microsoft. >> this is purely based on studying the price action. it's a trade >> 15% in a few days, three days, five days. >> how high is high? no one knows the answer. >> liz, final. >> gold. i've liked this for a while. i know it'sal all-time highs i think it's there for a reason. >> what's the name >> uso >> i'll see you on "closing bell." "the exchange" is now. ♪ ♪ thank you very much, scott hi, everybody in on this monday. i'm kelly evans and here's what's ahead this hour there's washington and then there's wall street. treasury secretary yellen ratcheting up the debt ceiling warning of a financial and economic chaos and the president about to convene an emergency meeting on it and investors don't seem too concerned and even warren buffett says he's not worried and is it presenting buying opportunities or not? we'll debate oil is running high and could it be the beginning of a meaningful recovery or a supply gut

we'll discuss how to position and an under the radar consumer stock that could be impacted by something in washington and we're not talking about the ceiling with everyone and first to dom chu it's red. >> it's red, but an even keeled start to a new trading week, kelly. to your point, good vibes, don't worry, be happy. whatever the theme you want to put in there is, the debt ceiling debacle happening in washington right now is not really playing out in the markets because even with all of the brinksmanship, the markets don't seem that worried. the s&p 500 still solidly above 4100 and down about three points and it's been a narrow trading range today. at the highs of the session we were positive by four points, down nine points at the low of the session and that spread of 13 points in the s&p, very, very even keeled start to the trading week the dow industrials down about 90 points and 33,582 and the nasdaq composite down 12,230 one place that has seen outsized

volatility is cryptocurrency specifically in bitcoin, this on word that binance halted because of what they characterized as increased network traffic and costs more to transact there bitcoin, 27,863 and it's been roughly there all day. down 3% to 4%. by the way, it's still in this trading range that we've seen over the last couple of months floating between 27,000 and 30,000 in that level we'll watch bitcoin, and then tyson foods, big food processor, specifically meats, pork, chicken, beef. it's tanking today down 15.5%, a surprise loss on weaker than expected revenues and they cut their full-year forecasts. they're talking about some pressures pricing wise with regard to input. at the same time, certain pricing pressures that are not being able to be realized on selling those good to end consumers and profit margins are

a good question right now. tyson foods down 15.5%, kelly and one of the big movers of the day and it speaks to that inflation narrative, right across all of america right now. >> that's what i was going to ask. so basically, they are at maybe the front end of what could soon be happening with the rest of the s&p 500, you know? this is the warning about profit margins collapsing, down 15%, that's -- i'm glad you flagged it >> it's not just that. this is about the raw materials cost increasing for them and them not being able to sell for as much, as another full scan. >> that's a very interesting one. down 43% in a year now dom chu. the president convening an emergency meeting with top congressional leaders as the debt ceiling looms let's get to eamon javers with the latest hi, eamon. >> treasury secretary janet yellen is making a dire prediction if the united states were to default on its debt in early june

>> we would simply not have enough cash to meet all of our obligations and it's widely agreed that economic chaos would ensue. >> economic chaos she says there. tax receipts have been coming in light this year and that moves the x date for default earlier than what she had expected and she says the treasury is also using so-called extraordinary measures to fund the government and keep things running right now. president biden, as you say, kelly, he's called top congressional leaders to the white house tomorrow to see if they can hammer out a deal the president wants a clean debt ceiling increase which would allow the u.s. government to continue to borrow money to fund operations without provisional additions attached, but republicans say they want to pair a debt increase with a package of spending cuts the actions will be between biden and speaker mccarthy mitch mcconnell said the only

solution to the impasse will be a deal between the president and the speaker of the house and he said that leaders should quit wasting time kelly, back over to you. >> i wonder what happens if brian reynolds is right and we're not actually careening towards it and yellen wants a deal done because that's her job as treasury secretary. she's been taking steps since january to extraordinary measures, if we're not going to run right into it what happens markets are going to sell off then or they won't push people to come to a deal. if we get corporate tax deals until june 15th and it can go a few more months and i'm wondering in september and the debt ceiling and one of those kind episodes. >> if tax revenues come in heavier than expected, then maybe they can kick the can down the road a little bit. you get the staredowns between washington in the debt ceiling where the politicians are waiting to see if the financial markets blink and the financial markets don't blink because they believe that the politicians will come up with a solution and you don't get the deal until after you go through some deadline and markets start to

react and you see markets moving down sharply on news that's when politicians say we better take action and get this done everyone is waiting for everybody else >> right exactly. there should be a plate like the "seinfeld" episode >> waiting for the debt ceiling. >> eamon javers. >> don't miss the treasury secretary herself janet yellen will be on "closing bell" at 4:00 p.m. eastern and we'll hear from her directly on this. the house flat since it passed the debt ceiling bill and is this political posturing to get this deal done now it's not an imminent problem and warren buffett said he's not concerned and if we're not going to hit it, how much can the markets run, joining me is deputy chief from bernstein advisors and the glenview trust company and a berkshire shareholder. dan, very quickly on this debt ceiling issue, what is your investing advice

>> kelly, i think the investing advice is very much aligned with what warren buffett said over the weekend. i think you really shouldn't try to react to this this is not based on economic fundamentals that you can predict. this is like predicting a hurricane. we know we're in hurricane season, but i think how you respond to this and how the markets respond should be a function of your time horizon, if you only care about the next five to ten days or five to ten weeks then, sure, this could be a big market-moving volatile, vent for markets, but if you look past that over the next five to ten months it will settle out, the impact of the fundamentals will be pretty minimal, so therefore, the lasting impact over the markets over the time horizon will probably be pretty small >> bill, are you constructive on the markets at all i was struck seeing some of the upgrades today and maybe the s&p was going to 4400 now. if this run continues to get it to start the year, what are you doing in this kind of environment? >> i was constructive going into

the year i've got to be honest, i did not expect it to do this well this early, so i'm probably a little more cautious at the moment just because i do think the economy is going to start softening here in the second half you heard some of that from warren buffett on saturday talking about that most of the businesses that berkshire owns and it is so widely diversified in terms of businesses it owns and i think it's a pretty good proxy for thinking about the overall economy, but they would likely have down earnings year over year and it's worth keeping that in the back of your mind. so i think for us it's just continuing to focus on high quality companies that we're not going to have to worry about if, in fact, the recession comes it doesn't mean that the stocks won't go down, but i don't have to worry about them going out of business or something else i think that's important. >> it was interesting, bill, over the weekend to hear the rhetoric about the banks and to see the signs that buffett and munger put up to kind of mock the accounting practices and if

anything, they've pared their bank hold in recent years and they're not blaming management like at first republic for writing a lot of those mortgages. i know you like bank of america, but what does that tell you about the juncture we're at broadly speaking where you don't see these guys saying, yeah. it's cheap fear is priced in. they're very much on the sidelines here whether it's for the banks or the markets more broadly. >> yeah, and i think they would say we're in and with bank of america is the example and they may be the beneficiary, right? i think it's the very large versus the smaller bank's issue right now. it is unclear. one, they talked about it at the meeting and you've got all of this commercial real estate that needs to roll over their loans eventually and most is held by the smaller banks and not the biggest of the banks and they need to talk about that. i think that's why they're not in the place of wanting to dive

in there frankly, the valuations aren't that much different, right bank of america you can buy for 80 times earnings so it is not very expensive relative. so i think that's why they're saying we'll just wait this out and if one sees something that gets completely crushed or gets hit hard there's an opportunity and i'm sure they will go into it, if they thought the assets were good and yeah, i think that's why they're on the sideline >> my point is we're not getting that reassurance that we're at the crisis point yet >> no, not so sure >> they come in when everyone else is terrified. suzuki and bernstein and munger and buffett, what are you guys arguing about? i know that health care and staples and utilities, is it hard to stick to the defensive bias a little bit. bring me into the room for how you're trying to figure out strategy in this very odd environment. >> yeah, kelly, the main sort of

debate that we're trying to struggle right now is how to balance the next five to ten months, versus the next five to ten years and charlie munger, they only care about the next ten years and they don't care what happens this year, next year or the year after that. we do have to care about what happens in the next year or two, and so that's why we're focused on the fact that we're in a deepening profits recession and liquidity is tightening which suggests that you want to be focused on high quality defenses, but if you compare that to the next five to ten years, i think owning the banks and owning energy companies and owning the cyclical and cheap assets around the world will prove to be a profitable investment and it is too early given the headwinds we're facing. >> craft heinz is another one you're looking at and it feels like a bull market value investment is there anything that's getting you itchy and you say valuations

or super regionals and is there anything that really feels to you like a big opportunity right now or do you accumulate or have a decent amount of cash on the sidelines so that maybe in three, six or nine months if there are bigger opportunities that you can pounce on them? >> i think you probably do -- like i said, i'm a little less optimistic than i was just because the market's run up a bit. i'm kind of waiting for that opportunity. we had bought some technology when they got hit pretty hard last year, so, you know, that's run again. it's hard to -- i'm being looking around for something, but probably the only place, honestly is if you have a longer timeframe and the financials and we talked about -- i think schwab is interesting if you have a long enough timeframe on it and i'm not worried about it going away either, but you better have a longer timeframe because i think short run, the profits will be crimped a bit by

the whole craft sorting issue. >> the cautions i hear from both of you, it's a good reminder as we're all off to the races in this environment thanks for joining me, guys. appreciate it. >> dan suzuki and bill stone. the debt ceiling isn't the only potential stumbling block coming out of washington student loan payments are about to resume. the covid era likely to resume by august if not sooner, wells fargo flagged with what they believe is the highest exposure to student loan debt including target, best buy and the fitness brand lifetime lifetime shares have surged more than 25% less than a month and they're up 71% so far this year. they're also trading at a 65 times forward p-e. their comps were up 25% last quarter and they had more than 800,000 member, but could student loan repayments thwart their impressive growth? let's ask barahm rakwami

>> thank you for having me. >> why are you having such a moment it is so surprising >> just like your conversation before life time has been around for 30 years. for 30 years we have focused on building desireability we've focused on building a place for people to go to to be happy, to be healthy it's an athletic country club combination across the country and what we offer, we're the only unique company that does that in aggregate. there's nobody else like life time, and what all it's taken is for the business to re-ramp the way that it always ramps when we started a new club it takes three, four years to ramp after the covid we were virtually shut down substantially still through april of 2022. >> wow

>> so it's really been just a year the clubs are re-ramping all of the programming that we put in place, small group training and pickle ball and the training and all of the different programs we put in they're all working and they're all just starting to get momentum. >> sure. >> in that so our membership is building. the customer loves lifetime and they can't find anything else that replicates lifetime, particularly in a national basis. the customer is coming in. they love the product and they love the performers and they love the place and the beach clubs and they come in and go through the routine. so what we have been showing the street is what we have expected to happen. >> so let me just point out, your average membership could be over 200 a month in the new areas where they have an athletic country club captures it and whether it can save shopping malls who are looking

to save massive chunks and i see a lot of locations going up there and because 44% of your members are 35 years old 60% of them have a college education and that's why some of these analysts say when repayments start in a couple of months' time you can't laugh -- he's saying, forget about it, they'll never turn off their life time membership they might you never know, they might >> so we're talking about absolute or the total? if you're thinking about the number of people who get a little pinched during the recession and then the financial forces them to drop some spending, there are those who actually end up having more time on their hand and for live time that's a zero-sum game with the exception of the great recession which we had a little more dip, every other recession, the number of people who come to the club because now they have more time for leisure time to

come to life time offsets those who maybe have a little bit of pinching our positioning is such that the customer that we have is very resilient and even have $250 per month is $3,000 for a year that's one trip that you would take, one vacation trip and now you can use these clubs eight, ten hours a day and 365 days a year and there is no other healthy entertainment that replaces lifetime. the mistake that the analysts or other people are making, they keep comparing lifetime to gyms and that's where they'll go wrong, and they'll go wrong again. life time is an athletic country club like a resort and it's healthy entertainment and the customer is showing everybody that they love the brand and they keep coming back. >> i don't even have to ask if wego, and athletic country club

is a different thing thank you very much, bakram. thank you. >> thank you for having me. >> the owner and ceo of life time. is today's rally a comeback, and three nor names on deck to replace warner, paypal and warner group oil might be in the green and the nasdaq fractionally now and the dow, s&p and russell still in the red and the ten-year note below 350 and "the exchange" is back after this. ♪ ♪ >> this is "the chgeexan" on cnbc imagine, a car that goes as far as it does fast. as sleek as it is spacious.

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♪ ♪ >> welcome back to "the exchange." oil rebounding on easing recession fears and the bounceback comes after three straight weekly declines and one thing that hasn't bounced back is deal making despite big oil sitting out on records amount of cash and the oil and gas sector were in a two-year low and that's according to an analytics firm 16 were completed compared to 45 in the year earlier. let's talk about that and what it means to energy stocks with dan pickering. great to see you welcome. >> hi, kelly

good to be here. >> these have been tough days for bank investors and tough days for energy investors and you have the benefit of whatever happens with crude, if you're still at a level where the companies can throw off a ton of cash the companies we talked about last time, permian, diamond offshore and they're in a difficult macro. >> the absolute level is strong and they've been good after two really good years. energy fundamentals are better than energy prices right now, and so i think that we're having a little bit of a digestion period and risk off -- a risk off environment has hit this group and has hit crude like it's hit everything else, but i still think there's great cash flow and great fire power for some growth in m and a as we move ahead do you like the names that we talked about last time, still or are you changing emfasphasis >> you mentioned perm

onresources and the 6 billion market cap and great inventory and likely a consolidation candidate and diamond offshore, we like the offshore dynamic and we think more spending is headed toward offshore as the u.s. shale plateaus a little bit, but as i said before on your show, being involved is the key issue and the stock selection always matters, but do you want to own energy yes, you do. >> do you think you'll be disciplined in terms of returning capital and "the wall street journal" has this article today and they're talking about nat gas and that article is the last thing investors want to see. >> yeah. i think from an investment perspective, these companies, it's becoming embedded that they can't just grow at any price and spend all of their cash flow, their returning cash to shareholders i think that's a discipline that's becoming ingrained and while gas is oversupplied in the near-term oil is not, and we

think companies will keep giving money back to shareholders as dividends or share repurchases and slow their growth to 1, 2, 3% a year and not 10 or 15. >> in that case we go back to the idea of capital return how much is on the table and will it compete with deal making so if we start seeing the major players doing that, does that interfere with capital return or does that become -- and they're rolling companies up to enhance that in the long run >> i think we'll see this commitment to returning half of cash flow back to shareholders i don't think that's going away. there will be a cash component and some with stock, most sellers want upside exposure and they're not going to sell for cash at these depressed, three, four times cash flow valuations and they will take stock and i think we'll see deals and ongoing dividends and share repurchase >> what about occi and what do

you think about warren buffett over the weekend >> who knows what's really in the mind of warren buffett occi, chevron and the companies are a play on traditional oil and gas and the very strong, fast blows that we're seeing there and also a bill of a call option on what's happening in energy transition. so i think that, you know, warren said he's not buyinl of occi, that's okay, it will still generate cash in the next four or five years and you get the play on energy transition, as well. the majors are a fine place to be and we like playing offense with the upstream producers. >> got it. looking for more upside. dan, we'll leave it there. dan pickering, pickering energy partners. coming up, jeff killburn is a buyer and he likes to eat there, too the ceo behind the company joins us ahead and with community banks pulling back on loans, family offices are jumping in

fill in the gaps we'll explore the ramifications. as we head to break, here's a look at the heat map, the dow industrials are up 82 with disney, amex and visa leading tpinway and we have decliners ouacg advancers and home depot is once again, one of the biggest losers we're back after this.

welcome back to "the exchange." the dow is down almost a hundred points points and s&p lower, and a ten-year-year-old down 3.5% and let's get to contessa brewer >> the driver who rammed a car into a crowd in front of a texas shelter has been charged with eight counts of manslaughter

eight people were killed and nearly a dozen others critically injured following the incident, police have not ruled out the possibility that the crash was intentional. at least 22 people are dead after a tourist boat capsized in southern india authorities say the boat capsized because of overcrowding search teams are expected to recover more bodies from inside the boat as they continue to try to see if there's anyone left that they can rescue the arab league has readmitted syria after a 12-year suspension and syria's membership was suspended in 2011 after a crackdown on street protests erupted into a civil war which has killed nearly half a million people all of the members endorsed the decision to re-admit syria u.s. officials have criticized that move. kelly? >> contessa, thank you contessa brewer. coming up, paypal has only beaten earnings six times out of the past 19 reports. will we get updates on lucent's

subpoena from the sec? and warner music group has made a big bet on ai already. will it pay off? we'll get the action, the story and the trade on all three names in earnings exchange and throughout may cnbc is celebrating asian-american and pacific islander heritage with stories of their influential business leaders and here is the podcast host farn, on osh spoiz. >> when you stay financially curious, that's when you can actually start to build wealth it is the ultimate foundation for getting answers and leading you down the paths that are well aligned with your goals.

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(funky electronic music) (narrator) invest in. believe in. move in. grow in. build in. thrive in. all in north carolina. ranked america's top state for business. ♪ ♪ welcome back it's time for earnings exchange and today we've got the action, the story and the trade on a payment stock, a beleaguered ev maker and an under the radar ai name we'll start with paypal which reports after the bell today the shares are up 7% this year, not bad, but still below 26% below their 52-week high with us is kristina

partsinevelos and craig johnson is here with our trade today welcome to both of you kristina, what are you watching? >> the first one is e-commerce, sales and weather and they can drive revenue because visa and q1 posted visa with no card present and that was up 9% the mastercard e-commerce spending pulse was up 11.5% and then you have amazon that has shown sales flat in q1 and that's point number one. point number 2, paypal versus applepay is paypal losing market share to competitors and how is paypal leveraging the brand and the third thing is the traction with merchant and the payment level previously paypal had a 75% traction with the top 100 internet retailers around the globe and 33% of those hundred retailers use a more advanced version of paypal. so will the penetration increase and last, but not least, but is

very important, the fact that they do not have a ceo successor. the ceo dan schulman is set to retire by the end of this year they still haven't named who is going to replace him, thinking about we're in may right now and you want a long-tomorrow plan for this company and there's no ceo. how do you do that >> how about elon musk, anybody? >> paypal, if anything, one prediction was the ceo of pinterest, bill ready. >> i was going to say rivalries? frenemies and craig, what would you do with shares of paypal here >> look at paypal and we're still 76% off of the all-time highs and we've been essentially stuck in a trading range and the lower end of the range is 71 and the upper end is 78 and if you look at the options market and the applied options move coming into tonight and woe're still nt going to break out of this range and it's a hold here at this point in time, and i think that there's probably stocks.

again, i'll just add you're below the 200-tha200-day moving average. >> and that's interesting that visa has announced the partnership. everyone is trying to figure out they all seem to make partnerships you can't escape anything they're all linked together. >> exactly and you saw with visa and mastercard that they were still with strengths and they're stealing market share. so who is left to lose that market share hopefully it's not paypal in this case. >> all right we'll leave it there thanks, kristina kristina partsinevelos >> last month, they produced more than 2,000 cars at their facility in arizona and the sec closed the investigation into lucid last week and for more let's bring in phil lebeau what are you watching? >> it comes down to production, cash burn and liquidity and on

the production side you talked about first quarter production the question is what are they going to say about 2023 full-year production previous guidance was 12,000 to 14,000 vehicles. does it look like they'll be able to keep that? in terms of cash burn they're expected to post another quarterly loss, but the question is liquidity wise, they had 4.9 billion at the end of last year and they said at the time that's enough to get us through the first quarter of 2024. is that still the outlook or have things improved or deteriorated and that's what people will be focused on when they report after the bell >> are you a buyer here? >> just from the perspective, this is not a fundamental call and we've been in a downtrend for an extended period of time and when i looked at the previous quarterly earnings print, the average move has been around 13% the options market is suggesting we could see a 6.6% implied move here

i think it's -- call it a trade at this point in time. call it a trading buy, into the print and the expectations as phil has mentioned are extremely negative in here if they don't come out as negative as expected with a very high short interest of about 22%, there could be a short squeeze here with the stock creating a trading opportunity and again, to be clear it's not a long term hold and just a treading buy. >> we are about $8 short the question i'm going to ask you is how are there still so many players and it's a capital intensive business ask borrowing costs are through the roof and are they thinking about who can make a go of it in the next couple of years. >> yes they have enough liquidity that nobody has been forced to the point of paying, saying i can't do it and is there a combination with another automaker out there and this week we get the pure ev

start--op, and tomorrow we'll hear from rivian the question is where are these guys in terms of their liquidity? they'll make it through this year what was in '24 and '25, that's really the question. the established automakers, kelly, they have more than enough liquidity and capital to last for a long time we're not going to see any consolidation in that area any time soon. >> as we show the stocks, rivian and fisker, and tesla. i'm thinking of tesla in particular jump out at you as signaling something you want to strongly buy or sell at this point? >> no. tesla still looks to be a longer tomorrow chart and still a distributional looking chart i've not been a fan of the ev companies at this point in time and it will take more time and a little bias in minnesota, not great vehicles when it's 20 below zero. >> it's that way for six, seven months out of the year sometimes? >> some people think longer. >> my brother lives there, i get

the updates. phil lebeau, we'll see you in a few more minutes we'll finish out with warner music group, i almost said warner brothers. they continue to see streaming music and audio as an attractive growth market and they've got an overweight rating and the company disclosed a big ai bet back in 2020, and julia, they've already been using it to file a bunch more lawsuit which is seems like the normal use of ai in america julia boorstin, i should add, what are the results >> i think this quarter for warner music group is the top and bottom line results are expected to be in line with where they were last year, and what's more important here is what we learned from the company about its digital revenue and its subscription revenue in particular are they seeing meaningful increase in growth in that subscription revenue growth and so much of the industry has shifted such as apple music and

spotify. the second key thing we're looking for here is the update on the music subscription market there's talk about weakness in the ad market and the question is what are they seeing there? are they seeing the ad market stabilizing which is the term that marki zuckerberg used this is a company run by robert kienzle who used to be the business officer for youtube he's been running warner music group for this year, and he has experience in things like ai and how to better monetize assets across all of these digital platforms. so he hasn't been there that long this is his second quarter that we're going to be hearing from him and it will be fascinating to see what kind of guidance he gives, particularly around things such as margins so listening closely for more insight to what robert has to say about the second half of the year does hoo see accelerated business growth which is something some analysts are looking for. >> maybe he has to do more to

convince you to be a buyer here? >> yeah. i'm not a buyer on this one at all in terms of the warner music group and it's 42% off its highs in the downtrend below the 200 moving averages and volatility around 7.8% and at this point in time the shorter term uptrend has been broken off of the october lows so from my perspective, this is a stock that it looks like a sell to me than a buy or even a hold at this point in time given the price action that we're seeing in the crossovers or moving average, and all points to the stock moving lower. >> this is hardly a technical question and i was asking for any of the music and i don't know which ones come to mind, but you'd think this is such a secular trend and everyone is streaming music all of the time and it's been a struggle on the investment side. >> it's definitely been a struggle on the investment side and i think to get players out there such as apple and apple

music and those things that are literally consolidating the market, and that's where i think you're seeing the pain coming in for a lot of these companies. >> julia, quick final word >> i just think i'd be watching what robert kienzle has to say they do layoffs and they cut 4% of the staff since he started and the question is restructuring the company and he did not cut jobs in the ai-focused space and they'll be featuring different revenue tremes and it is if he doing anything he learned on you toub to transfer to the company. >> we'll let you go, thank you and julia, our thanks to you, as bell coming up after the break the kre lower today and the likes of pac west and western alliance are some of the best performers. shares up 5.5 and 2.5% respectively there they've pared their gains to 1.5% gains right now, but with

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♪ ♪ welcome back to "the exchange." family offices are ready to assume the role of community bankers according to a new goldman survey while that might sound like an easy fix to tighter lending or a crazy idea, it does have some risks. robert frank is here with details. this was surprising to me. >> it is surprising and family offices are holding a lot of cash and they plan to put some of that to work into private credit a new survey found that near's a third of family offices plan to invest more in private credit and that makes it one of the top investments. private credit is where small groups of investors and institutions make their loans directly to companies without a bank the big attraction here is double-digit returns thanks to these higher interest rates and growing demand because small and

medium-sized banks simply aren't lending as much. >> i think it leaves room for a whole new group of investors to kind of come in and be really opportunistic in this space, and if you know anything about family offices, they love being opportunistic on dislocations. that's why we see higher cash balances >> the private credit market has tripled over the past eight years to $1.4 trillion and larger than venture capital and it also has risks as companies struggle to meet these rising debt payments and family offices are working with special managers or funds in order to start investing in the space and as for the rest of the money and family offices are holding 12% of their assets in cash. they have nearly half of alternatives and private equity and real estate, they've got about 28% in equity which they also plan to add this year and you can see all of our latest family office investor interview out today on cnbc pro. >> i am so glad you do this, because you get as many warnings

about what we do about commercial real estate and the rest of it, but i'm skeptical of the idea that family offices can off community banks. you're talking about people being willing. >> if i'm trying to start a local business say a cupcake decorating business and i wanted to get that capital and my bank isn't going to give it to me how would i know which family office to turn to. >> typically they'll be investing in medium to larger companies and they're not going to do the mom and pop cupcake business although that is a good idea. >> they're going through a pol so and but there are more and more family offices doing it on their own. this is not a regulated space. the returns have been high for a reason these are floating rate loans that have never been through a recession and so this will be a real test for those family offices that want to do it on their own. do they really understand the risk >> and does it blow up or not? >> i'm not saying i want to open a cupcake decorate business, it

is not my secret dream, but there are plenty of people trying to do that. i don't know. >> you're getting double-digit returns for a business and these people can't get capital anywhere else and with the banks not lending, at least this could cushion the blow. >> sure. >> for the broader economy if banks start pulling back robert, thank you. robert frank. still ahead, shares are climbing 26% this year for portillos. down about 12% on an unexpected loss we'll discuss with the ceo, michael oslo rhtftano,ig aer this to verizon. (cecily) so you got an awesome network... (seth) and when i switched, i got to choose the phone i wanted. for free. not bragging. (cecily) you're bragging. (neighbor) oh, he's bragging. (seth) who, me? never. oh, excuse me. hello, your royal highness, sir... (cecily) okay, that's a brag. (seth) hey, mom. i gotta call you back. (vo) visit your verizon store during our spring savings event and choose the phone you want, like the incredible iphone 14, on us.

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welcome back to "the exchange." little disappointing earnings pressure shares of portillo's reported a penny loss and delays in a few store openings the shares are up 26% this year, though, and googen haim upgraded them to a buy. joining me now is mic michael orsanloo, the ceo. i remember the ipo couple years back how many stores do you have now? >> we're up to 78. i think there's something

incorrect. we're not delayed on any stores, so we've got nine planned for the back half of the year. we've been thrilled with the new restaurants that we're opening you know, we opened recently in texas to, geez, some of the biggest crowds we've ever seen so we're super excited about the new openings and where we are in our development cycle. >> if i'm not mistaken, you're looking at the southeast, as well i was joking but kind of wondering, how does a kind of chicago sandwich shop who makes a lot of hot, delicious sandwiches, translate that to a warmer climate you know, does that translate? >> you know, it's a great question i think it's actually something that some people have been sitting on the sidelines wondering about. i'll tell ya, we have restaurants in orlando, florida, and now in dallas, texas, that are rivaling any of the restaurants that we have in chicagoland. not surprising to us at least, or to me, is the number one thing we're selling is italian beef the simple truth, a beef

sandwich made by portillo's, this delicious, shaved beef, beautiful sauce, gravy on crispy bread, it's a food that transfers and works everywhere i joke with some people, my, your restaurant is doing so well in texas why do you thinkthat is? i said, apparently, texas enjoys beef and bread >> right, what a shocker, exactly. let's talk about the nuts and bolts that are affecting people, and everyone is wondering about. i don't know if you saw tyson's today is down because they're facing input pressures but feel they can't push it along as much anything on the horizon like that for you >> we feel great about where we are. we reported a quarter -- i agree with you that the response by the market was a big sut surprig but we are up 16% on the top line we improved our restaurant level margins, 24% in terms of dollars. we've expanded margins we're up in transaction count. we had more people visiting portillo's this kwaquarter than

last year. i think it's because we're careful about protecting the consumer value proposition we purposefully did not pass some of our costs on to consumers'22, so as we go into '23, we're in a great spot i look at our value proposition every day. portillo's is at a really great price point. i think businesses that are doing that are in a good spot right now. >> are you done raising prices >> we announced that we raised a little bit in early may. we're just announced, a couple days ago actually, our prices have come down year-over-year just a hair. in terms of the price racise. we have announced no other plans to raise prices this year. we'll sit back and see how commodities play out, labor inflation, and see where the consumers' mindset is. >> only a little time left, but labor market, easier to get people, still hard are you hoarding, worried to let

anyone go? >> it's still very tough for a lot of reasons, but we're actually seeing a lot of improvement. we're seeing that there are people who are back interested in getting into work, and we're seeing the good people it's the quality of the people we're hiring is better than ever, which is exciting for us. >> in a weird way, maybe it's not a good sign for the rest of the economy, right it should be hard to find those people but i take your point as an operator michael, thanks for joining us today. >> thank you very much >> michael osanloo, ceo of portillo's. dow is down 63 points as we come off the lows of the session. nasdaq turned positive a moment ago. watch the regional banks, who is repairing gains from earlier on the hardest hit gains. that does it for "the exchange." pacwest and western alliance back up. it's still volume atile. sign up for my newspaper, cnbc.co cnbc.com/newsletters le> coming up, dom chu is in for

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♪ welcome to "power lunch. i'm dom anyoinic chu alongside y evans. president biden expected to announce new rules to have airlines pay customers for delays and cancellations if the airline is to blame. how will this affect the carriers, and it sounds great for passengers but will the cost be passed on to us anyway, kelly? >> that is the question. we will debate it. peloton's stock has been a disaster for a couple of years now, but one analyst upgrading the name today is it really investable now? we will see. let's check on the markets, though, as we see the dow down 55 points. s&p is up by a couple. the nasdaq is up 13. regional banks rebounding. pacwest up after cutting the dividend to preserve cash. off the best l