visit coventrydirect.com. good afternoon, everybody, and welcome to "power lunch," i'm tyler mathisen alongside kelly e evans. coming up, two big messes to tell you about, flights and flooding the entire u.s. airport system shut down this morning because of a technology outage, and in california, a reprieve of sorts for now, but more storms, kelly are headed that way. >> yes, tyler, plus, you've seen the viral videos, thieves brazenly robbing stores while employees do nothing to stop

themm the them retailers are increasingly talking about this first, a check on the markets with stocks in the green right now, the nasdaq once again leading way up for a fourth straight day. >> for more on what's moving the nasdaq, let's bring in kristina partsinevelos. >> risk on load is back in favor, bed, bath and beyond surging, look at that, over 40%. triggered by news it would lay off more employees in an attempt to reduce costs and stay in business gamestop also climbing higher, the original meme star as well as amc soaring above 15% other nasdaq movers, you've not tesla that said it would expand its ev factor in texas, which is a good sign for the entire industry, which is helping lucid motors climb higher. other major nasdaq winners, you've got airbnb, amazon, health names, the biggest laggards, intuitive surgical guided lower, and so that stock

is trending down and there was also some profit taking in names like moderna, astrazeneca, after the recent jpmorgan health care conference. and there you go, guys. >> yeah, that was certainly a talker thank you so much. let's get to the big story of the day now, a complete shutdown of the air travel snm america this morning flights are back in the air now after all domestic flight departures are halted. still trying to figure out what happened joining us now from atlanta, hartsfield jackson airport is nbc news's blayne alexander. >> absolutely, this is the world's busiest airport for a reason when you do see some sort of disruption or interruption like we saw this morning, even though it's been hours since flights have been back in the air, you're going to sea e the ripple effects. 760 flights or so are delayed out of atlanta's hartsfield jackson international airport. 60 cancellations or so 36% of the total number of flights right now that are

delayed. this is something that when we've talked to passengers say, yes, there is a disruption some people were planning to get on flights this morning. they've now been rerouted to later this evening when you compare it to what we've seen with southwest, certainly less disruptive than a couple of weeks ago. the airport says you've just got to check with your individual airline. that's one thing that the air carriers, that airports around the country are really trying to stress to passengers go online to your air carrier's app. make sure you know when your flight is leaving, your connection make sure all of that's locked up as of right now, because we are seeing ripple effects, it's probably difficult to get through to your airlines by phone. make sure you actually check your departure times before you head to the airport. >> you mean more difficult than ever to get through to your airline by phone it is never easy, blayne as we all well know. thank you very much for more on the travel mess, let's bring in our panel leslie josephs, lee care is a principal

and head of security risk and resilience at the chertoff group and former chief of operations at the tsa l leslie, what happened is and why? >> we don't know what caused these outages. the messages that go to pilots, they're crucial, they give you every kind of safety information. from icy runway, these go out to pilots before a flight there could be dozens of them at a time that system failed the faa ordered a halt of all departing flighting. they lif they lifted it fairly quickly around 9:00 in the morning, just a cascade of delays following that it's not an easy thing for air la airlines to pick up where they left off now waer e're seeing about 7,00 delays in the u.s. >> are there underlying reasons why this could have happened is the infrastructure that fragile? we've laid to rest apparently for now the possibility of some

kind of cyber hack, so what is it that underpins this kind of system failure >> i can't really speak to the faa's system, but what i can say is it really highlights the need for cybersecurity and redundancy in all of these systems throughout the aviation ecosystem. they're all very integrated. some of them are very old and antiquated, particularly some of the airline systems like what we saw with southwest airlines, and so all those interge integratie it difficult to do all the modernization that needs to happen this happened on the slowest day of the week, on a relatively slow week of the year. if this would have happened during the wednesday before thanksgiving or something like, that this could have had days of impact because of just the magnitude of the impact when something like this happens. >> leslie, how long was the outage ro ouo

outage rough sfli. >> a little under two hours. we're seeing delays throughout the day. southwest told us that they are proactively canceling some flights. they don't want what happened over the holidays to happen again. >> they've gotten used to that, yeah. >> sometimes it's easier to just kind of cancel the flights get people in planes where they need to go and start over from there. it is very minor, under 10%. >> all right these possible reports of the wire that canada's system could be speciou experiencing the same thing. it's going to be hard to know if there was something like a direct attack, an effort to identify this system i'm so unfamiliar with how this technology operates to know whether this itself is more vulnerable than other parts of the faa's operations >> well, it is a little hard to say because we don't know exactly what caused it think of like your own phone when your email fails and you have to repopulate your emails even that on such a small scale with an individual person takes

a whmile imagine that in the busiest airport in the world. >> are there other parts of the world that have the kind of technology we need to do it better or have more up to date technology than we do? >> i think we'll all in the same boat here. around the world we have airlines, airports that all have varying systems and they all have to be integrated with customs and border protection and tsa and the faa and other parts to handle baggage handling all those integrated systems give you a very large attack surface for something like a cybersecurity attack you're only as good as your weakest link in any of those systems. something like a ground stop here in the u.s. is going to have major impacts, for example, for inbound aircraft coming into the united states going into a customs and border protection facility it's all so connected and that's why it's a difficult problem. >> thafrst was one of the interesting questions i was going to ask

leslie, why don't you go first this only affected departing flights. in other words, if i was in the air coming inbound to the united states from say europe, i would have experienced nothing different? >> no, a ground stop really halts planes at their departure point, so that means they can't take off they weren't doing like a 9/11 where they were essentially ordering planes out of the sky and having them land at the closest airport or land at their, you know, destination so this was -- the ground stop is solely departing flights. there is kind of like a hangover effect to it the airline won't have places for those planes to park there were delays in atlanta, boston, new york, pretty much all over, dlallas-fort worth. >> can't get to your gate. you sit on the tarmac for hours potentially. >> right exactly. it is starting to normalize a little bit you know, we have delays hovering around 7,000 for the day. >> yeah, still considerable. did you have pre-existing concerns about the efficacy of this technology at the faa

>> no, i actually don't have much information about the faa i think really it's about the integration of all the different systems there between the airline systems, the airport systems, cargo systems you know, a lot of those particularly private systems operated by the airlines and airports a lot of them have antiquated technology, and they all have to be integrated together in order to work properly and to transfer people and baggage and cargo effect effectively. really this was a wake-up call on a relatively slow day, so minimal impacts but it's a wake-up call what could happen for a cyber security attack on one of those systems and the ripple it could have throughout all of the systems. >> absolutely. like you said, it could have been much worse depending on the timing of it as well lee kair, our leslie josephs, thank you so much. coming up, we have been debating all week the health of the consumer is the consumer strong enough to

weather whatever economic storm may be on the horizon, or is the consumer already feeling the pinch of higher prices and uncertainty? we will ask a couple of retail veterans plus, we've seen a growing number of viral videos showing sl shoplifters taking the five finger discounts companies like target, walgreen's discussing the issue in conference calls. how big an issue is theft for retailers? "power lunch" will be right back rs today, so you can have more success tomorrow. ♪ one thing leads to another, yeah, yeah ♪

welcome back to "power lunch. let's get to the other big s disaster of the day. that would be flooding in california we've got nbc news' marissa power joining us in sonoma, california what is the situation where you are? >> reporter: as you can see, the rain coming down hard here, and we have been in the thick of it for the past few days across california it's just been battered. you've seen it yourself the last ten days it's been relentless, so right now the focus in terms of the rainfall is further north in california as opposed to maybe where we were around the santa cruz area. now we're in sonoma county, and what we're seeing, this is the russian river behind me, and people who live around here, they're no strangers to seeing this river flood you can suee just how high the water level is that saign, you can normally wak up to it obviously the water is quite high what i can say is there were concerns that this would flood

to a level that would put people at risk to the degree that they had people evacuate from here. we actually just spoke with someone who lives in a trailer right next to us and in fact, she and others that live around her had to evacuate their trailers because they were worried that this area would get flooded out. now, a big concern around here, the mudslides and the landslides you have to remember the wildfires that hit sonoma county over the past few years have really left the land in a vulnerable spot. so when we talk about the cost of these storms, it's the rain and the wind, which causes the flooding, which causes trees that are water logged to fall onto houses and cars, but it's also theimpact of the landslides, of the mudslides i mean, this is really on every level, when you just see the rainfall, you may not realize how catastrophic it can be for an area like this. it's really not equipped to handle it, especially after california's been through everything it's been through. >> ma ris,rissa what does the

forecast look like over the next five days? and is the most intense rain likely to be north of you as you move towards eureka, the northern border? >> reporter: there's good news and bad news here. obviously rain is still coming down when we have been checking in with our meteorologist trying to keep up to date on the latest information, they do believe that the very worst in terms of rainfall is behind us just in the sense that we're not expected to see the catastrophic level of rainfall that we have been seeing. but that doesn't mean that that's not going to still put people around here in a place where we might -- we might still see landslides we might still see mudslides it's very much a real concern around here. so i guess there's some good and bad. like we said, the russian river isn't expected to get to the level they were fearing it would get to, but that doesn't mean that we may not still see damage and just real quick, we just learned within the hour, sonoma county sheriff's office just released within the last hour that they found a body inside of

a submerged car about ten minutes from where we're standing here. we don't know the full circumstance of how that happened clearly the death toll, which we know was at least 17 as of yesterday continues to rise, and there's still that missing 5-year-old boy from pasa robles down south they have not found him. they're still searching for him. the only thing they've found is his shoe >> i heard he was actually in his mother's arms on his way to his first day of kindergarten after the holidays thank you very much, we appreciate your reporting. let's switch topics now, take a look at this video that's gone viral on instagram. an apple store being robbed late last year. thieves grabbing display devices while employees make no attempt to stop them, even shoeing customers away this problem isn't unique to apple. here's what target's ceo brian cornell said about theft during the company's earnings call in november >> we've seen a significant increase in theft and organized retail crime across our business as a result, we're making significant investments in training and technology that can

deter theft and keep our guest asks store team members safe >> last week walgreen's cfo saying, quote, we've put in incremental security we probably put in too much, and we migt ht step back theft is 2% oaf f sales. w a 2021 "new york times" article said walgreen's to close five stores in san francisco. has shoplifting always been the case in retail, just the cost of doing business let's bring in sandra compos and the former ceo of toys"r"us and the ceo of storage advisers. welcome to you both. sandra, i'll sta thert with you. is it worse now? >> it absolutely is worse. it's been getting worse since the pandemic we've seen shrink increase 50%

since the beginning of the pandemic it is definitely getting worse ultimately that is about a billion dollars of lost profits due to shrink. so yes, the factors are pretty broad s broad. >> walgreens is representing that perhaps the cost of trying to prevent the theft was worse than the theft itself. they've put a lot of merchandise in certain areas behind big plastic or glass cases, it's actually led to people buying fewer products how do they figure out how to strike the right balance >> that's tough. it's been a problem for a long time if you like the product up too much the consumers can't even get them after a while, it's like you basically put them behind bars and say you can't sell them. ultimately the solution has to be to do something about the online marketplaces. that's what's really driving this is the ability for organized crime to easily fence the goods through these rapidly growing ecommerce marketplace.

that's the difference from what it was like ten years ago. >> that's what i was going to ask you, sandra. how much of this is driven by electronic sort of the internet, in other words the thieves come in they take dozens of iphones off the shelves, and then they are able to put them up on some marketplace and sell them for cash, which is what they really want is that what's driving this? >> yes, and it's just become a best ultimately we've had supply chain shortages. those have enabled the shoplifters to sell those goods on third-party marketplaces, whether it's ebay, amazon and others, they're making a premium. that's a huge part of it, about 37% of this external theft came from organized shoplifting heists. >> sandra, what would you do, so kind of facing this new normal if that's what it is, and maybe it's not a new normal. listen, these problems e merched over the last couple of years,

if we see leadership changes in cities like san francisco, perhaps we can come to grips with them. what is your advice to retailers? what should they do? take the osses, try to combat them organize their stores differently? emphasize e-commerce what do you think they should do. >> there's not one magic solution in my mind it's going to have to be a combination of efforts. we can't talk about shrink without seeing the growth between e-commerce, labor shortages at retail, and the inflationary impact on the economy overall. so a combination of all the different effortsm you're seeing as you talked about before, doubling up on security efforts, product behind plastic so that you can't get to it, a variety of different things there's a lot of technology that is coming into play that is definitely being used from a return standpoint. returns have gotten higher because we've had an increase in the e-commerce business. as we continue to get bigger returns and those returns go back into stores as well,

there's gottin to be some effor made where hopefully this technology being implemented now is going to help that. in terms of reserves, retailers are going to be implementing new and different reserves 2.5 to 3% shrink is the new norm and it's not 1, 1.5% any longer. >> jerry, the urban myth is that law enforcement and prosecutors have taken a very different approach to what we call shopt l shoplifting, in some cases aren't going to try and apprehend the perpetrators or prosecute them unless say more than a thousand dollars worsth o goods is involved. how much is lax law enforcement contributing to an environment where brazen thieves feel i'm going to get away with this. the cops don't care. the prosecutors aren't coming after me >> that's certainly part of it, but ultimately if you don't cut it off, you know, at the payout, you're not going to solve it the real solution will only

happen, again, when there's something done about the marketplace. some people want to make the marketplace liable, say, look, amazon you got to control these things go on amazon, ebay, any of the marketplaces you see vast assortments of the private labels of retailers. and i can promise you they're not selling that to them it's very clear these are stolen products in the old days this existed, but it was at flea markets you'd have to go to the physical flea market to buy it. you can't sell nearly as many goods at a physical flea market as the e-commerce flea market. if you don't cut it off there, it's never going to go away and it's just going to keep growing, unde ultimately we all pay the price. unfortunately stores in a lot of these high shrink areas are closing and more will close creating kind of retail deserts. >> jerry, you also raised at a time when the president is writing about the need to go after big tech for being dangerous to society, you raise one for the brick and mortar point of view.

is amazon enabling a lot of the shoplifting or is that narrative compelling enough that it at least will require some kind of response i don't know what that response might look like. is that something that you think perhaps amazon investors would want to think about here >> i don't know about the investors, but i'll tell you, i know that the industry's thinking about it. you know, there's an allied area which is, you know, fakes, counterfeits that are sold in these marketplaces as well so the real general thing you can take this up a level, is are these marketplaces responsible business places or can they just say it's not our problem anyone comes to sell something, we're open for business. we don't care where it came from we don't care if it's real or not. you know, that doesn't seem like that's going to be sustainable going forward. >> thank you, very much, sandra campos, jerry, we appreciate your time today. thank you for enlightening us. still to come, 2022 was a record year for dividend payouts and despite all the anxiety and uncertain te ty spiraling arounh

market, many investors are expecting another record year. we will discuss dividends and more when "power lunch" returns. hi ladies! alex from u.s. bank! can she help? how about a comprehensive point of sale system... that can track inventory, manage schedules- and customize orders? that's what u.s. bank business essentials is for. (oven explosion) what about a new oven, can u.s. bank help us there? we can serve loans in as fast as 12 minutes. that would be a big help! huge! jumbo! ginormous! woo! -woo! finding ways to make your business boom. that's what u.s. bank is for. we'll get there together.

we planned well for retirement, but i wish we had more cash. you think those two have any idea? that they can sell their life insurance policy for cash? so they're basically sitting on a goldmine? i don't think they have a clue. that's crazy! well, not everyone knows coventry's helped thousands of people sell their policies for cash. even term policies. i can't believe they're just sitting up there! sitting on all this cash. if you own a life insurance policy of $100,000 or more, you can sell all or part of it to coventry. even a term policy. for cash, or a combination of cash and coverage, with no future premiums. someone needs to tell them, that they're sitting on a goldmine, and you have no idea! hey, guys! you're sitting on a goldmine! come on, guys! do you hear that? i don't hear anything anymore. find out if you're sitting on a goldmine. call coventry direct today at the number on your screen, or

visit coventrydirect.com. welcome back i'm kristina partsinevelos, and

here's your cnbc news update at that hour. ukrainian forces say they're holding out against russian attacks in one of the fiercest ground battles of the war. newly released video shows ukrainian troops firing upon russian soldiers a russian victory would mark the first capture of a key ukrainian town or city in months electric vehicles have won two out of the three categories for best autos of the year, in this year's north american car and truck and utility awards the ford f-150 lightning was chosen as best truck while kia's ev 6 was named top suv, the lone gas powered winner was the accra integra. it also won car of the year. and this is a good story, guys, no, the megamillions jackpot is not 13.5 billion bucks a billboard mistake in philadelphia shifted the decimal point so the sign showed a grand prize ten times bigger than it actually was, or is, i should say. the real $1.35 billion jackpot

is still big enough to be the fourth largest in u.s. lottery history. i'll take any of that. >> it's getting confusing. i don't blame them they're so big these days, you lose all sense of proportion thank you so much. an update on today's air traffic troubles, now canada's air trafficker controllers says their notam system has been restored we reported earlier last hour that there was first reporting about the same kind of outage experienced here in the u.s., they're now saying it's been restored all righty, ahead on plunchs t "power lunch," the long and short of it. our next guest says being only long in this market, that guest will share long and short picks. check out doordash, the stock surging more than 7% we'll trade atth name in today's three stock lunch. and we'll bring food as well

i screwed up. mhm. i got us t-mobile home internet. now cell phone users have priority over us. and your marriage survived that? you can almost feel the drag when people walk by with their phones. oh i can't hear you... you're froze-- ladies, please! you put it on airplane mode when you pass our house. i was trying to work. we're workin' it too. yeah! work it girl! woo! i want to hear you say it out loud. well, i could switch us to xfinity.

those smiles. that's why i do what i do. that and the paycheck. welcome back, everybody, just 90 minutes left in this trading day. let's get caught up across the markets on stocks, bonds, commodities and what the fed needs to do so that these markets can sustainably rally. let's start with where stocks are at the momentum.

dow's at session highs, half a percent for the dow, percent for the s&p, percent and a quarter for the nasdaq the best performer amazon, google and apple seeing nice gains again today amazon spiking nearly 5%, up 10% this week. consumer discretionary also heading higher, victoria's secret rising on fourth quarter guidance, pool corp. upgraded by deutsche bank, and the bond market rick santelli tracking the action there strong ten-year auction speaks to the demand for this yield, rick >> yeah, you're showing a bunch of strong stocks we see strong pricing pushing yields down, and all pretty much for the same reason that we're all expecting tomorrow's cpi to continue to confirm what we all have witnessed along the way, and that is prices are moving lower. here's a complete year-to-date chart of two-year note yields. you can see we haven't even jumped back into the range that we vacated on the employment

report if you look at the high water mark, it was early november, just shy of 4 3/4, we're 50 basis points down from the high water mark, the high yield close on two-year. and if you look to ten-year which had its high water mark, its highest yield october 24th just shy of 4 1/4. it's 70 basis points below that. the market is speaking and the more the fed protests, the more we see the curve invert. there it is. now, if you look at the last six sessions of three months to tenure, six sessions, we've more than doubled the inversion it went from a hay of minus 46 e to its current level at minus 112, an historic move by any measure. and tomorrow, what we want to pay closest attention to in my book will be the year-over-year core, and if it doesn't have a six handle, if it has a five handle as we talked about last hour, kelly, ting just puts the rubber stamp of approval on all

the markets we're discussing back yto you. >> i get a pit in my stomach looking at that chart. let's move to oil with a gain of nearly 3% on the day, pippa stevens has the latest. >> oil is jumping today alongside basically everything else this is despite inventory rising by 19 million barrels last week. the street had expected an increase thanks to refinery shutdowns on the gulf coast during bad weather, but the build was larger than forecast turning to nat gas, henry hub prices sinking to the lowest level since june 2021 before going positive just now. we do continue to see elevated prices in certain areas including california and so cal, spot prices are off their highs but still around 20 bucks per mmbtu according to s&p global market intelligence. that's nearly six times greater than the national average. two notable movers on the clean energy side today, german solar inverter maker sma jumping after jeffries upgraded the stock to

buy based on strong order momentum, lithium company, livent higher following a double upgrade from underperform to buy at bank of america >> that's an attention grabber, thanks. stocks higher this week even as fed officials continue to talk tough on inflation. can stocks rally while the fed is still raising rates, let's ask peter anderson, the chief investment officer at anderson capital management peter, welcome maybe you are bullish on stocks here or when do you become more so >> well, i think the plan for 2023 is the fed will start easing -- i mean, well, not easing rates but lowering the heights of which he raises rates. maybe 25 basis points, and then the next 25 basis points after that, kelly, i don't expect the fed to make any material statement that they're going to cut, but if they just pause, that will be a tremendous

catalyst, especially for tech companies this year to rally, and so that's what i'm looking forward to i think by six months into this year we will start to see that >> are you not troubled by increasing recession talk that we're hearing from ceos and economists particularly for the second half of the year? >> i'm not, tyler, because i don't think there is going to be a recession, and even if there is one, i think it will be very, very thin and very short lasting. and i think we have to look beyond that, and the most difficult thing i think for all investors right now is we're recovering from last year, which we all got our pants kicked, and now we have to figure out where it's headed this year, and i do think the fed has done a very, very good job. it has been less than a year that they've been raising rates, and so by a year, i would say march of this year, we will start to really see the suc successful impacts of their campaign. >> hasn't the market really been

rallying since october >> well, not in my book. i mean, i've had a tough year last year. you know, i run a concentrated portfolio, only 14 stocks long i have introduced the concept of shorting stocks, which has helped things, but in my eyes, i would say we have been really, really held back, especially on the growth stocks, but we do see little hints, you know, such as today or the past couple of days when people are starting to actually adapt to the narrative that the fed might actually slow down on these hikes. >> peter, not a side note, i don't know, but zillow is one of the stocks that you're short, which is having this big ripping week, got a double upgrade the other day, you think it's fundamentally flawed. >> i do, kelly, and let me tell you. there's all kinds of explanations about their so-called zestimate which is their algorithmic approximation

of how houses are worth. you can say i zillowed my neighbor's house to get a sense of what the market valuation is. they brag about neuro networks and artificial intelligent analysis for this, and i have to tell you, i did something extremely simple to test this. i went on the site or on the web. i googled my own house, and do you know you can log in to your own house and change those parameters to be anything you want for instance, if you have a three-bedroom house, maybe you want to enlarge it to 1 15-bedroom, so you can actually put false data into that database, and that goes into their zestimate. >> you're going tobreak my wife's heart when you say this one of her favorite pas ttimes s to drive around kelly's neighborhood and do the

zestimate on each other. you run a concentrated portfolio, 14 stocks what is your single largest holding? how long have you held it, and why is it in that favored position >> well, you know, i never trim either so i put in a position, tyler and i let it run its course unless, of course, there are new pieces of information. new facts that come out that would cause me to change my opinion on that stock. so my largest holding right now is united rental equipment i mean, i've talked about this before on this show, and i've been a long-term holder for that stock. i don't expect to trade it, to sell it, because it has been so successful, and the data coming along with united rentals is very, very positive. even in spite of all this stuff we've gone through the past two years of covid, et cetera, they have an excellent track record of rolling out -- >> how big a percentage of your

portfolio is it quickly? >> it's 6 to 7 e %% right now. you can imagine any one of these stocks is usually 3 to 5, 6% so they have a tremendous impact on the performance, but that's when the high conviction comes in, right? >> yep love it. peter anderson, as always, great to see you, sir. >> you're welcome. 2022 may have been a bad year for stocks, a bad year for bonds, but it was a good year for dividends. besides energy, utilities led the way with serious payouts, but with treasuries now paying out some higher yields, are utilies stitla year's cupcakes >> announcer: the bond report is brought to you by pimco, a global leader in active fixed income

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i labra-dore you round of a-paws at&t 5g is fast, reliable and secure for your business. we planned well for retirement, but i wish we had more cash. you think those two have any idea? that they can sell their life insurance policy for cash? so they're basically sitting on a goldmine? i don't think they have a clue. that's crazy! well, not everyone knows coventry's helped thousands of people sell their policies for cash. even term policies. i can't believe they're just sitting up there! sitting on all this cash. if you own a life insurance policy of $100,000 or more, you can sell all or part of it to coventry. even a term policy. for cash, or a combination of cash and coverage, with no future premiums. someone needs to tell them, that they're sitting on a goldmine, and you have no idea! hey, guys! you're sitting on a goldmine! come on, guys! do you hear that? i don't hear anything anymore. find out if you're sitting on a goldmine. call

coventry direct today at the number on your screen, or visit coventrydirect.com. welcome back to "power lunch. when times get tough the tough go shopping for dividends. the safety strategy would have worked pretty well in 2022, what about now? bob pisani checks out the landscape for us. >> everybody wants to know a little story on the side, are dividends going to hit another record 2022 was an all time record, we had almost $600 billion in dividends paid out in the s&p. why is that happening? we had very strong cash flows.

that's the key to dividends and the margins are still high is it going to continue in 2023? well, the dividend yield is 1.8% roughly on the s&p 500, has been going up recently. investors have been throwing money into these dividend paying etfs he's one of them this is the aristocrats, it has a history of buying companies that increase their dividends every year, not high yield but increasing the dividend, and they're not utilities companies like procter & gamble, aflac, even caterpillar are in this that's the orange line dramatically outperformed the s&p by about ten percentage points i know what you're saying, oh, it's boring. dividend investing is boring it's actually a very important component of the overall investing profile. look here, going back almost 100 years, the average return of the s&p is 10.2%, total return the dividend as a percentage of that 10.2% is 39%. why is that happening? why is it so high? most people reinvest the dividends, even at 2 or 3% a year, that compounds the magic

of compounding returns increases it, and kelly and tyler, there's nothing like compounded "associated press. -- interest. the question for 2022 is cash flow and whether that will remain strong. >> one sector featured heavily in a dividend conversation, utilities. they are up 4% over past year joining energy as the only positive sector in that time frame. but as interest rates rise with a high dividend paying companies still an attractive buy, let's hear from utilities analyst at keybanc. last year was a good first start to the year. the punch bowl go pulled away at the end of the third quarter into the fourth. was that the beginning of the end of the rally for utilities and are we in a different phase now? >> hi, thanks for having me. and yes, i think that it is the beginning of the end i think that utilities are

expensive, right, at this juncture the sector has performed exactly as you would expect the defensive sector to perform in the markets like what they had last year. the index is trading at 2.8 times to the s&p 500, which is very high by historical standards, and we think that is inevitable here, in particular with the rates rising and the sector being expensive compared to treasury yields. >> are there still some selective buys in the sector that you would point us to >> absolutely. i think what you got to focus on in the sector right now is the unloved, under owned names that maybe have dealt already with a bunch of overhangs and they have positive near-term catalysts for example, i think energy deserves a close look here it's in a high utility it's a company that first made significant progress resolving regulatory issues in recent years. secondly, we expect the new ceo

announcement and the sale of a minority stake in one of the assets announced in kq1 of this year we expect this to be a positive catalyst for them. and last the bill, trade at a discount appears and has above average dividend payout here and dividend yields. i think that's an example of a name that you will not focus on going into this type of market >> to be clear, sophie, someone who's sitting at home and saying i'm a little concerned about the market this year, let me buy a utility's etf just to be safe, you think that would be mistaken >> i think so. i think that that has run its course what we see in the market, kelly is that the utilities do well when the anticipation of a recessionary environment begins to build we are over the hump here. what we will anticipate is the sector will trade more closely to its historical metric, which is in line with s&p 500, right

close to almost three insurance premium. we have not seen such premium of utilities since 2004 so i think if you want to buy something that's safe, you think that's utilities, you're probably too late. you missed the boat on that. >> sophie, thank you she makes a great argument, ty, and i love people who don't come on and just always talk up the thing that they know best. totally, i love it, sophie, great information. thank you so much. coming up, more data, denim and delivery we'll trade some of the biggest movers and calls of the day, three stock lunch is next.

welcome back it's time for three stock lunch. today we're sipping on the big movers like salesforce, lower after a downgrade to under perform on bernstein citing growth concerns. levi, falling at citi downgraded shares to neutral on issues, and shares of doordash, which are rising along with growth oriented names today on pace for their best day since nation here to trade them all, scott nations, founder and ceo of nation's index let's start with salesforce. strange one lathe. volatile. >> but it's a buy. downgrade from bernstein because they expect the recently

announced layoffs will pressure revenue but admit it's going to do wonderful things for margins. i consider that a wash i think what they produce, their business is going to be absolutely critical, while the labor market is still tight and we may be entering a golden age for customer service analysts expect revenues to increase by 10% over each of the next three years they expect eps to increase in 24 and 25. forward p/e means it's not cheap but you're getting the growth you're paying for. it's a buy. >> let's move on to number two, which is levi straus scott? >> tyler, this is a buy as well. it's down about 2%, actually 2.5% today on the citi downgrade. they're worried about the whole denim space. i would agree if we were headed into the office for four or five days a week, but that's not going to happen any time soon. levi's is the coca-cola of the

apparel space, and people have been forecasting the demise of sugary soft drinks and denim clothes for years and years, and it hasn't happened yet 3% dividend yield which is nice. very little debt just more than $2 billion in debt, forward p/e of 12.5, so this is a wonderful value play. >> all right then that brings us to doordash, a counter trend revival story. would you buy it >> no. this is a sell, even though it's up a bunch today we'll call it a debt cap bounce. i hate these bisz that get between consumers and the ultimate provider. growth is slowing, and, in fact, last week they got a downgrade because of recession fears insane p/e of 279 which makes no sense in a business that's showing slowing growth revenue even in 2024 is expected to still be less than $10 billion.

eps is growing a bunch, but it's growing from zero so that doesn't mean very much everybody is talking about gig workers. that's wonderful that means you have a bunch of employees for uber eats and doordash but doesn't mean you have a whole bunch of customers. >> don't break our hearts. what are we going to do? wonder those vans are going away, doordash, what are we left with >> it's an old-fashioned business pizzerias have been doing this for decades. >> we want more than pizza. >> how am i going to get sushi >> well, i'm sorry, i don't think sushi is the sort of thing you should be ordering out and eating at home >> the answer is you'll have to pay more, kelly, if you really want it. >> go get it on your own and pick it up yourself. >> i don't use it that much. i joke it takes forever, it's expensive. >> it makes a modestly priced meal not modestly priced meal, i

will have to say that. scott, thank you very much scott nations. slamming on doordash slamming the doordash. we're going to take a look at a key component of the cpi we're gointog put that one under the microscope in just a moment ♪upbeat music♪ ♪♪ ♪when the day that lies ahead of me♪ ♪♪ ♪seems impossible to face♪ ♪a lovely day (lovely day)♪ ♪(lovely day) (lovely day)♪ ♪(lovely day)♪ a bank that knows your business grows your business. bmo.

all right. tomorrow cpi report is the big number to watch on wall street this week. dominic chu putting one component of it under the microscope. >> one that you both have spent a good amount of time over the

last couple of years and that's used car prices because of what we've seen through the supply chain and everything else. >> oh, yes. >> earlier this week the manhime used car vehicle index which is what folks use to gauge the help or indexing ability for prices in used cars came out and what you're seeing on the screen right there is a massive move higher over the last several years. used car prices have surged, way higher than they were before the pandemic started if you ski on the right-hand side the drop, that tail, that represents between december of last year and december of this year this past year a nearly 15% drop in the price of used cars now, in the -- i'm showing you the long term because i want you to put it in context - >> i don't think people realize how much we went up. >> 15% is a lot. what it does represent is the biggest annual decrease ever in used car prices, according to the manhime used vehicle index the reason why i want to highlight it, it is one

component of the cpi and as of december 2021, new and used vehicle prices, which includes new and used purchases and leased cars, represents a little over 9% of the consumer price index. used cars make up half of that amount a little over 4% there if you tack tore in new car prices, holding up, used car prices plunging and leased cars part of it as well, you have a picture of one component of that cpi that could be in play for tomorrow the reason we bring it up, what's been driving some of the downside pressure in used vehicle prices if you look at crossovers and suvs, mid sized and luxury cars, they're down 15 to 17% the ones that have seen the least declines in vans and pick-up trucks, which are down 12% during the span. it's not any shock to people who

have owned trucks over the years and vans they tend to hold up well in terms of value compared to others. >> when you look back at the fall of 2021, there was such a dearth of inventory of new cars. everyone was pushed into used cars and pushed the prices up. thank you very much for watching "power lunch." >> i will order doordash and "closing bell" starts right now. stocks building on tuesday's gains with the nasdaq once again leading the charge here as wall street awaits tomorrow's inflation data this is the make or break hour for your money welcome to "closing bell." i'm sara eisen take a look at where we stand broadly in the market. nasdaq up 1.3%, dow up 200 points or so, the highs of the day, the s&p 500 up a full percentage point we're seeing more sizable gains than we did this time yesterday. every sector is higher right now except for consumer staples that's the only one under performing real estate up