dollar, other tranches of debt around $0.13 on the dollar bond investors think there is very little chance of getting paid in full they have to be made whole before shareholders get anything billionaire ronald pearlman controls 85% of the stock, so there isn't a lot of stock out there to trade the meme crowd has added $250 million to his net worth with this share increase, but bankruptcy experts say he's likely to get wiped out in this bankruptcy a recent post on wall street saying let's push our ev to the moon, $12 and up kelly, right now it's headed back down. >> wow great layout, and huge stakes for him personally as well robert, thank you very much. robert fraj. that does it for "the exchange," everybody "power lunch" begins right now

>> and welcome to "power lunch," everybody. tyler mathisen is off today, i'm kelly evans. here's what's ahead, a power player in real estate as ceos push to get workers back into the office, don peebls is here to discuss the headwinds facing commercial real estate and the development taking place in miami. city people are now calling wall street south. plus, exxon's ceo darren wood says the clean energy transition is to blame for high oil prices is he right? we will take a close look at energy policy, try to find possible solutions and figure out what it's all going to mean for your utility bills first, let's get a quick check on the markets where the dow is near session lows down almost 300 points right now after being up 400 earlier today it's the outperformer down 8/10, s&p is down 1.3, nasdaq down 2.25 energy is the best performing sector led higher by names like hess, marathon, and williams we also have qualcomm spiking midday on an analysts' tweet

the tweet said apple is likely to keep using qualcomm 5g modem chips. qualcomm shares are up 5.5% right now. the market is facing a major test in the form of profit margins. bob pisani takes a closer look at the new york stock exchange bob. >> hello, kelly. goldman sachs says profit margins are likely to decline next year whether or not the economy falls into a recession how much will profit margins decline? well, again, it depends on what side of the recession debate you're on. if there is no recession, goldman estimates there will be a 70 basis point decline that's 0.7 person. if there is a recession, it will be double that 130 basis points or 1.3% remember, profit margins hit a record last year, 13.5% in the middle of the year but have been declining ever since then. 12% last quarter and it will likely hit 11% this quarter it's important because you have

to understand why we hit these report profit margins. remember what happened during covid, big corporations cut back on spending rather dramatically, on labor, travel, and on real estate and at the same time they use more technology to increase the efficiency of their operations what happened? well, when the economy rebounded, the revenues for the companies rebounded, and more of those revenues went straight to the bottom line because they were operating more efficiently. that's called operating margin now, what's happening here, kelly, is the whole process is starting to reverse at this point because we're seeing higher costs for a lot of the companies and of course difficulties in transportation we saw these issues with nike show up several times in their commentary as well this is likely to weigh on earnings overall in the next several quarters kelly, back to you. >> thank you very much bob pisani down at the new york stock exchange our next guest is forecasting better than expected earnings leading to a year end price target of 4,500 on the

s&p, but should investors be concerned about those shrinking profit margins bob was just describing let's bring in art owingen, national securities chief strategist it's great to have you here for a throwdown on earnings per share where people are expecting they're going to be revised lower. they say that's the only reason some of these forward multiples make sense why are you still pretty constructive >> yeah, it seems to be the new conversation around the street, and the narrative is if we feel so badly in the here and now, how can earnings estimates not have come down yet, and i think the answer to that quite simply is probably threefold. first and foremost, emotionally we feel bad because we're paying so much for food and energy product. and yet corporate america has been able to pass along a lot of those costs. if we go through the first quarter earnings report and see what happened exiting that, we saw estimates for the second quarter and second half actually go higher and that's in a world where you and i know well and wall street tends to be very conservative that's why we've tended to see

65 to 70 p% of companies beat their estimates every quarter. i think we're trying to attach how we're feeling in the here and now versus what we would like to ascribe to earnings growth in the second half of this year. a lot of that may not come to fruition i think one of the things you forget is part of the issue is inflation and obviously that's going to inflate sales, and if margins remain not at record levels but something of more historic norms, certainly it's going to be fine we'll know a lot more about this in the second week of july. >> it's one of those times when you remember that we are an anominal gdp boom and a real gdp recession. the problem is expenses are priced that way too. i don't know if you can kind of look through and talk about the places where you think it might -- i mean, it was a surprise even for the financials back in the first quarter with jpmorgan and everybody when people said, wait a minute, you know, these profit margins are nowhere near what we thought they were going to be. could we be in for nasty

surprises still, even with strong top-line growth >> sure, i think jpmorgan is a great example of that. yesterday they had the ability to increase their dividend, increase their buyback, et cetera. what they're really going through is some of that over build in departments where they likely, you know, got ahead of themselves and the mortgage department, the mortgage underwriting department is clearly one of those there's going to be some adjustments corporate america has to make. we're going to see a lot of that the environment is different this year. i think on balance when you look at the entirety of the s&p 500, we're likely to see earnings that are above estimates for the second quarter and second half, unless something draconian changes. the real question is what multiple should you ascribe to those earnings and a slowing economy with an interest rate that's likely to be closer to 3.5. >> right >> u.s. tenure at the end of the year versus what you would have last year when the yield on the ten-year was 50 basis points. >> that brings up there's two very should we say controversial points that you have here, i

mean, one is that earnings will be revised higher and the second is am i right that you think the multiple in the s&p should be 19 times? >> yeah, but that's -- when we exit the year trailing 12 multiple, 19 times, that's not a forward multiple yeah, the forward multiple on 23 will likely be closer to 16 or 17. >> got it. but looking at 22, that's a year end target you have to look back at what the multiple is on last year's earnings. >> right, so 16 or 17 times, which is kind of where we are now, maybe a little bit of expansion but it sounds like you think this adjustment is done. our guest just a moment ago is saying he thinks people should be buying fixed income rates are kind of put in the highest for the year is that consistent with your world view as well >> i would tell you this, if the consensus is the fed funds rate exits this year, call it 3.25 to 3.5, which is where consensus is now, a week ago that was 3.5 to 3.75 the ten-year is likely to go to track somewhere around that. historically that will be the case at least for this year, know

that that sort of 3.5 level is probably where we peak out for a bit and we'll bounce in between 3.25 and 3.5 for most of the second quarter and into the third quarter. but yeah, that's what we would say, and if you want to ascribe what historically has been the right multiple for that, you sort of get to 17 quickly. >> all right, so stock pick wise, that's kind of also where the rubber meets the road. you've got a couple of tech names in here, apple, i doubt you would change it based on this tweet about qualcomm's modems apple, microsoft, even auto zone pops up on your list, why these three? >> all defensible. defensible cash flows in apple and microsoft, very strong management teams, great balance sheets what has become less and less a discretionary spend for people is both software and the suite that microsoft offers, if they're able to make this acquisition now, and just a real defensible cash flow

it's very much of a defensive growth win i feel apple falls in that same category with very shareholder friendly management team that buys back shares and has a steady dividend. auto zone is a different story it's, again, not a discretionary item if you need a new -- you know, you need a new alternator in your car to drive the kids to school, you're going to get it and the fleet age has continued to get older and older because people just can't access in u cars so the older the fleet age, the more the auto zones and o' o'reillys et cetera are going to be in demand and auto zone, shares consistently so i think the multiple is very attractive as well. >> betting on these stocks, betting on the market recovering to around 4,500 thisser year. shanghai disney reopens, the shares up fractionally as the market overall is losing steam here in the afternoon.

the company's board is also meeting and it's focused on ceo bob chapek's future. >> disney's 11 member board which includes the ceo is meeting right now in florida to review the company's businesses and also to consider his future. now, the stock is down 45% in the past year, and chapek's contract is expiring in february sources tell me they do expect the board to vote to extend chapek's contract at this meeting or at one in the fall after the board's chair issued a statement in support of chapek following his firing of senior executive peter rice the question is how long that contract extension is for. he drew criticism for his mishandling of the company's response to florida's don't say gay bill, but sources tell me that management's response to roe v. wade's reversal was in contrast well received

friday morning disney emailed all its employees reiterating its commitment to providing them and their dependents with reproductive care, no matter what state they live in. but sources tell me there is another business challenge that is now very much in focus. disney's recent release of "light year" had one of the lowest box office debuts of any pixar movie after the last two pixar movies were released exclusively on disney plus so that raises questions about whether disney plus is cannibalizing the box office, and that puts more pressure on chapek to deliver streaming subscriber growth in the next earnings report, which are due out in august. streaming strength could be the most important factor determining his longevity as disney's ceo kelly. >> yeah, still can't be a great sign that we're already talking about it this way, it's, you know, publicly obvious that there's been this sort of spat with his predecessor and a lot

of angst among employees yeah, it just -- like you said, if he wants this position for the long run, do you think he has to show that streaming is a huge success story >> well, absolutely. there's so much focus right now on the success of disney plus and the entire family of streaming apps including espn plus and also hulu because this company has really shifted its focus and is hoping to be valued more as a tech company than a traditional media company. but at the same time, kelly, the theme park business, which is the business that chapek came from is one that has been doing remarkably well through this rebound, and i do have to point out that the company just announced that shanghai disney is going to be opening on thursday this is sort of after a three-month shutdown of that park this is not unexpected, but it does show that there's more opportunity to keep generating money from his area of strength, which is those parks as they

work to grow the streaming business and hopefully, kelly, not cannibalize the all important movie business as well >> true, three-month closure in shanghai julia, thank you very much our julia boorstin. stocks are generally drifting lower right now to fresh session lows the dow is down 336. that's a 1% drop nasdaq's down almost 2.5%. coming up, a tough month for office reits boston property down 6%. real estate developer don peebles is here to talk about the headwinds facing the sector and which cities abest positione to fill those office towers. and cathie wood, three of her highest conviction names are zoom, tesla and roku they've all slumped this year. molson coors hitting a high, the stock the best performer in the staple sector so far this year it's up 20% on pace for its

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lunch," from low inventory to rising mortgage rates and a strong preference to work from home, there's a bunch of headwinds facing the real estate market office reits are mostly higher but names like boston properties, sl green and alexandria are 30% or more off their yearly highs let's bring in a real estate

power play tore get a read on the key issues impacting the space right now. don peebles is founder, chairman and ceo of the peebles corporation with a portfolio of multibillion dollar projects in most major metro areas including new york, miami, and l.a don, it's great to see you, and since the last time we spoke, it feels like the traction behind miami just keeps growing before we dive into that, though, let's talk overall about trends here. are people coming back to the office >> very slowly, and they're not going to come back full-time most fpeople that are coming bac to work and working live are working part-time three days a week, two days a week, but -- and i think that's a trend that will continue and go throughout the marketplace. >> what does it mean for new york, for manhattan especially i mean, just as an example because of its concentration in financial services where this has been such a huge fight, you know, there's companies that have been early and really pushing for people to come back to the office, and maybe now if

things slow down a little bit, workers won't have as much of a choice, and they'll have to. >> well, i think that one of the things is efficiency if you look at laufw firms, for example, especially transactional law firms, they've had some of their best years ever these last two years in terms of billable hours because their lawyers are working as opposed to spending their time commuting, so we're seeing more and more firms recognize that they are more efficient and more businesses are more efficient with remote working put into the mix, and so i don't think that that changes i think that that expands, and people are settling down and big law firms and major banks have accepted this change in how people are working, and what it means to new york is that businesses are going to suffer i mean, the businesses that depend on a large influx of workers in the city every day. i think that will continue to have a negative effect on those businesses and we're going to see many of these smaller

businesses unfortunately close, and some that many who have clothes will not reopen. i think it's a good thing in terms of the residential market, though. >> yeah, and anecdotally, sometimes people joke in new jersey about having a place in manhattan for the weekend, but you wonder if it turns into more of a bedroom community in the long run let's talk about these office reits, though. are these leases, you know, these are multiyear leases, and i wonder if they are -- you know, how long oaf a period of adjustment could we face in companies downsizing, and could that be offset by inflation where higher leases take some of the sting out of those declines. >> i think what happens on the residential side, for example, is rents are going to go up. even though the cost of capital increases and cap rates increase, you know, people, investors who own apartment buildings in most major cities around the country will continue to do well i think the commercial office market, of course, is very different because there's just a flood of subleased space on the market right now, and that along

with increasing vacancies, i mean, new york city is essentially over 20% vacancy factor overall in terms of leasing, not necessarily occupancy, and occupancy is only about 40 some odd percent right now, mid-40s at best so what you're going to continue to see is more sublet space going to market, and that's going to depress rents even further. >> let's talk about miami for a second was it -- is it in a bubble because of so much demand being driven by crypto >> well, no, i don't think so because i think that if you look at miami, i mean, bubbles are created by artificial or short-term stimulus, and miami is fundamentally very well equipped to compete against cities like new york, chicago, and many other northeastern cities, washington, d.c., for example, as well, and we saw that with king griffin moving citadel to miami he's moving out of chicago, moving a thousand plus workers down to miami.

miami has no state income tax. it's an extremely business friendly environment it's a right to work state, so even on my business construction side, unions do not have the same kind of impact that they do, say, in new york city. the quality of life in many regards is superior, certainly on a weather basis, and they don't have the same challenges of public safety, so they're fundamentally just so much better equipped to compete right now. >> it's a little humid, so not everyone likes that heat but i take your point, since you know so much about the real estate market, don, where would you have the individual investor put their money to work? do you like the office reits down 20% do you think they should steer clear of that and maybe look towards something more residential? should they be involved with reits at all, or is this a time for maybe more individual property ownership or rent exposure where do you think has the most value right now? >> i would stay away from the office reits investors understand that they are fundamentally challenged

i mean, any of the reits sl green, that are heavily concentrated on office space in new york city are in tremendous trouble. so i would be looking as an individual investor at where i could buy apartment reits who are investing in the sun belt area, and i think that's where you're going to see growth and as an individual investor, i would still invest in south florida overall and over parts of florida, tampa, jacksonville, i'd certainly look at nashville and throughout texas because texas is doing very well, quietly so it's not the headline state that miami and south florida in general is i would look at texas as well. arizona's strong, and las vegas, nevada, has made a big comeback, especially in the housing market, and i think you'll see more of that and the gaming business, that's another place if i were going to look to invest, i'd start looking at the gaming business again. and any reits i would look at would be in the hospitality sector, especially those hotel reits that are focused on leisure hotel ownerships

>> fascinating, brimming with ideas. nashville's still that strong? it hasn't slowed >> no, it's still strong, and all sectors, by the way, office, housing and of course hospitality as well. >> wow, don, great to have you today. thanks so much for your time. >> thank you, kelly for having me. >> don peebles. the k web etf breaking free from its web we'll run through the names and reasons next. stacking the deck for a comeback, china lifting covid restrictions, boosting casino stocks you just heard don spaly.g d llish on gaminan hoitit we'll dive into it next. hybri. it's there. it's everywhere. but for someone to be able to work from here, there has to be someone here making sure everything is safe. secure. consistent. so log in from here. or here. assured that someone is here ready to fix anything. anytime. anywhere. even here. that's because nobody...

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welcome back, everybody. we're seeing increased selling pressure as we move throughout the hour here. the dow is now down more than 400 points or about 1.3% the chinese tech stocks have been making a comeback, though the kweb etf is up 14% this month. analysts say because of valuations but have the fundamentals changed that much seema mody brings us the details. >> the rebound in chinese talks comes as china takes its first step to reopening its country to overseas travelers by cutting

down its quarantine requirement. also lifting sentiment, the chinese central bank governor is signaling yesterday that monetary policy would focus on boosting credit growth that's a departure from their comments in the past also, analysts at mcqueary pointing to industrial profits this is a proxy for earnings growth in china. they've been improving over the past couple of months and comes ahead of a big event this weekend, where the president xi jinping will visit hong kong and the question is whether he will unveil measures to support secondary listings for chinese companies like alibaba take a look at the chinese tech names leading the rebound this month, it's alibaba, jd.com, way bow, baidu, all up about 20% or more this month. wabo up about 6%, baidu up 9% for the month of june. this does follow months and months of extreme losses for all of these names for alibaba it's the first positive month in four and credit suisse telling investors that the company's valuation and profitability picture is a

reason to own own the stock. however, it's trading at a current price to earnings ratio of around 32 times, which is more expensive than recent months but still cheaper than levels it was trading at before the pandemic, something to keep in mind, kelly. >> well, and as strong as china's been, latin america, which was supposed to be a big beneficiary from higher commodity prices maybe not surprisingly as commodities have reset. >> after being the best performing market this year, brazil, real estate brazil is down about 20% in the past month. it comes as oil prices retreat, and also the growing uncertainty whether the u.s. will start to increase oil production in the second half of the year, that's been also weighing on sentiment, and as you pointed out, the stronger dollar, that certainly doesn't help et latin american trade, which has done well so far this year. just in the last month reversing some of those gains, kelly. >> yeah, by 21%. seema, thank you very much our seema mody.

let's get to christina parts nevada louse >> here is our cnbc update at this hour, the january 6th hearing is underway, and former aide cassidy hutchinson is techg on everything she remembers about the capitol attack hutchinson recalls the moment she told meadows there was violence at the capitol. >> he almost had a lack of reaction i remember him saying, all right, and something to the effect of how much longer does the president have left in his speech >> the court is back in session as ghislaine maxwell awaits her sentencing prosecutors are pushing for 30 years. maxwell was convicted of helping her one-time boyfriend jeffrey epstein lure women and girls for over ten years and juul labs says the agency

overlooked more than 6,000 pages of data it provided about the aerosols users inhale. kelly, back over to you. still ahead on "power lunch," cathie wood's safety ark, the fund manager says we're already in a recession plus, clean energy messy transition, exxon's ceo blaming the energy shortage on the rush to convert to alternative energy sources with old fossil fuel stocks leading the s&p today hess, marathon, occidental, one of the only sectors in the green. we'll be right back.

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. welcome back, everybody. just 90 minutes left in the trading day, but stocks have been sinking let's get you caught up across all the major averages, bonds, commodities and we're going to discuss the messy transition to clean energy, energy being the bright spot today. let's start with a check on markets. dow's down 431 points today, almost exactly reversing the gain we saw earlier in the session. the s&p is down almost 2%, the nasdaq shedding 2 and 2/3 of a percent. consumer discretionary worst

performer today, nike a huge drag on the dow after earnings that's falling almost 7 prerp after that report where it warned about revenue being hit by higher costs. inflation showing up everywhere. we have amazon, tesla and home depot sharply lower as well. amazon down 5% today over in the bond market, yields are on the rise, the ten-year at least was until it started driftidr drifting lower this afternoon. rick santelli has all the latest action rick. >> yeah, it's pretty incredible, especially as we start to see a much deeper red in the stock market, you would think that rates would be a little bit more susceptible like they were about two weeks, to the downside and upside in price, but we're at 320 on a 10, we're at 318. when the market was higher it's going towdown and rates are certainly not following. look at the seven-year, you can see at 1:00 eastern that rates popped up. they continue to gravitate to the upside, and if you look at

the first year ever for the seven-year, it was 2009. today's auction was the highest yield since 2010 the reason i put that chart up there, only about 30 basis points away from the highest yield of a seven-year ever, which was around 357 now, if we look at what's going on with boons, and i continue to point to boons christine lagarde and ecb are going to have their hands full, fragmentation. southern economies paper going one way, the good credit going another way. i'm not sure how they're going to accomplish it but look at the quarter, the month to date on boon yields they're definitely to the upside that chart is more aggressive than a 10, and how do we know who's leading? here's the spread between the two over two days. it shrunk from 175 basis points to around 156 basis points so we want to continue to monitor all that regarding interest rates kelly, back to you. >> absolutely affecting like you said, our yields as well thank you. and oil affecting them too

crude stubbornly high, back towards $111 a barrel. pippa stevens, what's going on >> hey, kelly, oil is heading for a third straight day of gains as g-7 leaders look to impose a price cap on russian oil. the goal here, of course, is to reduce the money heading to moscow, while also lowering oil prices on the practical front, though, this faces a whole lot of challenges national security adviser jake sullivan called the situation a, quote, novel challenge, saying the solution can't just be pulled off the shelf so let's check on prices here, wti up 2% at just under 112. brent crude up nearly 3% at 118.16, and turning to energy stocks, once again the top sector with every component in the green, did want to highlight occidental up more than 3%, berkshire hathaway has slightly increased its stake in the company. a filing yesterday shows that berkshire last week bought shares worth $44 million

bringing its total stake in occi to $9 billion based on yesterday's closing price. kelly. >> and there's the green on our screens today, pippa, thank you very much. exxon mobil's ceo predicting oil prices will remain high and he's pointing the finger for it as well. let's bring in brian sullivan with more. who is he targeting, brian >> i think he's just targeting general long-term policy mistakes by governments over years and decades and perhaps even generations in the past and going forward. there's so much to unpack here, and it kind of goes to what pippa was talking about. the administration currently desperate to find either someone to blame or some way to fix higher gas prices, likely not going to happen. so the exxon mobil ceo is sitting down with "the financial times", and he said this, you need a fairly robust set of alternative solutions if you are going to reliably and affordably meet the needs of people you can factor that in for gasoline you can talk that into home electricity needs if you want.

now, this morning we talked to jared bernstein who works, of course, under the national economics council under president biden, jared a long-time known to our viewers here on cnbc and i think a pretty rational actor. i was hosting "squawk box" this morning and i challenged jared a little bit, respectfully of course, about this energy transition and the speed of it, and i noted that throughout history, kelly, transitions have taken a lot longer than anybody thought they would and jared ag agreed. >> these transitions take time and look as someone who's worked in government economics for a long time, when i hear transition i get nervous because it usually means somebody's about to get smacked what we have to do is make sure that we bring people along with us as we make this transition to clean energy >> so you can hate gasoline, kelly. i get it, but only about 3 to 4% of car sales in the united states are pure electric vehicles right now, getting to

2030 with a 50% target looks pretty much impossible, but we'll see. in the meantime, a lot of gas cars on the road, and i think what woods is saying is you better plan for gasoline demand for the future in other words, we better have some refineries that can make some gas. >> we're concerned about how to keep the cars running and keep the lights and ac on and heat if you have electric heat source. that's the other big piece of this as well. >> it is again, i understand the need in climate change is real it is a threat, and we need to do something about it. and everybody wants to do about it yesterday, and i get that with any emergency you want to solve it sooner than later and i also want to lay out the stats and facts where we are as a nation okay, nationally, here's where we get our power, which is about 38% natural gas. so that's nationally, and then we get 22% coal. i mean, 22% coal in 2022, i want you to think about that, that is nationally it's even more fossil fuel-based

in certain areas like new england, kelly, and i've been highlighting this in the winter when they had all their electricity pricing issues right now if you're in boston and it's hot and you're running your air-conditioning, 60% of your power production, that's a live look for the new england iso, is natural gas. 27% is nuclear 11% is renewables of which some of that is actually certain other types of gas, wood 87%, kelly, of the energy being produced from connecticut to all the way up there in bangor, maine, is either natural gas or renewables -- or natural gas or nuclear. they're talking about killing nuclear. i get it i think the point is this, if you are going to take that 27% of power and nuclear offline because you don't want it, you better darn well have something that's going to make up for that, whether it's solar or wind offshore, great. but you can't take something offline without replacing it it's what we saw in the midwest

a couple of weeks ago, they had rolling brownouts and blackouts in columbus, ohio, in 100-degree temperature. i'll leave you with this, kelly. california, they want to shut down the diablo canyon nuclear plant, it's the last nuclear plant in california that's operating. 2,550 megawatts, you better have a lot of solar to make up for that once you shut that down shut it down, but make sure you have the backup power otherwise you're out of power. >> i think they're actually trying to look at not shutting it down at this point. can we stop the process seems to be where the rhetoric is going a lot of similar questions around here as well. new jersey has a lot of nuclear power. really appreciate it, brian sullivan a comprehensive look at the transition and how it is and is not working. it's our weekly working lunch, jon fortt bringing us a fintech that's focused on making your tax payments more n bdoen caite ne find out in a moment

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♪ ♪ welcome back to pl"power lunch. the dow down 450 points.

we've got companies of all sizes looking to keep commerce flowing as the economy slows, and that means doing everything more efficiently. today jon fortt brings us up close with the ceo of a fintech company that's simplifying the process of paying state and local taxes and even tariffs to get business done around the world. jon, i thought this was going to be for individual tax filers, but businesses need it too, i know >> everybody needs and everything, right, needs to pay taxes, yes, kelly. scott macfarlane is the ceo of avolera, a software company trying to make it easier for businesses to follow regulations across local, national and international borders. he was growing up in ohio, his father ran a hotel business and in college he and a roommate started a fitness equipment business that skyrocketed. >> and one day the inventor of life cycle walked into our office, the inventor of it, and

he said, you know, i've got this idea, you know, it hasn't gone anywhere would you guys take it over? and so we took over life fitness as, you know, sophomores and juniors in college, and we built that business into what it is today. now, i left, you know, after, you know, i don't know, you know, five years or something like that, and my roommate in college, you know, ran it until he sold it to, you know, bally fitness and brunswick, you know, years and years down the line. >> and now at avalara, scott is working to increase the reach of the technology through the use of apis, application program interfaces that allows other software companies in bookkeeping and other functions to plug into their technology and make it available to more customers. now, if this works as planned, outside developers are going to be able to write new types of apps based on avalara's unique

data. >> we've always had an api base. that's how we've actually connected in to all of the financial applications in the -- you know, in the past, jon but what -- i mean, the new technology and your ability to, you know, take what we're doing and make it part of our partner's experience with their customers more -- more integrated, is really a big -- is really a big step, and so our tools with low code allow, you know, sort of non-developers, if you will, or developers that want the ease of adding, you know, what we do that attacks technology and all of that into their applications, make it simple and almost like an afterthought for them. >> now, scott started reselling fitness equipment in college and moved up the value chain into selling his own brand, when the inventor gave it to them now with avalara he's looking to

expand by growing the influence of the company's software. it's similar, kelly, to what we see snowflake doing at a snowflake summit this month. they're about more than data management and warehousing. now they're encouraging developers to build on top of the snowflake they've already gone for higher efficiency that's how you become a platform and that's how you become a lot bigger. >> his personal story is so interesting. i was just reading that his dad was a big inspiration, a successful businessman, and scott's plans went up in smoke when his dad sold the family business. >> that's true not only that, but scott had dyslexia, right, and learning disabilities to get through sports helped him with that, just his jooutgoing personality he managed through help from other people to find a way maybe that can be inspiration from some people in this tough inflationary environment, this unstable economy, despite what you're dealing with, you can get through it. >> absolutely. very inspiring, jon, thank you very much for bringing that to us as always.

coming up, today's three stock lunch, is cathie woods conviction less, zoom, tesla and roku, our trader will tell you whether you should jump on this ark. we'll be right back.

welcome back, everybody. time for today's three-stock lunch. ark invest ceo cathie wood told cnbc earlier today that to manage the risk of a bear market, she's focused on the firm's highest conviction names. on the list, zoom, off 71% from its high, tesla down 43% from its high and roku, 82% off its high let's bring in scott nations, president and cio of nation shares scott, we want you to weigh in what's your trader's take on all three of these names >> yeah, cathie wood will have to show her work on how fewer names leads to more safety, particularly if she's going with zoom, which was great, kelly it was a lifeline for a lot of people during the pandemic but it's toast now because it's now going to have to compete with google, microsoft and amazon think about the eps of zoom.

it's trending lower, which is horrible it's down more than 70% other the past 52 weeks. zoom is cheap for a reason so i would be selling zoom. think of the 2000s and zoom is netscape and all four of those names are microsoft. >> all right let's go from zoom to tesla, which is a company that has a ten-year headstart at developing evs at scale the stock is still down 33% year to date. >> right but that's not that bad. compare it to meta or facebook, which is down more than 50%. tesla now has some problems, it has some competitors mercedes ev entry has longer range. the mustang ev from ford just got rave reviews i think the biggest problem for tess lays it needs a full-time ceo and completely engaged board. it doesn't have either of those. we love to love elon

we love him on twitter, but twitter is the problem until he's fully engaged, i would be a hold on tesla i wouldn't sell anything i oengd but i wouldn't be adding to it >> let's see if our winner is the final name for you, roku, probably the poorest performer of the three. >> yeah, it is it's the worst of the three. it's down more than 80% from july of 2021 but in many ways it's the best name here. it got punished along with netflix but it's a very different animal from netflix. netflix has one platform it spent a ton of money producing content for that one platform roku is very different it's got hardware, branded hardware, ad-supported platforms, ad-free and the thing i like about roku is it has the potential to be the portal for all of your streaming services so if you're like me and subscribe to three or four and

it's a mess, if roku can be the single portal for all of your streaming, then it will be the must buy so this is the one of the three that i will own. >> all right, we will leave it there with that glimmer of hope. the sunlight amid the rainstorm. scott, thanks so much for your time today. >> thanks, kelly. coming up, casino stocks are actually one of the best performing groups in the s&p today. look at the green there, with the dow down 416 points. why some of them are gtietng a boost from macau we have the details, next.

check out the casino stocks, everybody. they're not only higher today in a tough market, they're higher on the week and rallying on the news of china easing covid restrictions contessa brewer has the latest. >> this is silver lining news, china shrinking the mandatory quarantines for incoming international visitors from three weeks to ten days. let's dive into how the casinos with macau exposure reacted. wynn, you've got up almost 3.5%. las vegas sands up 4.5%. mgm relies less heavily on its macau revenues than the rest of the group. the dark cloud still looms what macau needs is for restrictions to ease on incoming travelers from china last week the government shut down macau bars, nightclubs, cinemas and in-restaurant dining

casinos remain open unless the government finds a case in the gaming area. that's according to macau's chief executive. bernstein analysts forecast gross gaming revenues this week near zero. that's right the liquidity situation seems to be worsening wynn macau borrowed up to half a billion dollars from its parent company. others could soon follow according to analysts who write that many have fewer than 12 months cash on hand at the rate they were spending it in the first quarter. on the upside here, the licensing concessions have been extended another six months to the end of december. that allows more time for this renewal process. another bright spot for sands, the singapore business is rebounding significantly we expect to get more color on that in the earnings report coming up next month, kelly. >> and positive news on the u.s. as well. what about vegas >> oh, we're hearing even with

consumer confidence worry, even with discretionary spending worries, the airport in las vegas is reporting that may was the third busiest month in history with more than 4.5 million passengers, a lot of those international travelers. that's a big boost to the city. >> gaming and hospitality. and the brunettes close it out again, everybody thanks for watching "power lunch. "closing bell" right now. the major averages pulling back sharply near session lows after an early rally attempt the nasdaq is down more than 2.5% the most important hour of trading starts now welcome to "closing bell." i'm jon fortt. here is where things standing in the market right now you can see there the dow is down about 1.33%, a little more. the s&p down close to 2% the nasdaq faring worse of a