tv Power Lunch CNBC June 9, 2022 2:00pm-3:00pm EDT
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course of the pandemic domino's down 27% and yum, pizza hut's owner down 10% in the last six months back over to you >> i am a pizza fan so i'll keep a close eye on those for sure. thank you very much, kate. you made me hungry that does it for "the exchange." the dow is off the session lows and we were down 232 at that point. that does it for us. "the exchange" is over "power lunch" starts right now ♪ ♪ thank you so much, dom and welcome, everybody, to "power lunch. so glad you could join us on spring thursday. here's what's ahead. signs of deflation yes, deflation most strrestaurant brands say ty are wrefrstling with rising prie and the opposite is happening and he'll explain exactly why. should the u.s. invoke the defense production act to support the oil and gas industry we'll talk to an energy ceo
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about the best way to lower prices and prevent future you are shot, but first, seema modi in today for kelly >> thank you for having me, tyler. stocks are treading water ahead of the key inflation report and the dow off the worst levels of the session and the s&p 500 lower by a half a percentage point and the nasdaq composite now below 12,000 and trading down by 0.8% on this down day, shares of tesla are trading higher ubs upgrading the stock to buy saying shares can rally more than 50% from current levels we will trade that stock later in today's three-stock lunch shares of ollie and signet, and the yield on the ten nf year yield remaining above 3% ty >> thanks, seema tomorrow's cpi report could answer a key question for investors and that is has inflation peaked the debate around inflation
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leading to tumultuous inflation in may and it briefly fell 20% from its recent 52-week highs and that's technically a bear market, boy, it has felt that way whether it's technically that way or not. the dow losing before rallying back at month's end and our next guest expects more volatility into the summer. he's mark lashini from janet, montgomery scott good to see you. let's look ahead to tomorrow's inflation number are you expecting signs that inflation has or is soon to peak >> i am, tyler i think we've seen several indicators that we are set up to see that occur and hopefully continue to in the coming months because that is so important to the fed's reaction and how it responds to it by all accounts, we know that goods prices has started to deflate. you mentioned chicken wings, for instance and other items in the
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sector, accessories, clothing, furnishings and the couple of reports in retail such as target reporting that they're going to have to mark down prices and walmart the same, and all suggest that the spike that they may have seen has the overall headline inflation resulting from everybody buying capital goods and core goods, if you will, has rolled over rather severely and hopefully that accompanied by prices falling will contribute to that headline number so if we get that kind of rolling over of inflation and we avoid a recession which i think you believe we are going to do, what does that imply for the kinds of stocks and investments i should make? >> tyler, that does have ramifications sectorally because we've seen, of course, mainly energy lead by a lot, up about 60% year to date
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utilities was the only sector that was positive and the resource particularly on the sector has done well and i would allow that to continue if we continue to see the positive economic momentum and if it does survey somewhat and it was off of its oil and that should allow to continue to produce positive gains and equities will continue to catch a bid. we like energy we like basic materials and we also like healthcare and it's a very valuation-attractive sector and one that has a defensive growth characteristic to it. those that we would tend to stay away from or at least underweight are the areas like real estate, for instance, part of the technology sector that are dependent particularly on hardware on seeing a economic block in the u.s. and global basis, but there's still room for the broad equity markets to
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reserve their advance deeper into the year even if we have to go through summer to get there >> i want to get your take on the jobs picture because this morning, jobless claims above 229,000 and that was much higher than expected and it comes after the very strong jobs report in may. i'm curious, yes, we'll watch the cpi report tomorrow, but how does this jobs picture change jerome's calculous going into next week's fed meeting? >> weekly jobless claims where they have been starting to trend higher and that is a leading indicator of the labor market more so than the actual jobs report which is a lagging indicator, of course at the same time, of course, we got a recent jolt survey that got 11 million job openings and i think what's going to concern the fed is not only the
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tightness of the labor market with just a 3.6% unemployment rate, but to what degree those numbers of unfilled jobs at 11.4 million start to work off because nirvana for them would be able to be -- triminflation somewhat and at the same time without seeing the unemployment rate rise and they can do that by taking down the number of unfilled jobs because they're reducing the capacity that they will need if they are seeing a downshift in, and while still positive is not recessionary in nature. >> thank you very much we have to leefr it there. mark liscchini, thanks again >> inflation seems to be everywhere you look, but wingstop saying chicken wing prices are in deflation. you heard that right deflagsz kate rogers is joining us with
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the ceo of that company. take it away >> thank you very much michael skipper, thank you for joining us today good to see you. >> thanks for having me, kate. >> we don't hear that every day. bone and wing prices about half of what they were last year. how does that put you in a competitive advantage in this market >> it puts us in a unique spot wings are at all-time high and we are at $1.63 a pound and our franchisees are very strong and it puts us in a unique place like other brands that are navigating inflation who might likely have to take price in order to manage their margins and we can lean into the deflation that we're enjoying in our business and potentially give that back to a value sensitive consumer in the form value and that would continue to grow our business and draw time line and growth.
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>> are you discounting for consumers as a result? what is the value proposition versus a chipotle, a domino, and 2021 marked our 18th consecutive year of positive same-store sales growth, think about the things that have allow the psychingel and we have a bundle out there right now called the boneless meal deal which is at a th $15.99 price point, 20 wings, and large fries that can feed two to three people and they see that as meaningful value and when they engage with wingstop it's not like other qsr brands who have an average frequency and call it four to five times a week that can see where you see consumers pull back. our average frequency is three times a quarter so guests almost
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feel like they've learned that indulgent occasion with wingstop and it associates value in their mind and it allows us to retain those visits and continue to top line growth. >> delivery is so important to your business model in particular are you experiencing any hurdles with driver shortages and we were talking about that in the last hour of programming and are people pulling back as delivery gets more expensive and they start to evaluate where they want to spend their money? >> it's roughly 25% of our business and we have a standard pullback we haven't seen issues with the performance of driver availability we leverage third-party delivery provider partnership there to provide that service and we haven't seen any performance issues to date >> let me just jump back to what i think you were saying as you talked about the fall in prices to $1.67, i can't remember
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did i hear you clearly say that among the things you would consider would be to cut prices not to raise them. cut them back to maybe where they were, or is the strategy not necessarily to cut prices, but to create other kind of value packages where your dollars in continue, but you give the customer more >> that's right. i think it would be more likely in the form of presenting guests with value and what they perceive with value and it does engage with wingstop it's cooked to order and we make our ranch and blue cheese every day in the restaurant and we hand cut our fries in the restaurant daily there is a quality element as well as price element that consumers are sensitive to when they think about being more discerning with how they spend their dollar so we'll press not a compelling offer that we believe we've been able to demonstrate in the past and deliver occasion for gas that retains that business >> i think there are a lot of restaurant owners that would be
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envious of the situation and the fact that you're seeing deflation when it comes to chicken, but given that your stock is down about 51% so far this year. we're entering this period where we're not really sure of the exact path of the economy and whether it's a soft or hard landing and are you scaling back from the -- our situation is almost the opposite of that. we're 98% franchised and as you think about our business, the unit economics for our brand partners and franchisees their sales are up over 30% over the last few years and as food cost is down and the sweet spot for the model, their cash flows are as strong as they've ever been and so the demand for unit growth from our franchisees are strong and gave us confidence to increase our unit outlook for 2022 to be over 320 restaurants we expect to open this year. >> it's kate again
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franchisees are feeling confident in re-investing the money back into the business and opening up new locations and i'm sure they have concerns as do all operators in this environment. what's the top concern you hear from operators is it labor? fuel prices? is it supply chain tell us what they're saying. >> it's a unique spot for us to be in. the biggest thing they're talking to us about is how do i get access to more territory to develop more restaurants we offer a lean operating model and you can run a wingstop with three to four team members and so we're in a very unique position as it relates to naff ga navigating around labor and it's really strong and it's being opportunistic in their mind and continuing to grow in our brand. >> thanks, michael thanks so much for joining us. good to see you. >> great to see you. tyler? seema? >> i am now very hungry. thank you, kate rogers chinese tech stocks roaring back and the kweb outperforming the nasdaq 100 quarter to date, so
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why sentiment is taking a turn plus nearly every member of the energy index has hit a new 52-week high over the past three months we'll talk to a high-profile ceo about output, where prices are heading and thou how to get the little lower and travel stocks seema. seema! wake up here >> they're down! >> did you know carnival is once again the worst performer on the s&p 500 this year? tough year >> there you go. another 7%. >> yeah. >> we'll be right back
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welcome back to "power lunch. i'm dominic chu. shares of meta platforms at this hour trading near its lows of the session on its first official day with the m-e-t-a, meta ticker. as we look back in the last year, it's fallen from $1.1 trillion at its highs last september to just over $500 billion these days it's still hovering around 12% from its april low and down 40% on a year to date basis. those meta shares again down 3.5% near session lows, seema. i'll send things back over to you. >> dom, thank you. >> chinese internet stocks have been soaring this weeks on hopes for an easing of regulations in the tech sector. take a look at this, the kweb
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etf up 9% so far this week even with the pull baback, the rebound in these beaten down chinese names follows better than expected economic data overnight on the trade front and the growing expectations that china will unveil some type of monetary and fiscal policy which bernstein analysts say will in turn help technology and real estate companies in china outperform also lifting sentiment, bloomberg reporting this morning that chinese officials are in talks to revive and financials ipo. with this week's games, the etf is outperforming the qqqs which has the tech companies before. the critical question is whether china loosens the zero-covid policy and gives the economy the stimulus that it really needs to recover, tyler >> my guess, seema is that china
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will become increasingly interested in stimulating its economy. they've got to get back to some high level of growth or they'll have an unemployment problem >> this zero-covid policy has created a lot of havoc on the ground in china, right it's impacted the employment story for sure earnings as well at some point they have to say we need to give our economy the economic medicine we need in order to stimulate the economy and ensure that we remain one of the post powerful nations in asia. >> they have these graduates coming out of universities who will need jobs and not simple, menial ones, but it's a tough -- it takes some -- fortitude, chutzpah to put money into chinese internet stocks. >> it does the volatility that we've seen within china, within technology, it's not for the calm minded >> thank you for saying chutzpah >> i was going through the other ones and i was thinking inappropriate, inappropriate,
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progress is everything investing heavy weights offering their best ideas at the annual sown conference leslie picker with more on what ftx founder sam bankman freeh had to say hi, leslie >> it was an interesting fireside chat with strive's patrick karlsson the conversation kicked off with how the macro changes are impacting the price of bitcoin especially rising interest
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rates. >> high real rates are very lickly to be bad for crypto and the reason is basically that crypto is an investable asset and, you know, high real rates means that there is, you know, less money sort of sloshing around, and thus, less money that one could use to buy things like for instance, a bitcoin >> bankman-fried added that what's triggered, quote, a cascade of selling in both bitcoin and equities carlson asked him with it isn't seen as a positive for it. to that he had an interesting response it's been going up for a long time alongside bitcoin and what's changed this year is that formal indicators like cpi has finally started to reflect what's actually been happening and in reaction we've seen
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changes in monetary policy and that is why you're seeing a sll off in bitcoin bankman-fried said the real change is not increased inflation, it's decreased expectations of future inflation. so i haven't really heard that argument before, guys, but i thought it was an interesting and introspective way with the correlation between bitcoin, inflation and monetary policy. >> i wonder where he sees the decreased expectations of future inflation? >> yeah. >> well, he didn't go extrapolate into where exactly he sees that, but it's interesting given just where everybody else is in the market in looking ahead there are other presentations today that have basically said we expect inflation to be around for a very long time and you get two different schools of thought, but bankman-fried which i assume he thinks it's bullish for bitcoin. >> i would think so. leslie, thanks very much
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leslie picker. let's get to frank holland for a cnbc news update hi, frank. >> hi, seema here is your cnbc news update within this hour philadelphia officials announcing the arrest of two men who will be facing murder charges for the deaths of two bystanders last week the video shows the suspects fired randomly into the crowd after they heard gunshots down the block. the uk is concerned about two british sinnicitizens and a moroccan as the january 6th committee prepares for its prime time hearing tonight with promises of major revelations, the top republican in the house says it is unlike any other committee in american history >> in fact, it is the most political and least legitimate committee in american history. it has permanently damaged the
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house and divided this country let's be honest, it is a smoke screen for democrats to push their radical agenda >> coverage of the hearing with shepard smith starting at 8:00 eastern here on cnbc seema and tyler, back over to you. >> thank you very much and ahead on "power lunch," oil sitting around ad$120. national gas prices nearing $5 on average how much higher can they go? >> plus, we've got the three ts of the market today. we are hitting tesla, take two and target "power lunch" will be right back
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♪ ♪ 90 minutes left in trade and we want to get you caught up on the markets. stocks, bonds, commodities and as gas heads to $5 a gallon, what are some ways to lower prices let's start with the check on markets. the dow currently down a half a percent. s&p 500 lower by three-quarters of 1%. the nasdaq down 1%, back below 12,000
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new economy and old both trading lower today. check out the basic materials whether it's steel, lithium, gold there you see newmont mining down 3%. media and streaming services also falling warner brother, discovery, paramount global and netflix also trading down by 3.5%. now to the bond market, ten-year yield above 3% ahead of tomorrow's cpi report. let's get over to rick santelli who has been tracking the action rick, where do we go from here >> you know, most likely priced down, yields up although as you look at an intra-day 30 chart what you will notice is everything changed right around 1:00 eastern and that's when the results of the auction came out and it was best of breed we had threes, tens and it's when investors showed up and they showed up aggressively and you see the rates drop there and if you go and look at the ten-year chart back to memorial
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day, you can see rates have just continued to creep up and going into next week's fed meeting and most likely you'll see that continue, and we had a meeting today, the ecb had a meeting today and if you look at a boon chart. the last time they were negative was on the 7th of march. so look at what has happened since then and we see that's been aggressive and in the short period of time we covered 140 basis points and they closed at an eight-year fresh high today and the currency didn't quite make it. the euro was holding up because the ecb is much more hawkish they did a reverse burden of proof and instead of inflation having to go higher to tighten, it now needs to go lower for them not to tighten. so the euro started to move lower after about an hour and once it traded under yesterday's low price it really dropped aggressively and the dollar index, well, it responded with a three-week high as the euro
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looks like it's going to close at a three-week low. seema, back to you. >> the euro dollar parity with what christine lagarde said today. oil holding close to $122 a barrel near that three-month high before falling slightly on news of a new lockdown in china. natural gas and gas futures both higher today, as well and gas prices nearing $5 a gallon nationally right now and while that's bad for consumers, it has been good news for energy stocks nearly every stock in that sector has hit a new high within the last few months and most are trading just off their 52-week high let's get an insider's take on crude's climb and if there is any sign of relief we have matt gallagher, he's on the board so pioneer natural resources and he's also the founder and president and ceo of greenlake energy, a private company that explores, drills and produces oil and gas primarily in west texas. it's a pleasure to have you on today.
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>> hi, seema it's great to be here. thanks for having me it's not for the u.s. to produce more oil, but to take significant action what exactly are you calling for? >> look, it's time to have a blunt and honest and adult conversation with the american people we are in the middle of an energy crisis here the good news is we have the resources and the capabilities to stem that crisis, but we need regulatory and policy certainty. we mentioned the high gas prices across the country right now when you look at policy and policy matters, the state of georgia is deficient in fossil fuels and yet it has the lowest gasoline price across the country. on the flip side, california has the highest gasoline price in the country and sits on the treasure trove of resources. so policy really matters and we need approximately see stability and we need to do our part we need to continue to drill
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>> what do you think that would actually look like >> well, we can get incremental rigs from here, but when you look at the last two years since the pandemic, the service sector has had to cannibalize its equipment and we know labor is tight, as well, but even if we get those rigs we can't get the steel to put in the ground to produce these wells and 20% of the steel we imported came from russia and ukraine we could use help on those big infrastructure projects and build more plants and more pipelines so that we can input cheap energy and affordable, abundant energy to our economy and to our allies. >> when you say we need to have an adult conversation in this country and we need to deploy, for example, the defense production act, is that another way of basically saying that the country needs to adopt a kind of
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little bit of everything approach to energy and that we need to do more drilling, we need to lay more pipelines, we need to build or repair more refineries we need to invest in more lng export ports is that really what you're saying and we have to have that adult conversation in light of commitments or the desires we have to wean ourselveses from fossil fuels and decarbonize the economy. >> that's right, tyler thanks the crux of it right there. if it was a multiple choice exam we would fill all of the above >> we need to continue to decarbonize the industry and energy sector. along the way, over the next decade or two we need continued investment in these projects to provide reliable energy to the
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american people and our allies, for that matter and to do that, we have to have a more pragmatic conversation and we have to talk about the tradeoffs. we've grown production and crude oil north of 90% since the year 2000 and we've reduced the united states greenhouse gas emissions by 18% so we can make improvements on our industry and along the way, while we are supportive of the transition soy it can't be an either/or it needs to be all of the above. >> so what's the obstacle to having that adult conversation because my -- my sense is -- i may be full of you know what, but my sense is that there are a lot of reasonable environmental-leaning people who say i get that, and i can buy that, but somehow that just never breaks through in other words, i get the idea that we're not going to flip the light switch like this and move
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from a carbon-heavy economy to a carbon-free economy and that it's going to be transitional and we do need an all of the above, but the conversation never takes off because everyone is so stuck in their own political positions. i don't know >> you're right. there is some polarization i do think it's on the edges. >> it's vocal edges, right it's loud edges. >> those edges have gotten louder and have stolen the air out of the conversation and we work very well with a lot of the environmental groups and they're spending a lot of money on satellites, for example, to identify methane emissions and leaks sooner than we have historically and now we're karching up. so you're working in conjunction to improve the common goals and you're not getting too far off
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on a single metric a good friend of mine said to save the world, we need to save the conversation we need toen game and lift each other up and see where we can drive solutions. it's an all of the above approach. >> i think a lot of people would agree with you i'm just curious, given the board seats you hold chesapeake energy, what type of conversations are you having with those two companies about trying to push this type of agenda forward and pushing that need for a conversation in washington and even those who might not agree with their plans to expand. >> at both companies it's leading by xafrmel and trying to be the best we can be, so we both made an impact on the global sail and for sure the domestic scale and global scale. with those companies it's leading by example and when we
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walk in we engage with the state of texas and the local communities and also in pennsylvania we've contributed through our taxes billions of dollars to state and local taxes which helps education dramatically and a large partnership with the strategic partnership addressing labor needs and education and health care and it's leading by example on your assets >> yeah. this has been really interesting. thank you for joining us today matt gallagher appreciate it. >> thank you, seema. thanks, tyler. >> after the break, the cfo council surveys while most companies are preparing for a recession, few will cut down on cybersecurity costs. we've got the details of that next, and as we head to a break, this month we offer financial planning trips to help you protect your portfolio here's our senior personal finance correspondent sharon
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epperson >> here's a tip for your money, your future you are. take your monthly income after taxes and that's your monthly inflow and then add up mortgage, rent, credit card, auto loan payments and all committed and diskregsary expenses that's your monthly outflow. your minus inflow minus your outflow it is your personal cash flow and that tells you if you're living within your means to pay expenses. i'm sharon epperson.
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♪ ♪ in other words... you are going to see some remarkable things today. you coming or what? bigger... why do they always have to go bigger? yes, folks, it has been a rough year even for cyber stocks, but they have been making a comeback recently the hack etf, that's a good one, though still down 20% this year has rebounded 8% in the past month. frank holland has more on cybersecurity and why many people consider it to be recession proof, frank >> hi there, tyler and seema cybersecurities certainly on the mind of corporate financial decision makers. take a look. 68% of cfos say their company is spending more on cybersecurity to protect their data and networks with 46% saying their
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companies are either more vulnerable or just as vulnerable as it was last year and that coming as many as 85% of cfos see a recession coming next year more than two-thirds believe it will happen next year announcing a big economic downturn in 2024. this survey taken between may 12th and june 6th. cfi came in at 8.3%, near a 40-year high russia was preparing for a long war in ukraine and on may 10th, fed president rafael bostick said supply chain issues were easing and the fed achieving the quote, unquote, soft landing and he said that would be difficult. cybersecurity spending is up and they do not see it as the biggest risk of this business and more than 40% of rising prices with only 5% with threats along with the war in ukraine, those two things often tied together >> you mentioned that most cfos
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are forecasting a recession for 2023, were any of them bullish on the economy >> sad to say none were bullish on the economy they see recession coming this year so a lot of these decision makers forecasting troubling times ahead, but still willing to spend on cybersecurity. thank you. >> target is raising its dividend by 20% looking to attract income investors like target, there are other stocks out there that consistently raise their dividends and beat the market over the long term cnbc pro ran a screen in the s&p for dividend growth of more than 7%, beating the index in the past five years, and a yield of 2% and a dividend payout ratio of less than 50% some of the names that came up on this dividend elite list include nrg energy, morgan stanley, netapp, regions
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financial and t. rowe price. for more names you can head to cnbc.com/pro. >> interesting you don't think of morgan stanley as a dividend player. >> or meta either. >> still to come, microsoft, betting on video game streaming. when does this mean for publishers like take two interactive. we will discuss in the lunch next lemons. lemons, lemons, lemons. look how nice they are.
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>> time for today's three-stock lunch. today it is all about the three ts tesla, take two interactive and target first up, tesla shares rising after getting upgraded to a buy at ubs take two interactive upgraded to overweight at j.p. morgan and target raising its dividend by 20% despite the ongoing margin pressure let's bring in mark travis, president and ceo of intrepid capital. great to have you on let's start with tesla u ubs reiterating a target and the stock is down 28% so far this year and it's in line with other technology companies what do you think? >> yeah. it's hard to, you know, vote
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against god in terms of elon musk and his value creation. you know, i just marvel looking at my bloomberg. the market cap's gone from 75 billion at the end of 19 to three-quarters of a billion here now five years a wonderful product. everybody that has one loves it. i think it's not really for the average man at the price points where they are and, you know, i would just tend to sit and watch at this price i wouldn't go short, just because it has a cult-like following. one of the points i would make too is if you saw wall street over the weekend and they profiled two women that went from new orleans to chicago and back and honestly how hard it was to find charging stations and secondarily the comment was we spent more time charging than we did sleeping. so, you know, as an old farmer in this area says t equals m,
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time equals money. if you don't mind waiting three hours to have your vehicle charged, it's probably not bad but i have a feeling americans are happier at $5 a gallon of gas filling up in five minutes and off they go. so we'll see with tesla, but interesting story to this point. >> let's go next to take-two interactive. >> yeah. you know, trevor, it's kind of a lockdown story as all the gaming stocks were over 2020. then as we've come unlocked they have traded off just like you mentioned tesla being off 25, 30%. take-two is as well. i think strauss has done a great job there, a great gaming franchise and now they have integrated zynga and do it mobily so i joke that the people i see out of my truck texting while
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they drive can play mobile games while they drive so you might want a double shoulder harness in your vehicle. >> you probably do that in your tesla. >> yeah. maybe with auto driver they can do one of take-two's games we'll see how that goes. >> i want to know where you live all right, target under a lot of scrutiny the dividend raising even though it's seen ongoing margin pressure, mismanagement of inventory, but you like the stock. tell us whey, mark. >> well, i'm blessed to be married to a cpa so i never look at my checkbook. any time i did, i swear every third entry was to target. they sell really a value proposition to everybody in terms of clothing, groceries, cvs pharmacies embedded in them. they developed an omni channel to compete with amazon i think the true test of a lot of businesses is the free cash flow generation. if you contrast target's
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valuation at eight times enterprise value to pretax cash flow versus i want to say it's 59 times for tesla and the fact that they have free cash flow to pay a dividend, i think we'll keep investors out of trouble. the other thing i'd say to investors is you probably need a five-year window if you're going to commit money to the equity market i wouldn't commit moneto the equity market if i was going to pay my tax in november but maybe my student loan in case it's paid off and you which have to worry about it i think their dividend rate is attractive in this environment. >> especially in this environment. target at $155 a share, forward price to earnings ratio at 16 times. mark, appreciate you joining us today. >> thank you. >> mark travis. live and let buy pga, the latest drama facing the world of golf. "power lunch" will be right back and talk about that in a sec
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but the things that last a lifetime like happiness, love and confidence... you can't buy those. but you can invest in them. at t. rowe price, our strategic investing approach can help you build the future you imagine. (vo) hi. we're visible. a new kind of wireless company. started by this company. (hi, dad.) can help you build other companies pay for stores. which means you pay for stores. but this is our store. which means you get a single line unlimited plan... for as low as $25 a month. switch today at visible dot com. we got some news that inflation may be taking a toll on the consumer along with a drop in the stock market u.s. household wealth declined for the first time in two years in the first quarter of 2022 the drop was driven by a $3 trillion fall in value for stocks still, the report showed household balance sheets overall remained healthy through the
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first three months of the year some 32.5 trillion above pre-pandemic level and speaking of wealth, the great golf saga taking a new turn and the saurdi-backed golf tour tees off. dominic chu has been following all the twists and turns of this story story. >> so much drama what happened was the pga tour announced earlier today that they will be suspending the 17 members who are now competing from the pga tour in this inaugural liv golf tournament today just outside of london in the uk now, the tour is saying that these players are no longer eligible to compete in any pga tour events for the foreseeable future or even the presidents cup competition. in a memo to players, commissioner jay monahan of the pga tour said, quote, these players have made their choice for their own financial-based reasons. meanwhile, liv golf fired back
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with its own statement saying, quote, today's announcement by the pga tour is vindictive and it deepens the divide between the tour and its members it's troubling that the tour, an organization dedicated to creating opportunities for golfers to play the game, is the entity blocking golfers from playing. remember, liv golf has not secured any major tv contracts, major u.s. ones anyway so fans that want to watch have to go through online channels like youtube, facebook or duzone. currently 100,000 are tuned in on youtube so as we watch this play out, remember, this is the first example. we have a small sample set this is the only one we've seen. but people will be gauging whether or not there's any kind of a dent that liv golf can make in the pga tour and its influence based on what's happening this week with the field of friday players it currently has. >> they don't have a tv agreement in the united states they don't have major sponsors
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in the united states they can work that up. but let me ask you this. there are non-pga tour events that pros play around the world, aren't there >> correct and they get exemptions to do so. >> how do they do that >> prior to this there could be exceptions made -- remember, collin morikawa won the dp world tour he was the highest graded golfer in the european tour in essence for that an american golfer got the exemptions to play in some of these events to do it. in the past they have been able to get these exemptions on a case-by-case basis. >> which they are given by the pga. >> correct they have to be given permission to go do these things. when it comes to a rival golf league that is trying to come into play right now, that is where apparently the tour has drawn the line it is also where the european tour has drawn lines so there is this kind of challenging to the establishment of the game of golf right now that's happening and a lot of these things, the battle lines are still in the process of being drawn right now. >> is this type of drama rare
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for this tournament? it seems historic. >> this is the first i've seen in my golfing career of any kind of drama of this variety at all, tyler. and i think you feel the same way. the pga tour has been the pga tour for years. >> yeah. >> nothing like this. >> and a lot of major tournament winners up on that list of 17. >> major winners, yes. >> dom chu, thanks very much thank you for watching "power lunch. >> great to be here with you "closing bell" starts now. thank you, seema and tyler we've got red across the board as investors await tomorrow's crucial cpi inflation report nasdaq is down more than 1.4%. we're near session lows. the most important hour of trading starts now welcome, everyone, to "closing bell." i'm sara eisen take a look at where we stand isn't the market the s&p is off a little more than 1%. you've got every sector in the red. consumer staples are holding up the best communication services down 1.5% along with financials, technology and materials the nasdaq as
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