[crowd chanting] they ignored your potential, and mocked your ambition. but it's not the critic who counts. with every swing and block, your game plan never changed. ♪♪ some still call it luck. let them. because you know what it's always been. inevitable. ♪♪ ♪♪ ♪ good afternoon, everybody, and welcome to "power lunch." alongside ellie evans, i'm tyler mathisen, and we will get to that presidential debate, but

let's start with the markets. the nasdaq and the s&p 500 did hit new record highs earlier in the session following some inflation data called the pce showing that inflation is still rising but slowly. and as expected. and as we wrap up the first half of the trading year, look at the gains for the major averages. okay, 4% on the dow. 15% on the nasdaq, and nearly -- i'm sorry, for the s&p, and nearly 19% for the nasdaq. and dragging on the dow today is that big drop in nike, which is costing the index more than 120 points. goldman, caterpillar, unh, helping to balance out nike's negative impact, so let's talk more about the set-up as we now, believe it or not, head into the second half of the year following a great and epic first six months. let's bring in david, chief market strategist at turtle creek wealth advisors. who's the turtle, who's the rabbit for the back half? >> you're right, kelly, it's been a very strong first half. if you told me at the beginning of the year, when expectations were for six rate cuts, and that

we would get through the middle of the year with no rate cuts and that expectation falling to one, there's no way i would have said we'll be up 15%. the key has been earnings growth. that has been the key, and that's very good to see. historically, earnings do drive the market, and fundamentals drive the market, but what we've seen since 2008, it's been monetary policy, and i feel like we've gotten way too dependent on monetary policy, so earnings growth is driving the share, earners are outperforming nonearners for the first time since 2021, and in the second half, i think that continues, and there's a lot of tailwinds for this market that i think will continue to drive stocks higher. >> tailwinds like? >> well, tailwinds like liquidity, tyler. we've seen deficits increase for the u.s. government, so they're going to have to issue more treasurys, so that increases liquidity. the market generally responds well after a presidential election, so we're likely to see a rally in the fourth quarter. and the disinflationary traction continues. you mentioned the pce data.

the disinflationary momentum continues, and we're likely to see a fed rate cut in the second half. all that bodes well for stocks. >> so, soft landing, rising stocks? >> absolutely. and again, the beginning of the year, that was a tough bet, but where we are today, given how strong the economy continues to be, and inflation continuing to fall, that's very much a likely scenario, and that's good for earnings growth. that's good for stock prices. and quite frankly, don't overlook bonds with rates continuing to be at an elevated level relative to where we've been. >> what happens to nvidia? second half like the first? >> well, you've seen nvidia tail off a little bit. i think the valuation got a little ahead of itself. but one of the things that really has been the key for nvidia has been earnings growth. it's been a.i. and the exposure to a.i. and that tremendous earnings growth that nvidia's

seen. i would rather own other companies that can benefit from the same trends, like broadcom, that's trading at a much more reasonable valuation. broadcom is trading at about 25 times next year's earnings, still going to grow 15 to 20%, has that exposure to a.i. i think that's a better place to be than a company like nvidia that i think accounted for about 35% of first half gains. there's other things you can do to benefit from a.i. but i wouldn't put it past nvidia continuing to go higher. i mean, that's a bet i don't want to make at this point. >> you also like consumer discretionary. give me some examples. >> one of the names we like, tyler, is costco. admittedly, trading at a very premium valuation, but think about where the consumer is today. inflationary prices are still hurting the consumer. they need to be able to shop some place where they can get a good value. costco is that place. i can tell you for a fact, my 93-year-old father shops no place else, and he is very much a value buyer. costco also saw a significant

increase in re-enrollment of their membership. in fact, the highest we've seen was last quarter. it's another revenue stream most of their competitors don't have. >> it is expensive, though. it's ironic that we talk about what's happening with nvidia or broadcom. i think is costco 50 times still, or has it come off that? >> it's still trading pretty close to 50 times, kelly, you're right, and it's grown at about 10%, so that really doesn't jive, but at the end of the day, consumers have to have their staples, and quite frankly, costco saw some pretty good discretionary sales in the last quarter, but they've got to have their staples. i know we've seen walmart have some pretty poor results, but costco continues to chug along, and again, we've got to shop some place. we've got to get our staples some place, and costco is a place that we think will do well in that environment. >> it's like my mother-in-law, she's cheering the tv right now, saying, i told you. i should have bought the stock, not the membership. but i can't. david, thanks so much for your time. we appreciate it today.

>> thank you. bond yields falling slightly after that inflation data that came out this morning. rick santelli's been following the market all day long as he always does. hi, rick. >> hi, tyler. indeed, they did fall, but the story changes. there's a big u-turn. let's start at the beginning. you expressed it quite well at the top of the show, tyler. we still have inflation. it's just that it's growing much more slowly, which is a good thing. now, if you look at intraday and put twos and tens on one chart, appro the fed, much more responsive to any good news on inflation moderating because of the implications of the fed affecting it more dramatically than long maturities. if you put a two-year, something should jump out at you. the long end, the orange/red chart, you see is above yesterday's high yields.

short maturities, not quite. and if you open it up to one week, it is quite revealing. we had a two-year note option, which had a negative role, meaning the new guy, the on the run, has a higher yield than the off the run, but that's because it is important that these metrics are responsive to current conditions. and what you see on a week-to-date chart is that two-year notes are virtually unchanged. i'm sorry. lower yield by about six basis points than the two-year that we now have is off the run. so, 4.71% is unchanged, but look at ten-years on the week. they're up eight basis points. they said last week, right around that 4.26% mark, which is virtually the low of the session. big u-turns there. why u-turns? i think mostly because end of month, end of quarter, end of half year, and if you look at how much lower inflation is and how much lower yields are and how much higher bond prices are,

usually you see the adjustment reverse those, just like in equities. equities had a good month, quarter, half-year, and to adjust for that, you have to go the opposite direction to reload your positions. so, some of this is going to disappear, but also remember, earlier in the week, we basically were at minus 50 on twos to tens. right now, they're at minus 37. just to show you how the realignment of short and long maturities has made such a big move this week. kelly, back to you. >> wow. rick, thank you very much. rick santelli. turning to the debate last night and the focus not so much on what president biden said but the way he said it. his health and the possibility, even, of him not running. what had always been out there seemed unlikely, but is it more realistic today? let's bring in eamon javers now for more. >> kelly, what a difference a day makes. we justi saw an entirely different joe biden at a rally in raleigh, north carolina.

he was energetic, did not give the impression of somebody who's at all considering dropping out of this race. he did, at one point, acknowledge the reality of his disastrous performance in the debate last night, but he tried, at some point, to turn that into a bit of a rallying cry for his loyal supporters in the crowd. take a listen. >> i don't want walk as easy as i used to. i don't speak as smoothly as i used to. i don't debate as well as i used to. but i know what i do know. i know how to tell the truth. i know right from wrong. and i know how to do this job. >> after you heard biden there saying, "i know how to do this job," we saw the crowd rallying to his support, saying, "yes, you can," an echo of the

obama-era chant, "yes, we can." the question now for the democratic party is, what can they do? there's a number of scenarios here after that very poor performance last night from biden, starting with just simply gutting it out. that seems to be the most likely scenario as we sit here today, given what we're hearing from democratic party leaders and the president himself. it avoids chaos at a convention, gives biden time to stabilize things. it does risk going into a general election with a candidate who's seen by the public as unfit to serve, though. another option is force him out. some kind of hostile challenge to biden to try to win over the democratic voters at the convention on the convention floor. that could accelerate the campaign of a successful challenger, but it really risks hard feelings, protracted struggles, a divided party. that is, by far, the least likely scenario here. and the one with the question on it as we come to the end of the day today is a graceful bow-out by biden, a chance for the democratic party to pay respect to a president they have

admired. even that, though, is a bit of a messy scenario, because that risks a messy internal struggle over red-hot issues like gaza. we saw at the rally today, in raleigh, we saw one heckler trying to heckle the president over the issue of gaza and israel. that is a huge split inside this democratic party that the president has been able to keep a lid on for now. if the president were to go and open this up to a food fight among other democratic politicians, you could see that split, among others, reaching a fever pitch. not at all clear what democrats will do today. elected officials so far today have been expressing their support for the president. we'll see what happens. >> the graceful bow-out -- the time for the graceful bow-out was probably a year and a half or two years ago. >> it might have been october, right? >> exactly. has he got rocky in him? that's what it's going to take. he's got to channel his inner ro rocky. >> yeah, you saw him trying to do that today in north carolina. this speech today was absolutely

make-or-break moment for the president to show his party leaders that he's still up to it. he was -- he was loud. he was convincing. you see him there walking on the stage with dr. jill biden in her "vote vote vote" dress. this was all the hallmarks of a campaign rally showing that the president still has the energy to do this job. the question is, you know, whether elected leaders in the democratic party feel that this is the horse they want to have in the race in november. and if it's not, is there anything that they can really do about it? a lot of this is so psychological for joe biden and sort of what's in his mind at the end of his career facing his own mortality, his own ageing, all those things are deeply psychological, deeply personal. it's not clear who else could weigh in, in any way that would have an effect on him. >> what do i know? i would put the possibility of him pulling out at very, very low at this point. >> very low. >> very, very low. >> yeah. >> eamon, thanks very much. i bet we'll be talking about this again. >> i bet we will.

coming up, the a.i. haves and have notes. big tech sprinting into the second half of the year, but those names, not betting on artificial intelligence, are limping, more on that in "chte check" when "power lunch" returns here on cnbc. >> university of maryland global campus is a school for real life, one that values the successes you've already achieved. earn up to 90 undergraduate credits for relevant experience

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with the first half of a very good year for the markets so far coming to an end, we asked investors, strategists and our own cnbc contributors for their thoughts and the results from our delivering alpha survey tells us it's still all about tech. their biggest investments right now, almost half said big cap tech was their top holding, followed by energy, but they admit they don't love this dynamic. 80% say the fact that major indexes have become heavy with a few stocks makes them nervous.

80% say, i don't like it. kate rooney has more on big tech's domination so far this year. >> mega cab tech has dominated the market, but investors are describing this as a split between the a.i. haves and have not. once loved software names, mongodb, snowflake, those are considered the have notes. you can see it clearly. then you look at mag seven. really, aside from tesla, having a banner year thanks to the a.i. story and really strong earnings growth, especially nvidia, topping $3 trillion this year. amazon joining in the $2 trillion club this week. it does really come down to i.t. spending, so enterprise customers, they're feeling the pressure to bulk up their own a.i. offerings and with smaller budgets for the rest of software out there. gartner, for example, sees spending growing 8% when it comes to i.t. this year, but mostly for generative a.i., calling it a gold rush level of spending. we are seeing the same dynamic out here in silicone valley.

a.i. start-ups are really the only ones people talk about. according to pitchbook, they're the ones bringing in all the money. they represent 45% of so-called unicorns. those valued above a billion dollars, and they account for over 60% of the recent added value. mega cap tech is really full circle. they're also investing billions in the hottest start-ups out here, anthropic, openai. that pushes up prices and makes it harder for the normal venture capital group to get into those deals. some are hopeful that this dynamic, the haves and the have nots, at least in public markets, they think that's going to shift into the back half of this year, mizuho pointing out a breakout move in the igv says that for a sector that's been out of favor, june has been a revival, and they say clearly, semi money is rotating out of semis and into software and internet. we'll see if that continues, guys. >> kate, thanks very much. you better have a.i. in your initials somewhere. thanks a lot. coming up, surging insurance costs, majorly hurting the solar space. we'll give you the details when we return.

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welcome back to "power lunch." stocks right now, as you see, with the slightest of gains. excuse me, of losses. the dow has turned gains into losses with the industrials still above 39,000. meantime, insurance costs are going up for a lot of things lately, but the solar industry has had to pause projects as a result. pippa stevens here to explain. >> hey, tyler. as solar energy becomes ever more popular, arrays are being put in places with more extreme weather, putting panels at risk. because of that, insurance costs are becoming a really big problem for solar developers. in some places, they've kwa gr quadrupled over the last five years. this is especially true for hail insurance since hail can have devastating impacts on solar farms. in the last five years, the number of hail-related claims has been low, about 1.4%, but it's the costliest category at roughly 54% of insurance

payouts, according to g-cube. not only have insurance costs risen, but underwriters are offering less coverage and lenders require comprehensive policies to protect their investments. insurance is now often the highest operating cost at a solar farm, and i've spoken to several developers who are pausing projects because of the cost. now, the industry is taking action to protect panels, including putting them in what's known as stow mode ahead of a storm. that's a 75-degree tilt so damage one's from nextracker. a lot of this depends on the developer's size and where the project is. >> that's fascinating. you show some of those pictures. the damage is big on those things. >> yeah, imagine, you're out in the middle of a field. the panels that are made of glass are pointly diing directl. there were a couple instances of total wipeouts, so insurance companies say, we can't be the underwriters. we can't bear all of this. they've changed their deductibles and coverage. >> what kind of insurers write

this kind of insurance? are they specialty insurance, or are the ones we know and would be household names? >> it's ones you've heard of, chubb, aig. but one issue is that this requires specialty knowledge. you have to have very sophisticated weather patterns, things like the size of the hail makes a massive difference on how much damage is done. so, we've also seen companies like kwh, new and up and comers, who specialize in this, and they can then advise the insurance companies and recommend which projects to underwrite, which ones to steer clear of. >> this is going to be an unfair comment, but you sometimes wonder if the whole solar thing is just a massive waste of capital. the intermittency issue, which can never be solved until the batteries get online. i don't know. maybe the costs are coming down so much that this is really, truly becoming another great back-up option, but is it still an open question? >> i think the issue is that the easy projects have been built. so, where it made the most sense, where there was no risk, those ones were the first ones, the early adopters, and now

we're getting to the next stage, where we're trying to push the needle, get more online, but with it comes, maybe you're in a convective storm area but there's no other option, so they're still developing it. >> not to mention the land space required for a really big installation. these things are football-size. airport-size installations. pippa, have a good weekend. get some sun. let's get overto kate rodgers for a cnbc news update. >> hi, tyler. russian president vladimir putin today called for resuming production of nuclear capable intermediate range missiles. they were banned under a previous treaty with the u.s. signed by president reagan and myk gorbachev in 1987. the trump administration withdrew from the treaty in 2019, citing russian violations. the biden administration today announced new temporary protected status to more than 300,000 haitians who arrived in the u.s. on or before june 3rd, saying it's meant to shield

those who entered illegally from being sent back to haiti amid growing gang violence there. and the texas supreme court today refused to block a gop-backed state law banning transgender minors from gender-affirming medical care such as hormones and puberty blockers. in an 8-1 vote, the court rejected arguments by families with transgender kids that that law deprives parents of their right to make decisions about their children's care. kelly and tyler, back over to you. >> kate, thank you very much. coming up, growing criticism against pharmacy benefit managers, claiming these companies, these middle men, drive up the cost of drugs for millions in the u.s. we'll debate when "power lunch" returns. tamra, izzy and emma... no one puts more love into logistics than these three. you need them. they need a retirement plan. work with principal so we can help you with a plan that's right for your team. let our expertise round out yours.

welcome back to "power lunch." as we mentioned at the top of the show, united health is helping to boost the dow today, and at least one analyst is actually pointing to last night's debate as a potential positive for the company. bertha coombs is here to explain. >> the big medicare advantage companies appear to be getting a boost from last night's debate,

saying president biden's weak performance is boosting sentiment around the prospect of an easier regulatory environment for the group under a trump administration. humana and cvs especially have faced pressure on changing medicare reimbursement rates and quality ratings on their plans. cigna, which is more focused on commercial plans, has outperformed this year as a result, but hendricks says a federal trade commission under a second trump administration could pose less of a headwind to m&a. recall that cigna had reportedly looked to buy humana, but cigna, united health also faced regulatory pressure over their pbms and how their business models impact drug prices. that's not just coming from the ftc under lina khan. there's still a lot of bipartisan support in congress to try to rein in their businesses as well. tyler? >> all right, thank you very much, bertha. those pbms are under fire for

their perceived role in the alarming rise of prescription drug prices in america. according to new data from goodrx, the cost of prescription meds has increased almost 40% over the past decade. the price hikes have slowed a bit this year. the average american spends about $16 out of pocket per prescription. a recent "new york times" investigation says pharmacy benefit managers or pbms are largely to blame for those rising drug costs. critics argue there are positives to pbms as well, which act as middlemen, but they say improvements are still needed. here to weigh in is dr. scott gottlieb and david fields. he is ceo of a pharmacy benefit manager partly owned by costco. gentlemen, welcome. dr. scott gottlieb, let me just begin by sort of disclosing my bias, and that is that it seems to me that an awful lot of the

health care, insurance, and coverage system is cloaked in opacity and intentionally so. and nowhere more so than in pharmacy benefit managers. they profit, i think, because they keep things behind the curtains and opaque. am i wrong? >> no, i think there's fairness to your analysis there. i think there's ways to bring more transparency into this market. i think we need to start a discussion around pbms with first acknowledging the benefits they provide to the system. they do extract significant discounts from the drug makers that might not exist without their purchasing power. they also provide medication therapy management, which helps patients understand their medications, drug utilization review, which makes sure patients aren't exposed to unintended side effects. they maintain patient assistance programs. the problem is the way that the discounting happens in the marketplace is through back-ended rebates, so what

happens is the pbms negotiate with the drug makers to extract discounts. those discounts are paid in the form of rebates that are paid after the transaction takes place, so if you're a patient and you go to the pharmacy and there's a thousand dollar medication, the medication is lists at a thousand dollar list price, so take, for example, the weight loss drugs we've talked about, the pbm might have negotiated with the drug maker for a $500 rebate on that drug, but when you're at the pharmacy counter, you're going to pay $1,000, and your insurer is going to pay $1,000. your co-pay is going to be $200 if you have a 20% co-pay. later, the drug maker will pay a $500 rebate back to the insurance company. so, the actual cost to the insurance company was $500. what the drug maker got paid was $500, but what the patient paid at the pharmacy counter was $200, and those rebates, when they go back to the insurance company, the insurance company typically doesn't give it back to the patient. they use those rebates to pay down premiums.

there's heavy discounting, but those discounts aren't always flowing back to the patients who are out of pocket for the cost of their medications. some pbms like cvs and others have launched initiative to try to get the rebates back to the patient at the pharmacy counter, through their true cost initiative and other pbms are doing this, but employers who are ultimately responsible for setting those contracts, they like the rebates, because it allows them to offset other costs in their administration of their health benefit. so, they don't often engage in the contracts with the pbms where the rebates would go back to the patient. and that's the problem. there's also policy fixes. i'll pause here, but there's policy fixes i think we can implement to bring more transparency into what's being paid to whom. that would collectively, i think, put pressure on many of these practices that you outlined at the top of the set. >> as always, dr. gottlieb, you've given a very thorough answer here, but i think you've kind of made my point. my head spins at what you just described there. i can't quickly do the math on that. david fields, i'd like you to react to what scott said.

it seems to me that whether or not the pbms have the -- one of which you run -- have the salutary effect of extracting a bigger discount from a drug maker, what is the incentive for the drug maker not to raise the price higher and higher and then give yet another bigger discount back to the pbm? in other words, if i'm a pbm and there's a -- and dr. gottlieb's case, there's a thousand dollar drug, and i'm getting a $500 rebate, why not price the drug at $2,000 and give a thousand dollar rebate back to the pbm? >> well, tyler and kelly, thank you for having me on today. dr. gottlieb makes a lot of really great points in his commentary, and in fact, the traditional pbms do drive up the cost of medications. they have no incentive to deliver the lowest cost to their customers, and in fact, the more

rebates they can generate, the more that they can keep a percentage of that. >> that's my point. the incentive there is for them to keep the price going up so that the -- so that the rebate, the fees that they get that they may or may the no pass back to consumers, are higher. your pbm is different, though. explain how. and what the transparency difference is and the rebate policy. >> our pbm was founded 22 years ago for the express -- it was founded by disaffected customers of the big three pbms. it was founded on transparency. it was founded on passing through all rebates and fees and retail discounts back to the customers that generated them. the important thing is that the traditional pbm model is very much like a casino.

they set the odds. they set the rules. they set the definitions, and it's virtually impossible for a -- for a customer to reap the benefits because the traditional pbm steps in and takes part of that. so, our business model was founded by customers who wanted that transparency and wanted to get rid of the opacity that exists. >> dr. gottlieb, i'm struck by what mark cuban is trying to do in this space to basically, again, kind of drive out old system and maybe replace it with something newer and more transparent. are we overdoing it? i don't know whether to call it stockholm syndrome or something, but even looking at walgreens' results this week, they didn't go the pbm route. the company is clearly struggling as a result, so the ones who did go that route are being rewarded, albeit perhaps for the wrong reasons, as it never improved the consumer experience or lowered price. >> with the current structure that we have in place, there's a lot of ways to make money. it's not just the rebates but

also fees that get paid. there's a lot of discounting in the marketplace, and we often talk about the list price of the drugs but not the net fries of the drugs, and net price is often much lower, especially in competitive spaces. but the problem, again, is that those discounts aren't always flowing back to the patients that are out of pocket for the cost of their drugs, and the other players in the system have preferred the rebate structure. the employers like that rebated money, because they use it to offset other costs to lower their premiums, which is important to them, so that most of their members have a lower cost product, even if the patients that are out of pocket for the cost of the drugs face higher costs. the drug makers, oftentimes, as much as they decry the rebates, they like them when they're using them to buy access to a formulary. they say, we'll pay the highest rebates if you put it in a preferred tier in your formulary. because a lot of players in the health care system are benefitting from this structure, the structure stays in place. i think there's ways we could put pressure on these arrangements so more of the contracting goes towards things like what cvs is doing through their true cost initiative where the rebates and discounts that are being acquired in the

marketplace are going back to the patients who are out of pocket for the high cost of those medications. i don't think we need to blow up the current system. i think the pbms put a lot of pressure on the drug makers, and i say that as someone who's been around the drug industry for a long time and continues to be. they put a lot of pressure on the drug makers to lower their prices, but the discounts aren't benefitting the patients who are paying for the highest-cost drugs. i think what mark cuban is doing is outstanding. it's largely affecting the marketplace for generic drugs. he's providing a low-cost option. i think there's things we can do to make sure that when patients go into the pharmacy to purchase a generic drug that's paid for under a pbm contract, they're not paying a higher price. right now, the pharmacies are sometimes reimbursed on a basket of generic drugs, so even if overall what the pharmacies are getting is a fair price on all their generics, certain generics might be higher cost to off -- lower cost to offset the cost of another generic drug, and the patient, again, who was

purchasing a generic drug at the pharmacy counter might be facing a very high cost. >> we have to leave it there, gentlemen. it is a deep and woolly topic, and we appreciate your efforts today to try and brush away some of the wool. i think we can all agree there's a lot of gaming going on from lots of different sort of vectors in this space. gentlemen, thank you once again. dr. gottlieb and david fields. we do want to mention we reached out to cigna, cvs health, and united health group for comment on that "new york times" investigation. they own the three largest pbms. we are awaiting responses. coming up, the nhl draft going big and heading to vegas to be the first sports-related event at the sphere. we will speak to the nhl commissioner about that next. before you use ai

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inside the sphere in las vegas. joining us to talk all things hockey is commissioner gary bettman and our vegas and gambling correspondent, contessa brewer. you've been to the sphere. >> i have. it's amazing. i can't believe the hockey draft is going to be there tonight. >> yeah. commissioner bettman, you have had a busy week. you had a thrilling game 7. i guess i can't remember what night it was. maybe monday night? florida won the cup from edmonton. the ratings were really good. >> it's a great time to be at the nhl. what takes place on the ice has never been better. people are saying competitive and aesthetically, we may have had our best season ever. business is booming. ratings are great, and we're in vegas. we celebrated our awards last night with the special show, and being here in amazing, amazing company at sphere of vegas is just simply incredible, and what i think we're going to show for what's typically a business meeting is going to be nothing

short of dazzling. >> i mean, what's really remarkable is that this is the first time the sphere will have anything sports-related and the first live event coming from the sphere, and the very first time that what's happening inside the sphere is actually broadcast on the outside of the exoskeleton. what does hockey and the draft get out of that, commissioner? >> all the attention, including what we're discussing now. actually, it's a testament to james dolan and his vision for sphere. the crew here at sphere has been incredible, and our own events people, headed by steve mayer, have really gone to school on figuring out how to make this work and make it a lot of fun, both for the people who are going to be here in attendance, and people who are watching from afar. >> look, i was covering gambling when the supreme court overturned paspa, which then cleared the way for the states to embrace sports gambling. as soon as that happened, you were about first in line to say,

yeah, okay, sign us up. you got the knights in vegas, the hockey franchise that's happening there. but now, all of a sudden, we're getting a lot of headlines about professional athletes and referees and others associated with sports involved with gambling in ways that are calling into question the integrity of sports. how do you look at how that impacts fan enthusiasm for the sport? >> actually, sports betting, for those who want to participate, create another connection point to the games that people are fans of. what's happened with legalized gambling is that the monitoring of betting, which was going on illegally, is much more rigorous. we have had one incident, and it had nothing to do with betting on our games. it had to do with not adhering to the protocols that the online companies want you to adhere to. and we disciplined the player,

but it's about education, and we have complete confidence in our personnel, players, officials who's involved with what takes place on the ice, and it hasn't been an issue for us, and we're intent on making sure that it's not an issue, but the difference between legalized and nonlegalized, it just means we have a better opportunity to supervise and monitor what's going on. >> let me ask a little bit about your television situation, because obviously, that landscape is changing. i watch your games on espn and turner. i guess it's tbs. that's where i find them. are you going to branch out into the streaming services? maybe you already have, and i don't know it. talk to us a little bit about -- >> we already have. >> go ahead. >> our first -- our first arrangement that involves streaming was ten years ago in canada with rodgers where we granted streaming rights, and our current arrangement with disney, espn, and abc and espn+

involves our out-of-market package being included inside espn+. what we did, we think, was extremely consumer friendly, because we took our stand-alone out-of-market digital package and merged it in at half the cost when you subscribe to espn+ as one of their services. viewership has increased dramatically. not just over the air because of how well espn has been taking care of us, but also with respect to the digital engagement that fans are doing through espn+. so, this has been a win-win for us and for disney. >> is it just random? or is there some reason behind the fact that no canadian team has won the stanley cup in 28 years or something? >> i -- well, the first time i gave out the cup was in 1993. that's how long i've been doing this, and it went to the

montreal canadiens. there are those who think there's some conspiracy going on, but i assure you that there isn't. you know, who wins the cup is a function of how well the players play, the team is put together, the team is managed and coached, not where your geographic location is. >> it was a thrilling finish to the season, the edmonton team, oilers, almost came back there from three games down to nothing and lost 2-1 in the final. commissioner bettman, thank you. >> and the view. >> go ahead. >> great. and the viewership for game seven was simply off the charts. and it's gratifying to see our fans gravitate to the game the way they have been. >> awesome stuff. gary bettman, thank you. >> that shot is so amazing. can you imagine when they put fighting in there? they have corporate events in that space. hp just did a big corporate event in there. that sphere is unbelievable. >> you got to give dolan credit. it's really -- game-changer. wow. still to ce, wll gome'et the

trade on nike and other key movers in three stock lunch. we'll be right back. >> university of maryland global campus is a school for real life, one that values the successes you've already achieved. earn up to 90 undergraduate credits for relevant experience and get the support you need from your first day to graduation day and beyond. what will your next success be?

welcome back.

it is time for three-stock lunch. eva ados is coo and chief investment strategist. we have to start with nike. shares are having their worst day ever as a publicly traded company, down 20% after that revenue problem and disappointing guidance. they expect sales to drop 10% in the current quarter. eva, are you a buyer? >> nope. >> okay. >> unfortunately it was once a great entrepreneurial company, now it is a tired brand, we're sticking about flat growth as of now and now negative up to 10%, negative 10% as you mentioned. and most importantly there are profits that have come down since covid and we're speaking about an area, a category that is traditionally slow, very, very flat industry, very unexcited. new upstarts, young companies such as on branding or hoka, they're taking away market share from nike and unfortunately, it

is a bleak outlook for them in the future. that's what we're predicting. >> wow. a tired brand, nike. wow. that is -- that is really -- that's harsh, eva. but, good. that's all right. love when you say -- you go at it. let's talk about chewy. that stock dropping just today after roaring kitty's dog post -- >> phrases you never thought you would have to say. >> roaring kitty -- shares have risen as much as 34% following the dog post from roaring kitty. what is your trade on chewy? >> i'm buying it. it is a meme stock now at this point, but we actually own it, and there is 20 million shares that are being shorted, but there is plenty of liquidity. most important what we like is the company -- the stock is well off its highs, its covid highs, but back then they were not profitable. now the company is making money and the growth is significantly higher than its peers, 70%

compared to flat for the rest of the category. and relative valuation, they are completely aligned. it is exactly on the industry average, and so when you have revenue growth that is higher and relative valuation that is in line, we're speaking about an industry that is -- that we have millennials especially getting more into owning pets and we saw this trend starting during covid. i think the outlook -- the outlook is good for them. >> people will spend on their pets. that is for sure. >> she's jumping on the meme trade, interesting. for our final name, we asked you to give us your top pick for the second half and of all the stocks in all the world, you chose arista networks. why is this one a strong buy? >> so, it is an alternative a.i. play, a company such as nvidia. and what we like about them is that there are many companies speaking about a.i., there are many companies saying -- claiming they use a.i. to

improve their margins, but there is not really any evidence when you look at their fundamentals. this is a company that sees margins imfprove from 31% to 41. revenue growth is 25% compared to negative 1% for the category. and the most revealing statistic of all is that their ebitda growth is 39% compared to negative 10% for the category. so this company, such as nvidia, are one of the -- a few examples we see globally of companies that are able to take all the market share away from tirhe competitors and grow in an exponential way. >> eva, thank you very much. have a great weekend. we appreciate it. and we'll be back with more on the markets. go deeper with thinkorswim: our award-wining trading platforms ♪♪ unlock support from the schwab trade desk— our team of passionate traders who live and breathe trading. ♪♪ and sharpen your skills with an immersive online education

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so we checked the markets. the dow has gone from the green as you see on that chart for much of the early part of the day, now moving deeper into the red.

up about a third of a percentage point. nasdaq is down .2% or 36 points. up 18% so far for the year. there is a comprehensive look, the big three, the dow, the s&p, nasdaq, all negative. russell, a little bit higher and there you see the yield on the ten-year at 4.34. >> we have gone negative on the trading session, but it is still very strong, very positive start to the year. yeah. have a good weekend. >> second half coming up. have a good weekend. thank you for watching "power lunch." "closing bell" starts right now. kelly, thanks so much. welcome to "closing bell." i'm scott wapner at the new york stock exchange. this make or break hour begins with a great first half for your money and the big question now, what comes next? we'll ask our experts over this final stretch. look at the score card, with 60 minutes to go in regulation, the fed's favorite inflation read was tame, no big lift though for stocks on the other side of that. the s&p and nasdaq did hit new highs earlier as technology once again led the way. but we are now r