♪ welcome to "power lunch," i'm con at thtessa brewer the supreme court strikes down the president's plan to cancel student loan debt. and we expect to hear from the president live this afternoon on the next steps for the white house, grappling with the cost of higher education apple hit the $3 trillion mark as it soars to a new all-time high, but the question here for the company and all of tech, can it go higher from

here first, a check on the markets as stocks, higher across the board. there you're seeing them, the tech stocks outperforming as they have most of this year. nasdaq up 31% in the first half of the year while the dow managed only a 3% gain those huge gains leading many people to wonder if we're in for more growth in the second half of the year. in the face of, really, a lot of economic uncertainty we asks investors, strategists, and our own cnbc contributors for their opinion in the delivering alpha investor survey 61% of the 400 people polled say we have entered a new bull market 39% say this is a bear market rally. 80% say there won't be a recession this year. maybe not at all let's bring in jim tierney, and joining me here, ron ensana, cnbc senior analyst and commentator, co-ceo of contrast capital partners gentlemen, great to see you. i can see you out of my

peripheral vision, ron, when i say the survey shows, no, there won't be a recession, yes, will will be a bull run, which of those statements do you disagree with >> when i'm shaking my head, it's the definition o a bull market, contessa in my education over time, the last 39 years, a bull market really starts when you have taken out the old highs from the last bull market so, whether or not it's a bear market rally remains open to speculation. it has certainly been a tradeable rally in the nasdaq, the nasdaq composite, and the s&p 500, but nasdaq -- i should say the s&p stopped out at about 4,800, so you would have to go through that and stay above it on a consistent and persistent basis in order to define it as a new bull market. that's just my understanding of how you measure bull markets, not 20% off the line >> what about the recession question with me, you have said before that there is likely to be a recession based on the data that we're getting from the economy past performance -- >> is no guarantee of future

results. i wrote a column today, we might be entering a goldilocks phase and outlined some of the reasons why i might be wrong about the recession call, despite the fact that the yield curve is inverted, leading economic indicators down for over a year, typically all of that suggests recession. manufacturing has contracted real estate is in recession. but we've got three things that would suggest that maybe that recession call can be put off, and that is number one, households are not as interest rate sensitive, nor are corporations as they were in prior cycles they all locked in long-term mortgages or long-term debt. you've had manufacturing -- i should say, construction boom in manufacturing and residential real estate, and then you have had some other factors that have maybe offset more of the fed's tightening than we would have otherwise thought, which is fiscal spending, which is stimulative, not contracting >> when we're looking at how far the tech rally has gone this year, a.i. gets a lot of the credit here. do you think there is still enough enthusiasm over a.i. to

keep fueling growth for the second half of the year? >> i think when you look at the market performance, up 17% this year, on estimate cuts since the beginning of the year, you have about a 20% p.e. expansion i think that's going to be very difficult to duplicate in the second half of this year getting to a.i. specifically, i think we have to see benefit for all companies. that will come i'm just not sure that's going to happen in the second half of this year. and the fundamentals get tougher, and you looked at consumer spending today. the consumer's pulling back. so, all of that suggests that the fundamentals are more stretched here than not. >> we were just showing your picks, that you said abbott laboratories, automatic data, and american tower are stock picks that you think can weather whatever's to come in the second half where are you seeing these cracks i mean, you were talking a little bit about consumer spending here. do you think that those gaps will widen for the broader economy? >> i think they have to. when you look at the totality of what the fed has done over the

past 18 months or so, 500 basis points of hikes and maybe a couple more to go, that will eventually have an impact. you look at existing home sales, down 20% year over year, that's because people just can't move out of their house they can't give up that 3% mortgage and take on a 6 or 7% mortgage, so i think there are things that delayed the recession, and they may continue for a few more quarters, but ultimately, we probably get into a recession here >> that issue of the rate hikes and where people have bought into their debt, not just -- it's not just an issue for homeowners it's also an issue for companies that issued corporate bonds. >> and they issued long-term debt, so what we call termed out their debt at extremely low interest rates, so they don't have the near-term concern of having to refinance that debt, contessa, you know, and that is a big deal, because normally, if you were a corporation that was running with short-term debt or adjustable rate debt that was coming due in the intermediate term -- now, we'll see some of that, and in fact, a lot of that in commercial real estate. we won't necessarily see it

elsewhere. but it's a different environment, so the interest rate sensitivity of the economy may be less than we would have otherwise thought. the other item that i would add that i didn't mention is energy prices have continued to come down, and everybody was expecting them to go up, up, up. opec has cut three times and yet here we are at around $70 a barrel gasoline is cheaper than it was a year ago so, consumers, although they may be slowing their spending, have more disposable income than we would have thought otherwise at this point in the cycle. >> that's a really important factor what gas prices cost for how people feel in their po pocketbooks, regardless of other factors that are going on. the same can be said for what you spend at the grocery store, and even if you're seeing inflation moderating, that doesn't mean it's gone away. it certainly doesn't mean the prices have gone down once again, which i think is part of your point, looking at the cracks that the consumer demand is presenting. what do you think about this issue of the u.s. becoming energy independent and becoming

such an incredibly important producer of oil and gas? >> i think that's such a key point. it's a key point politically around the world, and it's something that we have to pursue, and it would resolve a lot of different things. >> we're actually there, contessa we're back to being the largest producer of oil in the world certainly, we have surplus natural gas, which offset some of the concerns about russian supply, and it's hard to underestimate, although i did originally, the impact both the chips act and the inflation reduction act -- that was an event a week or so ago, a department of agriculture official was there talking to power companies about the incentives that are built into the inflation reduction act for them to make transitions, spend more on infrastructure, zero-interest loans, all kinds of incentives to do this, which may spark additional economic activity >> it's interesting, because you heard the president this week really trying to send that message to the american people, and yet, at the same time, he's getting a lot of blame for inflation, for how much government spending is going on, not to weigh in on politics

here, but it's part of what the white house is trying to navigate in terms of that message. >> if i were in their shoes, i would suggest, look, the money that we're spending is productivity-enhancing disinflationary dollars. this is not the type of stuff that just stimulates excess demand >> ron, thank you for being here >> sure. >> jim, great to see you thank you for joining us on this friday >> thank you all right, from stocks to bonds. traders including the fed's preferred inflation gauge. rick santelli joins us live. hi, rick >> hi. contessa, it's been a wild week. look at the intraday of twos and tens on one chart. rates have gone up, and even though for today's session, twos are only up a little, tens are nearly unchanged, they're both up smartly on the week yes, you're right. gdp was better than expected, consumption, better an cthan expected we had eight quarters in a row above 4% on that core pce on gdp

price index yesterday, even though it moderated to 4.9%. you had the lowest deflator year over year since april of '21, but the pce core deflator, the 20th consecutive month over 4% chicago, ten months of contraction in the pmi, and finally, if you look at the one-year michigan inflation, 3.3, the lowest since march of '21, but it was the same as two weeks ago, not really new. so, what's going on? let's go talk to danny the trader hey, danny, what's going on? >> how you doing, rick >> we see all the metrics today, and for the most part, here's what i hear. inflation is coming down unlike the uk, no outliers to the upside, but it's coming down like a helium balloon with a slow leak. what does it mean? why are equities so happy? >> right now, we see everybody here on the floor getting ready for the quarter-end big collar trades coming through. >> what's a collar trade >> there's a big rebalance that happens every quarter, so the market's coming in, getting ready for it >> so they're coraling where they believe prices are going to

stay somewhat contained. >> correct >> how is that trade is it big? what are the ramifications >> it's big, and it moves off of whatever's happening with the data points that we have had yesterday and today. >> okay, so, this is the last trading day of the month, the quarter, the half-year, so on the close today, do you expect you're going to see some action based on where all of those things line up >> absolutely. >> is there any kind of a notion, is it going to be more bullish, bearish, or it's hard to tell? >> it's hard to tell, which is good >> in the end, here's the biggest question i have. when central bank looks up at the screens on days like today and yesterday, and they see we've made progress, do they want to still continue to put rates higher and put the economy in a deep freeze or leave it where it's at and let it work for a while, pretty much like the atlanta fed has talked about? >> i think we're getting ready to see -- the fed's done a good job at trying to anticipate a soft landing and a couple of potential rate hikes left and continue to be data dependent, which the markets like >> i guess one other issue we should revisit, and that is the

fact that we kept interest rates virtually at zero for a long time, you could argue since a little after the credit crisis so, they really think things are going to clean up smartly in a couple of years? there has to be some common sense here the central bank should keep rates high, but they can't expect this progress to be overnight when it took so long to screw it up >> that's right. if they say time, and usually before we see, as we get out of it, we're going to be out of it, but two rate hikes, maybe three. we'll see what happens, but things do take time. as one of my favorite people says, rather be early than late. >> absolutely. doc sanders, the man danny, you're the man today. thank you for joining us contessa, i hope you have a great independence day, and back to you >> thank you very much, rick santelli, for that lively report coming up, a mega milestone. market cap of $3 trillion for apple. what could fuel the tech goliath to another trillion dollars in valuation? that's ahead in today's "tech

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welcome back to "power

lunch. markets near session highs now the dow is up 317 points, and look at apple, up 1.78% at $192.97, which means, with those gains, it hit an all-time high and crosses the $3 trillion market cap level let's get to "tech check." joining us to talk more about apple's run, deirdre bosa. >> it is only a symbolic milestone, but what it does tell us is what an incredible run apple has been on. keeping up with mega cap, that magnificent seven. it is notable too that growth is slowing at apple revenue is expected to decline this year, yet it has still been here, and you know, it begs the question, what is apple? it's a defense play in a way because of its huge amount of cash on the books. it also may be becoming sort of this can't live without consumer staples company. the ecosystem, the installed

base of 2 billion people, this is what the bulls point to >> dan ives was with me, as you know, a well-known apple watcher/believer >> big-time. he thinks it's going to $4 trillion very soon. >> yeah. that's exactly what he said to me but a lot of it is based on services and what a.i. does for apple. what's your take on the new ecosystem that apple's trying to push about the headset and the way that a.i. gets you there >> it's a little less about the headset, i think, contessa, because that's -- first of all, that's not coming out until early next year and in a very limited way, u.s. only, apple stores only. $3,500 it's not going to be a huge seller they're not positioning it that way. but look, citi had a great note today in initiating coverage, and they kind of laid out a very bullish case i think their price target's $240 it's at, what, $190 right now, and part of that is, it all goes back to the iphone, a little bit

more so than services, because one trend we saw this last year is people are gravitating toward the more expensive pro, so even though sales might be down, they would be a lot worse if people aren't buying those pro models, so citi analysts believe the margins are going to improve even more because of those more expensive phones on top of that, like deirdre is saying, that's 2 billion opportunities to sell more services >> well, deirdre, how does this -- the broader issue about consumers pulling back on their spending, how does that factor into what apple's facing because honestly, i still have an iphone 10 i haven't upgraded my personal cell phone if you're one of those people and you're looking at, perhaps, looming recession, do you do it now? >> i mean, a lot of the bulls think that apple is that, and the iphone is that one product that you're going to shell out for, and that has sort of being the case so far. the fact that you haven't upgraded means you could be a

customer in this upcoming cycle when we see the iphone 15, so that could just add to that bull case i will say,the flipside of this is that apple, remember, briefly hit $3 trillion at the beginning of this year, and then all the china supply chain risks came up, so i feel like this is an area that always sort of rears its head i don't know if steve agrees with me, every once in a while, investors are caught flat-footed because even though apple is trying to diversify that supply chain, it is still hugely dependent on china and that's maybe sometimes taken for granted. >> they learned their lesson the hard way last year with those chinese shutdowns. that's why we've seen the expansion into india to diversify the supply chain it's not going to happen if for some reason china decides to lock down again or there's another crazy wave of covid or something to that nature or a conflict with taiwan, whatever it might be, apple's stuck in the same situation that they were in the last holiday quarter, and sales are down. i would also say, just with what deirdre is saying, that sales are going to be -- have been down the last two consecutive

quarters they will be down again this quarter. they've already guided towards that unless the iphone 15 just really knocks our socks off, the chances of someone like you going out there and upgrading are very low, but at the same time, contessa, i bet if i looked at your apple account, you'd see tons of subscriptions in there with you and your family >> yeah, right >> they almost -- they would love for you to buy a new phone, but they almost don't care because you're spending on services >> deirdre, it's almost as though steve knows me. i don't know >> you're not buying the phone, you're not upgrading >> i have no plans to upgrade, because my phone still works and it's fine, and iphones are expensive. >> but between you, your family, your kids -- >> he's right about the subscriptions and the apple tv >> and now i've got a 7-year-old buying all those subscriptions >> there's accidental roblox charges, right >> we haven't gotten to roblox just yet coming up, student loan groans, losing shein, and home

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the white house is bracing for the fallout from a supreme court decision reversing president biden's plan to forgive roughly $400 billion in student loan debt. emily wilkins joins us from washington with more on this it was widely anticipated, emily, but it's still -- i think there's a lot of people who are hanging on what's the white house going to do next? >> that is a huge question, contessa, and we are expecting to hear more about that. you know, today's ruling, it's a huge blow to some 43 million borrowers who are expected -- who expected to have some or all of their student debt canceled under this program biden will be delivering remarks later this afternoon on the outcome of the case, but in a statement earlier today, biden emphasized that his plan would have primarily benefitted americans making less than $75,000 a year president biden said he would stop at nothing to find other ways to deliver relief to hardworking and middle class families, and he vowed his administration would continue to

work to bring the promise of higher education to every american borrowers are going to be hit here with a one-two punch, contessa not only are they not getting any of their current balance canceled, but they'll have to restart making payments this october after a two-and-a-half-year hiatus for covid. biden said he plans to announce new actions to help borrowers. one of those might be coming as soon as next week. the education department is working on a new program for borrowers that would tie the amount they owe each month with how much they make under the proposed program, which is more generous than current ones, borrowers would not have to pay more than 5% of their discretionary income and any amount left over after 20 years of payments would be forgiven, leaving more in their budget for other things like clothes, electronics, and stuff that retail would like. contessa, the department could finalize this rule as soon as july >> emily, thank you for that so, with student loan relief now gone for those americans, we're wondering whether it trickles down to retail

the resumption of payments in the fall means borrowers will likely have to cut back spending on, as emily was saying, clothing, electronics. let's discuss that and some other key retail headlines we're watching with melissa. melissa, first of all, we've even seen analysts talking about the hit for specific retailers where do you see this reflected in the share price >> yes, the two primary factors at play here are retailers that skew towards discretionary goods, like electronics and clothing, but also skew towards having a lot of younger consumers that are college-educated, so think names like american eagle, even companies like target skew toward those items that people might, frankly, say, i can't afford it anymore. i'm paying this bill again so, we're seeing not a lot of movement today with the retail etf, because as you mentioned, this was widely expected, but we are seeing target down a bit, american eagle down a bit today and some of those other names, urban outfitters, were in the red today slightly on this news. >> we were involved in a very heated workplace conversation

about the student loan forgiveness and the end thereof and how that's factoring into personal budgets upstairs with some of our colleagues it is an issue if you're talking about younger consumers, i wanted to ask you about this whole thing about shein because the social influencers are in all kinds of trouble because they took a trip to this -- what is shein >> shein is basically an ultra-fast fashion company it's grown to be huge, valued around $64 billion at this point, but it's been in the hot seat for a lot of different reasons from both lawmakers and consumers. it recently filed for an ipo reportedly, according to reuters. that's something the company has denied, but also the company sent some influencers over to china for a tour of factories. the influencers posted a lot of glowing results, and online commenters were very skeptical, saying, hey, they don't really buy it they think it was staged and just kind of adding to the company's headache >> usually, investigative journalists don't take paid trips to see the factories in china. let's talk a little bit about

the electric lawn tools that we're now seeing everywhere in home depot why is this a big effort for these home improvement companies to focus on the move to electric tools? >> there's a couple of different reasons. ok, those home improvement names were big winners during the pandemic they saw a lot of growth now, the tide has turned they're seeing a lot of people pull back, not buy those big-ticket items, and frankly, they need something that gets people excited again, and they're seeing more interest in these electric tools because the electric tools are much quieter so there's a bit of an upgrade cycle going on california also notably is banning sales of these new tools starting in 2024 >> the gas-powered tools they want you to buy the electric ones. >> the only thing i'm going to sigh, i'm a huge diy'er and i own a lot of electric lawn tools. an electric chainsaw is simply not as powerful. >> you're not the first person i've heard say that, but when do

you buy those? >> ten years ago >> well, there could be a difference if you try some of the tools today. i spoke to home depot about it, and i also spoke to some of the manufacturers of the equipment, and they say, give it another chance they're doing demos with a lot of landscaping crews and even golf courses, saying, try it out and maybe you'll be impressed, because the battery life has gotten longer, and the power has gotten stronger. >> they're not trying to convince me. they're trying to convince these landscaping crews so they can sell lots and lots and lots of electric tools >> exactly that's where they see the opportunity. >> melissa, i hope that you and everyone at home has a different picture of me now, knowing that i have wielded a chainsaw before >> yes let's get to bertha. >> i don't have a chainsaw, but i have a power drill a majority of judges in brazil voted today to block former president bolsonaro from seeking public office again until the end of the decade. the judges ruled the 68-year-old far-right leader violated brazil's election laws by abusing his power and casting

unfounded doubts on the country's electronic voting system bolsonaro called the ruling unfair and vowed to appeal mexican navy officials say they seized a submarine that contained over 3.5 tons of drugs earlier this week, believed to be cocaine five people traveling on the vessel were detained and turned over to local authorities in the country. and a new law goes into effect tomorrow in hawaii that will ban people from packing guns in their beach bags the measure prohibits firearms from a wide range of places, including on beaches, in hospitals, stadiums, bars, and movie theaters three maui residents are suing to block that law from going into effect. >> bertha, thank you ahead on "power lunch," is corporate debt crisis coming some warning signs pointing to potential default. plus, flag on the parlay more and more nfl players suspended for violating the

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all right, we're seeing stocks at session highs today, dow almost a personal point. the s&p 500 is up 1.33% and you've got the nasdaq up 1.5%. well, stocks, of course are soaring through the first half of the year, but investors by nature are always looking for the thing that could derail the rally. our next guest sounding a warning on corporate debt. a lot of high-yield debt is coming due in the next few years. let's bring in chris white, the founder and ceo of bond click, a start-up company that's building an innovative central market system for corporate bonds i like it, because you can watch bonds trading the way we normally watch stocks trading. all right, so, first of all, we've been watching this year of extraordinary rate hikes what has that meant for investors? where do we stand today? >> the story really goes back to when the fed changed policy, and they went from trying to help companies to really trying to fight inflation by raising rates, so if we go back to the

begin of january 2022, that's when the policy shift occurred, and it really had a profound impact on bond market yields >> you've got, you know, the doubling of current rates, a five-year aaa-rated credit today provides more yield, you say, than a five-year bb-rated credit did this time last year. that's remarkable. >> yeah, well, actually, it goes back a little bit further. if we start at january 2022, when you're looking at bb-rated debt, it's a five-year be, b-rated debt is yielding less than what current aaa-rated debt is yielding. so, that's actually just showing you how profound the shift has been in terms of credit yields >> and then you see investors just rushing into short-term debt is that going to remain the case >> well, as rates started to rise, investors jumped to the short-term debt because of a lot of uncertainty and also long-term debt gets hit in terms of its value going down when rates rise and what we've seen, for example, even today, contessa, there are over a thousand

investment grade bonds that are trading between 50 to 80 cents on the dollar, so for example, i saw that you did a stock segment on apple a few minutes ago well, apple long bond right now is yielding about 470, but on a dollar price basis, it's trading at less than 70 cents on the dollar, so there are huge values out there for investors who are okay with holding long-term debt for, you know, a couple of decades. however, initially, if you were holding that debt in the beginning, it lost several points apple was issued at par and then now the debt's down to something below 70 cents on the dollar >> i mentioned all the corporate debt that is reaching maturity now and through the next couple years. what impact does that have on the companies themselves, and then what opportunity is there for investors? >> sure, so, let's use an analogy that i think you and i can relate to, which is, when you have to refinance your mortgage, you're hoping that rates at the time are going to be favorable to you, so if you got a mortgage at, let's say, 4.5%, and now you have to

refinance at 8.25% or 8.5%, that's going to hurt your household income that's what's happening for the high-yield market. lots of high-yield debt is short-term in nature, and what we're seeing is a significant wall of high-yield debt that looks like it's going to mature in the next three to four years. many of these high-yield companies do not have the money to pay off their debt in full, so they have to refinance in an environment in which interest rates have effectively doubled since 2022, so i think for investors, something to pay attention to is how are some high-yield companies not only their debt, how is their stock going to react to these higher debt capital costs, because it's ultimately going to hurt their net income >> are there specific companies you're seeing warning bells about that >> i know that, for example, sprint is one of the largest issue i r issuers of high-yield debt, and they have a ton of debt coming due in the next few years. this is where i would say looking at bond data becomes really advantageous for all investors, whether or not you're investing in bonds or stocks or

other asset classes. by looking at the debt profile of the companies that are out there, you are going to be able to predict who's going to have some headwinds and what other companies are looking at >> what about market liquidity how does that factor into this bigger bond picture? >> the one thing the institutional investors were worried about is how are overall trading volumes going to stand up in the face of more volatility what we've seen is basically trading volumes have remained steady, which i think is a really positive indication that just overall liquidity conditions have been solid, and that investors aren't getting beaten up when they have to trade in the marketplace, which is certainly happens at times of really pronounced volatility where the market's whipping around >> chris, nice to see you. thau thank you for coming in right before holiday weekend time now for our weekly etf tracker. this week, we're looking at small cap stocks mega cap tech getting most of the attention and money so far this year, but small cap funds seeing net inflows of more than $300 million in the last week according to our partners at

track insight. and you can see gains of more than 4% this week for vanguard, spider, and dimensional small cap indexes. more information is available on the wilshire etf hub june is pride month and we're celebrating by sharing stories of corporate leaders here's sally susman. >> on my journey, i was very fortunate to come out early when i was in my 20s, and it's given me a lifetime to build true, deep, authentic relationships based on honesty and truth we can never stop celebrating and honoring pride month the important rights that we've won, those that i hold dear, the ability to be married, to have adopted a child, cannot be taken for granted, and we need to think about that at least once a year

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♪ (upbeat music) ♪ ( ♪♪ ) constant contact's advanced automation lets you send the right message at the right time, every time. ( ♪♪ ) constant contact. helping the small stand tall. welcome back to "power lunch. after years of shying away from gambling, sports leagues have fully embraced it, but this balancing act of condoning it while also making rules for players and league personnel is

proving rather difficult the nfl suspended three players indefinitely this year with a fourth player getting sidelined for six games for violating the league's gambling policy five other players were suspended in april joining us now is chad millman, the chief content officer at the action network that focuses on the sports betting space chad, good to talk to you. first of all, the nfl has made it clear that integrity is the priority you talk to other league commissioners, team owners, they will all say the same thing, so where's the disconnect between what's the priority for the bosses and what's happening with the players? >> well, look, it's like any other element of regulation that the players have to abide by, whether it's what they're doing on the field or how they're taking care of their bodies. the nfl is in the gaming space all the leagues are in the gaming space at this point it's legal it's regulated it's a lot of money for them to ignore if they're not in it. so, now, they have to figure out, how do we police the

players? that's where it gets a little bit trickier, because a lot of the rules are very clear there's one story about isaiah rogers, a player for the colts, this story was broken by sports handle he had gambled on players on his team and their individual performance. that is a no-no. that is going to be a no-no. that is a black-and-white no-no. everybody should know that there's other regulations that are a little bit harder to follow about where you can gamble and where you can't gamble, and some players are finding themselves tripped up by these gray areas that all the leagues are trying to navigate >> like you can't place bets on sports from team facilities. that's the rule, and so when they go on and make an -- even if they're betting on golf, it's still violates the rules okay so, that's one i think that that's -- i just want to put it in perspective for the investing audience about why this matters because what we've seen is when integrity in sports comes under suspicion or skepticism, what you see is a regulatory

backlash, both in sports and for the gaming regulators, and this regulatory crackdown, we've seen it happen in europe, it ends up hurting the bottom line. so, there is a cohesive effort to make sure that there's broad education in sport about the rules for gaming we got to talk about this. you know, there's a forbidden word that would be like a, you know, it's like a match between two guys who are out there and seeing who -- you know what i'm saying i don't like to say it on tv, but draftkings and fanatics, you've got two charismatic, invested founders running these companies, and they make a play, both of them, for points bet it's going to fanatics, but fanatics had to significantly ramp up its offer because of what draftkings did. can you set the scene about what happened and where we're going >> yeah, this is when it gets really fun to be in the sports betting space, and this is

what's fun about it being so new. we're getting these exciting corporate rivalries, and on the one hand, you have fanatics, owned by michael reuben, who is charismatic, brilliant, competitive, and he's built an incredibly successful business through fanatics, and he decided a couple years ago he wanted to get into the sports betting space, and he's being very patient, but they are inching closer to launching as an operator in multiple states, and part of that plan was to acquire a lesser-performing operator like pointsbet they made an offer for $150 million as they were getting closer to the finish line, draftkings came in and decided to offer more, offer up to $195 million now, draftkings is struggling to reach more market share. they are consistently second to fan duel

fanatics is a little bit like the boogeyman. they know they are going to be able to acquire customers, so draftkings decided to try to block it it didn't work out their bid fell apart fanatics came up by about $75 million, which, for fanatics, is really nothing, and it gives them a little bit more of a competitive opportunity once they begin launching in many more states >> a gaming insider, a highly placed gaming insider, texted me, like, draftkings spent a couple thousand on the legal paperwork here, and then they cost fanatics $50 million or $70 million to ramp up their offer for pointsbet. they got it done my whole team back there, everybody in the control room loves sports betting they are bemoaning the all-star game and then the fact that there's nothing the day before, the day after. is there anything to gamble on >> well, look, you can always gamble on the home run derby,

which last year people were gambling on it, and it's incredibly fun i don't recommend anybody invest a huge number of dollars in it it's one of those, you don't really care, you're just watching it, it gives you a little bit of a sweat to have a good time while you're watching it then you got the all-star game the next day, and then you just take wednesday off and, you know, you got the barbaso will champ championship, the pga tournament, so take wednesday to research barbasol and enjoy the home run derby and the all-star game >> it's supposed to be fun, guys taking a break from it is fine chad, good to talk to you. thank you. that was fun coming up, a special july 4th edition of three stock lunch because what's a holiday weekend if we don't talk about beer and barbecue we're trading pepsico, beyond def e eaotr -inbev on the he si othbrk.

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we're looking at companies whose products might be enjoyed over this long holiday weekend first on our list is anheuser-busch the stock has been hit after a controversy bubble up over its partnership with a transgender

influencer they're trying to get the focus back on beer saying it will assist wholesalers and distributors here with our trades, david wagner you broke out your special fourth of july shirt for us. i love it. >> big fan of america. i had to >> okay. let's talk about beer. what's the problem here? where did the sales go >> yeah, will contessa, i'd be remiss to say this is a very polarizing company right now and most importantly for some americans, i think it calls into question the old july fourth adage that if you leave budw budweiser and firearms outside your house, kid rock's going to bring you fireworks. we all know the story here i think the biggest question is if the recent price movement conforms to the underlying fundamentals of the stock, yeah,

we know sales are down 30% year-over-year, but i think investors are going to focus on the second derivative here basically does this lead to changes in shelf space allocation in favor of molson, coors and other brands secondly, how much it's going to affect tap handles given the craft beer boom, most restaurants and bars only have one tap for light beer there's just a lot of unknowns here and it really begs the question how does bud light get their core consumer back because it appears that price discounting really isn't solving the problem nor enticing me to want to own the stock. >> they issued a big rebate for the weekend where it makes a case of bud light almost free. i don't know if that's going to move the stock but that's what they're doing. pepsico is introducing it's like ketchup for fourth of july

ketchup is supposed to be tomatoy and pepsi. i don't get it >> puts me on the sidelines just there. but i'm a bull on this and contessa, i'll be honest that staples, they're pretty expensive right now even after they've underperformed the s&p 500 by about 13% it's currently trading at a 30% premium to the market and then you look at pepsi. it's the most expensive house and neighborhood trading at like a 35% premium. i think investors are getting a lot of earnings resiliency as about two-thirds of revenue comes from north america it's been pretty darn stellar. market expeckations are continuing to grow at an 8 to 9% rate that tell mes me consumer are continuing to pay for what they want and pepsi sells affordable

indulgences. >> lastly, beyond meat shares down more than 40% over the last year. would you get in here? >> no. no i think i'd pay homage to hank hill he taught americans that if someone asks for their steak well done, you should ask them politely to leave. that's what investors have been doing to the stock it's well done and it's basically been shunned from portfolios the fundamental problem is they have a product that everyone wanted to try because it materialized overnight it's not meat and it's not a cravable aspect. honestly, without mentioning the balance sheet, this stock is just doa no growth. no margins not my style >> i'm a yankee doodle dandy my boss told me never to sing. don't sing still to come, ferrari revving

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a term policy? even a term policy! find out if you're sitting on a goldmine. call coventry direct today at the number on your screen, or visit coventrydirect.com. ferrari on a record run. 50% gain this year helping drive

its market cap to more than 61 billion. that's higher than both ford and gm robert, what's behind this power move >> it's a lot of wealth basically. ferrari shares hitting an all time high today, up more than 50% for the year its market cap over $60 billion. worth more than ford or gm ford and gm sell more than 4 million cars ferrari sales about 13,000 the reason for that valuation is faster growth and much bigger profits. the gross margin is now over 50%. more than twice tesla. more like a louis vuitton or gucci margin analysts expecting even stronger growth this year with a launch of a lot of new models like yesterday, they announced the 1,000 horsepower hybrid sf 90. 0 to 60 in under two seconds over $800,000.

if you walk into a ferrari dealer today and try to buy a car, any car, they start at $230,000 you're looking at a three and a half year wait try ordering its new suv, you can't even get one until at least 2026 unlike most cars, ferrari's gained value over time because demand far exceeds supply. they're one of the few brands slow rolling the ev transition their first not expected until 2026 but still the best performing auto stock after tesla this year. >> okay so this is a company not worried about consumer pullback at all >> not yet we haven't seen it even if there is one, they've got that three and a half year buffer to take them through any kind of recession or slowdown. when you talk to the auto analysts, they say if you're looking for safety in the auto sector, it's ferrari >> what does this mean about the luxury sport car market? like the appetite for that and

the need for speed >> right now, it's super strong partly because people worry these internal combustion engine ferrari's famous for, are going to disappear we'll see what happens in the ev landscape. >> i love it thank you. and thank you for watching "power lunch." "closing bell" starting right now. contessa, thank you so much. welcome to "closing bell." this make or break hour begins with a first half to remember for stocks and whether this market melt up can keep going in the second half of the year. we'll ask the wharton schooschool's jeremy siegel. inflation read comes in lighter than expected. stocks reacting almost immediately and it's a broad-based move for the s&p 500. the index pacing for its best half since 2019. a strong week for energy, industrial and financial