(woman) i can do diabetes differently with mounjaro. (avo) ask your doctor about once-weekly mounjaro. your shipping manager left to “find themself.” leaving you lost. 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 day, everyone welcome to "power lunch" alongside kelly evans i'm tyler mathis coming up, congress holding hearings on how to regulate ai we'll tell you about the 26-year-old billionaire they're listening to and microsoft shares jumping as the company makes more ai-related announcements including how much it's going to charge for ai in office.

plus, as the economy seems to be slowing, maybe, and maybe headed for a potential recession, we will look at the state of the online advertising business and the under the radar names one analyst thinks can be a big win. kelly? >> yes, we will, tyler thanks we'll look at the markets. green arrows across the board. the s&p is up half a percent today and similar gain for the nasdaq here is microsoft, 5% pop. gaining on its news. that pricing analysts are very excited about how creative it can be united health also up 3% after an upgrade from bernstein. goldman sachs up 3% as well boosting the dow ahead of its earnings tomorrow following morgan stanley morgan stanley up 6% thanks to wealth management and ceo james goreman telling cnbc he thinks

the worse is over for banks. >> i think we bottomed in this business four or six weeks ago now, how much it improved for that the rest of the year is unknown. next year, definitely a pickup so i think, you know -- i'm seeing it with the conversations i'm having with other ceos we just felt like, you know, april was weak and first half of may also weak. then started picking up second half in june where it's not gang busters. but we're off the bottom. >> and speaking of off the bottom take a look at shares of charles schwab jumping 12% to lead the s&p and 47% hire than the banking crisis low the company beat estimates despite 31% drop in bank deposits from the last year. ceo says he's optimistic and so are clients. >> clients are now moving back into the equity markets. so that's a good thing it's not simply clients moving money into something in cash that pace higher yields. they're back in the markets. and we saw in the aggregate for

the second quarter, buys were about 20% higher than sells. so our clients are showing optimism they have moved above the line in terms of their optimism about being a good time to invest and that's reflected in their actions. >> and lastly, bank of america shares popping 4% today after the company earned $7.4 billion in the quarter revenue up 11% from last year, stronger than a lot of people expected ceo brian moynihan will join us at 2:30 to talk live about those results, ty. congress continues to grapple with the problems of ai, one man is emerging as a go-to voice. he is a 26-year-old billionaire, ceo of an ai company and he testified before a house sub committee. emily wilkins joins with us more hi, emily. >> reporter: hi, tyler lawmakers working on ai legislation are getting advice as you mentioned a 26-year-old billionaire who is urging congress to move quickly when it comes to developing ai in the

military alexander wang is the ceo of scale ai, a company he founded to accurately label and classify data ai models use he's got the ear of top senators on the intelligence committee and he testified in front of the house panel this morning on ai's role in the military >> i don't think we should rest easy on that because military implementations of ai will be incredibly important we need to make sure the u.s. is economically dominant but also has military leadership as well when it comes to artificial intelligence >> reporter: congressman mike gallagher, who chairs the ai sub committee said he hopes lawmakers can start passing smaller and bipartisan bills on ai by the end of next year >> i don't think we have too much time to waste just given the massive -- just the scope and scale of investment and innovation in this space

>> reporter: tyler, of all the house is looking at more focussed bills the senate is working on a comprehensive and larger package. and we'll just have to see how those two approaches wind up panning out. >> so how did alexander make all of his money 26-year-old billionaire. what does his company do >> reporter: well, the co-founder of scale ai you know ai models run on data you have to give them data and they wind up processing that well, it's not always that easy. say he works with companies like lyft and lyft has self-driving cars those cars need to know which pictures have a human they can't hit and which pictures don't have a human or maybe are able to slow down or stop so basically it's a lot of classification it's a lot of labeling it's a lot of making sure that the data that our ai models are using are good and accurate, or at least accurate in terms of how they go about and free from any sort of bias that's really his biscontg

contributor to ai. it's a billion dollar company. >> little known. nice to be a 26-year-old billionaire. thanks very much, emily. appreciate it. speaking of ai, microsoft looking to cash in namely a new paid version of its ai chat bot as well as a feature for office 365 the stock hitting a record high on the news. steve kovach is here to discuss the details. what are they doing and how? >> yes, big ones monetization is the keyword out of this. so we finally got a pricing plan from microsoft today, 30 bucks per month per user for this ai co-pilot that's the chat bot they announced for office apps that we use here at nbc outlook, microsoft word, one drive, so forth. now we know how much they're going to be charging these customers. we're seeing the stock react to that let me put that number in context. that kind of sounds expensive, right? $30 per month per user. >> for companies >> but put that on top of what they're already paying most of these customers are paying $36 per month per user,

add another 30 bucks on top of that that's a huge premium just for this ai product. so this -- event that microsoft is having inspire, try to sell businesses like ours all these new suites of products they have to convince these customers it's worth the 30 bucks per user per month now, they're also not saying when it's going to be widely available. presumably this year if they're announcing pricing already but it is being tested with a few enterprises right now. >> so microsoft collects already roughly $30 a month. >> 36. >> $36. >> it depends. a lot of different plans, yeah. >> each of its enterprise customers. >> per user per month who are using the suite of 365 product they had better be able to explain what this is going to do to make my experience not just more enjoyable but create value for the company. >> that's exactly right. that's what today's event is all about, tyler just one more thing to note here, to put this in

perspective, microsoft 365 formally known as office 365 how we colloquially know about it, several hundred million users. do the math there. $30 times a few hundred million, that's the adjustable market they're going after here now, as far as what it can do, some interesting stuff again, i haven't had a chance to test it yet. a lot of people haven't outside of microsoft yet but, for example, if you're in a teams meeting and miss it. i can't make the meeting the co-pilot can collate what everyone said, tyler said this kelly said that. here are the actionable items you missed out on. >> i might want that even if i'm there. >> exactly, right. >> take notes for me. >> when you zone out during a teams meeting it's great so that is -- those are the kind of features they're saying it's going to make you more productive showed off research when announcing this today. this can add -- these ai tools can add trillions to gdp growth. so he was really pitching these customers saying, look, you guys

are really productive right now with our tools this is going to supercharge you, whether or not that pans out and people are willing to pay for we have to see it is quite expensive. one other thing they're announcing that people have been asking for, what they're calling bing chat enterprise now, this is the same bing chat bot we have been talking about the last six months or so. >> the chat ai powered -- >> exactly but this is for businesses so you might have heard these stories, apple and samsung and google banning chatgpt usage among their wokkers. it's locked down, encrypted and therefore the enterprise customers can feel safe up loading proprietary information to it and feel safe putting proprietary information in an email. that will be included. not an extra cost. >> 160 billion users for the bing chat enterprise 50% of the install base will ultimately be on the ai functionality within the next -- >> that's a lot of money microsoft hasn't given us exact

user numbers in a long time. it's hard to do exact math 2 to at least 300 million users potentially could be -- >> my skepticism on these things is as follows. there are a lot of things that these ai devices or autonomous driving devices they can do. >> right. >> but do we really need them to do those things? do we want them to do those things and are they worth the incremental cost to me, the user, to be able to do something that -- oh, look, we can do that maybe i don't really care -- >> yeah. >> sometimes knobs are actually better you know >> this is a little different -- look this is the decision ctos and cios and people who make purchasing divisions for large corporations like ours, is it worth that cost? is the product benefit going to be worth it in we don't know we haven't tried it yet. we don't know if it's going to

work that way. i will also notice, look, google is working towards the same thing. microsoft very much still ahead of google when it comes to not just announcing new products and new features on the ai front, but making money here is how we're going to sell it we haven't heard that from google yet. >> that's a great point. steve, as always, thanks we appreciate it steve kovach. still ahead, a power player to weigh in on the bank earnings b of a brian moynihan will join us in a little white and as we head to break, a quick power check on the positive side today mosaic, maintaining buy, cutting price target a new usga report says 60% of corn crops are in good condition. on the negative side, rising rates and dipping retention rates in its quarterly results one of the strongest performancers in recent years. down 4% today. we'll beig bk. rhtac there are some things that go better... together. burger and fries... soup and salad.

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shares of yelp are up today almost 2% after a bullish call from goldman yesterday they upgraded the stock from neutral to buy raised the price target 47 from 38 just under 43 right now citing stable and rising local advertising trend. we love a trend like that. joining us now is eric sharedan. great to see you again welcome. >> thank you for having me on today. >> so local -- here is why this catches my attention so much

by this point in the cycle we would have thought a lot of deceleration and local and small business because of super high loan rates what do you see here that says actually there's a lot of strength >> couple things number one there's not only just local into local but also national dollars into local. and local ad dollars generally are the ones that still are at the lowest percentage of mix, how they moved to online versus offline and we see in other aspects of digital advertising overall. so we see a secular growth tail wind of dollars believe it or not still moving offline into online then we see new pockets of opportunity of local dollars finding local consumers and national dollars finding local consumers. on top of that, we have a company like yelp that's rebuild many of their ad products and much of their ad tech stock to address that opportunity therefore we see upside from a revenue growth perspective >> sure. and when we talk about that upside, you know, you raised your price target by about $10 but how big of a deal is this

really in other words, is this just, okay, this business is a little bit better than we thought to change from a neutral to a buy, pinterest and mark last hour, maybe you think they're at an inflection point. >> yeah. and we do. and i think what we typically do when we try to change ratings like this to look not just at the absolute price target, because obviously things can be volatile in a given day, we also try to take a longer term look at the risk/reward skew. this was a stock that if you actually zoom out of the last couple years has mostly been stuck in the low 30s stock for years in the backdrop of a wildly bullish digital advertising market and this company was in transition from what it was, web 1.0 company that was predominantly tied to desktop web and now they have new ad products, more mobile focus. not just the old restaurant business but also a services business inside their revenue mix. so you come out of an investment cycle. you open up revenue

opportunities. you see a secular growth tail wind around local. we think it's the right combination of both top line momentum as well as incremental margin momentum that looks underappreciated not just for the quarter over the next six months but arguably looking out well into 2024 and beyond. we try to make that point yesterday. >> how does yelp make money? what are its revenue streams sort of by difference sizes? and which ones are going to grow fastest? >> it's really a function of advertisers trying to reach consumers on a local level and basically these guys having the impressions and service requests that advertisers and service providers want to find to be able to meet their dollars with middle to bottom of the funnel purchase intent on a local scale. that really is the best way to describe it. >> so i go on yelp and i say i want to find a plumber or find a mexican restaurant or go on yelp and say i want to find a good

shoe repair individual >> well, all examples that i would back you on, yes >> yeah. >> does this extend to any other companies, eric? >> broadly the point we tried to make in the note yesterday away from the upgrade, sounds like you have been talking about digital advertising today as well, despite the continued debate about the state of the consumer and the state of the economy, the digital advertising economy, as we did work across all the names recovered showed a lot of momentum in the june quarter. so, elements of brand advertising snapping back from some of the cuts in q4 elements of direct response advertising, especially in key verticals like e-commerce and travel remaining very stable even some of the financially driven interest rate sensitive sectors like housing and autos surprised us to the upside and what we heard from ad agencies and advertisers in the quarter away from just the yelp call also does seem to be a bit of a wider all boats rising narrative

playing out digital advertising that really was reflected in us changing numbers and price targets to the positive for most of the names in the sub sector >> you also mentioned pinterest, google as well it's fascinating what a world reverse where we thought we would be in january eric, thank you so much for joining us today. >> thank you for having me on. coming up, burying the lead. new reports emerging that lead lined covered cables in the ground under water, on overhead poles are widespread across the u.s. left behind by telecom giants like verizon and at&t. we have the details in today's tech check and what the risks may be we'll be right back. ♪

this is american infrastructure, a prime target for cyberattacks. but the same ai-powered security that protects all of google also defends these services for everyone who lives here. ♪

welcome back to "power lunch. stocks higher once again the dow up nearly 350 points bond yields falling. let's go to rick santelli in chicago. hi, rick >> hi, tyler indeed it was a very interesting morning. at 8:30 retail sales, early look at june, the numbers weren't stellar until you looked at the control number up . 6/ that was good. and the revisions which hit the screens late were fairly

positive you look at a two-year, 8:30 eastern all that volatility. we traded down around 465. then revisions hit and we started to move higher and then later in the session, maybe about 11:30, 12:00 p.m. eastern when we finally traded above that 474 high yield established during the day at 8:30, that's when the market started heating up across the entire curve ten years, october 1st ten years not the first time i've looked at this chart. we have not traded above that fall high yield. however, however, let's look at the dollar index see the way the dollar index has been moving down right now it's hovering darn close to 15-month lows the reason interest rates moved down not only on the long end but on the short end. we know that fed fund futures reflecting the end of the line darn soon with respect to the increase in rates. not good for the dollar. however, overseas, if you look at the uk, look at their guild

their guild did trade higher than their high year close why? because their inflation keeps getting hotter and hotter, ours gets cooler and cooler that put the pound nearly at 15.5 month highs against the green back and underscores how not every country dealing with inflation is dealing with it at the same speed kelly, back to you. >> that's a great point. a lot of talk lately about the uneven economies thanks. oil now. what does it mean for crude up by 2% as we head into the close of trading been much more bullish the last several weeks. maybe not last week. >> a lot to push above the 80 dollars range. feels like a little sentiment shift as rick was talking about the dollars at 15-month low. that's good for wti and hopes in the market about more stimulus out of china and signs that russian sea born exports are falling. they were down at six-month low. but i do think we need to see a confirmation of that trend because as recently as mid may they were still very high.

so that is optimism. tbd on that front in terms of russian exports. gas is up more than 5% today i thought yesterday we would have seen a big move to the upside given the record temperatures but, several traders told me that it really is all about that storage level being about 14% above the five-year average. so the market is just not tight here while the recount has fallen, it hasn't fallen off a cliff. so that's why we didn't see the big jump over the weekend as temperatures rose. now that 5% or 4.6% gain today, bok financial said this really is about shorts covering their positions. since the heat wave is going to extend nobody really wants to be on the short side here, but it's not necessarily some sort of shift in sent meant. >> the supplies are ample. >> yes solar has performed very well. wind has also performed well meaning there hasn't been a surge in demand for gas other types of generations are very much on line holding up very well in this type of climate the sun is very strong down

there. and so solar is doing well. >> it's so hard to predict we have to pay the output, the prices we appreciate it pippa stevens. >> i realized i started to read. >> that's all right. we're going to christina partsinevelos now. there she is take it away. attorneys for donald trump and prosecutors are in court for a pretrial hearing in trump's classified documents case. they're expecting to discuss how they're handle classified material in the case and how it will be presented at trial the hearing is also expected to include arguments about the timing of the trial. trump's attorneys argued it should be held after the 2024 election trump pleaded not guilty in this case. president biden hosted israel's president at the white house today. he reaffirmed america's commitment to the country. herzog's visit comes one day after biden extended invitation to prime minister benjamin netanyahu to come to the u.s. in the fall

president biden has been critical to netanyahu's plan to limit power of the supreme court. lionel messi joined his new team during a inter miami league he is expected to play in his first league game on friday. heard the tickets are really, really expensive kelly, back to you. >> i bet they are. christina, thanks. still to come on "power lunch," banks coming in strong to what was supposed to be a rougher earnings season. morgan stanley james gorman saying that inflows are incredible bank of america reported solid results and 19% boosts and ceo brian moynihan joins us here next on "power lunch." conventional thinking delivers conventional results. at allspring, we break away with purpose. harnessing data-driven insights and boundless curiosity. we dissect the market from every angle. helping to build portfolios that redefine what's possible.

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welcome back to "power lunch. some impressive results from the major banks today. and their stocks are powering the market higher. bank of america shares jumping about 4% after second quarter earnings beat out both the top and bottom lines leslie pick ert joins us now with bank of america ceo brian moynihan on a first on cnbc interview. >> thank you thank you very much for being here, brian. big day for you.

bank of america reporting most profitable first half of the year except for 2021 when i know there were large reserve releases, higher for longer rates. clearly a big tail wind for you and your banking peers you have some of the lowest funding costs out there, though. loan demand has really been steady what's the competitive dynamic right now with regard to deposits and loans right now and how is that impacting your pricing decisions moving forward? >> well, leslie, first, thank you for having me. and i just want to thank -- i have 200,000 plus teammates who did a good job of customering. that's our key competitive advantage. they bring in loans and deposits and fees and trade well. so if you think about what's going on now, obviously as the rates for excess cash, cash people don't need to run their household became more competitive, goes in the market and frankly that's some of our wealth management flows or putting those deposits in the market but the important thing is we have a huge amount, deposits

and those deposits are very stable and they represent a dominant part of the money that people move to conduct their daily lives and therefore very low cost because that money is always in motion our competitive lane is different. we have a trillion.8 of fosts and trillion 40 of loans and that difference is excess and represents people's money who is in motion conducting their daily lives. >> speaking of money in motion, consumer -- consumers clearly seem to be spending here growth in line with inflation for credit and debit card spending during the quarter. we did see that softer cpi print when inflation had been a head wind for consumer spending you know, in the past but that seems to be abating a bit. still credit card loss rates were up 40 bases points quarter over quarter although still below those pre-pandemic levels. so you know, i'm curious how you

characterize the health of the consumer at this point how much do they have left in those excess savings that you were describing a bit ago? >> let's sort out two things from a credit cost standpoint, you're seeing the activities of consumers move back to where they were. but everybody talks about normalized into 2019 pre-pandemic people have to realize, for our company, the pre -- the 2019 charge was a 40 or 50-year low and so we are at levels that are very low credit risk very low credit cost we're doing a billion dollars of provision a quarter back then and doing a little more than that now, et cetera, given recession predicted ahead of us. so, the normalization is pretty good times in banking system broaden back out, the u.s. consumer, what we see with 60 plus million consumers we have, the rate of their spending, across all the ways they put money out everyday, is growing at about a 5% rate for the

second quarter and frankly about the same rate for the first half of july here which is half the rate it was growing last quarter or end of last year over the year prior quarter year. now, that's showing that the consumer is more in line with the low inflation, lower growth economies that were there in 16, 17, 18, 19 when the fed raised rates and inflation was low. so that gives me a view that inflation is getting under control. you saw that in the spending numbers today that you see that in some of the inflation numbers over the last few weeks. and that's good. because at the end of the darks it would be great if we could get this inflation tamped and have unemployment at 3.7% or whatever the unemployment rate is that is marvelous. unemployment slow down fantastic outcome. consumers are spending they're employed they're earning more money and they have a lot of money in their accounts leftover. the question is, if times get tougher, will they be less employment, more unemployment, be more layoffs and things like that right now the activity taking place has been absorbed by the

economy. we'll have to see what happens our research team, which is terrific, still has us having a slight recession in the early part of '24. but they have moved that out again. reduced to two quarters not three and lessened the depths to soft landing more or less 1% down so they've continued to get more -- less conservative on the future of recession. but they still have a recession predicted. >> i have to ask you about your capital markets and investment banking backdrop broadly constructive during the quarter, big jump in global markets for your firm. better than many of your peers even, do you think the industry is past the trough here. if there is a potential recession next year, how is that impacting client confidence in terms of doing more deal making and issuing more debt and equity and doing more trading >> let's separate the markets and trading side of that the team have done a great job, as you know, leslie, a few years

ago tom montag still leading the group we made a major investment, increased our size we have a steady growth and profit they've done a great job and just had the best second quarter, best first half they had in a long, long time that's terrific. they made money every trading day. that's what they're supposed to do go to the investment banking side, the reality is that it looks like we outperform the market and had better year over year comparisons and quarter to quarter comparison the fee pool shrank a lot and maintained other share because we have a natural advantage in our customer bases as the market stabilized, the view of the fed closer to being done if not done on rate raises, market settles, we're seeing more activity. saw some deals get done this quarter. seeing more discussion, a lot of pipeline a lot of activity so we feel that if the stability continues to hold in the market, you'll see that activity come in as you move out of the summer into the fall. and that's important because

that capital formation is what will lessen the probability of recession out in the future because that capital formation spending is part of the drill that makes america great. >> let's talk about your balance sheet because a key topic in the industry right now is regulation and the regulation coming down the pike you have fed vice chair barr who gave a speech outlining new capital rules that would require 2 percentage points more in capital for the largest banks. you are among the largest banks. basel 3m gain could be disclosed in a few weeks could have impact on capital a lot of uncertainty a lot of time for these to get put in place, but at this point in time, what do you think are some of the major ramifications that the industry could face from higher capital requirements at this point in time? >> i would hope as people consider the rules that we realize two or three things. one is we have to have a level playing field between us and european companies that's not only important for

large banks and everybody talks about that but the regional banks who lend money, their capital moneys go up and lending to a person supply chain for another company in the u.s. and same supplier that can supply car seats in germany or france and have a lower cost of capital in their banking system, lower amount of capital required they can lend at lower rates therefore business will start to move out of the u.s. there are ramifications for increasing capital levels not only for large banks but smaller banks. we have to be careful we have a level playing field. the balance sheets of the ugs companies, they're stronger, more liquid and frankly have a higher amount of equity per square inch than the counterparts around the world. yet our capital ratios rated lower. they use advanced. getting this right is tricky that's one thing the second thing i think is to think about the ramifications of this which is in our industry, half of the assets we lend to are already outside the industry

mortgage loans, home loans or things like that even commercial credit with the private lending funds. is that a good thing or bad thing? i think in terms of maintaining order in the business, it's a good thing that the banking system is there to provide the cushions and shock absorbers and be there like early this year or during covid when we had $70 billion of loans coming on the books in matter of weeks there to support that. i think that's important i think, you know, so i think getting this right and getting a balance is important at the end of the day, whatever the rules are, we'll comply with the rules and we're sitting with 11.6% capital against requirement much lower than that and these rules come out we'll figure out what it means to us and go and continue on but i'm pretty confident earning 20 bases points plus a quarter even when we pay dividend and buy back stock, anything i heard about would be in a range that we can absorb. i'm still not sure it's the right answer for the u.s. economy. that has to be thought through it's a trade negotiations as much as a banking regulatory

we had multiple people in the role that vice chair barr is in and in the chair role saying these companies have adequate capital so the question is why do we need to change that. that's the question that will be debated hotly after the rules come out. >> yeah. you can expect a lot of debate on that front. if i'm understanding you correctly, you believe that higher capital requirements would cause a pullback in lending, would cause shrinking of balance sheets among the big banks and you think that could have ramifications for the overall economy? i believe we may have just lost his shot unfortunately i will have to get that answer from him at a later time and we will be sure to share that with you. kelly, i'll send it back to you. >> we like to take it right up to the wire. >> right up to the last window must have gone away at 40 past the hour window closed on us. >> thank you very much and our thanks, of course, to bank of america ceo brian moynihan. >> it was a good question. trouble for the telecoms at&t shares downgraded yet again

after that "wall street journal" investigation uncovered toxic lead cables left behind by america's phone companies. 30 year lows in the market falling below $15 a share. we will discuss that and more when "power lunch" returns

shares of at&t just off their lowest closing price in 30 years as a recent "wall street journal" investigation into toxic lead cables and a series of downgrades weigh on that stock. deirdre bosa digs into that in today's tech check hi, deirdre. >> tyler, 1993 was the here whitney houston topped the billboard 100, jurassic park won the box office and at&t traded at 13 bucks a share. three decades later, at&t is back at those levels after journal report over toxic lead cables left behind by teleco companies. at&t said the testing methodology is flawed but scrutiny has begun with lawmakers. asking for more details and investors as well who are trying to size the cost and litigation potential. now, this is the latest catalyst pressuring shares coming on top

of repeated downward revisions for at&t's wireless and fiber growth business. and that slowdown in subscriber growth to be fair, verizon also has a similarly ugly chart of returns over the last three decades. it's also getting hit by the lead cables report you're seeing them come back a little bit today but, some investors are looking at them to buy them close to historic lows. another reason may be their dividend yield at&t is 8.2% versus s&p 1.5% the uncertainty bringing these stocks further down. no one knows how long this is going to last. >> these are legacy telephone companies we're talking about here are any other companies like cable companies afflicted by the same issues or not >> yeah, they are. there are other companies that have been selling off. frontier communications. there's lumen technologies that have been affected by this report from "the wall street

journal. but you know, really we focus on at&t and verizon at&t in particular because it is so widely held tyler it's in mutual funds it's in hedge funds. it's held by individuals the idea it has gone nowhere in three decades, hasn't credited any value for its shareholders is remarkable. >> at&t was the phone company. verizon was a portion of the phone company. it was bell atlantic, c & p telephone, a lot of other things but these were all branchs off the at&t tree. >> you know what they've also tried to become much more than a phone company, right >> of course. >> part of the reason that it hasn't created value is all of these sort of doomed acquisitions the company has gone after -- remember at one point it tried to go after t mobile there was a huge $3 billion breakup fee. there was directv, of course and time warner who could forget that $85 billion now, you know, off

loading. so part of the reason it's huge debt load as well because of this. >> but these talk about some of these are cables running through the sea or through lake tahoe. some of these are cables hanging over bus stations and near where children are going to elementary schools. now that this is highlighted, there's -- they're going to have to remediate it somehow. and i don't know exactly what precedent there is, deirdre, but i think it will be a costly one. >> yeah. i mean, there was -- i guess some precedent that some people pointed to was this issue over lead paint that involved sherwin williams and nl industries it was ultimately i think more than $300 million settlement over lead paint lawsuit, but it actually took years to resolve so on maybe the flip side, it could take a very long time to figure this out. so that cost could be in the future but that's the one sort of precedent i've heard. >> thank you very much still ahead, some international flavor chipotle signing first-ever

franchise partnership to open the middle east. we'll trade itnd a other movers in the day in pre-stock lunch next this is american infrastructure, a prime target for cyberattacks. but the same ai-powered security that protects all of google also defends these services for everyone who lives here. ♪

welcome back time for today's three stock lunch, and we're looking at some of the movers. there's plenty to pick from with this big earnings week we'll start with lockheed martin despite reporting a second-quarter beat and raising full-year guidance on strong demand for military spending shares are down 3% and remember defense was supposed to be one of the big trades. eva atos is chief operations officer at er shares good to see you, eva what would you do at lockheed? >> i think it's a hold what's interesting with the company is they have major production cycles and that are visible, so there are no major surprises here i do not see any major categories moving the stock price and they have $150 billion in revenue backlog, so it's a good, steady, slow and steady company and a good company to own for the long term so if you're in it, it's good to

continue holding it and if you do not own it, i do not see a reason why you should rush into it, and a good long-term hold, i would say. >> i am hungry, and i feel like rushing into a chipotle. it announced its first-ever development deal to expand in the middle east in partnership with the al shia group the stock is up more than 50% on the year do you like chipotle as a stock? it's definitely a buy and we've owned it for many years and it's up 50% since march and the performing restaurant stock year to date. in fact, many people do not realize it's the second largest restaurant stock after mcdonald's this is a company that was able to grow its margin from 9% to 19% last year and that's regardless of the fact that the industry was beset by both food price increases and labor

issues this is also a company that has by far the biggest growth of 60%, and that's 6-0 despite the competition and they're able to maintain their edge and take advantage of the fact that the competition is not doing good and cutting costs and widening margins for me. >> i don't think it will be the next chipotle either, but we'll see. what about pinterest we talked to mark mahaney. he sees an inflexion point do you >> i disagree with that. i think it's a sell. i think it's a sell because, so although i would say their gross margin is above average, which i like however, the margin is minus 11% compared to 6% for the industry and their sgn accosts are out of control. the ceo compensation is out of control. the ceo has half a billion in

compensation for the last three years. although the stock price was decreasing and so this is not fair for their employees and it is not fair for the shareholders i do not see any reason to justify it this is a company that's right for the activist investor, and for investors to come in it's a sell for me >> we'll have a bull/bear debate all over pinterest thank you. we appreciate it >> still to come, europe's economic reality and the french drinking less red wine and italians rationing pasta and the consumption of meat and recession taking the romance out of that european way of life 'ldiusth and much more when "power lunch" returns

i'm so glad we did this. i'm so glad we did this. i'm so glad we did this. life is for living. let's partner for all of it. i'm so glad we did this. edward jones

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welcome back three minutes left in the show and several stories to run through today. europeans facing the prospect of being poor especially relative to americans for the first time in decades "the wall street journal" highlighting three main reasons their aging population values three times over learning leading to economic stagnation and raising electricity bills and lawmakers leaving people without a cash cushion when inflation is out control and two other data points i mentioned in the piece. europeans are on average now

poorer than every u.s. state except idaho and mississippi the average in the country is, in the u.s. the average age is 38 years old in germany and now 48 it's pretty sad, honestly. >> you look at income growth, too. in the article and the u.s.' income growth which we sometimes complain about. >> right >> remains much, much, much stronger than in those european countries you just mentioned in fact, income has actually declined we're looking at a period of 2008 until now has declined over these years in many cases and it's income growth and also growth of the overall economy. our economy has grown something like 80% europe by single digits. >> i wonder if a lot of people will notice this first hand when so many americans are in europe this summer. >> i just got back from europe it's quieter and pleasant and that i do have to say. >> as tech continues to dominate the market some mutual funds are running into a diversification problem. major asset managers like

fidelity, black rock and others being blocked from buying more shares in popular stocks because of diversification rules this as they struggle to keep up with indexes struggling with tech names and berkshire hathaway, microsoft or amazon because they made up a combined 32% of the portfolio. technology opportunities at plaque rock, can't buy apple, microsoft, nvidia, j.p. morgan's large-cap growth and apple, nvidia and alphabet. so if you want to call yourself diversified, you'd better be diversified. >> it shows you how much it's changed in the market. >> and the battle over taco tuesday is settled and we told you about this when it happened and taco john's will no longer defend will trademark of the phrase taco bell said it was too generic and anyone should be able to use it i think lebron james was involved, as well. now the coast is clear for taco tuesday and you can now do this

promotion in every state except new jersey >> except new jersey because of another copyright holder. >> maybe we'll have to find out who it is and go there let's go find them thanks, everybody, for watching "power lunch." enjoyed having you >> enjoy your tackes on. the dow is up 357 points "closing bell" starts right now. ♪ ♪ >> all right kelly, thanks so much. welcome to "closing bell." i'm scott wapner from post 9 at the new york stock exchange. this make or break begins with another new high for stocks and whether the fear of missing out might just keep this rally going for a while. we'll ask ankur crawford in a moment and your scorecard with 60 minutes to go in regulation and the dow up sharply for most of the day, better than 300 led mostly by -- well, microsoft's having another great day another a.i. announcement and another gain for the stock and those shares have been surging united health continuing its post earnings rally and getting another upgrade today,