Power Lunch - Air Quality Alert, and Back-To-Office Battle 6/8/23

Episode Date: June 8, 2023

Smoke from Canada wildfires is still blanketing New York City and the Northeast. We’ll look at the impact it’s starting to have on businesses that rely on customers being outside.Plus, Google says it will start cracking down on office attendance. We’ll cover that and more developments in the battle over returning to offices. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Welcome everybody to Power Lunch alongside Kelly Evans. I'm Tyler Matheson. Glad you could join us today. Coming up, smoke, still blanketing New York City, much of the Northeast. We're going to look at its impact. The impact it's starting to have on businesses that rely on customers being outside. Plus, the battle over the back-to-office movement. Google will now be cracking down on attendance. That story and a lot more coming up, Kelly. Tyler, but first let's get a check on these markets where we see the Dow, we're pretty much around session highs. Dow up 140, S&P up 4 tenths of a percent to 4284. Nasdaq up two-thirds of 1% today. Shares of GameStop are down sharply. The company getting rid of its CEO and naming Ryan Cohen as executive chairman. We'll have much more on that coming up with an 18% drop in GME. And check out shares of Carvana soaring 40% today and 370% this year. This is still only a $22 stock.

But the company is expecting $50 million of profit now in the second quarter. Analysts were only expecting them to break even. Plus some travel and leisure names falling today. Las Vegas Sands, wind resorts, downgraded to hold at Jeffries. Expedia and Airbnb initiated at Wells Fargo with an underway rating on both. All of those stocks down about half to 1.5% tie. All right, we begin with the air quality concerns here on the East Coast. The smoke from those Canadian wildfires causing New York City's worst air quality in recent history.

officials telling residents to try and stay indoors, the smog, leading to a host of event cancellations last night, from Major League Baseball games to Broadway productions of Hamilton and Camelot, members of the cast, taking ill. Now Target saying it will not offer drive-up services in locations where it is unsafe for workers to be outside. Matt Higgins is the CEO of RSE Ventures, which owns and invests in many New York area businesses. Matt, welcome. How is this air quality issue affecting your businesses, those that depend on walk-up customers? Well, I think it's the way the city has handled, unfortunately, has been somewhat of a disaster. I mean, this is foreseeable.

We knew about the Canadian fires. And when I talk to the businesses that we own or invest in, Bluestone Lane, Magnolia Bakery, these iconic brands, what I hear over and over again from our CEOs is, could we have had a little more notice and a little more communication? So we're New Yorkers. You know, we're tough. We've been through everything, but there's a feeling that there wasn't enough communication so people can prepare. Across the board, businesses are down at least 15%. How would you have, how would you have expected them to know that this was coming to the degree it was coming?

I mean, they don't need to know the degree to which is coming. But remember, to go back in time, I was the press secretary for New York on 9-11, right? So we have a collective PTSD in New York. And if there's going to be this massive apocalyptic smog descending upon our city, you can communicate. what may happen so business can prepare and have masks on hand. As a result, everybody goes home last night, says, oh my God, and what do we do? We panic and we shut everything down. We could have adapted with a little bit more communication. Well, to be fair, things haven't completely shut down, Matt. I mean, you can still go. I mean, I guess if you're going to want to dine outdoors, maybe you make a decision

that you're not going to dine outdoors. But you don't hear of a lot of business closures. It's certainly not like COVID. All I can tell you is. what's going on on the ground, food traffic, these businesses that depend on foot traffic, particularly restaurants, anything that does dining, they're experiencing a dramatic decline. It may not seem like a big deal to you or anybody watching, but the reality is, coming out of COVID, every dollar matters. And if the city had communicated, we could have prepared and we could have went on with our day. Lots of cities contend with air pollution, right?

But there was a lack of communication and urgency. If the city had given you five days notice that this was coming, what would you have done? I think people would have been prepared with masks, number one. They would have had, and when they walked out and they saw that the entire city had descended into this yellow mist that we have never seen. I was there on 9-11. This is worse than what I saw on 9-11. People panic when you've been through that and you have that burned into your memory.

People would have known it was coming. We would have made provisions. Maybe it wouldn't shut down schools. People who had kids who have asthma would have been able to prepare. But as a result, we all scrambled late last night. Yeah. Yeah, yeah. I guess I question whether the provision of masks would have changed people's willingness to go out and go to a, and go patronize a restaurant or an event. I think Major League Baseball made the smart decision in canceling the games last night because there's a risk to individuals who have asthma and kids and the elderly and so forth. But I think I question whether just if you'd had five days to hand out masks that, that, you'd had five days to hand out masks that, that the restaurants would be full.

It's not about handing out masks. That's what you seem to be making it about. I mean, I asked you the question. I mean, I just asked you the question, Matt. I said, what would you have done differently

if you'd had five days notice? You said you would have been able to hand out masks. No, I would have communicated to my employees. Look, we're going to have a situation in New York. If you have any health issues, you either could bring a mask,

be prepared, or maybe stay home. I would have told New Yorkers that who might find this is reminiscent of 9-11 to be emotionally and mentally prepared. I'm not, I would have given people information. The first rule of crisis management is to show up and provide information. Are there, are people going to pursue any damages

here, Matt? I don't know what those avenues would look like exactly. I don't know if people are going to pursue damages. So the reality is if you look at the data that the number of wildfires, I think is 15 times in terms of the acreage. This might be a steady occurrence. And we were acting in an ad hoc way in response to this crisis. And cities all over the world have had to do. with pollution, unfortunately. So I do think this is a test run for what we might have to deal with, and I doubt people are going to be rushing to file lawsuits. It's we can do better. We're New York City, the capital of the world. We should know how to handle a crisis a little bit better. Matt, thank you. Matt Higgins joining us with some of the fallout. Speaking of which,

if he's right, and we do start to see this more often, let's take a closer look at the potential impact harmful air quality could have on things like the theme parks, which are heading into their peak season right now. Shares of six flags with a number of locations in the Northeast or down about 3% today. Ian Zafino is managing director and senior analyst at Oppenheimer. He's worried things could get worse if this stretches into the weekend. Ian, tell me about your concerns and their exposure. Hi, well, thank you for having me. But the way I look at this is we're lucky here from perspective of the timing of this. You know, midweek typically tends not to be a very busy time for six flags. Kids are in school. People are at work. And not a lot of people are attending the parks right now,

and particularly not in the summer time frame. I do worry, you know, as we get into the weekend and if this persists, I mean, again, I'm not a weatherman. I mean, I think I was an infectious disease scientist before this with Six Flags and COVID. Now I'm a weatherman, but, you know, I'm really hoping that a lot of this just blows out to see by the weekend and by the busier time. But, you know, if it persists and it looms, you know, we could face some type of decline in attendance. How much of Six Flags kind of annual revenue, if I can put it like this, does a single June weekend carry in terms of exposure? Yes. So I think the way you have to think about it is they have about 27 parks, roughly speaking.

This probably affects right now. Today, it's about four parks. Sorry, two parks. Four are sort of in striking distance, which would be, you know, Great Escape, Montreal, which are currently not affected. but New Jersey and D.C. would be affected. So those are the four out of a system of about 27. June tends to be a lot busier, but the cadence really becomes July and August, or really your make or break. And that's really where your months are and your weekends become that much more important.

I assume that there are properties in California and the West that have been impacted by wildfires as well. What has the experience there been? So I think the way you want to think about wildfires is primarily as a rain day. You know, so if you see a lot of smoke in the air, just the way rain, that tends to impact. It also kind of where you are. So, you know, if you're in, for instance, in the ski season, if you're in New York and New York gets a lot of snow, people will head up to Killington and go skiing, even if there's no snow up in Killington because it's a psychological effect. But to put kind of numbers to it on a rain day.

So if you look at this first quarter, L.A. and Northern California were very rainy. Attendance swung about 10%. So you basically comp, or they comp, down 5% when they would have been up 6%. And California is about 40% of attendance during that first quarter. So it's a very, very large slay. It makes you almost wonder if the impact wouldn't be large. I mean, who knows if this would ever happen again. But, Ian, you make us aware that July, August, if that does,

you know, theme parks aren't going to be happy. Ian Zafino, joining us today from Oppenheimer. Thank you. All right. All the business impact that we've been talking about depends on how long this smoke and haze sticks around. So let's go to NBC's Lindsay Riser. She's outside in New York City right now.

Is it getting anybody better, Lindsay? And I see you are masked up and prepared. Yeah, thank you guys for having me. So, you know, we've been dealing with this for the last more than 24 hours or so. You know, my nose has been running. People have been, you know, rubbing their eyes, feeling those scratchy throats. But the numbers show that there is an improvement.

So the air quality index for this region should be around 50. That's what's considered normal healthy. Remember yesterday when we saw that orange haze blanketing the city, the AQI was about 400. And so now that number is hovering in the 170s. So it is high, but it is much better as expected to get better throughout the week. I'll get to more of that in a second. But we do know that this has had wide impacts. And you guys have been talking about the business impacts.

Schools have closed in Newark and Elizabeth, New Jersey, Yonkers, New York. So a lot of shows have been canceled. I've been talking to tourists and, you know, this is their vacation. They haven't been letting it ruin. But one couple that I talked to said instead of doing the hop-on, hop-off tour bus, they were just going to hop on and see the sights there from the bus. Another family that I talked to said they were bummed that their Hamilton tickets were canceled, but they were planning on hunkering down in their hotel in the house.

the afternoon for the worst of it. Now right now we are seeing areas like D.C., Philadelphia, areas in Pennsylvania, Delaware, Maryland, they're seeing the worst of it right now. And so meteorologists generally expect things to improve tomorrow. The AQI is predicted to be around 120. So still unhealthy for sensitive groups, but not for the entire population. And hopefully also by the weekend, things will be much clearer. Guys, back to you. I don't want to put a point on it, Lindsay, but when exactly on the weekend, Friday night, Saturday morning, Saturday night, Sunday morning, do we know? Kelly's got plans.

So, I mean, the weather models are showing that by Saturday morning that smoke should have moved on quite a bit. But, you know, the National Weather Service would be the one that they've been posting constant updates on Twitter. So if you've got weekend plans outside, if you're wondering what you should do, you know, stay glued to those because things can change on a win. Remember, you guys, when we see that hour-by-hour time lapse of what happens. And yesterday it caught a lot of people off guard.

So it's definitely good if you've got kids playing soccer games and things like that to check. And this incredible app from the EPA on the Air Now, it tells you what that AQI, the air quality index is in your area and your zip code. Yeah, the big air show in New Jersey. Kids are trying to make it. Lindsay, thank you. We appreciate it. Lindsay Riser. Coming up, the Mean King's new throne.

Game Stop firing its CEO, Matthew Furlong, appointing Ryan Cohen as exoner. appointing Ryan Cohen as executive chairman, effective immediately. The stock down 17% on the news today. Power Lunch has more when we come back. Welcome back to Power Lunch. We're watching shares of GameStop down 17% today on a big executive shakeup. The company firing its CEO and appointing Ryan Cohen as executive chairman. The shakeup came alongside the company reporting its quarterly result,

where revenue dropped and its loss narrowed in the first quarter. Melissa Lee just did a documentary on Ryan Cohen. And the meme king. I was going to say the meme queen now is here, along with our own Steve Kovac. And it's really great to have you both to kind of explain the significance of this move. And why, Melissa, do you think they went in this direction? It's almost not surprising because they've had five CEOs in the past five years. They've had three CFOs in the past five years.

Two of the managers who they brought in as part of this big shakeup that Ryan Cohen initially embarked on when he was named as chairman of the board back in 2021, June of 2021, they've left. So this is a company that has been in real chaos and turnover ever since he took over. And he runs things. He tends to run things as if he owns the place because he's so used to being the boss. I mean, think about his background. He started Chewy, right? Sold it for $3.35 billion. At the time, the biggest e-commerce transaction to that time.

Wow. And so he is an entrepreneurial genius, some would say. GameStop? He's the biggest shareholder. I think it's 10% is just over 10% something like that. He doesn't own it, but he is certainly influential. Yes. You said he runs it like he owns it. He runs it like he runs it like he's the sole proprietor. Let's put it that way. Effective CEO now with this change. He is the effective CEO and I think that's exactly what he wanted. Steve, what do people in the video game world, and maybe this is too niche of a question to ask, but what do they think GameStop's best opportunity is right now? The last time

we really heard they were going to try to shake things up with NFTs and I can imagine that hasn't gotten more traction. Yeah, I want to read you guys something from their earnings call. I think this is last fall. And this is from Furlong, the fired CEO. Here's what he said. The launch of our NFT marketplace supports GameStop's pursuit of long-term growth in the cryptocurrency, NFT, and Web 3 gaming verticals.

I don't even understand what that means. They launched this NFT platform. I think it was June or July of last year. It has not taken off. In fact, yesterday, in their 10-Q filing, they said it was. is non-material. They don't even generate enough sales to report the revenue on this.

This was supposed to save the company. This was supposed to turn the company around. And basically what happened was, if you go to the website of their NFT, it's like just junk. There's no real IP there. Wasn't that itself a Ryan Cohen idea? I mean, wasn't he the one?

Maybe I'm wrong, but who was supposed to come in with these kind of like new vows to do business. Back then, when you mentioned NFT as part of a business, you gained whatever percentage in your stock. So that was like the hot thing. But if you take a look at what has actually changed for GameStop since Ryan Cohen took over, not that much. Yes, they have more cash on the balance sheet.

They had reported a profitable quarter, but they have revenue declines. They've been cost cutting. Almost every single line of their business has been in decline on a revenue basis except for hardware this quarter. And the only reason why it's up, a lot of analysts say, is because there were supply chain issues with some of the consoles last year. Their losses narrowed, right, in the most recent quarter. But that was probably because they cost. Cost. Costs cutting. Not because they were literally making more money. Labor costs came down. Those things. But that only gets you so much, right? And then what happens?

It's still mostly a bricks and mortar business. It's still mostly a hardware-focused business. Are its days as a meme stock over? That's hard to say, because look at just the reaction in their shares yesterday just on just one thing. And also in the run-up to earnings yesterday, I think it was up five or six percent before the market's closed. So it trades like that just before earning. So there is a memeiness still to it. I don't know if you agree, but yeah, it's still on that. And look, back to the gaming point, though,

I know we've been talking about this since the meme crazy started, but the video game industry is changing. It is no longer hardware-driven. It's moving more and more towards subscription and streaming and downloads, and you don't go to a physical retailer for that. So the NFT bit was supposed to help them kind of offset that and more focus on collectibles and funco-pubes. and things like that.

But again, it's not working. It's blockbuster in the era of Netflix. Yeah, and I think that what Ryan Cohen, you know, with Chewy, you couldn't download bags of dog food. You know, there's certain things that you could not intermediate in terms of how you get that product to the consumer. And here, there's a fundamental change in this industry where you don't have to have that cartridge or whatever. I don't know what you call it these days. A cartridge.

A disc or whatnot. You don't need that piece of plastic. Is the mean king going to lose his crown or is it gone already? I mean, I can't help but wonder when I look at Bedbath, when I look at GameStop, which is now kind of sputtering and his involvement has made things worse and not better. And you just wonder, are his fans or his followers going to ultimately feel very betrayed?

You will find plenty of people who still call him Papa Cohen on Reddit. There are definitely the big fans still of Ryan Cohen. But I think that the tide changed a little bit after he sold out of his Bedbath and Beyond Steak. that's when people started really thinking, were we just the victim of a rug pole here? Yeah. Did he just lead us into it? And then we're left holding the bag.

So it's a little bit mixed in terms of his legacy as an activist investor. Who knows right now, right? As an entrepreneur, yes, he was brilliant. As an activist investor, he hasn't yet found success. And no color yesterday and what his plan is moving forward. Obviously, an FD thing hasn't worked out. They canceled their earnings call. So we have no idea.

And he just tweeted, not for long. Not for, exactly. That's not helpful. That's not very tallus. Yeah, exactly. Dismissal of an executive. Exactly. Guys, thank you.

All right, a quick programming note. The Making of the Meme King, the new CNBC documentary that profiles Ryan Cohn's rise to fame will air tomorrow night. 8 p.m. Eastern is also available anytime. Anytime. Anytime you want it. Melissa, thank you. Thank you. All right.

Further ahead on the program, calling in some technical support. We'll take a look at a screen of stock. showing signs they could break out higher and then have our technician chart them out. We'll be right back. More Power Lunch coming right up. Welcome back to Power Lunch, everybody. Bond yields falling today after jobless claims came in higher than expected. Let's go to Rick Centelli at Cebo.

Rick. Yes, Tyler, 261,000, a 19-month high. Look at the 2's intense chart. Boy, they dropped rather quickly. And today we have a really special guest, Jerome Schneider, managing director of PIMCO. Jerome, let's get right into it. You saw the date of this morning. You saw the market move.

Give me your impression. What really caught my eye is we dip below 50% on that move with respect to the July news. Yeah, we basically are undulating between the expectations of real-time data and the expectations that inflation is going to stay stickier for longer. This is going to be a consistent thing for a good period of time. We call it the aftershock economy at Pimco. But really what we're thinking about is the fact that there's a lot. the fact that we are dealing with the long-term challenges with the economy, the forecast of

likely recession, coupled with an evolving economic landscape. Profitabilities are in question, and more importantly, systemic liquidity is going to be in flux over the next six months. Now, correct me if I'm wrong, but these are topics we've been talking about a lot. So, really, it's refocused due to the bill bomb. T-bill. How many T-bills are going to be falling from Janet Yellen? One to one-and-half trillion? One-point-1 trillion over the next few months. And where's it going to come from? In reality, we're going to see that. the digestion this week has actually been pretty well. It's been pretty well digested.

Super well. But we actually have issuance out the curve. We have other things to consider. And so over time, the fundamental question is, how do we digest these T bills, get in money market funds, are robust at this point in time, but largely investing their cash in the reverse repo facility still near all-term records.

This in itself is a drain on liquidity. We're going to have excess reserves decrease. And when we look out the time schedule, we actually have to think about where this liquidity goes. There's a crowding out effect for cash. Now, correct me if I'm wrong, though. Listen, that $1.5 trillion is a lot of T-bills. And the Treasury General Fund is, what, under $50 billion?

I get it. However, has there been anything going on the last three weeks that hasn't involved this conversation by market players? Is it really going to be all that shocking? Have we taken some of the sting out of it, in your opinion? Well, the sting immediately has been very well good in communicating that the T-bill issuance is going to be large. So the shock effect is gone. However, the ongoing effect of how it's going to be digested is the effector. We have to think about, most importantly, some of the shocks we saw back in March, bank effects, funding with banks.

And there's going to be effectively a rationalization of bank funding where we need to think about it. Now, the market knows that now. And think about next week's calendar. Okay? You have the bills you're talking about. QT resumption. They basically kind of stop QT. You have CPI coming out and you have the Fed meeting and you have VIX at what?

A three and a half year low. Right. The VIX is obviously a very large sounding point with regard to the economy. It's a little bit sanguine. In reality, we need to be preparing for a little bit more volatility in market. Whether it's from the economic outlook, whether it's from monetary supply. Money supply, just liquidity in general. So portfolios, clients need to be thinking about how to utilize a diversified portfolio

to manage volatility given this low volatility state. And probably won't be here for long. Real quickly now, we have 30 seconds left. Negative one-tenth-1% Q4 and Q1. The European Union, they are, in my opinion, in a recession. Your thoughts on that, we have to close it up. Basically, we're going to see uneven growth across the economies. You saw the bank of Canada.

It's certainly not going to help our global economy, is it? It won't. And just emulates volatility that is going to be persistent throughout the global marketplace. And we have to be prepared for that by being balanced in that result. Excellent. So, Jerome, you want to be cautious, but it doesn't mean you can't plan what you're going to trade and trade your plan. Exactly.

Be cautious, but also understand that. in this world of lower volatility, recognize the fact that there's a lot of income that's out there and utilize that as a counterbalance to risk assets. Jerome Schneider of Fimco, thank you. Kelly, Tyler, back to you. Thank you, Rick. Let's get to oil now on a volatile day with a lot of news and rumors, should we call them that? Pete Stevens here.

Yeah, it was a roller coaster day. So earlier today it fell more than 4%. And that was on a report from Middle East Eye saying that Iran and the U.S. were nearing a nuclear deal that would have Iran limit there. uranium enrichment in favor of no more sanctions on oil specifically. Then about 45 minutes ago, the Reuters came out and said the White House was denying that, calling the report false. And so you can see that oil took a big tumble initially when that report came out,

but then it did start to make its way higher even before Reuters came out reporting in the White House called it false, given that a lot of people did have some skepticism around that. One source told me that while she thought the talks were happening, she was skeptical that there was any type of deal going on. And also, we have to remember that Iranian oil is still on the market. And so even if this were to happen, it wouldn't be all that much new oil coming to the market. And I think what's even more interesting here is that today's drop was larger than the gain we saw after Saudi Arabia announced the $1 million barrel per day surprise cut. And so it really just does show that the market is very, very bearish here and that it really is more kind of skew to the downside.

Who buys Iranian oil? Well, it's still on the market. It's in shadow fleets. And so that's another thing if a deal came to fruition. And then that information would have to be more out there that could limit the profits for some people who are operating kind of on the shadow market, you know, below the surface where we don't always have access to that data. All right. Pippa. Thank you very much. Appreciate it. Well, let's get to Contessa Brewer now for a CNBC news update. Contessa.

Tyler, as unhealthy air from wildfires in Canada billowing to the United States, New York's governor, is echoing a warning that there's no need for millions of Americans threatened by the smoke to even be outside right now. The governor spoke to CNBC about the dangerous conditions. There's no reason unless you absolutely have to to be outdoors. We're telling even workers, our highway workers and others who work on the roads and bridges, get indoors because people in New York aren't used to this. Other countries, other states may be more accustomed, but we're not used to it. The Vatican says Pope Francis is in good, condition following his abdominal surgery. The Pontiff underwent the three-hour operation yesterday to

repair a hernia. The Vatican added that the 86-year-old Pontiff felt well enough to receive communion today. A new measure in Louisiana would require parents to sign off before minors can sign up for new social media accounts. The state legislature just passed the bill, sending it to the governor's desk. The U.S. Surgeon General, of course, has issued a warning about the harm social media poses for young people. But of course, often Kelly, Tyler, Tyler, you'd know this. The kids don't even ask for permission, right? They just do it even if their parents don't approve.

Yes, they do. They find a way. They are, we've all been teenagers. Remember that? It was a long time ago. We found ways. They better not be anything like I was. To get around parental.

It's coming full circle. Yes, it is. All righty. Thanks, Contessa. Sure. Ahead on Power Lunch, the clash in corporate America over return to office. Google's HR chief telling employees they're cracking down on attendance. Just the latest example of the be a fight, but have conditions in the office improved for workers compared with pre-pandemic.

Can it lure them back? We'll discuss next. Welcome back to Power Lunch. The battle over return to office flaring up on some new fronts this week. Martha Stewart says America will go down the drain if remote work continues. Chipotle calls its corporate employees. employees back four days a week. Farmers insurance changing its remote work policies and employees are revolting. Plus this today from CNBC.com, Google to crack down on office attendance, asking

remote workers to reconsider. Jennifer Elias wrote that piece and she joins us now from San Francisco. Cracking down on office attendance. So is this monitoring badges and, you know, is there, what were those people in the hall monitor, Jennifer? Yeah, exactly, Kelly. So basically they're going to be monitoring badge data and see, you know, if employees in aggregate are actually coming into the office. They're also, as of yesterday, we reported the chief people officer ordering basically for these to be included in people's performance reviews as well. So now your office attendance and whether you're adhering to the schedule is actually going to be considered in their performance reviews. She also encouraged employees who are already approved for remote work to reconsider.

and to come back into the office. So this is definitely the most, you know, stringent ask for employees to come back to the office. What are the expectations at Google? So right now it's hybrid work, and for them that means three days a week at minimum in physical offices. And then they have, you know,

the additional two days to work from wherever they want, but the company is really doubling down on having employees come in. And I think they've been able to be a little flexible up until this point, but now they're definitely kind of trying to say, no, you need to come in three days a week. I expect you to be there all day on those three days, or could you come in and do a couple of hours and then say,

I've checked in, my badge has been red, I'm out of here. Yeah, for the most part, I think they do expect them to be kind of butts in seats for the whole day, although every team and business organization is kind of different. But yeah, for the most part, it's like, we want you in here, we want you doing the work with your employees. and they've also been having some issues with leaks, and they're in a very competitive place right now with AI. So I think that's also part of why they're asking some employees

to be more strict at this. Jennifer, thank you. Jennifer Elias reporting. We appreciate it. All righty. There could be some advantages to coming into the office, I suppose. A new CNBC survey monkey poll shows the percentage of workers who believe that in-person employees will enjoy better career opportunities keeps rising.

Sharon Epperson joins us now with. more on the latest findings there. So if I come in, I might get through, get higher in the corporations quickly. Well, a number of people are saying that. You know, this CNBC survey pulled nearly 9,000 workers and a record number of employees, 56 percent, say in-person workers will have the opportunity to advance further in their careers than workers who are hybrid or fully remote. That's nearly 10 percentage points higher than in October of 2021. Now, the majority of respondents are already working fully in person, but there are some key differences in their answers among age, gender, and race. Workers in their mid-20s to mid-30s are least likely to see a career benefit

in working in-person, while more than half of younger employees, as well as those 35 and older, believe in-person work is an advantage. Women are much less likely than men to believe in-person work has a better impact on career advancement, and a far higher percentage of white employees than blacks, Hispanics, and Asians believe in-person workers will have better outcomes than those working remotely. Now, also, higher-paid employees, those making $150,000 a year or more, are far more likely than workers who make $50,000 a year or less to say there is a career advantage to working in person. And you can go to CNBC.com for more of these survey results. You know, I think that, and there's so many things to talk about here, but for younger workers, obviously, being in the office is huge for your career.

For older workers, again, if it's important to society to raise the fertility rate and actually, like, we have to make a decision about how viable. Even Martha Stewart, I don't know if Martha Stewart has kids. Does she? Has she? I don't know. But I did think it was really interesting that the least likely were in that 25 to 35 category where you are thinking to see a career advancement. Because what are the priorities. So I think that's what you're saying, what you have to ask yourself at the different ages. I just wonder if this is being painted with a very broad brush when the situation varies so much. And so many of the people in that 30s cohort all just moved to houses way far away from their offices during the pandemic.

It might be ill-advised, but it's a reality. And I just, you know, there's going to be further disruption because people's lives are so set by this. Just want to mention the introduction of AI in the middle of all of this. Does that make a further onus kind of against the worker or to the idea of come back into the office and improve your productivity or could it help your productivity at home as well? Well, far more people said that they see that AI could help them in their career if they're working in person than the ones that said remotely. And so they said it wasn't necessary, but it could help them in their career. So they're seeing in the office, I think, an opportunity to use AI in their jobs. What would each of you say, and I'll then tell you what I would say, if I was asked that same thing,

question. Will you get farther in your career if you are an in-person worker or a remote worker? What would you say? I would say farther in my career in person, but I might not have a career if I had to be in-person all the time. So it becomes a bit binary. Yeah, I definitely say in-person, more opportunities. But again, not all the, like hours, not all day, not five days a week, but at least. Not necessarily five days a week. But I agree. I think there is no substitute for being there. Oh, sure. And so, you know, what is it, 90% of it's just showing up. You got to show up.

And if you don't, because there are some that are managing teams abroad, they may not be able to be there to see one another. But you have to see them at least doing a virtual meeting once a week, something that's not just about the business initiative, but what did you do? Something social, something lighter. Or limit the hours? I don't know. Does it have to be five days old? You know, just be creative. Be creative.

Say it. Yeah. Sharon, thanks. Great stuff. employees are creative. So if you want us to be, goes both ways. Exactly. We are monitoring air quality alerts up and down the East Coast as the wildfire haze spreads. Check out this view from the Reagan National Airport in D.C. where it's getting pretty smoky. And as we had to break, June's Pride Month and CNBC is celebrating all month long.

It's sharing stories of corporate leaders. Here is Deborah Schrapp, Patty, Toast Chief Technology Officer. You know, the definition of the word. pride is consciousness of one's own dignity. And I think this annual event designated time to recognize the LGBTQ community and to celebrate out loud and proud creates great awareness for ourselves and others that we're deserving of love, honor, and celebration and of dignity. And I think everyone deserves dignity. Welcome back to Power Lunch. Checking the markets right now, all the major averages are right near session highs. Dow's up 179. S&P is just seven points shy of 4,300. And shares of Amazon are rising after Wells Fargo initiates coverage with an overweight and a $159 price target. It's about $35 up from here.

The analyst saying the company's investments in fulfillment centers is paying off an increased efficiency. And speaking of Amazon, a firm shares are rallying today after Amazon announced they'll add the Buy Now Pay Later service to Amazon pay. John Ford asked a firm CEO Max Levchen about that move. Here's what Levchen had to say. One more step towards making the product more ubiquitous. Digital wallets are accelerating. We expect half of e-commerce to be done through some form of digital wallets. Being offered within the leading ones is really important to our mission of bringing honest financial products to all consumers.

And this is one major step towards that. Very excited about it. You can catch the rest of that interview today at 4 p.m. closing bell over time. All right, still ahead. We asked our technician to check the charts and tell us which names he thinks are poised for a breakout or a breakdown. We'll get some technical support. One power lunch. Return. Pro out with a new screener that lays out a list of stocks showing some signs that they could be about to break out. These are S&P 500 stocks that have 50-day moving averages about to break above their

respective 200-day averages. That's a bullish momentum. signal for these names. With all these strong technical signals, we thought we could use a little technical support, so we're going to bring in Dan Fitzpatrick. He is founder and chief market analyst with stockmarket mentor.com. Hope I got it right there. Dan, welcome. Good to have you in house with us. Let's start with one of these stocks, Ball Corp. A lot of us are familiar with what Ball Carp does. We're not so familiar with the chart. Yeah, well, it's interesting on this one. You can see the what I call the gap and crap pattern here. Gap and crap.

The gap and crap or the jump and dump. Okay. What they did was they reported earnings that were, let's just say, they said, well, we expected to be really, really bad, but instead it was just really bad. How do you like us? And so the stock ran up and then it fell back down to like a 17% decline. There we go. So it went up and then it gave back everything.

Yeah. And so what that, look, what that means is folks are looking at the earnings and they're going, oh, that's great. They buy the stock and then they turn around and they sell the stock back down because they realize, well, that was a mistake. So this is a stock that's really still under distribution. Even though the 50 and the 200 day are trending sideways, that's not really a bullish signal. It just means that the stock's kind of dead.

So as a general precept or principle here, gap and crap is to be avoided. Right? Yes, that's a technical term that I just made out. Let's see how it applies. So that's a sell for you. Ball is. What about Sherwin-Williams? You feel better about this one?

Sherwin-Williams is about, it's funny that the technicals are about the same, but the chart is very, very different. Here, you've got this inverse head and shoulders, which I'm highlighting in yellow. So you've got the inverse head and shoulders, which signifies a reversal pattern from this prevailing downtrend. And then over the last several weeks, the stock actually consolidated and drifted sideways to where the volatility gets really, really low. And then finally, it exploded. Now, this is the exact opposite. We've got, again, 50 and 200-day moving average crossovers. But in this one, the stock jumps out, and it doesn't pull back. So this is just kind of a gap. And, well, here I am. How do you like me? So I think this is a stock that's probably going higher, definitely longer term as a trader. Maybe you want to wait a couple days and see if it pulls back, but I like this as much as I don't like ball. And it's that little tail of white that we see there on the screen is the telltale, right? That's right. Yeah, just this little thing there. That little thing right there that you erased.

Or you just threw over. Well, I do tend to do that. Yeah, it's that little squiggle there. This little thing right there. Yes. I got it. All right, let's move on to CarMax. And this one, you're bullish on as well.

Explain why. Yeah, so CarMax actually looks, again, pretty similar with the 50 and the 200-day crossover. And here, again, the fundamentals are just kind of so-so. They're not that great. And when you think about it, particularly with the used car market, which is what these guys do, their margins are super, super skinny. Car prices are getting up, and I think it's a little bit like homes where people are not selling their homes because they can't afford the new ones.

Same thing here. So this had a nice breakout right from the 50 and the 200 crossover. And again, it's moving higher and you can see the volume. The volume's also going higher as well. So this is a stock that's under accumulation. Frankly, I think the industries are really bad one to be in. But when things look the worst, a lot of times that's when stocks start to run. So I think that's going to happen as well.

CarMax and Sherwin-Williams, I would say are stocks that you want to buy if you're patient and want them for a long-term hold. What are those volume spikes that I see there in January, 23, June 23? Sure. Well, these are basically it's the stock's response to earnings. Earnings, yeah. And that's a really good question, because it doesn't matter what earnings really are. If earnings are really bad, but they're less bad, you'll see that because the stock will jump.

People say, oh, it's not that bad, I got to buy the stock. On the other hand, if earnings are really good, but, the stock jumps and then sells off, well, then it really just tells you what the market is expecting. And so you've got to pay attention not just to what the stock does in response to earnings, but what it does afterwards. You look at the follow through. If the stock follows through, the move is real. If the stock doesn't follow through and it reverses, well, that's the gap and crap again.

You made it very clear and colorful. Dan Fitzpatrick, thank you. Hey, thanks a lot, Tyler. You got it, my friend. Those were just three of the names that you can get the full list of companies that met the screener at CNBC.com slash pro. And coming up, the geopolitical threat from China is reportedly coming much closer to home. Also, corporate bankruptcies hitting a troubling milestone and why a golf league not named PGA or Live is making headlines. It's nearly closing time when Power Lunch returns.

Welcome back, everybody. about three minutes left in the show and several more stories you need to know. So let's get right to it, starting with the Wall Street Journal reporting that China has reached an agreement with Cuba to set up a spy base in Havana, specifically focused on the U.S. The so-called eavesdropping facility would allow Beijing to monitor electronic communications throughout the southeastern United States, where many military bases and important shipping hubs are located. Officials familiar with a deal told the journal that China will pay Cuba several billion dollars for the right to build the facility. We spoke with a senator last hour,

who said, in a way that this kind of eavesdropping activity is going on while he was concerned, he says it's going on all the time and emphasize that we need to be proactive about all of it. Yeah, and I'm sure we can defend against a lot of it, I presume, I don't know. But it's certainly part of a pattern of China sending spy balloons over our airspace and now coming into our hemisphere and potentially building a listing post. For what it's worth, John Kirby, the spokesperson for the White House National Security Council, did tell Reuters we have seen the report and it's not accurate. So this remains a Wall Street Journal story.

Again, because of where it's the Wall Street Journal. And given the history there, I don't think they would run a story like this. No, I mean to say something is not accurate does not mean that the whole thing is meritless at all. There may be quibbles with certain parts of it. Who knows? All right, let's move on. Rising rates and inflation, coupled with the e-commerce boom, pushing several corporate bankruptcies or corporate bankrupties overall. the highest level since the Great Recession a decade and a half ago.

The new data show that this year, 286 bankruptcy so far. That's the largest total for five months since 2010. Consumer discretionary firms leading the way with 37 of those. You've probably heard the names. Party City, the mattress maker, Serta Simmons, bed, bed bath, and beyond. Among them, it shows the vulnerability and the thin margins that these businesses are operating on, particularly as their costs of goods sold. rise. Yes. I think that people, you know, we have... And rents go up. Rents, there's a lot of factors.

We focus a lot on the publicly traded names, who in some cases are holding up relatively well in terms of the consumer right now, but these bankruptcies are up in a big way. And it's, I mean, it goes back to everything from stock selection to where you want to be in the credit stack and all the rest of it. And another big move in the world of golf. A team golf league, led by Tiger Woods and Roy McElroy is getting its first team owners. Alexis O'Hanian and Serena and Venus Williams are purchasing the first club in the TGL. This. This league is expected to play Monday night starting next year. No one knows how this week's PGA Live deal will affect it, Tyler.

But what an incredibly busy week for golf. Yeah. Team golf feels like it's a coming thing. Live has an element of team golf involved. And they always have the celebrity partnerships. Yeah. All right, folks, thanks for watching Power Lunch on a smoggy, foggy Thursday.