i'll join rahel solomon for "power lunch" in just a moment and here we are. welcome to "power lunch. i'm kelly evans along with rahel solomon in for tyler mathison. topping the hour profit growth, the best it's been in more than a decade estimates are up, the s&p at a new high we will look at the reports due out that matter most to investors and the market chinese education stocks getting cut in half after a report china is widening its crackdown. is it a nirvana setup for tech one analyst says yes >> that's an interesting twist and a new type of activism the hedge fund manager who is shaking up companies in the name of esg, continuing on our big series from yesterday. and reaping returns for investors doing it her way more in just a moment. first, a check on the markets. the dow, the s&p and nasdaq

heading for a record close after the big declines on monday and strong earnings from tech stocks giving the market a lift facebook also gaining. >> huge moves. you can see the latest, snap is up 25% going the other way among the decliners, intel falling after an annual sales forecast implied a weak end to the year shares are down another 6% today. a huge driver of the rally we've seen this week has been some big earnings from companies in nearly all sectors. it's been the best quarter for growth in more than a decade bob be pisani has that story now. bob? >> reporter: rahel, this has been an extraordinary quarter. there's been a lot of talk about peak everything. what does that mean? it means the kind of numbers we're seeing in the second quarter. we're expecting the s&p 500 to report earnings now 76% above the same period last year. remember that was the depths of what we saw in the covid crisis.

it was 54% in april. 65%, 78% this is remarkable normally companies beat by 3% to 5% on the whole. analyst have is been way underestimating the extent of the economic recovery. there are other things helping move the market forward. number one is third and fourth quarter. the forward estimates are rising as long as they're still going up, that's good. they don't have to go up as fast as they were going up in the first and second quarter but still rising is a good sign. secondly near record profit margins, 13% in the first quarter. almost 13% in the second quarter. those are records. we're not seeing any significant deterioration in the margins despite some higher costs most companies are able to pass on the higher prices. covid variants, it's a big worry, but right now it's simply slowing the recovery not derailing the recovery that's an important distinction. finally operating coverage what does that mean? fancy wall street term but means higher profits

what's been happening is in the covid thing companies have been reducing their costs, reducing travel costs, real estate costs, cutting jobs now revenues are coming back because you've had these cost cuts in the middle more profit is going to the bottom line. that's called operating leverage it's a big talk, big discussion on all the earnings calls. next week, of course, will get a lot of the big tech names to microsoft, the amazons, teslas and facebook coming out. the path of least resistance is higher we are sort of in the middle of the economic cycle, the economic recovery growth stocks like tech stocks tend to do very well in these kinds of cycles. but expectations are high. earnings average companies beat by 18% you can bet there are some expectations they will do that and the real, real important numbers are in the guidance and particularly in the revenue guidance for next week back to you. >> bob, thank you. so can this profit growth continue through the second half of the year and what reports

matter the most to investors next week? let's bring in ron insana. and stephanie link, a cnbc contributor and "halftime" trader and chief investment strategist and portfolio manager. ron and stephanie, good to see you both ron, let's start with you. the world has reopened earnings were strong what's behind these numbers and what are you looking for the second half of the year? >> i think bob outlined it extraordinarily well we had the delta scare last friday and monday. and it would appear now that folks are less concerned about it completely derailing the economic recovery although it may slow some regions of the u.s. and certainly other parts of the world they seem to have gotten over that quite quickly earnings are supporting prices, not just the extent of the beat but the number of companies is at a historic level. and rates remain

it's a little bit goldilocks i always hesitate to use that expression first used by my friend art cashin used on the floor of the stock exchange. but that seems to be where we are at the moment. >> and stephanie, amd, google, microsoft, apple what are you looking next week as especially important reports? >> yeah, i'm going to call it super tuesday, rahel, because it really is going to be a tremendous day let's step back for half a sec 20% of the companies in the s&p 500 have reported. so far really good, beating estimates by 18%, mainly led by financials which have beaten expectations by 26%. the rest of the market is up about 11%. i think that's going to continue i've been very encouraged this past week how broad based the beats were and the guidance raised across the board to j&j, and a whole lit any of companies

that raised numbers. what am i looking for? certainly i think the big four that you guys were talking about earlier, amd, google, microsoft and apple, they all will have very strong reports. no question in my mind the question is what's guidance going to look like number one and number two, have the stocks run up too much into the print we know digital advertising is going to be very strong. we saw that at snap and twitter. that bodes well for google and for apple. but google is up 56% on the year apple is only up 12% maybe the bar is a little bit lower. let's see if they can really beat, raise and the stocks can follow through >> stephanie, it's a good point. it was a really strong week. if we're looking back even to monday, it's been a volatile week so, ron, are the markets perhaps a little too competent about the second half of the year? we have the delta variant hanging out there in the ethey are. we really don't know what the cooler months will bring as far as the variant is concerned. are the markets too confident

about growth in the second half of the year? >> perhaps and i still assume, rahel and folks, i think peak growth may be behind us. we've seen the atlanta gdp number come down from nearly 14% to just over 7% and i expect the gdp growth won't be as robust in the third and fourth quarters and it seems inflation has peaked as well having said that, i think everything going forward beyond earnings season hinges on the federal reserve. do they openly start discussing tapering and tightening? do they start talking about a coming change in policy in the beginning of 2022. that would be meaningful to the markets. then i think you start worrying about where valuations are versus the risk-free rate, versus a potential taper tantrum. growth will be strong. as stephanie said as well. apple is worth $2.5 trillion some of the companies are going to have to grow into these

numbers still, but i really think we're going to transition from earnings to the fed within a matter of just a couple days to a couple of weeks and that will be as critical as anything else we see. >> and actually, stephanie, one final question we have jackson hole, like ron is talking about in the next few weeks, but we heard from mike over at jpmorgan who thinks powell may not get appointed to a second term. do you think that kind of uncertainty around the fed's leadership could create its own turmoil? >> oh, absolutely. the markets do not like uncertainty. and so to the extent he gets replaced, hopefully there's a name that's right behind it so that we can embrace what the decision has been made and what kind of policies going forward we believe will be implemented but for sure the market will stumble on that kind of news, in my opinion, sure >> kelly, if i may that would be a big mistake on joe biden's part and i said this when president obama came in about ben

bernanke jay powell has done an outstanding job. jay powell has done an extraordinary job. i think it would be a big mistake to not be reappointed as fed chair. >> there was a report there's a lot of confidence in the job he's been doing. thank you. have a great weekend >> you, too, thanks. let's head over to the bond market where a serious problem could be emerging. $10.5 trillion debt mark are at an inflection point. with economic support from the fed and the blunt of the crisis, they ramp up buybacks and other policies while it seems to be in the best interests of companies and shareholders today, could they be creating a problem or headwind down the line joining us is co-head of fixed income scott, where are we in terms of overall debt levels? it first came down much more quickly than people anticipated. are they starting to grow again? >> yeah. well, thank you for having me and, yes, the answer is when we

look at a company's balance sheet, the sheer amount of debt that is on their liability side of the equation has been growing. it's picked up following the pandemic you would anticipate that debt might fall when markets are in that much turmoil. the recovery to both the economy and the market has been very quick. it's something we have to keep in mind when we look at balance sheets we have an investment management perspective about debt levels and yields and spreads and what we're getting compensated for owning debt. if we flip the switch and take a look at the corporate finance perspective, i heard in a previous segment you mentioned the s&p 500 is at an all-time high we think about the debt to equity ratio that a lot of corporate america looks at, their equity valuations are very high which is actually giving them an incentive to increase debt the ratios are indicating more debt capacity. effectively from their perspective signaling a much different thing. you can take out a high cost of

capital and move it to a lower cost which is debt >> i guess the question, though, is about stocks' performance if we come back to this idea the quicker they lower their debt levels, the fewer headwinds for their rebound. are we creating a drag at some point those debt costs have to be paid, right >> yeah. the one thing about debt i think a lot of people forget whether you're looking at treasuries through corporate bonds they are payback dates. we encourage investors and the way we're positions throughout our corporate income strategies is we take a look at a company and we're not -- we see the growth that has risen but has been offset by stable net debt what net debt is telling you is how much reserves a company is holding against their liabilities. so if you're going to be using a higher amount of debt capital that does leave you those debt to equity ratios and metrics, they do ebb and flow if you're holding a higher degree of liquidity, if you have that backstop for your

bondholders in check, then it's okay we can accept operating at a higher leverage profile. >> sure. so fast forward the clock for us a little bit here. how do you think this all plays out? we've been speaking about how yields on junk bonds were approaching record lows. they were below the inflation rate for the first time ever any signs of uncertainty picking up in the space is not there that's facilitating the increase in debt levels does this support bullishness in the equity markets until it doesn't? >> in reality, i think when we look at valuation anywhere from corporate bonds through government yields through stocks, i think we all are holding our nose a bit at this point if we're putting more money into the mark place. from the bond perspective and with the long-term implications sin the financial crisis where we saw mortgage-backed securities get hammered and go through the high default cycle this needling in the back of

investors' minds when is corporate debt going to have its super psychle? one thing that has changed dramatically, not just quantitative easing in the u.s. we've seen the fed themselves backstop the credit and bond markets which means it's systematically important not just to expansion but to recoveries this could carry on for quite a while. we think the u.s. economy has room in front of it for further growth and further recovery. >> well, and like you said, the central bank has indicated they'll backstop it, maybe a topic for another time thank you for joining us great to have you. scott kimball. >> i haven't heard that expression in quite some time, holding our nose >> when we're talking about the bond markets lately, i think people -- they're struggling for metaphors. >> fair enough. >> that's one of them. coming up, money is pouring out of u.s.-listed chinese stocks and could be making its way to one specific part of the

market a top analyst tells us where and how investors can profit plus, embracing the digital dollar is the u.s. ready to go ca cashless why the move could reshape the american economy and a look at the sectors on pace to close at records what a difference a week has made both health care and tech. experience our advance standards safety technology on a full line of vehicles. at the lexus golden opportunity sales event. get 1.9% apr financing

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i'm kristina partsinevelos chinese education stocks are plunging more than 15% as regulators crack down on foreign investment on those companies. names like tal education, new oriental have been slammed down nearly, some of them, 100% in 2021 and that's as investors have geared up for this crackdown. you can see the downward trend across the board it comes amid broader scrutiny of u.s.-listed chinese stocks we've been talking you havenotable declines in several of the larger stocks including pinduoduo and jd.com a sea of red on your screen. >> kristina, thank you it isn't the first kind of crackdown. the chinese communist party is taking aim to fintech and to tech more broadly. reports china was planning an

unprecedented penalty against didi joining us for more on what is going on cnbc contributor john rutledge is here john, you have an interesting take on this you think china is trying for information. tell me about that >> everybody talking, including my buddy jim this morning about communism and the party, this has nothing to do with isms. i'm too old for isms this is a single strongman government afraid of losing power. the threat is free circulation of energy. they have now wonderful tools to manage energy, the government. they manage information. and so basically they've taken on and been slowly nationalizing the industry as a way of controlling the dialogue inside china. >> it feels in the long run like there has to be a tradeoff between power and growth perhaps we will see in china's case whether they can have both.

more in the near term as far as investors are concerned, are you warning them away of all chinese names? >> as i said a few days ago on "fast money," this is the spicy meatball, something most investors should not touch if you don't have sources in china, i would stay away from this however, long term, companies like alibaba and billy billy, the eye of the hurricane for today's issues, those are going to be among the best tech companies in the world china's long-term position will depend on their ability to retain tech talent they have a real -- she has a tradeoff problem between the tech industry and control short term over the power base he can only wound the industry these are companies today both

bilibili selling two times revenue and alibaba for two times their earnings three years out. these companies are just way too cheap. so i would have little positions in them to watch and long term i want to have significant positions in all of those companies. >> i suppose for most investors they might understand the near-term risk and the posturing or otherwise that china is doing. but they can't possibly have an interest in harming he's companies. why would they wouldn't investors be on the side of chinese growth or the china east communist party if they have interest in these names? >> absolutely. the u.s. attacking wuhei and an attempt to push chinese influence into africa and latin

america and south asia and the u.s. is now pushing back there's a little bit of a good news story, too, two weeks ago the u.s. tried to have an under secretary visit the foreign minister of china and china offered up a fifth level official we turned it down, which was the right thing to do. yesterday they offered up a vice foreign minister which means that you another on parity i think long term we have to have dialogue with china we're the only two elephants left in the room we have to manage ourselves to not blow the place up. more dialogue is better than less >> sure. one fining question in this vein questions about the new york stock exchange or the nasdaq, their due diligence on listing these names, what are your thoughts on that front

the situation changes day-to-day in the case of didi, even though that seems to have taken most of the world by surprise, is there something more the nasdaq or wherever it's listed, so it would more warn or try to protest investors in the listing? >> i really think so china has had a long time problem of having an underdeveloped banking system. because of that they have an overdeveloped public company system too many small public companies with bad audits or numbers we should not allow any cup to list without well vetted numbers, period. and that's a change that needs to be made we could see delistings happen because of it. that's why i only want to hold small bits of these companies. i may end up holding hong kong

listed shares before this is all done >> john, thank you again with today's declines, didi is an $8 stock. john rutledge, we appreciate your point of view today thank you. >> great to talk with you. >> and while the crackdown in china may be bad for chinese stocks our next guest says it's creating a nirvana setup for faang names and the tech sector. dan, good to have you with us. it's a theory you've had for some time. explain were >> it's more exacerbated from a growth perspective baba, jd and others. now what you've seen with this crackdown that's been much stronger than anyone expected from all angled, it's pushed more of that growth to u.s. tech stocks you have regulatory head winds in the u.s. but nothing compared

to china what you're seeing is a rotation trade. another going in this year >> you see tech stocks going up another 10% and the nasdaq ending at 16,000 for the year. do you think the reaction perhaps is a bit overblown we had a coo in hong kong telling cnbc essentially we're moving from no regulation in internet and the pressure may seem high but it's because of the low base is the reaction a little overblown? >> you look at didi in particular and that really, i think, is what broke the camel's back what you see on the regulatory focus, you saw it on the financial and, of course, now with alibaba and others, investors don't know you don't know what you will wake up on monday morning. u.s. tech you have regulatory

and other risks. but right now fundamentals, it's a risk entree and that's why the 2q earnings will put more gasoline in the gas tank for the bulls. >> it's an x-factor, as you say, that we don't know what regulations will look like would you say it's safe to say that if anything else it will be more regulation and not less >> i think we're going to more regulation in some areas it's more contained. the u.s. in terms of large cap you will see more m&a, more scrutiny from an m&a perspective. apple is one that's $15, $20 overhang on the stock. the bark is worse than a bite. you look at the news that's come out, it's been a nightmare on

elm street for any scenario in those chinese tech stocks. the biggest disparity in a long time >> dan, it's kelly here. i just don't understand what china's goal is here the biggest disparity you've seen now, why investors should favor u.s. tech stocks instead of chinese ones. what is the goal i know you don't have these answers. what do you think about this >> it's been a head scratcher, to say the least just like you said, we're right now in a decoupling. what they're doing with their call stalwarts is limiting growth when you look at didi, that spoiled the party for many others behind it this is something that started in terms of more regulatory and a big brother is watching.

i think it's turned into something much more and is a black cloud and is bewildering >> thank you >> thank you >> such a fascinating one to watch. king cash is dead, they said is america ready for a digital standard of cash becomes obsolete tesla earnings on deck it's been a volatile year for the stock. what do investors need to worry about the most we'll dig into it. ♪ ♪

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i'm frank holland. here is your cnbc news update this hour. trump inaugural chairman tom barrack will be released on bail ahead of his trial with restrictions under a deal with prosecutors announced during an l.a. court hearing, barrack is charged with illegally lobbying the u.s. government on behalf of the united arab emirates an appeals court is disqualifying a private judge in angelina jolie and brad pitt's

court case jolie argued he failed to disclose business. cleveland will change their name >> the name change will be ditch for some of us and the transition will take time. it is our hope and believe this change will divert us from a divisive path and instead steer us to the future where our fans, city and region are cleveland guardians. >> the team getting a new name and logo following a similar move by the washington football team >> frank, thank you. let's pivot back to the markets and get a check on record highs for the s&p and nasdaq the dow could close above

35,000 it is the laggard. let's rewind a bit here. the dow was down almost 1,000 points again, a pretty strong gabbing here and could put it above 35,000 rahel? >> kelly, thank you. and ahead on "power lunch" why one top economist says that physical cash could become obsolete and a digital standard could fill the void. he will join us next to discuss. plus, some refer to them as visionaries. others may call themselves serving. regardless of the motives, how important are activist investors to the esg movemt?en

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welcome back stocks rebounding from monday's sell-off a similar trend for oil. to pippa stevens at the commodities desk oil is basically ending the week right where it started. the market moving beyond opec's announcement to boost output, and the price action suggests traders believe fears over demand were overblown.

wti finishing the session up 0.1% at $72.01 it is also wti's first negative week -- first positive week in the last three brent crude advancing 0.3% to $74.05 and since it's friday got to get a check on gas prices. the average is $3.15, down slightly from last week but still nearly $1 higher than last year, kelly. back to you. >> pippa, thank you very much. with all the different ways to pay for something, you probably use a lot less cash than you once did and as cryptocurrencies make trans,s ever easier do we need cash at all? even the fed has floated the idea of a digital dollar arguing cash will soon be obsolete an economics professor at cornell university and a senior fellow at brookings. it's great to have you here. you're a longtime observer of currency rates and so forth.

it's eye roironic because we mi have a ways to go here, right? >> it's important to make a distinction between a central bank digital currency and cryptocurrency cryptocurrencies are run privately. they do not have any government backing. they provide at least some degree of anonymity. a digital dollar would essentially be similar to the dollar bills you have in your bill fold except they will be virtual so you would have them on your phone and could use for digital payments it's important to understand this is not the cryptocurrency in that sense. >> right i used to be confused for the need for a digital dollar because i would think the dollar is already digital i don't use cash already i pay with dollars digitally all the time looking more closely i think the crypto space has helped me understand the need for kind after crypto dollar coin that could stay within that environment and understandably the fed wants to do that because

there are risks to the bitcoin space, but if they come out with a real u.s. dollar coin, eswar, could they build up to other practice that is are currently taking place in the crypto space? what do you expect the fed to do if they don't want to worsen the problem? >> the distinction is very important because it will not be a new asset. it's just going to be converting the existing dollar bills that are out there in circulation into digital form. there are many advantage, it will make it harder to use dollars for money laundering, terrorism financing and it would give a lot of people who right now don't have access to an easy digital payment system access to one. if you can afford to get a credit card or a bank account

which may have fees for a low balance, that's great. for a lot of people in the u.s. the digital dollar could be a way to a low-cost payment system and it could be good for businesses as well the transaction cost it makes it unnecessary for them to have the costs and difficulties of handling cash. really a speculative assetbut payment mechanism. >> i understand. the need for storage anyway, i can see why something like that could be useful. a totally different question, will there be some sort of constitutional right to anonymous cash or anonymous dollars? everything you describe basically suggests that once dollars are digital and tracked rules can be set about how they're used and it would be harder for people to earn their living off the books

even talking about babysitting there's a lot at stake here. how does the fed navigate that >> there's a profound question many countries around the world are already dipping their toes into these waters and it is the number one concern that citizens in those countries are rating and it's a deep question whether we want to live in a world where every transition, paying the babysitter, buying a cup of coffee, is known through either a payment provider or the government there are ways you can make sure there is some degree of anonymity such as buying a cup of coffee but no central bank wants its digital money to be used for illegal purposes for money laundering and such ot others we face a risk as a society we might be losing the last vestige of privacy

so we need to have a conversation >> absolutely. i guess just one final observation on that front as well other things can be done with digital currencies. they can be set to expire. conditions can be attached and that sort of thing and we're not even down that road at all thanks for joining us. we appreciate it >> thank you >> interesting discussion, kelly, especially serving the poor and the unbanked and the ramifications of that. >> are you doing more harm than good while you're trying to reach those populations, if you hurt them -- for example, a house painter who is not registered with the irs or something, if that is not tracked, the business suffers as a result there's a lot here of give and take i think the privacy question >> so much to consider still ahead, tesla stock has been stuck in neutral and there is a lot on the line

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hello and welcome back to "power lunch." shares are down 0.2% they've lagged this year after a stellar 2020 let's bring in our trading nation team. craig johnson and chad morganlander of washington how does the stock look to you >> if you take a look at the chart i brought in, this is a stock in a company that's been in a trading range, stuck in the mud if you'd like to say upper end 833.

the last six months the stock has been consolidating, making a descending triangle. it's going to come down to the next catalyst, which is earnings coming up next week. and if we can move above the upper end at 689 you have a good shot to break out of that descending triangle. this is a stock that our firm likes fundamentally. it's followed by alex potter, high on the street with a $1,200 target on it i look at this chart and say i think it will be very interesting next week and i think you have a real shot to break out of this triangle to the upside >> chad, views on tesla and the overall ev market? >> we are big believers over the next 5, 10, 15 years it's obviously going to be a major driving force for auto sales. and tesla is a great company overall. unfortunately, it's about valuation for us so when we look at tesla's

valuation we're looking at a ten times revenue number for 2022. that's very, very high p/e multiples are also really quite frothy so we would be somewhat more circumspect about this name. we would be avoiding it or if you own it we would be scaling back our position. yes, we are really quite interested in overall ev market as a whole again, valuations do matter so we would avoid this one. >> all right, craig and chad, thank you very much. enjoy your weekend and for more "trading nation" head to our website or follow us on twitter kelly? rahel, thank you very much coming up, the next boardroom showdown activists are pushing for change targeting companies based on their record on esg. lauren taylor wolfe explains her approach and how it's paying off for investors next

welcome back, we have a quick news alert a judge in tom barrack's case has approve a release bond he will wear a gps bracelet, have a curfew and spending restr restrictions it's the third highest bail, ever thank you, kelly it's not just fund companies that are paying attention. activist investors are also putting their money to work. they're taking a different approach, and it's pays off. let's bring in lauren taylor wolfe, she's an angel member of 100 women this finance and named one of the 50 leading women in

hedge funds globally by "hedge fund journal." we know you don't do a lot of press so, it's good to have you. what are you looking for in terms of new industries or companies? >> we generally look agnostically as energies and companies, first for very high-quality businesses. then we think about adding the esg activism to the cool kit, which is capital allocation oriented we any it's an underexplored tool to unlock shareholder value. you mentioned asbury automotive, which i thought was an interesting value explain what you were able to do to meet a growing issue because of the tightening labor demand. >> sure. a lot of investors have a hard time understanding how diversity, equity and inclusion can drive shareholders value

asbury is one of the nation's largest chain, however the most profitable segment is the parts and services segment, but more mechanics are retiring faster than they can attract new mechanics to the space what is interesting is you're looking one entire candy pool, women. they represent 2% of candidates, but they dominate the industry as customers and what we know in economics so we engage with the company and say why don't you try to attract and maintain women in your workforce and you can drive a huge uplift. >> talk about that endeavor. was it as simple as, why don't you hire more women? which seems pretty sim listic, or were there changes that needed to happen >> of course there are changes that need to happen.

we have a culture that is 98% male, so it's very difficult there's an excellent management team that's extremely receptive. they are the first to offer paid ma terrence leave. they have gone to a four-day work weeks this allow for child care and elder care, so if you can simply make some tiny tweaks on the business and think about the cultural considerations, you'll be able to attract and remain more mechanics if do you that, you can take industrywise utilization, whic is roughly 50% if you can take it up to 55%, even 20% to 60 percent, you can drive north of 20% on the overall enterprise value. >> it's an interesting idea and seem like a win/win. what's on your radar moving forward? if memory serves some he correctly, currently ten companies in your portfolio.

what are some areas that may benefit from some fresh energy >> sure. we love -- we think the environment theme is here to stay, right? we love the circular economy we believe we're going to a more hydrogen-based economy, and that's our investment in kbr, and we work with these companies to make sure the sustainability story is told properly when you think about esg at the high level it's really about focusing on key stakeholders, customers, employees and shareholders if you focus on the right esg initiatives, uattract the stickiest shareholders, employers and employees, and that makes you more valuable and profitable >> lauren, just an observation, we showed w ed wyndham -- if u

don't want your room cleaned, the hotel gives you part of a loyalty program, and just -- something like that can be an interesting example of a real-world environmental impact, as opposed to the discussions we had yet with the problems, for instance, the carbon credit programs, where it's really not clear if they're delivering what's promised. >> absolutely. for windham, if like l.e.d. lighting, smart hvac systems, motion detectors so lighting and cooling only goes on when there's occupancy. it's primarily a franchise high-quality business. the franchisees, if can you help lower the overall energy bill, they'll have a higher profitability, a higher margin we worked with them to think about ways to lower the overall costs that leads to higher cash-on-cash returns, which makes more franchisees choose

wyndham. similarly, what you're talking about on the foregoing the linen cleaning, that's a win/win as well you encourage more user engagement in your loyalty program which will enkurt more ghost stays in a future. >> i certainly wouldn't mind to have my roomed cleaned a bit less i'm fine. >> is rahel going to say no way jose >> no, no, no. i'm totally fine with it. we'll have more "power lunch" coming up next. sales are down from last quarter but we are hoping things will pick up by q3. yeah...uh... doug? sorry about that. umm... what...its...um... you alright? [sigh] [ding]

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