searches over the past month around whether or not if you have solar and storage how you can survive a power can outage, and it doesn't mean as one data point as well as spiking utility rates. as i've said before, we looked into it and felt like it wasn't ready for prime time, but with every passing year maybe we're getting closer pippa, thank you very much, our pippa stephens how one company is using clean energy to provide disaster relief coming up on "power lunch. >> and welcome, everybody, to "power lunch." happy monday i'm tyler matheson president biden with the chips act and set to move ahead in congress and it could move subsidies for the semiconductor business and dividends on pace to set a record this year, but there are a few companies that

our guest says have unsustainable payouts and a market veteran has some names to be wary of that's coming up, kelly, later this hour. >> hi, tyler thank you. hi, everybody. let's start the week with the look at the markets and the dow has been fluctuating in a very narrow range and it's down seven points and the nasdaq is the clear underperformer and it's down two-thirds of 1% and a lot of nervousness about big tech results and most of those names are under pressure today check out newmont mining the worst performer in the s&p after reporting a quarterly loss, and hurt by a drop in gold prices there for nem, and energy, meantime, the best performing sector today, and diamondback, apa and marathon and we're seeing gains of 6% and the energy sector up about 3% for its part and this week is being called the most important of the summer we've got earnings we've got fed chair powell setting the tone for the back half and let's go to bob pisani

at the nyse. >> kelly, apple and microsoft earnings and the fed meeting will set the tone for the second half of the year and you're absolutely right and for the fed the problem is simple and nobody is quite sure what version of jay powell will show up for the press conference will it be the fire-breathes, dragon-slaying jay powell or someone in between we don't know. what the goals desperately want is powell to have a recession, and the battle against inflation hasn't won and that will be august 25th and it might be the opportunity to note that inflation is improving and the economy is indeed slowing or going for a pause in rate hikes and that's what's going to happen maybe, we'll see apple and microsoft are the most important earnings this week

everyone is afraid of a slower spending environment and the effect of the strong dollar. yet bulls are insisting that iphone demand is feared and expect to hear about managing expenses and the bulls have a better fourth quarter and a better 2023. want an example? dan ives, as of now we believe iphone demand is holding up better than expected that said, the street is well aware of weakness this quarter and ultimately is looking past june numbers to the september and december quarters with all eyes with the i-phone in production for the fall staying on track he said that in a note to clients last week. like everyone, he is hedging his bets and arguing that the street is well aware that a slowdown is under way. in a shaky macro environment there will be casualties that a slow are spending environment is on the horizon a lot of weather meta fors there, tyler, but the bottom

line, tyler, the street is arguing don't look here, it might be difficult here and the fourth quarter you'll hear a lot about that in the next couple of days. >> all right, bob, thank you very much. bob pisani our next guest watches it all very closely and says there are a few names beyond big tech to pay attention to right now we'll get those in just a moment from stephanie link, chief investment strategist and portfolio manager at hightower advisers, also a cnbc contributor. let's start with the macro picture, stephanie take us through some of the numbers that you'll be looking for and with particular note that some of the inflation numbers we will be seeing are rear-view mirror kind of numbers. >> yeah. it's a huge week, tyler, this week the next five days we'll learn a lot about the economy and where we're going, where we were and where we're going and we'll learn about monetary policy and the fed and of course got profits.

in terms of the data, the three data points i'm looking for for the economic side of things and this is the second quarter good-bye and the preliminary number, believe it or not, the number expected is still 2.3% positive that's a year over year number, probably a bit too high. in term of the inflation figures, core pce at 4.8% year over year is expected. we know the fed likes this gauge, and they want it to be 2% and the employment cost index which will also be pretty hot as well as 6.7% and again, year over year numbers and the inflation story isn't going away and we do get the fed on wednesday as bob was just mentioning is expected to be 75 basis points i think they'll do another 75 in september and then we kind of have to hope that they'll just step back and look at the economic data, but the data is definitely slowing at this point and that's why last week, tyler, the markets rallied, believe it or not because of the fed pivot talk, right?

because the economic data came in so soft and lastly, just quickly on the big picture on earnings and the 35% of the s&p reports this week, but it's 49% of the market cap and 21% of consumer stocks within the s&p so we'll get a real time gauge of the very important consumer >> let me just spend one more second on the gdp number and the first quarter number was pooh-poohed and there were technical reasons why it was negative, but this time if it came in negative would that be more worrisome to you? >> yeah. ri mean, is it technically a recession two negative quarters in a row, but you're right first quarter inventories and you have to adjust for exports and this is a more softening of demand side of things and that's why the consumer companies will be super important to watch. we have general mills and they were able to see 13% organic

growth and they did not see demand destruction yet even though they put in 12% price increases and we have to hear a lot of what the consumer is doing, but we know it's weakening. >> steph, tell us and hello and happy monday >> hello. >> everyone is focused on faang and they're super important companies. so the following will be commentary versus the numbers and 787 and getting clarity on the delivery resumption. 737 max has to be recertified in china and the recovery in travel we saw american express, tne rose 84%iary over year when they reported on friday and that's an indication that travel is picking up and we all know when we go to the airports and see that kind of thing and that should help the overall

deflation, and in the third quarter that inflect positive. so that's a good thing they have an investor day in september. quickly on cat it's a global proxy for demand i want to hear what they have to say. total analyst day will be better than the prior peak highs which was in 2012 at 66 billion. watch free cash flow for them as well and they have a $15 billion buyback, and i like that stock a lot. if they were to weaken that is one i would look at and buy back chevron, we know all of the energy companies are printing money and we saw it on schlumberger on friday, and i think they'll feed on the upstream because of oil prices and downstream because of refining margins and this is a free cash flow story and break even is $50, so we want to see what they'll do with the 11.2 billion in free cash flow just with this quarter alone that they'll generate. >> stephanie, as always. great to see you as always >> stephanie link. appreciate it.

>> what a busy week, in just a few minutes president biden is scheduled to host a virtual meeting with ceos and labor leaders on the chips act the bill earmarked their 52 billion for chipmakers to build plants in the u.s. those in favor it would help counter china's growing tech dominance and those against says chip companies themselves should pay. kayla ka kayla tausche is here. >> let's start with you. >> this is the first time we've seen president biden in three days as he's been isolating with covid and certainly this has been an issue that's been top of mind for the white house and you see the commerce secretary, the national security adviser and the counselor of economic counsel attending. the makers of the semiconductor chips should not see it for tens of millions of there ares and the ceos that you see in the virtual meeting are the executives leaving comments.

the administration here will argue that these end users of chips who are making medical devices and jet engines and those javelin missile systems that the pentagon has estimated use up to 200 chips per system, that it is these companies and the labor unions who will be providing some of these jobs who will be the ones benefiting so look for that argument to be made and it's worth noting, kelly that this is a fight that has long been in the making. in february 2021, that's when the white house first announced a task force to start studying the supply chain logjam and about 100 days later announced that it was semiconductors where an acute shortage was being felt discussing what sort of incentives were needed to go forward from there the industry has estimated that it takes six months or up to six months to produce a single one of these very advanced chips and it's several years to produce a factory that actually makes these chips and as we've now seen, kelly, it might take

several years for the political process to get out and get some of the factories here in the united states. >> absolutely. that's another story, kayla. by the way, kayla, should we expect anything else from the president policy wise? and i know this is more of a question for elon as well as the time line through congress, but it sounds like there are two big things we can expect between now and the midterms, the chips act and possibly this health care thing that would cap prescription drug prices and not let subsidies expire >> i mean, this in particular, is this a big issue that would galvanize voters 2 doesn't feel like it would be. >> perhaps not, but it has been the fight against china and the competition against china that's been a bipartisan issue and i think you can read the tea leaves about how the white house is discussing both of those pieces of legislation that you referenced as to the likelihood or the possibility that it's

ascribing those to the finish line the president is holding a big public event in essence to help the president get any sort of halo effect if it were to cross the finish line. by contrast, when you talk to white house officials about the slimmed down health care package that would no longer include the climate funding this is senator chuck schumer and the democratic lead are in the senate, this is his ball game and he's the one leading those negotiations and we'll see how they proceed and they're trying to establish some distance from the health care bill even if they're trying to establish some proximity to this one, kelly >> kayla, thank you very much. let's go to eloylan with a time line for the vote. >> the next procedural vote is scheduled for 5:30 this evening and it could happen this tuesday

or possibly wednesday. nancy pelosi will be in her chamber and then it will be on to the president's desk for her signature. the official cost of this bill is $79 billion that includes 52 billion for chips and roughly 24 billion for investment benefit for tooling equipment and another 2 billion for the public wireless supply chain. this measure got bipartisan support during an earlier procedural report and there's speculation that margin can grow when it's time for the senate to take up final passage, but the business community is not taking any chances. ibm has been one of the most vocal proponents of this bill and this week, 60 senior executives are flying into washington to lobby lawmakers and the biden administration to get this across the finish line. that includes ibm vice chairman gary cohn. in a statement he told cnbc that this is an historic investment in an industry that america created and we'll put our country back at the forefront of chip manufacturing and guys, as

you arc lewlluded to, this coule the last piece of legislation before the midterms. >> thanks, ylan. i know you'll be watching it for us coming up, folks, are cracks forming in the lending markets ally financial may hold the answer to that the analyst behind today's power call will be with us plus the big techtrade into earnings this week find out which stock our trader says will bring short term pain, but long term pain in today's three-stock lunch. as we head to break, take a look at shares of webber, the grill maker after the company announced its exit of the ceo and suspended its quarterly cash dividend we'll be right back.

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welcome back to "power lunch," everybody. allied financial with piper sandler. the company which is one of the largest auto lenders in the u.s. reported its 30-day auto delinquencies increased 58% year over year last quarter that's up from a 41% increase in the first quarter of the year. those are big numbers. joining me for today's power call is kevin barker, managing director at piper sandler. kevin, what are you seeing here and why does it have you so unnerved you've cut the price target from 34 to 45 >> so we're seeing that to your

point the rising tlifrndelinque rates are rising at a faster clip and there is a normalization that needs to happen because losses were so low for so long after the pandemic and while we expect losses to go up, the growth rates that we're seeing now are a little bit worrisome, and if they continue at those rates we think losses could really hurt earnings in the future. >> what is driving those losses? it's not rising unemployment it's not falling wages, per se i have to assume it's the rising price of automobiles and that people have just taken out more loan to buy more expensive cars than they can afford >> the loan numbers have gone up a lot. duration has extended and the standards overall have been fairly consistent and used car prices were so high.

inflation's really making it difficult for people to make payments or to even handle their bills on a day to day basis and we're starting to see some of that fall through. part of that is the normalization of consumer balance sheets and a part of it is also, you know, payments are much higher than they were two years ago. >> but it's not a case like in the financial crisis of -- or that you seem to be saying it's not a case as in the financial crisis of lenders lending to people who shouldn't be taking out loans. in other words, that these are loser loans. they're junk loans >> no, they're not junk loans at all. the auto market is incredibly mature and there's lending from everybody with no fight it goes all of the way up to the top so i'm not too worried about the auto market. >> how does this trickle through and affect the profitability of ally, its margins and its eps?

>> yeah. so delinquency rates lead charge-offs and eventually you will see higher credit losses in the future just given that delinquency rates are rising if used car prices continue to soften like they have that would make the losses even higher. the likes of ally or any other consumer lender that is involved in the auto space will likely have to either maintain reserves where they are now or potentially increase them depending upon how the economy plays out over the next six to 12 months? >> how will that potentially hurt profitability maybe car prices can plateau if they go down they'll be stuck in a downward spiral, these stocks in the post-pandemic were similar to what we saw pre-pandemic and with used car prices up a lot, and the new car

prices have gone up allot, that will increase the severity and we could see not necessarily a normalization back to pre-pandemic, and maybe something a little bit above that especially if we see higher unemployment so watching that really closely and worried that the delinquency rates could continue for the next several months especially interest a recession. >> people are going to be under water in these loans, aren't they >> yeah. usually the recovery rates on auto loans are 50% and if they're running above that, it's possible if we do see persistent declines in used car prices it could be much lower. >> it looks like this cut in price target that you put through this morning or today is abrupt a month ago you had it up at 45. not so many months ago you were in the 50s so these numbers must have gotten your attention >> it's partly delinquency rates

and it's partly excess capital with the value coming down and equity values coming down with interest rates and it's partly due to the fact that we're seeing higher funding cost, as well so that can impact the profitability in the company. >> kevin, thank you for coming on and discussing your call today on ally. a warning on ally. kevin barker of piper sandler. thank you. >> thank you, tyler. coming up, saving lives and the environment. a mobile disaster unit that runs on clean energy. plus tech on deck, a key week for tech earnings and we'll break down today's three-stock lunch.

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use code tv and get $50 off plus a free foot rest. welcome back to "power lunch. it's not only a big week for tech earnings. the industrials, as well and as we're trying to gauge recession this is an especially important time seema modi is here at what we can expect. >> if we talk about the consumer spending data that we got from

american express and the banks you would say, well, the consumer is holding up pretty well, but the industrial economy less so. the manufacturing flash pmi was the weakest in two years while services pmi fell into contraction territory and that's below 50 data out of europe has not been faring better and new orders have been in contraction, and 3m set to report tomorrow at an investor conference this month the company talked about how its numbers reported to a 3% negative impact from the china shutdown ask also citing currency headwinds and continued concerns around inflation. j.p. morgan's price target out today $134 that's exactly where the stock is trading at right now and a similar story for general electic which has seen estimates cut on the continued supply chain constraints and both 3m and ge have been trailing the industrial sector by a wide margin and you'll see the industrial sector down 14% this

year and 3m down 24% and ge down 27% and we've seen the earnings growth rate for the sector come down from 30% to earlier this year now down to about 26. so here's where investors see opportunity. morgan stanley says stick with tritan and oppenheimer and emerson electric and wesco international and they both operate in the electric utility space, kelly. >> and we have john deere and this has been with ag in the spotlight and first in the positive sense for much of the year and it's also been part of the correction >> this has been a sector within industrials and john deere have been underperforming as of late on the idea that there will be a shortage of wheat and commodities buy these names and

since weight prices have collapsed, they've come under pressure and 365 price target ahead of earnings which come out on the 19th of august. they think that the second-half rebound with the ag equipment will stay in touch. >> amazing to see ag and wheat prices down. that's the big question. >> let's go to kristina partsinevelos for a cnbc update. kristina >> hello, tyler. i humbly beg forgiveness for the christians on the indigenous people canada's decades-long policy of forcing native childrens to attend residential schools where the abuse was rampant. it caused the assimilation effort catastrophic and a disastrous error

>> a former u.s. representative is one of people facing insider trading and stephen by err represented indiana from 1993 through 2011 is accused by the sec of buying sprint shares in 2018 when he was a consultant after attending a golf outing where a t-mobile executive told him of the company's secret plan to acquire its competitor. and britain will host next year's euro vision song competition on behalf of ukraine. the uk entry in this year's contest came in second behind a ukrainian group that won in the wake of russia's invasion. it would be too dangerous to keep with tradition and have ukraine host next year. >> kristina, thank you very much coming up on "power lunch," the dividend, and are these payoffs unsustainable. we'll discuss that and we'll name names next.

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let's get you caught up on stocks, bonds, commodities and the question of unsustainable dividends. before all of that let's check in with dom chu. how are we looking on the market, dom? >> this is very much a wait and see, kelly the gdp release and the busiest week of earnings season type scenario playing out right now so the trading range today has been narrow and calm on a relative basis at its peak, the large cap s&p 500 was up roughly one-third of 1% at its lows of the day it was down one-third of 1% how is that for symmetry and an action day energy, by far, the best performer up three and a half on the day and it's utilities and consumer staples and two defensive ones are leaders and a big week come services and consumer discretionary earnings and those are the big laggards as for the bigger stocks stories of the day, check out you in

montt corporation and the gold miner reporting disappointing earnings amid the drop in gold prices outside of the s&p, check out weber inc. and outdoor cooking grills getting smoked today. it fell shy of analyst estimates and it's dealing with inflation and supply chain-related issues. what else? it gave disappointing sales guidance for the quarter and the ceo is stepping down you're seeing real earnings movers, kelly, even though we're not even at the heart of this busy season. >> i am shocked that weber was doing so well, and the boom and the new homeowners that they would give them something more of a lifeline. >> tough comps the pandemic drove the outdoor grilling spending and i don't know you can replicate that. >> i know. i'll think of ita i grill. >> you and me both. >> let's get to the bond market

now where treasury yields, we could say higher, but 282 is still so much lower than where we were at the high point of the year, up closer to 3.5%. so we've come a long ways down, but that's where we are as of this afternoon and part of the curve is also still nverted an we're talking about the twos relative to the tens yeah still by 20 basis points and pretty significant and something we're always keeping an eye on oil closing out the day in 2% making energy one of the best performing sectors in the market and nat gas continues climbing for a lot of supply-driven reasons. let's get to pippa stephens. >> nat gas is up 50% for the month and that puts it on track for its best month going back to september 2009 a combination of factors boosting prices regarding extreme temperatures which means higher demand for natural gas. the contract also rolls on wednesday, so we're seeing

volatility ahead of that expiration we also saw a bump as russia's gazprom said beginning wednesday it will have the vital pain line by 50% to 53 million cubic mooerts and that's 20% for the capacity and nat gas futures jumped 10% on the back of that news that comes as they're refueling storage ahead of wi winter bank of america saying europe is choking on the higher energy costs ever. turning to oil and a more muted gain here with wti at 76.31 and energy stocks are responding to oil and gas and they're leading the s&p 500 and they're the outperformers with apa, diamondback and marathon all up 8% >> let's turn to dividends on record to set a record, but are

they payouts sustainable picking up, jack, on a discussion we were having last hour, as well, taking a case like verizon and not saying a dividend is in any danger, how do you know if it is a promise sign or a lifeline >> a diffident looks like it's a great to sustain walk us as you go through an enticinger have investment to i start with the 500, it generally is in very good shape in terms of dividend and dividend sustainability overall. i also, from that point, took out all of the real estate investment trusts and pipelines because these are structures that are designed to pay out

most of their cash flow in dividends anyway so stripping away there, i looked at companies that have had a difficult time making their last dividend payment. their payout ratio relative to the earnings was over 100% or in some cases massive if earnings were negative. so here are some of the names i came out with first were pp sk l. it is a regional utility, payout is 166 and the investment group trade, bbb bond quality and the equities are rated at a c+ on the service that i use next is the cme. the cme group and the exchange, the mercantile exchange. this is an interesting one

because the cme pays a very small, regular dividend, but then has a -- an extremely high special dividend, and so that special dividend that they paid the the endiary year, while i, they had the optionality, no pun intended, to cut back on that special dividend that they reward their holders in the fourth quarter of the year >> so really, the numbers -- excuse me, jack, if i might. >> go ahead. >> the numbers are the ratios to look at. it's not that necessarily a high-dend din sig nols there's at almost gautdy and its payout ratio is just 14% more does a low dividend

necessarily offer you sol sass. >> that's it take ford, for example, the most controversial on my list and they're only paying a 15% dividend, but the last of the fourth quarter earnings was negative 7 cents so as long as -- as long as they'll be able to, you know, continually crank out positive results, they should be able to cover the 15-cent dividend, but if -- keep in mind, ford has had a track record of eliminating the dividend in fact in 2020, they withheld the dividend for two consecutive quarters so i wouldn't be surprised if things got tough for ford that 15 cents would disappear for a little while. >> so when eye company may more money than it earnings, it can

come from from cash flow -- whichless also be part of the ash three. you have to understand earnings what the ayn sustainability was over that cash flow, and i rpg the other thing thevenl dividends are sank ro safrnth. if a company issues a dividend and if they have to come back and cut that's an issue, but if you're looking at dividends in europe, for example, that's not the same case. so just because you're enjoying a great dividend, management has no hesitation of cutting that dividend and it doesn't carry the same stigma that, say, an s&p 500 company would. >> all right jack, thank you very much. we appreciate your time. as always, jack ablin. up next, the clean start, between the start-up sesame solar. we'll be right back with that one after this

>> well, it's an increasingly sight, and those are just adding to the problem in the fight to stop global warming. there may now be an alternative. diana olick joins us in her continuing series on clean start-ups. hi, di >> hey, ty think about how much goes into disaster relief, mobile communications and command, mobile medical, kitchens and housing all usually powered by diesel fuel and all of that dirty energy just adding to the cause of these disasters in the first place, but a start-up called sesame solar is making fossil-free relief possible. >> the whole concept is that no fossil fuels are required to be able to have days or weeks of energy autonomy after an extreme weather disaster like a hurricane or tornado or a wildfire or in the event of grid outage in california like psps

or a cyber attack or any time the grid is down >> it's mobile systems that can be pre-loaded and ready for use within 15 minutes of arrival water, power and communications that can be towed and deployed almost anywhere. >> we have other sources of renewable power and we can to a small wind she sells the systems from $300, in the case of a medical clinic. its cut of mers already include the u.s. air force as well as telecom company like cox and comcast, parents company of cnbc its invest investors say they see huge potential >> there's been 18 multi billion dollar climate disasters in the u.s. in the last 18 months and it's rare you will find a

company that that already has revenue, already has customers and already has impact on the world and has done it on a shoe spring budget. it's by morgan stanley, and so far $2 million >> it may not sound like a lot and flanagan says she's not concerned because of the strong revenue growth already and she's looking at a model where rather than sell the units she can rents them her dream is to get fema onboard with that which would be a game changer. >> they've sold 20 given that about. >> 50, that's just amazing can they have supply chain issues that can retard that growth >> they're not seeing the supply chain issues that others are seeing right now >> fascinating, diana. always good to see you

thank you. diana olick. >> still to come, today's three-stock lunch and it's the mega-cap earnings edition and aturl reveal each of these names th o trard code that could be s sell among meta, alphabet and apple. don't go anywhere. iter. they do the legwork and they get my job posting sell among meta, alphabet and apple. don't go anywhere. lo marketing, hardware, field techs. you can basically tell ziprecruiter who you need, when you need it, and they deliver. - [narrator] ziprecruiter. rated the number one hiring site. try it for free at ziprecruiter.com try it for free at ziprecruiter.com

welcome back the moment we've been waiting, for the busiest week of earnings season is upon us. we get the tech titans all set to report. we'll sample a few of them for today's three stock lunch. alphabet is after the bell tomorrow, meta after the bell wednesday and apple after the bell on thursday here to help us trade them is matt mailey. it's great to have you here, matt we're very much talking about the very short term into results. what's priced in, how do you think they can move? let's start with alphabet. >> yeah, alphabet, as you mentioned, the stock is down -- it's down testing its lows for the year you know, i understand why people are worried about what happened with snap last week most people saying we know google is much better than snap and there are concerns about the issues of ad revenues. but we've got a situation that's very unique. this year is a midterm election

year, which is usually not a big one but it will be this year speaking with my expert in the field, matt mailey jr., there are records amounts of fund-raising this year they're not going to use it on tv spending. they'll use it in their email programs and move over to areas like the google apps, google search, i'm sorry. so that's a great thing. but the big thing for the stock is that it's cheap it's priced at 17 times earnings, their market share is off the charts if this thing sees any weakness on their earnings, it's going to be a great time to buy it. >> a stock even cheaper is meta at 15 times earnings you like it, but not with both hands. >> right, tyler. the thing about -- i think a lot of people are getting very cautious on the stock and more so as the months go by mark zuckerberg is so focused on the metaverse, et cetera

but i think he's more crafty than people give him credit for. all these companies are talking about going in and throwing the kitchen sink this quarter with their earnings reports that's something mark zuckerberg did six months ago if they can turn things around, monetize the whatsapp situation, you know, that's going to be something where it could really help the stock again, i don't think it's one that's going to bounce right away like google k it's something you want to buy it, a little every month between now and the end of the year and five years from now you can look back and say i'm glad i bought meta >> apple, you sound a little more concerned why? >> yeah, obviously apple is a great, great company, kelly. and sometimes the stock isn't as good as the company. this is a stock that's 17% off its lows versus a google which is right on its lows for the

year they're starting to throw some negative hints at it it wasn't today they talk about lowering prices on some of their iphones in china but last week they talk about hiring freezes more importantly talking about cutting back on spending these are the hints that tell me they haven't priced in any recession. with the stock trading 25 times earnings, that's great historically it's still quite expensive for apple. so my concern is if they report some problems, this is a flight to safety trade for the tech sector and people could say maybe we should look at google instead of apple i think it's a great opportunity to buy apple later this year, i just think it's in the fall months rather than right now. >> matt, thank you, sir, we appreciate it. >> thanks, kelly. >> three stock lunch. all right, sticking with big tech, folks, which stock could see the most volatility after it reports earnings ptnsart llio mketes us, next of the le.

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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. welcome back to "power lunch. dom hinted at this earlier but the options market is telling us that it could be a more razzle dazzle, are they good fireworks, bad fireworks? dom chu is back to explain, what is this telling us about this? >> you don't know. the options markets, there's traders jockeying for positions. they're using put options and call options ahead of these earnings reports

what it can tell you is how things could move. the magnitude but not the direction because they can't tell you exactly what's going to happen check out the qqq trust which measures the nasdaq etf format, is the market right now already getting set for some kind of a move higher given what's happening with earnings? if you take a look at some of the biggest stocks in play, we talked about the big five reporting this week. if you look at apple and amazon right now, they have had some rough years so far, but the big moves that you're seeing up here translate into roughly 18 to 19% moves off the lows already for apple and amazon as for what the options market is telling us about the trade, what it would be is a plus or minus 4% move on that stock. for amazon, it's plus or minus 6% so some of the more volatile ones we could see.

it's about 5 to 7% that we're seeing here, but when you look at microsoft and alphabet, you're talking 5 or 6% plus or minus in terms of these particular moves but it's meta platforms that's the real outlier. right now the options market is pricing in what could be a plus or minus 10% or 11% move in the stock. >> that's pretty unusual. >> it is pretty big. you're also talking about meta platforms, a company that's already lost 50% of its market value over the last year to date period but we know that with snapchat's earnings, snap inc.'s earnings that online advertising, advertising spend and some of the trends there could be huge people have already used companies like snap or pinterest as, quote, unquote, wellbellwet, but alphabet and facebook control the bulk of online advertising out there.

when you talk about bellwether, it will be meta platforms and they are already pricing in a pretty big move on that stock, up or down. >> stay tuned. that is a tease. >> thank you, dom. our dom chu. >> thank you very much well, welcome back, everybody. another big week ahead. >> very big. >> thanks for joining us and watching "power lunch. >> "closing bell" starts right now. >> thanks, kelly and tyler stocks are trading in a narrow range as a pivotal week for the market gets under way. the most important hour of trading starts now welcome, everyone, to "closing bell." here's where we stand in the market the s&p giving up a third of 1%. you've got communication services as the underperformer and that's dragging down the nasdaq as well it's down a percent. the dow, it's been in a narrow range, it's down 46. the high was up 129. the low today down 40, so we're near the lows of the dsession.

small caps are