issues, potentially not having access to their money, and cybersecurity is another issue people worry about if it's not a trust the exchange, or even if it is, the thought is why not hold it offline where it's seen as safer it's not easy to do though, you're right >> it's certainly not, not your keys not your coin kate, thank you very much. speaking of assets with big declines, the metals are on their way down gold, silver, copper, platinum all falling. we'll look at what that means on "power lunch," which begins right now. welcome, everybody, to "power lunch," i'm tyler mathisen, glad to have you with us here on a summer tuesday. here's what's ahead. inflation in america, households are feeling it business owners haven't been this worried about it since about 1980, but is it at a tipping point? we've got a game plan for investors like you that includes looking for value in some unusual places plus, is china investable? the bulls say china's reopening

will pay off the bears say it's too risky, given sudden covid shutdowns and all the rest the risks and rewards of putting some money in the world's second largest economy. we'll explore that one first, a check on the markets. the dow is up 172 points at its high, down 93 at its low, and right now kind of splitting the difference high orer by about a quarter, te s&p 500 essentially flat, negative, positive, take your pick, kelly. there it is at 385 4rk4 and nasq essentially flat shares of boeing up 8% strong deliveries there, have reached the highest level since march of 2019. oil prices slumping on demand concerns and you're starting to see it, kelly, at the bump as well >> no question which way that one's going today, and it comes with the american economy defined today by one word,

inflation. a new cnbc morning consult poll shows nearly two-thirds of high income americans are very concerned about rising prices. business owners call inflation their number one most important problem, the housing market may be slowing, but potential buyers still say prices are too high, and in the commodity complex, as tyler mentioned, oil is back below 100 bucks a barrel metal prices are falling what does it mean when you add it all up? we have all of these angles covered. we begin with sharon epperson with more on how americans are feeling about inflation. sharon >> kelly, a new poll of americans making $100,000 a year or more found that healthy income isn't necessarily going as far as it used to about one-third or 34% of the 1,000 adults surveyed by cnbc and morning last week said they are worse off financially than a year ago almost half, 46% said they've had to cut household spending due to inflation, and 38% said

they plan to cut spending if inflation gets worse now after paying higher praices on everything from gas, to food, to housing over the past year, these high owners said the first expenses to go are dining out at restaurants, entertainment outside the home and travel and vacations. more than half also said they'd delay big household purchases. if inflation continues to rise hitting, say, 10%, seven out of ten adults said they would have a difficult time keeping up with monthly expenses and we'll get another read on inflation tomorrow when the consumer price index for june comes out remember, it was 8.6% in may, and we saw a huge increase in gas prices last month, so we'll see how that plays out in the june cpi, kelly. >> this data is a good reminder, sharon, while no one's crying for the high earners at, they will be crying for the restaurant owners whose clientele is suddenly not

showing up. >> absolutely. and this is a wake-up call for so many americans, including high earners it's a time to kind of take stock of where you stand, what your needs and your wants are, and figure out what is optional and what you can cut out it's also a time if you are making that higher salary, you have certain protections through your job like disability insurance. this is the time to protect that income, and also, financial advisers say this is the time to -- you'll hear it all the time -- increase that emergency fund, but we are slowly starting to see savings rates ridse, so i you have a savings account at an online bank, you could be earning 1.5% it's much higher than it has been, much higher than at your average bank this is the time to boost the savings too. >> absolutely. inflation is also finding its way into main street businesses as optimism there slides kate rogers has that part of the story for us.

>> overall optimism slid again in june by 3.6 points to its lowest level in nearly a decade of 89.5 per the nfib every month of the year so far this index has declined in every measure in the index fell this month. the key challenge here, no surprise, it's inflation with more than a third of owners reporting it was their single most important problem in operations this is up six points from may, also at its highest level since 2 q 4 of 1980. labor and taxes have held the top spot on and off for years. the survey finds that owners expecting better business conditions in the next six months is at its lowest level ever a net negative 61%. expectations for better business conditions have also fallen every month in 2022. the group's chief economist writing declines in the net percent expecting better business conditions have always preceded down turns in economic activity, at a net negative 61% the lowest in 48 years, it is

tr strongly indicating bad times for the economy to come. also noting a mixed picture on main street as housing has been doing really well, restaurant sales are higher, while workers are still in demand. owners are also raising prices but the production side shows some signs of slowing, flashing greater warning signs about what the future might hold. >> they're worried obviously about inflation, one of the metrics there was labor quality as well. labor supply must be worrying them tremendously also and what they have to pay for it. >> yeah, and that had held the top spot for a long time now it's the second most important issue for owners about 50% of them reporting job openings that couldn't be filled down one point from may, historically very high you're seeing more owners raising their pay to find these workers that they need, and then they're kind of grappling with inflation and how to pass that on to consumers as these recession fears continue, that's really a tough call for smaller businesses to make because it could be harder for them to absorb those costs if you don't wind up passing them on to the

consumer they're all making tough calls right now for sure. >> kate, thank you very much now on the housing front, confidence in the market still pretty weak. prices are stubbornly high, even amid rising rates. diane olick has more on the state of housing which will be a major figure in the way inflation and rents go from here. >> confidence in housing has definitely shifted, both quickly and dramatically, thanks to the sharp jump in mortgage interest rates and still high home prices the share of homeowners who think now is a good time to sell fell from 76% to 68% in june that according to fannie mae 20% of consumers think it's a good time to buy, although that's slightly improved from may. the biggest issue may be that more people are concerned they could lose their jobs and the share who think the economy is on the wrong track hit a survey high of 81%. that may also be why more potential buyers are canceling contracts on homes they recently agreed to buy. cancellations hit 15% in june, according to red fin that's the highest share since

the first months of the pandemic when home buying paused immediately, although very briefly. cancellations were at about 11% one year ago buyers are canceling for several reasons. some are afraid prices will fall in the coming year, and they'll lose money on their investment others are not qualifying for loans at the higher rates. others may think if the market cools a little bit, they can get a better house at a better price, kelly. >> well, i guess maybe the key question is, well, diana is wh haven't we or will we start to see prices drop more >> we've seen the gains shrink, and we're seeing that already, but these prices were just -- they were like a freight train in order to stop that, you really have to see a huge turn in the market. the supply demand imbalance has not been fixed yet we haven't seen more construction we haven't seen the number of sellers that we need to put their homes on the market. when you still have that imbalance, prices are going to hold we should see the gains at least come back down to -- i want to say come back down to earth.

>> diana, thank you very much. rising prices are a concern for many investors, collapsing metal metal prices could be flashing a warning sign of their own, kristina partsinevelos looking at the metals cooldown, kristina. >> the doctor is in and the economy isn't looking so hot copper's nickname is dr. copper, the metal with a ph.d. or doctor in economics because of its use in a range of items we buy from cars to appliances in other words, a barometer of the health for our economy and copper futures were lower today with the base metal recently hitting a 20-month low just last week precious metals aren't faring that well either you've got silver that also hit a two-year low just last week, while gold is often seen as an inflation hedge, it actually fell to a nine and a half month low just yesterday so investors, what they're doing right now, they're turning to a stronger u.s. dollar as a hedge given higher rates and really

with the graph that we're showing you, you're really starting to see a dichotomy between both of these hedges, and why else are we seeing metal pra prices collapse? you've got slowdown fears, a stronger u.s. dollar makes dollar denominated metals more expensive. tighter central bank policy, and then renewed chinese lockdown fears clashing with the optimism surrounding chinese stimulus that we had at the end of last week take a look at these metal miners in the past few days, iron gold, king cross, barrett gold all down double-digits, even more than 20% lower so wall street as of now is relatively bearish on metals large gold positions that could be easily liquidated and goldman sachs coming out with a note, bank of america slashing copper forecasts, saying the metal slump has much further to run. >> so let's talk a little bit more of that relationship between a rising dollar, falling euro, and gold explain it, tease it out for me

a little bit >> well, if you have a discrepancy, right, so traders will try to take advantage of the discrepancy between the euro and the dollar, you know, putting more money into the usd, especially because the consensus is maybe the central bank in europe is further along in their tightening process, so more money pours into the usd that doesn't do necessarily -- it's not necessarily a good thing for gold at the moment, which is why the consensus is that it could fall a little bit further as more people go into the u.s. dollar. >> thanks very much, kristina partsinevelos. as you've just seen and heard, inflation may define our economy right now, but our nest guest still expect it is to reseed recede meghan shue is head of investment strategy at wilmington trust it's good to see you again let's start with how much will inflation recede part of this, how important is this to investing right now? >> oh, it's the single most

important issue that investors are facing right now, and we are, you know, a very important inflation report tomorrow. we are expecting inflation to decelerate into the balance of this year, and we're hoping that at least at the core level, peak inflation is behind us, but for consumers, as we all know, food, energy, are very important, so while we typically would be focused a little bit more on core and the impacts on monetary policy, headline inflation is very important, so the risks there being food and energy, but we do expect it to decelerate. recession odds are elevated, say maybe 30 to 40% over the next year, but we still think there's a landing strip for inflation to slow, the fed to be on net a little bit more dovish than what the market is expecting, and the consumer to remain in good health. >> so that all suggests to me, meghan, that the recession odds are rising but it is not your base case that the fed may not

be as hawkish as it is appearing to be right now, that inflation might be slowing that we are closer to the end of this market selloff than the beginning. how likely do you think it is that the stock market in the u.s. begins to turn up over the next couple of months and maybe ends the year somewhat higher than it is at least today? >> yeah, well, that's really interesting. so you raised a couple of good points, which is the duration of this selloff, and we do think this could be a little bit on the longer side of things. mostly because the catalyst that we need in order to see the market bottom is not only inflation to peak, but to get a better sense of the pace of deceleration and whether the fed really will be able to maybe get to a point where they raise the next couple of meetings, and then slow that pace or even pause and look around. but the key is that the market tends to sniff out any changes in inflation, even ahead of the

actual data, you've had a number of guests and commentary on talking about how june cpi will be a little bit lagged to some degree because of the changes in gasoline prices and energy prices and how much that has changed just over the last couple of weeks. so we do expect the market might sniff that out in advance, and that's just why it's just simply not a time for investors to be taking big bets in this market we've tightened up our positioning, and we're just looking to remain diversified and find opportunities within different sectors. >> so it's a dollar cost average in at reasonable intervals it's an investors' market, not a trader's market. >> well, i would say for the tactical trading point of view, we do have elevated cash much higher than we typically would hold and that we've held over the recent years, but for investors who have had -- we deal with a lot of investors who have had a liquidity event and are looking to put a large amount of money to work and at a

particular time. we still think it's a good idea to stick with the plan and dollar cost average in for those clients because even if we get a recession, which is not our base case but elevated probability, we're probably two-thirds of the way there to pricing that in, and it's very difficult to time the market and the bottom perfectly as we all know, so getting that cash in gradually and methodically we think is still the right way to go. >> god, i'd love to have a liquidity event. that's all i want. i just want a liquidity event. >> you become an influencer first. >> become an influencer, maybe there will be a liquidity event. >> meghan, thanks very much for your time today, we appreciate it rj it. coming up, high risk, high reward liquidity events. chinese tech stocks are gaining 22%, some are betting on china's reopening. others say steer clear, too much uncertainty about the country's government, action, a bull, bear debate you won't want to miss. and the shake-up at the gap, the ceo out of here.

the stock's value cut in half this year. that's a gap why is it so cheap is it a buy? we will trade it in today's three stock lunch. bubbles bubbles bubbles bubbles there are bubbles everywhere! as an expedia member you earn points on top of your airline miles. so you can go see even more of all the world's bubbles. # #

. one of the most volatile corners of the market is u.s. listed chinese stocks. take a look at the numbers, names likealibaba, jd.com, and pinduoduo trading lower, down

more than 45%. amid some signs of easing covid restrictions, those names have soared over the past two months. look at those numbers. and just yesterday those stocks sold off sharply again on renewed fears of fresh lockdowns, more regulatory challenges for big tech and so much more. with so much volatility, is china investable yes or no? joining us now is a china bull, jonathan broadski founder of cedar street asset management, and john rutledge ceo of safanad, and former adviser to presidents bush and reagan welcome, gentlemen, great to have you with us. >> thank you >> jonathan, let me begin with you. i think maybe you have the harder case to make at least to this skeptic here. why should i think china is a safe -- not necessarily a safe, but a good return place to put my money now

>> well, as you stated, it's pretty easy to be a pessimist, it's a lot harder to be a optimist given the zero covid policy, geopolitical concerns and obviously one of the big elephants in the room and that is the regulatory issues between the s.e.c. and the chinese government, around u.s. listed chinese companies, but i think there's some silver lining behind the pessimism, and that's around the fact that we are moving away from a very aggressive zero covid policy, 14-day lockdown to seven-day lockdown very localized approach. in addition, in the original covid outbreak, the chinese government really did not stimulate the economy very much. so there's a lot of policy room there with low inflation, but i think a key point for the viewership to understand in terms of where we are within the china investment landscape is just how dramatic the unemployment numbers have risen with youth in china around 20% and given the fact that historically within china, you know, when you do have issues

with government stability, it often comes from that crowd. the chinese government is very inclined to find ways of stimulating the economy and finding jobs for these younger people who are really struggling right now, and we think especially that that is going to be oriented around the public markets, not around property investments with some very interesting policy changes associated with access to southbound investing within hong kong as well as tax deferrals for pension assets, so we think that there's actually some interesting trends from this very low point where we are right now. >> very detailed prescription there or description i should say by jonathan. john rutledge, let me ask you how what jonathan describes strikes you. it sounds in a nutshell -- and i realize i'm over simplifying it that there is a lot of room for china to stimulate and particularly to stimulate at a

target market of young unemployed, whom they might be worried about creating social unrest >> well, you know, tyler in 100 trips to china over the years, i've been mostly a china bull in the sense that every time that people say china is going to crash, i say no, it's going to keep growing, and that's been true but right now, i don't want to own anything in china until at least the end of october and let me tell you why. october, mr. xi jinping is going to be appointed very probably to his third term in president, which has never been done before, and that makes him effectively lifetime leader. fortunately he's 66, so that's not that long of a period, so between now and then, the look is everything for him. he has announced a policy that's called a new development concept, new development concept is what kevin rud, former pm of

australia called pivot to the states, which means that all direction for the economy for now is going to come out of beijing. he has criticized ceos of service companies, tech companies for being not patriotic. he has denied credit to three of them in the last week, so the service companies are being shoved to the side in favor of the industrial companies that he controls more tightly. this week we'll have a gdp number it's going to be the first negative number since the first quarter of covid and the second one in modern chinese history. we have a shanghai lockdown over the last two months that took chinese -- so what's happening there right now? covid numbers over the last several days have popped up again. now, they're tiny by western standards, but she has his entire reputation resting on the zero covid policy, and zero

covid means shut it down so today there are 11 cities shut down. that's 114 million people, and it's the heartland of china's industry. >> let me come back to something you began, and i want to bring jonathan back into the conversation if might. let me ask you to linger for a moment you said i certainly wouldn't consider china investable until after the october -- i guess it's a congress where xi will presumably be reelected as president of the country and head of the party. at that point, what would be -- what would make you say, okay, now that we know this, we can go ahead and invest is it that kind of binary situation or not >> whatever the outcome, it's going to be more certain after october than it is right now >> okay. >> xi is under intense personal pressure to deliver a economy. he's instructed the provincial government to do everything they can to hit a 5.5% target it's going to be 4, not 5.5, so

that's not going to happen, but longer term they have all the advantages they've had for the last 30, 40 years, and they're still working for them the problem is xi jinping has controlled the government top down, and it's pushed the people into what i call -- think of as the -- when you shock a system, it moves backwards in time, and back ward in time for china is mow sai tong >> let's go back to jonathan, and get some final thoughts reacting to what john rutledge said and maybe particularly focus on that post-october window, i guess or moment that could be historically and market significant. >> always difficult to time the markets and i think that john made some points that are favorable for the bull case, and that is xi jinping in order to get elected needs to not only control covid, but he needs to get the economy going. historically there's been an

orientation around state-owned enterprises as dominating the investment landscape, but i think chairman xi and the rest of the government knows that that's not the real job creator within china the real job creator is in mid cap and small cap companies, especially those oriented around mega trends. that's going to be environmental improvements, electrification, non-dank financials, health care as examples. those really benefit the small and mid cap part of the market in china, especially around hong kong where we have -- we're very bullish on investment flows, especially southbound away from the property market. so although it's very difficult to time things, begin where the concern is from a valuation perspective, number one, and number two the volatility of this upcoming election, there's a strong case to be made that if you stay away from the large data centric companies and move towards smaller, mega trend oriented businesses, especially those that are going to benefit

from southbound investments out of china, which is being promoted by the government, you stand a good chance to be in a good spot a couple of years down the road. >> all right gentlemen, there's the debate in a nutshell for you john rutledge, jonathan broadski, thank you very much. up next, finding the top state for business, cnbc is set to reveal this year's winner we will give you a key hint next and in today's working lu lunch, we're taking you down to mexico for a look at the country's first fintech unicorn. "power lunch" is back in a memont

♪ welcome back, we are getting set to reveal merksamerica's to states for business for 2022 this year it comes with exare tra difficulties like a crippling worker shortage. scott cohn is live to tell us why that is a game changer this year >> reporter: for years we've talked about what they call the skills gap, companies trying to find talent and how states that can help companies bridge that gap have an advantage in our

study. well, for 2022 that gap has gotten wider and deeper. >> with his pick of engineering jobs to choose from, heavily recruited ohio state graduate robert yango took a job in texas. >> because i've been in ohio my entire life, i decided that i wanted to explore and see other things >> reporter: but now it's not just the engineers getting snapped up >> bmw's 2022. >> reporter: these community college graduates in south carolina all have guaranteed jobs with automaker bmw before they started school. >> the industry itself is growing so fast that there's not infras enough of us to fill the industry. >> reporter: bmw has been partnering with community colleges here for a decade now they've added a program in high school building a worker pipeline. >> we continually need more of these people skand the industry needs more throughout the world.

>> reporter: the race has escalated the war for workers, now expanding to manufacturing. >> there is a stark need for people who have the ability to work not only with their hands and then to troubleshoot that back across technology >> reporter: the states that are winning experts say are taking the long view. zb >> they're thinking about ways that they can attract talent, but more importantly they're looking at a long tail of how they can actually build their talent >> reporter: with all of that in mind, we've retooled our metrics just a little bit in both the work force and education categories to account for career education, community colleges, industry recognized certificates and the like you can read more about our methodology and our study and all about competitiveness at topstates.cnbc.com, which is where you'll be able to see where your state stacks up tomorrow, and tomorrow you'll be able to see where i am i'll give you another hint, playing the blues. playing the blues. now, every state has a blues

scene, but this state's blues scene is special, playing the blues. t topstates.cnbc.com guys. >> memphis would be too obvious i assume it's got to be way more subtle than that. >> memphis and new orleans would be too obvious i can't -- that's a really good one, scott i'm thinking it's got -- i'm looking around there, it looks like rain showers are coming it looks like it's green. >> humid >> i think tennessee is not a bad guess there. >> something southern. >> tennessee's not a bad guess all right, scott, we'll see you tomorrow >> reporter: okay. >> he's like no comment. let's get to bertha coombs now for a cnbc news update. >> hey, tyler. today's hearing for the january 6th committee, they played back some videotaped excerpts from the recent behind closed doors testimony of white house counsel pat cipollone. he talks about how he thought then president trump was getting

bad advice from outside the white house on challenging the election results, recounting how he was dismayed when he walked into an oval office meeting to find among others the one-time ceo of overstock.com, patrick byrne. >> i walked in, i saw general flynn. i saw sidney powell sitting there. i was not happy to see the people in the oval office. >> explain why. >> well, again, i don't think that you have to -- well, first of all, the overstock person, never knew who this guy was. >> a senior islamic state leader was killed in a u.s. air strike in northwest syria the strike also wounded a senior isis official closely associated with the leader. and spotify announcing that it's acquiring hurdle, a music recognition trivia game for an undisclosed amount the deal will push spotify further into its mission to make

its app more interactive as it invests in video, live streaming and podcasts in an effort to diversify its revenue streams. and tyler, it sounds like hurdle is like a cross between wordle and name that tune. >> it sounds like wordle, wordle with music >> exactly exactly what it is >> thanks. ahead on "power lunch," folks, we've got dressing -- not distressing, not distressing -- and flying we've got big calls focused around the consumer in today's three-stock lunch. plus -- >> we'll go yield hunting to find you even more opportunities, companies paying out a record amount in dividends despite all this volatility. we'll run you through some stocks and etfs with solid returns.

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earlier. the s&p is still negative and the nasdaq is down 25. some of the alternative financial names, if you want to call them that are seeing green today like affirm, block, p paypal, and coinbase affirm is up 4%, and it's a big move higher for the airline stocks you've got a couple of things going on, plunging oil prices are helping, so too is that jam packed heath row traffic where they're saying they're going to have to halt new schedules until september. so american up 10%, united, delta, hawaiian all up 7 to 8% today. and the semi stocks are also seeing a lift, western digital, micron, and skyworks two of the biggest losers today are over in the cloud where names like servicenow and paycome rpaycom remain under pressure. a busy day in the bond market where the focus is on yield curves and currencies and rates and rick santelli is tracking all the action. rick, what are our takeaways >> yeah, i'll tell you, all of

the above and let's not forget the reason we're studying all of the above is because central banks have been so busy the last decade and a half, accumulating large positions, our central bank 9 trillion ecb, boat loads of negative securities, that's why inflation and recession and tightening cycles are so painful, because of decades plus of manipulation by the big central banks. look at an intraday of 10s, you see that selloff that pushed yields up, that was a failed option i gave it a d minus. it was an ugly option in front of tomorrow's cpi. look at a two-day of 10s and realize less than a month ago we have intraday highs, a whisker shy of 3.5%, much lower and yields higher in price look at a three month of boons look how they've dropped from 177 to its current level just above 110, and then look at the

three-month euro versus the dollar notice how the right side is the same as interest rates fell the last six weeks in europe, so goes the euro currency, add in the ecb and fragmentation, there's going to be trouble in europe trying to get these markets to normal ice, and finally that yield curve, here's the real recession yield curve. it's nearly cut in half just on a month to date chart. kelly, back to you. >> a big drop and a fast drop, rick, thanks. i mentioned falling oil, let's get the full details from pippa stevens with more on today's slump. >> hey, kelly, big declines across the energy complex sending oil tumbling more than 8% to its lowest level since april and falling into the close. a number of factors weigh in, covid cases in china are jumping, which could hit demand. the dollar is also stronger and we've got mounting recession fears. this all ahead of president biden's meeting with saudi leaders later this weekmen

opec does have room to raise production she doesn't believe they have that spare capacity. even if they did, would they be willing to raise output. today's decline is at odds with comments from key agencies, the iea saying the world has never witnessed such a major energy crisis in terms of both depth and complexity meantime, opec today released its first look at 2023 and they see a tight market so a lot of different moves here wti down more than 8% at 9950. brent crude also falling below 100 bucks currently at $99 meantime, gasoline futures down another 6%, so that is one bright spot for consumers, kelly, with gas prices expected to continue to decline >> absolutely, pippa, thank you very much, pippa stevens. now let's look at the rise in dividends that we've seen and some of the etfs that track them despite how rocky the markets have been, dividend payouts hit another record in the second

quarter. according to s&p dow jones, companies in the s&p 500 paid out a record $140 billion in dividends last quarter they estimate that dividend payments will jump more than 10% in 2022 year on year that's the first double-digit increase since 2014 and there are a number of etfs, like the vig from vanguard, the dvy from i shares and the vym they're all actually down for the year, which reflects the price action we've seen, within them some names that come up constantly and are pretty familiar big dividend payers, widely owned names like coca-cola, pepsi, verizon, and broad come other popular names, ibm, exxon and phillip morris tyler, over to you >> thanks very much. after the break, today's working lunch, we got jon fortt who's going to speak with the ceo of cliff

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fintech companies are among the winners with paypal, block, and affirm up more than 2% and today jon fortt brings us up close with the founder of a startup bringing digital payments to mexico in a way that reveals the category's global potential. jon. >> yeah, ad company that allows small businesses in latin america to accept credit cards and killing payments adolfo worked for paypal before realizing latin america needed its own fintech, and starting clip a decade ago. clip raised $250 million in a series d round last year and intends to go public in the u.s. eventually, adolfo grew up in a wealthier part of mexico city and when a major earthquake struck in 1985, he saw how people's economic status affected the devastation >> but in the case of this earthquake, particularly it was also the part of the city where you lived. mexico city is built over a lake, and the parts where the lake was, they tend to shake a

lot more, okay we live in the south, the south is firm ground so in the south there was -- there were no problems there were no homes destroyed, no buildings, everything was -- everything seemed normal okay but as the day started following, i remember my brother, my oldest brother went to the baseball stadium to carry corpses. >> about 5,000 dead, adolfo started to feel a social responsibility to improve things after that later he saw the potential for business and entrepreneurship to have a positive grass roots impact now with clip, he's making it easier for small businesses in the region to transact, set up omni channel processes, even get access to capital. an interesting part of the equation is helping them sell wireless services. >> clip has almost doubled the size of the pie in terms of merchants that accept digital payments in the country, just clip pi iby itself. so number one is that, number

two is to make sure that we provide tools to the merchants that really help them grow their business, and what are those tools? number one, financial services we can provide them with a loan. we can provide them with a bank account. we could provide with insurance on their business. how to sell online, how to sell on multiple formats. that's kind of the third piece of this. how do we really give them tools to sell more, selling services, things like that and the fourth piece it has to do with the apis, how do we leverage payments, clip's amazing payment infrastructure so that everyone can use it? >> here in the u.s. we talk a lot about fintech in terms of crypto and buy know, pay later, which is fine. it's also interesting how digital and mobile payments are changing the rules of entrepreneurship in emerging

markets. guys like adolfo babatz have a front row seat, guys. >> they have some fantastic blue chip investors including softbank, goldman and general atlantic among others. so they've got that edge, but what is their edge in terms of service over the big guys like or square? >> well, being on the ground, understanding local american appearance, local services that they need, adolfo used to work for paypal and was in charge of managing mexico before he went and started clip decided that some of the things he wanted to do, paypal wasn't moving as quickly as he wanted to and that's part of what inspired him to start the company. >> amazing jon, thank you very much jon fortt in today's working lunch. coming up, all fun and games. cruises, casinos and beer stocks are high tayerod we have those details, next.

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welcome back to "power lunch. it looks like investors are betting that consumers are looking to get out, have fun and downplaying covid concerns because the cruise stocks are getting a nice pop carnival up 8%, norwegian right on its tail.

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welcome back, everybody. time for three-stock lunch we're looking at gap, lower after its ceo announced she's

stepping down after two years on the job. peloton higher on news it will outsource all manufacturing of its products, and southwest higher on an upgrade at susquehanna which sees a 23% upside in shares here to help us trade them all is eva atos. welcome. let's kick things off with the gap which to me has been a terminally troubled company over the past decade. >> yeah, i agree it's a sell for us it's in the news with their ceo departing within a year, that's not a surprise to us because they're underperforming. gross margin is dropping, ebitda margin is dropping they have the worst revenue margins in the sector and that's a company that saw a 50% increase in their inventory. that's why the economy was good. we're very concerned what's going to happen to them. in an economic slowdown, will

they have extra pressure on their margins and further markdowns. >> well, speaking of potential big changes in a business model, how about peloton, where now they're outsourcing the manufacturing? >> yes that's a sell too for us that's because out of the 56,000 global publicly listed companies that we're tracking, this is one of the worst, if not the worst example of corporate greed and that's because there was key insider trading of $500 million at the top of the market, $400 million dollars in key executive compensation while they had $1.9 billion in losses. that's why their gross margin was dropping, the fundamentals did not look good. they certainly did not justify such a big compensation, so we're concerned about their

culture and their management there's nothing worse when a company is managed by bad entrepreneurs and unfortunately that's the case. certainly not a buy, i would say sell. >> we'll have to have you back because you seem to be suggesting that the executives there traded out of the stock with some foreknowledge of what was to come. we'll have to talk about that a little bit more. but meantime, we've got a minute let's talk about southwest air is there finally something you like, eva, finally >> so that's a buy definitely. there's pent-up demand when it comes to travel. and also that's the company that has the biggest revenue growth in its sector. it's growing by 168% they are improving in all key three areas, sg and a costs are dropping their valuation is similar to their peers so definitely a buy. >> definitely a buy. two sells and a buy. >> so much positivity for the

airlines of all things today. >> yeah, exactly. >> eva, thank you very much. >> i guess they don't fly into london heathrow. >> right i understand there's that much demand, but there's still a lot of bottlenecks crazy. >> and sas is on strike. i was planning to go to norway, who knows, we'lly. >> forget that. >> thanks for watching "power lunch. >> "closing bell" starts right now. stocks are searching for direction in another choppy day of trading as investors await tomorrow's big inflation report. the most important hour of trading starts now welcome, everyone, to "closing bell." i'm sara eisen the dow is down about 45 points or so. we've been in a range of up 172 at the highs and down 93 at the lows s&p 500 giving up half a percent. you've got strength in materials, consumer and some real weakness in energy stocks as crude oil sells off hard. health care, technology and real