hi, everybody. welcome to "power lunch. we have a mega media merger. at&t joining discovery both stocks falling intraday elon musk moving markets again bitcoin tumbling and then rebounding a little trying to clear things up. does he have too much power? plus a major spending shift is likely about to happen spending the summer buying experiences

not stuff. why this trend could be underestimated and affect retailers. "power lunch" starts right now good afternoon, everybody. welcome again to "power lunch. i'm tyler matheson we begin with stocks because the selling resumed in technology. the nasdaq down about 1% and 5% in the past month. let's check in with bob pisani at the new york stock exchange for what's moving today. >> hello, tyler. it's a mixed market. health care, some other things like consumer staples doing well but the selling pressure in technology is an issue take a look at the mega-cap tech names here

everything down 1% to 2% as a group this is 10%, 13 % frm the 52-week highs but held up better this is the clean energy funds cathie woods' ark funds. remember as a group here we are talking about down 30%, 35%, even 45% from the 52-week highs most hit in february show you the speculative tech names. cathie wood holds in the ark fund here. you can see down more than the rest of the market today tesla. we are talking off 40%, 45% off the 52-week highs and when does the momentum traders have abandoned this come back in to play this again? it's not there right now fundamental guys were not

interested in this stock another thing to keep an eye on is reopening trade in general. remember february and march? the airlines up 30% in about a month. it is not works very well today. united is up boosting capacity in july. generally positive comments and not a notable reaction in most airlines today and that's an indication that it is tougher to move the stocks forward. they had the big moves and since then a lot is essentially sideways and the same with the other sectors like the hotels and marriott, mgm resorts and the travel companies pricing markets, hard to move them forward. >> good do see you at the nyse what is it like on the floor there? >> i felt the moment was right it is like the rest of the country. slowly reopening but trickles. people coming in, some people not comfortable with the subway

or issues at home and some people aren't entirely vaccinated and representative of the country as a whole. >> reassuring to see you back in the seat thank you. >> thank you. mask mandates lifting temperatures rising. americans could spend more on services less so on goods. steve lies mans has a closer look at the shift. steve? >> yeah. the official data does a lousy part to track it but the alternative is alternative data to track what's happening in the economy. the cnbc road back barometer shows the turn of services but slowly box office spending is 89% pre-covid levels pro sports spending is surging but down 53% from before the

pandemic passenger airline traffic is coming back. it is down 37% but that's a 5-point improvement from april this data is not captured in the retail sales report. spending at bars up 3% last week. jpmorgan credit card data shows spending with the card not present still stronger than those going to stores and come back some and could suffer of a permanent shift. undoing 14 months of staying and works at home. it will take time to get people back the road back to the service economy is slow but it could accelerate now that the mask mandate is lifted. >> interesting point why what about the inflationary implications >> they're huge. so think about this. it may get worse before it gets

better you have the goods inflation service sector coming back and could have a double barrelled goods inflation and service inflation until the goods inflation eases off as more spending shifts to servicing so short term may be bad but long term this is how we end up having a transitory inflation experience >> yeah. all right. steve, appreciate it ty >> thank you. all right. so if folks shift away from buying stuff to buying services, what does that mean for conventional traditional retail? the sector has had a nice run in the past year. the retail etf is up nearly 40% as you see and with a huge week of earnings many in the retail area on deck we may get the early indications

of how reopening affects target and walmart and home depot joining us is paul deutsche. welcome. you heard what steve had to say i assume does a dollar spent on services necessarily mean one less dollar spent on traditional retail? whether online or in person. >> in essence it is a shift away from spending on goods but ultimately we think a lot of that spin goes hand in hand. right? as you return back to work or as you're going do an event or traveling, there's a big focus on replenishing that closet and ultimately we think opportunity for the retail stocks to still outperform certainly near to medium term and expect to see robust results this week. >> so as people start going back to offices, they're going to

spend on both, on experiences going out for drinks or dinner, more on travel, but they will also spend and move away from drawstring pants and hoodies and going to have to put on regular clothes again and in many cases they may find, may just find that the old clothes don't fit anymore. is that part of the argument >> we found a lot of that in our survey where there's a lot of covid weight gain that transpired and we do sense that people need to go back and take a look and update their denim update their work and going out wardrobe we have seen people go out and start receiving invitations to weddings and other evens and think that apparel will be a robust category over the next few months. >> i think a few people have put

on the covid 19 as the saying goes i guess everybody knows the likes of target is a juggernaut. but you have others on the list that might have escaped notice. >> absolutely right. target is best in class. we are really leaning into the earnings this week the names like kohl's. we think this is a company with really low operating rent and expenses flow through on strong sales well received and ross stores is underperformed this year in the off price sector with no digital and online presence so ultimately as people get back out and about and go in store we think the traffic is actually surge especially since the state of california has reopened and then ulta beauty is a name that's a favorite. we don't believe that there's been a lot of makeup just used just yet but this is a name

where think the skincare category is very, very strong. so as hair care and fragrance and we think makeup is nice duration trade to ulta beauty and some of the top ideas into this earnings season. >> on the list as well is gap and that surprised me. is it gap that you like or is it athleta that you like? all i seem to see or hear is that the main gap franchise isn't doing very well and closing stores left and right. >> yeah. so gap is a trading call we have into this quarter and part of the bullish aspect of the thesis is the fact they're closing the unprofitable gap stores so you have an earnings power and margin rate that's showcasing significant expansion and we continue to track promotional activity down substantially and

think that stimulus dollars really aided a lot of top line especially as denim has become a top category and we should see that through gap, through old navy and then athleta performing very well. >> all right, paul thank you for your time today. we appreciate your points of view thank you. warner media combining with discoy ri for a media giant they say compete with disney on streaming. we'll hear from the ceos. look at what musk did to the price of bitcoin plummeting with a tweet. does he have too much power to ve crypto? we'll debate coming up

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welcome back to "power lunch. i'm dom chu. dillard's today. last week the retailer smashed earnings expectations and 'proved a $500 million stock buyback program. dillard's is an outperformer this year. up 130% year to date outpacing kohl's and macy's which have made themselves post gains north of 50% >> thank you. it's m&a monday in the media space. warner is merging with discovery.

making the new company one of the biggest players in the content space. david farver - >> other news on ksu. >> it was a great interview. >> thank you we should have been focussed on the merger of warner media and discovery but as much for investors to digest is as you take a look at the details that is an all stock reverse morris trust. the shareholders will own 71% of the new company and getting $43 billion to help them reduce leverage or debt on the balance sheet. that is a big concern for many investors there. there's the projections. a nine multiple and you get a feel for how large the company may be in terms of market cap and will be led by david zaslav.

it is a focus as what at&t is going the look like after this deal as it is what this new media colos sus is going to do to that industry i did have a chance to ask john stankey what does at&t look like and for example what is the capital structure going do look like and what does it mean for the dividend. >> taking the cash to go to the highest return and it is not to be unexpected that when we shift out as much of the cash flow as we do with the media company transaction, what we have done with the directv transaction to resize the dividend as a result of that but general rating really attractive returns far in excess of the 5% yield that maybe the returns is the right thing to do for shareholders and want the business to grow organically. >> will be a somewhat different at&t in terms of shareholder

base perhaps with organic growth being a priority you can see, of course, what they're targeting in terms of 20 billion in free cash flow for the payout ratio and 43 billion is debt reduction and use it to expand, to compete against the likes of t-mobile, comcast our parent with a wireless business and verizon. look at the properties to be brought together but may be a reason looking now at stocks scroll down. >> we have shares of potential rivals down like comcast and also looking at charter or other asets. >> yep. >> there's disney doing 3% and think shareholders must like the tie-up. >> listen. there's a lot to digest here for

investors to understand and frankly still a lot to yet know in terms of what this combined company is able to produce they still don't have a name at this point even though they do have very impressive projections for financials but there's a belief it only makes things competitive and those disadvantages doesn't make it easier for them. comcast down 6% is quite something. maybe they have less leverage now in terms of price concessions from the likes of a company with that many cable networks under the warner discovery umbrella maybe they face more competition in wireless. hard to say but the reception overall is not perhaps what they hoped for at discovery or even at&t the stock of at&t today up quite

nicely and reversed. may be a result of people understanding the dividend not the same. >> he said 5% dividend isn't as attractive as what he hopes. ty, what do you make of it >> i have a couple questions i guess i want the know who screwed up here? because he says we see this as an opportunity to redeploy the cash they have to have known in 2018 what the average or projected return was on the media businesses so how -- what is the mind flash that just awakened the guys that they had something not as a good return as the other businesses wireless or whatever. >> i think part is that even if they generated fairly significant returns and you have to argue at this point that the launch of hbo max is a success

so far but even with that they would not feel it would move the stock price significantly. we both have seen the story over and over again right? >> god yeah. >> you have to be vertically integrated pure play now. >> exactly >> and we have seen it happen with at&t time and again and a number of companies. you are right. it is a huge about-face for at&t a repudiation to the strategy by randall stevenson -- sorry done by stankey in 11 months the ceo. >> if we wait another five or ten or 15 years, david, i won't be here with you, but they'll combine them again and go back to vertical integration. what does this say about that theory if anything of the

vertical integration or does it say more that you tillty companies like at&t and verizon which got rid of aol and yahoo! are not natively suited to run media companies? >> that may be the case. for verizon the assets were not an enormous bet. you're right maybe they don't know how to run them well but by the way to be fair there were plenty of people that questioned the strategy from the outset, the acquisition of directv at a high price and the acquisition of warner and whether vertical integration was the way to gain significant organic growth particularly with assets that were yot under stress but not growing that quickly already. >> yeah. david, thank you so much fun to talk. appreciate it. >> sure thing jirngs citi is

bullish on the deal saying they will have scale to be a major player in streaming. coming up, joined by the ceo of one of the largest recruiting firm why businesses can't find the people they need two technicians that have tech trades. one says this stock is a buy after selling off nearly 50% in the past month we're back in a moment they grow from our imagination, but they can't be held back. they want to be set free. to make the world more responsible, and even more incredible. ideas start the future, just like that.

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welcome back i'm rahel solomon. here's the covid update. tropical sigh loan making land fall today the storm killed at least 12 people and suspended vaccination states in a state. officials are worried that the winds could cause significant damage to roadways and disrupt shipments of medical supplies. taiwan reporting 700 new covid cases over the week. the spike is troublesome for the island that largely kept the outbreak in check and reported only roughly 2,000 cases since the pandemic started

the u.s. boosting its global vaccine sharing commitment to 80 million. shots from pfizer and american and johnson & johnson will be sent by the end of june. the uk is lifting international travel ban today residents will not be required to quarantine after traveling to countries low risk a big winner is portugal. tonight reports from athens and london for a firsthand look at how people react to the loosening of those restrictions good news. back to you. >> i thought you meant, athens, georgia. >> a little bit more exotic. not that there's anything wrong with athens, georgia. >> we'll add a krontd there jirn let's get to dom. >> i could use a greek vacation right now. everything from boat manufacturers and sellers like

marinemax and malibu boats to the vehicle make ores like thor and outperforms in the virus pandemic and into 2021 and some momentum slowed down as of week. camping world holdings up this year but 10% below the all-time high of this month beeches, boats and rvs back over to you. >> all right thank you. coming up, asking a largest recruiting firm in the country how the recovery is going and what he thinks is the biggest threat to jobs. musk ado about bitcoin the tesla ceo crashing the cryptocurrency this weekend. how connected are the two? we we'll explore that one after this quick break .and in kevin's.

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all right. the markets showing losses across the board but the nasdaq once again in focus down nearly 1% the other markets barometer off a third to a half to a quarter percent. dom chu is covering the oil market dom, what do you not do around

here >> it is one of the times to approach the summer we all wear a lot of hats. opposite direction green on the screen for wti, $66.24 brent crude $69.43 traders are continuing to handicap that global economic recovery against the rising covid infection rates in asia but we have some news on the market structure front traders big and small will have a new vehicle to take a view on oil prices the cme group will begin trading the micro crude oil futures july 12th pending approval. the new size contract for 100 barrels of oil unlike the start 1,000-barrel contract it will be cash settled so no worries of taking physical

delivery maybe no more negative prices. >> too bad but bottom line is new contract we reference >> depend on how much they're traded this is also by the way financially versus physical settlement and maybe a different clientele. >> absolutely. especially those who are thinking of inflation these days thank you. american companies have job openings and a big problem filling them there's discussion over what is causing this problem we wanted to hear what the unemployed are saying about their own personal situation just rahel solomon has the results of a survey. >> yeah. janet yelling is hearing the same from business owners and yeah at the unemployment rate up last month and what is on the minds of the unemployed so cnbc

with morning consult surveyed 1,000 worngers and 87% said they were not offered but looking but when we asked those rejected an offer of job how important a factor are the enhanced unemployment benefits, almost two thirds said it wasn't a reason at all. what were major reasons for turning down a job about one third said they need to care for the family including child care 35% said health concerns because of covid 36% said the offered salary is too low why three quarters offered a job say the proposed wages lower than the prior job we did average hourly wages tick up in the last jobs report and an indication that employers offer competitive wages but with so many people reporting low wages as a reason to not accept offers for those business owners looking to hire employees thigh might have to do more.

>> people have been looking to the september expiration of the enhanced benefits as a catalyst for wages to pick up or resettle back with not the competition but the survey says that date is not as el relevant but other factors. >> that's an interesting point because we saw when the benefits decrease from 600 per week to 300 we didn't see a correlation in sort of people returning back to work because the benefits were lower so it's a question that a lot of people are trying to answer and from what we can tell it's not a major factor but it might also stand to reason that it's very case to case depending on the situation financially and the child care responsibilities. >> that may be harder to solve increased ages would address the other issues thank you.

ty >> thank you. so why are we seeing this labor market disconnect? how do we fix it next guest may have answers. peter quigley president of kelly a worldwide staffing firm. a bright spot this year up about 25% and near lip 125% in 12 months we are glad to have you with us. we can't have the head of kelly and not get kelly into the interview. what are you seeing in the labor market you heard the description there that the reason it is hard to find workers is more complex than just one factor and that factor being the unexpended unemployment benefits. >> thank you welcome back good to be with you. i think just to set the table when we talk about unemployment and employment, it's also helpful to note that for the first time since 1975 when the government started tracking it,

people who say they are not in the labor force surpassed 100 million. so in addition to the unemployed and employed we have that group which is increased by some 5 million during the pandemic. the reasons why the unemployed are not finding work which sort of belies the rational or the numbers we saw in april where the number of job openings is at a record high but the job growth is relatively tepid, at the top of the list, not pandemic necessarily relatted, it always is near or top of the list, is the mismatch or misalignment between what employers and employees think is fair compensation so that's number one. but then the other factors that you mentioned are all contributing we have health care concerns for individuals going back to

the workplace. you have got care giving responsibilities people not showing up to worng because they have a child or a parent at home that they have to care for and then there's the enhanced unemployment benefits. and i think the survey would suggest not any one of those things and i would argue it's the weight of all of them creating this interesting dynamic in the labor markets. >> you talk about a mismatch of perspective employees' ideas about their value and the mismatch between them and the employer what about a mismatch of skills? are you seeing that? it is fascinating how your company has moved from what it was and what i remember it being to what it is today. is there a mismatch of skills that's another explanation >> yeah. unquestionably with the digitization of the workplace, the introduction of

new technologies, our customers are letting us know that they don't have the employees with the right skill sets than you have employees on the other hand who feel that they do have and can make a contribution to the new workforce or the new workplace and i think there is a disequilibrium in the marketplace rite now we are coming out of this here ichk recession and it's probably going to make a while for that equilibrium to find itself but there's a mismatch with skills and needs of customers and employees. >> kelly, do you want to jump in here kelly meet kelly. >> i want the ticker peter, i want to reference what

we heard from rahel solomon and the main issue is what happens when the extended unemployment benefits expire in september will that be a catalyst to come back in the workforce and maybe keep wages down? the reporting suggests maybe the extra payments aren't as big of a factor but child care and fear of covid and not getting offered what they were making before the pandemic. >> when the enhanced benefits expired last summer we expected to see influx of talent and we didn't and anecdotally we saw a stronger correlation for schools to reopen and the influx of talent so i do think it's going to be that trifecta of opening schools, getting more people vaccinated so people feel safe going back to work and creating opportunities for workers to

make a decent wage that will create that equilibrium that i referenced before. >> you emphasize the point about schools because that seems to be the missing puzzle piece and it goes back to whether the schools will be open and i guess we make progress on that front but what happens for people with a fear of getting covid, you assume it's now something specific to them maybe immuno compromised or don't want the vaccine is there some way to provide recompense for people in that situation? is it a matter of wait and see for another job that could be a fit if working on the front lines isn't? a third of respond eents said that's the main reason to not go back to the workforce. >> i would encourage them to lookfor remote work where they

feel safe and plenty of opportunity with employers who are looking for workers. where work gets done prepandemic and postpandemic that picture has changed dramatically and where the work is done much less pompbt than the outcome and more and more customers and employers generally are looking for individuals who can work remotely at home and when you look at the job searches the words remote and at home come up very frequently so something that will continue after the pandemic and i would encourage those individuals to look for work where they can stay at home. >> let me jump in with one quick final question need a quick answer here what are the two hottest sectors where workers are most in demand right now? >> life sciences and i.t. no

doubt. >> peter, thank you. nice to see you. >> thank you. >> kelly we'll look at the tech trade and whether the selling is overdone there's more "power lunch" after this

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crepe corrector lotion... only from gold bond. welcome back to "power lunch. with technology the worst performing sector down 1% we asked our traders for their best pair trades. tech stocks to buy and ones to sell bring in the team.

ari weld, mark tepper. this is normally matching a long position with a short so which two stocks stand out to you? >> so i'll give you a fintech pair trade since crypto beaten up you have good opportunities there i would buy silvergate capital and i would sell coinbase. here's why remember years ago when there were stockbrokers. paid a commission every time they sold a stock? basically extinct today because they were replaced with invest advisers paid a recruiting aset under management fee coinbase is the stockbroker of cryptos. they're paid by the transmission and will be commodityized. silvergate makes money off the money on depositive it

both companies grow at 40% next year that's what i would do. >> both stocks down 6% today ari, you are looking at semiconductor space? >> yes for our long short hedge fund clients we red to buy against a short agency in z ylinx. both corrected into the support at the march low where the similarities agenda the differences are that broadcom above the 200-day moving arch and the largest breakout and see that as relative strength. ivago with the breakout in march and since consolidated given that relative strength we expect it to reclaim the leadership position. >> betting on the rebound. thank you.

for more head to our website or follow us on twitter >> thank you. bitcoin had a wild weekend and all signs point to one person we'll take a look at who may be to blame and what might be next for the cryptocurrency bitcoin's fall continues down 23% in a week and discovery session lows right now this following its deal with at&t announced today we'll be right back. >> and now, the latest from trading nation.cnbc.com and a word from our sponsor.

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deposit, plan and pay with easy tools from chase. simplicity feels good. chase. make more of what's yours. welcome back to "power lunch. perhaps no other person can move markets like elon musk can move crypto right now here's how elon and bitcoin are

intertwined. bitcoin hit an all-time high in april when it topped $64,000 by the end of the month elon tweeted that tesla sold some of the bitcoin and then he turned more bearish recently. tesla said it would no longer accept bitcoin as payment. that was back in here. you can see how the price sank after that now, more recently over the weekend, musk sent a tweet saying tesla would sell more bitcoin and that's taken it to a three-month low. musk sent another tweet sending prices jumping at 2:00 a.m eastern time to clarify tesla hasn't sold its bitcoin. there's the intraday chart that's what got us back to positive territory by this morning. so all of that said, how can an asset be so highly valuable if its price is so easily influenced by one man's twitter

account? let's bring in mike bocelli to break down how investors are reacting to this it seems like elon musk represents corporate demand for holding a portion of your cash in bitcoin to the extent that he's waffling on it, doesn't that represent a big problem for the bulls who think there's going to be a huge source of corporate american buying power >> yeah, an i think with elon you have to take the good with the bad. crypto touted him for being an early adopter. he was one of the first real institutional investors to buy bitcoin and now they're chastising him for bringing forward -- i think conversations are frankly happening in board rooms around the world now thinking about the consequences of their investments now, the informedness of those tweets or the public format in which he is making those statements creates a little bit more of an opportunistic trading environment for folks in the space. >> let's be more specific for a moment are you frustrated by musk's

ability to move bitcoin? what does that tell you about the market fundamentally >> it's just another input it's like any market or any asset that can be impacted by a particular individual. elon was positive for the market and still continues to be. he's bringing a lot of discussion around cryptocurrency to fold with the more public community base whether it's cyops and he thinks faster block time would make for better cryptocurrency, or this is a ploy where he's trying to get information from the crypto community. i'm not frustrated i think it's helpful for the long-term proposition of bitcoin for people to be more informed. >> i guess the analogy would be what other asset class does somebody wield such power? >> traditional equities you have many folks that can impact a single stock you have the fed or politicians

what can impact macro assets like the dollar. everything in this day and age open platform, large social platforms create that dynamic. it's not something that i think we can ever really avoid thankfully with bitcoin you have a bit more of a distributed holder base, nothing has changed long term. like any commodity, short-term price fluctuations are influenced by demand or someone like elon but long-term value is driven by supply if you understand bitcoin and the supply dynamic, that's a game-changer >> that's kind of what i wanted to ask you about, mike there was a very interesting article in "the times" by daniel conneman making a decision between bias in decision-making and noise. would you call, whether it's elon or paul tudor jones or any of these people that have talked about bitcoin, that is noise and

what we want to do is strip that out as you look at an investment decision, that's variability, and what you really want to look at is fundamentals. >> stripping out signals from noise is critical. that's part of elon's take he's going to something like crypto twitter one that's very instructive from a community standpoint he's throwing out things that are akin to a freshman in college taking four years of psych versus ten years of cryptography he's putting out arguments against crypto so the community can provide answers to the questions which is great it's a massive, massive reach that crypto wouldn't otherwise have. >> mike, thanks for your perspective on this. we appreciate it mike bucella. copper is having a comeback after breaking its five-week winning streak we're looking at other commodities that are coming back down to earth. thank you. that was fast!

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keeping your oysters business growing visit letsmakeaplan.org to findhas you swamped.ssional. you need to hire. i need indeed indeed you do. the moment you sponsor a job on indeed you get a shortlist of quality candidates from a resume data base claim your seventy-five-dollar credit when you post your first job at indeed.com/promo the great commodity boom, is it already winding down? dom chu with a closer look. >> copper and corn prices coming off of their highs copper from record ones. we're not at the stage where we hear people stripping houses for copper like we did during the last super cycle but kelly, tyler, did you know we were talking about six straight down days for lumber prices as well it's fallen 24% during that span at least for lumber futures for july expiration, guys.

>> 24% in six days, and all we've been talking about, dom, is how much it's been going up. >> right and home prices and rent prices have been going up because of that so this is going to be interesting to see if this is the whole transitory word that the fed likes to word. >> absolutely. i still thought we were talking about the headlines moving higher i did not know we had come down quite that much. dom, thank you thanks, everybody, for watching "power lunch." tyler, we'll see you tomorrow. "closing bell" starts right now. >> thank you, kelly and tyler. welcome to "closing bell." i'm sara eisen along with wilfred frost at the new york stock exchange the major averages are in the red this monday afternoon, though off the worst levels of the session following the worst week for stocks since february let's look at what is driving the action in this final hour of trade. apple, microsoft, netflix down more than a percent. tesla is down significantly more this follows a 2.3% drop for the nasdaq in the last week. >> there's major merger to talk about.