welcome to "power lunch. the big story today as the u.s. gets closer to that debt ceiling deadline and potential default, president biden is meeting with congressional leaders this afternoon. we'll look at the potential economic damage and the market impact plus, paypal plunges after its earnings report amid weaker guidance a firm reports later on today

and we'll dig into the potential payment problems with that bnpl trade. >> that was a tongue twister, dom. thanks markets up 15 points we were briefly positive a little earlier today we'll see if we can hang on to the gains this time. s&p down 8 nasdaq is down about 0.4%. boeing shares are higher that is adding a few points to the dow. the company booked an order of 300 737 max jets from ryan air worth about $40 billion before discounting. that seems to be over shadowing the somewhat weak delivery numbers for april. ba shares up 1.5%. palentir soaring, the ceo saying demand for the company's new ai platform is, quote, without precedent. a 23.5% and shopify lower today. atlantic equities downgrading them to neutral, valuation being the main concern the stock had an 80% run so far this year and is only down 2% today, dom.

>> the debt ceiling debate continues and rages in washington, d.c. president biden is meeting with congressional leaders on that issue later on this afternoon. however, with neither side expecting a quick resolution, worse case scenarios are becoming more prominent in the narrative. according to the bipartisan policy center, it says the u.s. government will be defaulting on its payment obligations between early june and early august. now, given this is an unprecedented event, it is hard to say exactly what could happen but here are what some experts say. under the contingency plan, placed back in 2011, there would be no default on treasury securities, and the payments would continue as they are due frozen federal benefits delaying payments to agencies and programs like social security and medicaid federal employees would continue to work unless we have a government shutdown. so here now to discuss the potential economic impact of the debt crisis is the chief global

economist at pgim and also former national security adviser for international economics under the biden administration so as we talk about just how worried everyone should be about the debt ceiling crisis, this is something many large scale investors shrugged off how big a deal is this >> dom, kelly, you talk about default. it is a dark and needless journey into the unknown no one has any basis to make confident predictions because it has never happened before. it is safe to assume the uncertainty alone would crush equities and credit markets. there could be major disruptions to the plumbing of the global financial system that liquifies the global economy even if the fed intervenes this could be seen as subverting the will of congress and putting at risk the independence that it cars to be sack row sanctuary. what happens to our borrowing costs and the dollar in that

scenario, when seven of our $31 trillion of debt is held abroad that is anybody's guess but this is a reckless, unforced error we should never make. >> if you take a look at the way things are shaping up now the reason many large investors are not as scared simply because we've never done it before and every time we've come close with the brinksmanship game we've found a solution what do clients have to worry about from your side of things with regard to what would eventually happen? is there a bad case scenario you're trying to kind of plan around contingency wise >> yeah. i mean you have to think about worst case scenarios all the time if you are managing risk. look, it seems as though the best we can hope for in the very short term is the signal we're headed for a short-term. but that is not a given. even a short-term deal has a price and sets a precedent in this case what would be the price of gaining a few extra months to negotiate?

maybe it is rescinding the unspent covid funds. but it is also the harmful precedent of horse trading u.s. default risk when it really should be nonnegotiable and totally off the table. what is the return, dom? does anything really change even if we get a short-term deal? the budget choices and constraints are the same four months from now we'll just be closer to another general election and that makes it even harder to come together. >> major investors have been in that one-month treasury bill saying i'll take 5% for a month or whatever it is. it is a lot if you have several billion. the opportunity wouldn't be there if we weren't talking about a possible default what do you think about the rest of the curve even in a one-month bill, okay you get your money back in a month. you are in three month, six month, you like the 5% but can't get it further out on the curve. what should you do if you are looking for a return where you want your money locked up or safe for a couple years' time?

>> in my view, conditions in the market have to get worse before they can get better. so if you're thinking about risky assets, equities, credit markets, i can see a lot of down side from here when it comes to short-term bills and risk free assets, kiddo, there is going to be a sizable economic effect if we go anywhere near the x date and beyond and so normally, you would expect those yields to fall and you can get some return especially when the risk premium being built in is as high as you're describing. again, this is a venture into the unknown. we simply don't know especially in the geo political context in which we are having this discussion we simply don't know what the knock on effects of the hit to confidence of this size could do to assets we don't normally think of as risk free. >> you mentioned before in one of your responses the elevated or rising costs of borrowing for the u.s. that carries through into

corporate credit as well especially for investment grade and to a certain extent of course high yield. can you take us through what exactly corporate treasurers should be thinking about right now as well as investors in corporate debt, whether it is high yield or investment grade >> well, every asset in the world is priced off of the risk free benchmark and so when that risk free benchmark becomes less risk free, there is a knock on effect to any cash flow you're discounting. look, it really depends on the scenarios that unfold until the x date and beyond. if we don't get a deal before the x date we are either looking at an area of prioritization or unilateral options that the executive branch doesn't want to use and are far from costless or we get default none of those scenarios are good for assets priced off of treasuries the only question is, what is the size of the repricing and for how long

and that is a journey into the unknown. no one can make confident predictions about it >> we'll see if our next guest is any more positive thank you very much. we appreciate you laying out the contours trying to figure out what will happen to the markets in the event of a debt default is difficult because there isn't a lot of historical precedent. we had 2011 when the similar brinksmanship resulted in a huge sell-off in stocks through the summer over the past three months debt ceiling hasn't done much at all to impact the market and the s&p 500 is slightly positive it is good to see you, ryan. maybe it is because there is still a decent amount of time to go or maybe people want to buy this event and therefore it is somehow not going to happen. >> i don't think it is going to happen the united states has raised the debt ceiling almost 90 times since the 20th century began 16 in the last 20. in my view this is political posturing. it is gamesmanship

it is something that must be done once in a while it is no different than parents telling their kids santa claus won't come if they don't behave better in my opinion i thinkthe debt ceiling will get raised and it as matter of if and not when. the outcome is obviously very severe and hard to plan for but there is no way they're not going to raise this debt ceiling. right now both political parties are acting in their own self-interests my hope is that at some point they come together and put the country's best interests first >> i am trying to think through the santa analogy because i can control what santa brings. right? well, i guess the point is this. if there really does need to be some negotiation between republicans and democrats over spending for say the next year or the next couple years, what are going to be the other opportunities to do that there is the debt ceiling. i guess at some point it is going to get rolled up into a discussion about government spening broadly speaking could the risk of a shutdown as well be looming again as we move

through the calendar year? >> you are probably right, kelly. the debt ceiling was put in place for a reason it was put in place, you know, back in the early 1900s. you know, you got to have a spending limit there is a reason it exists. it is just kind of perpetually gets, the can gets kicked down the road until, you know, some modifications are met. i think that is what is going to happen this time there will be some concessions on both sides and ultimately will put the strength of the u.s. dollar and reserve currency of the world ahead of the political persuasions negotiating these things and that will, you know, be a good thing for investors. right now they're just concerned, what does this mean and to us it doesn't mean you change any of your investment allocations. you know, i think you have plenty more to worry about in this economy. >> speaking of those things to worry about, even if you don't make wholesale portfolio changes because of debt ceilings or

government shutdowns , there isa general risk sentiment you have to position for. what exactly is your portfolio tilted toward right now and what exactly are you overweight or buying more of >> well, we're probably more overweight in bonds than we have been in a long time. the bond math is great getting yields of close to 5% or more, you just haven't had the opportunity in a long time savers finally can earn something in a money market. hopefully they're in a money market a lot of people are still sitting somehow in cash in a bank that is the easiest thing to do is get your money into a money market ladder some treasuries get some yield but you can't give up on your stocks stocks over the long term are the best long term creation of wealth that we have. and so in my opinion you keep your stock allocation, you probably want to reduce it just because there are a lot of head winds that we see. you are probably on the lower end of your equity range and liking the income you're getting

from your bonds. >> so, ryan, on the question about bonds, is this going to be a one time sale so to speak? you know, if you look at some of the yields you can get they are really good for one month, pretty good for six months, a little less interesting for a year and a lot less interesting for two or three years are people going to have as good options in maybe three, six, nine months' time when it is reinvestment time? >> it is a great observation, kelly. in my opinion the 75% probability that we get a rate cut by september is ludicrous. i can't believe that is what the curve is suggesting. in my opinion the investors are going to continue to get opportunities to roll their credit at 4%, 5% come fall and winter and that'll be good for a lot of investors i think the yield curve is pricing in something that is unattainable at the moment and that is a rate cut i just don't see it happening. >> t-bill and chill. has some legs to it. thank you so much. coming up, if the debt hits

the fan in washington, which stocks should people absolutely avoid? citigroup is out with their guide to trading the debt ceiling drama. we'll discuss in today's three stock lunch. plus affirm earnings after the bell today, after a rough 2022 the stock is higher this year but what impact will the continued banking crunch have on the buy now pay later bnpl trade? which stocks rely a bit more on looser lending speaking of payments let's get a quick check on our way to break on the negative side of the s&p paypal beating on earnings but the company's margins disappointing investors. on the positive side, devita the kidney care name beating on earnings up 14% today paypal down 12%. more on that in a bit.

welcome back to "power lunch. check out shares of affirm up 4% today as they are about to report third quarter earnings after the bell the stock was down 90% last year but has rebounded 29% so far since january 1. despite those gains it is important to note major head winds facing the company most obviously the bank crisis. the free money market is gone. companies like affirm, sizzle, all reportedly tightening credit standards. got to try to make a profit. and some customers are finding themselves facing denials.

the firm could face the same issues as paypal today as well that stock hit new heights during the pandemic and the price squeezed recently by a slow down in e-commerce spending and growing competition from the likes of apple it reported an earnings beat yesterday but issuing what many felt was underwheming comments about profit margins down 12%. let's bring in the managing director of fintech services andrew, good to see you. is paypal kind of a problem for the broader, what, payment space? >> i think paypal is a specific case and when we look at the bifurcation of the market between the legacy payment providers and some of the next gwen digital competitors i think paypal is struggling to maintain the reliability of its brand and it is blending down the take

rate and blending down the margin and more than i would have expected. i was disappointed to see that it is going to take longer than i would have thought for the strategy to play out. >> un"the wall street journal" is reporting on this a lot of people are talking about buy now pay later having to face characteristics where the base, if they're not making payments they are cut off from access to some of the products and have to shop around. they are going through their first down cycle how do you think they'll come out of it? >> i think when you look at paypal bnpl is a nice add on i don't think it is the key driver it is much more important for a pure play like a firm. the big picture to me is whether or not bnpl is a legitimate tender type and whether it is here to stay i believe it is. i think the scarcity value affirm offers is really interesting even more so than paypal which has its own set of issues as you mentioned some of them competition from apple, from shopify, other buy buttons of the major issues there. >> andrew, it is dom

is there a case to be made that the stocks so far this year have reflected a fundamental case for a tail wind? in other words, the banking crisis, the kind of more conservative nature of traditional banking has now made alternative or shadow banking a little more available and a little more kind of attractive and is that the reason why, because banks aren't doing as much of that business, so bnpl is filling some of that void >> i think bnpl specifically but i think more broadly and we haven't seen it play out in the stocks yet but i think over the next couple years we'll see the inability of traditional bafrnls to serve especially younger consumers in a digital way is really going to accelerate the growth for alternative banking providers. you can see the strength in their cash app performance i think bnpl is another product that will serve as an

alternative to traditional credit cards this isn't going to happen overnight. there are cyclical issues. there are going to be some growth hiccups which we've seen but i think yes the banking crisis holds the stark possibility of alternative products. >> affirm being one of your favorites you say the category leader, is it going to be a take out target how much of that do you think the stock has priced in right now? >> look, i think the industry is going to consolidate i think broadly some of the under performing native names will see consolidation capital markets have been an impediment so far this year. there is real scarcity value in bnpl there are really only two independent players left i think affirm is far and away the technology leader. it has the best customers with amazon and shopify so i think over time as the industry consolidates having that kind of technology as part of a bigger entity perhaps could be really

attractive and is certainly one of the reasons we stayed bullish on affirm despite the disappointing financial performance. >> can we take it up to a slightly bigger picture, talking about payments companies and fintech, square/block is 30, 40 some billion in market cap you've got paypal which is around maybe 80 or so call it in terms of market cap. there was a time when paypal was bigger than most of the biggest banks in america in terms of market value what exactly does it take for a fintech to get back those glory days compared to traditional banks? >> yeah. i don't think those glory days are coming back. what i do think is that you're going to see a slow and steady shift in consumer behavior and monday tiesation of products -- monetization of cash apps that provide some of what the banks do in terms of debit spending and perhaps savings and maybe even other short term lending products i think you're going to see a

convergence. i think you're going to see one of these next gen banking solutions steadily chip away at bank share i think you're going to see the stocks be relative out performers and banks continue to struggle to grow and i think over time these two industries are going to meet somewhere in the middle there is certainly a role for traditional banks but i think their centrality in the financial system is slowly being chipped away i don't see these stocks going back to pandemic highs those were really transitory. >> all right thank you very much, sir we'll see you soon. >> thanks for having me. appreciate it. further ahead on the show, nextera's next era one of the most valuable u.s. power companies making a huge bet on hydrogen banking on lucrative tax credits. that's next, after the break

conventional thinking delivers conventional results. at allspring, we break away with purpose. harnessing data-driven insights and boundless curiosity. we dissect the market from every angle. helping to build portfolios that redefine what's possible. because investing isn't one size fits all. allspring. purposefully divergent. (vo) this is a place for ambition. allspring. a forge of progress. a unicorn in training. a corner to build a legacy. a vision for tomorrow.

a fresh start. a blank canvas. a second act. a renewed company culture. a temple for ideas. and a place to make your mark. loopnet. the most popular place to find a space. (cecily) you're looking pleased with yourself. (seth) not to brag, but i just switched 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. verizon welcome back to "power lunch. markets right now just about flat if you look at the dow only down about nine points that is kind of tilting toward the higher end of the session. the s&p is down 11 points the nasdaq composite down 0.5 of 1% or 55 points we talked a lot about what is going on and what is going to happen in the economy the second

half of the year but one good indication possibly is forward guidance from actual companies themselves so let's get out to bob pisani at the new york stock exchange with a look at what we've heard so far this earnings season. bob? >> the important thing is there may be concerns about a recession, dom, but there is not evidence that it is showing up if the earnings guidance, at least not yet. let me show you where we are right now at least for the first quarter. the numbers are coming in better than expected. 77% of the companies and we're almost done the first quarter beating, above the average, usually the mid 60s. they're beating by about 7%. that is also above average they usually beat by 4% to 6%. overall the fears that we were going to have some kind of big miss isn't happening as for the second quarter it is all about who is guiding up and who is guiding down as dom mentioned, 35 companies with negative preannouncements, 27 positive that means raising it. so the negative to positive ratio is 1.3 believe it or not that is really good it is typically twice as bad

many more companies generally warn then say we'll do a lot better so far the body language of companies is better than it typically is looking forward to the quarter we're in right now where does that leave us take a look here the estimates for the numbers here aren't that bad q1 the numbers have been going up better we're slightly lower for the second quarter compared to say six, seven weeks ago slightly lower for the third quarter but it is almost statistically irrelevant and the fourth quarter is steady you put this all together and it is just about a wash for 2023. the estimates, the total for 2023 is earnings will be up about 1% maybe 1.5%. in a typical recession your earnings will drop 10 to 20% they dropped 50% during the great financial recession back in 2008 and 2009 so the bottom line here, dom, is we've got a flattish earning situation. we have valuations that are very, very high, above normal,

about 18 times forward earnings. none of this is signaling a recession. the market is positioned for a soft landing that may or may not happen but that is the way the market is positioned right now >> a base case for sure. bob pisani at the stock exchange, thank you very much. as we talked about, a lot of focus on this afternoon's meeting in washington, d.c. regarding the debt limit but a big report due out tomorrow as well on of course inflation. let's get out to rick santelli live in chicago at the cboe. which are traders more focused on, debt ceiling or elsewhere? >> dom, you know what? in one second i'm going to let you know exactly what those traders think. but before we get to that we had a three-year note auction today. 40 billion of those guys left the treasury coffers around 1:00 eastern. it was an amazingly strong auction. why are investors stepping up in front of cpi, in front of debt

ceiling to buy short maturity? if you look at a longer term chart 2s and 3s are the only maturityies that took out in march the high yield from the fall right here, hovering near 1.5 year low pay attention to that. let's do this right. all right, gang. what are we more worried about in the morning cpi? raise your hand. or the debt ceiling? [ boo >> well, i think the answer is quite clear. and to that end let's go to michael. >> hey, rick good to see you. >> thanks for joining me today what do you think? what is the issue to pay most attention to, debt ceiling or cpi? >> i think you got to say cpi. it has been moving markets of late and means a lot to the fed and tothe amount of appetite, interest rates, the equity risk portfolio. i think right now we've been seeing these moves in the s&p

area in the morning when the cpi happens these are the out sized moves in the morning i don't expect anything new tomorrow >> i got you we have the small vicks, big vix. it is hovering near the lowest level since last fall. any thoughts >> we had a big rally last week and in addition had really modest moves in the s&p 500 since then we are down 10 points today. we haven't had big moves overnight. there are big things on the horizon but you have to say the realized volatility in the market is pretty low and the vix is reflecting that we'll see what happens over the next month of course as it stands right now i don't see any reason for the vix to be trading any higher than right now. >> year over year is the biggies. headline and core. last month core was out of line and didn't move down every month the way headline year over year. which one do you think is going to be the biggy tomorrow >> i mean, right now, consensus is 5%. if we come out of line of that, if we pop higher, as you said, we haven't seen that, it could be detrimental to the market that said, we could be right in

line this could be actually a nonevent if we stick in line and this trend continues but we'll see tomorrow morning at 7:30, you know, chicago time is when it is all going to happen. >> oh, yes and i'm teasing 24 hours ahead of time. you viewers out there i have a big surprise guest from this floor tomorrow make sure you don't miss it. kelly, back to you and dom i hope i answered your question, buddy. >> who is the guest? i don't even know. >> i'm going to watch "squawk box" tomorrow morning >> i love the poll with the sign appreciate it. let's get to bertha coombs for the cnbc news update. >> hi, kelly here is your cnbc news update for this hour. ukrainian president volodymyr zelenskyy said russia has intensified its attack across the country out of frustration that several ukrainian cities including bakhmut have not fallen to russian troops amid the renewed russian air strikes and attacks the u.n. has confirmed nearly 8800 civilian deaths since the war began caution, the true figure could

be much higher the white house issuing its first statement since the death of jordan neely on a new york subway last week a spokesperson called neely's death while in the chokehold of another passenger, quote, tragic and deeply disturbing. the white house also called for a thorough investigation president biden will be in new york city tomorrow for a pair of fundraisers, his first since launching his re-election campaign and the dispute between china and canada continues to escalate after canada accused a chinese official of targeting a lawmaker and his family. the two countries have now expelled diplomats and tit for tat moves after beijing denied the allegation and responded with what it called reciprocal countermeasures. some tensions to watch there, kelly. >> bingo thank you very much. bertha coombs. still ahead on "power lunch" cnbc is out with the 11th annual disrupter 50 list where we

highlight private companies chasing some of market's biggest opportunities. making a big impact not just ai. also green tech. we'll hear from a company whose clients include constellation brands among others. lily! welcome to our third bark-ery. oh, i can tell business is going through the “woof”. but seriously we need a reliable way to help keep everyone connected from wherever we go. well at at&t we'll help you find the right wireless plan for you. so, you can stay connected to all your drivers and stores on america's most reliable 5g network. that sounds just paw-fect. terrier-iffic i labra-dore you round of a-paws at&t 5g is fast, reliable and secure for your business. asking the right question at&t 5g is fast, can greatly impact your future. - are, are you qualified to do this? - what? - especially when it comes to your finances. - are you a certified financial planner™? - i'm a cfp® professional. - cfp® professionals are committed to acting in your best interest. that's why it's gotta be a cfp®.

your record label is taking off. but so is your sound engineer. you need to hire. i need indeed. indeed you do. indeed instant match instantly delivers quality candidates matching your job description. visit indeed.com/hire

cnbc is out with our 11th annual disrupter 50 list where we highlight private companies chasing some of the market's biggest opportunities. artificial intelligence and automation made a big splash on this year's list with nearly half the featured companies focused on those technologies. with chat gpt becoming a household name it is no surprise the number one slot went to open ai the company behind chat gpt. as more public companies go green, it is no wonder environmental technology was also prominent on the list this year take monarch tractor valued at more than $270 million monarch makes the world's first ever, ever first fully electric driver

optional smart tractor here with more is the monarch tractor ceo with our very own julia boorstin who spearheads our disruptor coverage julia, over to you >> thanks so much, dom thanks so much for being with us here today we have your autonomous or driver optional electric tractor behind us, about a mile from your office. we are here on a vineyard where your tractors are working. explain to us both the environmental and business advantages of these new vehicles >> julia, farmers around the world are struggling with high labor costs and also having to meet the new sustainable metrics coming down. what our all electric driver optional smart tractor does for farmers is save on diesel fuel, also is more efficient on the labor side, but decreases emissions that come from farm equipment. it will power not only the tractor but the other equipment on the farm and more importantly on the sustainability side

looking at a reduction in chemicals thanks to using all of our technology on the tractor including a lot of ai and machine learning technologies. >> talk to us about ai obviously artificial intelligence is a huge trend on the series disruptor list. is ai how the tractor moves around the vineyard and knows how to go? >> absolutely. when we started this company our goal was to build a tractor every farmer in the world can afford to use and have a difference made on the farm. we use cameras on the tractor and using ai our cameras recognize what is happening not only on the tractor but on the implement behind it and also what is happening on the farm. all of this ai allows us to train the tractor very quickly so we can go into new farms and new crops and within days help the farmers start to automate operations and give them alerts and insights to make them more efficient and sustainable. >> dom, you want to jump in. >> thank you so much you know, i am watching intently

because i have a special emotional tie to where you guys are sitting. i was born and raised in the east bay in san ramon not far from where we are sitting right now. livermore was just cows and a little agriculture when i was growing up how important is it for your company to be doing this kind of technology and looking at california as a way to show what exactly autonomous farming can be like? >> dom, a great question we at monarch are turning liver into the center of ag tech for the world over like you mentioned, farms and farmland is close by but we are also very close to silicon valley where ai technologies are developed. autonomy was developed here. electric equipment and cars were developed here so that makes this the logical location for us to develop these technologies and deploy them but, also, we are at a vineyard here in livermore making a difference on the farm both on

giving them more efficiency and savings but also making the farms more sustainable so we are very thrilled to be at the forefront of the agriculture and food ecosystem revolution here >> we mentioned you have some partnerships such as with constellation brands these vehicles are clearly expensive. what is the plan to make them widely accessible? what is your plan to get these into more farms, more vineyards? >> julia, our tractor while it is a little more expensive than an arm or diesel tractor actually pays itself off much faster we are seeing pay back for california farmers in under two years just using all the ai and the smart technologies on the tractor. even including the higher price that comes with being an electric tractor brands like constellation now have to meet and report on esg goals as part of their metrics and the fact that they can use this equipment on the farm, to see the cost savings, meet the esg goals is a win-win for

constellation but all its consumers as well. >> reporter: so interesting how the tractors being ev and autonomous are collecting so much data that the farms or the vineyards end up being these connected vineyards in a whole new way. we have to leave it here but thank you so much for joining us and telling us about monarch tractor and everything that is ahead. i'll send it back over to you guys. >> julia boorstin, thank you very much. and of course to monarch tractor as well. make sure to stay tuned for our next disruptor 50 spotlight, 5:00 p.m. eastern time today we'll sit down with adrian gomez the co-founder and ceo of google linked chat gpt rival -- cohere. tomorrow we'll talk to number 25 on the list. keller rinaudo clifton the co-founder and ceo of zipline another interview you won't want to miss. we have disruptors up the waz oo. >> zipline

interesting. i thought julia would get on the tractor. 45 minutes outside san francisco. >> farmer driver optional. >> she doesn't have to get on the tractor. it drives itself. coming up wti crude lower today and pacing for the worst month since november we'll bring you the latest on this trade including a key player doubling down on renewables cnbc is celebrating aapi heritage through may sharing stories of business leaders in the community. >> what i would love for people to learn and take away from my own journey as an iranian american is that when you stay financially curious that is when you can actually start to build wealth it is the ultimate foundation for leading you down the paths well aligned with your goals ♪ opportunity is using data to create

a competitive advantage. ♪ it's raising capital to help companies change the world. ♪ opportunity is making the dream of home ownership a reality. ♪ ...and driving the world forward to a greener energy future. [applause] sometimes the only thing standing between you and opportunity is someone who can make the connection. at ice, we connect people to opportunity.

if you have this... and you get this... you could end up with this... unexpected out-of-pocket costs. so if you're on medicare, or soon to be, consider this. an aarp medicare supplement insurance plan from unitedhealthcare. medicare alone doesn't pay for everything. and what it doesn't pay for, like deductibles and copays, could add up to thousands of dollars. medicare supplement plans help by paying some of what medicare doesn't... and making your out-of-pocket costs a lot more predictable. call unitedhealthcare now and ask for your free decision guide. medicare supplement plans also let you see any doctor. any specialist. anywhere in the u.s. who accepts medicare patients.

take charge of your health care today. consider adding this. call unitedhealthcare today about an aarp medicare supplement plan. ♪ ♪ call unitedhealthcare today about an aarp medicare ready for the big show? buckle up. ♪ ♪ i'm not gonna lie to you... that was awesome! welcome back to "power lunch. oil is trading, just closed for the day. let's get out to pippa stevens for the numbers. over all it has been one of the weird last few days for oil

price action. >> and the weirdness continues today. heading into the close, oil reversed on a 2% loss from earlier today and turned positive there doesn't seem to be a catalyst for why i've been talking to people. there is some chatter about the d.o.e. and unrefilling the spr but there is not a whole lot new there. secretary granholm said before they will look to refill the spr once the maintenance is over and once it makes sense from a price perspective. that could happen as soon as later this year but did not say it will happen a lot of people seem to be pinning their hopes on that at this point because it was thought that wouldn't happen for a few years but it doesn't seem like there's been definitive language from the spr, sorry, from the d.o.e so kind of different forces going on here just speaking to the wacky trading recently >> not to take this totally off course but can we talk nextera for a minute this is such a fascinating -- the market cap is astonishing,

performance spectacular. are they getting totally out of fossil fuels what is happening with the renewables push? >> basically nextera outlined a new strategy whereby they will abpure play renewable energy company. this is a strategic shift because they had plans to become 100% renewables. it will be more relevant for climate focused investors. this is low tide about simplifying its financials there were worries the company might have to issue stock. now it can use the proceeds from the pipeline sales to cover expenses with parent company nextera also suspending the incentive distribution rights fees typical in a limited partnership. shares are up 16% the last two sessions with key banks saying the move restores investor confidence while jpmorgan upgraded the stock to overweight clearly that shift to renewables is beneficial but also it is about the financials as well >> impressive. quite a run. i know this year is challenging.

>> the parent company for sure. >> thank you we appreciate it. when we come back, as the fight over the debt ceiling and federal spending ramps up citi says beware of stocks with high vemenue coming from the gornnt we'll trade the names that made its list in three stock lunch next

welcome back time for today's throw-stock lunch. as congressional leaders prepare to meet with president biden today over the impending debt limit, government spending and contracts. the list has a lot of health care and defense names we're going to trade three of them today joining us to do that, oh, let's start with the stock down 19% this year, but citi says the defense sector intends to recover the most when a spending resolution is released here's david wagner. it's good to see you let's start with northrop. what would do you with the stock here >> great seeing you too, kelly i think one of the greatest things about outside of what kathy warden has been doing over there is their portportfolio if you dive into where they have space, hyperdeterrence, and the defense budget is moving forward. because, you know, if you look

at some peers and i don't want to call anyone out, but cough, cough, martin. they have a lot of dependence on the f-35, and an area of spending that's lower on the list of importance if you want to heed to a quote from "animal farm," all animals are created equal, yet some are created more equal you may find some aerospace companies are positioned a lot more favorably than others and that would definitely be not i think it wouldn't surprise me if you look three or four years down the road from now that we're probably still going to be talked about the top line growth, and i'm not sure that can be said about at their peers. >> general electric is up 55% this year as citi puts it with exposure, and do you think the valuation is getting a little hard this company's breaking up fully over the next couple of years. >> oh, 100% it is. it's the best name in the industrial space right now,and you know, i do think in my

commentary, i'm going to come out sound a little bit bullish i love the transformative story. i also love the actions taken by the ceo. how can you dislike a strategy where the ceo says their favorite metric is free cash flow and earnings is just a by-product, but given the recent run you mentioned, i'm on the sidelines based on valuation such as the s&p 500 where it's historically traded a 10% premium. i think that a lot of this transformative story is being priced in right now. it's, like, since january was the official start date that ge got out of that, you know, deal purgatory because that health care spinout was definitely executed quite well, and they're in the homestretch for that, but can't get past valuation >> just on boeing, what an that ryan air order >> i think if you did a flashback to say, three, four years ago, i don't think i would ever say that i was bullish on boeing, but, you know, the dynamic has definitely changed i may not be fully bullish right now. i'm definitely get a littlemor

optimistic. >> david wagner, a pleasure, sir. thanks for your time today for more on the stock city, things are more exposed to the debt ceiling for better or worse, head to cnbc.com/pro. we have a lot of stories we want to get to we'll see how ma wcafit nye n in the time we have left. that rapid fire is coming up after the break. ♪ the biggest ideas inspire new ones. 30 years ago, state street created an etf that inspired the world to invest differently. it still does. what can you do with spy? ♪ ♪ lomita feed is 101 years old. when covid hit, we had some challenges. i heard about the payroll tax refund that allowed us to keep the people that have been here taking care of us. learn more at getrefunds.com.

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. ♪ (upbeat music) ♪ ( ♪♪ ) with the push of a button, constant contact's ai tools help you know what to say, even when you don't. hi! constant contact. helping the small stand tall. welcome back, everybody. 3 1/2 minutes left in the show, and there are so many stories we want to get to let's not waste any time

the clock is ticking with so much volatility in the banking space, let's start here. the regional banks which bore the brunt of the recent blow are likely to see bonus declines as low as 20% this is from johnson associates data a split reemerging. >> what's curious is what the aftermath will look like, what this does to talent and management in the coming year if people know they can only count on a certain amount of money to make over the course of the next year >> exactly let's talk a little bit an bank of america. they say the number of customers contributing to 529 college savings plans have jumped 30% since 2019, and that's thanks, in part, to covid-era stimulus cash on hand the biggest jump came from lower income households at nearly 50%, show higher income households still make up the majority of the participants there is a gap, but direct government payments allow certain people to contribute

more to college savings plans. >> i won't get snarky. the government is giving people money to pay for a tuition that's high. at least they're saving for college. >> tuition inflation because of direct government. >> it seems to just keep going round and round. here we go. music streaming service spotify the pulling tens of thousands of tracks from their platform there were signs of suspicious streaming activity, bots being used to boost listener figures and the platform has been battling a wave of ai-generated songs, that viral drake weeknd one. this is the future as long as people can get compensated for it. >> i just don't know -- to me, i'm a little bit more scared of the fact that i could not tell the difference between an ai-generated song versus what a legitimate one is. >> it wouldn't matter as long as drake got paid either way or the producers is part of the ecosystem. >> i wouldn't care as long as i was entertained, but as a content creator, i would have to

think about it. >> ruthless. disney is unwinding pa pandemic-era changes it's unwinding the reservation requirement for dining in parks. you can buy a ticket for a specific date. it's also bringing back the dining plan. disney says the changes were made in response to guest feedback, and i've gone this year with my friends and family. that genie-plus fast pass/lightning lane thing is crazy with regard. you need a full-time job just to understand how to navigate the rides and the lines. >> i don't think we're ever going, and i'm okay with it. most people are happy to leave a tip in recognition of excellent service, but what if there's no service at all? tips appearing in checkout areas where you don't even interact with anybody customers are feeling anxious because of this, and there was a term for it. >> i'm not sure what it was, but here's what i will tell you. the guidance i was given -- because i'm normally a very generous tipper. the guidance i was given by a financial expert was, unless it is a tipped position like a

server, then you shouldn't feel compelled about having to leave something -- >> am i supposed to ask somebody are you a tipped position? should i pay you. >> i don't think a cashier is a tipped position. >> i'm not going to worry about it no tip just give me that receipt. >> and walk away in shame. >> thank you so much >> thanks for watching "power lunch," guys. >> "closing bell" starts right now. thanks so much welcome. i'm scott wapner at the new york stock exchange this make or break hour begins with the debt ceiling duel the president, the speaker, and other congressional leaders meeting at the white house in less than an hour. no resolution yet is in sight. stocks so far, taking the whole mess largely in stride here's your scorecard with 60 minutes in go in regulation. we seem to be waiting on tomorrow morning's cpi release before making the next move. there's your picture dow has been down five in the past six days. the fed, regional banks and earnings