Power Lunch - Earnings, Earnings, Earnings, + Covid coming back? 8/1/23

Episode Date: August 1, 2023

The busiest week of earnings season is in full swing, and it’s Wall Street’s chance to see how companies are faring. The results are pouring in, and we’ll dig into which names have reported and those yet to come.Plus, the U.S. is seeing a new Covid surge, with cases up by more than 10% compared to last week. Hospitalizations are on the rise as well. With an updated vaccine on the way, will enough people actually take it? We’ll explore. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Hi, everybody, and welcome to Power Lunch alongside Kelly Evans. I'm Tyler Matheson. Coming up, we've got earnings, earnings and more earnings. It is Wall Street's chance to see how companies are doing. The results are pouring in. We're going to dig into the big names that have reported and those yet to come. Plus, a new COVID surge. Cases are up by more than 10% compared with last week. Hospitalizations rising as well.

And updated vaccines should be available by the fall, but the question is well enough people take it, Kelly. And we were just talking about the return. of Manhattan office space, but let's get a check on the markets where the Dow is up 39 points today, leading the way while the S&P's down 11 or a quarter point, 4577, the NASDAX down a third of a percent. And Caterpillar is a big reason the Dow is holding up. It's adding more than 100 points to the index after an earnings beat. The shares are soaring 8%. We'll have more on those results in just a moment. Meanwhile, JetBlue on pays for its biggest drop in more than a year. Cutting its outlook as demand for domestic travel is starting to soften, and that's an 8% drop for Jay

blue. And in the bond market, some weaker data out this morning. We've got ADP tomorrow. We've got the jobs report on Friday, but the 10-year popping today, the yield over 4%, the yield on the 30-year at its highest level since January. We'll talk to Rick Santelli coming up. All righty, let's dive into second quarter results now from some of the big pharmaceutical names. Pfizer posting earnings that top Wall Street expectations, but the company did miss on sales, while Merck, on the other hand, beat on both the top and the bottom lines. Both names were impacted by dwindling sales for their COVID-19 products, which comes at a time where cases are starting to move up again.

According to CDC data, hospitalizations jumped to 12% for the week ending July 22nd. So how concern should we be about a current wave if it is that? And what could lie ahead in the fall as children go back to school? Let's ask our friend Dr. John Torres. News senior medical correspondent. Are we really seeing a spike in cases, John, and how concerns should we be? Yeah, good afternoon. We are definitely seeing a spike in cases, but when you compare it to what's happened, especially over the last three years and even a year ago, the concern isn't nearly there at that point. Essentially, they're describing it as kind of like

a ski jump where the cases have gone up and they've started to come down over the last four to six months, and at the end, there's just a little bit of an upswing, 12% like you mentioned, to put numbers in perspective January 22nd or June 22nd, sorry, July 22nd that week, 8,000 cases or hospitalizations in that week, a year ago, 44,000. So you can see a big difference there. However, we do know now that the variant that is out there. The dominant variant is the XBB variant, 95% of the viruses, and unfortunately only 17% of people have that XBB or have the current booster, the bi-valent booster shot that can protect them as much as possible. How virulent or, you know, infectious is this new variant and you will get to the to the vaccination question in just a minute.

So the virus itself is very contagious. It's very easy to catch and it's essentially getting to the point where you can catch it just about anywhere you go if the cases are there. As far as virulence, how bad it is, it doesn't seem to be nearly as bad as it was, even over the last few months or so. And this XBBB1, more contagious, less virulent, but it is certainly out there, especially for people who are more vulnerable, those above the ages of 60 or 65, those with pre-existing medical conditions, especially if they're immunosuppressed, it can still be deadly for them. Luckily, deaths have not gone up, but they do delay by a couple weeks, so we're going to definitely keep an eye on that. You said that only about 17% of individuals,

I think, is what you said, have the XB protection in the vaccines that they have taken. Is there a new booster that is going to come out that will protect or supposedly protect you against this this disease, this strain of the disease, I should say, number one, that's number one. And number two, if I have had COVID and I have had four shots, as I have, do I have some protection beyond what an unvaccinated person who has never had COVID has? And I'll go ahead and answer that last part first, and that's one of the reasons we're not seeing the virulence there, because people are vaccinated, maybe have not gotten the booster. And that's what I was referring to, 70% 17% have gotten the booster.

It's not an XBB yet. I misspoke on that one. It's just the old type of booster that's there. But 17% have gotten that booster. The rest of us have either gotten the boosters, gotten the shots, gotten infected, or all the above. And so we do have some protection. The concern is what's going to happen in the fall as that protection starts to wane and that XBV variant comes on?

Well, the FDA just went ahead. And they made recommendations to put the XB 1.5, which is one of the dominant ones, and the new booster is going to come out in the fall. They think by August, Pfizer will be able to submit for its FDA approval, and then the CDC will move forward with what they want to do as far as recommendations and who should be getting it. So that's interesting. Maybe someone like me who hasn't had, I can't tell you when the last booster was,

or when I had COVID, I guess, was a year or two ago. I mean, probably a candidate for a re-up. So Pfizer is the manufacturer to watch here. What happened to the others? So the others are coming along as well. they're just a little bit more delayed. Pfizer is leading the surge right now or leading the race to get that booster out. And that's going to be the one again.

The CDC, the FDA is going to approve and the CDC is going to say, here's who we recommend getting it. More than likely by the time fall comes around, we'll start seeing the other ones come about as well. And there'll be a different choices in what you can get. But Pfizer thinks by the end of August they'll be able to submit the data, go ahead and get the approval, and then go ahead and have the CDC recommend it. If I were to go in the fall as I normally do, either to a local CVS or to my doctor and say, I'm due for my flu shot.

Are they going to say to me, well, do you want to get the COVID booster as well? They probably are, and because right now we know that you want to get both of those. And on top of that, there is also the RSV vaccine that is coming out, especially for older adults, that you can get as well. And we know last year we had that tripodemic. And the one thing about RSV is they don't realize it affects older adults. those are the ones that suffer the most from as far as dying from RSV. So it might be that you get three of them.

And currently they're not combined separately, but definitely COVID and flu will be the ones that will be offered mostly as to whether you need it or not. That's going to depend on a couple of factors. You know, where are you as far as your own immune status, your age, your own health? You know, certain people are going to definitely need it. Other ones are going to have to think about it and decide on their own if they want to get it. Quick final question on this, Dr. Torres. We appreciate your kind of walking us through this.

as we face this choice of potentially getting all three, a flu shot and a COVID and an RSV side effects? I mean, in conjunction or one by one? I mean, should they be spaced out? Should we expect anything if they're all taken pretty much together? So you can get them together. And that's one of the things the CDC has said, especially with the COVID and the flu shot, you can get those together. There is a little bit of research out there that shows if you get them together, it doesn't bump your immune system quite as much, but the percentage is very, very small.

And so getting together shouldn't be causing an issue. If you have time to get them apart and separate them by two weeks each, that is probably the best thing to do. But you can certainly get them together if it's convenient, and that's all you can do at that time. All right. Dr. John Torres, thank you, as always, for your time today and your insight. We appreciate it.

You bet. Now to Caterpillar up 8% today, enough to keep the Dow positive while the other averages are lower. Sima Modi has more on those results. Cella. Kelly, it's not often you see an industrial stock move this way. Caterpillar shares surging up over 8% with second quarter sales, jumping 22% year over year thanks to strength in its mining business, helped by the rebound what we are seeing in commodity prices.

Construction equipment, also a bright spot putting to bed these concerns of demand reaching peak levels. CEO Jim Opleby telling CNBC this morning that the supply chain situation too has improved and that the allocation of funds from the infrastructure bill will last a long time. That is seen as a big catalyst for longer-term growth for U.S. equipment here in the U.S. As we see demand in China remaining weak, shares of Caterpillar hitting a fresh all-time high, trading at 287 a share which is above the average Wall Street price target of 255. And Caterpillar results seem to be lifting sentiment for other construction names, Eaton, which came out with better than expected results, and United Rentals, you'll see shares up

nearly 2%. Kelly and Tyler. Wow. Seema, thank you very much. Still ahead, oil having a big month in July, surging more than 15%. I'm already seeing some sticker shock at the gas station, although the stocks haven't really come along. We'll talk to an analyst who's getting bullish on Chevron and a big interview coming up on Power Lunch tomorrow. J.P. Morgan's CEO Jamie Diamond will join us. You don't want to miss it. And before we go to break, a power check. Arista Network's leading the S&P after beating on earnings and revenue.

Shares are surging almost 19% on the flip side, zebra technologies after its numbers came in short of what the street was looking for. What's a black and white joke I can make, Todd? I don't know. A lot of red for this. A lot of red on that. That's the zebra with a sunburn. We'll be back after this. Welcome back to Power Lunch, everybody.

Oil jumped more than 15% in July while shares of Chevron barely budged. We're going to talk to an analyst who is upgrading that stock in just a moment. First, let's bring in Pippa Stevens for more on oil and other topics. Hi, Pippa. Hello. Well, oil is moving between gains and losses today, not doing all that much. We do have the stronger dollar. And then also people taking profits after that enormous move in July, which was the best month, going back to January of 2022.

So the key level here to watch going forward, according to Matt Mali at Miller-Taybock is 83-25. That was the level that acted as resistance back in April. So if oil can top that, then it's a confirmation of a moment. bullish trend, although he did say it's looking a little bit overbought here, so it might be a while before it tests that levels. And it wasn't only oil, actually, last month. We also saw some strength in the base metals, copper and aluminum, had their best month going back to January. So more interest in the commodity space. People look at crude. They also look at gasoline. The prices there are moving up. Yeah, the prices there are moving up. We're at 375 on the national average, the highest

in eight months. And if we do get a hurricane next month, or this month, I should say, since it's August, that knocks a refiner offline. That could be a pivotal moment. We are seeing very strong demand. Inventory for gasoline is lower than the five-year average. So that's having an impact, and it is, of course, the summer driving season. We're getting some $4 prints, especially on those roads into Manhattan around here. That makes us question, what alternative fuel sources are there? And we finally, the first nuclear reactor to come online in this country in a long time down in Georgia, finally it's happening. This is incredible. Yeah, so this is Vogel Unit 3 that we're talking about. It's the first nuclear reactor to come online in the U.S. in seven years, but it's actually the first built-from-scratch reactor in 30 years.

So this is a very big moment for the industry. It started commercial operations yesterday. It provides enough power to power about half a million homes and businesses. So a really big moment, Maria Korsnick from the Nuclear Energy Institute told me it's a huge milestone that shows not just here in the U.S., but it puts the U.S. back on the world stage and says we're open for business. Where is it exactly and who owns it? It is near Waynesboro, Georgia, and Georgia Power is the primary operator with about 49% interest, but there are multiple parties involved. However, one thing to note here, it was years, years behind schedule and massively, massively over budget.

To the tune of, I think, about $13 billion or so over budget. So it's a huge moment for the industry, and they're all saying that this shows that we can build more reactors here. But from the developer standpoint, it is quite pricey. I'm not sure if it shows that we can build more, if it shows how hard it is to literally build one. Is there anything else in the pipeline right now in the near term? So Vogel 4 is going to come online at the end of this year or early next year. No large-care reactors are in the pipeline, but what the Nuclear Energy Institute has said is that you have to build these to have the know-how. You have to do this frequently in order to know how to do it.

And so this was our first new one in three decades. And so, you know, we were a little bit rusty. We kind of forgot how to make these. And so now that this is built, it's come to fruition, the rest of the world where there's a lot. of interest, Japan, China, Czech Republic. They can now look to the U.S. and say they know how to do that. They can use our companies, use our know-how. I don't want to wait into the political question here, which is a hot one,

but you just know with the EV revolution that seems to be coming and electricity demand rising that it's got to be filled somehow. And nuclear would seem to be a piece of that puzzle. Yeah, nuclear is the only, exactly, SMRs, that's a big thing. those are escalated to come online maybe at the end of the decade with some different technologies. But it's the only 24-7 baseload power source that's green. Although critics say that it's that waste. What do you do with the waste at the end of the life cycle?

And that's what they're worried about. And so that's why nuclear has traditionally had a lot of critics. It's because once the people use... It's kind of green with a big asterisk, isn't it? I mean... But it depends on who you talk to. A lot of people say it's purely green. It's the only green option that's not intermittent like solar and wind.

We've seen it included in the IRA. There are massive production cuts there. And so, sorry, production incentives there. And so we are seeing support at the state and federal level that we haven't seen in years. And, of course, Russia's invasion of Ukraine and renewed focus on energy and energy security, a big part of that. I think New Jersey's own grid is like 40% nuclear. So we benefit from... Yeah, 18% nationwide power is from nuclear.

Wow. Pippa thanks. We appreciate it. Pippa Stevens. And oil giant Chevron is, meanwhile, getting an upgrade over at Goldman this week. They're forecasting big gains from Chevron saying the company is on the verge of a breakout. Shares of Chevron have struggled this year. They're actually down 10%. That's about a 30-point drag relative to the S&P's 19% gain. Let's bring in the analyst behind this upgrade, Neil Mehta.

He is head of America's Natural Resources Equity Research with Goldman. Neil, it's great to see you. And it's pretty shocking. I mean, Chevron's underperformance. What gives? Yeah, it's really a function of execution. We've had a couple of issues at major projects. The first is in Kazakhstan, where we've gone over budget at Tenghis. It is a project that was initially slayed to be $37 billion in capital, and it's been running closer to $45 billion. And in the last couple of quarters, they've had challenges in the Permian as well, as productivity has missed expectations. As we look at the back half of the year into 2024 and then into 2025, some of these headwinds start to move in their direction. Tenghis, the Kazakhstan project, is 98%

complete. The Permian actually had an excellent second quarter, up 11% sequentially. And the commodity prices are firming up. And while you wait for these projects to come online, you get a 10% capital returns yield. That's a 4% dividend and a 6% buyback yield, which makes it interesting relative to the S&P 100. Sure. And what would you say, you know, we finally are seeing some catch up in crude. And I can't even quite figure out what that's about because, yes, some Chinese stocks are higher, but other big China exposure names like Starbucks are lagging. So what's going on behind Crude's little uptick here? And it's bigger than little when people start noticing it,

the gas pump in the weeks to come. Yeah, from an equity perspective, we model $80 Brent through the back half of the year and then 80 next year as well. And so to see Brent up at $85 a barrel is a little firmer than we had anticipated, and that's a function really of demand. In July, the demand print hit a record level, We've seen strength in both OECD and in emerging markets.

And you see that manifested in refining margins. We talked about that a few minutes ago in terms of the strength of retail gasoline prices. You're also seeing it in diesel prices. Typically, New York Harbor refining margins are $15 a barrel. Today, they're $37 a barrel. So we're in a very strong refining margin environment. It's causing refiners to run hard. It's pulling up the crude complex and creating some of the strength

in the physical market, which it should accrue to the valuation of some of the refiners that we like as well, including Marathon Petroleum that reported today. Yeah, you've got a couple of other names outside of kind of the pure place, if you will. First, solar, Southern are on your conviction list. What's the rationale there? Yeah, and so to Pippa's point, we need it all the above. We are going to need baseload nuclear in order to meet the long-term demand needs of a growing electricity grid.

We're going to need renewables in order. to transition effectively, and we're going to need oil and gas. And so if you look at the America's conviction list compiled by our directors of research, the three natural resources names we have are Southern, which is behind Georgia power and behind the nuclear reactor that just turned on. Congrats to them. First solar, which has an interesting play on the Inflation Reduction Act. And we just added Chevron in place of Baker Hughes as a catch-up trade as we think

the commodity price will firm up, and these big projects come into service. All right, Neil, thanks for your time today. Appreciate it. Great to see you. All right, Neil Metta with Goldman Sachs. All right, still ahead. The next ad frontier, Walmart, turning to a familiar space to grow its advertising business, its own aisles. We'll discuss that ahead on the program when Power Lunch comes right back. Welcome back to Power Launch, everybody.

Let's get to Deirdre Bosa now for a market flash on Uber. Deidre. Tyler, Uber, shares have been volatile today. Right after they reported earning shares were up and pre-trade, but as you, you can see, they have fallen throughout the day. They're now down about 6%, which is the biggest drop in nine months, which really does tell you how investors have felt about the stock this year. It has nearly doubled. So this could be some profit taking, but it is pretty steep at about 6%. So the company did notch its first operating profit. However, the sustainability of those

profits, a little cloudier earlier on we talked about Uber's equity stakes in different companies like Aurora, Lyme, D, D, Grab. So it's net profit. profitability going forward may swing on their fortunes, not necessarily Uber's fundamental. So investors could be taking a step back and looking at that profitability picture. So as you see, stock is down today. But again, it's been quite the air for the company up about 100%. A little less than that now, Tyler. They've struggled to have operating profit, haven't they in the past? They've had lots of swings in there, right?

Yeah. And again, a lot of those swings have been based on its equity stakes in other companies. So kind of tells you that despite everything that Darikhaas Shahi has done to get to that better profitability, some things are out of his control. And the companies that I mentioned, like DEDA, Grab, Aurora, these are volatile tech companies as well. So out of his control a little bit. And remember, too, we used to talk about adjusted EBITDA profitability. It is a good sign that now we are talking about gap net income. And if Uber can achieve four straight quarters of that, it actually has a chance of being included in the S&P 500.

Again, that is some ways off. And that path is a little cloudy because of those equity stakes. Interesting. All right. Thank you very much. Deirdre Bosa reporting. Let's get meantime to Rick Santelli in Chicago for more on the action in the bond market. Rick.

Yes, Tyler. You know, we had some important data this morning. Obviously, some of the PMIs were on the weak side. But what really caught traders and markets today, was jolts. Job opening labor turnover, lowest level since April of 21, and the quits were at the lowest level since March of 21. Both of those go a long way to potentially alleviate some of the tension within the Federal Reserve that has led them to keep rates where they're at or potentially go higher to combat inflation. And if you look at the two-year no yields, which is very sensitive

to inflation and pricing pressures, it's nearly unchanged. However, unchanged, is not far away from its 507 high yield close in March, and that is huge if you talk to any of the big institutional traders trading the yield curve. And if you look at 10-year, a very similar case, but a little further back, you have to go back to October. Their high-yield close is more and a quarter. Neither maturity has taken those levels out.

But the long end really is coming back. There's some de-inverting of the yield curves going on. As the Fed comes to the end, it certainly seems, though, sellers are starting to move down the curve. And as you look at Tuesday tens there, realize right in the middle area, that spike right around minus 108, that is a 43-year most inverted. So we've come off that where the least inverted one-and-a-half months, many traders are paying very close attention to whether we get back above four and a quarter in 10-year. Finally, if you look at the Niki stock market and a lot of people have been focusing on Japan since they tweet their yield curve, well, we're getting ever closer to that $9.5. 1989 high right around 39,000. What are we, 33 and a half thousand? But we're still not quite there yet. Their stock market still hasn't recaptured that area from 1989. Kelly, back to you. Would you say that the de-inverting, as you use the phrase, of the yield curve is commensurate with what we seem to be hearing in the public opinion surveys that and among some investment managers that the likelihood of a recession is,

lessening and if we have one it will be short and shallow. You know I can't really read that much into the yield curve Tyler it was so inverted at its extremes not that long ago it's certainly do historically suggest a recession the fact that it's deinverting and mostly led by longer maturities just doesn't give me enough clues to make that statement quite yet. Okay fantastic Rick thanks Rick Santelli let's get over to Courtney Reagan now for the CNBC news update. Courtney. Hi, Kelly. When updated COVID-19 booster vaccine could be available by the end of this month, the CEO of Pfizer said during today's investor call that the drugmaker asked the FDA in June to authorize the updated shot. It is designed to target a coronavirus strain that began

circulating widely last winter. Moderna made a similar request in June as well. It's so unclear if the CDC will recommend the boosters for everyone in the U.S. or just specific groups of people. Well, Canadians need to start looking for news sources other than Facebook and Instagram. A meta-spoken says today the company has started the process of ending access to news on the platforms. The decision comes after legislation passed that would force social media platforms to pay Canadian news publishers for their content. And police are searching for a trio of brazen, armed robbers that hit a luxury watch store in the heart of Paris and made out with between $11 million and $16 million worth of jewelry. Authorities say they targeted the flagship Piaget store in the middle of the day on one of the city's main shopping streets. Kelly, back over to you.

Unsettling. Wow. Courtney, thanks. Thanks. Still to come on Power Lunch, Pinterest's ad potential. The shares are lower ahead of earnings after the bell today. Wall Street eager for updates on the ad business as they make a bigger push into shopping. Can they catch up to digital giants like Google and meta?

And what about a new player like Walmart? We'll discuss after the break. Welcome back to Power Lunch, everybody. Let's look at the advertising market, both online and in store. Julia Borsden looking at digital ads. Melissa Repco here with details of a new plan. Walmart is rolling out. Melissa, let's start with you. Walmart has between online and its stores a huge captive audience to advertise to. What are they doing? Yes, so Tyler, they are ramping up their advertising business and that will change the way that shoppers notice things in stores.

Think of places like self-checkout screens or even the overhead radio that plays in Walmart will have 30-second spots that advertisers can buy and things that are also pretty pretty, popular with customers, typically, sampling stations that will be more prominent and one we're trying to incorporate more QR codes that allow people to pick up more information about that product like a bag of chips or a beverage. Are they going to have video screens also in their stores? In other words, they are having their customer, their clients, their merchandise, they're charging them to advertise in their store. Exactly. And it's not exactly new because if you think about it, every end of the aisle has always been an advertising opportunity. But now they're really trying to bring that into the more digital age with a lot of TV screens.

And it's just a little bit more high tech now. So it'll even be like a little bit of information about a pet product that's right next to pet food. So I got a behind the scenes look of this in Bentonville near their headquarters and they're planning to roll this out to more stores nationwide. The sampling thing is very exciting, just like at Costco. Julia, meanwhile, the broader idea here is to just get ads to people where they buy. I even asked Moulson-Courcio about this earlier. So where do you advertise these days? He said, it's all social media.

But even there, it's a challenge for online advertisers lately. Pinterest, they're kind of working over time. They've been working to try to make it easier to buy things. You know, investors still hoping that they can kind of push people a little bit closer to that finish line. That's the big opportunity for Pinterest. People oftentimes go to Pinterest because they're looking for products. They're sort of on the verge of shopping. And so what we've seen so far with Pinterest is that this is a company that could really benefit from CEO Bill Reddy's focus on making it easier to shop on this platform.

Now, this quarter in particular, investors will be looking for an update on a big partnership the company announced with Amazon to bring third-party ads onto Pinterest, which they announced back at the end of April. Now, loop capital with a buy rating on this stock writing, quote, we think the Amazon collaboration is critical to demonstrating the bull case that Pinterest can turn. its high intent traffic into action and become a valuable shopping utility. So the question is how this ability to drive shopping helps attract ad dollars and then how Pinterest fares compared to meta, which far exceeded expectations with accelerating revenue growth in the quarter, while Alphabet's YouTube's ads also beat expectations. On the other hand, Snap not only fell short of projections, it also forecast negative to flat third quarter revenue growth. Now for Pinterest, there are some other key areas to watch, including comments on the overall health of the ad market,

the success of some of its new advertising tools, as well as the success of his content partnerships. Now, Pinterest is expected to grow its earnings by 5.9 percent and revenue by 4.5 percent. How much of that growth is going to be driven by advertising? Basically all of it. Basically all. Because Pinterest is an ad-driven platform. They are working on some of these other businesses. But when it comes to the value of driving shopping, that's all about making their advertising.

ads more valuable. If you can get people to click to buy, then if you have an ad that says, here, check out this new couch. You can click and buy it right now. That's going to make that ad for whatever the product is more valuable. How much, you know, Melissa, if Walmart pushes further into this realm, I mean, I don't typically think of them as an advertising-driven company like a Pinterest, but as they're starting to ramp that up as Amazon has clearly pushed into this space. I mean, how much do traditional stores look to vie for advertising dollars from the likes of a Pinterest or a different kind of social media platform? including Walmart are really in the early phases of this journey, partially because what they see

with Pinterest and companies like Meta because they know it's a higher margin business, and that's where they want to be. It's a lot more lucrative to sell an ad than to sell milk and eggs. And so Walmart is making a concerted push here. So is Kroger, so is Target. And this is part of an effort to kind of take some of the playbook of those tech companies and get into it. A lot of their sales do happen in stores, so that's why they're branching to that. But they're also selling a lot more digital ads. So it's really cutting across both spectrums. Worth noting that Walmart has a huge audience. As Tyler mentioned at the beginning, you know, they draw about 139 million customers to Walmart every week. If you think about that, that's larger than the most recent Super Bowl

in terms of viewership. And it's really important to know that Amazon has really been leading the charge here. We have Google and Meta, which are the two leaders in digital advertising, but Amazon is growing really quickly in this area and is really becoming a major. third force in the digital ad market and really demonstrating to other retailers, hey, maybe you should be getting into this business too. It's not great as a user experience, though. I'm getting Googled now on Amazon, where if I want to actually find what the best product is, I have to, no, no, sponsored sponsors, but, okay, all the way, all the way down here at the end of

the page, you know, item number 13 is maybe the item I'm looking for. You're listening to what I say. Alexis, I know, Alexis is listening. Let me ask you how relevant. You know, it often used to be that when you were heading into an election year, you're heading into an Olympic year that the advertising business benefited. Is that still, does that still, Julia, hold as true as it used to? Well, for the business of TV advertising, it's definitely true.

Because for the Olympics and anything involving the Olympics, which is, of course, on our sister network, there is a drive of viewership towards that big event. The fact that that viewing is live, is incredibly valuable. You can reach people in real time. When it comes to platforms like Pinterest, what they benefit from is consumer trends. If people are going on to Pinterest to say during the pandemic, to outfit their kitchens, to buy new furniture, to figure out a home office, then they're going to benefit from that. So that's about different consumer trends. The question is right now because consumers are spending a lot of money on travel, Pinterest is trying to say, plan your trips on Pinterest.

And then we'll drive you relevant ads around that. The fact that people are spending less perhaps on retail and more on experiences like concert tickets and travel, that might not benefit Pinterest as much. So the fact that Pinterest is really about retail purchasing things, that might give us a little bit of insight into where consumers are spending right now. Well, and it suggests the pandemic was Pinterest Super Bowl. And meanwhile, Walmart gets a Super Bowl every week with 139 million people. So that does feel, as long as I guess they don't alienate people with this experience, and you saw it so maybe you can describe how invasive it is,

that that's a natural place to put those eyeballs. It will be a delicate balance. And this is something that other retailers are struggling with as well. Walgreens actually is facing a lawsuit from a company, that has turned its cooler aisles into digital screens. The new Walgreens CEO came in. She allegedly did not like the appearance of it and then ended that contract.

There's a dispute over why that contract was ended, but again, it kind of illustrates the tension here about the consumer experience and selling ads, which again, very lucrative. Yeah. All righty. Thanks, guys. Appreciate it.

Good, have you with us. Let's see what Pinterest says after the bell. Yeah. Meantime, if you want to take your business to the next level, there's still time to register for CNBC's free small business playbook virtual event tomorrow. You can learn from industry experts about how to beat inflation,

hire top talent, and access capital. Just scan that QR code or visit cnbcvenc events.com slash small business and power lunch will be right back. Welcome back. Let's get over to Sima Modi for a market flash on Norwegian Cruise Line. Big mover to the downside today, Sima. Yeah, well as you know,

Kelly, cruise lines have been among the best performers on the S&P 500 this year, but Norwegian Cruise Lines second quarter report putting a damper on the rally earnings easily beat estimates. However, a conservative third quarter guide is sending shares down by 13% in today's trade. The cruise operator also revealing that occupancy will be 200 basis points lower than 2019 levels as it focuses on premium longer term cruise itineraries, whereas Royal and Carnival are looking at bringing shorter three-day trips to customers. Now, Norwegian CFOs still very bullish on the travel economy and the

consumers saying we are not seeing any signs of any consumer deterioration. I would also point out that pricing and 2024 bookings pacing well, but again, shares down nearly 13%. Ty. All right, Seema, thank you. The busiest week of earnings season so far rolls on with a pair of tech titans on deck. We reached out for some technical support to see how to trade some key names and turn them into results for you. We'll check the charts when Power Lunch return. Welcome back to Power Lunch, everybody. AMD shares firmly. in positive territory ahead of the chipmaker's quarterly results. They come out after the bell. The stock has been on a tear this year up more than 80% on the year so far, though currently

more than 10% off the June high. We will bring you those numbers at 4 o'clock Eastern Time, and we'll hear more from CEO Lisa Sue at 9 a.m. tomorrow. That is on squawk on the street. Kelly. Yes, Tyler. And let's look ahead to some of the other big names reporting this week. We've got two of the world's largest companies, Apple, Amazon. We'll throw Dupon. in there as well here to chart them. Bill Strasulo is partner and chief market strategist at Bell Curve Trading. Welcome to you. So we've got a very busy week. Let's start with Apple, which everyone's curious about, maybe show the chart here, the price action. What are your thoughts about it? Great place to start, Kelly. Greatest creator of shareholder wealth over the

last three decades. When you look at that period of time, you're talking about 75 trillion globally, 60,000 plus global stock universe. And the stark reality is most of that, money comes from a handful of names, 2 to 3% of the total. Right. And this is the key driver right here. So you'll always have to know what's going on with Apple. It's got to be part of everybody's portfolio. So when I look at this big picture, first question is where to start.

The long term and most major indices, ETF, stocks, goes back to early 2020 in the height of the pandemic lows. So right around here, okay, that's where most of these big picture trends start around $60. Then I look at... $60. Imagine that at almost 200 now. Yeah.

Not going to see that for a long time. Now, then we look at where is fair value? Fair value is simply where is the bulk of dollars been invested in that name over this critical time period. It comes in right here around like 140, 150. Wow. And then when you look at that, these big picture trends, they tend to be symmetric around fair value. So 60 to 150 is $90, $150 and 90 is 240. Apple is going to 235, 240.

So there's still major upside here. When you say there's major upside and that it could go 90 bucks above this fair value range of trading, well, if we call that fair value, is that where the stock should be? I mean... No, I mean, at some point in the future, it may retrace there, but you can see you've got your low, you've got where the bulk of trading activities taking place.

Now you've broken out well above there. So then the question is, okay, where do we go? And all the black boxes, all the algorithms, the math and statistics is really simple. It's basically that markets trade in a series of normal distributions and bell-shaped curves, hence the name of our company. Right. And so 60, 150, 150, 90 is 240. And, you know, Kelly, when I started in the business, all the stars were the portfolio managers, Peter Lynch and Fidelity, Soros, Steinhardt.

Now the stars in this business are the algorithms and the black boxes. And I'm just basically showing you what the simple math and statistics are. All right. Apple's going to 235, 240. I want to buy a pullback of weakness in the earnings around the 180, 185 level. Risk of close below the mid range of this last leg up, 173. And then I want to take that ride all the way to 235, 240. So let's see what that means for Amazon.

Maybe we can do this one a little more quickly because Apple, I agree with you is kind of the biggie. But Amazon is still massive, still important. And talk to me about what you see in this. Yeah, this is a great follow up because totally different structure. Again, very popular, high-tech name, but totally different strategy, totally different structure. Note, we still start March 20. This is where the key lows in most of the equity markets around the world are. You go up, you make highs all the way to around 180 area, but you come all the way back, double bottom, around the same area of March 20 lows.

What price level is this around here? Around 80? Yeah, yeah. And so now we're right back in the middle of things, basically in the middle of nowhere. It sounds like, okay, you don't do anything. The problem is with Amazon, you've got this big overhang of volume that I've just circled here. The average person who is long Amazon from this critical March 2020 lows is long from about 145, 150. Wow.

So whereas I want to buy Apple and a pullback because I think there's big ups. And Amazon, if we get any kind of strength, we've got earnings august third, we get any kind of pop in here, middle 140s, high 140s. I want to let it go. Because you think other people will be doing it too. You see this. I know that you're going to have significant selling in the mid-140s and higher. Very interesting. So you buy Apple and a pullback on weakness with Amazon.

You get any kind of strength out of these August 3rd earnings into the mid-140s, 150. Let it go. All right. So very different playbooks for the two tech giants there. What about DuPont, which kind of comes out of nowhere, but perhaps tells us something about a little bit different part of the market. What does this chart tell you? Yeah, I wanted to change it up a little bit and show you something different.

This is what we call a balanced market. Here we start a little bit further back. We go to the Jan 18 highs. We come right down, these critical March 2020 lows. And then we just go and kind of go sideways. Whereas with Apple, I want to buy weakness for big upside. Amazon, I want to sell strength because I think you're going to get another move down. With DuPont, I really just kind of want to wait and watch and see the market breaks.

If you go back the last five years, the average person's long DuPont right around here, like 70 to 75 and near. And so what I want to do with DuPont is I want to wait. I want to see a reflexive move. I want to see a week where the thing's up 10 bucks or down 10 bucks and then play that as a breakout from fair value, which is around the 75 area. Sure.

So three very different strategies. Apple buy weakness for much bigger highs. Amazon sell strength. DuPont, let it just play out. Let it break from the 70, 75 area. Once you see the break, could be up or down, then you play that move. Let me throw you in audible, but something I'm sure you think about every day,

even if you don't have the chart for it. What about the broader market? Yeah, no. What are you reading here? Very good question. When I look at the S&P right now, it's range, $4,500 to $4,700. When I look at the NASDAQ 100, it's $15,000 to $16,000. So I think the broader market is kind of range bound.

But I think the much bigger takeaway is, Kelly, when you look at them big picture, we all see significant new upsides. We think over the next several years, the S&P 500 is going to 5,400 to 5,700. We think the NASDAQ 100 is going from 18,0005 up to 20,000, and we think the Dow is going from 45,000 and 50,000. Wow. So, bigger picture, we're very bullish on the market.

Shorter term, we're in a range 4,500 to 4,700 in the S&P, 15,000 to 165, and the NASDAQ 100. All right. But you look a couple years down the line, all-time new highs, absolutely. If you're right, Amazon's got to figure this out and participate because that's some serious upside. Bill, appreciate it. My pleasure. Thank you for your time today for joining us, Bill Strasullo of Bell Curve Trading.

All righty, folks. We've only got a couple of minutes left in our program, but we have a lot more content to ram right at you. It's closing time when Power Lunch returns. We're ready to go. All right, we've got about three minutes, three and a half in the program. A bunch more stories that you need to know about. So let's get right to it, starting with. Amazon. It is rolling out its virtual health clinic nationwide. The service doesn't actually

provide telemedicine that Amazon provides. Instead, it provides the platform to connect patients like you, me, with other existing telemed providers online. Now, Amazon Clinic first launched last November in select regions. Shares of the rival Teledoc are down about 5% on the news. I guess you'd expect it. When it, where Amazon goes, it is a disruptor. We have an offering like this, Teledoc's down 7% now, through various companies' insurance. I think it's ours is called Circle, but for me I'd kind of use whatever the insurance points you to. Whatever your company's insurance does.

That's what we do. We do a lot. And I think this is video in every state, I think, text message kind of appointments in, let's see, 34 states. Wow. And that would certainly be helpful. Now, and under the radar barometer shows Tesla losing some of its cool factor with Gen Z. Morgan Stanley's latest survey of its own

and turned some 500 of them found Tesla is no longer the most desirable car brand. It falls to second place, Tyler. Can you guess who's number one now? I just read it, so it's not fair. I wouldn't have guessed it necessarily. Nor I. Mercedes is the replacement one.

I would have thought maybe BMW, but I'm truly surprised Tesla is dethroned or maybe Rivian or like a lucid or something super cool like that, but EVs have actually declined in popularity. And yet, the survey indicates that Tesla will still be the number one EV sold in this country. And if they come down in price, they'll sell more of them and become the Toyota of EVs, not to the sense that they're not already. Car gurus says the average

price for a used Tesla vehicle has fallen by $25,000 from its peak in July of 2022. It's at an all-time low of just under $43,000. We took a family vacation, as you know, about a month ago, went to Norway, and we rode in a Mercedes EV that was maybe the most beautiful car I've ever lived in. It was gorgeous. The display was great. I have no idea what it costs. I'm sure it costs a tremendous amount of money. Well, that was Tesla's first original market, you know, with the hydropower and all of.

And you saw a lot of Tesla's there. Absolutely. A ton. All right, an update on a story we told you about yesterday. Elon Musk's new sign, a flashing X on the company's San Francisco headquarters. Not anymore. It's been taken down. The city said,

received 24 complaints about the X sign, including one that said the flashing light, made it hard to sleep. There it is, X, not anymore. They came in, they took it down. Apparently, with some permitting issues on top of the question of consumers or neighbors complaining that the throbbing X there. Listen, my head's throbbing from using X. I wish they'd go back. I was so excited when he took over Twitter because he's a proud of guy. No, at this point, I just refused to even call it X. Oh, we got to get in the Diamond promo. Yes, thank you.

Come on, Jamie Diamond. Quick programming note. Exclusive interview tomorrow right here on this program, J.P. Morgan, CEO, Jamie Diamond. We will discuss the state of the economy, America's banks, and much more. I think it comes from Bozeman, Montana. Leslie Picker will be there.

He's on his bus tour. Nice place to do an interview, Boseman, Montana. In this time of year. Yeah. Gorgeous. Thank you for watching Power Lunch, everybody. See you tomorrow. Closing bell starts right now.

Thank you.