the company profile tool, in thinkorswim®. yes, i love you!! please ignore that. td ameritrade. award-winning customer service that has your back. i'm tyler mathisen glad to have you with us coming up the strength of the consumer retail earnings reports creating a bit of a worrisome picture but former fed chair ben bernanke says a soft landing in the economy is still very possible plus the view from the c suite cnbc gathering business leaders for a ceo summit in california we'll talk with the ceo of crocs about all the issues everybody's talking about. debt ceiling, economy, dealing with china and trade and more. kelly. >> looking forward to that hi, everybody. first let's get a check of the markets which have turned a little bit more negative in the last 30, 45 minutes or so but

the dow's down still less than 100 points the s&p is down 3/4 of a percent at 4162 and the nasdaq a little worse than that. it's quiet on the regional bank front, though. pac west jumping western alliance higher. comerica, zion's in the grebe west alliance is slightly lower i should say and we're also seeing continued gains in some momentum names, palantir, carvana sxwrup start which had been on a monster move but is actually now down 2 1/2% carvana up 7% palantir a similar amount. if we show you the gains so far in may some pretty impressive returns and lots of earnings movers in retail to mention as well here's of course the month to date gains as we mentioned upstart has nearly doubled incredible stuff on the retail front, though, a little bit different story let's get over to courtney reagan where lowe's investors are shrugging off a dour forecast >> shares of lowe's slightly higher here and it's perhaps because it was a bit expected after we heard from competitor home depot and their results lowe's did lower their expectations for the full year

for earnings, revenues and same-store sales but it did beat the street's first quarter estimates for erin aings and revenue. like home depot lowe's was hit by lumber deflation, bad spring weather and lower discretionary purchasing leading to disappointing comparable sales for the quarter. dick's sporting goods beating, missing slight liu on the same-store sales growth. the sporting goods retailer reaffirming its full-year forecast and looking for margin yum prochlt. executive chairman ed stack tells me he's cautiously optimistic for the balance of the year dick's sporting goods shares losing momentum down 1%. b.j.'s wholesale also reaffirms full-year guidance counting on continued strength and n. grocery and improvement in general merchandise particularly apparel and toys as we move through the balance of the year. investors, though, not convinced. shares down more than 7% bj's first quarter revenue was light. comparable sales also much lower than expected. earnings did come in in line tyler and kelly? >> so what conclusions if any can we draw, courtney, about the overall state of the consumer? when you look at lowe's and home depot i suppose you can say they

are particular kinds of retailers, particular cases, they were both affected by lumber deflation, which could affect their revenues. >> yeah, that's true but i think there also is some weakness generally in the home category even tjx, which of course has marshalls and t.j. max but also home goods we even heard walmart and target call out home as a soft area i think we all did our homes, did what we needed to do during the pandemic that part was done also some pull forward in some sporting goods equipment, outdoor things that's correct what dick's said as well also during the pandemic, how many kayaks does one family really need. and of course we do see some weakness in apparel and? discretionary spending and there's some question again is that because we went out and spend so much when we did finally re-emerge or is that because you're feeling a little tighter with a possible recession? i think there's a lot of question marks there so a lot of cautiousness for the rest of the year >> or how many trips could my wife jo make to home goods never enough

>> never enough. and don't question her when she comes home >> i do not. i sit in the car all right, court, thanks >> thank you >> meanwhile, lots of opinions on the state of the economy and what the fed needs to do to engineer a soft landing. one opinion from a former fed head seems to carry a little more weight. let's bring in steve liesman with more on ben bernanke's thoughts steve? >> yeah, kelly, thanks two of the world's top economists in a paper that looks at the sources of the pandemic era inflation conclude it's possible to escape without a massive rise in unemployment, though unclear how probable that is former fed chair ben bernanke, he joined with former imf chief economist olivia blancher, they conclude in a brookings paper presented this morning that supply shocks combined with government stimulus, loose monetary policy and a consumer preference for goods, that's what caused the inflation outbreak we kind of knew that it was not at least initially driven by tight labor markets. but they say that's changing now and does require higher interest rates. quote, the portion of inflation which traces its origins to overheating of labor markets can

only be reversed by policy actions, they say. the more interesting idea, how much does unemployment have to rise to conquer inflation? the two have at least one optimistic scenario in which job openings decline without a big rise in unemployment the paper says for reasons not fully understood the job-worker matching process have become less efficient if that shift were to be fully reversed, that is, back to the way it was before the pandemic, it could bring down inflation over time without a significant increase in unemployment an immaculate disinflation alternatively if you have high job openings unemployment may have to rise higher and stay there to loosen up the leave market in a conference on the paper this afternoon at brookings i asked bernanke about this. he said it's unclear it's going to happen but, quote, so far so good for the immaculate disinflation folks kelly? >> steve, stick around because in addition to all those concerns about the consumer and the fed and the economy we've got the debt ceiling drama that doesn't seem close to a conclusion how is it all impacting markets?

let's ask phil orlando he's chief equity market strategist with federated hermes good to see you, phil. and how concerned are you on a scale of 1 to bernanke >> kelly, thank you very much for having me back i'm concerned. there's a lot of things out there. certainly the debt ceiling is near the top of our list and here's the market sitting up at the 4200 level. so you wonder, stocks have had a phenomenal run here. they're up 20%, 21% since their mid october bottom to some degree they may be overbought and you've got a number of concerns like the debt ceiling, like the slowing consumer, and you wonder what's going to give. and we're watching as intently as anyone. >> you say that you expect this year to look in the stock market like a barbell with a good start and a good finish. and then that would suggest that between now and the end of the year let's say, mid october to the end of the year, between now

and then sort of muddling through or maybe down if the economy shows signs of going into recession why do you think we'll end on an up note? >> so counterintuitive that we have negative gdp prints forecast for the third and the fourth quarter and we're also concerned that the debt ceiling situation that's dragging on right now might resemble what we saw in the summer of 2011. president obama and a republican congress the stock market, remember, dropped about 10% or 15% of the first couple of weeks of august. in the entire third quarter of 2011 the stock market was down about 20%. now, cooler heads prevailed. we successfully resolved the problem, lifted the debt ceiling. stocks rallied by 17% in the fourth quarter of 2011 we could be looking at a similar situation here in addition, we're forecasting negative gdp prints in the third and the fourth quarter

the federal reserve we think has probably hiked rates for the last time in the may 3rd meeting. we think they go on pause on june 14th. we think they pause until sometime next year so if we get negative gdp in the third and fourth quarter the fed probably comes in sometime during the fourth quarter this year and says you know what, if the economy is trending toward recession we'll probably cut interest rates at some point next year. the equity market is a forward-looking discounting mechanism. probably rallies on that ahead of the cuts. and that's how we end up with a barbell-shaped year. >> although steve, the fed has done everything it can to convince markets they won't be cutting this year. >> no, not this year but phil's idea of cuts next year is not an out of sample forecast the fed has cuts actually built in and the market does as well we're just arguing over, you know, the calendar year that it happens in i don't think, though, i guess i would push back a little bit on phil because i keep asking fed

officials this question, what would you do if inflation remains high and the economy were in recession? and they're not so quick to say they would cut that's a big difference. it's a bit like, you know, flying -- or doing acrobatics without a net in this case that would make things different. but the idea, guys, in the bernanke paper with blanchard. that maybe we can get out of this with a soft landing without a big rise in the unemployment rate it's a potential big deal. i wish they were more definitive like hey, it's going to happen but what it requires in part is going back to of the some things that were the way they were before the pandemic. and i don't think those are crazy ideas. the idea that the job matching process has become inefficient and we just have to become as efficient as we were before the pandemic, that doesn't seem crazy to me. so there are some reasons for opt optimism there are some reasons if you follow goldman sachs, alan sinai is another economist who says we might be able to get out of this

without a recession. there's not i guess total doom and gloom on the horizon from my perspective. >> phil, react to that and particularly in the context of your call that we're going to have negative gdp prints in the next two quarters, which is technically the definition of a recession. >> well, but we had two negative prints last year and because the domestic final sales were still positive we were not in a recession. one of the things that concerns us right now is the april retail sales had a nice rebound it was the first sequential improvement in retail sales in three months and only the second increase in six months but because of the rotating nature of passover and easter we like to look at the mashup of march and april. mapril sales they were only up 2% year on year this year versus 8 1/2% in mapril last year so as we look ahead to the other two important retail seasons coming up, back to school and christmas, if those numbers are

similarly low to mid single digit and because the consumer accounts for 70% of gdp, we could be looking at a marginally negative third and fourth quarter. and that's disconcerting now, vis-a-vis the federal reserve, remember, their march s.e.p. is forecasting the rate of unemployment to go up to 4 1/2% by the end of this year we're at 3.4% right now. if that's right, if the rate of unemployment goes up by a full percentage point every o'the next eight months, over the course of history whenever that's happened the economy has gone into recession. there's a new s.e.p. coming out on june 14th let's see if the fed changes its forecast and sort of pulls back from that 4 1/2% number. >> all right we will find out phil orlando, steve liesman, thanks >> thank you >> appreciate it all right. let's see how all the stuff we just talked about about the economy, the fed, the debt ceiling, is playing out in the bond markets we know the two-year yield getting back to march highs. rick santelli standing by at

cbo. react and take us forward, rick. >> alls i need to tell you is we had a 21-day cash management built t bill auction today you know what the yield was? 6.2% holy cannoli, that is a big yield. and if we look at two-years as reference they're on pace for the highest yield close again since the second week of march and 30-year bond yields. did you notice this morning they crossed 4% intraday? they've done that a few times. but we haven't closed above 4% going all the way back, yes, you guessed it, to november of last year finally, one thing we want to point out, when it comes to t-bills, what's going to happen after we get a debt ceiling? let's go talk to a trader. paul how's it going, wig guy? >> hey, rick, how are you oing >> debt ceiling is all anyone wants to talk about. give me your rendition of that story. >> well, you know, you're talking about that auction

the market's definitely paying attention to the debt ceiling, but we see down here vix isn't elevated you know, it's not really busy yet. people are not really pricing in the worst case scenario right now. >> what i find is that everybody's upset about it no matter what your political persuasion is, everybody's upset. i hear things like they need to grow up. and if you're going to start using economic sanctions because you're the world's superpower, the reserve currency, all of this stuff isn't helping >> well, it's not. but i'm going to leave it to you to scold the people that are running the show right now that's not really -- >> do you think they're actually going to get it done on time and on budget? are we going dove this little omnibus window where everybody's pulling their eyelashes out? >> well, it's hard to know what is on time, rick there's a lot of different projections of when the x date is so that's actually interesting down here. that's the one place where people are really able to take advantage of these short dated options to trade a lot of

calendars and make sure their risk is -- >> yeah, tailored exactly. and as for june 1st i am sure treasury secretary janet y yellen's a sharp one she probably has i couple of days, a week in her pocket think that will make a difference final thought. >> yeah, she's been on the other side of this in her past life. so i'm sure she's going to do her best to make sure we don't see a catastrophe. >> there's one job i'm glad i don't have paul, thank you for being our guest today. kelly, back to you >> great stuff, guys thank you. coming up, microsoft stepping on the gas to keep its lead in the ai race. the company announcing concrete ways to use all of these innovative tools we have those details coming up. plus a quick power check before we go to break moderna leading the s&p 500 as the company is trying to transition to the post-covid world. headlines of a new wave sweeping through china are boosting the stock 10% today. on the other side of the biotech coin is edex labs. the worst former in the p s&500 today with almost a 6% drop.

we're back after this.

microsoft taking another step forward in the ai race today detailing plans on how to intends to use chat bots to help its customers. stove kovacs is here with the details. oh, goodie, chat bots. >> microsoft announcing a slew

of new products as part of its build developers conference. of course everything was ai colored. big announcement today, bing will be the default search engine in the chatgpt app. this is one of the most important things microsoft wants to do with ai expand its search market share against google. few signs of progress there since announcing the ai-powered bing just a few months ago but incorporating into chatgpt puts bing front and center in one of the hottest apps right now. just last week it came out on the iphone and is sitting at the top of the app store also announcing plug-ins for bing chat. thinks think of these as ai apps that tap into ai's capabilities. companies like spotify, kayak, instacart, they're already on board. and then windows it's also getting microsoft's ai co-pilot features. this is coming to windows 11 very soon. now, overall if you're keeping score in the ai race between microsoft and google, microsoft is proving it's still ahead when it comes to actually shipping products though google did tease several

upcoming ai products at its own developers conference a few weeks ago, guys. >> so bing uses chatgpt. >> we put some chatgpt in your bing and some bing in your chatgpt. >> is that what it is? they're going to have bing in their. >> it's all together they're calling these plug-ins basically the way i think is the easiest to think about it is they're ai apps. these third parties including bing can tie into this open ai technology that's partnered with microsoft and open ai. >> i'm a first-grader at this. what do i use bing for and what do i use chatgpt for in other words, one is purely a search engine. >> right >> the other is an ai-infused what search engine? >> exactly the way they're pitching -- so for the chat bot part of it, it's basically -- think of it as a tool to help you do something. i need to write an essay i need 20 come up with ideas for a kid's birthday party i need to go on a trip, help me come up with ideas for that. also sometimes, you've probably used chatgpt before. it doesn't always give you

results directly from the web. so you might want to say okay, what does the rest of the internet have to say about this? i heard from chatgpt well, bing is going to now be the default search engine for that in theory google can build itself into this too but right now bing is going to be the default because of that relationship with microsoft. >> okay. >> you also read a little bit of the kind of competitive landscape into sundar pa chai's very focal views on "60 minutes," the f.t. op-ed about building rules for ai. is it in some way his attempt to say we may not have been first but we're going to get everyone's stamp of approval >> you could read into it that way. but he's also mimicking a lot of the messaging that we heard from sam altman on capitol hill last month, that we heard from the ceo of microsoft they're all asking for regulation whether they believe they want it i don't know if that's true they're plowing ahead. i know senator ted cruz was on "squawk box" today and he's one of the people who are going to be making the decisions how to regulate these things.

he effectively says we don't know i talked to him off camera for a little bit and he was like, this is out of our hands and no one knows what they're doing right now. and that was very blunt from the senator. >> i also think of section 230 we always talk about what we did or didn't do with social media even the legislation at the heart of the rise of the internet and social media continues to be, you know, controversial today. so it just feels to me like they should wait to be very sure what kind of legislation they want before moving ahead with it. i understand people say you can't wait, but there's a bigger danger in doing this wrong i would think than in not doing it at all >> exactly it's also a clicken and egg problem because we don't know what this technology's going to be capable of a year from now let alone ten years from now shou do you regulate something you can't foresee? at the same time again, these companies are plowing ahead. that's why you here some people, let's pause, pump the brakes for a second, figure out where we're going first and then figure out the path forward but that's not what's happening. >> no, we like to keep the foot on the accelerator 100 miles --

>> ready, fire, aim is what they'ring do >> thank you, steve. our steve kovach don't miss our "power lunch" special report, all things ai a deep dive on everything you need to know. coming up this friday may 26th 2:00 p.m. eastern time. >> watch and learn i will be learning a lot as we head to break cnbc celebrates asian american and pacific islander heritage month this month of may, sharing stories of business leaders in their community. here is shizu okusa, apothecary founder and ceo. >> what makes me proud of being an asian american founder is my parents. they immigrated here in the 1980s with nothing they were farmers. and here i am today having raised over 13 million of venture capital on my second company, apothecary, filmed for shark tank, and i am just getting started.

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welcome back to "power lunch," everybody. stocks falling now to session lows off 260 points, about 3/4 of a percent let's get a check on the energy markets as trading closes for the day. and pippa's here to join us on set. >> oil is higher extending yesterday's moderate rally and part of that is thanks to comments from saudi arabia's

energy minister, speaking earlier in doha, he was asked about speculators and short sellers in the oil market and he said that i would keep advising them that they will be ouching they did ouch in april before adding i would just tell them watch out. so of course actions speak louder than words and we may not see any follow-through but i think the market is i can thatting these comments a little bit more seriously than usual given that that opec plus meeting is coming up in a week and a half and saudi arabia has been known to announce surprise moments. >> pippa, i've been on twitter, and twitter is telling me that maybe people are getting very bearish about the permian all of a sudden and what' really going on with this opec squeeze is maybe we couldn't step in and fill the supply gap if they wanted to pull back. and all of that sounds kind of bullish crude for me which explains why it's in the green on a day when everything else looks a lot uglier >> you're seeing productivity come down and the permian's been such a symbol of american energy and even with that too yesterday with chevron expanding into both

delaware and colorado. and you know, beefing up their operations in other basins i think there are worries that there's so much hope on the permian and it still is very productive but while productivity has come down so if twitter is saying that -- >> then it must be right >> yeah, then it must be right >> scott sheffield has talked about it too so i know there's some legit thought process here but yeah, if that's changing it could kind of come at the worst time too for a weaker u.s. economy, weaker u.s. consumer, stronger energy prices. >> saudi arabia does know they're sitting in a good position because they can ramp things up, ramp things down. they're in a pretty good position right now >> pippa stevens let's get to leslie picker for a cnbc news update leslie >> thank you, tyler. the family of a colorado man shot and killed last year by a deputy will receive a $19 million settlement that is the largest of its kind in the state's history an attorney for christian glass's family says the 22-year-old was likely having a mental health crisis when he called 911 after his suv got

stuck. glass appeared to be holding a knife when he was shot five times after refusing to get out of his vehicle the u.s. embassy in moscow called the extension of a "wall street journal" reporter's detention in russia deeply concerning a russian judge extend evan gershkovich's pretrial detention by three months today. the embassy says russia's espionage charges against the reporter are baseless and says moscow unjustifiably detained -- denied its request for a consular visit to gershkovich last week. nbc news has learned florida governor ron desantis will announce he is running for president during a discussion with twitter ceo elon musk it will come as musk and desantis host an event on twitter spaces, the site's platform for audio chats, on wednesday 7:00 p.m. eastern time kelly, back over to you. >> wow that's a biggie. >> so it's an audio chat >> or maybe is there a video component to it? >> i don't know. she just said audio. it's their -- spaces is for audio. but an interesting choice of

interviewers >> yes and also for musk to -- i mean, let's just call it, sort of endorse or appear with desantis. you just go back and look at the kind of colorful history he's had with trump where at times they've been nemeses, at other times they supported one another. of course he basically sig namd his openness to bring trump back on twitter when he bought it a year or so ago trump never did it, he stayed on his own social media site. but this a pretty big statement to appear with his chief rival basically ron desantis so it should be spicy -- trump's on twitter but social media will be abuzz cnbc's ceo council summit discussing top frikz markets to geopolitics. yesterday nike ceo john done ojo warned about the potentials of decoupling from china. big market for them despite tensions in the pacific. take a listen. >> i think decoupling would be disastrous economically between the u.s. and china or china and the european union if you really look at the trade

flows, both ways, they play a mutually valuable role and so, you know, again, we believe in global trade and we'll continue to try to do everything we can to support that >> and coming up we'll hear from another retail executive on our ceo council about doing business with china, about the consumer and more crocs ceo andrew rees injos us live "power lunch" will be right back dow's down 220 when you think of golf... i'm probably not what you'd picture. it's time we change that. and when you think of the future of finance, picture... me. and me. and me. and me. justin: because everyone deserves a shot at success.

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"power lunch." cnbc's inaugural ceo council summit in full swing out in santa barbara, california. it comes at a time when business leaders are faced with a host of challenges ranging from rising interest rates to inflation and often getting dragged into difficult social issues. there's also a lot of uncertainty with the debt ceiling, recession fears, and how those things weigh on consumers. joining us now to discuss all of the above from the ceo council summit is andrew rees. he is the ceo of crocs andrew, welcome. good to have you with us we just went to commercial break hearing from john donahoe of nike and he was talking about how it would be sort of bad business

and bad policy to decouple from china. komina is your third largest sort of cluster of stores. i presume you do some production out of china talk to me about your relation with china and how you feel -- how you are trying to thread the needle of doing business there in an economy and in a system that's not always comfortable to deal with. >> look, i completely agree with john i think if the u.s. was to decouple from china in any way, shape or form it would be extremely problematic for many, many businesses in the world right? there's a lot of mutual dependency, as you just said in your introduction. we like nike manufacture in china as well as sell into china. so the country, you know, forms kind of both ends of our supply chain. i would say from a manufacturing base we've been doing a lot of migration out of china so it's a much smaller portion of our manufacturing base. but it's an incredible consumer market right? in terms of the global footwear

market the chinese market is the second biggest market in the world after the u.s. marketplace. and frankly a very large gap between them and the third biggest market it's super important to us what we try and do is really focus on the chinese consumer. how do we meet the chinese consumer's needs how do we appeal to them in a productive way and then just recently we've gotten great traction with our personalization engine you may know that as gibbbets where we add them into the shoe and the consumer can express their points of view and different things in fun and interesting ways that's gotten a great deal of traction in china recently >> you just mentioned something that triggered something the gibbets are something you can express your own point of view do you in any way control what those consumers can say in their point of view? in other words, if some gibbet was in some way offensive or misogynistic or racist or whatever, do you control that? >> we do not control that. right?

so we don't encourage that either our tag line -- and really our brand ethos that we see both in our consumers but also in our employees and how we interact with the world in terms of our kind of social responsibility is come as you are. so we're really -- we want to encourage people to be themselves and to express the views and feelings that they have we do not make gibbets that we think are in bad taste, et cetera so we avoid that but we definitely encourage consumers to come as they are. and i think that's an incredibly powerful platform in today's world. and a global platform at that. >> you know, as we're talking about this, we talk about how companies sometimes can get drawn into socially controversial topics obviously, case number one may be what's going on between disney and the state of florida right now. as you look at your portfolio of products and you look at all of the issues that may come across your desk as ceo including

social issues, environmental responsibilities, sustainability, income inequality, et cetera, et cetera, how do you choose which issues you might engage with and which you would pass on? >> yeah. look, this is an incredibly complex world. as i kind of grew up in the business world and getting ready to be potentially getting the diverse experiences to enable you to be a ceo, you kind of worry about how do i generate revenue, how do i control costs, how do i support margins, how do i make money none of those topics are in that education process that you go through. so you're right. it's very complex. it's fraught with dangers. and i think, yeah, actually, we were just having some discussions here at the council about how do you do that and i told another ceo what i do is i have a representative group of people, i think i have a diverse set of points of view and i try to make sure i engage them and hear lots of different points of view about things.

i think as a company our size we want to focus on what's important to our consumers we're not trying to push agendas that are i think created by the company. we're trying to represent and do the best job for our consumers and i think if we remain focused on the consumer, hopefully we can navigate a course which is we represent them really well, we provide them products that they love and adore and continue to buy, and we probably try and stay a little bit below the radar screen of maybe some of these larger topics. i think when companies engage -- go ahead sorry. >> no, that's a very comprehensive answer and i sympathize with the predicament that ceos like you have to deal with because obviously you're very much a consumer-facing company and people can get really bent out of shape if you take a stand on something and they don't agree with you you know, i remember what was it, michael jordan said hey, republicans buy nikes too.

you know, you can't xhooz which side -- >> exactly >> -- which side you're going to be on. let's talk a little about where you see the consumer right now andar this level of health obviously, crocs are an affordable brand they ain't yeezies which is probably a good thing but talk to me about where you see the consumer right now >> i think before i kind of dive into that what i would actually say is we have actually two affordable brands. so the crocs company, we own crocs, which everybody knows and knows exactly what it is sells at $50 typically the classic croc we also own a new brand we bought just over a year ago called hey dude which also sells at a very affordable price, usually around $60, $65. i think that's a tremendous asset for us what we see in kind of the consumer world today is there's some tier of consumers that are forced to make choices i believe -- and you can kind of see that in the broad-based retail results we've had in the last couple of weeks i think walmart's seeing some

trade down, target's suffering a little bit home depot's seeing some slowing in spending on people's homes. and i think the consumer is forced into making choices and if you talk to some of the bankers and some of the economists here at this conference they say, well, that is exactly the point that is the point of the rising interest rates, is to put the brakes on the economy without destroying the economy so i think we're starting to see that in our world, in the footwear world. and we're seeing some sxwirnz losers you know, personally i think we succeeded as a company because of the democratic price point we sell at and the very broad consumer bases we have for both of our brands. but i think you're certainly starting to see that emerging. >> andrew, thank you very much for a very interesting conversation we appreciate it >> thank you so much >> andrew rees of crocs. >> still ahead, pedaling to new pastures peloton announcing a new brand refresh including a pivot from

members-only focus to fitness for all. but with shares already cut in half over the past year will th be ouatengh to salvage its image? "power lunch" is back with that question 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.

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a new chapter today, relaunching the brand from an in-home bike company to a fitness brand for all. cnbc.com reporting along with the new mantra peloton will be introducing a new tiered pricing structure for its app including a free option for users and a new feature called peloton gym peloton shares are down 8% in 2023 and of course fell almost half the previous year to discuss let's welcome in the writer behind this piece, retailer reporter gabrielle farouj welcome. >> thanks for having me. >> so juicy. we all follow the peloton saga trying to figure out what we would do in the same situation i don't know about this move what is their intent here? >> you know, peloton has long been reserved for a very specific type of person and they've always marketed the company in that way. this in their eyes is going to open up a whole new addressable market for them. they're hoping to get new customers that previously they weren't speaking to. >> it's strength, it's bar, it's stretching, it's all kinds of things let me ask you this question if i am the owner of a peloton

bike, which i am, and i subscribe to their monthly plan at $44.95, i believe that's the price right now, they are now going to have peloton app plus at $24 a month that seems like it's going to be, quote, frictionless with unlimited access to peloton's vast library. the tier includes all of the app's offerings and unlocks access to thousands of equipment-based cardio classes why would i continue to pay $44.95 if i can get the same thing for $24? and if, if they are actually offering essentially what i get for $44 for 24 and i don't get it, i'm going to cancel. so you tell them that. >> you make an excellent point because it's totally true. you can pay $44 a month with the bike and have all of that. but now you can pay $24 a month and still be able to do those awesome classes that everybody loves. the cycling classes, the tread classes. so customers who have shelled out for the bike already, you're

kind of out of luck. but -- >> great >> -- new customers are going to be able to take advantage. >> no, listen, it's never a great idea to alienate your existing customer base >> no. i'm thinking of tesla. i bought a tesla and then he cuts the price >> exactly >> this is mathisen. i buy at the peak. every time >> so what they should do, though, is really make sure the people who love the bike and feel part of the community are not alienated by this move which we don't even know if it will work. you could say $24 is a bargain but maybe it's not maybe that still prices out a lot of people. >> you know, absolutely. and this kind of space sees a lot of churn as is and i spoke with some peloton users for this story and a lot of them were like you know, peloton was like a club and now everybody can get into the club the brand isn't -- i asked them, are you concerned about brand dilution and they said look, this is how peloton has always been and now peloton inside is now peloton on the outside. >> and what's the idea that you can take the peloton classes to the gym? on your phone? in other words, you would take your phone into the gym and

follow my favorite instructor? i love the product it's a fantastic product you can take your favorite instructor and do the workout there in the gym is that the idea >> yes that's exactly the idea. you know, before peloton was always seen as anti-gym, gym was an existential threat to their business but they realized that's holding them back. the shares speak for themselves. the revenue speaks for itself. can't is not what it once was. so they need to bring other people in, find more use cases for this so with the gym app you can -- or with the gym function in the app you can set up a custom workout. you can be at the gym. a lot of people don't know what to do at the gym they're there, they're overwhelmed. so the app will give you a custom workout that you can follow along while you're there. >> very interesting. all right. >> i don't know. >> it's a new day for peloton. we'll see how it works out gabrielle, thank you very much appreciate it. >> my pleasure thank you. >> speaking of peloton, ndamukong suh's house of kings not getting any help from those shares in this year's stock draft. his team is currently in last place. those were his picks, unh and peloton. pton down about 15% since that

draft. meanwhile, tory dunn and the feminists have a lead thanks to amd which is up more than 25% since the draft. doesn't hurt they have microsoft too. >> chips, cars and communications we're going to trade broadcom auto zone and zoom in a fresh three stock lunch. we'll be right back. 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!

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all right, folks it's time for today's three-stock lunch. we focus on three big movers from today we've got your broad com, auto zone, and zoom shares are up after apple announced a multi-year multi-billion dollar deal with the technology and advanced manufacturing company today. here with that and more, victoria greene at private wealth thank you for joining us good to see you again. let's start with broadcom. like it, love it, loathe it? >> oh, i love this stock you've got to love the new that is their biggest customer, 20% of their revenues and about $7 billion in annual revenues has re-upped what has been seen as a more contentious situation. it gave up our affirmation that the stock will grow. it broke out of the 2021s, hitting a new high bank of america targeting 800. i really like the momentum the stock has.

i think it could leg up. >> feeling good about it what about auto zone the stock such an interesting one. it and o'reilly have been amazing performers, but it's taking a 7.5% chop, and how the the fundamentals changed for you? would you bail on it >> this is a bail for me you have to read through, and the biggest driver is their margins are going to contract because their diy retail versus the commercial is changing diy retail is only 7% of revenues and starting to slip a little bit, and their commercial is lower margins they're under margin pressure, and the stock is expensive it's around 20 or 40 for the 200-day moving average if you are down, the stock is just right for a pullback because if you have slowing margins and slowing revenue growth, it puts pressure on expensive stuff that had been on a tear >> zoom's story is zoom fall down, go boom, right what do you think of this one? >> i can't touch it. i know it went boom from 600 to

60 basically, but i think actually 60 is where we're going to retest. they had to throw out the ai remember when everyone was throwing out esg and brainwashing because it was a buzzword ai has been a buzzword, and i think they're going to be under pressure they're struggling to have growth they're going to have increased cost they're trying to expand their products and their margins are going to come under pressure yes, maybe some of the worst is behind them and they have a lower bar, but you would think they have so many head winds to actually achieve growth, and i think that 60 low is reasonable maybe, but just too much downside pressure and their chart is so ugly i mean, just like a bad hockey stick ugly i can't touch it right here. >> that was about $6 below current prices victoria, please apply this analysis to the broader market can you explain the stock market today? we are down -- we have been, you know, it's been so resilient and suddenly we're down 250. good luck finding a real headline. >> it is i think it's just nervousness about the debt deal. there seems to be contention

between the two sides that seem to be growing further apart. they're calling into question the g1, and tlhere's nervousness it's not trading that great, and there's been a lot of fomo they're saying the bottom must be in, and we haven't crossed 4,200. maybe that bear market is intact >> why is the nasdaq underperforming? especially because the mentality has been the chase is on, just grab nvidia and go. >> anything ai no i think they got a little expensive. i think potentially you're seeing profit taking, some people trying to hedge this potential tail end risk coming june 1st, and without news, i think you could see a little bit more of a meltdown because people may say, hey. these stocks are up 80%, 90%, 100%, and maybe i want to protect these gains just a little bit. >> absolutely. victoria, thanks today we appreciate it victoria greene. >> thanks, guys.

still to come, italy's got a pasta problem and a mortgage giant trying to make buyers' eadrms come true that and much more when "power lunch" continues ♪♪ ♪ a bunch of dead guys made up work, way back when. ♪ ♪ it's our turn now we'll make it up again. ♪

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welcome back a little under three minutes left in the show a bunch more stories you need to know let's not waste any time the clock the ticking and rocket mortgage is letting buyers put as little as 1% down on a new home the new program is aimed at low and moderate income buyers and will also waive mortgage insurance.

the catch, strict qualifications including high credit standards. rocket estimates 90 million people could qualify, but the high credit quality often are, like, the cash-rich buyers that don't need this program. i don't get it. >> it should be people whose income is 80% or less than the median in the area in which the mortgage is being written. i think these are also going to be guaranteed by fanny may and freddy mac. >> which is huge. >> that's a big deal there. a surgeon general's warning on social media, folks, to tell you about. t this time it is social media vivek murthy says it can be profound to young peemg, and he says protecting kids needs to come from the tech companies and the government to set product safety standards i believe he says no kid under 13 should be using social media, but about 90% of kids between 13

and 17 to. . >> do. >> it's an uphill battle. catching criticism for being too lenient. offering first-time offenders intervention programs instead of prosecution. shoplifting is up 44% in the past year. de-escalation training what does that mean? excuse me, sir i see you have 40 shirts in your hands. could you please put them back i don't know i think giving first-time offenders intervention programs, maybe that makes some sense here. >> i think retailers are saying we need a real solution to a huge problem. >> i'm not sure that is here install kiosks in stores to connect would-be thieves to programs the pass problem pasta prices have jumped 17% year of year in each of the past two months roughly double the increase for consumer price index the situation's gotten so dire

that the minister started a meeting. one of which is to tell italians just to not eat pasta. bring down the demand, and you may bring down the price >> price spikes. now pasta. >> the italian eats 50 pounds of pasta. >> "closing bell" starts right now. kelly, thanks so much. welcome to "closing bell." i'm scott wapner live right here at the new york stock exchange this begins with the tech run. whether it has more room to run, and if so, for how long? we'll ask a top fund manager that very question in a moment here's your scorecard with 60 minutes to go in regulation. stocks mostly in the red for much of the day. investors obviously watching that debt duel and another move higher in interest rates today key yields now at their highest level since march. big tech also pulling back slightly even as microsoft briefly hits another new