t closer. daughter: (gasps) what the?! daughter: alright. dad: side to side. when you work with someone who knows a lot and cares even more... you can do this. ...you're unstoppable. (♪♪) wow... are you kidding me? you can do this. at truist, we believe the same is true for banking. ♪ good afternoon, everybody. welcome to "power lunch" alongside kelly evans, i'm tyler mathisen. glad you could join us. we're 24 hours away now from the fed's decision on interest rates and 24.5 hours away from jay powell's news conference. we're checking our watches here. we'll hear what our mock fed says the fed should do and what they would do if they were on the fed's open market committee. >> looking forward to that. before we do that, let's

take a quick glance at the markets. the nasdaq the worst performer again with down 1.3%. the dow is higher now despite being weighed down by procter & gamble falling 5 and 10%. goldman and united health are helping to counter the balance and impact positively. microsoft results due out a after the bell today. we talked about consumer spending during terning season. for microsoft it's about corporate spending on ai. will it continue? will it lead to profits? steve kovach joins us with more in today's tech check. >> those are all the big questions. nothing else to say. look, the pressure, tyler, is on for the magnificent sevens, cloud giants when they report earnings this week to show all the money they're spending to build out ai will pay off and like you said, it will start today with microsoft. the challenge here for microsoft, not to fall into the same trap alphabet did last week and ease investor worries that all those ai capital expenditures are going to be

worth it. cap-x has been increasing with the last year with microsoft spending $14 billion in the march quarter, but when it comes to the payoff of all that investment, things are a little less clear. two main ways microsoft is making money, selling ai services on azure cloud and co-pilot to consumers and large businesses. azure is getting the most ai action with a few percentage of azure growth coming from ai in recent quarters. but we don't know what that comes out to in actual dollars. azure co-pilot not seeing much momentum there while microsoft touts big customer wins, among the customers that is. there are very few signs companies are adopting it broadly. last week, morgan stanley research put out a report quoting major farmer cio who said co-pilot is too expense i have and too many concerns sensitive data will leak out. i heard several feedback from i.t. pros.

lots of testing going on in small groups of employees but ultimately they decide not to employee to everyone. investors have been okay with that so far as long as azure cloud growth continues its resurgence. the question tonight, how they react to cap-x, guys. >> yeah, well. that major question, we have some data points to maybe begin to figure that out, but earnings will say a lot. stick around, steve, megacap tech is in the red ahead of microsoft's earnings. look at these declines. microsoft down almost 2% and investors are on edge after disappointing results from alphabet. four other names in the mag seven are reporting this week. joining us is rob sanderson, covering amazon and meta and on set with us is daniel ives at wed bush he covers microsoft, apple and amazon. and it's greet have you here. >> great to be here. >> first of all. set the scene, talk to us the peak to trough declines. nvidia down 6% today. the rest of the big cap tech is

down a trillion dollars in market cap the past couple of weeks. what's going on here? >> it's the white knuckles that started last week in terms of tesla, alphabet on cap-x. but in my opinion, this is the week when we end the week, we're going to look back and say, the ai revolution, the monetization started. i believe -- if i look at all of our checks what we're seeing from microsoft, amazon, across software service, now palantir and others, this is the prove me moment for big tech. and that's why i expect gold medal performance from big tech playing out this week. and the -- if you look at the last 18 months, this whole bull market skepticism, haters have hated. as we have gone up. this is just another speed bump on what i view is a tech bull market that continues for the next few years. and this will be i think a pivotal, historical week for big tech starting tonight with dell. >> talk to us about microsoft, which is a stock you follow. then we'll turn to you, rob, in

just a moment. what are you expecting there? and what would be the red flag moment? >> sure. i think we're going to see upside in azure from a cloud perspective, intelligent cloud, that's really the source of the upside. pcs in a lot of other, that's really background noise here. i would actually expect not conservatism but actually pretty positive outlook going into next year about uptick from a co-pilot perspective what we're seeing in demand. you talk about red flag, cap-x is going to continue to expand. to me that is the right strategy. we're in an ai arm's race. that's what microsoft and alphabet needs to do. if there was a red flag, some sort of pause or hesitation in customers going toward co-pilot and ai. all of our checks around the world, we do not see that. i think this is a validation moment. i think it sends the bears back into hibernation mode. >> rob, that's the perfect place

to pick up on. if it's all just about spend and ultimately the supply side cost of things, okay, fine. if there's any sign that demand is weak, for instance, koe-pilot, just not delivering as much for cios as much as they like, that's a much different story. anything you can add there? >> yeah, well, i can't speak to the microsoft side of it on co-pilot. i would say the monetization on gains from ai at meta have been on going. this is -- they've been doing some really important work on their core ai. it's been driving monetization. they've been able to run much bigger algorithms because of the transition to gpu compute it's leading to much better content matching, better ad targeting and campaign automations through things like advantage plus. so, you know, it's -- the strategic gen-ai portion of their spend which is still up in the air and probably, you know, several quarters at a minimum away from any sights of monetization on that, i would echo some of the comments on

monetization for at least social media and meta and ad tech. it's already happening with pretty large degree. this is the cause of the major revaluation and acceleration in meta over the past year and a half. >> i suppose of all these stocks you could say that meta, apple, amazon, these are consumer stocks. rob, i want to turn to you. and dan to you as well because you both follow amazon. but rob, let me start with you. and talk about the consumer side of amazon's business. and we're beginning to see some sort of incipient signs that the consumer is getting a little less -- has a little less propensity to spend. are you seeing that? and how might that play out in the numbers that we see from an amazon? >> yeah. we are seeing the same signs that everybody is watching. and there's definitely some instances and anecdotes of

softening, at least around the edges. the question is how systemic and how deep. if we go back to some of the data we tracked on retail spending and e-commerce, e-commerce sales.org the u.s. census came in for 8% on the june quarter. it was 9% growth in the march quarter. this is completely in line with expectations. it's a softish environment for retail spending. i think everyone understands that and appreciates it. the month of june deceleration from the previous run rate is an asterisk that bears watching, but the quarter overall is about in line with what expectations are. for amazon specifically, their story in retail is about margin improvement and getting their cost of serve back in line. >> you got a buy rating on amazon and target of 225. it's now at 181. how about you, dan? talk to us about amazon and then why don't you pivot a little bit to apple, which is clearly a

consumer stock if there ever was one. >> in terms of amazon what will drive the stock is aws. it's about cloud, the perception, microsoft, google way ahead. them showing upside on aws and really the ai story. biggest cloud player in the world, how can they monetize ai, that's huge for the sum of the part. i think even pivot into apple, the ai revolution to date, god father of ai, nvidia, microsoft and that's really about it. the second, fourth derivative play out but the consumer ai revolution goes through the walls of cooper tina. cook, 270 iphones, iphone 16 will be ai-driven super cycle and speaks to my view despite the white knuckles we're seeing, it is 9:00 p.m. in the ai party. that goes to 4:00 a.m. >> i can't stay up that late. >> so let me just throw one

thing in there. these number on apple are looking backwards from march through june. >> correct. >> this quarter, june through september, this is not the upgrade quarter here. >> it is the last couple weeks will be. >> the last couple of weeks of this quarter will be. >> earlyish september and by the last week, week and a half in september -- >> but the next quarter. >> of the iphone sales. i want to go back to cap-x while we talk about apple. we learned something really interesting about apple yesterday. they're not out there buying boat loads of nvidia chips. jensen loves mark zuckerberg because he is spending ga zillions of dollars on these nvidia chips. apple disclosed in a paper, they're using google-made chip. they were renting chips from google for about 2 bucks an hour, times gazillion chips to train their ai models. they didn't need nvidia. it's a different strategy a

little bit what we're seeing from some of these other guys. they're training on these google chips and then they're doing what's called the infrimpbsing on their own chips, own servers they don't have to spend as much on cap-x. using the same chips ask siri a question, it's the same chip in your mac book right now answering that question for you in the cloud. >> you have 2.2 billion ios devices. apple has a unique advantage, no other company has. >> is there any reason to question whether it's output will be as good as using the best chips -- i don't want to say they're not the best chips, but is there any -- >> we don't know yet. it just released yesterday. >> shares -- >> that could explain a little bit of it. again, this is backwards looking. they've already trained them. presumably they're training more sophisticated models. but, yeah, that could be part of the thing hitting nvidia today, but it's unclear. >> to that point, this is not -- right now they're the only game in town.

but in terms of chips, you will continue to see this play out. this ai arms race starts. and i think today is just good news and validation. >> rob, let's tie it off here. we heard from google last week. we have meta and amazon coming up. those are the three stocks that you follow. which of those three would be your most investable choice today? >> i prefer amazon over the other two. i think that they have as i mentioned we're kind of in that inflection upward on aws. the gen-ai contribution is still building and has, i think, a lot in front of it. and they're in a kind of coming around peak margin, so there's a lot of earnings contribution there. u look, the recovery in the retail unit economics, i think the street is just getting this very wrong. there's a meaningful amount of incremental earnings power bringing the full illment network back to where it once was. you have both reasons to earn the stock on both aws and on the

retail business. >> there's a strong call for amazon. thanks very much, rob sanderson, dan ives and steve kovach, thank you. we're less than 24 hours away from the federal reserve's latest decision on interest rates or next decision on interest rates. we're going to hear from one of our mock fed members about what he thinks should happen with rates right now and what if he were a member of that committee he would say and do. "power lunch" is back in two. (♪♪) car, this isn't the way home. that's right james, it isn't. car, where are we going? we're here. (♪♪) surprise!!! the future isn't scary. not investing in it is. car, were you in on this? nothing gets by you james. nasdaq-100 innovators. one etf.

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♪ welcome back to "power lunch," everybody. ahead of tomorrow's fed meeting, it is time to check in with our own mock fed, our panel voted to keep rates steady this time, but just barely. split verdict here, four votes in favor of cutting, three on

the hold side. have i got that right? yes. claudia sahm and julia koruna doe now joining don peebles. we're joined by bill. always good to see you. so, if you were on the fed today or tomorrow, you would be voting to hold rates where they are. why do you say that? >> i think we're making too big a deal out of the rise in unemployment rate. after all, 4 to 4.5% is within the bounds of most people estimate where the natural rate is supposed to me. risk of slow down is coming from consumers. more and more households are having to get second jobs in order to make ends meet. we see that survey in employment numbers households are not growing employment very much but payrolls are. more and more people need that second job to make ends meet.

there we see the risk of a slow down. for me, the consumers are still going to be confident, they'll still be spending so long as we don't see lay off. right now we don't see any layoffs accounting for the rise in unemployment rate. that really makes the case that we don't need to rush and accelerate any kind of rate cuts and we need to make sure that inflation truly is on a downward trend and takes three to five data points in order to make that trend convincing. and so -- >> go ahead. finish your thought. i'm sorry. >> well, the case is really not so much when to cut but how much to cut. i think the real discussion is going to be where will target neutral rate be? and i think it will be much higher than where most people think. and that means that given the rise in the federal debt and the competition for investment funds, we may see some crowding out down the line. but that is yet to be priced in by the markets. so for me, the key issue is hold now because the downside risks are not there. but the upside risks for

inflation still remain. >> so, where are you on a cut at the next meeting which comes in late september? are you anticipating that you will go from the hold camp to the cut camp then? and what would it be that would -- in that intervening period, what would it be that would change your mind? or am i wrong, you're just saying let's just hold them here for as long as the eye can see and when we start to see a difference in data, then i'll start to think about cutting? >> definitely not stay where we are. i think we're ready to move. but i think one or two more data points will be really make the case. we need to see the labor market continue to be where it is and not get much, much worse, much, much more quickly. and we want to make sure that we don't see lay-offs as the reason why unemployment rate is rising. the second thing i want to see would be a couple more data points on inflation. and evidence that we are really on the down ward trend. i think september is going to

be -- things continue the way they are now, september is a good time to start cut. >> to start cutting. you're a hold out now, bill, nothing that would keep you of a different mindset than what it sounds like the fed will do with the september cut. >> the key to the unemployment rate rise is whether it's accounted for by a rise in the labor force or layoffs. and right now, it's the labor force that's doing -- the increase and that is whole host of factors that have nothing to do with weakening of monetary policy. >> final question on this is do you think the fed can message rate cuts with an economy that's still growing and inflation that while disinflating is still high and still has a lot of consumers angsty. >> i'm not a big believer in forward guidance. the credibility of the fed has really been trashed over the years. but if there's a time to start putting in forward guidance,

this is it. and the market needs some verification for whether the fed will be ready to cut in september or november and december. and that messaging has to put b put in place at the next press conference. otherwise the uncertainty in the market will battle everybody and make the recent volatility that we've seen nothing. >> all right. bill, thank you for now. we appreciate it. bill lee with the milken institute. bond yields are falling along with stocks today ahead of that decision. let's get to rick santelli in chicago. some are siting what's happening in israel as well, rick. i don't know what you're hearing. >> you know, there's a lot of reasons to see interest rates moving down. what's going on the middle east and gio politics is one. we all know the fed at least at this point certainly seems to be flagging rate cut next meeting, not the one tomorrow or the first day today finishes up tomorrow. and if you look at intraday of 10s, what's interesting is we're down three bases points.

we're pacing right now for 4.5 month low yield close. 2s are pacing for six-month low yield close. what's really interesting today is the momentum trade, whether it's geopolitical or central bank driven, we now see all treasury yields open 10 year up to a two day chart. all treasury yields now are trading below yesterday's low yields or have traded below yesterday's low yields. and that really makes a big difference. we see that there still is urgency for investors to jump into many of these funds of course, fixed income, looking at the rally that's going to continue as the fed moves towards a more sustained easing cycle next year. now, if you look at 4.5 month chart, 10s are on pace, as i said. what's really interesting here is that many of us, including me, didn't think we would test 4% again.

granted, we're not quite there yet. but this really has been unusual rally insofar as the yield curve is still deinverting. that's a significant development. finally, we see that the on shore and offshore juan have weakened against the dollar. now look at the strength the yen has. that's the dollar versus the yen. right now the dollar is at basically a three-month low, not only our central bank meets tomorrow, but at the end of the week, the bank of japan meets and there's a good handicapping going on as to whether they're going to raise or not. we'll have to wait and see. but the currency certainly reflecting the fact that they're going to see higher rates in japan. kelly, back to you. >> interesting. we got to tie it all in when you're talking rates, all these global developments. rick santelli. still ahead, president biden helped champion the inflation reduction act and yet the bulk of the money is going to projects in red states. we will follow those dollars when "power lunch" returns.

[♪♪] can a mortgage move you forward? absolutely. sofi has helped over 130,000 people take the leap towards home ownerships. sofi mortgage. verified pre-approval. low down payment options. and on-time close guarantee. ♪ welcome back to "power lunch." holdings on the move this morning. steve kovach is back with that moving. what's happening?

>> shares up 9% after bloomberg reported tenable putting itself up for sale, taking interest from potential buyers, whether that's a strategic investor or private equity and the like. this is a cybersecurity company, which is kind of the hot button issue right now of course, because of the crowdstrike outage a couple weeks ago and then that fail deal for $20 billion that google wanted to buy them for that fell through. a hot area of mna right now. shares up just shy of 9%, kelly. >> interesting timing in the wake of crowdstrike. former president trump becomes future president trump, could the inflation reduction act be repealed or cut back in a significant way? if it is, might have unintended consequences for his party. pippa stevens following the money for us. >> democrats out theed the ira largest investment in clean energy and investment on record republicans consistently tried to repeal it since it was signed into law. but complicating matters come november is republican districts

have been the biggest beneficiary. more than half of the announced projects are in gop held areas attracting 85% of total investments, according to data from e2. the ira also created nearly 74,000 jobs in republican areas, according to the firm, compared to roughly 27,000 jobs in blue districts. part of that is thanks to rule and semirule districts that tend to skew republican offering more land to build factories, access to relatively cheaper labor and proximity to prior manufacturing hubs. now, while experts say a total repeal is unlikely, parts of the ira could be struck down. global co-chair of the energy group at baker bots said there could be stricter qualifications for the $7,500 ev credit, adding areas where guidance has yet to be clarified. hydrogen could be at risk. bob keef told me that the saber rattling and the rhetoric around the law is already casting a shadow on projects. these are very capital intensive

and lenders and developers want to see certainty if there's any question we probably will see a pause on new projects until the election. >> so one of the things that you mentioned there that could be subject to change is the $7,500 credit on electric vehicles. a president trump had been sort of critical of electric vehicles. now he is less critical because elon musk has been favorable inclined to president trump. >> that could play a part but it's one of the easier things to strike down. it's also much newer. if you think about things like the i.t.c., that's been in place going back to 2006. and it's really become part of the renewable story and gained bipartisan support. so it's kind of the newer things on the chopping block. also if you think about bad credit is on the demand side. and talking about republicans and reshoring and wanting national security that's more on the domestic manufacturing side, ptc, that's safer. it's more what can we talk away that won't impact national

security, what's more consumer friendly. so that's why that credit is often cited as one that could be on the chopping block. >> very interesting. to kate rogers for cnbc update. >> israel says they carried out a retaliatory strike. targeting a senior hezbollah commander that killed 12 children in the israeli-controlled golan heights. israel has a right to respond but that it's working to avoid an all-out escalation of violence in the region. another wild fire is leading to evacuations in california. the newly ignited nixon fire has already burned more than 3,700 acres in riverside county near san diego. in northern california, the massive park fire has already burned 380,000 acres and only 14% contained. and federal regulators said today amazon can be held responsible for defective goods sold by third party merchants

sold on his marketplace. they rejected the online retailers argument it's only an intermediary saying the company will bear responsibility for product recalls. amazon did not immediately respond to request for comment. tyler, back over to you. >> thank you very much, kate rogers reporting. regional bank stocks continue to rally. kre up 19% in july. we'll discuss some catalysts for the sectors next when we return.

♪ welcome back to "power lunch," everybody. regional bank stocks seeing a nice bounce this month. kre is up 19% compared with the broader bank index which is up just 10%. our next guests thinks mna actively will be a key catalyst for the group going forward. here is tom meachum, president and ceo of kbw. he joins from the kbw community bank investor conference in new york city. tom, welcome. good to have you with us. we'll get to banking consolidation in a moment, i'm sure. but i want to get your hypothesis on why regional bank stocks have been as hot as they have been in the month of july. it ain't just the weather.

that's number one. number two, what would an interest rate reduction from the fed mean both for the businesses of regional banks and for their stock prices? >> sure thing. so first of all, number one is, there was was a lot of bad news already priced into these stocks. and when you look at the fundamentals, for example, the most recent quarter, over 80% of banks met or exceeded earnings estimates for the quarter. credit quality for the banking industry has been actually very benign. and with the prospect of interest rate changes may be coming as early as this september, the backdrop for these banks fundamentally is pretty good. we also think the second quarter will be the low point for net interest income. so the stocks had a lot of bad news into them. the results turned out to be pretty good. and the valuation gap with the market was so historic we think these stocks were coiled spring ready to move.

and we think that's what you see happening right now. our view is that it's going to continue. there was a lot of talk, tyler, that these stocks were moving because of the trump bump after the convention. the reality is even with the change in the democratic nominee, these stocks are still outperforming. it's much more than just the election. it's also fundamentals. we think it has longer to go. these stocks still trade at discount historic levels. >> that's a really clear explanation, tom. how about tim pact of an interest rate cut on the businesses of regional banks? >> well, so, what we like is we like orderly. and it's my opinion that we're likely to get a cut in september. as long as we don't get the big swings like the way rates came down at the beginning of the pandemic and then the way the rates went back up, that is a disorderly market. that's bad for banks. anything that's happening that is orderly is good. also, i'll tell you another bull case for these stocks, tyler, is that credit quality has been

benign and the fed hasn't even cut rates yet. the fed starts easing, that will take pressure off of any credit quality concerns. i think that will be a positive for the industry. i think it will also hopefully make the yield curve not be inverted. another point i'll make to you is that for the last 67 years we currently have the longest inverted yield curve that we've ever had and when that stops happening, that will be good for the banks. >> tom, we spoke with three of the regional banks there last hour. pennsylvania-based, silicon valley area and down in houston, texas, and they were yun normally positive on the economy and the consumer. what does that tell you? >> it tells me -- we have over 100 banks here in the story is the same. credit -- aside from a few banks that got off sides, the industry by and large credit quality is benign and actually even better than historic averages. so i think it says a soft landing for now is a reasonable outlook. and given where these stocks --

bank stocks trade, i think that leaves a lots of room for the upside. >> how much more consolidation -- it's already happening couple deals earlier this week -- well, yesterday. what's next in the area of consolidation and what will drive it? >> so the turmoil of last year really put a pause on consolidation. there is considerable pent-up demand for consolidation. if i were to show you a chart of profitability in the industry you would see that scale is working. so there's a lot of pressure for regional banks to come together so they can compete with the biggest banks in the nation. i think it's good for the industry. the other thing i can say is the bank stocks after these merger announcements have been acting very well, so investors have been supporting them. i think from a policy perspective it's good for the industry for these big banks to have more competitors. remember, there are only 145 banks in america above 10

billion in assets. the top 25 control 66% of the dm deposits. so what's happening the middle tier is really important. and i think you're going to have regional champions emerge that will be able to compete more with the bigger banks which is good for main street america and the main street economy. >> when you consolidate you create fewer banks. if fewer it means less competition. but what you're saying is fewer will be bigger banks, better able to compete with the super banks. >> so let's talk about -- so jp morgan's $4 trillion round numbers in assets. two $8 billion banks that merged together create a $16 billion bank. what you'll see is a $16 billion bank can offer more products to main street america where -- remember, over half the jobs in america are in main street. those top 25 banks have 66% of the deposits.

but they do not make 66% of the middle market loans. that's why these smaller banks are falling behind because of all the cost of regulation and technology. if they get a little bit bigger, they can be more competitive and that's what the statistics talk about. the other thing, tyler, is i just can't miss this moment, the unfinished business from last year is we need deposit insurance reform because what we went through last year was at a moment of concern or crisis, deposits go to the too big to fail banks. the government responded with higher capital rules but they didn't address the core issue which is these middle market banks need a higher deposit insurance limit and they haven't addressed that yet. that is what we talk about at this conference as a missing piece of policy reform. >> all right. interesting thing. it's out there on the table and you put it there tom. thank you very much. we appreciate it. >> tyler, thank you. >> you bet. >> that was really interesting. shares of merck are lower despite topping second quarter estimates, including strong

sales for its block buster cancer drug keytruda. should you buy the dip? we'll ask our trader next in three stock lunch.

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it's odd how in an instant things can transform. slipping out of balance into freefall. (the stock market is now down 23%). this is happening people. where there are so few certainties... (laughing) look around you. you deserve to know. as we navigate a future unknown. i'm glad i found stability amidst it all. gold. standing the test of time.

it's time for today's three stock lunch. here with our trades, victoria green, cio of green square wealth and cnbc contributor. victoria, great to see you. lot of stories to get to. let's start with merck, having its worst drop in year despite the earnings beat the shares are down almost 10%. do you pick it up here? >> i do. i love this stock. a lot of selloff was due to expenses trended higher, lowering their guidance. that has been the kiss of death. if you lower your guidance, no one loves that. number one, some of that has to be taken with a grain of salt. number two, hbv vaccination numbers really bad, they're s

saying they're having a look into it. they talk about still over 120 million women in china and the opportunity is still there. so it's yet to be seen if this was one-time slow down in china or lasting. i think the sell-off is overdone and buying the stock. it's got a great pipeline, very active in mna. >> let's move on to paypal higher on second quarter earnings than up beat outlook also raised guidance. victoria, your thoughts on paypal down 13% in a year. >> well, i mean, can i get cheesy and say pay wow. they turned it around a little bit. they've come through. venmo is looking strong. i love their growth catalyst the fast lane which is their one stop checkout making it easier for people to spend their money. i don't need a lot of help making it easier to spend my money online but they are. they're moving beyond just paypal and venmo. they're looking at enterprise payments platform. it's a good sign and i see a lot

of growth going forward. i think their catalysts are in tact and could be a huge catalyst for them. as they continue to fend off other fintech, paypal has been phenomenal at keeping their market share and keeping their transaction shares up and keeping the transaction numbers growing. sorry about that. i look at paypal, i like it and like where it's going. >> dan yesterday thinks there's a lot cooking there. along to jetblue, shares surging thanks to surprise profit in the second quarter and saying they will defer another $3 billion in aircraft spending through 2029. shares are up almost 12%. some analysts calling it a self help story that is bearing some fruit. what do you say? >> no, no no. jetblue is jet boo for me. i'm a seller. take your $7. it was at 7 when i looked at it earlier. look, they're robbing peter to paypal. defer this. deferring 44 airlines from air bus. trying to cut costs. they're exiting i think they

exited 15 more cities, 50 routes. downsizing. they're trying to sell a premium product. but guess what, that's not unique. southwest pivoted to edto that. spirit announced they'll have a premium product. spirit will have a premium airline product. jetblue is targeting customers that there's still a lot of demand for. they have fuel costs potentially higher. wages of airlines have been growing. i look at this number one airlines not my favorite sector right now. jetblue is not in position to pick up the revenue and the margins that the market think they have. this turn around plan will get grounded. >> go premium was the advice earlier this week from our guest as well. interesting. victoria, thank you very much. we appreciate your time today. we'll see how ms. garrity responds to those comments. quick programming note, don't miss cnbc exclusive with jetblue at 4:30 p.m. eastern.

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welcome back to "power lunch." airbus stock is higher today following its results. profit did fall. revenue, however, was higher, but the company previously warned about results, given supply chain issues. joining us now is airbus's ceo, along with our own phil lebeau. phil? >> tyler, thank you very much. thank you for joining us. first from the analyst call, i'm curious, during the call, i'm listening to it and there were a number of questions from analysts about the target you have for production aircraft deliveries this year and whether or not you can hit them, given the chang challenges in the sup chain. how do you convince investors you'll be able to hit this target you previously brought down your guidance for several weeks ago?

>> last year, we had guidance for 720 planes. we ended up with 735. this year, we're facing some changes with the supplies, expected in q1. unfortunately, they're impacting the final line, quite delayed, because it's engine, standing gears, seats. we have a challenge that we need to overcome. and the guidance that we have changed, that we have modified, go to 770. it's something that reflects the best of what we think we can do. and we are, with suppliers, working to secure the deliveries. we see what july delivers, but i think it is an encouraging performance that puts us well on trajectory for this revised

guidance. >> what is the biggest issue for suppliers right now? is it manpower? is it skilled knowledge that they need in order to increase their production? what's the issue? >> actually,st the diversity of situations. we have the engine makers. they are struggling with metal issues. i mean, with section parts, the availability of parts on time with the right quality. that'll be a challenge. also, when it comes to seats, that's the diversity and the quantity of configurations that they have to manage, facing, indeed, some labor issues, challenges. it's a form of covid-19, where there was a lot of activity in this part of the supply chain.

going now to post covid-19 with a lot of demand and diversity on the configuration. the landing gears, again, is another situation. we say diverse situation, case by case, and that's what we need to manage in the aftermath of a situation that was two or three years ago with supply chain issues coming from availability of material, logistic challenges on the world, labor issues, inflation, and those kind of issues that compounded with each other. >> it's kelly here. if playmaking were an olympic sport, you'd have an olympic m medal. you outpaced boeing. it grates me as an american to see what's been taking place. you think it's given a black eye to an extent to the strindustry. what would you do to fix boeing problems if you were the ceo, and do you think taking suppliers back in-house is the

right thing to do here? >> thanks for the question. you know we see ourself as well as the u.s. company. we are producing a lot in the u.s. we also are assembly, producing in the u.s. we have final assembly lines for the 220, 320, satellites, helicopters in the u.s. we have thousands of employees in terms of the the priority. i wouldn't comment for the challenges we see at boeing. we have also our own difficulties to overcome, and that's good enough for me. thank you. >> any quick comment as we go? >> no comment on the boeing thing. one quick answer, if i could. a3 a321xlr. commercial this year? >> of course. of course. we got the certification for the cfm. the first service would be later this summer.

we will see the first one flying in the air and in service by the end of the year, before the end of this year. that's great news because it is an important product for us. we've been hearing about the middle of the market for now. we did it in five years. this is a great product. >> you're making me feel worse. no, congratulations. thank you for joining us. ilph lebeau, appreciate you bringing the interview to us. we'll be right back. power e*trade's easy-to-use tools, like dynamic charting and risk-reward analysis, help make trading feel effortless. and its customizable scans with social sentiment help you find and unlock opportunities in the market. e*trade from morgan stanley with powerful, easy-to-use tools, power e*trade makes complex trading easier. react to fast-moving markets with dynamic charting and a futures ladder that lets you place, flatten, or reverse orders so you won't miss an opportunity.

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welcome back. the dow is hanging on to gains, but the nasdaq is in the red as losses continue across tech, nvidia, qualcomm, super micro, in particular, weighed down today. nvidia, there you site down about 6%. crowd strike down 10%, as well. 40% so far in july. a lot of people saying its problems are still lingering for the whole market.

>> it has been a rough, rough past couple of weeks for technology. glad i was away for most of it. thanks for watching "power lunch," everybody. congratulations, swimmer torri huske, 100 meter gold medalist. went to my high school in arlington, virginia. >> congratulations to her. and the women's gymnastics team. >> they just won, spoiler alert. "closing bell" starts right now. see ya in a bit. welcome to "closing bell" at the new york stock exchange. this make or break hour begins with the countdown to microsoft earnings in overtime and what it could mean for the tech trade, under selling pressure again today. by the way, there are microsoft shares. they are down ahead of the print. we'll ask our experts where the stock and the secretator is hea from here. we will start with the nasdaq because it is the laggard today, the big underperformer. several mega-cap names are dropping today. nvidia is the biggest drag