but saw a drop in single family housing starts and permits we're seeing that on the single family side. >> that's a key point. i still like to watch a single family for the trend thank you so much. diana olick with the latest. that's it for "the exchange. "power lunch" picks things up right now. welcome to "power lunch. kelly will join us in a minute i'm tyler the story of the day is netflix. having one of the worst sessions ever down 62% in 2022 can you imagine that it is mass iive disappointing results.

moments ago morningstar announced the awards for investing excellence one is with us saying the powerful move in yields is good news for investors kelly? >> thank you netflix is dragging down the nasdaq but the dow and the s&p higher s&p up the dow up 1% rite now the nasdaq down. netflix the latest even worse than last night down 36% $50 billion wiped from the market cap below $100 billion. yesterday the company worth $157 billion and the peak more than $300 billion just last november. just five months ago. >> 300 billion to where it is today. we'll spend time here with netflix. wall street of course reacting to the netflix implosion last evening and no one is saying buy

the dip. not a soul evercore saying there's no fixing the problem stifle saying good growth has to end and piper sandler saying it is more than a postcovid hangover barclays asking if the streaming party is over. is it streaming overload as the platforms expandemic with the consumers tightening the belt streamers could be competing for a slice of a smaller market. let's bring in julia boorstin, ed lee and alan gould. alan, what do you think ails netflix most of all? what do the next two or three years look like for this stock

and company? is it an ordinary stock now? >> thank you i think the things that ails them the most is saturation in the u.s. market. with passport sharing probably close to 85, 90% of the market right now. where is the stock going from here the event path is tough for a year or two. the second quarter is going to be a down 2 million sub quarter. third quarter they will have the comp against "squid game" and go against amazon for "lord of the rings. you have tough competition and got to edit the model to add in password sharing. >> julia, what's the buzz in hollywood and in the entertainment business about

what happened to netflix are people saying, we have to rethink the streaming business in light of this what's the business? >> there is a lot of yapping about it but i also think this identification of the fact that netflix has done things its own way. they didn't worry for many years of cracking down on password sharing. they were anti-advertising now they're talking about trying to get an ad supported model in the next year or so. so i think this realization that you have to really generate revenue from the viewers is something the more traditional streaming companies are pushing for and makes the companies with peacock or hbo max with ad supported version or paramount looking smart in that they were thinking about multiple price

points for different consumers to keep the prices down with astds. there's a sense that netflix has to focus on quantity and quality and the co-ceo mentioned yesterday. >> alan, why do you think the guidance is so bad they obviously know why. why have they decelerated to such an extent. >> the second quarter's always weaker than the first quarter. expectations were for a flattish amount without the russia impact down 2 million that's a very negative amount. also keep in mind netflix has 220 million subs every quarter percent of churn is 1.7 million subs. that's a dprimpbs roughly break even subs and being down 1.7

million. the biggest issue is competition. >> ed, the rest of the streaming complex is selling off today lauren martin said it's a sign that consolidation may be sped up now where do we go from here >> again, the issue of password sharing is not a real issue. that's happening since the beginning of netflix competition as alan pointed out is the real bugaboo here if most households pay for three or four services is that it? single interest players, in the smaller route? i think so i think that's where it will head netflix to get the super charged growth back, gaming or even theme parks, they have a lot of

ip, would be capital intensive if 300 million is top line for them they will get there and that's what investors are responding to looking at the multiple i think that's where it will level out like that that's the new netflix going forward. >> isn't it odd to hear people say rightly that they need live news and sports? the very business models are disintermediating netflix. is that right? >> they're the followers now which the ad thing surprised me more than anything else. hulu was probably the first to really have a sort of a sexy ad

supported version. that's more revenue and true for years. netflix knows this i don't know why they never thought do get in the game as reed hastings said i favor consumer choice and justified the pivot and should have been doing that years ago and a sign of poor thinking on their part. >> i'll get julia's thought in a minute on password sharing which you rempblsed. two questions for you, alan. why does it so long? this was a 2023 effect or implementation why does it take so long to crack down on password sharing what do we know or estimate is the amount of money they will collect if they force me to drop my mother-in-law from my netflix

account? confession >> mine's on, as well. say there's 100 million people that are sharing passwords and charge $3 a month. that would be times 12 months is 3.6 billion and what percentage of people take maybe $900 million increment maybe password sharing and advertising is simultaneous so that when they start challenging for password sharing and raise the price $3 they give you the option of a lower price ad support tier that's $5 price. >> julia, your thought on why did it take so long to get to this point >> is netflix a tech company a media company? and as it's transitioned from being a tech company to a media

company and has a huge presence in hollywood as it's been investing in original content, we have seen that they have had to adapt how they think about things and not just unprofitable growth but growing profits and revenue and subscribe everies numbers. they're adopting >> thank you my mother-in-law, sorry. see you soon love you. let's get to breaking news from the fed release of the beige book with the key details on the wages and the economy. steve liesman, how's it looking? >> interesting comments. we were hoping to see signs of peak inflation from the report the beige book saying that inflationary pressures are strong firms continue to pass swiftly rising costs on to consumers there were steep increases in

transportation, materials and labor costs. this covers the beginning of the invasion of russia of ukraine. a few districts reported negative sales impacts from rising prices. consumers perhaps balking at the rising prices. new york reported it eroded consumer spending power and bad news where inflationary pressures expected to continue over the next coming months. employment increased at a moderate pace with strong demand for workers but couldn't hire them because it's held back by a lack of available employees. a recurring people in the beige book we have to see if that continues. firms report significant turnover as workers left for high every wages and mentioned

footloose workers. wage growth strong and inflation contributes to higher wages. no relief at all in the chashlgterization of the inflation dynamic ripping through the economy. i will say ukraine was mentioned 37 times having not been mentioned at all in the prior beige book. russia mentioned ten times this is a new issue and seen as a shock to the economy. >> takes on the greater significance because this is the fed trying to listen to see if inflation expectations are becoming entrenched. to the extent that the reporting tells them there's pressures got to make them tend towards the hawkish side right? >> can i bottle that explanation up >> please. >> exactly how the federal reserve use it is beige book and

goes beyond that because they watch the inflationary dynamic work the economy watching and listening to businesses say, we have higher prices, passing them along higher wages, we pass them along. not only does it tell them what's going on in the economy but the economic dynamic and people out there that want to believe in this concept of peak inflation and i don't think you can tell that story from this report it looks like there's more stuff to come down into consumers with the big question being where we kind of started is do you get to a point where consumers don't have the money to pay the higher prices and balk and have a negative sales reaction as in huh-uh >> right not going there. done all right. thank you. coming up, the winner of

morningstar's outstanding portfolio manager award. will tell us if they've topped out. bank of america's francisco blanch tells us if oil prices will spike further first a look at the stocks hitting new 52-week highs in today's session including hca health care, before scientific, dollar tree, marriott.

welcome back to "power lunch. bond yields pulling bash after nearly four-year highs yesterday. 10-year government yield just under 3% yields up more than 100 basis points since january the next guest has successfully been able to do, winning of the morningstar 2022 investing awards mary ellen stannic is winner of the outstanding portfolio manager award. congratulations on the award. >> thank you, tyler. great to be with you. >> a lot of hard work went into it the award recognizes performances in 2021 a lot changes in 2022. i know you're not a believer in

market timing, trying to move in and out because it rarely works but what kind of moves have you made this year in the portfolios to protect investors and position the portfolios for an eventual higher yields and better profit? >> certainly as you suggest we have seen a significant rise in interest rates this year and largely with the reported inflation numbers and more deliberate focused fed on fighting inflation and so in a lot of ways the bond market has been doing the work in advance of actual moves on the part of the fed so as you suggest the recognition and the team is humbled but we are long term investors. we don't try to time short term movements in interest rates. we think that's generally a lose

every. many times investors are caught and end up not delivering the same value and take an all-weather approach and try to build portfolios that said right now some of the areas we have continued to selectively nibble in as spreads have gotten wider on interest grade credit ta taking advantage there investing is what you choose not to own and an area we believe is going to see further pressure is the u.s. government real estate pass throughs. the spreads are widening we'll start nibbling back. finally municipals they have suffered and interest rates risen more significantly

in the market and actually the relative value is attractive across the curve looking at the fundamentals underlying the sector and we see a lot of strength there and very good fundamentals. so there's a number of things we are doing. bottom up. bond by bond positioning the portfolio. >> you are bond pickers in the sense that mario is not a macro investor let's talk about this -- go back to the first quarter which had to be a quarter. there are a lot of investors and maybe portfolio managers who have never seen interest rates go up the way they did in the first quarter and never seen the net value asset declines that

funds had to endure. how do you keep the investors calm and the team calm when they go, whoa, man, i have seen anything like this before? >> what matters most is units of risk are you paid to take the risk? ironically having done this for decades and started my career with others on the team back in the late '70s, early '80s and dubbed as the bear market babies but it allowed us to have some framework. what do we do now? again being freed from having to make the big top down interest rate calls allows us into the volatility to look at valuation and value for those units of risk we are taking we find that as volatility picks up and the more dislocated a

market gets the more opportunities that often are presented as others need to sell and get out of the way and others shiftinging being on the wrong side of macro call they had on in the portfolios so think of it as very laser-like surgery we do. that's how we add value. we do it -- it is baseball season we try to hit a lot of single. we'll take a walk and a get on base with a hit pitch if need be and then high batting averages we don't try to hit home runs because if you look at the home run hitters their high strikeout percentages. we try to compound high average and compound consistency while providing the investors

predictable ride with liquidity. >> with that analogy, you could be describing the yankees. thank you very much. i was reading an article home runs are down in baseball this season. congratulations on the award. >> thank you again. >> you bet. >> that's a metta baseball analogy. it was. we have a big mover, wall street and a preview of the names and a ton of hype on oatly and beyond meat but the stocks face planting isth year. we'll discuss when "power lunch" continues. you need to hire. i need indeed. indeed you do. indeed instant match instantly delivers quality candidates matching your job description. visit indeed.com/hire hybrid work is here. it's there. it's everywhere.

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with access to financial advice, tools and a personalized plan that helps you build a future for those you love. vanguard. become an owner. welcome back to "power lunch. it's a big day for big blue with ibm now on pace for its best day in nearly two years up more than 7% so far after reporting earnings and revenue above analyst forecast that was thanks in part to strong performance in the high bid cloud business today's move puts the stock in positive territory for 2022 with

ibm less than 5% from the most recent high in june of 2021. big day. big blue kelly, tyler, bag to you. >> big disparity between ibm and netflix. now berhe sha coombs with an update. >> here's what's happening treasury secretary yellen walked out of a g20 meeting when a russian representative began speaking and joined by several finance ministers from other countries. florida senate passed a bill ending special tax ben if thes for disney world following the opposition to the new law limiting sexuality talk in schools. a trial has been delayed to determine how much alex jones info wars -- the families of the sandy hook school massacre they sought bankruptcy

protection after jones lost cases over the claims that it was a hoax. walmart wants a new trial after a jury found it wrongly fired an employee with downs syndrome and awarded $125 million in damages go to cnbc.com for more on why walmart opposes that verdict. >> thank you. commodity prices going haywire climbing to highs but for some investors it is fueling recession fears. demand to flights. speaking to the ceo of an airline looking for a bigger piece of the big three's air space. ingenuity... in motion. it listens, learns, adapts and anticipates your every need.

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i am encouraged by the fact that several sectors in a down trend putting together today two nice up days. transports doing better. the russell 2000 small caps stocks doing better. banks turned around. these have had a tough month over all elsewhere old school tech. remember they used to write off ibm? what a great report this morning. software strong. services strong. oracle, hpq, even doing well apple on the flat side not participating in the rally interestingly is cathie wood and the ark stocks roku is a victim of netflix. high multiple tech stocks not participating in the rally still pressure there don't kid yourself

the new high list is utilities and defensive stocks coca-cola, walmart, general mills. the stocks on the new high list almost every single day. defensive. >> exactly that's the word. thank you. that means yields pulling back from the highs, especially event of the day, you tell me. 20-year auction. >> yes believe me interest rates already moving lower in europe. look at the intraday chart of a 20-year chart. boy their fighting each other to buy it almost 76% of the auction taken by indirect bidders. if you look at a wooeek to date see how they have risen. look at the contrast

the longer maturities look like that completely different look. as a matter of fact, longer maturities toying with yesterday's loi yields short maturities near unchanged and looking at a week to date of 10-year tips, yes, we visited positive territory first time since march of 2020 several investors said the sign was to fade the trends kelly, back to you. >> good to point out thank you. oil closing the day lower today. you can see again not a ton of movement we are kind of hanging in around $4 a gallon at the gas pump and natural gas soaring on monday

back below $7. our next guest said with we can see another mini spike in oil. francisco great to see you again. now that china is coming back online and the supply situation didn't change could we see a spike in oil prices again? >> i'm rather glad you asked thank you for having me. when we think about our airports, go to newark or lax, you probably feel like flights are buzzing but if you look at china the shanghai index for road transport is down to the ground many cities are in lockdown. most emerging market air travel go backwards in the last few months so there's pent-up demand and i think we are about to

start seeing that when people in emerging markts like china with revenge travel we constructive on energy. we think the demand for gasoline is strong this year and of course oil is 106, 108 with china mostly in lockdown and having cut back the imports by 14% in the last month. >> over the next few months, we enter the peak driving season in the u.s., after that what happens? is it so unpredictable right now given what is going on and can't make a prediction about the average price of oil west texas or brent will be

>> again, one of the hard parts in this cycle is that v inventories are very, very low when inventories are low in commodity markets prices have to do a lot of the work to adjust supply and demand to be in balance because inventories are addition it bribdges that supply the buffer is not low. strategic inventories we have been drawing them down quite extensively in the last six months and worried with little commercial buffer but strategic buffer if something else happens. it is difficult to forecast prices past this summer season because the russia-ukraine conflict could abate russia lost more than a million

barrels of supply with sanctions. another big issue is iran fit comes back or if it doesn't come back and cloudy but again the big trend of the post-covid demand recovery with us i think for knicks 12 to 16 months. >> if prices spike again, 120 a barrel, upward pressure on gas prices again and then getting closer to the midterms what levers do politicians have to pull? we saw the release of barrels from the spr we don't have the buffer left there. >> that scares me the most keeping the fingers crossed here because we've been releasing

strategic oil for political or moral reasons to impose cost on russia and curtailing taxes in the u.s. and around the world. economics tells you if you cap fuel taxes people won't consume less gasoline and diesel but more >> exactly. >> we kind of put ourselves in an impossible situation. we've reduced the elasticity by cutting the taxes and as we know with esg considerations and financial considerations energy companies are unwilling or reluctant to plow money back in the ground to develop the resources so that's the issue you have

it is coming into the oil and energy markets. >> well said your concerns are well outlined. thank you for joining us this afternoon. >> thank you. this summer could be a come dsz back for airlines but amid the heightened demand is there an idea to disrupt the big guys? we'll discuss athewe turn wn t all my employees need something different. oh, we can help with that. okay, imagine this. your mover, rob, he's on the scene and needs a plan with a mobile hotspot. we cut to downtown, your sales rep lisa has to send some files, like asap! so basically i can pick the right plan for each employee. yeah i should've just led with that. with at&t business. you can pick the best plan for each employee and get the best deals on every smart phone.

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the truly moving fo picture award.d. oh, stop! you making me blush. it's an action packed animated adventure. show the world that you're more than just a scary stereotype. everyone will love. is this wagging? - good right? welcome back to "power lunch. airline stocks mostly higher this afternoon budget airlines, breeze airways hoping to capitalize on that by adding new transcontinental routes from new york phil lebeau has more with ceo david. >> thank you you are joining us from hartford where you're busy adding flights and today adding transcontinental flights from white plains to san francisco, los angeles. what are you seeing in terms of demand right now for those

flights? >> it's good air travel demand this summer is great. fares have gone up with the higher fuel prices but people seem to be ready to travel and see friends and family and new places. >> you have been around the block a time or two in your career have you seen a market like this with demand that fares rise as much as they have people are still saying i want to go and i will pay >> it's quite incredible it seems like there's an insatiable demand. i'm interested to see what happens in september and october. it's the same in brazil. it's off the charts. universal between here and brazil and seems like everywhere else. >> as you know a number of regional airlines had to cut back without the staffing that they expected to have because

the industry has a shortage of pilots, you name it. has that opened up more opportunities for you because you have been targeting secondary markets saying there's a market here where others might have had to cut back the service? >> we have 75 routes epa not aware of any where a regional carrier was there and left i would say 98% of the routes is no nonstop competition westchester to lax no one's flown that before. they can go nonstop and now the furthest west is chicago lower the fares stimulating the traffic. >> you mentioned it would be

interesting to see what happens in the fall. the industry has peaks and valleys. does that same for the industry or do you think that perhaps we won't see that valley in the fall >> we'll see there's a lot of peptd-up demand and worry that inflation is everywhere the mills you go out with on vacation or the rental car you get or the hotel keeping a close eye on it but i don't think there's an unlimited amount of money that you can raise the fares in this environment so thankfully we have really fuel efficient airplanes. we're stimulating traffic and with the economy generally we are keeping a close eye on it. >> david, busy day with earnings season in full swing

we appreciate you joining us as you add flights from white plains to california we have a number of earnings today and tomorrow in the industry - >> thank you. >> thank you united after the bell and don't miss the first on cnbc interview with ceo skocott kirby on "fast money. >> thank you. after the break, three deem with major stock movers. whether to buy or sell get seated get ready. we're back after this.

welcome back, everybody. time for today's "three stock lunch" trading three of the day's big movers looking at road blocks, accused of deceptive marketing practices and a complaint to the s.e.c. and avis budget group shares up 12% on upgrade of barclays and tesla lower than quarterly results after the bell trader is carter worth market strategy at worth charting

great to see you, carter start with road blocks what do you do with the stocks >> the facts are sad it's a weak stock and established downturn no way around that two, the invent fact broke its ipo price. march 9, 2021 came out at $45 a share printed as high as $70 and here it is at $37. the history of stocks that break not good basically 70%, 80% negative returns on a five-year basis and the street doesn't know what to do with it. highest 100. lowest 50. here's the stock at 37 below ipo price. no thanks. >> the company's responding to allegations about deceptive marketing saying, we have strict guidelines for developers that want to promote or use ads within they're experiences including tech users under 13. a stock seen as, all right metaverse is coming. maybe a decent foothold in it?

>> all true, yet results for invest. holders of shares, anything but. also this -- of course, 30% of the float is 250id up by venture capitalists. their stock no way out, if they were to come out, another problem. >> carter, good to see you usually see you closer to the cocktail hour. day drinking here. avis budget group a stock you describe as underweighted. what do you think underhestimat. 1998 $52 a share in march. march of 2021, 23 years no progress the breakout, a strong stock still it's underestimated. basically the price target on the street is 230. it's trading at 310. no one believes it, never liked it it's a strong stock and establishing a good business that makes money road blocks loses money. >> hmm

always a key differentiator. isn't it what about tesla and what are you expecting tonight and what do you do with the stock >> tesla for me a pair of twos not bearish or bullish fair money stocks don't always revise themselves sometimes they're where they belong. that's the case for tesla. same price three months, six months ago stays in this range. i would bet against volatility actually. >> wow maybe the biggest bet of all in tesla's case. >> outlandish price targets on this stock, though not that you have to agree. >> all over the place here, too. highest 1,500 a share. lowest 300 prominent, big investment banks. very smart people wrestling wat to do with this very important

stock. probably earnd of the day ricsk stock. >> tell us your true feelings. nasdaq nund underperform rates not higher what do you do >> nothing to do with rates. premise somehow the long-term cost of capital, still very cheap. sub3 sub 3% same thing on the way down money's coming out don't want to be on the wrong side of money flow. >> carter a pleasure. >> wisdom. great to see you system to come, seems money might not grow on trees. stocks tied to the plant-based food craze are sinking this year more on that esg play next on "power lunch." face plant.

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(bat hitting) - ohhhh i'mma call his momma. aflac! aflac! alternative food and beverages billed as better for you and better for the environment, but they haven't been better for investors. go to kate rogers for more on that hi, kate. >> tyler, first look at oakley hitting a new 52-week low just over $4. down 70% over the last six months story line at the company ramping up production, but both expensive and timely guggenheim noting in the u.s. hit with issues related to spare

parts, and electricity at ogden, utah plant production half capacity in march. supply tightest for u.s. business and firm says at 8 5% for starbucks drinks this year and others have to supplement the coffee giant beyond meat also down in the last six months. 2022 big brands like pepsi and mcdonald's launched a jerky product with pepsi, expanded chicken nuggets into retail, struggling compared to its rescue business and btig said mcplant tests with mcdonald's underperforming franchisee expectations and a national rollout not likely in the near future. last quarter the ceo pointed to intensified competition in the u.s. over the last year with many new entrants and on the point of market saturation, good food institute says more than 1,000 plant-based brands, food and drink brands, rather, in the u.s.

retail including 123 that launched in 2021 alone, guys back to you. >> just too much competition in this area? or is demand the problem here, kate >> so we asked npd group demand held steady over the last years particularly young people expressing interest. one in five one to increase intake with plant-based foods and brands demand is there, but 100 new labels launches in the last year alone is market saturation a lot of competitor, out there, beyond meat, and impossible, two big ones on the food side. oakley a leader with oatmeal so many options as a consumer looking to integrate that into your diet. >> i do like oat milk in my coffee i find it good as a particular creamer. hard to find peak oatmeal, i don't know. >> prices going um certainly a quick check on netflix before we go. watched stock falling 37% earlier.

the market overall under pressure trading heavy dow only up 178 netflix weighing on the nasdaq. >> all righty. >> what do you think, everybody? time to go >> time to go. >> thanks for watching "power lunch." >> "closing bell" starts right now. the dow higher but nasdaq falling hard near session lows as netflix weigh was on tech the most important hour starts now. welcome to "closing bell." i'm sara eisen dow remains higher up half a percent thanks to ibm and procter & gamble s&p 500 lower by 0.2 masking strength in real estate, consumer staples, health care, utilities. slightly defensive financials up. so are industrials, materials and energy what's not technology communications services. thanks to netflix. chart of the day it is shedding tens of billions of dollars in market cap now down 37% about $5