> and affirm shares are up almost 8% on that news. the main passageway into baltimore's shipping port has officially been restored following the collapse of the key bridge in march that left four people dead. the channel was brought back to operational capacity last night. >> it's amazing how quickly they can clear all of the tonnage of bridge wreckage and containers that was knocked over. fixing the bridge is another matter. that will take years.

>> remember when that portion of the highway was collapsed around philadelphia. they can really move quickly when they move to. it's no secret that buying a home is more expensive than ever, but the cost of maintaining one has gotten pricier, too. new data from bank rate found that the, quote, hidden costs of home ownership, like property taxes, insurance, utilities, upkeep now total more than $18,000 per year on average. my wife and i were going over this. in my town, the taxes are very high. it's more than $2,000 a month is just in taxes. >> this is now the new housing crisis that people are talking about. forget trying to afford the house. the carrying costs are aastroas astronomical. >> and insurance, too. joey chestnut banned from the fourth of july hot dog eating contest. major league eating says that

chestnut is promoting impossible foods. for record, his draft entry is flat. he picked oracle and starbucks. >> come on, i would like to see how many impossible hot dogs he could eat! i always want to nascar to include electric cars. broaden the tent. >> let him in! free the chestnut! all right, thanks for watching "power lunch." "closing bell" starts right now. all right, guys. thanks so much. welcome to "closing bell." i'm scott wapner live from san francisco today. this make-or-break hour begins with apple's all-time high. its ai rollout cheered by investors and many analysts as well today. in fact, we'll hear from eric stanley's erik woodring in just a moment. his first reaction to wwdc and where he thinks shares can go from now. take a look at the scorecard with 60 minutes to go in regulation, because we have a developing story there as well. new closing highs at this moment for the s&p 500 and the nasdaq, all of this about 24 hours ahead

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