$941 billion in dry powder a lot of money to spend on companies. we saw coupa acquired by thoma bravo. >> thank you, frank. that does it for the exchange. "power lunch" picks things up looking for the bright spots it begins right now. >> welcome to "power lunch," everybody. hope you had a great christmas china once again one of the biggest wild cards for the energy markets now that the world's second biggest economy is easing covid curbs bill the oil bulls take control in the new year or will a global recession keep the lid on demand? plus, no place to hide the bond market turning in its worst performance ever this year, one analyst says it is nothing like he has seen before. so will next year bring even more surprises that is all coming up in just a few minutes. kelly, what are you looking at

>> hi, everybody by the way, i'm looking at tesla, but we'll get to that in a moment let's look at the major averages the dow paring gains up 53. impressive because apple is the worst performer in the dow s&p down about .4% the nasdaq down 1.3% just over 10,000 10,365 for that index. now, this all comes interestingly enough as we had a lot of positive sentiment out of china overnight. that's lifted shares of chinese based stocks on the loosening of the covid rules. jd.com, alibaba, alibaba up 4% the news is also lifting macao casino stocks. las vegas sands and wynn are benefitting this afternoon, and with the s&p on pace for its seventh worst year ever, what are the odds 2023 is that bad? bob pisani is at the new york stock exchange >> the short answer is the odds are not very good it will happen again, but it could. there's a lot of people worried

with a down year in 2022 and still heading down, 2023 could be another down year it's possible but statistically very unlikely. this is where it's important to know about market history. there's been actually only four periods, four series of events where the s&p has been down back to back years. down once four years in a row in the depression, '23 to '32, and then from '31 to '41, and then down two years in a row during the big oil crisis in 1973 to 1974 so really only four times has it ever been down back-to-back more than two or mere years in a row. the last consecutive down years, as you saw there, 2000 to 2002 another important question is, down 20% years, this is very unusual. we're almost down 20%. we were down 25% peak to trough. these are very, very unusual declines here. down 20% to 30% has only

happened seven times since 1945. there have been a few more extreme events, down 30% to 40% happened three times these are peak to trough, and down 50%, of course, the great financial crisis, 2008 and 2009. so even here, declines of 20%, back-to-back declines, these are very unusual events, and by the way, in most cases when you're down more than 20%, you're made whole within a year of the trough year and the reason things tend to resolve themselves is the stock market goes up long term. this is one of the great investment insoigz ight anybodyn have it's up about three quarters of the time since 1928. we have unusual events that have led to big declines. and the question is, is 2023 going to be a part of those big unusual events remember, what we saw here, kelly, the oil price shocks in '73 and '74, big down year 2000, 2002, dotcom year, big down year.

2008, 2009, financial crisis 2020, covid. these are usually unusual events is the fed hiking rates and keeping them higher, covid and the russia thing another reason for us to be concerned about another big down event not clear yet. back to you. >> thank you, bob. >> our next guest says the market is close to a bottom. he's betting on energy, some retail, and payment companies into 2023. jerry is president and cio welcome, and yeah, close to a bottom i don't think there's any sense in us trying to pinpoint bottom here, bottom there, bottom everywhere, but what do you think in terms of the fed and recession risks? why do you sound relatively sanguine >> the first thing is i kind of sound crazy with apple trying to make a new low >> sure. >> and guessing that the overall market, the biggest stock is breaking down. but looking back over all those questions you raised, when you think about it, all this exercise we have gone through

and are continuing to, is this idea that the fed controls financial markets, earning estimates, and global growth i'm afraid that had an influence on financial markets this year by pulling all the liquidity away, but they certainly don't control global growth i think to the extent investors think or believe. what we see happening is this whole fear an entire purpose for the increase in rates has come based on the view that inflation is going to sustain and being with us for a long time. and you don't see evidence of that it's already rolled over on the cpi. >> here's my question, so this is what steve was reporting last hour, inflation is peaking and it's peaking dploeglobally, bute see apple hitting new lows and the ten-year up at 3.85. i mean, it is -- it makes you uncomfortable. >> well, first of all, you should always invest with a little fear. usually get in trouble when

you're very confident of something. you know, we have to have some opportunity to make a mistake. this is why we think if you set aside the things like apple that are in position there and investors are very overweight and very worried about their markets and their margins, that's fine. but you forget about why is the market now significantly higher for housing, industrials, financials a lot of the names you would have otherwise expected to be working to new lows right now, and they're significantly higher than this summer and fall's lows so there is something else going on right now, and it's not something the fed will ultimately correct it's really there in the valuations of the stocks >> jerry, it's brian listen, let's try to be optimistic going into the new year, shall we terrible year for stocks and bonds. to follow up on what bob said, i want to ask you if you have a view for next year and here's why it is very rare that the s&p 500

or the dow go down two years in a row. we know that so that looks good however, when they do go down two years in a row, i read over the weekend, the second year tends to be worse than the first. so if we're down next year, it might be an even bigger drop what is your take on 2023? >> my take is each of those examples you cite came in a financial crisis the recession -- the depression, the great financial crisis, we don't have that type of structural underpinning. european banks, u.s. banks, all the banks in the financial institutions of the world are vastly more stable and have better balance sheets going into what again is this feared downturn and i would also point out, we haven't talked about this, but the fact that china now is going to pull forward a reopening cycle that took us two years, they may be done with their entire reopening here in the next three or four months. that's the biggest economy in the world set to grow again for the first time that's not part of these other

narratives that i think has been grossly underestimated >> you like exxon for that reason, schlumberger, the payment companies, mastercard, paypal, nike we can see that china blend if the demand comes back. jerry, thanks. we appreciate it >> thank you so much happy new year >> if gas prices go up, you can pay on your visa card, because you might like convenience >> higher fees >> something is afoot at the circle k >> this year, the single biggest wild card for oil and gas prices has been china china covid lockdowns crushing domestic demand. car and air travel way, way down now, china's making a big u-turn, easing up on their covid curbs. while much of the public in china may be self-quarantining for now, that likely won't last for long like what happened here and in europe that's fueling hopes energy demand will recover a country that has largely been shut down. with more on the impact of

china's reopen, andy lipow, great to have you back on. when you look at iea data, and maybe you have your own, the difference in china's oil consumption could be anywhere from 2 million to 3 million barrels per day based on how their economy is going what do you see with china and oil demand >> well, i don't think it's that much of an impact. i think it's closer to a half a million barrels a day up to a million barrels a day. and irrespective of the total exact amount, i think that's worth about $5 to $7 a barrel increase in oil prices, especially as airline traffic comes back >> how much do you think, and we're seeing, by the way, air travel and i guess demand for tickets was up like 90% in china. how much do you think that jet travel, air travel, flying, jet fuel, et cetera, driving more, will ultimately drive demand

is china going to be back to 15.5, maybe 16 million barrel a day consumption? >> i don't think that's going to be the case in the near term i think it's going to be 6 to 12 months out you combine that with, say, the halt in the strategic petroleum reserve sales as well as a slower growth rate of oil supplies here in the united states we have a mix of a number of factors that are going to increase oil prices even more than just the china reopening. >> so andy, let's talk a little bit about what that means for consumers at the gas pump. the falling gasoline prices probably the biggest positive story, maybe saved christmas restaurant spending, retail spending being built out somewhat should we expect this to last? >> i don't think so. i think in the near term we're going to see gasoline prices rise around 10 cents a gallon as oil prices have been increasing as well as this freeze we just

went through with winter storm elliott has impacted about 2 million barrels a day of refining capacity just here on the texas gulf coast now, it's true it's going to quickly recover, but it is another supply impact. >> what else do you see as kind of the main theme for oil next year i think the recent weakness has sup surprised many people, particularly those who can point to five or six different bullish things and maybe only one bearish thing, the potential for a global recession what do aio see happening in the first couple months of next year >> the recession is definitely weighed heavily on market sentiment. i think going forward, especially in the next six weeks, it is what is the european union ban on the purchases of russian diesel, how is that going to impact on the oil market because russia was able to sell its crude oil to india and china, but that's not the case with russian diesel because china and india are long diesel.

so there is going to be a scramble for diesel supplies, and what we just saw with this freeze is the new england utilities came in to burn diesel as they were curtailed on natural gas. >> and that being the case, andy, what's that mean for the prices, and brian has been doing reporting on this, what does it mean for the prices everybody is paying and for the resilience of the energy system? >> well, it certainly means that the consumers are going to be faces with higher utility bills, not only from natural gas but home heating oil as well in addition, all the goods and services delivered by truck and rail are going to see higher transportation costs that's ultimately passed through to the consumer. >> finally, i want to ask you this, vladimir putin maybe an hour or two ago, came out and did what was expected and said we're not going to sell oil to any nation that subscribes to the price cap that was put into effect by most of the g-7

nations and all of europe. they're selling most of their oil right now under the price cap cost, but if we hit that number, is that going to make any difference or is this just kind of lip service and hot air by putin >> i don't think it's going to make any difference because the majority of russian crude oil is now being sold to china, india, turkey, and bulgaria, and the first three are simply not going to pay attention to the price cap because they're buying hugely discounted oil. >> andy lipow, really appreciate your views an important time. thank you very much. >> thank you by the way, everybody, if you want to hear more about the energy market and the year ahead, tune in tonight we have a big hour at 6:00 eastern on all things energy with guests on oil and gas and how many american families st struggling to pay electric bills. tune in tonight and all week for a cnbc 6:00 p.m. special

>> not apple in turmoil yet, but we should point out that you remind us, the utility bills, you know how over the holidays, okay, bitcoin or the price of gasoline you know what conversation came up guess how much my utility bill was last month that's already starting. even though there's an offset with lower prices at the pump, it's still a huge pressure point. >> for most people based on 50 gallons a month of driving cost, which tends to be the average, unfortunately, their heating bill increases, particularly in the northeast, have probably mitigated most of if not all or more of their gasoline savings i was posting on twitter that this weekend, kelly, 30% of new england's electricity generation was oil. it's normally zero what are they saying about how close that grid may have been, oh, by the way, it's 5 degrees

and massive bomb cyclones. >> exactly imagine if the price of oil were naupt as low as it is. let's move on. historic sell-off in the bond market that boost ed yields. is the worst over? plus, rethinking tech regulation who's most at risk with the eu taking it on >> as we head to break, a look at shares of tesla the worst performing s&p stock right now, down 8.5% on reports they're extending a production halt in shanghai the stock is down more than 40% this month its market cap is just $357 wee ckft tn. 'rba aerhis. here. aspercreme arthritis. full prescription-strength? reduces inflammation? thank the gods. don't thank them too soon. kick pain in the aspercreme.

welcome back, everybody. bond yields are rising today the treasury market getting ready to close out an historic year, and not in a good way. because it has been the worst year in decades, if not ever, for big parts of the government bond market. let's get a live check of where we stand rick santelli is at the cme. the china story i would imagine also has to play into the bond market, does it not? >> absolutely, it needs to play into the bond market if china gets going, we'll continue to see interest rates potentially move higher. a global recession would be if china doesn't come back to the game, doesn't put their baseball bat into the game, and starts swinging at a few. the global economy isn't in great shape to begin with.

and if you look at how investors flock today to the two-year, i was a bit surprised. especially the last week of the year look at an intra of 2-year twos are up 7 on the day, they dropped on that news when you think about the year it's been in treasuries, it's mind boggling. here's a year to date of two-year, it settled at .273 which means at current levels it's up367 basis points this year it's currently hovering near a one-month high should it close here and if you look at a year to date of tens, they closed last year at 1.51 so hovering at 385, it's up ten basis points on the day. it's up 234 basis points on the year these are astronomically large numbers. and if we look at year to date of boons, and this is another reason our yields are going up, bund yields are flying

year to date, bunds are up 270 basis points they settled at minus 18 last year, 2.52 this year that's an 11-year high close all of that is pushing the spread closure together of our tens versus europe's tens and the low 1.30s it's the closest they have been in 26 months. yes, things are heating up despite all that, many traders where talk to think they're going to be buying yields the first week of next year after they continue to rise for the rest of this week. so traders say kelly, back to you >> rick, thank you as yields rye again, this will be remembered as the year where there was nowhere for tinvestor to hide. what about bonds 7% inflation eating into your cash and the bond market by many accounts closing out the worst year ever. the aggregate bloomberg bond index down 12%, only the fifth negative year since the '70s will 2023 bring fixed income

back from the dead let's ask gilbert garcia managing partner and cnbc contributor. you, i'm sure you're going to say yes here, but i guess it's a question of where and to what extent tell me everything you think about where people should be in bonds. >> first of all -- >> is that me, kelly i want to make sure i'm not having a moment. are we having audio issues >> we'll come back to you. you know when you're on the phone, you give it a second to wait to see. >> our viewers will know this, and i'm going to sound snotty here, use airpods. i call it the airpod lag you get a call and put the airpod in, hello, hello? sorry, hold on like seven seconds later you connect. and they're halfway through. >> i try to wait for an opportunity. gilbert, are you back with us? >> i am. can you hear me? >> what's eating gilbert garcia? >> tell us everything. >> thank you so much

at the end of the day, bonds may be down, but they're not out i think people need to recognize when you look at the 60/40 blend, if you look even with the great financial crisis, even with this terrible year this year, that 60/40 blend has been a return -- i understand this last year was eye-poppingly negative, but that model has worked and i think it's going to continue to work >> gilbert, we're going to try to get you back as we smooth out the audio a little bit gilbert one of our favorite guests here and we want to hear -- i know what he's saying, but want him to fill in the gap himself. >> if you're not familiar with the historical data, maybe for our casual viewers or casual listeners, by the way, a lot of people on the road listening on sirius xm 112, the worst year ever for stocks and bonds. usually one goes down, the other goes up.

that's why they say you need a diversifies portfolio. that did not work this year, but let's be honest. if you're youngish or young, you want to buy stuff when it's cheap. i'm not say things things are cheap, but i'm confident the s&p 500 will be higher in ten years or we have other issues that the stock market probably wouldn't matter >> and there's plenty of people who say, yeah, we do we'll see if the market can still work >> speaking of problems, a lot of you trying to fly the last couple days, we get it coming up, airlines canceling 17,000 flights since wednesday but southwest is the biggest of the big problems >> plus, stocks wall street loves to hate. we'll take a look at some of the most shorted stocks out there and whether or not you should buy them now thinking maybe they'll turn around or perhaps have a short squeeze we'll call it a segment for all you apes out there 'rba rhton't have amc. wee ckig after this.

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welcome back, everybody. we're talking about how there's been no place to hide this year. couldn't put your money in stocks, couldn't put them in

bonds. we're going to ask gilbert garcia great to have you back where would you be in bond land for 2023 >> thank you first, bonds may be down but their prr not out. if you look at the 60/40 blend which a lot of people focus on even if you put in the mathematics, that 60/40 blend has given you over 6% annual return i recognize last year's eye popping, but that's what creates an extraordinary opportunity in bonds today. it just takes the two-year if it's yielding 2.45, 2.50, the blake even is almost 500 basis points meaning the two-year would have to go up to almost 9 or 10% before you lose on that trade. and so i think the break evens are extraordinarily compelling >> there's so many different ways to get yield now, right

there's pretty good yielding stocks even. you can be in one-year cds that will give you over 4%, even in bonds, you have munis which people are getting interested in now, and then you have corporates what are your favorites? kind of rank them for us >> first and foremost, get in the bond market. that's the most important thing. frankly, i would get as much duration as possible bid as long as possible. the reason is we are going to see a slowdown because if you look at all the leading indicators, not looking backwards like the fed focuses on backwards or current data, if you look at the yield curve, money supply growth, which is growing negative now, if you look at all of these leading indicators, they suggest that a slowdown is going to occur and a recession somewhere by the first or second quarter of next year and if that happens, you should see rates go significantly lower. if you look within the sectors of the bond market, and my view,

corporate bonds are very vulnerable because in a recession, stocks will correct and i think credit comes under pressure but what's very attractive, and almost historic attractive, are mortgage backed securities the old fashioned agency guarantee. >> let me ask before we let you go on the one hand, you're saying, i want to reiterate, get as much duration as possible is that why you're worried about corporate bonds? do you think people are going to default or is there exposure risk >> there is exposure risk. i expect defaults to increase. there's not an attractive place to be. i know they have widens and on the excess return for the year, they don't look good, but you have to remember, when you get an extra yield of say 100 basis points, that means one thing when rates are 200 but when rates are 400, on a ratio that's not very good value. and that's what credit is today.

>> that's why we tried so hard to bring you back, gilbert exactly for hot takes like that. thank you for your time. we appreciate it >> please invite me a again. thank you, team. >> gilbert garcia. let's get to kristina partsinevelos now for a cnbc news update. >> hello, kelly. and here's what's happening at this hour. more criticism for newly elected republican congressman who admitted to lying about his resume the republican jewish commission says new york representative george santos is no longer welcome at their events. santos told the "new york post" he never claimed to be jewish, directly contradicting his remarks to the gop group last november on the shore of lake michigan, a wisconsin gift shop has been turned into a block of ice by the historic winter storm the owner of the store estimates the ice is over a foot thick the results of three days of high winds and freezing waves. look at that video and a florida couple, always in florida, got an unexpected christmas present. their long lost engagement ring

was found 21 years later after it fell in a toilet. it turned up when the groom's parents replaced the much older toilet after a much needed cleaning the couple got the ring for christmas. good that they just rolled with it >> i like that ice castle. that was crazy looking >> some of the footage - >> also 1980s movie, ice castle, what was that? about 1979, you weren't even born by the way, i have been to sturgeon bay, i spend a lot of time in wisconsin. >> that would be a cool tourist -- >> you know what that call that in wisconsin spring >> ahead on "power lunch," tech is in 2023 it's been a rough year for the sector, no joke, with growing regulatory threats here and abroad we'll talk about the biggest issues that are facing them down as apple trades tougheh re stay with us on "power lunch." we're back in a moment

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ah, these bills are crazy. she has no idea she's sitting on a goldmine. well she doesn't know that if she owns a life insurance policy of $100,000 or more she can sell all or part of it to coventry for cash. even a term policy. even a term policy? even a term policy! find out if you're sitting on a goldmine. call coventry direct today at the number on your screen, or visit coventrydirect.com. if there's one thing that both parties might be able to agree on in d.c., it's that they may have a need to rein in big tech but it's europe that might have the most to say in the near term with company and deal busting next year. they have two huge new rules

coming into effect the digital markets act could impact companies like apple and google while the digital services act could pressure the world's biggest social media companies. what exactly are these and what might they mean let's hit it with steve kovac. >> i'm going to talk about the digital markets act or the dma, as most people call it one of the two major laws passed this year targeting the big tech companies. the dma will have the most impact on apple and google, forcing them to open up their software for smartphones this is why bloomberg reported a few weeks ago that apple is building a version of ios that would allow third party apps and app stores this is what to expect next year the eu will designate so-called gate keepers, the companies meeting markers for the number of customers and revenue in the eu it's written specifically to target apple, google, and amazon the companies will have to comply with the rules or face

fines up to 10% of global revenues by march 2024 for some perspective on those fines, that would be nearly $40 billion fine for apple based on last year's annual sales apple and google may find ways to charge fees anyway, something they have done to get around other app store regulations. it may not be a huge financial hit for apple. in apple's case, eu app store sales are a small fraction of what's made in the u.s. and china. although here in the u.s., a similar bill did not make it out this year. if congress takes it up next year, they'll have the european law as a possible model. >> thank you how it could impact social platforms in particular, let's turn to joulia for that piece of the story. >> steve was talking about the dm arb i'm talking about the dsa, and right now, the social and search giants are bracing for the impact of the eu's digital services act content moderation regulatio that the eu passed last month.

it aims to force the likes of meta, google, twitter, and tiktok to crack down on the spread of misinformation and hate speech. now, of course, the likes of meta and google have internal guidelines these regulations are the first regulations on the topic and they come a threat of meaningful fines. the dsa mandates transparency around removal orders and reports of illegal content criteria for how platforms should act when they detect illegal content. they also ban deseiseceptive de and require they take steps to mitigate risk. the maximum penalty for violating these rules is 6% of global revenue that as of last year, that would be about $15 billion for alphabet and $7 billion for meta now, the regulatory process has officially started, but the enforcement of this law and the

penalties won't come until february of 2024 one company that could face a massive risk around this is elon musk's twitter that's because most of its compliance officers have either been fired or have left. brian. >> wow julia boorstin, thank you very much >> so is there a rethinking of big tech regulation here in the u.s. joining us is ed lee, "new york times" assistant editor, cnbc contributor. lots to talk about first off, very macro question we have a congress divided, sometimes they actually agree on technology do you think any major legislation will get done? >> yeah, no, this is the one bipartisan issue there's enough hate on both sides for the big tech companies. even so, there's very -- there's rar much lesser chance they're going to pass meaningful regulation next year as you said, it's a divided congress that's one reason why, and these

companies still spend a lot of money on lobbying. if there's some senators, some congressmen who are in some ways you could argue beholden to big tech, even if publicly a lot of them are sort of finding ways to rail against it. in terms of regulation, it's unlikely we'll see anything in 2023 we're likely to see big action on antitrust issues from doj and ftc. it would be more case law versus legislation that might take effect next year at the same time, eu regulations will start to creep in and it will affect how they operate could be a model >> last year, there was a picture of a congressman from new york, a democrat, who posted a picture of himself with a coffee mug that said wu and con and cantor tim wu and lena con and jonathan canter these are the folks, and the congressman said we're coming for you, big tech. that seems like a pretty big

notice do you think there will actually be significant antitrust action on some of these big techs or come on, k street y have seen the bentleys rolling around near the lobbyists' houses? >> yeah, no, it's a good question and it's sort of a funny scenario, but i do think what we're seeing with these guys, with this sort of antitrust sort of they're testing the limits or the definitions of antitrust we went by the old bork definition, which was these two companies combined, does it make things more expensive for consumers or cheaper even? and that was often sort of the boundary or sort of the litmus test now it's with lena khan coming in, not how much it hurts consumers, it's how much it hurts other businesses we saw that with simon and schuster that sale was blocked and they were looking at how does this hurt authors versus readers? and that's a model for how they might look at looking at

microsoft activision, for example, and any other potential big things and in a lot of ways that's a back door way into what the eu is already legislated, which is is there enough competition amongst providers within the space, and that's a thing they're going legislatively in the eu, in the u.s. we're doing it through the court system >> ed, i'm struck by the fact that big tech has lost basically $4 trillion of market cap this year, and it tourns out their biggest foe wasn't regulators. it was the fed regulators, they couldn't in their wildest dreams axed $4 trillion in market cap off these companies. >> right leave it up to the markets to actually really hurt the businesses look, the thing is that tech has sort of fueled the growth engine for the economy and for the u.s. for so long. and that's what the market has been betting on. that's why they have been giving them high multiples and rightly so now, they have gotten so big and it's not just that regulators are coming in, it's the market,

are they kind of saturated in some of the bigger places, especially the u.s., also in the eu so they need to find growth faster it's not happening the way it should be. the economy certainly, the pandemic, supply chain issues have affected everybody including big tech now, if you're in the market, you're like, well, i'm not getting the returns i was expecting from big tech. i need to go elsewhere that's where the pullback is coming from and now tech is like, hey, didn't you love us a second ago they still love them, but it's not the growth engine it used to be that's the other side of this. they're really getting it from both ends. at the same time, they're really big. they can afford a lot of these things and they have the budgets to find where the growth may be. >> i don't want to break the hearts of many teens and content creators who have gotten rich out there, but it's that time of year for hot takes and wild predictions. i'm not sure if this is that wild, ed is it possible that if we do this one year from today, tiktok will be illegal in the united

states like, gone >> you know what, that's actually one of those predictions that i might buy into that. just given that, again, it's like, if there's one thing that there's consensus on in washington, it's tiktok. both sides of the aisle are really wary, and it's not just u.s. government as well. other governments are really wary just given how beholden it is to beijing. so i think there is a very strong chance of that. at the same time, you know what, the market will find its balance. you have instagram out there, emulating a lot of what tiktok does i'm sure there are other apps coming to the fore twitter itself, musk, who knows what he's going to do and find a way to edge in on that there will be other places for our teenagers to land, certainly. but i do think from a legislative, from a regulatory standpoint, teiktok is kind of doomed >> yeah, i mean, just banned on

many government devices. we'll see if that extends. somebody -- don't worry, content creators, there will be a platform for you may not be reels we'll see. ed lee, thank you very much. >> check out the dow, which has just turned negative on the session. we're down ten points. had been the only average in the green. but there's energy, speaking of which, hitting a three-week high ocr oil that's lifting the stks we'll bring you the closing numbers right after this

welcome back, everybody. it's been the best sector of the year, how is it doing? oil closing a few moments ago. let's get to peppa with the latest >> oil had risen to a three-week high earlier today before giving back those gains into the close. optimism china easing covid restrictions would boost demands had earlier supported prices the country is the world's biggest oil imported they're sensitive to how china's demand picture looks coal also hitting production with output in the balkan down by 500,000 barrels a day, but forecasters are improving so that production should return very soon. let's check on prices.

w wti at $79.61 after earlier trading above $81. both are coming off their best week in nearly three months. now, energy stocks are the best s&p sector today data from sentiment traders shows last week more than 95% of the sector regained its ten-day moving average, following historic oversold conditions brian. >> all right, pippa stevens, appreciate that. thank you. >> still to come, today's three-stock lunch. wall street betting big against these stocks but should you move against the grain? is their short your profit that's next. ! welcome to our thd bark-ery. oh, i can tell business is going through the “woof”. but seriously we need a reliable way to help keep everyone connected from wherever we go. well at at&t we'll help you find the right wireless plan for you. so, you can stay connected to all your drivers and stores on america's most reliable 5g network.

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it's time for today's "three stock lunch. sipping on underdog names the street is betting against. high short interest, down 25% or more this year tesla, energy airlines, and

others victoria, let's start with tesla. boy, what a trade, what do you say? >> i'm not touching it i'm just watching the dumpster fire burn and roasting marshmallows there's a direct correlation between the twitter deal and when elon musk started selling tesla shares and their stock started to plummet i think there's potentially a margin call, there could be further selling pressure the stock has through all the major supports right now not touching it. and the slow-down happening in china -- >> a 21 times four te, that doesn't get you a little excited? -- it doesn't if demand is slowing it, you're seeing it across the evs, and you have a little competition, it's different what earnings look like going forward. especially the reputational risks potentially they're facing with everything elon musk's done this year. is the tesla furor and the tesla cult that helped drive this stock to a new high, is that

suddenly going off i'd say yes. >> roasting marshmallows over the dumpster fire. speaking of dumpster fires, dallas basic you described air travel these last five days maybe a short-term play. american airlines, 13% short interest, down 11% this month. you're there in texas. they're huge at dfw. you say sell this name, you're not buying american? >> i'm not if you want to touch a falling knife airlines, go for southwest, bearing the brunt of the storm. american is the weakest of the largest u.s. carriers right now. one of the only with negative free cash flow last quarter, some of the highest and oldest pilots, they're going to have higher retirements they're going to have a lot of pressure and pricing pressure. they don't have a negotiated deal going into next year, pilots are demanding more. so i think they're the weak els of the u.s. carriers if you're playing the china reopening, united. if you're playing the travel

slowdown, south west is the most attractive today i'm not touching it even with short interest highs. >> let's see if we can get you something here nrg energy a little more ease sew tearic for people esoteric for people. could it pique your interest >> it does this one's a buy some of it's looking at the insider trades after the invest vant deal was announced. you saw solid insider buying to me that shows management has confidence i think the cross-selling is tremendous the back-end technology they bought and their caps low are great. the company is changing, trying to diversify revenue streams the subscription base is great for them versus some of the revenues that are peak and valley i love this deal for nrg i think they're going to be able to pay off the debt they're taking on and go back to their 50/50 capital expansion plan and return to shareholders. they are committed to growing that dividend. for me and especially seeing the confidence management has that this deal will work, i'm buying nrg.

>> and there we have it. brian loves it we're happy there's a stock you like we appreciate it very much, thank you. >> nrg, big energy company, the former ceo, david crane, about to get a big new job in d.c. in the biden administration based in the coal and oil capital of the world. you know where that is >> no. >> princeton, new jersey, where nrg is based their headquarters route 1, giant building. >> do you think they're still that kind of energy market in princeton, new jersey? >> well, nrg, they've got coal. >> 150 years ago. >> capital coal, central new jersey southwest, mass cancelations getting attention of the pame otrsptaondertntf anorti are you due a refund if you got left out in the cold on luv?

it was a huge weekend for travel, assuming you were able to travel. because it was an even bigger week for flight cancelations airlines canceling more than 17,000 flights between december 21st and 26th. the biggest culprit, southwest airlines canceling more than 70% of its flights on monday alone and warning of more to come. the transportation department concerned by southwest's unacceptable rate of cancelations and delays and reports of lack of prompt customer service i'm sure you know people - >> tons. >> -- that are still somewhere

they don't want to be. >> yeah. >> not just southwest, by the way. >> not at all. we have tweets we've heard from biden on this, we've heard from pete buttigieg we spoke to going into this week obviously he's saying you might qualify for some kind of reimbursement. senator blumenthal tweets from the president, he says f. you've been effected, go to the dashboard to see if you're entitled to compensation. i'm always watching to see if he's going to start going after the companies more specifically. senator blumenthal, southwest must allow customers to switch to other airlines and provide refunds right away. >> that's fair since covid, insert reason here - >> yeah. >> there has been a shortage of things like air traffic control agents. >> yeah. >> some of them -- some were fired, some couldn't get to the airport. there's a lot of reasons why air travel has been screwed up for a long time. >> yeah. >> right this next gen radar they've been talking about for 20 years and now this horrific storm. >> and some reports that

southwest's systems went down, they had to kind of manually book everything. they're trying to explain to their own staff what happened. so one of the major debacles that we've seen. you're right, the brittleness that covid delivered - >> also, 20 degrees, they don't do that. they don't do 20. >> no, they don't. guys, thank you for watching "power lunch" today. >> "closing bell" begins right now. stocks mostly lower as we kick off the final trading week of the year. the dow giving up a triple digit gain, the nasdaq down more than 1% this is a make-or-break hour for your money welcome to "closing bell." i'm sarah eisen. take a look at where we stand in the market the s&p down about .4% it's not all red today, pockets of green like energy, commodities are doing really, really well off the reopening scene in china, loosening more trav