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alongside kelly evan, i'm tyler matheson game over, uk regulators blocking microsoft's takeover of activision, likely killing the deal forever we will discuss the impact on both companies and the increase in governments standing in the way of mergers plus, just when you thought it was safe or safer, the banking crisis getting ugly again. first republic slumping below $5 a share earlier today as it attempts a last-ditch effort to get help from other banks. can it still be saved? first let's check the markets where we see the dow down 174 points. the s&p down 8 to 4063, and the nasdaq hanging onto .3% gain >> we have more. dom? >> first republic is down again because it's in the headlines, heavy trading volumes so far, down by 23%. by the way, that's better than the more than 30% drop earlier today. there are those growing concerns that efforts to sell assets, to

shore up its balance sheet, may not be as well received by some other banks as hoped for that negativity, by the way, has led to at least seven different separate trading halts so far for first republic today seven halts. so watch first republic shares down 23% meanwhile, fellow west coast regional lender pacwest is moving the opposite direction. there's a bid, a 15% move higher after it reported results after yesterday's close. the important key here, deposits at the southern california-based bank fell 17% to quarter end, but deposit inflows were seen between march 20th and april 24th, just a few days ago, of roughly $1.8 billion deposit stability there. and in financials but away from banks, crypto exchange operator coin base is up on the day right now, about 1.25% off the session highs. getting help from analysts at hc wainright with the buy rating and $75 price target saying they

see coinbase as an asset for a stand-alone crypto native option some traders do attribute the move higher in bitcoin and ether prices as of late to the stresses in the traditional banking sector so now that we've gotten that done, christina, what are you watching from the nasdaq market site >> a lot of today has to do with microsoft. it's the big mover given its weight on the s&p 500. shares are up 7.5% on a better-than-expected earnings report that came out yesterday the street reacting today with really a strong bullish sentiment given microsoft's promise to invest nature in artificial intelligence, azure, the cloud service. but the stock is still off its earlier highs. a little bit higher after british regulators blocked a proposed deal to acquire video game giant activision blizzard for $69 billion because of competition concerns in the cloud gaming market. actvision blizzard shares you can see are down over 11% right now even though the company said it will work aggressively with microsoft to reverse the block the drop comes even after my

actvision blizzard posted the q1 earnings beat. and we have shares of google parent alphabet up slightly less than, let's see that, barely, now in the red this is despite an earnings beat there's a lot of concern now that microsoft is stealing market share from google in the search category. does that mean bing is finally cool alphabet also announcing a $70 billion share buyback. and since i said microsoft is a theme, we told you about microsoft's strong quarter and plans to spend more. that's why cloud providers are higher on the news look at that, datadog, 12% mongodb, 12%, snowflake, and the list continues >> thank you very much kristina today we turn to the power struggle between corporations and governments. from blocked mergers to ideological battles, the fights are being waged on multiple fronts the latest, disney now suing florida governor ron desantis. we have the latest on this story.

julia? >> reporter: well, disney and florida's power struggle has turned into a legal battle, and it is now a lawsuit. disney suing the state of florida over management over its tax district now things escalated just this morning when an oversight board that was appointed by florida governor ron desantis declared null and void the agreement that had been made back in february to retain control of -- for disney to retain control over the theme park's tax district. then walt disney parks and resorts sued the governor over his curtailing of its rights saying it is a clear violation of disney's federal constitutional rights to retaliate against disney for expressing its opposition to florida's bill which banned conversation about sexual orientation in schools now in its suit, disney writing that it has exhausted efforts to seek a resolution and is, quote, left with no choice but to file this lawsuit to protect its cast members, guests, and local development partners from a relentless campaign to weaponize

government power against disney in retaliation for expressing a political viewpoint unpopular with certain state officials desantis' communications director responding saying, quote, we are unaware of any legal right that a company has to operate its own government or maintain special privileges not held by other businesses in the state. going on to say this lawsuit is another unfortunate example of their hope to undermine the will of the florida voters and operate outside the bounds of the law. now, it looks like neither side is willing to back down. disney shares not really moved by this, down fractionally >> at its core, julia, it seems as though we know two things -- florida needs disney, number one. number two, disney for better or worse, after all the investment they have, is stuck with florida, whether they want to be -- whether if they were making a decision today on where to locate a theme park, they would

choose florida or not remains to be seen in light of what's happened do you agree with that >> well, yeah, you're right. these two entities are inherently in business together. the fact is is that disney generates a lot of money in terms of tax revenue for florida. and disney is planning to invest billions of dollars in the state employi ing even more people in the state. disney can't pick up and move its theme park, so much invested in terms of the real estate and all the operations there so these companies are going to have to figure out how to work it out it seems like it might be a judge that is going to be figuring out that compromise >> i also, julia, think is it reminiscent of manhattan to new york state, right, or i guess san francisco, california, not so much. but you know, major blue cities, in this case it happens to be a major theme park always having a little bit different feel maybe than the rest of the state or population. >> yeah. at the end of the day, this isn't a city, this is a business this is a massive business that got the ability to have this tax

district decades ago because of some of the quirks of operating a theme park where you're trying to get building permits and you're operate your own fire department and the like. interesting to see how this plays out. an expensive legal battle and perhaps a distraction for both sides. >> lost in all the deliciousness of this is what in the world is disney asking for here are they asking for money for damages or asking for some type of temporary restraining order or what? >> right now they want to have back the power they say they negotiated fairly and legally to have back in february to have that control over their district so what does that mean that means that the district should have the same controls that it's had for the past recent decades which includes things like approving building permits which is very important if you're a theme park, but also other things, in controlling this as a special tax district, that they are in charge of things like the garbage collection or the fire department so from disney's perspective, it's cleaner, easier, makes more

sense for them to maintain that control. and in fact, there is an argument that it would be more expensive for the state of florida to take over some of those responsibilities exactly. >> all right, julia, thank you so much. reporting on an ongoing spat between florida and disney onto another corporate fight we go. and that is the united kingdom's blocking of microsoft's deal to acquire actvision blizzard saying that it would give microsoft an unfair advantage in so-called cloud gaming this could make other large tech companies more cautious when looking to do any acquisitions in the future. this while the doj here in the united states is attempting basically to do the same that is the subject of today's "tech check. let's bring in our technology correspondent steve kovak along with tim herran at oppenheimer who says this could chill microsoft's ability to do any other deals for now. tim, i'm going to begin with you. in a funny way, did the uk's

competition authority do microsoft a favor? >> probably. i mean, this actually helps out earnings a little bit because they are earn a higher return on the cash in the bank now than they can investing here. and you know, it's hard to see how this is so strategic for microsoft. it's kind of less than 2%, 3% of earnings in the gaming sector now, less than 5% of revenues. they were paying an extremely high price for the asset also. >> to that point, steve, it is a small -- gaming is a small but not insignificant portion of microsoft's revenues and profits. >> and they've been doing this business for 20 years. >> they've been doing there business for a long time to tim's point, why not step back and say our bread and butter are the kind of enterprise software things that we sell, and now ai. >> that seems to be what investors want, too. look at microsoft shares right now. it's up -- they had that knockout quarter, they reported yesterday. azure, still growing like crazy,

this cloud product then all the excitement around ai, that's where all the focus is now it's really funny to think back when the deal was first announced the beginning of last year, one of the reasons they said they wanted to buy it was the metaverse. remember the metaverse exactly. so look, it's really not playing out the way they originally saw it, and look, it is too expensive. right after they announced the deal we saw what happened to the market throughout the rest of the year it got way too expensive $3 billion is the break fee, i think people would rather than spend their money -- >> $3 billion rather than $69 -- >> one of the reasons people thought you can't lose in activision shares because you get the break or the good games or the deal is consummated and we're going -- >> and they put out earnings early today. a spokesperson said they were getting inbound requests saying what does this mean for you, look, it's all addressed there in the earnings. one way -- that's true and they have a really strong statement out against the cma. another thing that's true is

they're a healthy company. they beat the top and bottom lines. they still have plenty of room for growth they have a lot of cash on hand, something that bobby kodak as talked about to our friends on "squawk box. that's the key, the company will probably be just fine on its own and potential for mergers with another game studio we'll have to see >> that is what i was going to ask. broaden this out to big tech i'm not sure if they're in the mood to acquire. maybe it they need ai help that's where they would be looking. will they now feel as though there's a chill on any dealmaking because of this ruling >> i mean, i think every hyper scaler has to think that this is definitely a political decision there's not a lot of market like dynamics that you can justify blocking this transaction with but you know, people are worried about the future microsoft is likely going to dominate ai here, and ai is going to impact so many industries that are out there. it could end up dominating gaming in 10 or 15 years by combining this with ai

but that said, i think microsoft will look to do tuck-in acquisitions, and i think they're going to look to use ai themselves to help them create content. because they need better gaming content. their gaming content, you know, is bad >> all right let's end on that cheery note. tim, thank you very much appreciate your time steve, thank you it's kovak and weather on the 8s see you back here. activision blizzard ceo bobby kovak will join "squawk box" tomorrow at 8:00 a.m. to react to this news >> that deal is far from the only one catching the eye of the government also caught in the cross hairs are major deals like jetblue and spirit, adobe and figma, and recently t-mobile and mint mobile, vmware and qualcomm facing scrutiny. the big mergers could harm consumers at a time of ramp and inflation. let's bring in former ftc commissioner and chair bill, it's good to see you again. the message here seems loud and clear -- don't try to do any deals right now. am i overstating it? >> if you're a large tech

company, you have a significant position in a variety of tech markets, had is a very discouraging move. it reflects a view on the part of major enforcement agencies around the world that they were afford lenient from 2000 through 2020 in reviewing gig tech deals. it's led to a determination to look at these deals not only very carefully, but to come up with inventive theories of harm that can be used to block deals. so yes indeed, this is a chilling event it's a very strong indication of the kind of scrutiny that one will receive not just in the united states but globally often through a coalition of regulators that are focused on the same transaction >> put your policy hat back on, bill i can see you say it's unmitigated, chilling effect on dealmaking but is it similarly an unmitigated disaster for the economy? if you were one -- a regulator

today, would you be trying to block these very deals on competitive grounds? >> i think the belief that lies behind it is that there are going to be other paths for the development of these companies that there are other acquisitions that will not place the assets in the hands of a leading player in the tech field, that there's a great deal of resilience in the market. and i think in many instances there's a belief that we can certainly debate and test that lots of large-scale acquisitions don't deliver on the promises that motivate them so i think from the point of view of the regulators there's relatively little downside to intervening here and there's the potential to stimulate other transactions or developments that will be positive >> you know, i'm not sure, bill, this is just a big tech story. a lot of the deals that are getting hung up are kind of smaller and -- seemingly almost a side story you know, like the standard general tegna deal, a hedge fund trying to buy a local tv operator, or spirit and jetblue,

okay, well, you know, it's not a big tech company and to their point, they're saying how are we to be the fifth biggest airline if we can't merge. it seems like no matter where you look the answer these days is no. >> it is not just a big tech deal you think back to july of 2021 when president biden issued his manifesto on competition, executive order on competition he decried what he referred to basically as 40 years of failure of enforcement where merger enforcement in particular was far too permissive this has galvanized the current leadership of the u.s. antitrust agencies to bear down on hard on an array of transactions transportation is one of the most important, health care, finance, tech, as well so the concern that we see reflected in the challenge to microsoft activision is replicated across the board in a variety of other sectors and again, a crucial motivating

impulse here is that mergers and acquisitions so often fail to deliver on their promises, so you're not giving up a lot by getting in the way of that and perhaps you're creating opportunities for business to evolve in other directions so it's a deep belief that antitrust blew the call in the past by being too permissive the need as a result to bear down very hard now with a great deal of confidence that you're not losing a whole lot because most dealmaking does not generate net economic benefits those are firm beliefs in the enforcement process. >> so i'll come back to the question i asked the previous guest. did the british competition authority do microsoft and maybe activision a favor here? >> they may have there's no systematic study of this, but there are so many other transactions we can point to and think of where the parties after the fact, once the deal has been blocked, expressed a sigh of relief thinking that

this saved us from making improv dent choice. we can think of a new of companies that probably wish the government had succeeded in its efforts to block the transactions >> i used to work for one, aol, time warner. >> can you imagine how often time warner has perhaps looked back and thought wouldn't it have been great if the ftc had just blocked aol time warner >> all right, bill thank you so much for your analysis we appreciate it thanks again further ahead on the broadcast, first republic trading at all-time lows all the way back to its ipo. the regional bank searching for a rescue plan. we'll talk to a former fdic official to weigh in on how this case should be resolved and what it means for the rest of the banking system plus, what about stocks that are hitting new highs? chipotle where my son eats about four, five nights a week, is one of them. hitting its highest level since going public and it's back on the list of potential stock picks for the 2023 stock draft that is tomorrow, folks.

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welcome back to "power lunch. mixed bag on wall street now the nasdaq seeing triple-digit gains following big tech results including microsoft. but both of our next guests are bearish on the markets now let's bring in michael

canterwitz, chief investment strategist with piper sandler, and pamal kumar, president of sri kumar global strategies. welcome. michael, let me start with you what do you see as the trajectory or path of the markets and the economy over the next six to eight months >> hi, good afternoon. we've had the view for most -- for the entire year that markets are going to be range bound until we start seeing unemployment claims start to rise i think -- we have started to see that how fast they rise in the several next couple of quarters will be to be seen certainly things point that direction. so next six to eight months i think markets are down and we price in a hard landing, and that comes along with lower earnings estimates, wider credit spreads, and lower market multiples. >> let me understand, rising claims would be good news because it wouldsuggest that we're coming into or toward the end of the bad news? >> rising claims would be the

worst news as it is historically, tells you people are losing jobs. and when job losses we get credit losses beget further earnings losses. that's what gets you into a negative feedback loop for the markets, that's a recession. that's a hard landing when unemployment rises so that would be bad news. i think focusing on inflation at this point in the business cycle, in the tightening cycle, is really old news >> yeah. >> sri, what about you looking at it cyclically with the same concern and what wabout those who say what is the fed going do here? >> two things. first of all, in terms of where economy is headed, the bond market has been giving a clear indication in recent months with the inversion of the two to ten-year -- three or ten year that we are headed toward a recession. and i'm looking for that to begin in the third quarter of 2024 in terms of what more could

happen with respect to the economy, what the fed may do about it, i believe that sometime soon the fed is going to pivot away there rate increases first to a pause to a rate cut at least a couple of rate cuts before the end of this year. where is this coming from? because inflation mitigation only takes on as a target as long as there are other problems which don't arise. we know that march 21st, 22nd, before the meeting the fed considered pausing because of the problems with signature bank and sdb. now that we have continuing issues with frc, my expectation is that even next week's increase is not a given. if things worsen between now and next wednesday, expect a pause after that it will probably tell us that he's going to still

increase interest rates, but i don't think it's going to happen any time soon after that >> michael, let's look a couple of longs that you like including chipotle, which we mentioned, coca-cola, and humana. two out of three seem to have something in common. one of them is food and pricing power, and maybe humana has -- may not have food, but they may have pricing power >> yeah. what they do have in common is that among their sectors and peer groups, they rank most attractively on a combination of being less cyclical, having better superior earnings -- current earnings momentum, having better realized earnings growth, and having higher profitability than their peers, in addition to that. those are microfundamental factors. in addition on the macro front, they tend to trend positively correlated with credit spreads on a relative basis, meaning that if we do see wider credit spreads that they're likely to outperform >> final question and quickly, where would you be putting money now?

would you be stocking it into t-bills? >> i would be stocking it into t-bills, tyler if you look at the difference between one month on the one hand and three months and four months, you are looking at -- there is a big spread of 125 basis points more if you invest in three months rather than one month. the market is very concerned about the debt default i don't think the debt default is a big deal at all i think even they default for a couple of days it's going to come back, and i would say go for the three month, four-month paper rather than one-month paper. despite the risk of a default, and enjoy it also kenya looks very attractive i look at the ten-year as going to work 3% soon. and eventually settling down at 275. so if you're looking at long duration securities, that's another way in which you can make money and all of those are headwinds for equities, tyler, because you can make so much on the fixed

income side. who needs equities at this point? >> a thought on which to leave it thank you very much. we appreciate it >> thank you, tyler. >> thank you both. climbing interest rates wreak havoc on banks in other corns of the market, housing relit. he details.

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welcome back, everybody. tech stocks and bond neeltds both moving high -- yields both moving higher today. we have the bond market part of the story. hi, rick >> yes, tyler, indeed. if you look at all maturities two through 30s, yields are higher, but i caution yesterday we auctioned twos, today we auction five which means the old securities and the new securities we just optioned do have a spread spred. the two-year note up a couple basis points more than its previous two year the active security as you look at the ten-year chart, we're up a handful of basis points when you put it against the rest of the week, the weak-to-day chart on, the week to day it's lower and lower on the week. and how much lower, well, the low yield close for all of 2023

thus far was right mid-april, and that yield was 3.30% so you can see how close we're starting to get on that chart. and by the way, three months and ten-year spread today at minus 171 is another historic inversion for all those watching the recession meter. and finally, the dollar index, some legendary people look to be shorting it. here's a 20-year chart for the last year going back to april, we've had this crown formation where it's basically above the previous 19 years. this chart really does auger for potential bearish environment because really the last year has been above everything normal for dollar index trading back to you. >> and we just heard kumar saying 275 on the ten year is his projection the solar stocks -- could they warn us, they talked about it as a matter of fact, it doesn't make sense with higher rates. >> that stock is cratering, down

more than 24%. it's on pace for the worst day in almost three years. and that comes after the company warned of a slowdown in the u.s. so last night i did report a mixed quarter for q1, but it is that weak q2 revenue guidance. they see it between $700 million and $750 muhammad illion, and id to the ceo after the call, and he got right to it simply saying we are not growing in the u.s. and that's for a number of reasons, primarily those higher rates and then moderating utility bills in deregulated markets like florida and texas that ultimately makes economics of solar less attractive, meaning customers are less likely to sign up. now he did say that he thinks that customer originations bottomed in q1, so that means that end phase will see soft demand in q2 as they forecast with things looking better in q3 that lag is because there is a -- a lag between when customers choose to go solar and when distributors buy end phase's product. in the meantime, europe is

growing rapidly. revenue up 25% quarter over quarter and more than three times on a year-over-year basis. they're trying to emphasize growth in europe with things in the u.s. looking much less certain. >> and it's supposed -- is one of the big beneficiaries of inflation reduction act and all the rest of it big shocker today. pippa, thanks. let's go to bertha coombs for the news update. >> thanks, here's what's happening this hour -- writer e. jean carroll testified during her civil lawsuit against former president donald trump today telling jurors i'm here because trump raped me carroll said the former president attacked her in a new york city department store nearly three decades ago trump has denied the allegations, calling them fraudulent and false former theranos ceo elizabeth holmes' 11-year prison sentence has been automatically delayed after she appealed the lower court's order that she begin serving the sentence separately former theranos' coo began his nearly 13-year sentence at a los

angeles prison last week and republican north dakota governor doug bergam signed a law limiting bathroom use for transgender people under the new law, these individuals will not be able to access bathrooms, locker rooms, or shower rooms that match the gender they identify with in some state-run facilities. the american civil liberties union said more than 450 bills restricting the rights of transgender people have been introduced in state legislatures this year. back to you. >> thank you very much ahead on "power lunch," will first republic get a helping hand or simply face the market's invisible one? reportsemerging the government won't intervene in rescue efforts leading to more concerns around the regional bank's ability to turn around its business - double check that. eh, pretty good!

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welcome back to "power lunch. shares of first republic continuing to slide after falling by almost 50% yesterday after they reported that massive drop in deposits today the bleeding continues as the shares were below $5

earlier. this was a $147 stock in february as the bank looks for a rescue deal. our next guest says the fdic deposit insurance fund took a hit with sbv and signature, and he thinks it's the outcome the government would like to avoid if at all possible for more, we bring in john popio from the galatin group and the fdic and reserve group thank you for being here it sound like a hit could be inevitable, don't you think? >> well, i think that's something that they would like to avoid if at all possible. if you look at what happened last few days it seems that first republic's confirmed the worst of our suspicions. the earnings call real in motion a series of events into motion in some ways confirmed the worst of our suspicions. there was a massive deposit outflow, roughly $100 billion, and banks businesses suffering in a substantial way i think not taking questions on the quarterly earnings call was less than helpful for the institution, as normally an institution in a bind would seek

to quell fears of its stakeholders, particularly its depositors, lenders, and shareholders i think they could have used that opportunity to better outline the specifics of the strategic options that they're exploring. but that said, the damage has been done, and regulators don't generally act on stock prices, they do take notice. things are moving quickly in this particular case and i think it's unlikely that the firm is going to recover either without a private sector restructuring or a government intervention >> so you do not -- a week from now, say, do you think this bank still is operating as first republic >> i think that they're actively exploring options right now. i think there are a few options on the table first is the first republic could effectively wait for the fdic to be appointed, do nothing. i don't think that's a great option alternatively, they could explore surrendering their charter to their primary chartering authority

it's possible they might use that as a leverage or bargaining chip in order to compel some sort of private sector solution. i think if it fails, there would certainly be a bridge bank due to the size of the institution, the scope of its operations. so the fdic would have this interim financial institution where they could undertake a number of measures they would be bound by preserving costs to the government, what's called lease cost tests, and would seek to actively explore a buyer and ideally a bank buyer for the assets and liabilities for the institution. i think that alternatively i know first republic is looking to raise capital and sell assets i think it's a very trying period to do that. i think it's particularly challenging because not only are the financial stress of the institution but then also any purchase or would-be purchaser would have to realize losses which really leaves two options -- government intervention at

some scale, or a private sector bailout, something to the tune of long-term capital management. like solution that we saw in 1998 >> you know, it's fascinating, john, because the government officials seem to be saying no -- that is absolutely not the route we want to go and that's fine that leaves the private sector where it's almost like first republic's kind of issuing this veiled threat of, okay, well, help us out more now, or you're going to pay more into the fdic to resolve the cost of our failure. which do you think -- if you're a big bank, you have a fiduciary duty, what should they do here >> i think the primary dealers, the largest wall street banks, they can come together really to effect a solution that could augment their $30 billion inje injection. they could act once more and seek to effectively convert their deposits into in form of equity in first republic and assist in its turnaround i think we all agree that this

failure would be shift to the fdic's deposit insurance fund for banks diabetic. >> if you don't mind my jumping in as a final question here, what would be the impetus for the private sector to jump in and get equity -- transform deposits to equity or anything like that for a franchise that's probably permanently imperilled, right? they're already potentially going to take a haircut on their initial round of bailout money which their shareholders probably not that happy about. why should they step up more especially on a day which the market is not sewing much connoc contagion from the shinkansening shop >> that's -- sinking ship? >> that's a great question that's the point that they would make to regulators to the extent that there could be contagion risk down the road or there could be knock-on effects in the financial system, i think that is certainly would incite behavior by the primary dealers, the wall street banks, to act they've done so in the past, and i think their injection of $30

billion was done -- hard to quell some of those concerns over the course of the weekend of march 10th. given that they've already acted once, i think it's likely that they might act again to preserve that infusion. and then also reserve the right to bid on assets should there be a receivership or agreement with the government to effect some sector solution. >> they're trying to figure out what is the cheapest solution here >> the least pain solution thank you very much. appreciate your time today we'll have you back. and still ahead, there is no place like home -- mortgage applications rising for the second time in three weeks despite interest rates moving up, as well. arngo housing market finally stti tstabilize? that is next on "power lunch."

welcome back, everybody. mortgage demand rebounding even as interest rates hit the highest level in more than a month. we have more hi >> hey that's right demand from home buyers actually drove the gains last week after they had really fallen hard the previous week. morning applications to buy a home rose 5% from the previous week, still 28% lower than the same a year ago. this even as mortgage rates rose the average on the 30-year fixed for the week increased to 6.55% from 6.43, that's for loans with

20% down an increasing number of consumers are now buying down their rates. nearly 45% did that last year as a way to reduce their monthly payments that according to government data the home builders are also buying down rates short term to get more buyers into a new home, and that is keeping new home sales up which we saw that big jump in march, nearly 10% higher despite those higher rates rates are actually falling back a little thanks to the renewed concern of course about the regional banks guys >> so taylor morrison out with numbers this morning following the horton and pulte nice numbers how are they doing this? >> solid beats they're getting them in the door because they're doing the mortgage rate buydowns that's helping a lot interestingly, it's all about supply i know like this was kelly's favorite number, she says, but usually the homebuilders' supply makes up between 9% and 10% of all the supply in the market the rest existing. they're making up over 30% now of the inventory in the market

because the existing home inventory is just so low >> it's just so low. and the sellers don't want to sell because they know they're going to have to pay -- trade up >> twice as much >> wow >> i was thinking about like, okay, if i bought a piece of land now and spec built a house, do you think i could sell it for a lot of money >> oh, yeah. >> are you kidding >> do you think a lot of people would be doing this if they look at the market and say, wait a minute -- and we know -- >> it depends on where first, if you're talking about northern new jersey, where are you going to find a piece of land that you can afford a piece of land. but in general, it costs less that build a home than buy a home nobody wants to go through that. >> true. i'm wondering kind of the number of people who have been in the market in the past to own homes and rent them out and that kind of thing at some point if this trend looks like it's going to be sustainable beyond the past six or nine months -- mom and pops have been suffering because of the credit access, too it's an interesting dynamic now. >> right we're also starting to see home prices firm which is really interesting. they had been easing up coming down, but in the last reports we're seeing them start to inch up again, especially in the

sunbelts still in the west, but prices, you know, core logic said prices have bottomed. >> wow bottomed >> a report this morning from a realtor in southwest florida showing that prices from two years ago on single-family homes in a certain area have almost doubled. almost doubled >> no question >> two years ago it was -- >> pre-pandemic still up 43% >> they only have like eight houses in inventory. i mean, it's crazy great to have you in the house >> thanks. great to be here ahead on "power lunch," we are less than 24 hours away from the cmbc stock draft ten teams compell kmooeting for investing -- teams competing for investing domination we'll have a veteran at the top his 2023 draft board next.

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with the 2023 cnbc stock draft set to kick off tomorrow at 2:00 p.m., we want to kick things off with a special edition of three-stocked lunch. chipotle, charles swab and peloton. here to give us his picks is our draft veteran. let's start with chipotle. if you were in the draft and this was a name tomorrow, would you be picking it?

>> i'm excited for tomorrow, kelly. i'll be tuned in this is one that i hope comes off the board tomorrow and not just because of the great quarter they've had. they use a system that allows eaters to do things quicker. it's made for high margins and more efficient sales that's been helpful for them over the last few quarters it's increasing in the last quarter as well. with the pricing power that chipotle has displayed, i think it's a solid stock to own. >> miss the move on it >> i don't think so. if you look at the chart, three, four, five years, the charts are moving higher. after the move they've had today, it will be profit picky

investors can hold it for long term because they're opening new stores focusing on growth. >> to win this stock draft, typically you need long shots to come through could charles schwab be a long shot >> yeah, this is the second, third or fourth rounder that could play out pretty well the regional banking fears are real charles schwab is a different situation. their deposits are fdic insured. they have ample liquidity. revenue is up. you have to think about where their deposits come from they added over 1 million new brokerage accounts when the cash slows down, i think the deposits will grow rather than dip. they'll be in a good position.

>> one of the other names is peloton. do you think people should take a flyer on this one? >> no. this is one that would be an undrafted free agent there's a few reasons why. new management is starting to focus on subscription revenue, which could be good, but it's going to take a while to play out. the profitability will be extended for a while liquidity is looking less ample as well for peloton. this is one i would stay away from. >> downward dog. there you go >> the 2023 stock draft, a lot of new faces this year. >> a lot of new faces and interesting stocks to choose from it's one of the best days of the year for us.

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[office sounds] ♪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. the intersection or collision of government and business has been a theme of today's program. here's one more example. british american tobacco, one of the biggest in the world, agreed to pay approximately $635 million to settle with the

department of justice for violating u.s. sanctions with north korea. the london-based company admitted to doing business with pyongyang in defiance of u.s. trade law and despite publicly stating it would no longer conduct business there officials say smuggled tobacco was a major source of revenue for north korea's nuclear program. it's not the largest settlement a business paid this week as fox is paying $787 million to settle the dominion case. governments matter laws matters regulators matter. >> we had seagate with a fine for sending property to yahweh that fine was the largest in its

history. there's a clear message here coming from the government. >> we began the show with the lawsuit filed by disney against florida governor ron desantis. >> stay tuned on that one. >> thank you for watching "power lunch. >> get your picks ready for the stock draft tomorrow "closing bell" starts now. welcome. we're live from the new york stock exchange we begin with a mixed picture on wall street. nasdaq a bright spot still regionals remain front and center as first republic continues to get hammered. disney suing florida governor ron desantis. jim stewart joins us shortly. we begin with the talk of the tape