Power Lunch - Ending The Week On A High Note? 8/9/24

Episode Date: August 9, 2024

A lot has happened since last Friday’s market meltdown. We’ve seen 2 separate rallies, a swath of earnings reports, and some more economic red flags. We’ll recap it all, and tell you how to prepare for the week ahead.  Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Good afternoon, everybody, and welcome to Power Lunch alongside Kelly Evans. I'm Tyler Matheson. Glad you could join us on Asagi Friday in New York. A lot has happened since last Friday's sell-off tied to the jobs report. We've seen two separate rallies in that space of time, a swath of earnings, and some more economic red flags. We'll recap it all for you. Let's start with a check in where we stand right now with the major averages fighting to keep yesterday's gains. The Dow is up only 13 points right now. The S&P 20, the NASDAQ outperforming up a half percent.

but the S&P is coming off its best day in two years. And beyond meat shares have been halted briefly, the stock popping 20% to $8 a share. Is it a short squeeze? It has 38% short interest. We see no other deal headlines, and there's been some chatter about a short squeeze on the Wall Street that's Reddit.

And let's dig into some of the key earnings movers today. First, you got take two beating estimates. The maker of Grand Theft Auto said it sees significant growth ahead, driven hot by the highly anticipated Grand Theft Auto 6 or VI. And Expedia shares are higher after results. Investors struggling off their weak guidance and warnings about demand from the company. The shares are up almost 10%.

Capri lower, the fashion company behind Versace, Michael Coors, weak results there. The CEO citing softening demand globally for luxury fashion. Haven't we heard that time and again? Elf Beauty, by the way, keep an eye on the beauty trade. It was once a sure bet no longer. The shares are down 15%. As sales jumped 50% on the launch. of new bronzing drops the serum, Tyler.

I know you were following that closely. I'm one of the main drivers behind that. To help the company today. Most restaurants, Kelly, you know, have been struggling lately, but not so sweet green. It is thriving. The salad chain beating on results saying last hour that things look good in that business.

That stock up 29% today. And quickly moves in the solar space, the tan ETF down 2.5%. More on that later in the hour. All right. The volatility this past week was historic by some standards with the Vic spiking past 60 for the first time since 2020. It started with that weak jobs report last Friday, that sort of unnerved investors, reigniting recession fears,

with blame getting tossed at the Fed for being too slow to cut rates. All the yield talk leading to problems on the international front, the yen carry trade unwinding over the weekend, leading to panic in Japan, along with a thousand point decline on Monday here in the United stays Tuesday. A bit of a comeback, but lost Steam Wednesday, multiple companies warning about consumer weakness. And then finally, we saw the comeback return in earnest in yesterday's session, Best Day in a couple of years there. For more on how this all happened and what could happen next, let's bring in Mike Santoli. We've kind of summed it up, Mike. Do you want to put a button on the past week, what we've seen and what we might expect? At least all of that, maybe a little bit more.

I would even take it back before last Friday's jobs report for the setup to what got the market to its record levels in mid-July. And to me it was, and I said at the time, an abundance of certainty around several things, which was, we're headed for a soft landing, which means the Fed is going to do the right thing at the right time for the right reasons at the correct pace, maybe even throw in there some certainty around the election probabilities and what that would mean policy-wise. And then you did have this, you know, hard landing fear raised by the jobs report. And in terms of the way that destabilized markets, to me, that's the key. The accelerant was what we're now called.

the yen carry trade, borrowing in yen to buy riskier assets. But it was part of a multitude of strategies, I think, that were premised on continued calm markets. The market was just very gently rotating higher. You had very tight credit spreads. You had this very trending yen in a weakening direction. So all the thing, the constellation was all working in a harmonious way. And we did get this, I say, accelerant to the sell-up, because I think that's what it was. It was a concentrated liquidation of risk positions on Monday, which destabilize the markets, but I think we still have to contend with sort of the aftershocks of that. I would say it's like a half-life. The VIX is now going down toward 20. That's a more normal level, but it's not settled

down entirely. And we still have to figure out how much of a probability of true economic weakness we need to account for in valuations. And I think a lot of this goes back to last Wednesday as well. The Bank of Japan and the Fed had their meetings on the same day. The Bank of Japan raised rates to positive territory for the first time since 2008. So that does make that funding source more expensive. We saw the yen rally. And then the Fed at the same time kind of hinted towards rate cuts in the future. And so you had this big reversal. I wonder and I wonder what you're hearing about this. What happens in the months to come now? I mean, some put the yen carry trade at $40 trillion in size. So do people put it back on and go, okay, the economics have changed slightly, but we can still stick

with this? Or is it the end of like a 15-year era? I would say, I don't think it immediately, rebuilds to where it was. And these notional values of these collective traits, I have no idea what to make of those things except to say it's big. What Powell says about like the neutral rate of inflation, we know it by its works. I'm just looking at the market indications of stress or something like the volatility index. Look at the forex markets. Are they having dislocated moves or not? And right now they've settled down. So to me, I think there was a massive just flattening out of risk positions on Monday. I think it's clean. up positioning to some degree. I don't know that it necessarily is going to be the next thing

that matters in terms of the direction of this carry trade. To me, it's much more about, you know, did the economic and earnings fundamentals substantiate where the market is trading out right now? Well, that's what I wanted to ask you. We've talked here a lot about sort of macro concepts, whether it's the broad U.S. economy, the carry trade, interest rates and so forth. But there's been in the last 12 days, let's say, there's been a lot of company-specific news that has. has come out on earnings and forecasts and beats and and and forecasts going forward that were not maybe what the market expected. No, I think there's a high sensitivity to signs of consumer fatigue. You're seeing that in a multitude of companies. And I think really all it is is we assigned a very

low probability to a true economic downturn in valuations when the S&P got to 22 times earnings. And again, everyone thought this rotation out of the crowded, magnificent seven type stocks and into small caps made all the sense in the world because small caps had lagged by so much and cyclicals is lagged by so much. That's a weird time for that to happen late in an economic cycle, if we're indeed late in an economic cycle. So I think that sort of logic also got upended by this repositioning this week. So in aggregate, look, earnings are okay. I mean, they're growing at double-digit rates on an annual basis and all the rest of it. It's about how much it might have to come down and down the road. But do you just put a cap on that?

the MAG 7 part of this goes back to those alphabet earnings, goes back to Boucher exiting its Apple position. We talked about this with Marco Pappich last hour, this idea that is their outperformance era over, the long side of the carry trade, in other words, kind of crumbling. I don't know if it's over. I definitely think there's a very serious reassessment going on in terms of whether we paid too much up front for whatever AI can deliver us. You know, companies that were rewarded for raising their CAPEX budgets, that's now in question. So, yeah, I do think it's a good argument that we're going to be having for a little while in terms of this rethink of AI as creating this exceptionalism in the U.S. market because that's what it did for months on end. Indeed. All right, Michael. Thank you very much.

Can we keep him here? We'll see at 6 o'clock tonight. Are you going to be here at 6 o'clock? You have a special stock market-oriented program. Thank you very much. I'll do that. But from home. In your slippers, no.

With more economic data due out next week, what can we expect for? from markets. Let's bring in Chad Morgan Lander. He's senior portfolio manager with Washington Crossing Advisors. And Greg Daco is chief economist with EY Parthenon. Welcome to you both. Greg, remind me, what is it next week? CPI, any other top-level data? We have retail sales as well next week. So it's a busy week in terms of the direction of travel of consumer spending as well as inflation. Two very important elements for the Fed. As you noted earlier, we are in this uncertain environment where I think both investors and policy makers were hypnotized by this gold deluxe economy, where most were expecting things to

remain fairly steady. And what we learned after the payrolls report and the Fed meeting is that the economy is indeed weakening, as we've been highlighting for time now, and the Fed is likely behind the curve when it comes to easy monetary policy given expected economic conditions. Chad, do you think they're behind the curve? To what extent do you expect them to play catch-up? And what should we make of market positioning? So I don't believe that the Federal Reserve is really behind the curve. They're getting what they wanted. So they're in the cap-bird seat.

They had that inversion of the yield curve. There's a deceleration or moderation of high-frequency data points that are coming out. You're hearing from earnings, particularly in June, July, that there has been a material slowdown. And now the Federal Reserve will do what the Federal Reserve has typically done throughout. history, which is start to lower interest rates. September will be the launch of it, 50 basis points, perhaps, perhaps 25 overall. And next week we're going to focus on is the initial jobless claims, the CPI, and of course, that PPI. The inflation numbers are cooling. They're getting what they wanted. What kinds of stocks, Chad, excuse me, should I be looking at in this kind of

environment. It feels as though some of those Mag 7 stocks are a little wobbly again. I mean, you've got Nvidia and we'll have earnings from them within the next couple of weeks. But there are a lot of them out there that feel maybe a little vulnerable. Should I be looking elsewhere if I've got fresh money to put to work? Thank you for that. Yes. Actually, you're going to see a broadening out of many of the higher quality, lower volatility names now participate within the market. as you see the deceleration of the U.S. economy. So we would look at consumer staple companies, healthcare companies, and two to look at us well, or Elevents as well as Pepsi,

to high-quality companies growing profitable, well-capitalized, lower volatility names. Greg, as we ponder that, I wonder what you would tell us, you mentioned you think the fed's behind the curve, but does that mean you think the data is going to weaken? or just that you think inflation is giving them room to cut? I think both are likely the case, Kelly. I think we have an environment where there's ongoing disinflation momentum. Consumer spending has been slowing for some time now.

Disposable income growth is only 1%. That's going to drag consumer spending lower. You have less markup ability from businesses. You have more pricing sensitivity. You have declining wage growth. And you have a strong productivity environment. These are all this inflationary. But the direction of travel of the economy is really what's most concerning for me.

seeing that the labor market is similar to that of 2019, but we're coming in a different trajectory with a slowing of labor market developments. I'll note one thing to highlight why the Fed, I believe, is behind the curve. If you look at their latest summary of economic projections for the end of 2025, they have an unemployment rate at 4-2, they have inflation at 2.3 percent, and they have a Fed funds rate at 4.1 percent. Look at today's economic conditions. The unemployment rate is at 4.3 already.

around two and a half, and the Fed funds rate is still at 5.4. That means that the delta, in terms of real interest rates, is around 120 basis points, which would give the Fed the leeway to ease monetary policy. I don't think they will do that, but that's the type of gap we're looking at in terms of monetary policy being excessively restricted. In other words, you don't think they'll go all the way down to that level, or that they won't make changes at all? That they'll be more gradual. We're not going to see a rapid reversal in their approach to policymaking. We've said for a while now that the Fed has been excessively backward-looking and data-dependent. They don't have, in my opinion, a sufficiently

forward-looking framework to analyze current economic conditions and expected conditions in six months, 12 months' time. And unless we start to see the Fed reclaim control of the narrative and adopt more of that forward-looking perspective, the Fed is likely to remain behind the curve for some time. Fetcher Powell will have an opportunity at the Jackson Hole Symposium to regain control of that narrative and perhaps propose a for-looking perspective, but I don't know that most policy makers are on board. So, Chad, as more and more market commentators, including Grary, say that the Fed is behind the curve, hasn't stuck the landing or hasn't stuck the landing just yet. What does that really mean? In other words, how

How worrisome is it that if indeed the Fed is, quote, behind the curve? Does it presage really bad economic times ahead or maybe just a higher rate of unemployment than we might have anticipated a bumpier landing? It would be a slightly bumpier, more volatile landing. I mean, currently credit spreads are still historically tight. They'll have to continue to widen out so high-yield bonds will be less atroval. You'll see earnings for the S&P perhaps roll over by $10, $20, $30. Currently, market multiples are somewhat historically elevated at an earnings yield of 5%.

Equity risk premiums have to normalize from that perspective. Hence the reason why we're recommending that investors look towards more equal-weighted market cap index funds as opposed to the S&P 500 and look towards more high-quality, low-beta companies, in particular rising dividend stocks. You can see the S&P go down to close to $5,000. That wouldn't shock me as we normalize and we see it's somewhat of a deceleration within the economy. All right. All right, folks. Thank you very much. Chad Morgan-Lander, Gregory Docco. Thank you. And coming up, we saw a few.

red flags emerging on the consumer this week. After the break, we'll talk to one company that might provide some insight into spending the CEO of Marquetta. That stock fractionally lower today down 25% this year. Power Lunch will be right back. Welcome back to Power Lunch. Shares of Marquetta lower today by 1% off the lows of the day, despite reporting an earnings beat earlier this week coming off decent gains yesterday. The company offers payment solutions for businesses and saw processing volume surge more than 30% to 71 billion. million dollars over the past quarter. Joining us now to discuss all of this and more is the CEO of Marquetta, Simon Kaloff. Mr. Kaloff, welcome. Good to have you with us. You know, your results were

really terrific. 23 cents a share EPS versus 17 cent estimate revenues, 125 million versus 121 million volume, as you point out, very good. And yet the stock does not seem to be performing all that well, down six and a half percent over the past year, as of earlier today, I believe. The past week has been pretty good. What is the market not understanding or is it endemic, not necessarily to your company and its performance, but more broadly to the payments sector or financial services in general? Thanks for having me and having Marquette come back again. I would say that you've got two factors.

the first one is just the industry in general and the malaise you have around concerns with a broader economical downturn. And the second one is the Marquetta story has not been clean over the past year because of the changes we've done in revenue presentation as well as renegotiating large contracts. So that's about to change because next quarter, our gross profit growth is, is going to come back to be in the mid-20s, and it will be a better reflection of the underlying business performance of the company. So the story will be much simpler on the Marquetta side.

In addition, coming back to the economy, I think we have spoken the last four quarters about how resilient the US consumer is. And despite all the, I say, macroeconomical indicators, the American consumer in general is doing fine, although they're stretched out, but they're still doing fine. So we're coming to the soft lending, even with a few bumps. And I think both conditions, the Marquetta story getting better and demonstrating gross profit growth in a profitable way.

And then confidence around the U.S. consumer will propel us back. So what I hear you say is that the stock's performance is partly endemic to the sector in which it resides, number one, and number two, that maybe there were some things you know. needed to clean up in the presentation of your business to the street, and you have gone about doing that. Am I clear? You're absolutely correct. So let's turn to the broader question. It seems like the world is coming your way in terms of transaction management. Is cash dead? Cash will be dead. So we're going to be the generation that's going to see the end of the bank note, we're going to be the generation that's going to see the end of the plastic card.

We look at the behavior of, I'd say, the teenagers, they probably don't touch a banknote. And if I look at my kids, they actually don't even understand that the piece of plastic translates to money. It's all digital. Oh, boy, do I agree with that, Simon. The teenagers do not understand that plastic equates to money, man. I get their bills. Go ahead.

Finish your thought. Yes, absolutely. What I was going to say is that that's phenomenal for a digital company like ours that can take payments and make a great digital product out of it. But also, it gives the consumers the ability to get great financial services in real time. And they don't have to wait a month to get underwritten. They can get phenomenal, I'd say, just in time, short-term loans and a fraction of a second that can help them with their purchasing habits without going into revolving and penalizing debt. Simon, can you speak to your market share? When I see the shares down the way that they are this year, I wonder if people feel others are making some inroads or what's kind of the roadmap for that?

Yeah, it's actually the other way around. If you look at the broader economy or our sector, the volume growth, which is actually the most important indicator of the underlying business performance, which is effectively the money that's being spent on the platform that we power. Our volume growth has been stable, but has been above 30 percent, Eurovere, while others are the incumbents, even the large networks, are in the single-digit growth. So we are definitely picking up a market share faster than everyone else. And it has, despite our growth, it has been, the growth rate has been stable. So we're very comfortable. And as you mentioned, the market is coming in our direction. And I would say that it has accelerated.

Final question. Is Europe, is Asia ahead of the United States in terms of adopting the kinds of payment systems, electronic payments that you specialize in? We have a lot of work to do. Let's put it this way in the United States. Yes, our European business is from a smaller base, but it's growing significantly faster than our U.S. business in terms of volume growth. And we've conducted a survey that demonstrated that the U.S. is behind.

But while we're catching up and we're making great progress, and I'd say that you've got three to four trends in the United States that are helping, and we're going to see, we're going to catch up. Simon Kaloff, thank you very much. Simon is with Marquetta. He's the CEO there. Thank you for having me. We'll highlight some stocks with nice setups for potential options trades. Market Navigator tackles that one after a quick break. Welcome back to Paralyanche, everybody. We're really actually very glad you're here. While many parts of the market are recovering from Monday's Yen-carry trade take others are still fighting their own fundamentals. Dom Chu, what is in today's market navigators?

We're looking for signs about any possible earnings-related setups next week that might tell us something about the broader macro economy, globally speaking, and maybe what the risk appetite is from here. So some parts of the market have had to fight that bigger battle, so to speak, right? You take John Deere, for instance, I should just say deer, that's what it is these days, nothing runs like one. It's slated to report results next week in the face of declining commodity prices, but there's still a way to try to grow some green from that red chart that you're seeing right there. Three months down. Right, exactly.

Now, we're going to talk to Mike Co, the chief strategist over at Open Interest Pro. He joins us with more. And Mike, you're using options to take a view here. What exactly is the trade on deer? And we'll take us through a little bit about the reason why a little bit later on. Yeah, sure things. So just looking into earnings, they're going to be reporting next week on the 15th. Options prices are slightly elevated.

relative to the last eight reported quarters or so. And so I think we can take advantage of the elevated options premiums and sell an upside call spread. I was looking out to September, that September 20th expiration, the 360, 370 call spread, selling the 360 calls, buying the 370. So that's a $10 wide call spread. You could collect about $3.5 bucks or so when I was looking at that a little bit earlier today.

And I think that's a way that you can essentially try to get a little yield out of deer, whether you own the stock or not, you could put this trade on. So, Mike, what happens now is you make three bucks in change. If the stock either stays where it is or goes down from here, there's the kind of bearish tilt. And then if it goes above 360 past 370, your losses are capped as well. Yeah, that's right. So I don't generally like to sell uncovered calls going into events such as earnings. And you can always get a surprise.

and, you know, I think we have a sense of what's going on for agricultural equipment. Of course, that's the biggest driver for deer right here. But I think capping that upside risk, as you point out, is an important element of the trade. You know, Mike, commodity prices are one of the issues that deer must confront. You see others? Yeah, I mean, I think there's two things, right? So you just alluded to one. The two biggest cash crops in the United States, and that's where they do most of their sales,

are corn and soybeans. and the price of both of those have declined precipitously from their sort of pandemic-era highs. Now, some of the costs, those have also dropped. So fertilizer costs are probably down about $100 an acre. But I think it's important to remember that for farmers, when you start seeing a really big increase in prices of the commodities they sell, you know, buying new equipment in that year can make a lot of sense, in part because of tax reasons. So they can take accelerated depreciation.

That encourages when you have that banner year for you to go out and then. spend that money on new equipment that year. And we're back to 2018 prices in both of those two commodities I just mentioned. So you don't have that reasoning standing behind a purchase of a big some kind of combine or mower or whatever they got. What over they got. Mike Coe, thank you very much. Appreciate it. Thank you. Good to see you. Dom, great to see you. Have a good weekend. You too. Hit them straight. I will try. Still ahead. Shares of Chinese companies lower after disappointing inflation data out of Beijing. We're going to dig into that and much, much more.

after this. Welcome back to Power Lunch. I'm Emily Wilkins, and here's your CNBC News Update at this hour. Iran is stepping up its influence campaign ahead of the U.S. election, according to a new report from Microsoft. Researchers there identified websites that they could attribute to Iran that spread misinformation to voters across the political spectrum. The report says Iran is likely using AI to publish content on these fake news sites.

Major League Baseball has formally announced its first ever game end. ever game at a NASCAR track. The Atlanta Braves and the Cincinnati Reds will square off at Bristol Motor Speedway for a game next August. The Tennessee sporting venue is one of the largest in the country with a seating capacity of close to 1,500,000, and if the stadium is anywhere close to field, it will likely blow away attendance records for a baseball game. The dramatic video here, as a hazardous goods container explodes on a ship port in China. The incident at the Kei Ningbao port led to a fire that has since then.

been contained, though the port, which is one of the world's busiest, remains closed until further notice. The port and ship operator said the cause of the incident was not yet clear. No casualties or injuries were announced. Tyler, back to you. Emily, thank you very much. And speaking of China, it is out with new data on its economy. Consumer prices up there, 0.5% in July from a year ago. That was a little bit more than expected. And while producer prices fell from a year ago, that was slightly less than forecast. The data not doing much to allay existing fears around the country's economy. Our next guest says business sentiment has collapsed in the region in the last two months.

Sean Ryan is managing director and founder of the China Market Research Group. joins us now from the Shanghai area. Sean, welcome good again to see you, my friend. Why do you say that business confidence is collapsing? What's driving that? It's good to see you. Unfortunately, business confidence. confidence has really dropped in the last six to eight weeks.

There are a couple reasons why. The first is even though the CPI index was okay, when you strip out pork prices, which went up 20.4% last month, inflation was only up about 0.2% in July, which is less than June. So the deword or deflation is still looming over the economy. And so wealthy consumers especially, and we have to remember, wealthy Chinese account for about 55, 60% of overall consumption. They're quite concerned, and they're concerned for two reasons, Tai. The first is the Chinese government doesn't seem likely to launch a bazooka-like stimulus

anytime soon. Xi Jinping and the Communist Party seem okay with slow 4-5% growth, and they're not going to launch a stimulus anytime soon, which was announced during the third plenum, which is the big event every five years where the Chinese government talks about what are the next five years goals for economics. Now, the announcements that came out of there had a lot of platitudes, but we're really short on details. And that's why, again, that wealthy Chinese consumer is really concerned about spending. They're not buying, so you should be cautious about buying Burberry or Louis V. Ton or Porsche or any big ticket items, and especially real estate. The real estate sector is the

biggest issue tie that everybody in China's is worried about. Prices are stable or dropping only one, two percent, but the problem is volumes are anemic. So if you want to sell a house, you really have to discount 20 to 30 percent. I'll give an example. One of my neighbors in Shanghai, he was trying to sell his house for 50 million U.S. dollars last year. It didn't sell. He's cut the price down to 25 million U.S. and it still hasn't sold. So that's why investors should be cautious. So let me dig in a little bit on what you said a moment ago, and that is that there is no indication or inclination on the part of the Chinese leadership to use the bazooka in the form of economic stimulus at this point. Is that because the leadership sees no need to do that? In other words,

they don't think that the situation calls for it, or is it because they are assuming a somewhat more defensive stance against the possibility of confrontation, more confrontation with the West? That's a great question. I think first, China's run out. out of money. So you've got to think during the zero COVID era, there's very little business going on, so there was no tax revenue. So the first thing is the Chinese government has run out of money. They don't want to go into debt like the United States has because at some point, I don't know when, but the United States is going to have a financial crisis because you can't double debt in five years like the U.S. has done. So China doesn't want to do that. But to your point, and I think it's a great

point, tie, where you're saying that the Chinese government is concerned about greater confrontation between the United States. I believe that China is holding a lot of its reserves, the limited reserves that it has as dry gunpowder in case there's a proxy war over Taiwan, a proxy war over the South China Sea, or if the United States keeps launching never-ending sanctions on China like it has over the last year. You've seen the House and Congress is trying to ban TikTok. The Biden regime has increased tariffs on Chinese NEVs to 100 percent, just to Today, the Biden regime put five more Chinese companies on the sanctions list for supposedly using slave labor. So I think China is very concerned that it might become like a Ukraine-Russia situation.

So it's holding all of its reserve in case there's a bigger issue. Now, one thing for investors they should know about is that means China's stockpiling things. They're stockpiling chrome ore. They're stock piling iron ore, agricultural products, just in case the situation. and the tension deteriorates even more. And while we ponder the unpleasant sort of implications of that, Sean, the biggest question I got after we did a China segment last hour was from investors asking about India. It's almost as if they've just moved on.

They've given it up. They don't care anymore. And they're looking for better opportunities. And they think India offers that. So basically, I just spent a month in the United States. And I met with about 70 hedge funds and mutual funds there. And the vast majority of them are very negative on China. they're reallocating their resources to India and to Japan. So India is the next big growth engine.

Now, but let's take a second and a step back, Kelly. India's per capita GDP is only a fifth out of China's. So if you're an investor in the short term, yeah, India is probably better than China. But if you're a multinational, if you're a Nike, if you're an Adidas, if you're a Louis Vuitton, China is the next China. You're going to be investing in China. But for investors, you should be looking certainly more Japan in the next month or two period. All right, Sean, we'll leave it there. Thanks for joining us today. We appreciate it. Thanks, Kelly.

Sean Ryan. Coming up, the solar stock, ETF tan, catching some shade today as it's on pace for its first down day and four. And its second straight weekly loss will dive deeper into the problems there when we return. Stay with us. Welcome back some big moves in the energy space, namely Nat Gas and Solar today. Let's bring in Pippa Stevens. What are we learning? Well, the solar mover du jour is a ray technology that's not. is down 21% after the company reported.

So they make the tracking systems for utility scale solar. Their Q2B, but for Q3, they cut their guidance for the full year, I should say, by 30% on revenue, EBITA and EPS. And as one analyst put it, you know, we thought it was going to be a little bit light on guidance, but we did not have this on our bingo card. Basically, what's happening is that projects aren't being canceled, but the timeline is being pushed out because of policy uncertainty. We still have IRA additions that have not been clarified, around domestic content. And then also we have that ongoing investigation into whether or not Chinese manufacturers have shifted their production to Southeast Asia. One quickly, one additional thing,

check out European natural gas because it's now up 30% in the last month. We haven't been talking about it a whole lot. Uh-oh. But it's at its highest level since December. That is because Ukraine has moved in on the southwestern city of Shudshah in Russia. And the reason why that's impacting that gas, you see it there, is because that is the terminal for gas that is flowing from Russia through Ukraine the European Union. The EU has moved away from Russian energy by in large over the last two years, but there are still some countries like Austria and Slovakia that get gas from that goes through Ukraine. And that's why we are seeing that lift in TTF. And that'll push their bill price, the bills up again, you think, or less so this time? I know that it was a big pressure

point over there. Well, nothing has been disrupted yet, and it's in everyone's best interest to keep that flowing and to not target that infrastructure. But it's clearly leading to some jitters, particularly since heat waves are pushing up prices already. And then we've seen some competition for cargo is going to Asia because of their heat wave as well. Wow. All right, Pippa, thank you very much. Pippa, Stevens. All right, coming up, work smarter, not harder. As markets try to wrap up a volatile week on a high note, we will speak to two retail investors using their platform to educate others about responsible investing. We will return in two minutes. Welcome back to Power Lunch as stock struggled to make gains after yesterday's big rally.

Between the sell-off last Friday and Monday and two separate rally. this week, how should regular investors handle the volatility? Our next guests have experience in this area as they help others be smarter about their money through their podcasts, online courses, and they're gearing up for their fourth annual Invest Fest later this month. Joining us now, Rashad Bilal and Troy Millings, who are co-founders of Earn Your Leisure. Welcome, gentlemen. Thank you for having us. You've been incredibly successful with what you're doing so far. Troy, just in a week like this, do you get a ton of new interest or what tends to happen? There's always a spike in interest, right? When people see volatility, they try to figure out,

Is it a good time to invest? It's a good time to sell. We always tell people there's opportunities. And so finding indexes, finding points or retracement levels for you to get into your positions that you love. There's no better time than right now. Wow. So you get that specific and literally say, so like give me an example from this week. What might you have been telling people?

Well, people have been talking about super semi all year. Super micro, whatever. Super micro. I'm sorry. Super micro chip. Yeah. Well, quite a down week for that one. Just pulled back over 60%.

So now if it's a time, if you love the stock and you love this company, you see the AI revolution happening and they're vital part of it. it, it's probably a good time to get into it. Rashad, how do you talk people through a period of volatility when we really haven't had one in a couple of years? We had one during the pandemic and big time. That's sort of epic volatility. But not so much in the past few years as everything is kind of levitated.

I think it's important to keep a long-term perspective. Before this, I was the financial advisor. And I came in during the Great Recession. So I know firsthand how people can panic when the stock market is down 30, 40 percent. So I think it's important to keep in mind. whatever goes up must come down. It's healthy. Nothing can go up 30, 40 percent every single year, infinity. And it also provides buying opportunity. So I think the investor has a 20, 30, 40 year timeframe. They're less concerned with a bad week or a bad month. Would you say that tends

to be your clientele a little bit on the younger side? You're not worried about necessarily someone who's about to get ready for retirement. I mean, talk about the kind of people who typically are coming to you and where have you had the most success with your content? A lot of our followers are millennials. So yeah, I mean, we do have older followers as well, but a lot of our followers are 24 to 44. So these are people that have longer timeframes as opposed to somebody that's 70 or 80 years old. So the conversation is a little different. But we definitely encourage dollar cost averaging. We encourage long-term investing. We encourage index investing. So when you have that mindset, it's not a gambler approach as far as a lot of other retail investors that came in during the

pandemic like GameStop memes. So we're kind of counter to that. So I think, that our followers are more educated and are less emotional. Troy, you have a background in education, right? It's true. How has that helped you do what you do today? How has being a teacher helped you? I mean, when we talk to our audience, I want to talk to my perspective of an educator,

so I'm always looking at somebody as a student. It's also helping me in preparing. You know, it's one of these things as a lifelong learning. You're always trying to find new information. So I'm watching you guys all the time and figuring out how I can dissect it and explain it to a community that may have not understood it prior. So it's been a tremendous benefit when we're talking about educating

a population that pretty much was left out of a conversation for a while. Was it financial literacy that attracted you to this or driving to teach people about money, which is something that is probably undertaught? Yeah, as an educated, you know, I was teaching in the school district and realized it was pieces of information that were left out of the curriculum. And so financial education was part of that. And so we had a summer program where it was an opportunity to teach young adults about money who were getting paid for the first time. That led to realizing that adults didn't have this education no matter what aspect of or career that they had.

And it was like, okay, there's an avenue here for us to actually create a platform where people can come to get this information. Well, how is the evolution meant so you have Invest Fest coming up? Is that a recent thing or was that, you know, what should people expect? It's the fourth year that we're doing it. Okay. Best Fest has grown and become one of the biggest financial conferences in the world. We had 50,000 people over the course of the weekend last year.

We've had people like Tyler Perry, Steve Harvey this year. We have media mogul 50 cent. We have Van Jones. We have real estate mogul, Don Peebles. We have Damon John from Shark Tank. Microsoft is coming to provide AI experts. State Street is involved. So it is an unique experience, I would say that, that combines commerce or culture.

We make it fun. You don't have to wear a suit, but you can wear a suit if you want to. And it's something that you can learn everything from crypto to real estate to stocks, great networking opportunities. We have vendors. So it's a great experience. Do you generally recommend crypto? I mean, I'm sure you must get tons of questions about it.

You can't avoid crypto. I feel like, you know, at this point in time, it's kind of become mainstream, especially Bitcoin. So we definitely encourage people to educate themselves on crypto. We don't want to be risk takers and just bet on any meme coin out there. But I think that crypto definitely has to be a part of your portfolio. Rashad likes the suit, Troy, not so much. Well, we're trying to show you that the different sides. I ask for a financial education.

You come in a suit or you can come in the button. You come with your polo. Rashad Bilal, Troy Millings. Thank you for having your leisure. Thank you. Speaking of financial education, don't forget about our podcast. We have one too. Be sure to follow and listen to Power Lunch wherever you go.

And then tune in these guys. Why not? We'll be right back. Welcome back. The Dow has gone negative on the session again, down 16 points. As stocks stumble a little bit into the weekend after trying to make up some gains from Monday's deep sell-off. Really kind of a flat day, but down nonetheless. We've only got a minute left in the program.

A couple of more stories you need. to know about. Let's get to it. Paramount Global, cutting about 15% of its U.S. workforce, 2,000 jobs, part of a half billion dollar cost-cutting plan ahead of its merger with Skydance media. The company's second said second quarter revenue dropped 11% year over year, licensing, TV, ad, cable subscription sales, dropping. Streaming Division, first ever profitable quarter. Interesting there. A challenged business indeed. Oh, extremely. It would be very interesting to see what other levers they can pull. Also getting some data on the The holiday rush saying it's coming early for retailers this year. Container and freight imports surged in July as companies tried to lock up early to hedge against a potential port worker strike and shipping disruptions from attacks in the Red Sea.

According to Descartes Systems, U.S. container imports searched 17 percent year-on-year-on-year last month. That's the third highest monthly volume for maybe for any month on record. I can only imagine that the pandemic supply chain problems inform some of this. In other words, they don't want to get caught the way they did with the, empty shelves and not being able to deliver goods. The risk for retailers who can't forecast the future any better than any of us or the Fed can is they're going to be left with extra inventory if they overordered or caught shorthanded if they didn't and so on and so well have a good weekend, kill. You too. I love the suit. Thank you very much. That's so nice. Stay dry. Thanks for watching Power Lunch, everybody. Have a good weekend. Stay dry if you can. And closing bell starts right now.