a security issue, so act accordingly. interesting case here. >> fast-evolving. i see some senators want to exempt crypto if they use it for purchases under $50. so they are right to say that we need fixed rules and rules that we can follow. kate, for now, thank you very much. our kate rooney. today's housing data is finally showing the housing market cooling off. coming up, power lunch begins right now. good afternoon, everyone, and welcome to power lunch. i am tyler mathis. inflation increasing consumer behavior. they say that demand is holding up just fine. the new divide means new opportunities that are emerging for investors like you. and power play or livery

energy, north america's second largest frack are has issued information about the stock. we will talk with the ceo. energy headline again, and we are seeing the impact across the consumer space. let's start with the dow down 146, the 1%, and the nasdaq down three quarters of a percent right now. we are feeling a little heavy as we head into the last few hours of trading here. shares of our alphabet down and microsoft as well, they report after the bell today. lots of anticipation. google is trading at lower levels. if that breaks, that will make people nervous. walmart is the worst performing stock in the dow after that woman warning, and also the worst.

walmart is saying that inflation is causing consumers to pull back outside of the grocery space in particular, and it is rippling through the entire sector. target down 4%. amazon down 5%. costco down 3%, tyler. walmart is not the only company to give insight into the consumer. there is also mcdonald's, general motors, at&t, marriott to name a few. they are painting a picture of whether the consumer is starting to crack. we will take a close look now at demand and spending in retail, and restaurants, and automobiles as well, and what it all could mean to the economy and to your investments. we will start with the industry leader walmart. as she mentioned, it is down seven, nearly 8% right now, trading slightly above where it was at the start of the pandemic. courtney reagan starts us off with the news on walmart. courtney? >> reporter: hi, ty, it has been 8 1/2 years since walmart

has issued any kind of warning. sales are higher but profit is lower. ceo doug mcmillan says that the increasing prices of food and fuel are affecting how customers spend, particularly on general merchandise and apparel. so walmart is cutting prices further to incentivize shoppers to buy more discretionary merchandise. however, the retailer is increasing its total sales expectation, because it is selling more grocery items, which in turn are less profitable. about 55% of walmart sales come from groceries. food is only about 1/5 of targets revenue by contrast. goldman sachs, wells fargo, bmo, and oppenheimer are the analysts that are not worried about walmart as a long-term investment. as a warning, they are lowering those 12 month price targets.

morgan stanley are concerned, though, about the impact to brands that derive a lot of sales from walmart, including general mills, jm smucker, and conagra. walmart did note a good start for back to school, but did note more pressure to general merchandise in the back half of the year. tom? >> take me back to that number you lead with. sales did what but profits did what at walmart? >> reporter: so what walmart is saying for the rest of this quarter and as it impacts the rest of the year, that sales are anticipated to be higher. both revenues and general sales that they had forecast at the end of the first quarter. the total profit is expected to be lower than the first forecast, because they are selling more goods, but goods that are of lower margin or

less profitability. >> if they are having to cut prices on discretionary goods that you mentioned, which i assume include clothing and furnishings and other items like that, you end up subsidizing the sale that you are getting and making less money in return. okay, court, thank you very much. appreciate it. let's turn to mcdonald's now. that stock trading higher and better than expected. but wait a minute? what about everything we are just talking about actually? all the growing profit from the value menu. kate is here with the mcdonald's version of the consumer, kate? >> reporter: the road ahead is challenging, but mcdonald's reiterated that it is operating from a position of strength of the recession as it moves. the ceo said that it routinely pulls consumers in every market they operate in and nearly

everywhere, including in the u.s., they are leading amongst their peers for value perception. he said the company is pushing through pricing and the consumer is tolerating it well. the company is starting to see some trade down from lower income consumers to value offerings of fewer combo meals which are little bit pricier. mcdonald's is also looking for more local options for value compared to national ones, as location will determine if consumers are willing to pay more or if they are more price sensitive. menu price hikes for the second quarter were in the high single digits, and the company said it is expecting the same amount for the full year. >> so again, kate, how do we square this with what we are hearing from walmart, and why the market is so much more friendly? how did mcdonald's fare in the last recession? >> reporter: i think analysts and investors are looking to the last recession. mcdonald's did well, and it was

resilient again due to the price point. analysts are saying that for those same reasons it is well- positioned to hold up, while this time around the franchise model works in its favor. franchisees have had a very strong performance. even this quarter, mcdonald's is calling out their strength versus the company-owned stores. casual dining tends to rise and fall with economic conditions. maybe consumers can't justify spending as much money. mcdonald's, again, with that lower price point and options has more to offer the consumer in an environment that could be challenging moving ahead. >> all right, thanks, thank you so much. kate rogers reporting from the west coast. general motors trading lower after they missed the estimate, but automakers say that demand remains strong. phil lebeau picks it up from there. hi, phil. >> reporter: hi, tyler. one indication of demand is that revenue came in much stronger than expected, and the reason why? check out the transaction prices. a near record high. the average for the second quarter for the average vehicle

sold by general motors, $50,499. again, that is close to a record high. they are still seeing more demand than there is supply. here is cfo paul jacobson talking with us this morning on squawkbox about what he has seen. >> we have seen demand as we go through covid and the chip issue. >> reporter: general motors has announced that it has secured the ev raw components and materials needed that it needs to meet the ev target by 2025. they are going to be wrapping up dramatically over the next couple years, targeting to sell 1 million ev's in north america alone in 2025.

guys? >> phil, i can tell you that when i drive by a large chevy dealer to and from work, there is not much inventory in there a lot. they have a lot of suvs there, virtually no sedans, and some trucks. let's talk about auto delinquencies. there are reports we talked about yesterday from late payments on auto loans. is that a troubling sign, that auto sales could slow? >> reporter: it is worth watching, but keep in mind that delinquencies of the type that are being seen -- the increases on the very low end of the market. the subprime part of the market. it doesn't seem to be growing into the broader market. also, keep in mind that right now the inventory levels are just not growing. that is an indication that the dealers, they are essentially selling everything in advance. if you are i go into a dealership, it is rare, tyler, that you find something that is available to be bought. you are not placing an order,

customizing that vehicle, so to speak, then they will call you when it has been delivered to the dealership. >> that is quite a change from the way i was. it goes back to the way i remember it from when i was a little boy, and you had to go down to the chevy dealer or whatever dealer you chose and place an order and wait for the car to come in. phil, thanks. we have also heard from ceos talking about a diverging consumer and changing spending habits. let's listen. >> consumer numbers continue to be quite strong, employee numbers continue to be quite strong, so we are guardedly optimistic. but there are headwinds we are watching. >> consumers are experiencing stress. i see a lot of the numbers you see, and we know that there are trade-offs occurring right now and decisions on dining and travel and a number of other things. it is mostly hitting those and lower socioeconomic tears. >> so how do you invest given that consumer backdrop? let's go and speak to courtney garcia with bain capital.

you have heard a lot of conversation from mcdonald's to walmart to general motors to at&t and others. are you sensing what they are largely sensing, and that is a slightly slowing consumer, particularly at the lower economic end of the scale? >> i think you are seeing that, especially when walmart came out. people have to choose things like grocery compared to other things, so that is affecting their earnings. i don't want to read into too much as to whether this is negative for the consumer overall. the banks probably have a really good foothold on how the general consumer is doing, as opposed to just people who are shopping at walmart. they find the consumers are in a good place. they have a lot less leverage than they did leading into the

last recession. we need to see inflation come down because it is clearly affecting people, but at this point i don't think it is the dire warning that a lot of other people are worried about. >> the fed is going to have a word about when inflation is going to come down, and we will talk about in a little bit. but let's talk about the investing implications of what you see. typically when inflation is up, you want to invest in companies that have pricing power, that can benefit and push prices through. that is one. two, you want to invest in companies that have an inflation hedge. where can you find them today? what names, what sectors? >> we talked about energy and natural gas that doesn't have a lot of room to run, but also your commodities tend to be a good inflation hedge. i think people have gotten negative on this. if you look at freeport- mcmoran, they have taken a big hit this year as copper prices have come down. but in the long run, copper has huge demand, especially when you look at it as being one of the greenest metals. china has nearly half of the world's copper demand, and as

china gets back on board, you are going to start to see some of that benefit. but even if inflation is peaking, it is still going to be higher than it has been the last decade. you want to make sure you have those hedges in there. >> also, you are saying services instead of goods, but yum brands, how does that fit into the services bucket? >> people are still going out. they are choosing to eat out rather than eating at home, even with inflation kicking in. i think you are seeing that demand post-covid. what i like is that that is a way to play that, but you also have your taco bell, your kfc, your pizza hut. they also tend to be more recession-proof, because these are the more casual restaurants of people are going to go to even if there is a recession, even if people are going to be more pinched with inflation. i think it is a good way of having both of those items. having things that hold up regardless will be important. >> let's assume that the fed

raises interest rates by three quarters of a point tomorrow as most people expect. how soon would you expect those interest rate hikes to trickle through and start to really affect the inflation we have seen? is it three months? is it six months? longer? >> you already starting to see, right, if you look at futures markets, it is going to start to bring and shrink it down earlier next year. so you're looking at through the end of the year here, it is likely going to take until inflation is starting to be brought down. you are starting to see commodities prices come down, energy prices come down. so i think we are starting to see the peak of that already, from letter a, what the fed has already done, but b, people are starting to bring things down like supply constraints, and things that the fed doesn't necessarily control are coming down regardless. so the hope isn't necessarily what happens tomorrow with what the fed is doing, but late next year if the markets are coming down, that is what you are going to see as a sign that it is lowering. >> all right, courtney garcia, we appreciate it.

coming up, new home sales in june just dropped to their lowest level since the pandemic. inventory is still rising, and so are the incentives to buy. but the builder stocks are hanging in there! they have actually rallied this month. we will make sense of the move next. plus, the ceo of the energy company liberty, she said that the company's strong quarter well catch up with demand. as we had to break, here is what we have seen so far. 3m saw a four point headwind. 3m saw a four point headwind. we continue in just a moment.

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welcome back to power lunch. sales of newly-built homes have risen from the end of last year, and ceos are responding to this fast-changing market with better-than-expected earnings. sales are still down 3% today. they are offering incentives to buyers. the stock is 25% off, but many of the builders have rallied this month, outperforming the s&p even. let's bring in stephen kim. there is always a small band of bullish people on the team, stephen. i keep talking about these low valuations. what you say can power the next leg of a rally here?

>> i think the result is affordability or mental issues such as negative psychology concerns, fears, or strategy from people that think they are going to get a real buying opportunity if home prices go down. we are hearing that it is a lot more mental. in other words, it is not so much that people can't afford, as much as they are sitting on the sidelines and that we don't think these folks have much in the way of alternatives. rents are going through the roof. there is not a lot of standing inventory on the market in a finished form, and as a result, we are pretty confident that you will see buyer demand come back strongly by the end of the summer. we think that is probably going to be the catalyst for this group, which as you pointed out, is historically cheap. >> i look at the market, stephen, and you see what i see. bond yields rolling over, and all this talk about the consumer. it just seems like that would be out of keeping with where

momentum is heading, would it not? >> i think you are right. bond yields are also rolling, we are also seeing deals role. we think spreads right now are really, really high. the mortgage rate is really high relative to the 10 year yield than it usually is. these are reasons why we believe the mortgage rate is very likely to remain range bound, or frankly even lower by the time you get to the end of the year. now certainly i don't want to misrepresent what we are seeing in the market. the market right now is definitely cool. many would argue that it kind of needed to be. it was getting a little bit too frothy if anything, and we were worried about that earlier in the year. so we do think the fed is going to see signs of how it can slow down. in particular, we think we can see signs of how things start slow. we hear that builders are reacting to this environment by slowing their role a little bit on production. actually, that is going to help sustain pricing. because if you don't add a lot of supply, you help sustain

pricing. so folks who think that you are going to see a big drop in prices, i think that is where the disconnect is, and that is why i think -- >> that is where i was going to go, stephen. i think you answered my question. if you have more tentative buyers, that suggests a softening of demand. but if you are squeezing supply or slowing down new houses coming on, then you are compensating for that. are you seeing the possibility of price cuts, or are you seeing any builders having to throw in incentives a little less premium price on some extras or whatever? >> so yeah, that's the good news and the good news. on one hand, yes, you are starting to see concession. you needed to see that. for the housing market to do this it would defy belief, and it wouldn't make the feds to

happy. so we are seeing incentives rising. however, we are also seeing these incentive levels still below normal. that is what we heard from dr horton last week. these are some of the largest builders in the country. so yes, we are seeing some deal started to materialize, but they are actually less in the way of discounting that we have historically seen has normal. so it bodes very very well for the outlook, for the fundamentals. >> would you differentiate favorite to least favorite in the space? >> i think there is some timing issues. so right now, interestingly, what we are seeing is that homebuyers are really prioritizing and valuing homes that they can move into quickly. in this environment, were so many things are changing and people are really kind of nervous about the outlook, one thing that affects their decision, if they find a home, they want to get in there quick and close the door behind them and be safe in their home. so we are finding that builders who are doing speculative

building, builders that sort of build the home first and then work on selling it once they have gotten a little bit further along, they are actually doing better. poland told us that this morning. they said that contrary to what you might think, their cells were stronger at the entry level because of the entry level the homes are more standardized, and they start those speculatively, versus their move into active adult and luxury homes, where they actually have to wait -- they do that on a more build-to order basis. so really spec building is really getting the nod right now. >> all right, stephen, thanks for joining us today. >> thanks for having me. >> stephen kim with evercore isi one company that could benefit from amazon's acquisition of one medical. plus, a streaming slowdown. we will discusths at in today's stock lunch. power lunch will be right back

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your shipping manager left to “find themself.” leaving you lost. you need to hire. i need indeed. indeed you do. indeed instant match instantly delivers quality candidates matching your job description. visit indeed.com/hire welcome back to power lunch. we want to bring your attention to what is happening now with shop a five.

under pressure as the e- commerce infrastructure company lays off around 10% of its global workforce. shopify ceo sighting a downswing in online spending. like many others in this industry, shopify has been an under performer this year, down more than 80% off its november record highs. right now, we have traded, roughly kelly, 15 million shares of stock way above the average trading day for good reason. i will send things back over to you. >> it is like a good market today. don, thank you very much. kelly, good afternoon. here is a cnbc news update this hour. a bipartisan bill to boost u.s. competitiveness with china has cleared a key senate vote, setting it up for a final passage in the chamber in the

coming days. a short time ago, a live debate between the two conservative party leaders who are competing to be the country's next prime minister was interrupted by a loud noise, as foreign minister liz truss was speaking about vladimir putin. the feed was cut off, and after several minutes they found out that the moderator of the debate had fainted. that in the uk. the biden administration designing a new website to keep americans safe from extreme heat. the heat.gov site will help the public and local officials prepare for heat waves. understand the health risks and identify who is most vulnerable. and some sad news. tony dow, the actor known for playing the older brother in the iconic series leave it to

beaver has died. he was 77. kelly and tyler, back to you. ahead on power lunch, natural gas is up 3%. one term is doing very nicely. > the ceo of liberty energy, how they are benefiting from the state of the energy industry right now, and how long those benefits will last. that is all when power lunch that is all when power lunch returns. ♪ dreaming is free. ♪ accenture, let there be change. this thing, it's making me get an ice bath again. what do you mean? these straps are mind-blowing! they collect hundreds of data points like hrv and rem sleep, so you know all you need for recovery. and you are?

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welcome back, everybody. 90 minutes left in the trading day, and we keep seeing stocks moving to the downside. let's get caught up there with bonds, commodities, and the ceo of liberty energy. let's start with bob down at the new york stock exchange. bob? >> reporter: all right, good and bad news. among earnings we have in front of us today, the earnings apocalypse a lot of people are afraid of has not materialized. generally good results today from the largest companies out there, so just take a look. coke had good numbers. the organic revenue growth and guidance was excellent on that. mcdonald's good. 3m was good, although the 2022 guidance was a little bit

lowered by them, and even jd had a decent outlook out here. the problem is in big cat tech. they are very nervous about apples numbers and to an extent nervous about microsoft numbers. we are searing fairly heavy volume 2. what we have been seeing the last few weeks. apple is the light one. they don't particularly want to dramatically sell off apple, and yet if you talk to traders, these companies are mostly already in a very serious bear market. i just want to point out the top five stocks that are out there, look at what we have seen. amazon, tesla, alphabet all down almost 30%. apple is the one that is really not in bear market territory. s&p 500 is down 17%, and it is lot worse for the other ones. meta-is down 40%. people complained to me, how much more do you want them down, bob? 40% down for nvidia is

definitely a bear market, so we will find out. finally, credit squeeze is down 6% here. we had a wall street report saying that the ceo would be leaving shortly. that was just out a few moments ago from the wall street journal . we will get confirmation from that very soon. guys, back to you. >> that is a tough stock and the top story, lately, bob, we thank you very much. let's turn to the bond market now. bond yields are lower. here is rick santelli with all the latest. rick? >> reporter: it is all about what you want to concentrate on, especially considering how markets do leading up to a sub meeting. look at the two-year start and realize that right now, two year, three year, and it just crept to the five year are the only maturities with a higher yield lower price than yesterday. it was only twos, threes, fives. it is creeping up. if you look at the same start date, you can see exactly what i'm talking about.

the tens have a high watermark close to 350, so did toews. but you are about 20 points away from their high watermark, but you look at how far we are with 7.8% with regard to 3 1/2%, and you can see how much the curve flattened or inverted. this is really something. that minus is almost 26. today's close should be the most important close in 2020, going back to august 2000. maybe it will happen in the next few recessions, because our fed might be going in one direction and so are the ecb. but look at what happened with their yields since the tightening on thursday! they have dropped like a rock. as a matter of fact, boones closed today at the lowest level since may 12th! that is also the closest together since may 12th, 2 1/2

months. we need to monitor that. people say, are we going to buy treasuries? a lot of investors, they are certainly not going to be aiming to buy sovereign debt in japan or in europe. kelly, back to you. >> great point, rick, thank you. let's get to the heart of what is ailing europe and the u.s. these days. it is energy prices. pippa stevens is here with the latest. pippa? >> reporter: the u.s. contract surged more than 10% earlier in the day to 975, which is the highest is july 2008. it has since pulled way back from that level, but is holding right around the nine dollars level. this august contract rules tomorrow, so some of the activities revolve around trading volume and expiration, but on the trading side we do have hot temperatures and little production growth. that gas is now on track for its best month ever. if you thought our prices were elevated, take a look at europe. that gas there is surging nearly 20% today, crossing

above the ,■00 megawatt level. the eu today agreeing to voluntarily cut gas usage by 15% between august and next march, and those cuts would become mandatory in the event that an emergency is declared. the steal of course comes one day before russia is set to further cut gas deliveries via nord stream one. beginning tomorrow, kelly, it will be operating at just 20% capacity. >> and they are paying six times what we are paying for natural gas, and we know more for gasoline as well. amazing, pepper, thank you. our pippa stevens. let's stick with energy now with shares of liberty energy, which is the second-largest fracking company in north america rising at least a percent on expected earnings today. they are also announcing plans

to put equipment to work as strong demand has boosted pricing for the services. chris wright is the chairman and ceo and he joins us now. chris, it is great to see you. >> thanks for having me, kelly. >> so how do we fix the global energy problem? >> the solution here will come slowly and gradually. but what we are seeing is a culmination of eight years of under-investment, and frankly bad policy demonizing hydrocarbon and not allowing the needed infrastructure to bring the immense amount of american gas over to europe. better to get gas from the u.s. then get it from russia. we have that gas, we can deliver that gas, but we need the infrastructure to move it. >> we also know that it is going to be a record all-time high for gas exports, until that stability caught fire and went off-line. what impact is that having? >> that has softened natural

gas prices for a little bit. weather and other sources of incremental demand have offset that, but it is a big negative for europe. u.s. exports, most of which have gone to europe, is now off for a few months. i hope we see that back in the fall. i hope. >> you know, chris, i guess personally i am kind of in the we need a little bit of all of the above camp in terms of energy supply. but i am curious. you said we have had notably bad energy policy. i am not going to get into a debate on that, but let me ask this question. is it or is it not true that one of the reasons why we haven't invested in energy infrastructure, whether it is drilling, refining, pipelines, et cetera, has to do at least as much with where the prices were, and the fact that boards of directors didn't want to make those investments given what those prices were? that is point number one. let's not forget that the trump administration, whatever anyone thinks of it, was pretty friendly towards oil companies

and carbon-based energy suppliers. >> yes, spot on on your first point, tyler. there are two reasons for today's tight markets with natural gas. one is simply the economics and resistance to invest. the shell revolution changed the world, but for 10 years of bad returns in our industry, people are understandably gun shy. you're all right. that is a big factor. the problem is that prices have rebounded for a year or so now, and the additional factor, whether it is government regulation -- and it is not just federal government. pipeline regulation has been very hard for years, including during the trump administration, to build pipeline infrastructure. to get natural gas terminals. it has been a broader societal -- we are soon going to be away from hydrocarbons, so let's just cut back investment now. and that promise was wrong. of course we want new and exciting energy technologies, but the modern world runs on fossil fuels, and that will be

true for decades to come. and we can't prevent the investments required to make that work. >> it's an interesting point, because i think you are spot on on it. it is not just federal regulation that has been an impediment to some of these infrastructure investments. communities do not want a pipeline often coming through them. communities do not want additional refineries built in their backyard. why -- if i'm not remembering incorrectly, i thought that the pipeline, the one that was supposed to come down from canada was approved under trump. was nothing built in those years? >> it was built. it was built on the canadian side of the border, but wasn't built at the border crossing. billions of dollars was spent building the keystone xl -- >> keystone, that's the one. i couldn't think of it. >> yeah. but it never got the final approval to come across the border and that money to be spent. but you are right.

that opposition is broad. that is a wealthy society thing. it is harder to build a wind farm than to build an oil and gas well. there is very much in opposition to building anything these days, and that is a problem for our country. >> yeah. and it is a national security problem. i don't know how old you are, but i grew up with politicians all the way back to the 60s and 70s saying we have to end our addiction to foreign oil, to foreign energy supplies. well, here over the last decade or two, via fracking and other extraction techniques, we have been able to do that! we should be celebrating that and investing in responsible ways to do it. i don't know. that is just my editorial thought for a hot tuesday afternoon. appreciate it. >> take care. >> you too. still to come, we will bring you another working lunch interview with the ceo of

carbon now. before we go, tune in to squawk m. the street tomorrow at 10 a. the crew will sit down with the always provocative senator elizabeth warren. elizabeth warren. we will be right back. so you're covered. on-premise and in the cloud. you can run things the way you want - your team, ours or a mix of both. with the nation's largest ip converged network. from the most innovative company. bring on today with comcast business. powering possibilities. i'm so glad we did this. i'm so glad we did this. i'm so glad we did this. i'm so glad we did this.

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amazon $3.9 billion bid for one medical put a spotlight on the intersection of technology in primary care. this week we get up close with the ceo of a tech-driven doctors office who says that the growth is ahead. hi, john. >> reporter: the company has raised about a half $1 billion. before carbon health, he founded udemy, the company with a market cap. he grew up in a small village in turkey where the family would pick apricots in the summer to make ends meet.

get this. he loved the computer and he found his own online resources and won the gold medal in turkey's math olympiad, which then brought him to the united states. while the economies top carbon

health cut back on growth plans earlier this year, he sees room for lots of innovators including amazon to expand. >> this year we are changing our strategy to grow more slowly, and when i say grow more slowly, that is still 70% of our goals. i think the areas that we have been growing, we have seen 300 to 400% year-to-year. so even at 70%, that still adds a little bit conservation. also, the yield will grow more slowly.

>> the same thing is happening with doctor visits. telehealth has gone back to where it was. that means that to disrupt healthcare, you need a brick and-mortar location, and that means, guys, that you need capital. >> so let me understand what they do. are they the owner of medical practices that are then linked together and operated in efficient ways via technology, or what? are they general practitioner practices, or are they orthopedic practices or dermatology or what? >> reporter: they have urgent care, they have specializations in women's health, and actual physical locations where you can get care, use your insurance, et cetera. but they have also got an app on the phone that allows you to get that care more efficiently, and also they are trying to combine, everybody tells me that right now patients want a one-stop shop. they are trying to get

locations so that you can get it shipped to you. >> amazing. he is an impressive guy with everything he is doing. i hope he can do this. you know my thoughts on the waist and the chaos of the current tyler mathisen had. >> absolutely. >> so many entrepreneurs who achieve a lot are either running towards something or running away from something, right >> interesting, yeah. >> something that they had that they want more of or something they didn't have that they want to bring to the world. that's what i'm find again and again. >> there's a book in there somewhere. probably working on it. american stream or american nightmare? roku, paramount and disney getting bearish calls from analysts today are any of them worth buying you are trader will tell you next. stocks are near session lows the dow weighed down by walmart but also salesforce and nike we're back in a moment

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time now for today's three stock lunch. on the menu, some streamers on the rocks. roku is down to underperform and goldman double downgrading the

dreaded double downgrade paramount to sell on macro headwinds. goldman also lowering its price target for disney by $18 on ad market weakness. here to help us trade these stocks, tom lydon, vice president at vettafi tom joins us on the phone. let's start with roku. you sort of like roku. is it because you like the business or the possibility that it's a buyout candidate or both? >> well, a little of both, tyler. it is 85% off its high the question is can it go down further. advertising base streaming will continue to be competitive we know netflix is diving into that space netflix needs subscribers and roku has them. if there's ever a buyout, that's a possibility there. on top of it, there's not a bigger fan of roku than cathie wood with ark. she sees the target at $240. a lot of people are looking at a

target of $150 i think there's going to be a rebound at one point. >> all right makes me nervous what about paramount, tom? >> yeah, so paramount, this is one of those stories where i don't think even tom cruise can win this battle. the most valuable part of the business at paramount is the nfl and march madness streaming deals. it's 75% off its high. it's got a good dividend, 3.8% and the single digit pe. although "tom gun maverick" should take them through the third quarter from a profitability standpoint, the news that the nfl has just announced they're going to launch their own streaming service, nfl plus, is probably of great concern to paramount because they depend tremendously on the nfl deal. i think it's a hold right now. >> well, disney is also a company that has an awful liot riding on the nfl as well through espn and college sports

for that matter. >> you're right, tyler the big concern is espn plus has a price hike of 43%, almost $10 a month, that they're trying to push through during tough times. as you say, if nfl is going solo on streaming, what about major league baseball and basketball or hockey or the ncaa? all those organizations could join as well and, again, although it's 50% off its high, the pe is way to expensive so i would sell at this point. >> you've got a sell at disney look at how tom drained those three drinks, roku, paramount and disney not saying anything, just observing the grhiapc. >> more "power lunch" after this

alphabet and microsoft earnings are just hours, almost minutes away at this point dom chu is looking at the valuation reset we've sgleen. >> so if you take a look at this chart here on a year-to-date basis, microsoft and alphabet set them up with lowered expectations going into these numbers. if you take a look at microsoft first, the reason why valuations are coming into question right now is because at 23.5 times next year's earnings, we are now talking about levels that are hovering just above where we were at the depths of the pandemic for microsoft now, if you take a look at that, it's even more compelling here

with regard to alphabet because at 17.5 times next year's earnings, you've got to go all the way back to the summer of 2015 for valuations this low can they get lower of course they can but there's always a reason people are trying to figure out an investment thesis. >> they're playing the walk-off music, dom. >> they are. i'm going to walk off. >> thanks for watching "power lunch," everybody. >> "closing bell" right now. we'll see you tomorrow stocks taking a step back today as the fed meeting gets under way, and walmart sends a chill through wall street. the most important hour of trading starts now welcome, everyone, to "closing bell." i'm sara eisen take a look at where we stand at the market we're pretty much at the lows of the day, down 1.25 of a percent on the dow the s&p 500 is down and the nasdaq is down 2% ahead of big tech earnings which kick off after the bell microsoft and alphabet within the s&p there's some strength in defensive groups like health