yield. a great defensive way to own the qs. >> thank you. >> gilead, breaking out. 13 times, healthy dividend. encouraging signs in the pipeline. >> black rock. 14 times, 14% earnings growth, 17% revenue growth and margin expense. >> thanks for watching. see you on "closing bell." "the exchange" is now. and thank you, scott. welcome to "the exchange." i'm kelly evans. ahead this hour, nvidia is bouncing back after three down days, but our market guest says it doesn't matter from the market direction. why? my guest says we're heading higher no matter how the mag seven performs. he has three names to ride the next rally with. and we'll tell you how this is an insurance play. and as the temperatures dip hotter, this stock is heating

up, as well. up 25% in a month and probably not on your radar. we have the name and the potential upside from here. before all that, let's get over to dom chu with a mirror image of yesterday on the markets. >> it's kind of a ve reversal. for the blue chip dow industrials, which are underperforming after a nice string of outperformance versus the other indexes, the dow currently at 39,048. down 363 points, a nearly 1% decline. home depot among the biggest drag so far. the s&p 500 is just about flat on the session. 5448 is the last trade there. and again, flat. at one point, we were up roughly 19 points for the broader index. so tilting towards the lower end of the trading range for the broader s&p. the nasdaq composite shifting back to outperformance, thanks

to computer chip stocks. it's up three quarters of 1%. 131 points to the upside, 17,628. the best performing stock in the entire s&p 500 is not technology, it's carnival corporation. the cruise line companies doing well, after carnival reported better than expected rof its and revenues, and gave a better full year than expected. shares up nearly 9% right now, providing that ripple effect for norwegian cruise, up 6%, royal caribbean up 3%, as well. and then that chips trade is specifically the bounceback in nvidia, that's driving a lot of the upside in technology. nvidia shares up 4.5%, near session highs right now. we're still down roughly 12% from the highs we saw just in the past week. at one point we shaved off nearly $430 billion in market cap and just to put that in perspective, that's like losing an entire mastercard in market

value. but nvidia, as you can see here, still above its longer and medium trading averages. so we'll keep an eye on that chip trade. >> some night say still extended. dom, thank you very much. our next guess says where nvidia and the mag seven go from here doesn't matter nefin terms the market's next leg happener. let's bring in neil hennesee. welcome back. >> thank you, kelly. >> a lot of people are saying you have to watch the leadership for signals about the broader market, but you disagree. >> i totally disagree. the magnificent seven, that game's over, the boat's already sailed. you start looking at those seven companies, and they've done extremely well. but look at the average pe, about 47 on those seven companies combined. their price to sales is over 12. tesla and nvidia are just ridiculous when you start looking at the pe of 72 or 84.

get real. where the market's going, although it will be volatile with those seven stocks, if you look at them today, each are up, but the dow is down 400, 500 points. the reality of the world is, money is shifting over to value. and that's why the game is over on those seven stocks, because where the yeuphoria is, is in a and crypto. >> let me dive into this in a -- or make a couple of observations. in terms of value, a lot of people say you can't look to classic value stocks, you have to look to value factors like earnings growth that might point you back towards tech stocks opposed to other more than other valued parts of the market. i'm curious what you would say about that. what stocks to you indicate value? >> well, you can take a myriad of different stocks, kelly. but you can look at group one,

auto. the new, used car, maintenance, the whole nine yards. here is a company people don't even know about and earns $40 a share, has a pe of less than half the market at 8. the price of sales is 0.2, which means you're buying it at 20 cents on the dollar. you can look at oshkosh, which isn't children's clothes, but fire apparatus equipment and things like that, and a company here with a pe of seven, a price-to-sales of 0.9. the real value is really in looking at the price-to-sales, and we won't pay more than $1.50 for $1 in sales, but when you start tying that towards the magnificent seven, now you're paying $12 for $1 in sales on average. >> real quickly, i want to just get this before i bring in rick.

when you say the mag seven is over and the ship has sailed, and maybe you can throw out tesla and say the fab five, do you truly believe the rallies we have seen are behind us now, those stocks are going nowhere, they're going down? >> you know, i can't really answer that to any great degree with confidence, but i mean, i look at amazon. their pe is 51. you can look at meta, the pe is somewhere around 26. they're very, very rich. compared to what you can find out there. so when you were talking on the earlier segments, look at home depot getting killed, all these good, high quality earning companies can low pes, and low price-to-sales getting killed because people are betting on something that might or might not happen in the future. and that's what you got with the magnificent seven. >> i worry about kind of the broader post pandemic disinflation that's still happening. before we get into that, let's find out how the auction went. we have two-year notes at the top of the hour.

rick santelli has the results for us. rick, what does it tell you? >> well, $69 billion first of all. this is the third $69 billion two-year auction in terms of size. we've never had one bigger than $69 billion. the yield of this auction, 4.076, which pretty much is about where the one issued market was trading. from a pricing standpoint, it was very tight. if you look at the metrics, a couple jump out at me. the bid-to-cover, 2.75 more bids than we actually have securities to sell. that bid-to-cover is the most aggressive since august of last year. and all the other metrics are either above or right on top of ten auction average. so b plus is the grade, boy plus for the first of three legs of this particular set of auctions. tomorrow will be $70 billion fives, never had a bigger one. but the reason this two year is

important because if you look at the yield curve twos to tens, kelly, it's the most inverted of the entire year. and one of the reasons is because it was a sticky two-year because the fed has been leaning in a very confusing manner to many investors. the stickiness of the two-year goes a long way in this auction to show that investors may be thawing out a bit as to what they believe the fed will do, meaning a good auction, if you bought two years, you would be more inclined to think that one, maybe two eases will be in the cards for 2024. >> yeah, you're looking for cuts. rick, thank you. the next catalyst or concern for markets could come friday with the pce report, the fed's preferred gauge. let's bring in steve liesman. steve, to build on what rick was just saying, it's going to point us in the direction of finding out how many cuts may be coming this year. >> yeah, the friday number is

important. while we await that number, kelly, we did an analysis of possible inflation paths, showing the economy has to be lousy or perfect to get the fed down to that 2% target. but even a slight rise of monthly inflation from the prepandemic level, the fed may never hit that target, creating a series of tough choices for the fed. a little background. average monthly core inflation before the pandemic, orunning u to 2%. by contrast, in the period of the great financial crisis, it was 0.9 and the high was 0.4 or better than that. so we modeled that inflation with job inflation to around the 2% target at the end of 2024, at the prepandemic average of 0.15, that's the middle choice. it would take until the spring of 2025, so the fed could cut towards the end of the year because it wants to start cutting before you get to 2%.

but look what happens at 0.2. the fed never gets there, annual inflation settles at 2 to.4%. those are saying that we are not going back to the prepandemic levels because of government spending and higher labor cost. what is the fed going to do? it could keep rates high, even hike rates, bowman talked about that this morning, and possibly cause a recession to get down to the 2%. it could only do modest cuts, a few, but remain well above neutral. and it might eat crow and accept the higher inflation target or even go to a range. we're looking for 0.1% on friday. that would bring the year over year rate down 0.2 to 2.6%. but those good numbers, they have to continue if the fed wants to keep heading down to 2%. math is hard, kelly, as you can see. >> i don't know if you caught our chat yesterday, but he pointed out that a bag of chips, you know, typical -- this is in

the cpi, guess how much that cost on average these days? >> well, i bought some on sale the other day. they weren't that expensive. they were a couple bucks. >> so the average price is $6.60. the discounting isn't working enough to bring consumers back in. volumes are flat to down on the year. is that telling us there are pockets of deflation happening, whether that's e-commerce, look at home depot and pool corps. its consumer products, and it's just getting started. i wonder as that feeds through, if that is a fed that will have to do more cuts. >> well, that's a great question. i personally stepped down and bought the store brand on sale at the time. this was a fishing venture. and i don't really care how good the chips are when i'm on the water as long as there are chips. but i don't know -- what i do wonder about is how they begin to discount or how the bean counters at the bls who do the

cpi big your out how there's all of a sudden a $5 meal at mcdonald's or something like that. i don't want to say deflation, i would say a little bit of disinflation. i have seen more sort of bargains out there like that, or discounting out there. and then, of course, you had this morning lisa cook, the fed governor, talking about consumers being more price sensitive. you saw that in the beige book. this is how it's supposed to work, kelly. you raise prices, people pay it, you're fine. all of a sudden you don't pay it, they have to bring the price down. that's why i was not concerned about the stagflation argument, at least not yet. we can have lower growth, but you don't have stagflation until the -- what do you want to call it? the negotiation between the buyer and the seller is finished. >> i want to bring neil back into this discussion. make the analogy as a strategist to pick one example are saying

x, the big six, corporate revenues are stalling out, 2% in terms of year on year. and the consumer package is a good analogy for that. are you so sure when you look at the names you're referencing, whether you're seeing auto deflation right now, oshkosh, are you sure that these stocks will continue to grow revenues and earn sngs >> it doesn't necessarily mean you have to grow earnings and revenue every year. companies are making a lot of cash, and a lot of cash flow is going to the bottom line. any kind of decrease in interest rates is just going to pop their bottom line on top of it. but just because you don't increase your revenues or earnings per share, doesn't mean that your stock price can't increase when you're coming from a very low level. so you can say tesla or nvidia, their revenues are growing, earnings are growing, that's

great, but you're still 80 times earnings when you're down here six or seven times. >> tesla is at 66 forward, but it has its challenges. we can show nvidia, but how inexpensive that stock has been is striking. amazon, microsoft, there's nvidia, 46 times forward earnings, and those earnings, you know, maybe now they're fully priced in. they weren't last year. >> yeah, so i'm in the camp that if you buy value, you're going to be fine over time. when you buy value, you know, it's sort of like -- it's very boring, number one. it's like a coin operated laundry mat, but you've never seen a going out of business sign on a coin operated laundry mat. that's what these companies do, produce cash flow, earnings per share. so if they just get a little multiple on their earnings per share, the stock goes higher. >> coin operated laundry is one of the absolute best

investments. steve, i'll give you the last word. >> you know, i'll listen to neil about stocks all day long. i would just make this macro observation. there's an idea of the big six going quite so high, that the ones who will profit from this -- these technological developments are going to be the producers of the stock, not the users of the stock. i just wonder if there's a point, kelly, where it's time from an investment proposition to look around at who's going to use this stuff profitably and start making money? this happens all the time. the makers of the new stuff get bid up, but often it's the users of the stuff who profit. so i don't know when that moment is, but probably not too far from now. >> we'll leave it there. gentlemen, thank you. we appreciate it today. inflation, it ain't going away soon in housing it seems, making the affordability crisis even worse. diana olick has the details.

another record, diana? >> another record, kelly. home prices set that record high in april, according to the latest s&p index released this morning, up 6.3% nationally from april of last year. although this is a three-month moving average, it happened even as mortgage rates jumped sharply during april. the annual and monthly gains on the price index are shrinking a little bit. march's gain was 6.5%. april, 6.3%. this just feeds into what is now one of the least affordable housing markets in u.s. history. the housing cost burden hit a record high according to a new report from harvard's joint center for housing. home prices are now 47% higher than they were in early 2020. with the median sale price now five times the median household income. for renters, even though rent growth is slowing down a little bit due to increased supply, rents are 26% higher than they were in 2020, and rising in three out of every five markets.

now half of all renter households, over 22 million, spent more than 30% of their income on housing. that is considered cost burden. and of that, 12 million spend more than half their income on rent. so for homeowners, 20 million are considered cost burden by their monthly payments. these are all record highs. don't forget for homeowners, insurance costs are up sharply. and the cost of everything you need to fix and upgrade your house is also going up, as well, as kelly, i'm sure you know. >> this is somewhat analogous to the chip discussion, but at some point are buyers going to push back? home prices keep going up, but i keep hear thing's been relief on the rent side. is that the case? >> for multifamily apartments, there has been a little easing up, a shrinking of the gains, in some markets going down a little bit because of the supply coming onto the market. but as we eat through that supply, rents will go up again because many people cannot

afford to buy so they go to a rental and more are going to single family rentals, and those prices are up from a preer ago. in april, single family rents bumped up higher than they usually do in april. so it just shows demand is keeping those prices high, as well. >> and the most important data point for the fed, i'm sure everyone following this, the rental cost of single family homes is a direct input into what they're looking at for core inflation. diana, thank you. we appreciate it. we're talking shipping software. we'll look at how to position ahead of results for fedex and general mills and why our trader one of these names has been a value trap. but first, an inside look at one asset class coming off record returns last year, and with heatwaves sweeping the country and forecasters

forecasting a busy hurricane season, it might be best suessed for investors. details ahead on "the exchange." >> this is "the exchange" on cnbc. (♪♪) iconic brands speak for themselves. we are so excited to welcome you to our community. today is all about you. (♪♪)

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five years? -five years. introducing the comcast business 5-year price lock guarantee. powering 5 years of savings. powering possibilities. welcome back to "the exchange." inflation has been sticky throughout the economy. and while consumers are seeing relief at the gas pump, those lower prices could be short

lived. pippa stevens is here with the bad news. >> the national average for a gallon of gas is currently at $3.47 according to aaa. that's just a hair below the psychologically important $3.50 level. it's also down 13 cents in the last month. and also lower than where prices were last year. now, part of this decline is thanks to soft demand. there are several reasons why. people are now working from home in the post covid world. vehicles are also more efficient and we're seeing more evs and battery vehicles and hybrids on the road. also, plane travel, air travel has been very strong, and has been eating away at some of the road trips people are taking. and finally, if you are feeling stretched as many consumers are, driving is one area where you can lower your cost. now, all told, patrick dehaan from gas buddy saying demand is 10% below precovid levels. but gasoline futures have

started to tick back up after bottoming out earlier in june, and we are now in hurricane season, which noaa expecting an above normal atlantic hurricane season. more than 40% of u.s. retyping capacity is in the gulf coast, meaning severe storms could have a big imact on what you pay at the pump. these companies have the largest exposure from the region, with the firming saying that pbs looks more insulated. >> energy and gasoline prices are not the only things impacted by an increase in extreme weather. there's one investing vehicle that pays when those events don't happen and we're talking about catastrophe bonds, which sold a record total of returns last year. but since those returns hinge on those events not happening, they can have extra risk. let's bring in my next guest who specializes in insurance

securities. welcome. 23%, something last year, because there were no costly hurricanes, is that right? >> yeah, the cap was up 20% last year, which was a record return. it followed a historic supply and demand imbalance. in 2023, it was unimpactful from natural catastrophes, record yields were realized by investors. >> that might have people salivating, but those who have been in the market know that the years prior to that, they were positive by just a couple percentage points. why is that? >> from 2017 through 2022, the u.s. saw a significant number of hurricane landfalls on the coast. so people may remember 2017, hurricane erma. in 2022, hurricane ian. 2020 was a record hurricane season, the most named storms on record. so those years in the last five

to six years were some of the most destructive and costly within the market. so that led to this imbalance. >> do you have a meteorology degree to take a bet whether you're going to have more or fewer storms? it seems like the market is not pricing appropriately, basically the natural disaster outcome is the bigger impact on returns or maybe that's how it's supposed to work. >> so if you go back to the founding of the market, the reason this market was able to come to fruition is that there are problemalistic models that come out with an annual expected loss model. so the way investors have gotten comfortable with this asset class is being able to quantify that risk that allows them to price that ris high-yield fixed income

instruments. >> we're talking about $35 billion? >> it's about $45 billion today, which is a record high. >> it's growing but you wonder there has asset class, because it's a 144-a fixed income security is from qualified institution alibiers. so certain categories of institutions. it's made of sovereign wealth and pension funds around the globe. we have seen some more interest lately from hedge funds, family offices, endowments as yields have reached record high levels. but these are very large financial institutions putting maybe 1% to 3% of their portfolio to this asset class to get that diversification. >> what kind of yield could i get these days? >> so 2023, yields have come in

a little bit from there. we talked about those returns, about mid teens today, which is still a multidecadal range. >> that's for what kind of maturity profile? >> so the average maturity is three years. the maturity average for the market or duration for the market as a whole is about two years. so there's not a ton of duration risk. there are also floating rate instruments. >> so as rates have gone up, they benefit from that. >> yes, benefiting from about 2.5% collateral rate and the risk spreads. >> mid teens might be enough to entice people, even when you think we might have a lot of storms. more importantly for consumers, does the existence or if we had massive growth in the cat bond market, would that help lower premiums for consume sners >> similar to all financial markets, the cap market, pricing is driven by supply/price

demand. so we are seeing record supply of products come into the market, so if the market continues to grow at 20% like it grew in 2023, on pace to grow mid to high teens again this year, it depends on how much capital flowed into the market. but if there were more capital, the spreads -- >> are they looking to tap the broad market of bond investors? because i heard reinsurers have pulled back from this space, people have had massive losses and if you don't have someone to backstop those financings, you have to raise it, i would imagine on the consumer side. soer liquidity, would that help when we look for relief in terms of insurance pricing? >> yes, ultimately the more capital that comes into the market to support these insurance companies, there are also corporations that issue bonds, governments and government-like institutions, the more capital that comes in, the more capital that would then be available. as the rates to transfer that

risk to investors come down, that will have a flow through effect to the average consumer who is buying their home insurance. >> fascinating. i wish for its growth. jeffrey, thank you for joining us. >> thank you, kelly. coming up, retailers are among the worst names in the s&p today, but there's one name bucking the friend, with piper sandler saying it benefits from high temperatures across the country. that name is dipping lower today after slashing profit outlook. they say spending continues to be falling. we'll get a check on some of the day's otr g ve aer is.ebimorsft ♪ ♪ ♪ ♪ the biggest ideas inspire new ones. 30 years ago, state street created an etf that inspired the world to invest differently.

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we are so excited to welcome you to our community. today is all about you. (♪♪) (♪♪) welcome back to "the exchange." the nasdaq is rebounding from its worst date sense april. up almost 1%, even while the dow is down nearly 300 points. but that's 100 points off the session lows. bowing is part of that, lower after the company changed its $4 billion offer to buy spirit, proposing to pay now with stock instead of cash, as the company has been burning through more than $1 billion a month. the deal still values spirit air

owe systems about $35 a share, but spirit is selling off as investors aren't sure about this news. airbus is down after the company cut guidance saying they'll only deliver 770 aircraft this year, down from the previous forecast of about 800. airbus shares down almost 10% and delaying its timeline for ramping up production of the a-320. these shares are at their lowest self-since november. and for more on that go to cnbc.com. we'll be speaking with the delta ceo next hour. that's coming up at 2:30 p.m. eastern. over to tyler mathisen now for the cnbc news update. >> kelly, thank you very much. the burnoff of toxic chemicals in the east palestinian, ohio derailment was unnecessary and based on norfolk southern's misinterpretation of the situation, according to an ntsb investigation. the investigators had the final

meeting on that derailment today. investigators say the decision was based on norfolk southern's misinterpretation of the situation. board members will vote on findings and recommendations on the derailment soon. the oklahoma supreme court says a religious charter school is unconstitutional, ruling today that the state's virtual charter school board's vote last year to approve the application by the catholic arch diocese for oklahoma violated state law. the court said a charter school is a public school under oklahoma law, which meant a charter school must be nonsectarian. monday was the biggest flying day ever, according to the tsa. 2.99 million passengers went through check points and it's going to get more crowded as we get closer to july fourth. the agency expects to careen more than 3 million people on friday. yikes! back to you, kelly.

>> finally recouped those pandemic previous highs. thank you so much. i want to draw your attention to spehere entertainment. ariel investments remains the largest shareholder, owning about 18% of the company and adding to its position. the vice chair has expressed his affinity for the sphere on this show, starting back in march of 2021, when former parent company msg entertainment was still building it. sphere is down 30% from recent highs. carnival is kicking off the week with a bang, the highest earness the s&p right now. and three more on deck with the results. we have the action, the story and the trade on fedex, general mills and paycheck. back after this.

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welcome back to "the

exchange." believe it or not, we've already got some key names reporting results. we have the action, the story and trade on parcels, payments and packaged foods. lee munson is here with our trade. he's president and chief investment officer. lee, excited to see where you stand. let's start with fedex, which reported a surprise beat last quarter. lee, what would you do here? >> you know, i wouldn't touch this thing. so many value investors last year lost money on this thing. here's my issue with it. the express what we think of like regular fedex, it just doesn't have the growth. a lot of the growth is about a little less than 40%, which is, you know, fedex ground. here's my problem. all management can do is talk about how they have done all this -- they have a young fleet in terms of their airlines and all this stuff. at the end of the day, until

they harmonize the experience of ground and express, it's a no-go zone. i don't like the service and i don't think it works. >> we'll move along then and talk general mills up 4% this year. we were talking about this, in a broader retail slowdown. still expecting the pet category to help. general mills, what do you do with this one, lee? >> you know, usually if i just want to buy value stocks, i'll just buy the russell 1,000 and buy an etf. i like general mills. it's kind of like the old widow and orphan stock. if you need that yielding 3%, i like this. i'm not concerned about the slowdown, because i think people will be trading down. so i think if we have a slowdown in the economy, it will be a nice play. but i'll tell you, the pet food makes it hot. you have a lot of analysts, excited about pet food.

it's kind of a buggy thing, so if you are looking for widow and orphan stocks, i like this. it's a cheaper p ethan the value broader index. >> i just wonder if we're getting a message from general mills, pepsi, that there's more deflation coming, even the pet category is competitive. look at the prize of fresh pet. if people are going to pay, they want to pay for the good stuff. >> i agree with that. i don't think that we see in the numbers disinflation of a lot of just basic consumers products yet. people are in disbelief that price pressure is going to be relieved. >> let's move along to paycheck, which is about to report. they are on pace for their fifth positive month in six. rbc expects professional services demand to offset losses. they also see opportunity in pricing. i don't know, do you like p paychex? >> i don't think the stock is

immune, but i -- you know, i understand the long-term story. paychex has been payrola for people who have owned it. we're not even going to get to see 5% growth. we have a stock that's under 6% growth. it's not at a big discount in terms of valuation, and it's not that people don't want to hire out there. when you listen to management talk, they are just saying we can't find people to hire. so i don't know where that organic growth engine is going to be at best. what is it going to be flat at worse? we get softness in the labor markets, lower volumes. i would rather buy an index fund than paychex. >> i think that angle is interesting. there's a lot of reason why the labor market servicing areas might slow down. lee, thanks. we appreciate your time today. good to see you. >> thank you. still to come, apple yesterday, microsoft today. the eu charging another tech

giant with anti-trust violations. this time related to the bundling of other products. we remember the bundling issues microsoft faced in the past. wh'sifre cuss at dfent this time around after the break. iconic brands speak for themselves. we are so excited to welcome you to our community. today is all about you. (♪♪) (♪♪) what will you do when the power goes out? power outages can be unpredictable and inconvenient, but with a generac home standby generator, your life goes on uninterrupted. because when your generac detects a power outage, it automatically powers up, giving your family the security

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another major anti-trust case out of the eu today, saying microsoft's bundling of teams with other business software violates competitive rules. this just after they opened a case against apple's app store yesterday. deidre bosa has more. teams, deidre, there's stifling competition. >> well, break open big tech versus break them up. that is the motto for european regulators. so for microsoft, that means letting more companies in. clamping down on what it calls unfair distribution of advantage by packaging teams with other tools in office 365.

yesterday, it was apple. regulators accusing it of violating competition rules through the app store policy. next, it could be another mega cap the eu has deemed a gate keeper. investors don't seem to be worried, not that they have been in the past. both apple and microsoft shares are higher since the charges, but they might want to take note, this could be a new chapter european regulation that it's quicker, more nimble and could lead to tens of billions in fines. under the dma, gate keepers could be faced up to 10% of annual revenue, that could be $21 billion for microsoft. for apple, almost $40 billion. alphabet, meta and amazon, these are the other gatekeepers they're taking t. their fines also potentially tens of billions. the largest fine ever imposed by eu regulators on a tech company so far, only about $5 billion in 2018 against google.

and that was kind of thought of as a parking ticket back then, not hugely significant. so we're talking much larger here. this is a worst case scenario. apple and microsoft will have the chance to argue its case and propose commitments to avoid those potential fines. but kelly, there are some early signs that tougher regulation and the threat of these massive fines are already having an impact. apple, for example, would block the release of gen ai features to the eu due to the dma and some security concerns. so it could ironically put european consumers at odds. or at a disadvantage. >> i'm sure that's precisely what it will do. if microsoft said we have teams installed but you can literally get on the internet and use zoom or google, what have you, i'm sure that's the case they'll try to make. it's not that hard. >> yeah, they're not hitting

back with a statement saying we've done nothing wrong, saying basically they're making changes. both microsoft and apple have said that, you know, they're making these changes that will comply with the dma. but in the example of apple, it's interesting that they're withholding features. some think that's a hostile move that they're doing that to hit back at regulators. >> right. or to say okay, we can play hardball, too, basically. deidre, thanks for now. deidre bosa. coming up, it's shaping up to be the summer of sales. amazon announcing overnight that the prime date is returning july 16th and 17th. target revealing its circle week with savings up to 50% off. and mcdonald's revealing it's $5 meal deal yesterday. but as restaurants lower prices to entice shoppers, piper sandler expect one item to surge e alt d e stores. thanysanthstory behind that call.

>> i had 20 years of experience as an hr professional and i had reached a ceiling, so i enrolled in umgc. i would not be the person that i am today had it not been for the partnership with umgc.

okay, team! oh, thank you so much i couldn't have done it without you. honestly, i don't do a whole lot here. i'm really just here for the at&t internet, it's super-fast so, any pre-launch concerns? what if nobody buys them? that's mean or, what if everybody buys them? oh, i hadn't thought of that that's probably not gonna happen can we handle that kind of traffic? the network can handle it! i downloaded eight hours of true crime stories just during our last video call i'm learning a lot

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welcome back. we have our eamon javers with new developments in the big cdk global hack. what can you tell us? >> disappointing news from cdk global. they make automotive software used by dealerships to process their sales and their service departments. cdk global sending out a notice to the customers this afternoon saying we do feel it's important to share that we do not believe that we will be able to get all dealer's live prior to june 30th. should you need to make an alternate plans for your month-end financial close process, you should do so. so, that will be frustrating to hear by the thousands of auto dealers that use cdk soft war hit so badly by this cyberattack that began a week ago. now they're being told that might not be up and running for the month-end close process, which is so important in that auto dealership space, as you know, kelly. a lot more on all of this in the next hour. as you know, we'll talk to a dealer, a cybersecurity expert live from a big auto dealership

conference in georgia for all the fallout on this and how it's impacting the industry. that's coming up in the next hour, kelly. >> one of the dealer stocks auto nation down as well. thank you. we'll see you soon, eamon javers. walmart ceo sounding cautious saying not every quarter is going to be as good as the last one. and the current quarter has been the most challenging so far. that has walmart shares down 2.5% today. but as retailers seek to inknow vise and incentivize a slowing consumer piper sandler sees one particular bright spot. writing in a new note, this east coast heat wave san ideal selling environment for window ac units. it's a big ticket item. that was our mystery chart all hour. the shares climbed 19% in june. is ollie's two hot to ignore right now. let's talk to peter keith. it's great to have you. the only thing i ask -- i shouldn't ask this first but i can't help the climb in the stock this month, is this quite

interesting angle already priced in? >> well, i think it's gotten some appreciation. the company did talk about having a tough compare from july last year when there was a heat wave, selling acs. so, when they said a week or two later we have this heat wave. i think there was some expectation of acs doing well for them. but it's really just a value proposition that ollie's has right now. walmart taking things down. close-out retailer is very well positioned with the discount it provides to consumers. we look on average 40% discount on branded items. >> wow. >> to both walmart and amazon. so, we think the fundamentals overall at ollie's should remain strong the rest of the year. >> this is a sub theme, the idea that consumers are seeking out those deep discounts, not 10%, 40%. when they have to buy something

like a window ac unit, more or less under duress, ollie's is the place they're heading. >> sure. yeah. at ollie's we just check the prices. it's 300 dollars for a window ac unit. so if you can save 10, 20, 30%, it's still a brand new item. it's just that ollie's is able to get a good deal because they buy overrun merchandise. so, you're getting brand name, new items, but at these very healthy discounts and at a $300 ticket at 20% off is a very attractive to consumers. >> i also wonder, and you explained why it might not be, is it delutive, they sell at the rock bottom prices sit a loss later or can the company still make money on that? >> well, this is kind of what the company does. they are a close-out retailer, much more so of hard goods. t.j. maxx or ross stores specializing more in apparel. they have healthy margins.

ollie's has healthy margins but more like electronics and housewares, hardwares. ac may be lower margin for them, but they are a close-out specialist. so i'm sure this is not -- won't be a margin mover for them for the quarter, even if it does become a nice driver. >> raising your price target to 107. one of the little guys as everyone says the big will keep winning in the age of ai and everything else, here is a smaller stock play. thank you for explaining. we appreciate your time, peter. >> thank you, kelly. >> peter keith with piper sandler. jim cramer is giving his take on the stock tonight on "mad money" at 6:00 p.m. don't miss it. that's it for us. tyler is getting ready for "power lunch." ts icbrth se on the oerid ofhiquk eak. at enterprise mobility, our experts always see another road. because when there's no limit to how far mobility can go, there's no limit to how far businesses can go. (♪♪)

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♪ good afternoon and welcome to "power lunch," everybody. alongside kelly evans, i'm tyler mat mathisen. glad you could join us. the dow is lower but tech stocks are bouncing back thanks to nvidia. auto dealerships are not. many are still struggling with the effects of a crippling cyberattack. we'll hear from a dealership owner and a cybersecurity expert for the industry. and delta is opening a fancy new lounge at jfk. we'll talk to the company's ceo about efforts to attract higher-end customers. but first, let's get a check on the