tv The Exchange CNBC May 24, 2021 1:00pm-2:00pm EDT
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company that builds the property >> i mentioned dillard's last week and talk about retail stock and it had ripped along with bigger names in that space pete, finish it out. >> pete. >> l brands. we're seeing call activity in there. >> thank, everybody. "the exchange" is now. thank you, scott hi, everybody. here is what's ahead today the crypto crash a wild weekend leading to a bitcoin bounce this morning. we would look at who could be buying the dip and whether you should get in or get out it's not skrujust crypto. we have seen a bunch of blow ups this year. the broader market is weathering it pretty well beyond's big gains and merrill says no more to cold calls. that might be my favorite story
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of the day sd >> as i guy that used to do cold calls at win point, it's character building the s&p 500 is just about 4200 you can see we're trying to get back to that level now we're talking 1% gains the nasdaq about one, almost 1.5 at this stage here that's something to keep an eye on one place within the technology sector that's showing real signs of life in the very near term is the semiconductor trade. you can see over the last year it's up a very respectable and market beating 70% it's been trading a relative range here the last few months. we're right in the mid ofl that range and maybe not so much sitting right around the 50-day average price. this particular etf is one to watch. it could be one of those indicators for general market
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sentiment overall especially within the nasdaq. every single sector is in focus today because of the market moves higher but energy is also going higher as well not so for these two names cabot oil and gas is by far the worst performing stock these two companies are c combining in stock swap transaction that will merge two different shale geographies in the united states. this particular deal not being well received by investors it's the biggest shale deal in the yiet there's a lot of analyst takes out there about the valuation.
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cimarex will own slightly more of the company than cabot oils is there really isn't overlap. >> we'll see you in a moment thank you, sir let's get right to bitcoin's rebounce today it's around $37,000 and change after another big dip this weekend. one thing boosting it this morning, billionaire investor making some bullish remarks at coin desk consensus conference take a listen. >> the more we create savings in it, the more you'll say i'd
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rather have bitcoin than the bond >> that comment is making the rounds here. >> certainly giving investors confidence this morning. there are dynamic bes hiends the scene that are more responsible for those 30% drops we saw last week the big one here is margin trading. exchanging like bit mex and a lot of theedsse are based in asa they boarrrow to buy more bitcon they got to pay their broker back there's usually a liquidation price for the trades according to da fte buy bit
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that's a block chain bit mark cuban tweeted about this. he called it the great unwind. another dynamic, bitcoin lending. firms that offer loans backed by bitcoin. if you take out a million dollar loan, for example, and that's backed by kcrypto, if the price goes down by 30%, you end up owing more to your lenders you have to put up a little more cash or sell bit coin. analysts tell me these dynamics are not likely to change until the market matures >> that reminds me of the housing bubble back in the early 2000s. people wake money out of their home and it works great when you
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have equity that's growing you get the negative cycle working the other way. >> yeah. this whole derivative market is really mature. places don't allow traders to use leverage or trade or margin. a lot of the exchanges where there's a lot of crypto currency interest in asia 100 to 1 leverage is common in foreign e chxchange markets. it's a bit more normal that dieynamic have been pulling on the prices and it is something that retail traders need to be ware of because they might see a led line out of china or the treasury department saying this is likely what's weighing on it i think it's very important to keep some of these back end dynamics in mind if you're a new trader and don't know why, for example, something like a headline out of treasury department would weigh on bit justice of the peace coin and drag it down by 30%.
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>> what is it about the performance of coin chshares and coin desk. that's not the case right now. there are certain dynamics keep those separate for the most part any of theeds whether it's block chain sh tend to be long term tied to the price of bitcoin if there's a bit of difference in the near term, i think long term those bets tend to be placed in the same risk on, krip toy -- crypto currency long term. >> thank you very much for running us through all of this all of these moves are driving record breaking activity with us now is the chief strategy officer of coin shares
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which reported its first quarter of a company we're probably a bit more familiar with coin share is a big yeuropean crypto wallet tell me about the activity you are seeing and what's been happening with the crash here in crypto the last few weeks. >> thanks so much for having me around 40% came from asset management we have the largest digital asset. those have been trading in the market since 2015. we had 6 billion of the peak in may. today we're around 4 billion we also have 60% of our revenue in q1 coming from our trading capital markets activity very known q4, we were doing about 1 billion a month in turnover first quarter of this year was really active. we're trading in futures market. we take a risk mutual approach to trading
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q ja q1 across the board was busy we also saw a lot of activity in trading and as kate alluded to, on the trading side it's really less about the price of bitcoin. it's more about volatility it's great time for firms to be if the market. >> i know your earnings per share basiced fair value gain and all these kinds of things. make the case to an investor, reminds me of other commodity spaces i was think about this today that over the long run the price of oil has maybe not been a great investment but a company like exxon has been. is there an analogy and investing in a company like yours. how are you going fro vied a better return on capitol than
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somebody who says i'd rather own the underlying asset what we really look is at look at the cme traditional finances services model are a dying breed. we're well positioned to take advantage of that. we build and develop trading infrastructure that allows us to deploy innovative products but at the end of the day, the big shift that we're betting on and every one in this asset class is betting on is distribution model
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that are change fundamentally changing consumers want more optionalty we see this with millions of users every day logging onto these flat forms and trading around the clock, day, weekends, weeknights, weekend evening. this is a new paradigm that's what we're building for >> what will be the appetite longer term for institutional. are they buying the dips or scared off if they have been following some risk processes to add this into the portfolio. are they going, forget it. we'll take a step back and maybe try again in a couple of years >> that's a great question a lot of the selling has been retail a lot are people who entered the market recently feeling
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skiddish, selling and also traders. there's a huge market maker component to this. there's a will the of firms that are actively trading p this is really a process of heavy due diligence learning we're going to continue to see retail back into the market. spot exchange volume is at record highs over the last week. volatility drives baactivity whether it's up or down. >> interesting great data point thanks for your time this
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afternoon. >> thanks for having me. >> on the flip side goldman sachs initiated coverage today that's 30% upside. if you think that's high, da davidson, $650 price target makes them the most bullish. coin base went public in april hit $429 in its debut. it's down about 50%. the 8th positive session in 29 trading days as a public company. the business model should thrive on the volatility like melton was saying and buying shares is the best way to gain exposure to crypto coming up, oun of my next guests says there will a choppy year for stocks and upgraded this the biggest shake up in over
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a century. big changes could be coming to the way global companies are taxed. we have a closer look at the president's plan and how it would impact companies. we're back in a moment ok, at at&t everyone gets our best deals on all smartphones. let me break it down. you got your new customers — they get our best deals. you got your existing customers — they also get our best deals. everyone. gets. the deals. questions? got it. but, why did you use a permanent marker? because i want to make sure you remember. i am going to get a new whiteboard. it's not complicated. only at&t gives new & existing customers the same great deals on all smartphones. get up to $700 off our latest 5g smartphones. (vo) this is more than just a building. it's an ai-powered investment firm with billion-dollar views. a cutting-edge data-security enterprise.
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stocks have held up remarkably well this year as we dodged one sell off after another. welcome do both of you how are you positioning for what you think will be a choppy year? >> thank you for having me on the show absolutely choppy year to say the least we see us transitioning into the mid cycle at the moment and this transition with the access choppiness while we find ourtss selves in middle of the bull market, we
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expect a temporary pull back for sure >> how do you position >> we position by rotating into the quality. there are certain things we see do well. the tech, small caps, cyclicals. we're looking for place that will be a good place to hide for investors. continue be invested and benefit from this bull market by rotating to quality and dividend stocks >> i know your sectors are fina financials, health care, material and industrials let's talk about quality i think you're excited with the biden administration saying about alaska cruises this summer as well. >> yeah, that's just another instance of how travel and leisure will become streaming back we like a lot of the cyclical things as well maybe a rightful approach where you zero in on leisure and take advantage of things that will see a pop in prices.
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we think shipping had a big increase but it's just going to get more and more. we like the sector etfs that take advantage of that like a way or be dry and things like that the inflation concerns are what i think will create some of the choppiness as well it's double edge sword it's great that everything is rebounding but we look at what home prices will do tomorrow morning, they will be up double digits you're spending more on homes and gas, you can't buy add many things that's where sometimes you'll see a pull back in the markets as well. what i like about today is the stocks being led by tech, that used to be that's a stay at home trade. that's long gone there's, as you mentioned, there's a ton of liquidity out there in trying to find place to
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go one day you look like a genius and next day you look like a dunce. >> i think you're brick brinking this back to the liquidity question from both you have what i'm hearing is there's going to be lack there of. maybe it peaked in february. where do you think the liquidity that you mentioned, there's new money coming into the market do you expect that to continue where do do you expect that to come from? >> you're seeing the reverse facility that the fed put in place in the last week that was due to fear now it's cash looking for place
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to go. there's cash everywhere. it's searching for place to go because the yields are so low. that's why i think you will have some of these nice pops in the con equity market and things like that where cash says we have to make money somewhere i think tips and inflation protection, areas is where you'll see a lot of money go for bonds. that's a long term trend i know feds said everything is transitory but this is a ten-year average expectation with 2.5%. >> are you guys positioned for inflation? are you ignoring it? will the fed pull off the exit here kind of boil it down to concern
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or not one >> i think inflation is clearly a concern. we heard over and over they're not going to act on it too quickly. they are going to wait and see and perhaps the transitory nature eventually they will have to act. the sectors that we're looking at will be the ones positively correlated with higher inflation and higher rates like financials >> we have seen them doing quite well this year in anticipation of that. thanks guys. coming up, dollar general down as one analyst says there's six reasons to get bearish on this stock what are they and what dud it tell us about the economy? all month long we have been
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highlighting cnbc dcontributors business leaders here is our very own >> my mom grew up in a small fishing village in taiwan. she moved to can ada at the age of 16 with no english, no job and really no money. i watched her over come challenges as an immigrant, chartering an interrational marriage she ran for public office in can dap -- canada and embraced her letterage. they inspired me to begin my own career aa urli s jonast
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welcome back dow is up 241 at the highs it's the laggard the s&p is up 1% the nasdaq is up 1.5%. finally getting some traction here social stocks are high with snap seeing the biggest gain. it's up 6% twitter is up nearly 5% today that's positive for the month. twitter is still down more than 30% from its all time highs in february sports betting and casino stocks are higher mgm all seeing nice gains. still ban tough month for some of these names quantum escape, fuel cell seeing
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the biggest losses we're watching lords ttown that is up 2%. they are set to report earnings this afternoon it's been the subject of much debate with ford's new ev150. here's what's happen at this hour a seven day man hunt involving 300 officers has come to an end without a single shot fired. police have arrested tyler terry in connection with four killings in zk zsouth carolina and misso. he ran from a wrecked car after firing on local deputies tonight on the news to see how officers found terry and how he was able to evade them for so long americans logged $263 billion on road in march that'sen increase from last march and a 6% rise from february italy, investigators are focusing on why the lead cable
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snapped and emergency brake failed and a cable car disaster that killed 14 people. the lone survivor of that accident, just a 5-year-old boy remains in intensive care with multiple broken bones. the winner in friday's 516 million dollar megadrawing still has not come forward the ticket was sold at this 7-eleven at buck county pennsylvania they are urging them to share the wealth it's right outside of my hometown also urging the winner to share the wealth >> a big retirement area or is it just my parents >> i didn't know that. >> maybe it's just them. >> totallypossible >> if you have halfa billion dollars, you can retire anywhere s >> right you can retire in manhattan. cnbc first nft is up for grabs. we honoring mark haines bot on
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the. >> amazing the day it happened. it's really one of the best market calls mark passed away ten years ago today. the auction is open until 10:30 a.m. eastern on wednesday. even if you don't participate, it's an opportunity to learn more about this new asset class. we have a number of nfts we'll be auctioning off. all proceeds goes to autism speaks it's a favorite charity of mark's it's a carbon neutral event. go to mintable.app/cnbc. no soft words for the olympic ts and merrill nixes the mi uco cl. congp right after this
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i lovd ed your mom's life story did everybody see that into the break? was she in politics or just a run at it? >> she took a run at it. she did not get elected. her life story is -- one day i'll have to tell you all about it >> now i'm all intrigued thank you for joining us let's move right along the shares are climbing higher after a successful crew to test flight first in over two years. it's a big step towards the launch of commercial space flight >> it's not been a normal thing and mostly not expected in people's lifetimes that go into space is something to be considered this is the launch of this industry as it goes out. there's only six places that have taken humans to space virgin galactic is two of those. >> michael, i'm going to first tun e turn to you to put this
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stock move sinto context now all of a sudden it's gotten this traction. tell me what you think is going on from a market perspective >> it's revived. it has this tremendous surge up into the 60s now it's bouncing. what's most interesting to me is you go back, it's less than two years ago that initial merger that created virgin galactic with the spac. they thought they would be that far ahead of the game and we're going tests. >> fair point. how significant is this weekend's news >> it's significant. keep in mind, mike just pointed
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to this but this is company that's still pre-revenue this is the first of four test flights before you can see the commercial service launched and the ticket sales open back up and the revenue start up again in a meaningful way for the company. it was delayed it's been a long time coming is very notable. it also, according to cole keeps them on track. by the end of fall, then you see some up grated and the launch of service early 2022 >> my mom in tennessee says the sky is filled with 50. people are tweeting at elon musk
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saying is this your space satellite. is this all connected or are we going through strange mental moment >> we're ushering in this new commercially driven era of not only space flight and travel and now tourism. also ternsms of satellite. people keep spotting in the night sky. congress tasked our national security entities with delivering an unclassified report next month on unidentified aerial phenomenon this is a serious, real being investigated >> is this happening because of the satellites in the sky now? >> it has nothing to do with it.
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this is air force and navy pilots who have been seeing things that they can't identify for quite a number of years. there's videos some thoefzse have been release. you have some heavy litters. harry reid, to former cia directors are coming out the flood gates are open talking about ufo possibilities. >> where do you go from there? >> i don't know. >> i'm just here to listen today at ufo, space talk i'll leave that to you i trust morgan's expertise here. >> i was hoping -- >> i want to know, you might have a window in canada, are they also like wondering if we're being visited. is this just an american thing >> you know what, i'm not sure i'll ask around. i'll do some polling for you >> sorry, i put you on spot. >> it's purely, we're losing our
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collective minds beyond meat is surging after getting a double upgrade at alliance burnstein to out perform to under perform shares are on pace space for best day in four months but still negative on the year it was hot after going public in 201 2019 but it struggled bait i still think the share price is impressive they are really hanging in there. >> the analyst can see i has a stout valuation. we're talking about 13 times revenue. talking about no cash flow yet this snil the ramp up phase and yes, i think the stock is supported by general enthusiasm and market gains for meat alternatives which is not going
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away >> i tried to buy something other than the beyond meat burgers. no one else ate it some of the other products not so much. i know that high profile restaurants big sales for the company but throughout the pandemic, shouldn't people have continued to buy this. maybe it is competition biting not just impossible foods but some of the big players like tyson. we'll see as as the economy reopens if they will barbecue beyond meat burgers and sausages.
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>> the restaurant channels do seem toll be more lucrative. how do you cook a beyond meat patty? we haven't done much in our house but i'd go out and order it soft bank ceo is calling on the olympics more than 80% of people want the olympics to be postponed or cancelled. who and on what authority is it being forced through most of japan remains on lockdown the international olympic committee stated they will go ahead despite any covid restrictions
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raising the travel advisory to do not travel. >> this will be a tricky one >> interesting it's coming from this direction where people in japan concerned a bt the vulnerability of the local population and maybe being pressured by those outside to close down. >> i'm trying to make sense of this raising the travel advisory to do not travel to japan what does that mean for the olympics >> you'll have to wonder if the organizers go back with pressure from the u.s. but to its own population some 70% of japanese firms want the olympics postponed $26 billion. thest most expensive summer
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games ever it looks unlikely that they will cancel the question is will they mandate vaccines for athlete and fans >> true. they can reskcind it add the games open up. >> 80% are said to be vaccinated ahead of these games they will prevent the athletes from plmingling with public and keep their range of motion and where they can go very limited. we're seeing quite a number of
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folks -- ceo rakatan calling it a suicide mission. >> i happen to live in london when the olympics there in 2012, there was fury, locally about how it was going to be a disaster it went off beautifully. it showcased london and the uk at its best and became one of the public's favorite celebrations maybe this is part of the normal process we go through but obviously covid on top of things >> that's a pretty good reminder that maybe the locals don't always love the idea of hosting. it seems like it's more nuance than opportunity that might be coloring a little bit of the discussion. >> hopefully they will look back and maybe say it was an opportunity to remind everybody at a moment when they looking to travel that japan would be place to go. bank of america merrill lynches brokerage is saying good-bye to cold calls after relying on them
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for a century. they are referring them to use linkedin for new clients there's spam screening it's all made cold calling obsolete less than 2% of people cold called answer the phone. there's a funny stat, a guy used to say i have a 1% success rate and that was considered really good i love this how it's the triumph of linkedin. the annoy yan, first they ignore you, laugh at you then they fight you and linkedin wins. >> linkedin has become the new cold call. the message will get through to you. you can see your apple or android phone now that there's a spam risk. who really answers their cold calls. li linkedin is probably mart way of doing it it's an interesting change you think about the trainees are relying on their extensive personal networks.
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i wonder if this levels the field a little bit those tr tra trainees, get into your linked in training. >> when you apply for a job at merrill, that's like your best currency >> i feel like that's at any job. some way it's kind of over due or inevtable it have going to happen as everybody returns from the office because of things like linked in and other social media, how important referrals continue to be i think bank of america is at 40% still. >> absolutely. michael, i will give you the final word >> it's been a long time since kind of smile and dial
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it's always kept because you're reading people out these trainee programs are how much humiliation and rejection can you endure he met give them a stock tip it's much more about communicating the way they normally approach about things electronics. >> it's valuable got to find some replacement thank you. still ahead, president biden has proposal to stop a race to the bottom for corporate taxes but it would hit u.s. companies harder than those over ss.ea we'll look at how much they could pay after this (vo) ideas exist inside you, electrify you. they grow from our imagination, but they can't be held back.
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global minimum even high r number but robert frank joins me now with how much companies would likely pay robert >> the biden administration close to a deal with the g7 countries over a flu global minimum tax rate of 15%. that's lower than the 21% biden had originally proposed and would mark a massive shift in the way multinationals are taxed both here and abroad it would mark an end to what the white house calls race to the bottom for global tax rate fps way it would work, that companies would pay a minimum 15% tax rates and the countries where they do business u.s. companies would pay an additional tax on the overseas profits they bring back. biden has proposed doubling 21%. if the rest of the world moves to 15%, it's likely the rate for u.s. companies closer to that
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15%. he may even consider lowering the broader corporate tax rate to a proposed 28% to somebody maybe closer to the 21%. that's because of the gap between the rate companies pay in other countries and the rate they pay in the u.s. u.s. is too large that means more companies would move profits and jobs overseas and all of this matters because u.s. companies earn $550 billion from overseas, about a quarter of annual total. hardest hit here would be the tech sector, especially companies like alphabet, facebook and apple and rolling in pharmaceuticals, the big global barngs and some retail. all sectors likely paying more now that the rest of the world could come up to 15% as the minimum tax. >> fascinating to see how
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interconnected it is and countries may influence the xorp rat tax rate here. thank you. from higher gas prices to valuation, concerns bank of america laid out six reasons to get arh dlagebeisonolr neral. [typing sounds] [music fades in] [voice of female] my husband ben and i opened ben's chili bowl the very same year that we were married. that's 1958. [voice of male] the chili bowl really has never closed in our history. when the pandemic hit, we had to pivot. and it's been really helpful to keep people updated on google. we wouldn't be here without our wonderful customers. we're really thankful for all of them. [female voices soulfully singing “come on in”]
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welcome back shares of dollar general are down about 3% on a downgrade from b of a to underperform noting six head winds facing the stock and not just dollar general to struggle. let's bring in bobby olmes this is interesting to me because dollar general is a great performing stock so many years and economic implications here let's start with higher gas prices return of grocery store promos unline grocery penetration prescription growth. wage pressures just the valuation how much downside do you think for dollar general and who does benefit from the environment you're describing? >> yeah. we have $190 price objective on dollar general and it is a great
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company. doing great for a while. expect them to do very well. they have a great management team and strategy. we add them to a list of underperform rating grocery related names with kroger and sprouts in addition to dollar tree one of dollar general's more direct competitors and think a couple things are poitential incremental head winds potential is gas over $3 could weigh on dollar general same store sales and believe that the wage pressures you hear people talk about could disproportionately impact dollar general because we calculate the average wages around $8.50 starting wage compared with $11 for walmart and mcdonald's have taken the starting level wages up and that pressure could be an issue more than we realized as a quarter or two ago. >> you had a favorable view on
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walmart, target and possibly costco and bj's. what do you need >> you need all those things i think another advantage of walmart is $11 an hour minimum average and the pressures might not feel as much and you need an omnichannel capability drive up or pick at the store is a huge driver and executing that at what we believe a higher level than other stores. >> if gas prices reverse course could dollar general be investable again >> absolutely. i have had a long term buy rating on the company. i did downgrade them to neutral a few months ago i believe that they have tough comparisons against them and see things happening near term not
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happening last year. pharmacies coming back online. dollar general doesn't have a pharmacy but the drugstores could pick up the traffic than last year and seeing promotions to move up and believe a grocery environment as you move through the year puts more than average pressure on dollar general and if gas which is over three bucks continues to go higher and it stays there that's a head wind that we believe impacts dollar general more negatively than the other consumable retailers. >> fascinating thank you for your time today. >> thank you for having me. that does it for us. llat yi' cchou with tyler matheson for "power lunch. stay with us
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