coming up, we're looking at another area of the economy where inflation is starting to hit. real estate, did why one housing economy says there are signs the market is softening and what it means for supply ahead on "power lunch. over to tyler. >> kelly, thank you, and welcome to "power lunch" for this last day of may i'm tyler mathisen, and here's what we have planned for you a critical and rare high level meeting at the white house the president talking with the fed chair as the central bank battles decades high inflation is the administration signaling perhaps that it will accept a slower economy and rising oil prices fanning inflation fears. crude hitting $119 a barrel in trading today. a buck 25, 125 is that next? we've got the ceo of liberty energy here for his outlook on

prices and ability to boost production capacity. kelly. >> tyler, thank you very much. was it the meeting between the fed chair and the president? the dow just went positive erasing a 460-point gain today it's up two points, the s&p's up six points the nasdaq 47 right now a midday rally could also be leading the way. amazon, alphabet trying and succeeding in pulling the indexes higher amazon up more than 5% as tyler mentioned, crude is also getting a bounce. it's trading around 117 right now. wow, actually, it is trading below 115 right now. as you can see this sharp drop lower here in just the last couple of minutes. that's obviously going to firm up the tone of the market outside of the energy space as well so keep an eye on wti crude for this reversal lower. it's now down by about a quarter of a percent spiking energy prices have been just one reason washington is

concerned about inflation. let's get to kayla tausche with the details on the meeting between the president and the fed chair. >> it began just a few minutes ago. a white house official tells me that president biden wanted to simply touch base with his top economic official, the chair of the federal reserve, as he grapples with decades' high inflation. instead of policy tools, potentially to combat it from the executive branch the president in the next few months and this inflection point ahead of the midterm elections must decide which items to include in a legislative package to help bring down costs for americans and whether removing tariffs on goods imported from china will, in fact, help ease inflation. it is the first meeting of president biden and chair powell in six months. the two last sat or stood together when president biden renominated him for a second term in late november. they met just a few weeks before that, which is where president biden solidified his decision to do that. but then they met about five months before that with all top financial regulators at a time when inflation was at 5%, higher

than the fed's usual goal, and at that time experts both inside and outside the administration say that president biden perhaps should have nominated his selections to the fed sooner to allow them to get ahead of the curve. now, this meeting is taking place at a time when an economy whose growth was super charged by the policies brought by the fed over the last several years are slowing down a senior administration official telling me this, when an economy settles into a more normal cycle, you're not going to be posting gdp growth rates north of 5% and monthly job gains north of 500,000 our view is that the economy will start to normalize. it will expand this year, though not at the pace of last year when i speak to administration officials here at the white house, kelly and tyler, they say that a recession is always a possibility, but even this time it is not the base case. back to you. >> all right, kayla, thank you very much. kayla tausche reporting from the north lawn of the white house. our next guest says the president's meeting with chair powell will have more

significance than the market is giving it credit for these two powerful men not meeting today to drink tea and gossip let's bring in dan clifton, ahead of policy research good to have you with us we know they're talking about inflation. what else could be on the agenda >> yeah, so inflation is the backdrop to these discussions, and if you think about where both of these men stand right now, president biden's approval rating hit the lowest level of his presidency over the weekend as inflation concerns build. and for the federal reserve chairman, he really risked being one of the few fed chairs that l let inflation out of the bottle. both of these men have the incentive to get in a room and figure out how to solve this problem. i think much of the commentary today really kind of missed the point of what's happening. we have these dynamic economic issues that are in front of us that could exacerbate inflation, so, for example, the european union banning russian oil could

have the effect of raising oil prices you also have chinese tariffs on the agenda, the president said he's going to review those tariffs. secretary yellen has been pushing to reduce those tariffs. let's just say the president wakes up tomorrow and says i'm going to get rid of those tariffs. you're going to want to know how the federal reserve is going to respond to that type of change in fact, in 2018, it was a big problem for the trump administration he was raising tariffs powell kept interest rates higher so there's going to be that interaction. i think the big issue and kayla just tucked on touched this on introduction, the democrats are getting closer to a deal on what i call build back smaller, which would include tax increases. think about this, what is the fed chairman going to say on how tax increases impact monetary policy so increasingly, we have monetary and fiscal policy interacting. we have a set of issues that have risen to the level where both men need to get in a room

and figure out how these issues are going to be impacted so we have a more coordinated policy tha >> you've laid a lot objn the table there, dan i'm going to have a hard time getting through all of it. i guess on the face of it if there are lower taxes on china, that would be disinflationary, wouldn't it? >> well, it could be in the short run. but if you remember what happened with president trump when he started raising tariff rates, the fed kept interest rates high and financial conditions tightened so it may actually have the opposite effect because it may actually be more inflationary by improving economic growth. we just don't know i don't think the president knows, and i think the president's trying to understand where the fed chair stands on that if there's going to be a policy decision. ultimately, i think the fed is going to want lower tariffs, very similar to what treasury secretary yellen wants, and that will be an important input to their interagency process in deciding how to move forward on

tariffs. >> and if behind the curtain, the two men are talking about the possibility of higher income taxes or some kinds of taxes, domestically, if you have that working at the same time as higher interest rates and quantitative deeasing, you've got three fairly powerful disinflationary forces, number one, and also impediments to growth, right? >> yeah, but i would treat the tax krincreases very differently in 1968 the idea is we'll raise taxes on corporations and high income individuals and stamp out inflation. we've got lower growth and higher inflation in 1993 there was a meeting just like today between bill clinton and alan greenspan, and they didn't want to explicitly say it, but out of that meeting came the idea that if you raise taxes, the fed wouldn't have to raise as much interest rates we raised taxes. we got slower growth, but we still had the inflation, but as you know, the fed had to

aggressively raise interest rates in 1994. we need to be very careful on the tax increase side. the belief that that has reduced inflation not bearing itself out in history and could lead to a slower economy and raise that risk that's currently out there. >> what's that all mean to you in terms of both the possible political fallout, but even more so for investors >> yeah, i think we're in a position, we're at the beginning of a long stage to stamp out inflation. we haven't gone through this in 40 years the money growth supply is starting to decline. that is something very good. that's telling us that inflation is going to start coming down. but we got a long window before we actually start getting it out of the system. that means that we want to continue to be in energy, materials, utilities, health care health care is taking a little beating today on build back smaller. those are the defensive areas that we want to be in and be able to do relative performance because the market's going to have to grind itself out here until we start getting that

inflation rate down meaningfully we're still some time away before we start to see that happen. >> dan, great to have you here today. thank you for all your time. >> thank you, kelly. >> we have dan clifton and we have a sharp drop in oil prices right now this is on reports that opec is weighing suspending russia from an oil production deal brian sullivan joins us by phone. brian, apparently the issue here is that if russia's pumping less, but they don't count anymore, this could pave the way for saudi and others to pump significantly more is that right? >> yeah, we don't have a lot else, kelly, by the way, and this is a wall street journal exclusive. i want to give them props for their reporting on this. nothing is done, but what the journal is saying is that opec -- russia's not a member of that opec. they're a member of that opec plus group, which is russia and other countries, but russia matters more because of their size if they are suspended from this deal they have all made, this declaration of cooperation they made a few years ago, which is basically a one for all, all for

one type thing, that's why one can't pump unilaterally more if russia scoots out of that, perhaps opec has clearance for the companies that do have the ability, saudi, uae to fill that gap. maybe adding incremental barrels on the market. that's why the price of oil is still positive right now, but it's come down a couple of bucks. if this occurred -- and it's unclear from the journal if it will or not -- of course i'm reaching out to my opec sources as well. it's unclear when it would be enacted, how much more could come on the market obviously the market reacted. >> reacted and it reacted in a big way, brian we're down about 4 or $5 from the session highs earlier today. i mean, is there anything keeping saudi, i mean, other than agreements and formalities? could they be pumping a lot more crude right now? would that significantly ease the supply crisis globally >> they have the capacity. the uae has the spare capacity they may be the only opec

nations that do just due to just maintenance problems, issues, whatever it maybe. most opec countries do not the saudis do. what i says is what people don't get is the declaration of cooperation, all for one, one for all, that we're going to make a deal, and everybody has their quotas if one can't do it, nobody can do it. and so that provides the group the ability to say, well, i can't pump more because angola or whatever can't pump more. equatorial guinea cannot do it so of course the group could come to a group decision and change its targets we've kind of been waiting for that they've been adding 432,000 barrels per day the last couple of months. 400,000 barrels a day before that, and obviously the biden administration has been nudging, prodding, pushing, trying to cajole opec, particularly the saudis to pump more oil, which is something that they have not done because they will say we don't want to break with the opec deal. if the opec deal doesn't break itself, but if russia leaves,

that might give the other members cover, political group cover to do what they want. >> how tied is this to the idea that you're -- the eu has decided to place a ban on russian oil imports. >> well, tyler, i find the timing to be very interesting. maybe nothing, but that's -- look, obviously it has a lot to do with this timing. now, of course the eu is going to do it tomorrow. they haven't done anything officially it looks like it's going to happenm happen maybe that's why the journal got this leak. nice job by them, by the way if you see this lack of imports into russia or by russia it will cut off russian production probably by 1 or 2 million barrels a day, unless as kelly and i talked about last hour, they can find new buyers from that incremental barrel in india and china. if china says, you know what, russia, we're close but not that close, we don't need those barrels because we just don't want to deal with the hassle of

them, and india can't take enough well, russia's going to either, you know, they're going to come down in production and that would be a natural ability for opec to potentially make some of that up. it's easier to export from houston to rotterdam than it is to ship from houston to new jersey remember that, thank you, jones act. >> all right, thank you very much brian sullivan on the phone. the dow has gone negative once again by about seven points, but our next guest says investors should focus on top line revenue growth given the confusing inflation backdrop and that's leading him to take on both new long and short positions. let's bring in peter anderson, chief investment officer with anderson capital management. let's hear about the shorts first, peter welcome. >> thank you very much the shorts, what i've done is i've done the same process, kelly, to identify long positions, but ones that are real stinkers, so to say, in the screening mechanism, and what i've come up with are peloton,

zillow, carvana, and netflix, and these companies are not hedges against my longs. you know, there's a lot of long short managers that do that. they try to do pair trading. i'm not doing that i'm saying these are companies whose business models are broken, that did see some very attractive performance and demand during the pandemic, but when you strip that all away, the business models just aren't durable enough to go into the future. >> and so are you saying tse companies eventually are going to have to be merged into somebody else? they're going to go away, or they're going to fail? what are you saying here and if you're saying netflix is going to fail, stop the presses, man. >> well, you've asked a lot of questions, so let me first say this i do think that some exit plans of these companies might be that they would be purchased by somebody else or that they would have to have a complete

overhaul, such as netflix because i think the programming is the main process by which this company has not really got a very positive future i think that the business model is just very old, and most people when you poll them about netflix, they spend maybe 10 or 15 seconds on a movie, and then decide that it's not for them, but the algorithm then builds that into your suggestions for future movies. so it's almost like a death spiral when you're watching it. >> do you know how many people that i know spent about 15 hours this weekend watching "stranger thi things"? i mean, it stopped my house cold i didn't watch it. in fact, i fell asleep, but at any rate, i mean, i don't know i'm not sure i'd write their o'bit just yet in terms of their content because when they have good content --

>> i understand that, tyler. >> when they have good content, people tune in. >> absolutely. and you know, there's an argument that one of ten or one out of 20, home run like a venture capital investment might work, but let me also remind you that these stocks have been uncovered by an analytic process. it isn't just our opinions talking about "stranger things," et cetera, but it's the way i look at these stocks and their ebitda and leverage and coverage which are technical terms from the high yield bond market actually and when i see decreasing trends there's no hiding of those you can't hide from financial -- >> the numbers don't lie i agree. one of the reasons we love you is you say stuff, man. there's nobody -- the greatest -- the cardinal sin on television is to come on and say nothing and we don't have to worry about that with you. >> well, there's a lot of talk therapy going on right now, you know, for all of us because i think we're so confused, just if i can switch a bit to just where

we are in this cycle, right? >> sure. >> you know, inflation, all of it, the ipos of certain spacs. i mean, the dead bodies along the road for the past year, it's incredible, and i don't even know if we can assimilate all this data. so on top of that, we're trying to identify stocks, which is, you know, devilishly complicated anyway, but in this environment where we really don't know where we are in terms of coming out of this horrible position, you know, it just complicates matters even more, and i do think, you know, identifying shorts ironically might be a little bit easier in this environment than identifying longs simply because we've had two years of inflated attractions to some of these stocks that when you look at them in the bright sunlight and you say what is the potential for peloton, for instance, to thrive when we all can go back to our gyms and health care, health clubs, i think that most of us will say it's probably,

you know, seen its better day, and maybe it will be acquired, who knows. they've hired mckenzie to help them out on how to convert and adapt to the new, you know, merging post-covid, and i don't really have a lot of confidence in that. >> peter, we have to go, but i just want to mention to illustrate your point, i think that's very well said that it's almost easier to identify shorts than longs your longs are like booze hamilton and sonova holding. these are not your everyday faang names. revenue growers identified through your process and certainly not the names that we hear too much about. so we appreciate you joining us today. >> thank you, anytime you want to hear the straight truth, just ping me and i'll let you know, tyler, okay? >> all right, man, that's good enjoy "stranger things". >> okay. we'll see you, man peter andersen. >> didn't he go watch the "top gun" movie >> not him, no mac

>> spider-man he would go get tickets in advance i don't think he knows who tom cruise really is. >> maybe he'll go next weekend. >> he certainly doesn't know what "top gun" was, the phenomenon of "top gun". >> he will, though >> i want to go see it did you see it >> new yoo, i want to, though. home price growth hit a record in march, but as surging prices are starting to ease, we will find out what the nation's realtors are seeing right now. plus, the ceo of liberty energy on climbing crude and whether his company has capacity to increase production. as we head to the break, some of the energy related names hitting 52-week highs. marathon, diamondback, eog and ok psy pet just a little bit higher now (mom allen) verizon just gave us all a brand new iphone 13. (dad allen) we've been customers for years. (dad brown) we got iphone 13s, too. switched two minutes ago,

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welcome back to "power lunch," everybody. new data from s&p core logic shows record home price growth of 20% plus in march year-over-year but that was march since then new home sales have plunged, new home sales more than 16% in april versus a year ago, pending home sales were off nearly 4% that same month in a recent report from red fin said sellers are cutting prices at the fastest clip since 2019. realtor.com reports a 9% rise in

listings last week versus a year ago. our next guest says these are all signs the housing market is starting to soften lawrence yoon, national association of realtors chief economist. welcome. how abrupt was the turn there? in other words, the march price appreciation numbers were an all-time record. 20% year-over-year in the 20 largest metropolitans. what went off there in april that caused these numbers that we just cited to go the way they did? >> the price indicators are a lagging indicator. i mean, it's reflecting, you know, the market condition about six months prior what's happening is that mortgage rate really shot up, 200 basis point move from the early part of the year consequently, the life blood of the home sales market is getting hurt, so pending contracts, as

you mentioned, along with new home sales are now coming down back to the pre-pandemic sales activity, after the huge surge of two years so it's just inevitable that home price appreciation will slow down in the upcoming months. >> yeah, i mean, let's talk a little bit about that -- what was it, home listings, a 9% rise in listings last week versus a year ago what does that tell you? does that tell you that sellers or potential sellers are figuring this market has topped? >> well, it's implying that the housing shortage is coming to an end, and should be viewed as welcoming news because consumers, they were just chasing after limited inventory. multiple offers were prevalent, which was the reason for the strong price increases, but now with more inventory beginning to show up and maybe some home

sellers who were delaying and delaying, when is a good time to list, now they're understanding that days of the fast price gains are over and consequently now they're considering listing, more inventory showing up on the market, but interestingly, whatever is listed is finding buyers price quickly the days on the market are still very fast, less than three weeks. >> that's remarkable, lawrence, and again, it's borne out by a lot of the anecdotes i know of personally we still have a high proportion of all cash buyers, and yet we're seeing the beginnings of some price cuts, aren't we how do you think this push and pull is going to play out in the coming months for both the pace of sales and for prices? >> ell, let's first clarify what the price cut really means, so the home -- sellers essentially listed their home 20% above last year's price. now they are reducing it, so the prices could still be up 10% or 15% from one year ago.

so -- but the sellers are clearly recognizing that higher interest rate is essentially squeezing away some of the buyers the multiple offers in some cases are not happening anymore. homes are maybe sitting on the market, certain homes that are mispriced, so it just means that the sellers need to be very realistic to the market conditions we have a shrinking buyer pool because of higher mortgage rates, but now the home sales are retreating back to the pre-pandemic levels. let's hope that mortgage rates stabilize, and we have the job growth to continue to provide some support for housing demand. >> exactly it's such a different market from, lawrence, we remember especially speaking to you so much around the housing bubble and crash, and here we are again with another historic market a very different one as well thank you for joining us today. >> thank you. >> lawrence yun of nar. up next, fintech not finished the group having a rough start

to the year, but could there be signs of a turn around we'll explore that. plus, debt and stocks. one credit rating agency warning some major s&p stocks could be downgraded to junk status. the latest when "power lunch" returns.

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welcome back it's been a rough year for the fintech stocks paypal, affirm, sofi, and robin hood are all down at least 40%, but look at how these stocks have bounced off their lows from earlier in may since may 12th, affirm has more than doubled so do they have more room to rebound? kate rooney is taking a closer look at these names. kate. >> hey, kelly. wall street is certainly keeping an eye out for fintech opportunities at these price, and there were some big winners in may we had sew fie that was the big outperformer, followed by robinhood and affirm compared that to the ark, if you zoom out a little bit, the year-to-date charts not looking quite as good. affirm seeing the deepest losses there with about a 70% drop so far this year, and jmp securities is among those hunts

for value right now. firm ran some screens on 100 fintech names looking at cash, cash on the balance sheet, also earnings growth, and then short interest as well they first looked at cash relative to market cap, top of that list, root followed by robinhood and batch, jmp calling this a good starting point, compared to companies that could potentially go on offense here with either spending or potential m&a. they also rank the most attractive valuations based on the earnings projections calling out names like kuro, a consumer finance company, nerd wallet, upstart, lending tree and rocket all expected to see double-digit earnings expansion despite shares being in the red year-to-date: and finally short interest, upstart, lemonade, sofi, and if sentiment changes quickly, the shorts may have to come in and cover their positions. that can often spark a rally it might be part of the story with sofi, about 15% short

interest on that stock thank you very much. let's get to seema mody for the sn cnbc update. >> here's the update at this hour, rescuers in nepal recovering all 22 bodies from the site where a plane crashed on a mountainside on sunday within 20 minnesoutes of takingf all passengers and crew on board were killed. officials recovered the black box and are ordering an investigation. european union leaders agreeing own an embargo on russian crude oil imports that will take full effect by the end of the year. hungary and the czech republic, slovakia as well securing exemptions for the pipeline imports. the ban is aiming to halt 90% of russian crude oil imports. this marks the toughest sanction yet on russia and one that took weeks of debating to settle on. a federal jury in washington found hillary clinton campaign lawyer michael suzman not guilty on a charge of lying to the fbi. prosecutors from a special

counsel contended that he misrepresented himself to the fbi in 2017 in hopes of orchestrating an october surprise against former president donald trump thank you very much. and ahead on "power lunch," a crude conflict, the eu agreeing on a partial ban of russian oil imports. russia immediately striking back we will discuss high crude prices and how high they can go. plus, bull on the china stocks chinese tech and auto names surging as the country shows signs of reopening we will discuss in today's three stock lunch. you worked hard to save for my future. so now... i want to thank you. i started investing with vanguard to help take care of you, like you took care of me. te quiero, mamá. only at vanguard you're more than just an investor you're an owner. helping you take care of the ones you love.

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welcome back, everybody. 90 minutes left in the trading day, the final 90 minutes of the month. let's get caught up on the markets across stocks, bonds, commodities and an oil company ceo who will join us with more on what's going on with prices and what measuring could help bring them down. the dow and s&p back into the red today, but way off the lows. the dow is down 460 earlier on, and we're actually going to see small gains for the month of may for both the dow and the s&p it's been difficult to achieve this year. the nasdaq up 17 points today. let's move on to amazon, a big boost to the nasdaq up more than

5% with consumer discretionary the best sector as we seek to close out the month. starbucks and nike up 3% second best sector today communication services that's where we find names like google up 2.5%, netflix higher by 1%. disney higher as well. let's turn our attention to the bond market where yields are rising after those comments from the fed's chris waller yesterday. rick santelli joining us from chicago. rick >> yes, we've definitely seen interest rates firm up, up about ten basis points as you look at a monthly chart, and if you open the chart up for the month, we had a low close of 274, which means as we sit, we're up ten basis points from our lows and down nearly 30 basis points from our may meeting high yield close on the 6th, which was 313 now, we want to pay very close attention to the notion that we are seeing a bit of steepening in the yield curve today, and what's really fascinating is if you look towards the equity side

of the equation, which is getting, you know, very close to a decent month, definitely had a go week, we see that it has taken its toll on the intensity of how people trade treasury yields in deference to what the fed will do this year. and fed fund futures are about 11 basis points or 11 ticks above their lows for the month of may, which means less fed showing up in the marketplace. and you can see it in many different barometers like the hyg the high yield etf month to date it's on pace for a five-week high close kelly, back to you. >> rick, thank you very much it's been a two-part drama for the oil market today first surging higher, then reversing lower midday >> hey, kelly, a lot of moving parts but oil just now falling from its highs after a report from "the wall street journal" that opec is weighing suspending russia from its production deal. now, earlier in the day, oil hit

the highest since early march after the eu reached an agreement to ban the majority of russian oil and petroleum products the block had been debating this sixth round of sanctions for weeks. a possible oil embargo had been a sticking point given that different countries are more or less dependent on russia this agreement does include some temporary exemptions in order to get this over the finish line. so the ban covers russian sea born oil, which is about two-thirds of europe's russian in crude imports oil imported via pipeline will be allowed for the time being, which will give hungary and others extra time to find alternatives now, germany and poland have also pledged to reduce pipeline imports meaning that by the end of the year, 90% of russian oil to europe will be banned wti and brent both falling from their highs earlier in the day, but still on pace, kelly, for six straight months of gains for the first time in more than a decade. >> wow, pippa, thank you very

much pippa stevens. so what's next for crude our next guest has a unique perspective on energy prices as the leader of the second largest fracking company in north america. chris wright is the chairman and ceo of liberty energy. chris, it's great to have you here let me ask something that came up earlier about who can fill the supply needed in the global market how much more could the u.s. do right now? >> well, kelly, u.s. production grow, and it certainly can continue to grow there's a limit at how fast we can grow right now with tightness in labor markets, equipment, supply chain, and, frankly, permitting and pipeline and infrastructure and all the things it takes to grow u.s. oil production >> well, that being said, we'd obviously prefer to see it come from here than from other sources that might be less friendly and more complicated. we also have seen the uk moving to do a windfall tax on producers trying to kind of carve out a way to still incentivize production and then

giving the proceeds to low income households. could something like that happen here >> there's always the risk of that look, in the uk, they're raising taxes on oil and gas production from 40% to 65%. think of an industry that struggled for five or ten years and now they're going to have a good year or maybe a good few years and pay 65% tax rates. that's going to disincentivize more oil and gas production, which is exactly what the world doesn't need we need more oil, more natural gas, more refining capacity. >> so it sounds, chris, like in your answer to kelly's first question, you were saying it's not that we don't have the capacity, but we don't have the capacity to refine it, to transport it, to deliver it, to do what needs to be done to get it out of the ground how long, how many -- if everything went well, the permitting, the building, the labor market, supply chain, if everything went well, how

quickly could american supplies come in and blunt the shortages? >> you know, tyler, that's a border two years to get a lot of new production out of the united states two years to build some meaningful infrastructure, but even a messaging that that's going to happen, that permits are going to be approved, new pipelines will be built. that will spur some animal spirits and you'll see investment in front of that as well it's really the question of what's the trajectory of u.s. growth going to be in the next two or three years it could be strong in response to sober regulatory environments and less threats and resistance to our industry or it could be more muted, and the quality of life is very different in those two scenarios. >> yeah, so the reason why there has not been the kind of investment that we were just, you know, sort of spit balling

about there is what? is that boards and shareholders haven't wanted it, they haven't trusted that the demand was going to be there, they didn't want to put money there when they thought, well, it doesn't look like we're going to get the return on investment that we want, so we'd rather pay dividends. we'd rather do buybacks. whatever am i anywhere near the truth on that question? >> no, absolutely. that's one of the two factors for sure, but the shell revolution's been great for the world, but it's been poor returns in our industry for five or ten years tyler, that's the factor you're speaking to, but there's an additional factor, which is the ability to build infrastructure, pipelines to move natural gas, to move oil, to expand refining capacity, and maybe most critically to expand the u.s. ability to export natural gas, not just to help europe in their struggles, but we're in the front edge of a global food crisis because natural gas prices are so expensive,

nitrogen fertilizer production is down. all of these things need to come together, not just change in corporate boards price mechanisms fixing that problem already. what we need is a sobriety in government policy and regulatory affairs. >> fascinating conversation, chris. thank you very much. and i think you really hit a fascinating point. we're going to talk about a lot in the second half of this year, and that is the fertilizer issue and the food security issue that is sgoing to be a worldwide issu for all of us to consider. chris, thank you >> thank you, tyler. thanks, kelly. >> you bet. all righty, still to come, the debt pool amid the massive volatility and higher rates. how are stocks with high debt performing we'll break down the list next and as we head to break, remember, you can now listen to "power lunch" on the go. look for us on your favorite podcast app, follow, listen today. follow, listen tayod

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"power lunch." as interest rates rise, companies with high debt levels are under coming new scrutiny. seema mody is taking a closer look at these highly leveraged names. >> hey, ty letter, credit rating agency fitch says there are few companies with bonds at risk of being downgraded to junk status. what these names have in common is they're sitting on higher levels of debt than average of their peers. other travel names that had to take out a lot of debt due to the pandemic, southwest airlines, expedia, host hotels are at moderate risk according to fitch interest rates and the performance of highly leveraged stocks move inversely to eac other, which explains why a lot of these names have under performed in the last few months a cnbc analysis of data from s&p capital iq shows other names that fit the bill include the cruise lines, carnival, royal caribbean, norwegian cruise line with a debt to equity ratio higher than the sector average all three stocks you'll see are

down about 20% in the past month. higher debt isn't necessarily scaring all investors away ubs is out with a new note this morning writing if the cruise lines can turn a profit this summer around peak travel season, they will be able to focus on strengthening their balance sheets higher rates are also impacting how much new debt companies are issuing. take a look at this data just in the last month, only $3.5 billion was raised. that is the slowest pace since 2005, and well below the 45 billion, 47 billion that was raised in may of 2021. so companies are certainly feeling it, guys >> it's been a major reset, and we're only just now seeing the fallout. >> right. >> seema, thanks very much still to come, reopening positivity chinese stocks declining as shanghai moves towards ending its lockdown, this after weeks of declining we'll take a look at three names in particular. there they re. and whether you should be cautious or buy now. and a quick look at the dow, which is now moving steadily

lower once again we were briefly positive as you can see on that tiny chart up there, but we were also down by 460 earlier today. we're down 178 points. we're back in a moment miss allen over there isn't checking lesson plans. she's getting graded on her green investments with merrill. a-plus. still got it.

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all right. time for today's three stock lunch. we look today at stocks getting

a lift as china moves to ease covid restrictions one of them, jv.com, up 5 percent. neoup 4% after morgan stanley said the chinese ev maker is ready for an rebound estee lauder rising almost 2% on a call from oppenheimer that a recovery in china could help drive growth it is a bigley diversified company. let's bring in jeff goldberg, cnbc contributor let's start with jd.com which looks like a nice vodka gimlet on the rocks there. >> it does, tyler. certainly we may need more than three drinks to unpack but i'm cautiously optimistic china is reopening. we are certainly seeing the second largest economy coming back as lockdowns rebate jd is about 25% of allibaba.

if you think about the fulfillment infrastructure that amazon has implemented, they have the ability in the same way with the last-mile delivery network with their own employees. they are taking a playbook out of the amazon path but if you look at jd specifically, oversold conditions, i want to see it back to the 50-day moving average of $97 it should allow a nice name, about 32 times move higher >> what about nio? >> so nio is a really interesting name you look at this absolutely cream crackered, right, kelly? down about 47% year-to-date. even george soros came in a couple of weeks ago, dipped his toe with a mere $100 million if you think about them they're trying to find a solution in china, and at the end of the day they're the top performer in the ev space they're trying to create a middle class ev car. as we see the different components that we know, their supply issues, there's semiconductor issues, inflation, all of the headwinds may be starting to abate over there

again, it is a way for them to really move higher if you also look at what they've done, they borrowed a page out of the playbook of apple that they're doing a battery as a service subscription now you can charge, you can swap, you can even upgrade your battery. i think it will be pretty strategic moving forward as we see the reopening in china. >> let's go to the estee lauder which you see as a buy but not yet. >> it is if you look at the chart it has been in discovery mode, under the 50-day moving average as well as the two-day moving average since start of 2022. i want to be a buyer once we get above the 50-day moving average. that's a prudent way to get into the stock once you have confirmation on the technicals if you look, people are going out again. i know we all want to zoom filter look at this i need a zoom filter everywhere i know so i know i'm not using estee lauder products but a lot of people are embracing the fact we are going back out and want to look our best

you have an opportunity with a 35-times forward p/e ratio to grow at the end of the day i want to be a buyer of the stock at 258 not right now. >> at 258. once it crosses -- and that's the 50-day moving average. jeff -- >> that's right. >> i assume that's right jeff, thank you very much. you do not need any of those products you look just wonderful. >> my dad said i had a face for radio time. >> we will get you the right filter on tiktok >> it is all about the selfie positioning. anyway, up next wall street is set to close out a rocky month of trading again there are some charts that really tell th mth srythison'sto at's next. but weekends are still all about grilling. and walmart always keeps prices low on our fresh ingredients. so you can save money and live better. ♪ at fidelity, your dedicated advisor will work with you on a comprehensive wealth plan across your full financial picture. a plan with tax-smart investing strategies designed to help you keep more of what you earn.

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welcome back, everything we told to you the key levels to watch, we would give you here they are. 32 -- okay 32,977 we have to hold this if we want the dow to be positive for the month. we are only -- tyler, what is that 50 points she said than that level right now. >> a few points ahead of where we need to be, but the real message here to me is all of the talking that we've been doing this month has led to basically flat month to date, .15% higher after all of this storm and drama. >> flat is the new up in the kind of year we've had. >> flat is the new up. >> what mass been up, quickly show you crude oil this one briefly dropping below $100 a barrel earlier in the month, it has been a steady move

higher interest rates have not been a steady move higher, we have seen a lot of down appreciate if this goes to the upside i want to know how well things will hold up. >> we were above three, well above three earlier and now back at 2.84. and we got it all in for you, everybody that's why we do it here on "power lunch." thanks for watching today. >> "closing bell" starts right now. ♪ hank you, kelly and tyler. another volatile day for stocks. dow at lows but the broad market is heading south the most important hour of trading starts now welcome to "closing bell." i'm sara eisen the dow is down 200 points at the lows of the session we were down 460, then went positive and we're giving up again. consumer discretionary and services there's buying in the beaten down names that are helpin