then an influx of new four-legged friends changed everything. dr. petsworth welcomed these new patients. the only problem? more appointments meant he needed more space. that's when dr. petsworth turned to his american express business card, which offers flexible spending limits that adapt with his business. he used his card to furnish a new exam room, and everyone was happy. built for dr. petsworth business. built for your business. amex business. you founded your kayak company because you love the ocean- not spreadsheets. 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 good afternoon, everybody, and welcome to "power lunch. busy day alongside kelly evans i'm tyler mathisen coming up, president biden says

secretary of state antony blinken did a hell of a job over in china, but did anything real get accomplished meanwhile, china's central bank cuts interest rates as the economy over there continues to sputter. plus, tomorrow is the first day of summer, the longest day of the year, but worries are already starting about the holiday shopping season. we'll talk about that and several other hot retail topics. kelly, with our panel. >> tyler, thanks but before all that let's get a check on the markets nasdaq almost went positive a moment ago but is now down 35. the s&p down 18. below 3400 once again. while the dow is down more than 200. if you're wondering what is weighing down that index, nike and intel are the biggest percentage decliners while goldman and boeing are having the biggest point impact, accounting for about 100 points of those losses you can see here the biccest decliners on the s&p are actually the solar stocks. solar edge, enphase both down bic, 6% to 8%. more on those names coming up p and shares of lemonade the insurance startup getting hammered today morgan stanley initiating the

stock at underweight with a 14ing price tag. >> we begin with news out of china. the central bank cutting interest rates as the economy struggles it come out of the covid era. and it comes after secretary of state antony blinken meets with president xi let's go live to beijing now, where it's the middle of the night. but our eunice yoon is standing by hi, eunice >> reporter: hey, tyler. well, the central bank policy cuts were widely expected, but they just weren't as aggressive as many people had hoped the benchmark lending rates for households and businesses was trimmed by 10 basis points a lot of people were hoping to see the mortgage reference rate dropped by 15 basis points now, this comes as secretary of state antony blinken really sets the stage for an easing and a reprieve in the u.s.-china tensions he had a two-day visit here, speaking to chinese officials.

and it was really capped off by a 35-minute one-on-one with president xi jinping the two sides have said that they recognized that there was a need to inject some stability into this relationship secretary blinken later told journalists that he -- that both sides really saw that this relationship had hit a point of instability. now, the foreign ministry was quoting president xi as saying that he was pleased that there was some progress made on some specific issues. there are not a lot of details on what those specifics are. but what we're seeing now is that this visit really does pave the way for other senior officials to come in what secretary blinken had described in a matter of weeks >> all right thank you very much, eunice yoon reporting live tonight or tomorrow morning from beijing.

along with the economy, espionage worries in focus still. reports now say that china and cuba are planning to establish a joint military training facility on the island, raising concerns that it could lead to chinese troops and other intelligence operations just 100 miles off the coast of florida joining us now to talk all things china is shawn rhine. he is managing director with china market research group. he was one of the biggest bulls on china's economy for some 25 years but has now become one of the bigger bears since early last year. shawn, welcome good to have you here in the u.s. been a while since you've been here >> good to see you, ty yeah, this is my first time in the u.s. in four years i got locked down because of covid in china so it's great to be back >> and how long were you locked down you lived there with your family in shanghai. >> so i lived -- i was locked down for three full months in shanghai we had problems the first two to three weeks getting access to food we weren't able to buy anything. but actually it wasn't just one lockdown 40% of employees were locked

down three times so the second and third times were one and two weeks each. and it's these lockdowns that's caused a lot of depression and a lot of anxiety in china. so right now the government has estimated about 50% of shanghainese are suffering from depression and that's what's hitting consumer confidence right now. so if you look, in april retail sales went up 18.4%. theyball o'went up 12.7% in may. chinese consumers are cutting back on their spending so investors need to be cautious whether there's going to be an economic recovery or not >> people thought of the chinese economy when the sanctions -- not sanctions, when the restrictions were lifted, they felt the chinese economy would snap back very, very vigorously. it hasn't? >> it hasn't so i mean, jpmorgan and the big banks said that chinese households are sitting on 2 trillion u.s. dollars of savings. so they're going to go out and do revenge spending. i predicted that wouldn't happen and unfortunately, i was right the reason it didn't happen is chinese faced a lot of salary cuts, unpaid furloughs in 2022

but there are even bigger, more geopolitical issues that are facing the chinese consumer. chinese feel that the united states and the blinken regime is trying to contain china's economic growth and destabilize the party. you can look at it kkr, the big private equity giant, just announced yesterday that they're reshuffling their leadership in asia to deemphasize china. sequioa, the big venture capital firm -- >> i was going to say, yeah. >> split their operations. and there's a lot of pressure in back room from the biden regime to american companies not to invest in china right now. so fdi into china only went up 2% in q1 of this year. now, what does that mean it means that sme business confidence in china's low, consumer confidence is low they feel that we're going to go into a 10, 20-year economic stagnation because of the united states and what the chinese feel is economic coercion so the biden administration has gone to the dutch. they've gone to the japanese and said you can't sell semiconductors to china -- >> especially the dutch. extremely, you know, high-end

semiconductor machinery, let's say, they're worried about we have seen a number of high-profile american execs go to china jamie dimon, elon musk i believe tim cook perhaps was recently there maybe the head of starbucks. so they do seem to be trying to make a point of going there. they're getting a ton of media coverage does that mean there's still hope for this kind of whatever we want to call this relationship, where a lot of major companies are still seeing this as a huge part of their future >> yeah, that's a good question, kelly. there is hope. but you saw the companies that you just mentioned, starbucks, tesla, china's their largest or second largest market in the world. and they've only just come into china to take a look around in may and june so what's happening -- >> so you think those were recon visits more than they were confidence-building visits >> they want to see is china normalized, are there going to be covid lockdowns again, how is the consumer confidence, is china a place they can still invest if you look at it, larry fink was supposed to go to china in

april. the ceo of blackrock he didn't go because of pressure from the u.s so what's happening is i don't think the multinationals are going to come rushing in until maybe 2024 they're going to want to wait and see. 2023, how is the chinese government, how is geopolitics let's invest in india. let's invest in vietnam. maybe next year -- >> are businesses playing good cop to the u.s. government's bad cop or tough cop because it seems that both parties going into an election year, oh, by the way, want to appear to be tough on china. >> yeah, one of the problems is the only thing that republicans and democrats alike can seem to agree on is to hate on china it's to try to say derisking from china, maybe decoupling i think a lot of american businesses right now, ty, frankly, are nervous about investing in china they don't want to be caught up in political attacks from d.c. they don't want activists to attack them. you know, i was talking to a big sports apparel company and they were thinking maybe we should split our china operations off

from the rest the world so that our china operations can just focus on expanding in china, not worry about the xinjiang, you know, genocide and forced labor allegations in xinjiang with the uighurs and being there and beig as bearish as you are what's that going to look like for the next couple of years just in terms of any business operations risk >> it's a good question. i think on the consulting sield side i thy think there's been a sensationalism and exaggeration of the crackdown on consulting firms. they're doing private investigations, which has always

been illegal in china. i'm actually not worried my business is fine from the chinese government side. my business frankly has been hit hard i've lost money for 3 1/2 years not because of the chinese government but because american companies just don't want to invest in china right now. >> fascinating >> how do you rate the blinken visit and meeting with xi jinping? you've got 35 minutes of face time, which in the grand scheme of things isn't all that much. it doesn't seem to me. but what did it accomplish, if anything >> i give blinken a grade of c it didn't really accomplish much of anything, ty. because at the end of the day the chinese -- and the chinese state media have been reporting this ever since the meeting. blinken says nice things but let's see actions. right? the trade war is still serious there's still economic sanctions. whenever a chinese company does well, like huawei in telecom, biden says national security risk or when china does well in apps, tiktok, u.s. congress says security risk. when china does well in cotton,

remember, 20% of the world's cotton comes from xinjiang, all of a sudden the united states says there's genocide and forced labor. so the chinese feel that no matter what they do blinken and biden are going to try to contain and destabilize -- >> they see containment. they see george kennen containment. >> i am a red-blooded american i was born in new hampshire, love the united statese -- >> let's not confuse the chinese people with the chinese communist party who's doing a pretty good job of oppressing its own citizens with some of the surveillance and the things going on there and if they didn't want this treatment perhaps they shouldn't have been doing the corporate espionage that we have an entire documentary about and some of the otheeople see if they don't want to feed into this idea that there's tensions between these two countries. >> yeah, i don't see oppression of the chinese people. i've been living there for 25 years. when you see the cameras i don't see it as big brotherish

i view it as trying to save people i give an example. somebody hit my car the other day. and so i went to the police station and they look at the cameras and they were able to find out who did it. so actually most chinese like the cameras. it creates safe streets. you can walk anywhere at midnight i do think that there is definitely over -- there's too much implementation of zero covid last year. totally agree with that. i didn't like being caged down for three months they lost their minds. now, i have to be careful. i still live in shanghai so i want to be clear to everybody i support xi jinping and i support the communist party. i need to make that clear. now, that might say something. okay read between the lines but i don't think -- most of the chinese people still support the party. so when i think biden is saying to american companies you can't invest in china, that does hurt the quality of lives for chinese. and that's why they don't view the blinken visit as accomplishing anything they need to see actions, not words. >> a moment ago when you were talking about how the united states responds to various business advances that the chinese have, whether it's

tiktok o, and we then say this and then we say that isn't that just playing hardball competitively? >> i think not if it's based on lies right? if it's all allegations and you don't have any evidence. right? that's where it becomes the issue. >> in tiktok's case there was evidence that they were gathering all of the inputs that a person entered onto their phone, gathering that data if you had the app installed on your phone as the "wall street journal" reported. >> the "wall street journal" reports a lot of different things that end up not necessarily being true but that might be going to tiktok the idea is is tiktok an arm of the communist party of china that i'm not convinced of. if anyone knows how china works, you can see that huawei succeeded in spite of the chinese government, not because of the chinese government. so the chinese government has always had sort of a gray area look or skeptical look on chinese tech companies you see what's happened to alibaba. so alibaba had to break up, which was big news that you just talked about because they got too big so huawei has succeeded in spite

of the government, not because of it. >> shaun, great to have you in country. appreciate the perspective thanks very much shaun rein and speaking of china cnbc is as kelly mentioned premiering a new documentary taking a look at how chinese spies are targeting corporate america. eamon javers dives into the shadowy world ofespionage to tell the story of a spy from china who attempted to steal ge's jet engine secrets. "china's corporate spy war" premieres tomorrow night at 10:00 p.m. eastern and pacific on cnbc. shaun will be watching shaun rein >> we all will up next an alternative gauge of the state economist. we'll speak to the ceo of omni hotels for insight into what shrimp sales, oh yes, say about business travel and the state of unr owg enoffice bldeshinev the house of hits ain't

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welcome back to "power lunch. from gdp to consumer confidence there's a lot of data trying to tell us what the economy is doing, but could finding the answer be just as simple as attending a cocktail party omni hotels and resorts is out with a new measurement of economic health called the shrimp index they say if you see more raw wars at corporate outings vs. those cheese and fruit platters it's a sign people are ready to spend and the economy is swimming along for more let's bring in peter streebl. he's chairman of omni hotels and resorts. peter, we have to thank you for bringing this to us. and please reveal, are people in

shrimp or fruit and cheese mode these days >> people are still in shrimp these days it's been really great you can always tell the corporations and how well they're doing from a profitability standpoint whenever you go to meetings and events at our hotels and resorts, when they add shrimp and they add raw bars, they add caviar and they add great brands of alcohol, that means the economy's really goingn advertid going with just fruit and cheese, we realize we're up tore some rough times so right now the corporations are spending, customers are spending, and everybody seems to be forging ahead with travel >> no shrimp equals no good. all right. so where is this demand coming from is it coming from private personal parties is it coming more from corporate events, team-building exercises, those kinds of things? >> probably coming from both i would say.

the corporate events are very, very strong. the number one reason why people are having meetings today is they're bringing their staff back again during covid they've been basically working from home. the whole morale issue of the corporate america kind of went down with everybody not, woulding in an office anymore. and i think now they're really trying to bring people together to meet each other, to learn from each other. so a lot of it has to do with corporations bringing people together the other thing that's happening as well is also on the social side people have been -- they had small weddings now sbig better. people want to bring their friends together people are traveling in packs. there's much more entertainment going on from a special perspective as well. >> how are you coping with inflation? and let me ask it in a specific way. if i were to bring a group in and you would normally say -- three years ago you would have said okay, it's going to be 125

a head what would that price be today would it be 150? would it be 175? what >> probably be about 25% to 30% higher than it was precovid. so inflation has definitely happened our cost structures have basically increased. the wages of our associates have really increased we're about 30% up from wages from 1999 to 2023. working in a hotel is hard work and i'm actually glad our associates are benefiting from these higher wages >> peter strebel of omni hotels. thank you. and as we head to break, folks, a quick power check on the positive side of the s&p generac up -- generac up 7%. >> wow coming back. >> "barron's" righting recently that summer blackout season could boost the stock. a bad news equals good news for that company on the negative side solar edge

down 7%. the solar group in general lower today. more on that next. this is ge aerospace, advancing flight for future generations. ♪ welcome to a new era of flight.

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with sock prices rick santelli tracking the action for us from chicago hi, rick >> hi, tyler you know, they weren't always lower on the session as a matter of fact, let's start at the beginning, housing starts, shall we everybody was impressed. big number over 1.6 million so let's do a chart from 2006 to right before covid hit in february of 2020 because i want you to see in january of 2020 we're at 1,572,000 starts you see it on the right. that at the time it was released was the highest level of starts since 2006 now let's put the rest of the chart. so yes, we popped today, but it is still higher than it was precovid and it's higher than it was going back to that 14-year high why does that matter because maybe this is an anomaly, many are thinking it's a big turn in housing but quite possibly it could be a one-month off considering where it was precovid and all the issues

since. how did that move markets? as i said, yields were higher. look at 2s and 10s on one chart. there it is at 8:30 eastern. boy, it popped and then that was it the buying started to come in. and the buying continues to come in because many believe there's a lot of shorts in the treasury complex, especially in some of the long dated maturities. and as you look at 2s to 10s that yield curve spread is approaching minus 100. it's around minus 97 now and you can see that it is definitely the most inverted since march. however, it is very near if it gets through that march level once again testing levels that we haven't seen since 1981 and finally, we've all talked about china and how it's a big issue with regard to the global economy and how it's not coming back the way many had thought. well, whether you look in the on-shore or offshore yuan the dollar is at the highest level of the year against both kelly, back to you >> that's something to watch as we talk about china's weakness

thank you, rick. and add energy prices to the list of things falling today oil, nat gas, even solar stocks, pippa. >> yeah, a lot of moves today. starting here with oil and following up on what rick was just saying, china did cut another two lending rates overnight. but not as much as people were forecasting. so not really doing a lot to support oil prices there and we have seen very strong import data out of the region, but as matt smith over at kepler reminded me it's very important to look at where that oil's actually going and so he said that china's taking advantage of lower global oil prices and importing a lot and putting that oil actually into storage so it's not as if there's any type of, you know, robust demand growth going on over there turning over to nat gas, down about 4% today after that 17% jump last week that was in part thanks to short covering ahead of warmer temperatures and actually down in texas ercot, which is the grid operator, just about two hours ago called for a voluntary cut for users today between 4:00 and 8:00 p.m. as they expect a record demand load as

temperatures top 100 degrees so a lot to watch down in texas. and then finally solar shocks. solaredge and enphase both lower and that is after an industry conference in munich where there was chatter on the ground about weakness in the residential market over in europe as well as an oversupplied inverter market as chinese manufacturers ramp up so both solaredge and enphase have looked to europe to meet some of their demand growth that they're not seeing in the united states so the fact that now there's concerns over europe as well, of course their power prices have come down a lot. that's leading to a sell-off in those stocks >> less demand for solar when your regular power structure -- it always seems to come back to china. so they're now back up cranking out those inverters do we think this is justin a short-term thing or a long err why-term thing >> so they make more rudimentary string inverters so they haven't really gone to the power-level modular ones that solaredge makes or the microinverters that enphase makes, but they are now starting to adopt that technology there are some concerns around

security as well as whether or not they are made as -- to a certain quality that western companies make them to so we'll see but for right now the read on the ground is that both installers and distributors have a backlog of inventory, more so than they usually have at this time of year >> all right, pippa, thank you pippa stevens. let's get to kristina partsinevelos for the cnbc news update kristina >> thank you, tyler. let's talk about oceangate, the company that owns the submersible that went missing sunday during a mission to explore the tchk tnk wreck saying its ceo is also among the five-person crew a british billionaire, a pakistani businessman and his son as well as a "titanic" expert are also confirmed on that vessel. the coast guard said this afternoon there's likely only about 41 hours of oxygen left in the "titan" sub. france sent a ship to aid in the search at the request of american authorities actor jonathan majors will go to trial for his domestic violence case on august 3rd. his accuser says he sent her to the hospital for minor head as well as neck injuries back in

march after a confrontation in new york city. the "creed 3" and "ant-man" as well as "the wasp" actor is charged with misdemeanors and could be sentenced to up to a year in jail if convicted. fox news's bret bayer and martha mccallum are set to moderate their first republican primary date which will air on fox news the republican national committee announced earlier this month that candidates who participate in the debate will have to pledge to support the eventual republican nominee. kelly, back to you >> should be one to watch. kristina, thanks ahead on "power lunch," shrink leading to growth. a holiday warning sign 200 days early. and a no refund resurgence we'll hit all these topics in a spiareilunwnneecl ta rdo, xt gobble gobble. i've seen bigger legs on a turkey! rude. who are you? i'm an investor in a fund that helps advance innovative sports tech like this smart fitness mirror. i'm also mr. leg day...1989! anyone can become an agent of innovation with invesco qqq,

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welcome back to "power lunch," everybody. three key headlines in the retail industry that caught our attention. first ubs out with a new note on how shrinking the unexplained loss of inventory will turn from a headwind to a tailwind later this year and into next. reports suggest holiday clothing sales could be weaker than expected as some factory owners say they're seeing big drops in retailers' holiday orders. and lastly, is the era of unlimited returns online coming

to an end? non-refundable items are now popping up in even more places here to make sense of it all, brian guildenberg, managing director of retail cities and sandra campos, founder of fashion launchpad and a cnbc contributor. welcome to both of you let me begin with you, sandra and ask you what about this matter of shrinkage, i.e. the thought that companies are losing a lot of money to shoplifting, but it's somehow going to turn around >> well, they have been losing a lot. and we know a lot of that has come from organized crime. but for the most part there was an imbalance, an increase of sales vs. the number of employees that were actually fired in stores. so it was an increase of 42% in sales, 19% of employees. there's just an imbalance that you're not going to be able to keep organized crime at bay for that there was also more inventory that was moving through the retail system due to increased demand through the pandemic and more increase in online sales.

and then the last thing is really bookkeeping mistakes that were happening because retailers very quickly turned on buy online pickup, in store and other tengz that were helping them create less friction for the consumer, but it was actually new for them. so because of that in this year retailers focused on profitability and focused on these operational first,s but could actually have better performance overall. i think that's going to be impacted in a better way, in a more positive way this year. >> brian, what's your reaction to this new note from ubs where they think shrink has gotten so bad that maybe it could be good again? they say that improvement will be an investable theme in the back half of this year and into 2024 are we really turning a corner inning tha itackling this probl? >> i'm never a huge fan of things are so bad they can't get worse as an investment thesis. there's a couple important things to keep in mind number one, labor to sandra's point is really the issue here from an operations point of

view and until the retailers can hire more people that's going to be a challenge. the ubs report pointed out they're spending more on labor but that's mostly wages. more people prevent shrink, and i think that's a big issue i think the other piece which i do think is interesting are the efforts that the sellers of merchandise that's being taken by organized crime are making to prevent and curtail that they mentioned the inform act, which is requiring marketplaces to get better traceability on third-party sellers. and i think amazon in particular is doing a lot of work on this front to try and limit the ability of stolen merchandise to be resold in the retail system so i think that's an important step but i'm with a client today that's in a fairly high shrink category in the stores, and i think they found the idea that i was going to be on talking about how shrink was getting better to be not quite accurate. given their experience >> do you want to elaborate the a at all on that it's highly debated in new york

as well where there are efforts by -- retailers want more technology and more systems to try to help this problem and now they say they're not getting the help that they need. >> yeah, i think it's still a struggle right now i think it's particularly acute i also think too that the retailers are going to invest in solutions to try to prevent shrink but those solutions often have a deleterious effect on sale if you've been to a store in new york you know what that means. if everything's under lockup it's hard to sell things so i think this is a factor that this problem's probably going to stay bad for a while i might humbly suggest that this report may have been a tiny bit premature. >> all right sandra, let's move on to topic number two, and that is the holiday clothing sales outlook what are you seeing, what are you expecting? is there a killer item this year or just not? >> i don't think we can expect to have a killer item. clothing is definitely down four basis points from last year. when you have more than 60% of u.s. households that make less

than $100,000 a year discretionary income is just not where it was and it's certainly not clothing as the number one choice more trends are for wellness and beauty products and services so that's really where a lot of the disposable income is actually going impact on clothing has been there. it is real it's also been changing every year the other part that's impacting it is consumer behaviors have changed. and that is that they are now spending more on resale. a lot of consumers made profits in the last years in terms of reselling their own products on the real real, on poshmark and other sites. and many brands now have added their own secondary retail and secondary channels to be able to sell their preworn products. so that actually, if you look at the real real, their revenue's increased since 2020 by more than 2%. so that's an entirely different channel that we didn't used to have before. >> that's so interesting you mentioned that my wife does a lot of that, of

reselling items on i think it's poshmark i don't mean to ropromote poshmark but it is a different channel. brian, do you see thats aan infl that as an influencer here >> yeah. and i also think poshmark to your point does an extremely good job of engaging shoppers in that space i think a lot of that are people buying new apparel and reselling it later as well i think the other interesting piece of apparel, though, you've got everybody cycling laster, which was a back to normal year. when you're comparing results to last year it's a challenge retailers got stuck with excess inventory last year and it appears as though they're making the calculation to say you know what i don't -- i'll leave some sales on the table to avoid being overexposed from an inventory point of view, and i think that's been the news that was coming out about factories, saying much shorter orders from

retailers. >> it always feeds the debate about whether there is going to be a new normal kind of post-pan dem nick that sense. i want to ask you both what's going on with returns. i'll start with you, sandra. if it's true that amazon is cracking down a little bit and maybe others as well, there's huge ramifications for just how much consumers are willing to stick with these platforms, isn't there? >> yes and no. on the one hand consumers returned $816 billion in 2022 and that was up 7% from the year before so they've become accustomed to returning online if you look on the average women buy three dresses and keep one that's not sustainable for any business in any sector so unlimited returns, the number one focus is we have to remember retailers need and want profits. so that's the focus today. so i think it's important to reduce the friction with consumers. the retailers are really focusing on operational profitability and returns as they become higher and higher as online sales have gotten greater is just not going to help their profitability. so i think that all in all consumers are going to have to

get used to certain discounts being eliminated, certain returns being eliminated, and just technology tools that are now helping retailers to actually think through and forecast more efficiently for the future in terms of product needs. >> steering people to less returnable categories and things that we have to go bryan gildenberg, sandra campos, thank you. but again, that could be a really big shift ahead of the holidays this year coming up, the element of surprise disney execs blindsided by negative reviews for their new animated feature "elementals" even after getting what they thought was a positive reception at cannes. disney's stock down 1% today and as we head to break, june is pride month and cnbc is celebrating all month long, sharing stories of corporate leaders. here is amy aret madison, reed ceo and founder. >> diversity is key to having a culture that is robust and allows people to access their genius

when you can't bring your whole self to work, you're not your whole self and people integrated between their personal life and their work life is something i believe a new generation of people in the workforce, not just demand but don't want to be in a company where that's not true. at madison reed we are a diverse organization we have a saying the things that make us different make us. this is cynthia suarez, cfo of go-go foodco., an online food delivery service. business was steady, until... gogo-foodco. go check it out. whaatt?! overnight, users tripled. which meant hiring 20 new employees - and buying 20 new laptops. so she used her american express business card, which gives her more membership rewards points on her business purchases. somebody ordered some laptops? cynthia suarez. cfo. mvp.

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welcome back it seems disney's magic is not inexha inexhaustible. the company's newest animated film "elemental" facing one of the worst three-day opening weekends in its history. even though last month the movie received a five-minute standing ovation at cannes. but apparently, that's short by cannes clapping standards. julia boorstin joins us live from cannes, this time at the advertising conference, to talk more about this debacle. julia, was this a movie meant more for adults than kids fundamentally? >> no, this is a family film pixar films have that typical appeal where they get kids and the whole family goes.

so that's why it was a disappointing weekend at the box office now, this is "elemental" from disney's pixar it can fall short of already lowered expectations the film just grossed just $29.5 million, which is the lowest opening for apixar film when adjusted for inflation, and it did cost a reported $200 million to make and about another $100 million to market. now, this disappointing opening, despite the movie getting a 75% positive critics score and a 92% positive audience score on rotten tomatoes. and critics are flagging that this is pixar's third disappointment in a row. now, it's not just pixar under pressure another massive brand, warner brothers' d.c. comics, suffered the flop of "the flash." the movie, which also cost a reported roughly $300 million between production and marketing costs, grossed some $55 million in its opening weekend debut despite d.c. comics -- d.c. studios co-chief james gunn

saying it is one of the greatest superhero movies ever made now, though there are a number of big name franchise films coming up this summer, including indiana jones and mission impossible sequels, weakness in familiar brands could mean that the box office will not return to pre-pandemic levels this summer, which is something that industry watchers, analysts and of course the theater chains were hoping for. >> one of the greatest superhero movies ever made proving, julia, that hyperbole does live still in hollywood thank goodness while we have you, let's talk a little about social media. it is both a hot sector of the market but also a target as more and more people worry about the impact it could have on teens. we talked about tiktok earlier today in china they limit the number of hours that kids can be on social media per day. the ceo of pinterest, you talked to that person about ways to make the internet safer. what did he say? >> well, that's right, tyler

pinterest ceo bill reddy is here in cannes. he's actually here for the first time, having become ceo of pinterest just over a year ago right now i'm on what they call pinterest pier they're showcasing creative activity that happens on pinterest. they're also promoting how this platform is different from its rivals because it is promoting positivity they're showcasing their new inspired internet pledge, which is designed to make the internet a safer place for teens by minimizing negativity. ta take a listen >> we really think advertisers are looking for more places where they can engage with users in a place that is positive and not having these negative impacts on emotional well-being. so we think there's actually advertiser demand for this >> another key differentiator for ready and pinterest as he fights for ad dollars with fast-growing rivals such as tiktok is pinterest's partnership with amazon, bringing third-party ads to the platform and also pinterest's focus on shopping. >> more than half the users on

pinterest are there to shop. it is what the user came there to do. so the user's in a lean-forward mode looking to shop people come to pinterest, to plan, to dream, to do, to make, to buy so it is endemic to our platform so we're bringing more tools to help advertisers connect with other users already trying to do versus across much of the rest of social media. >> pinterest shares are up nearly 40% over the past 12 months but up just 4% year to date, having fallen dramatically after reporting earnings and a disappointing outlook. so the pressure's on for the company and bill ready to close more deals here in cannes and many of them perhaps will be deals that close on this beautiful beach. kelly? >> i've been waiting five years for pinterest to get more buyer-friendly because my biggest frustration is when i see something i like there and i can't find it. maybe ai can help with that, who knows, in the future julia, thanks. julia boorstin coming up, eli lilly acquiring dice therapeutics for almost $2.5 billion to bumming up its treatment for immune-related

diseases lilly shares which are already having a huge year up another 1% dice up 37%. we'll show you the news in three stock lunch, next. we see you. athletes. investment bankers. doctors. business leaders. we see your ambition. your desire to succeed. which is why we are investing in your future. ...empowering the next generation to reach the c-suite and elevating women's golf. because you may not always see yourself in the world, but we see you. 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

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well, it is time for "three stock lunch.

first up is eli lilly announcing it's buying dice therapeutics in a $2.4 billion all cash deal dice specializeness oral therapeutic drugs for autoimmune disease diseases with our trade victoria greene, a cnbc contributor victoria, what do you think of eli lilly? >> it's a buy. they can do no wrong great synergies on paper, the patents and the technology that dice has been working with lilly's size and scale lilly has so much cash to burn because everybody is getting into the weight loss drugs, the diabetes drugs and weight loss drugs are expected to be a $100 billion market lilly can do no wrong. i see this as a great acquisition in synergies about 100 different autoimmune disorders so the marketplace has a lot of room for growth. >> will mounjaro be one of the biggest drugs of all time? >> it could be i'm waiting for it to get easier

for swimsuit season. >> a big name investor, a billionaire, this morning told me he couldn't get any because he took it for a month, i don't want to jump the line. i want to play by the rules. lots of demand what about etsy? they have a buy back plan. do you like the stock? >> for me it's still a sell. all that hyper growth has slowed down estee needs to fix its platform, pinterest making it easier they're struggling to add users. the increase d fee has gone dow. they need to figure out how to grow again and they're struggling to get that growth. everybody competing for the same eyeballs and same tell, how to

get more profitability and more money. >> all right, thank you very much our last pick is philip morris -- not pick but stock citi upgrading the tobacco company to buy from neutral saying investors are undervaluing the growth of its smoke-free products, well on track to meet its goal of smokeless products, victoria >> to me it's a buy. it's an international stock. it gets about 40% of its revenues from asia and europe. american views on tobacco are not the same way the rest of the world views tobacco and they are truly a leader in smokeless tobacco. while we move away from what they call the combustible market whether it's vaping and snuff,

it's a 16-time value and they generated $32 billion in revenues last year it's a huge company. and tobacco still sells globally >> all right victoria greene, thank you, as always good to see you. >> thanks, guys. >> you bet and lots more stories we want to talk about they could be more efficient? i'm listening. well, with ibm, you can use software to help you connect and analyze data— from hvacs to elevators to lights. what if we use ai-driven insights to pinpoint inefficiency? yep. and act on it. saving energy, money... ... and emissions. yup. that's a big one. now you've built something better for everyone. that's the sustainability solution ibm and a global real estate company created. what will you create? ibm. let's create.

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the show and a lot of stories to know about starting with narendra modi, sitting down with elon musk in new york. >> it will be an interesting week we were mentioning that president biden does not do many state dinners and modi is getting one, i guess on thursday night. >> i'm sure he likes to play up the contrast with china. >> after the meeting with blinken and xi yesterday surrounding the partnership with a transgender influencer as a, quote, wake-up call i should say so. speaking at the cannes festival said marketers need to remain humble and listen to their customers. he expressed optimism about the brand saying it's coming back. i think bud light lost its spot as the number one beer in the country to modelo, if i'm remembering correctly.

this controversy was a big part of it. >> he said a turnaround but sales are not showing it yet this as that part of i-95 that got destroyed in a fire could reopen within a couple of weeks according to officials has many wondering how the project got down so quickly. what we could be capable of. >> englewood cliffs, just new. add climate change to the list of things people consider when deciding whether or not to have children according to a survey done on behalf of hp 53% of parents say it would affect their decision, climate change rising temperatures, water shortages are the highest concerns here. it is a new generation they really pay attention. >> looking for any excuse. it's efficient to have a lot of people in one household. >> you can speak to that >> silicon valley has a new

unicorn but not a tech or ai economy. a mining company raising $200 million. bill gates' venture fund, they explore for metals >> lithium, lithium, lithium >> "closing bell" starts right now. we'll see you tomorrow kelly, thank you welcome to "closing bell." i'm scott wapner whether the bulls can keep up this newfound momentum schwab's liz ann sonders answering that question. first your scorecard with 60 minutes to go in regulation. stocks have been red for most of the day. we are keeping an eye on apple it's been about $5 away for much of the session there it is. 1 185.52 that stock is up 42% year to date