Power Lunch - Inflation Nation, Druski In-Studio 8/16/24

Episode Date: August 16, 2024

Vice President Kamala Harris just unveiled her plans to fight high prices, and vowed to crack down on inflation. We’ll talk to celebrity chef Wolfgang Puck rising food prices and what the government can do to help.Plus, we’ll speak to comedian Druski - a star in this year’s CNBC Stock Draft - about what he’s been up to in the media landscape, and how his team is faring too. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Welcome to Power Lunch, everybody, alongside Kelly Evans. I'm Tyler Mathes. I'm Tyler Mathes. Glad to you joined us on a Friday. Vice President Kamala Harris vowing to crack down on high prices with a particular eye on food and groceries. We'll talk to celebrity chef Wolfgang Buck about rising food prices and what, if anything, the government could do to intervene. Plus, the star of this year's stock draft, Drewski will be here. He lit up the screen on draft day and he's been doing it ever since on YouTube, TikTok, and every form of social media. Before that, let's get a check on the mark. With today's nice gains, all three major averages are on pace for their best week of the year. The S&P up 4% since Monday, the NASDAQ up six, and both averages just a couple of percentage points away from their all-time high. So what changed in the last week or so, which caused last week's sell-off to turn into this week's rally?

Mike Santoli joins us with more. You know, it was just 10 days ago, Mike, after that jobs report, that the whole world unwound. The carry trade unwound in Japan. Kelly's explained that to me very well. Well, the significance seems greatly overstated. Yeah, and now we're having the best week of the year, and it's okay. Well, hard to overstate it in the actual moment when it was happening, because down 3% in the S&P 500 in a day,

1,000 points. Down 12% in the NECA. Something was going on. I think one of the things that changed in the last week is nothing else broke. So you didn't actually have any spillover effects. So, okay, you could set aside the idea that there was going to be some kind of chain reaction of other unwinds of leveraged trades. But beyond that, I also think we were in the midst of this growth scare after the monthly

jobs report. You got some reassurance on a couple of fronts there. CPI was benign, and you obviously got decent retail sales yesterday. The market reaction, I would say in the last, what, six, seven trading days to a pretty good or a couple of pretty good weekly unemployment claims reports and a good but not gangbusters monthly retail sales number and pretty good Walmart earnings. suggest to me not that everything's great, but that we really did hunker down and have low expectations or really were kind of saturated in this idea that July showed a faltering consumer.

So I think that's what it is. You kind of overshoot in one direction and then correct. I like what you said at the very beginning there. Nothing else broke. Yet, yeah, exactly. I mean, there's no real reason to think so. But there were some real exaggerated moves in so many respects. Many people have recited this, but the S&P Volatility Index.

That's the one. It went above 60. You know, it's interesting because even that was this weird phantom number at a blink in time. Yeah, the math that calculates the VIX was there, but nobody could sort of trade at those levels. Nonetheless, above 35, it closed. It goes down. It's both 15 now. Pretty much its fastest deflation of volatility, expected volatility, ever.

So it shows you that underlying it, okay, earnings came through five. There's still this kind of baseline demand for stocks, corporate buybacks, all that stuff is holding it together. I continue to think that at the highs, which by the way, one month ago today was the record high, July 16th. And you know, you're down a little bit from there, but semis are still down a lot more. There's sort of signs that there's an ongoing rethink of all the high momentum stuff that got us to those highs. It feels to me a bit like a continuation of the post-pandemic theme that nothing's working kind of like it's supposed to, which is fine, that's why their markets. If they were predictable, we'd all be billionaires.

But even with the economy, all the leading indicators that were supposed to work haven't worked. And it keeps being, it's just a waiting game. It's just a waiting game. With the market, too, you shouldn't go over 65 on the VIX and then it's all five. But maybe it is. You shouldn't go over 65 in the VIX when you're, like, within a few percent of record highs from a couple of weeks ago. So the intensity of that, of that mini, at least quantitative panic. It wasn't, I don't think humans panic really that much.

It really was. Now, crowding in trading and the fact that everybody had a lot of these bets piled on top of one another, that we're essentially saying we think things are going to stay calm. And then once they're no longer calm, you race for the exit. So I think you could be assured that that particular storm is over. It'll probably take incremental bad news on the economy to get us to retest those lows. And you're still in a weird seasonal period, though. We have Jackson Hole next week. That's true.

That's true. All right, Mike, stay there because our next guest says the market in the economy are in a sweet spot, but could be some. setting up for potential disappointment. Let's bring in CNBC contributor by phone. Greg Branch, he's also the founder and managing partner of Branch Global Capital Advisors. Gregory, welcome. Good to have you here. Why do you see us setting ourselves up for disappointment?

What are you pinpointing there? Well, I think it harkens back to something Mike just said. It's not that something broke. It's that we were suffering under the facade that something had broken. And so a 4.3% unemployment rate shouldn't have been that surprising. We'd had it the month before. The Fed had always projected that to embed a 2% inflation number we needed to get to around that. A jobs number of 114,000, again, shouldn't have been that alarming. We saw zero basis points growth in core over core for May, 10 basis points core over core for June, which compares to 30 and 40 for the months before that, which we saw zero basis points growth in core over core for May, which we naturally should have implied would have led to a low jobs number. And by the way, we had seen $150,000 in October. And the last thing that people were throwing out to say that the world was ending for those few days was an ISM manufacturing number of 46.8. Again, while

contractionary shouldn't have been all that alarming, particularly when you factor in the services number of 51.4. Yet we had those vociferously calling for emergency rate cuts, which, by the way, if you were doing that 10 days ago, you should probably be still doing that today. Nothing has really changed. And if you thought that was necessary, then, why not now? And the reason I worry is because we've got a glimpse into how the market would react if we had a real deceleration. And that wasn't it. Is it going to do so mildly? Sure.

I think the consumer is stretch. We have data to suggest that. And I don't think that they can embed this inflation without something of a deceleration from here. And we saw how the market is going to react to that when it starts. So what I think I hear you say is that here were some incipient signs of what a real slowdown might look like, rising unemployment, slowing consumer spending. And we got a taste of what the market reaction would be like, right? That's right.

It has not been, but since then, since then, as Mike pointed out, a lot of the numbers have been relatively more benign. Consumer retail spending was pretty good. The CPI was okay. Walmart, Walmart's doing okay, man. People spending money. So a lot of that has gone. A lot of that worry has dissipated, it seems. Greg, are you there?

I agree. And this is why I say, and what we said, yep. Hello, can you guys hear me? Yes, we got you. You guys got me? Yep. Okay, and so I agree, Tyler, this is the underpinning of why I moved to neutral about six weeks ago is we really have a sweet spot right now.

You know, GDP growth doubled into the second quarter as projected to rise slightly again in the third. We have the best earnings growth we've had since 2021. But that unemployment number, particularly if the Fed elects to leave it there, and I think they will. I'm in the minority. I'm often in the minority. I don't think they'll cut in September. They don't have to. The retail number, like you said, bounced back in a big way to 1% for retail spending, but nothing's broken in this economy right now. And we are reaching a point where we

have some price stability. I don't think they'll risk that newfound price stability with a rate cut, particularly when they failed to have price stability for three years. I think you're absolutely right. You are in the minority. with respect to whether there'd be a rate cut in September or not, what Michael would be the reaction of the market if there is not a rate cut in September? Because, boy, it sure looks to me like the market's pricing won in. Well, not only is the market pricing win, but it seems like the center of gravity on the committee,

based on their comments recently, is moved in the direction of, we've set the scene for this. We have enough assurance about inflation that we think it's time. Now, presumably that's going to be one week from today, Jay Powell's message at Jackson Hole, say presumably because if you just look at their framework going into all this, as many have said, right? Here's where they said inflation was going to be right now, and we're below it. And the Fed Fund's rate is way above the rate of inflation,

is way above the neutral rate, is way above the two-year note yields, it's way above every other indicator of where perhaps would be a normal rate. So they're going to characterize it as normalization, not as accommodation. That's been the case for a while that they feel as if, hey, we're restrictive now. We just have to become less so. I still think the absolute bull case for the markets is they go slow, they move in a way that doesn't feel like their hand is being forced. It's really just kind of trimming, trimming, trimming, trimming, just a slow return towards some version of normal. And we'll see if we get that. I mean, that's the thing we just don't know. Greg Branch, final thought. Yeah, look, I largely agree with Mike. I wouldn't be surprised either way. I'm doubt.

that they will, particularly with GDP, looking like it's accelerating, with earnings growth, looking like it's accelerating. Remember, the key fall here is that we need to reduce consumer spending in order to embed 2%. So I wouldn't be surprised if Mike's right here, my thinking is that they'll put it off until later in the year. All right, Greg, thanks very much. Mike Santoli, have a great weekend. See you. And if you want more, Mike will be on tonight's CNBC special taking stock. That starts at 6 p.m. Eastern. We always love those wrap-ups. Mike, thank you. We appreciate it today. Still to come, Inflation Nation, Vice President Harris unveiling her economic plan to crack down on higher prices for groceries, food, and more. But will her promises move the needle for America's

restaurant tours? Let's ask celebrity chef Wolfgang Park about that when we return. Don't go anywhere. Vice President Kamala Harris today laying out her economic proposals, chief among them, bringing down high prices for drugs and housing, but also for food and groceries. Megan Kassella joins us now from Washington with more on some of the novel twists in this Harris plan. Megan? Absolutely. Hey, Tyler. So these are the most detailed policy plans we've seen from Harris since the start of her campaign. She's set to speak in just a few minutes in Raleigh, North Carolina, to unveil a four-part agenda that's both populist and progressive. So you mentioned drugs at the top. Harris wants to cap costs for insulin and prescription drugs for everyone and accelerate Medicare's

ability to negotiate prices. On housing, she would use tax credits to incentive. to identify builders to construct more homes, boosting supply, while also offering up to $25,000 in down payment assistance to first-time buyers to help demand. She also wants to block Wall Street from interfering in the rental market. And then to lower grocery costs, Harris wants to break up what she called extreme consolidation in the food industry. And finally, there's a tax component here,

including an expanded child tax credit to provide up to $6,000 for families with kids under the age of one. So for all the talk or the expectation of Harris moving to the center, center, she's doing the opposite here. And her campaign says there is still more to come, but so far, there are no details on trade and tariffs, on energy or on China, aspects that are front and center in Trump's economic agenda. Trump slammed Harris's plans as socialist and offered his own ideas to lower costs, including drilling for more oil and extending tax cuts. But guys, economists see risks really in both candidates' plans, and so it is worth noting

that for now it's mostly campaign rhetoric on both sides, and the main focus here is on winning voters. Megan, let me ask you a question on the food matter. The way you expressed it there was that she wanted to target what she sees as over-concentration of, I guess, economic power in the food business. And I guess she's thinking of meat packers and package good makers and so on and so. I don't know. But then there have been also some headlines that I've been reading that she was going to call for price caps. Price controls on food. That is a that's an old, that's an old playbook item out of the Nixon years. You're right. It's a policy that really has gained a lot of headlines and a lot of concerns,

really. She's going after, she wants to pass what she's calling a federal ban on corporate price gouging, saying that grocery price, grocery stores and chains have been raising prices too much and winning huge profits over the past few years, that that's the reason that voters are seeing these high prices when they check out at the grocery store. It is not clear whether there's a lot of room in grocery stores' profit margins for them to really give back any of those gains here. And it's also not clear whether any of that would ever get passed. What we do know, though, is from reporting this out and from trying to figure out where these policies are coming from, progressive Democrats really want it to see Vice President Harris embrace a proposal like this because it polls well.

So that's where it gets into the campaign rhetoric. Groceries, Groceries, Groceries, groceries was sort of the mantra of the progressive Democratic wing of the party who have said, This is one of the things voters are most worried about. This gives them something to blame for high prices. Really interesting. We'll probably hear more about it at the Democratic Convention next week in Chicago. Megan, thank you. Our next guest has a great read on the consumer and food prices.

He owns and operates more than 20 restaurants around the world, catering to the high-end consumer primarily. Let's welcome back Wolf King Puck, the celebrity chef and restaurateur. It's great to have you. Just earlier this week, we spoke with other restaurateurs who say they're still really dealing with high inflation. What's your experience? Well, my experience is really that labor costs has gone up really consistently. Now we have to be competitive because if we don't have competitive pricing competitive salaries,

we will lose people to big operations, big hotels and so forth. So we have to be competitive and it's still cheaper to keep good employees than getting always new ones. So for us, labor has been a problem. food actually over the last year, food prices have not gone up in the main category. Some even down like wine, like the more expensive wines have gone down because I think there is a lot of wine in warehouses and so forth. So I think, but what is a problem like in Los Angeles, for example, comparing to last year or the year before, we had so many people coming here on vacation that this is a problem.

This year, I think it's at least 20% less traffic here in Los Angeles. So I mean, when I went to the airport or I see in the hotels and restaurants, you know, there is empty spaces now, whereas before, after the pandemic, especially the restaurants were packed, you couldn't get a table. And I think that's really difficult. So we have to manage better. We have to worry about the labor costs. The food costs, like, for example, beef is basically from last year over...

to this year it's about the same, you know, the expensive, the prime cuts. Over the last four or five years, like since the pandemic, since 19, it maybe rose 10%, because it went back down a little bit because there was a lot of beef and things like that. You know, they couldn't sell it because traffic was just not there. So I hear your point here, Wolfgang. I'm very interested in it. I'm hearing you say that when I go into a restaurant and I see, see that my average check is $20 higher. It's gone, let's say, from 40 to 60 or whatever it is,

that most of that increase is attributable to labor, and I would assume rent, less of it is attributable to food cost. Absolutely. I think the food cost has really stabilized over the last year, so we don't have this influx of price hikes for fish, for produce, for beef, which make up the most. There are groceries like cleaning supply and so forth. They are more expensive still. They went up over the last year like by 10% or so. I think rent have gone up a lot. I think especially rent for employees. So we have to adjust employees' salaries so they can actually pay their rent because rents these days are out of control. But a bigger effect also is that rent has gotten so expensive. So a lot of younger people, they don't have the money, the income

available to go out a lot. You know, they had to cut back a little bit. You mentioned what you perceive to be a slight slowdown in tourism in the L.A. market. Maybe they're waiting for 2028 in the Olympics. What about Las Vegas? I hope not. Yeah, yeah, you better hope. What about Las Vegas? What about Orlando? Orlando, as you hear about Disney traffic, is down in the Timbuck. So I think they are going to have to invest a lot of money to get traffic up because it is rather expensive to go to Disney World or Disneyland. So I think we see it in traffic in our restaurant in Orlando.

We also see it in traffic in Las Vegas. The restaurants, like for example at Palazzo, traffic was slower this year than last year. at the MGM grant, you know, which caters more to the middle class, they really still have good traffic in July. And I think for us, overall, I look, July was probably one of the slowest months in the last five years since we reopened after the pandemic. So I think certainly we feel a little bit uneasiness in the economy. People are not willing to spend money for parties or if they do weddings, they scale them down. So it is not so much where people celebrating, like after the first year, the second year after the pandemic,

everybody was full with cash. People didn't spend it during the pandemic. So they had a little bit more income to spend. And I'm curious, you know, we've seen some restaurant concepts working quite well right now. The likes of Sweet Green, for instance, you know, its value, it's fresh. Others just feel a little bit more tired and the high price points are not motivating consumers. And I don't know if there's, you know, sort of when you think about the mix that you're offering or the price points, what you think will drive traffic the most right now. Yeah, well, we're going to have to re-engineer our menus a little bit to be more price sensitive because I think we want to attract customers. We want to get customers in the door of our restaurants. So I know a lot of restaurants which are not as expensive, which are very price conscious, you know, on a lower scale, they are still doing very well.

We see it with us too at the MGM grant, the Wolfgang Pakapal and Grill, did very well so far the whole year, but the average check is maybe $60, you know, whereas like had cut in the Palazzo, the average check is $150. So I think that price, that top line, $150, I think we have to think a little bit, how can we give people options where they actually can spend maybe $100 or $80 and still get in the door, still drink a decent bottle of wine or have a cocktail, and so that way we can keep our employees, and hopefully, you know, people will start going out more again. I want to end with a question that will probably take an hour to answer,

but I'll let you take your quickest shot at it. I've had a long-time sort of academic interest in what separates companies like yours that have been able to sustain excellence over a period of decades. You began in the early 80s, if my history is correct. And you've remained relevant and you've remained successful throughout that time. There are others as well and other individuals who will become exemplars of sustainable excellence, whether it's Lauren Michaels at Saturday Night Live or some pick up, Bob Eiger.

What would you say is the culture of excellence that you've been able to foster? How do you explain your enduring excellence? Well, our company is very customer-centric. We want to give people a great experience at a reasonable price still. We never gouge our customer. We always try to be price sensitive, even in the upscale market where it costs a lot to operate. So I think for me, it's always a game. It's in the long run.

It's not like playing football. One quarter, you play well and then the next one. No, we play really decent over the years. And, you know, Spargo opened in 1982. And it's still one of the busiest restaurants in Los Angeles on the West Coast. So I think people, for me, really, customers come back. So it's really retention of the customer is the most important thing. How we make the people feel when they go home.

For me, a great customer is when they go home and says, I'm coming back on Tuesday. You know, like yesterday, I had a table with six people. And they said, are you going to be here on Tuesday? I said, yeah, why? Because they said, we are coming too. So I think retention of customers, do have regular customers, is really important. And that's what we strive for. You know, everyone has to get an experience, not just VIP customers, because there are a lot of people who come from out of state, out of the country, especially in the summer. And we want them to go home and tell the friends, you know, we went to Spargo and had a great experience. And I think

word of mouth for us is still the best other thing. I think. Wolfgang, thank you so much. Good to see you, sir. Thank you. Good to see you. Wolfgang Puck. And speaking of food, our trader has an appetizing stock pick. Market Navigator is up after the break. We'll be right back our exclusive segment to follow. Welcome back to Power Lunch. We have markets in the green across the board about a quarter of a percent as they look to close out their best week of the year, believe it or not. recovering from last week's route with the economic data coming in solid. Our trader is back to pick. stock with the most promising mix of technicals and fundamentals. Todd Gordon is founder of Inside Edge Capital and a CNBC contributor. And we're showing shares of Kava, which he likes, especially on the back of this week's Chipotle News. Welcome to you. Hey, thanks, Kelly. How you doing? So tell me, yeah, talk a little bit about the sort of broad idea here. And go ahead. Yeah, sorry. Yeah, this is an interesting name. Kava is a newcomer in the space. restaurant stock, about $11 billion, and there's a lot of comparison to Chipotle.

Obviously, there's a lot of news with Chipotle, losing the CEO to Starbucks. It's a high valuation company. It's on the cusp of a breakout above 100. I hold the stock, a small position. I'm looking to add. The valuation is very strong. There's certainly consideration on that. So if it's something you look at, you really want to watch the technicals.

But, I mean, the earnings are there. I mean, they're, you know, they're growing. about 30 to 35% expectations for the next two years on the bottom line, top line, 20%. Again, to compare against Chipotle, their margins are consistently better listening to Wolfgang, what he just said in terms of costs. They're running about 2 to 3% margins over Tripoli, and of course, Chipotle is seven times bigger. Chipotle's not cheap either, trading at 50 times next year's earnings, but, Cobb, I don't even want to say what the forward PE is.

It is very expensive, but the growth is significant. And the kids, my intern just left. He said the college kids all go to Kavana instead of Shippoli. So you got to have some risk management on this one. So explain that. What would you be looking for in terms of your upside potential? When might you think of jumping out? Yeah, absolutely.

So the breakout is very clear if we're showing the chart right now. It's right at about the 98 to 98 and a half. And again, this isn't a tape where Mark has been very, very busy. And it kind of didn't worry about it. consumer discretionary space that's been under pressure. So if we break, I mean, we should be able to get up to the 120, 125 mark, but again, I want to cap risk below 95. I'm looking to add another percent to my holdings if we can get confirmation from the broader markets that we might bump up through this resistance. So again, it's a high valuation, high momentum, high growth play. The lines are at the

door. We're not seeing that at Chipotle. I'm willing to play with that high valuation in this momentum name. And up 130 percent this year. You see. think there's more to come. Todd, thanks for joining us today. We really appreciate it. Todd Gordon. Absolutely. Happy Friday, guys. You too. Meantime, H&R Block, hitting an all-time high after the tax service. This giant announced a dividend hike and a share buyback plan. Is it too late to buy some shares yourself? We'll trade it in three-stock lunch. Next. Time for today's three-stock lunch. Getting to it a little early today. Here with our trades is CNBC contributor Michael Farr. Chief Market Strategist with High Tower Advisors. Michael,

welcome good as always to see you. First up, we've got NVIDIA rallying above a key level today and extending a four-day wind streak up nearly 20% this week. Your trade on that beloved stock. On that beloved stock, Tyler, I'm going to tell you to buy it cautiously if you don't own it. You've got to wade into that water.

This is the hottest area of the market. As long as the race for AI and this battle to continue to create AI continues, this stock's going to do well, they're still looking for like 40% growth in earnings from this company over the next five years. It's gone from 48 times earnings, 24 earnings, to 34 times next year and coming down with this large earnings growth. So it's performed beautifully well. It's a cyclical area. It probably has a few years left. But the AI impetus that's driving those earnings, I think, can take this stock higher.

even at a $3 trillion market cap. So if you want to establish a position, this is a dollar cost average in. I think so. I mean, this is if you have a blank in this space, I would want to have a position. It doesn't have to be a full position, and it has to be in keeping with your investment discipline

and philosophy. So it can't be an appropriate risk for your portfolio. Check with your advisor. All right. Let's move on to H&R Block, Michael, which is actually one of the biggest movers today of 12% in all-time high after it topped fiscal fourth quarter earnings estimates.

Again, this one, you know, look at the performance of 66% over the past 52 weeks. What are your thoughts? My thoughts, I wish like hell it had done this when I owned it. I owned it years ago. I could never get this stock. I could. The stock never moved. I ended up selling it where I bought it.

The stock has just had a great move. And the rule is to buy low and sell high. So I would sell this one into the strength, more of a fair. then they hit the sell button and, you know, break glass and run out of the room. No need to do that. But at 12 times earnings, this thing used to trade at seven times earnings. And it's going to kind of hover it around 7% earnings growth. So I think longer term, it's a sell. I don't see dramatic growth in H&R Block. And finally, Estée Lauder getting a downgrade from Bank of America today due to consumer headwinds in both China and the U.S. The Beauty and Skin Care Brand set to report earnings on Monday. Your trade on Estée Lauder. A P-U. I mean, if you look at the chart, I mean, this is, sorry folks at Estee Lauder, but, I mean, this stock was $165 a share.

It's fallen almost in a straight line down and below $95 a share. Has a little bit of a dividend, 2.77%. I think it's, I think it's just too high still, and I think it could still go lower. Now, watch them nail earnings on Monday and make me look stupid. But if I can buy Alta Beauty that Warren Buffett's buying it 14 times, I'm looking at Alta Beauty instead of this company at 24 times earnings. I just don't get any compelling story here. You know, if you look at when you see Chipotle fall and you see Starbucks rise, 20% a day

up on Starbucks and you see Chipotle fall 10%. The trader in me always says, oh, I'm going to sell the Starbucks and buy the Chipotle. I want to sell what's moving up and tearing up. and Chipoli, a good company. That's not my recommendation. But those are the way you have to think about it. This one, I don't see a reason about it. Final question, Michael, and I ask it because we're friends.

Shorts or long pants? Shorts and flip-flops, Tyler, below the camera. I'm trying to make Mark Haynes proud, okay? I don't have my Cheerios, but Mark Haynes would like me today. It's hot in here. It's getting hot in here. Michael Farr, thanks. Let's get over to Sima Modi now for a CNBC News update.

CMA. Kelly, former President Donald Trump, announcing the members of his presidential transition team today, should he return to the Oval Office. The two co-chairs are among his campaign's biggest donors, former small business administration head, Linda McMahon, and businessman Howard Lutnik. He also named his running mate Senator J.D. Vance as an honorary chair, along with his sons, Donald Trump Jr., and Eric Trump. World leaders are denouncing last night's deadly rampage in the Israeli-occupied West Bank. Residents said dozens of masked settlers entered their village, burned cars, homes, killing one Palestinian. Israel's Prime Minister issued a call for settlers to stand down, and the U.S., France, and the UK have condemned the attack. And President Biden signaled, excuse me, signed a proclamation this afternoon to designate the site of the 1908 Springfield, Illinois race riot as a national monument.

The tragedy which killed several black residents and destroyed dozens of black homes and businesses was the tipping point that led to the creation of the NAACP. The designation comes on the riot's 116th anniversary. Kelly, thank you. Seema, thank you very much, Sima Modi. Be sure to follow and listen to Power Lunch wherever you go on any podcast platform. You can stream our podcast today, and we'll be right back. Welcome back. Stocks have turned around and are now higher across the board. This is the seventh straight update for the S&P.

500. And the bond market yields are slightly lower following that big move higher yesterday. Let's get out to Rick Santelli in Chicago with more. Rick? Yes, Kelly, indeed. If you look at a two-day chart of two-year, a couple of things I want to point out. Of course, yesterday we did see yields pop as Kelly just reference, that's the left side there. But notice how the peaks on the left and the peaks on the right are very similar. That's because right now the two-year note is virtually unchanged on a day, down a couple of basis points, actually up. basis point on the week, it closed at 405. Now, let's go to a longer maturity of the 10-year. You can see the left side and the right side. The right side's lower. We see that long-term rates, even though they represent maybe a better glimpse in the deficits, have been easing back a bit.

So we see the yields are a bit lower there. And on the week, you're down about five basis points on a weekly perspective, only down two on the day. And when you consider we had CPI, PPI, retail sales, all of those cross-currents going on. It's rather amazing that we are so tight with respect to last Friday's levels. Take it a step farther. Right now, we're virtually unchanged on the year on a tenure. Very quickly, HYG, that's a high-yield ETF.

It's trading at two-year highs. When the Fed thinks everything is too tight and they need to ease, I question, why is everybody buying high-yield and junk then? That's a question I'd like to hear Chairman Powell answer. Kelly and Tyler, back to you and have a good weekend. You too, Rick. Thank you very much. Well, the NFL season is just a few weeks away, but our stock draft competition is midseason.

Ose Perlman leading the way with a 44% gain thanks to his second pick, Carvana. Coming up, we'll talk to another one of our competitors, the comedian Druski. Thankfully, he's got a sense of humor. His team is down about 3%. We'll be right back. Welcome back, everybody. As we take a look at our current stock draft standings right now, the mentalist Ose Perlman leads, thanks to Carvana, up 100% since the draft, and right behind him is Eddie George picking

Nvidia and Apple. Our current guest is in eighth place, representing Team 4 Lifers, picking Nike and Google, and he's here with us today. Joining us is the actor and comedian and content creator, Drusky, Drusky. Welcome, good to have you with us. Nike has been struggling here a good bit. That hasn't helped you. A lot bit.

A lot bit. Yeah. No, you know, you've got to write it out sometimes when you're. When you ride and die, you know, I'm with the company. And even though it might be some insider trading going on, you know, we just did a commercial with them. So I think it's going to start to rise again after they see my face so much on the TV. I can see that. Yeah, you can see it happening.

I can see why. Do you think they're still cool? I mean, some have said we just saw us, I were talking about maybe they get in women's sports and they have Caitlin Clark and all this. But it's, you know, I just agree with a thing. Well, at some point I need some return of an investment. So, yeah, I hope so, you know. We got some money in the pocket. Your other pick was Google.

It is up 5% since the draft. Nothing shabby there. It's a little bit of a game, right? Yeah, no, no. 5%? Yeah. You take that, 5% in a couple of months. We did this, what, in April?

End of April. We did this. Are you much of an investor? Somewhat, you know. You know, I always talk about capital gains and, you know, you know. Like I said, return. of investment. Yeah.

So, yeah, I don't know exactly what I'm talking about with it. Yeah, you're right. Well, that's all right. Most of the people on CNBC don't know what they're talking about either. Or sports betting. That was the deal of the way. But I'd love to shoot around the words, though. You know, it sounds cool to know.

Capital game. That's right. That's right. That's right. My big one lately has been the carry trade, as Kelly knows. A carry trade. You know, you are smack in the middle of the metamorphosis that is taking a big word. Well, yeah. Slow it down a little bit.

You're throwing words. I used fancy words. Yeah, I started it. I get it. I mean, what is he saying? But you're in the middle of all the changes that are going on in the world of media. Because legacy media is shriveling as new media, which you are in, is expanding. Yes.

What led you there and what did you see that as potential that you are realizing? I mean, you're getting millions and millions of views. I think a lot of people are just on their phones now. It's like social media has skyrocketed ever since, you know, COVID and everybody. If you want to reach an audience, do something that they can access on their phone. Exactly, exactly, which is why a lot of these companies love to work with me. It's like, why wouldn't you come to your phone to watch everything? Now, even news, any clips, whatever happens, sports, it's all on social media now.

It's like people are kind of watching TV, but like, you know, It's like the parents of the world. Oh, you're hurting me. Anybody not. On so many levels, you're just hurting me. I mean, I think people should be aware of just how much success you've had and how quickly when you go from having a sketch to making it a YouTube show to making it. How are you able to iterate that quickly and to get YouTube, for instance, to give you backing,

which I have to imagine there's such a bogged down boardroom kind of corporate process. So how do you get an idea? Are they reaching out to you? How do you get these partnerships and these things off the ground so quickly? The main thing I wanted to do with our show on YouTube, I wanted to make sure that it was free to the viewers, right? And to the fans.

I didn't want to go to a platform to where everybody had to subscribe and, you know, bring your whole crowd over here and force them to do something where they just, they want to keep getting it how they were getting it on Twitter or Instagram or, you know, Snapchat, wherever. I think that's really what I wanted to do. And I really care about my fan base and I care about that people don't have to,

to change what they were already doing. You know, like, I want them to be comfortable being able to go and watch me on a bigger platform, you know? You also, in this new media world, you have to have what the marketers describe as a 360 approach. And you do that because you've got upcoming a live event in Atlanta with lots of music stars, lots of comedians, what is it called? Cudifest. And when is it? And who's going to be there? And what's the theory?

It is September 7th. So it's a metamorphosis of things. Well, that's a big word. Yeah, yeah. So we have comedians, of course, artists. I actually have Robert Kraft and Michael Rubin coming. Wow. Yeah, so, you know, we're working on just expanding the label.

Like, we got could have been records that started out as a joke on Instagram. And now we've got a TV show. We've got a festival. You know, it's just expanded so much. But this show will be like the new generation of like what entertainment. looks at live, you know? Yeah. So, yeah, I'm super excited.

It's in Atlanta, Georgia, at State Farm Arena. Huge, I think, holds 10,000 people. So, yeah. More more. Yeah. Almost sold out, too. We're close. People are you working with in general these days. Like, who, how many are employed in the, I see.

You've seen how many people came in here. My God. Yeah, yeah, yeah. About 20. You're like a CEO of, like a major. That's what I'm, so you take the idea, you take success. And then you scale it so quickly and are able to. to launch all of these things.

It's about who you know at the end of the day. You know, you do good business with good people and continue to surround yourself with even better people. So, you know, we're trying to expand. And like you said, metamorphosis. Yeah. This whole situation that we have in hand. All right.

Drusky, thanks for being with us. Congratulations. And we'll be rooting for Nike on your behalf, all right? Well, we hope and keep growing. Drusky. Coming up, the countdown is on for private citizens, training for an out-of-this-world opportunity, attempting a spacewalk in outer orbit.

We'll get the key details when power lunch returns. Welcome back, take a quick glance at the Dow up 143 points, reversing its earlier declines. And we see major averages with small gains across the board, about a quarter percent, but enough to post their best weeks of the year after that difficult sell off last week. All right, the next frontier in the final frontier

for private citizens and not government astronauts. We'll launch on a SpaceX rocket, and while in orbit, attempt a spacewalk, 400 miles above Earth. Morgan Brennan had the opportunity to speak with the crew when she joins us now. Who are these people? Oh, well, one of them we know well. Jared Isaacman, the CEO and founder of Shift 4, who's been to space before.

So as you mentioned, the countdown is on. The targeted liftoff is August 26th. I sat down with the Polaris Dawn crew. They're finishing training. And I asked, Isaacman, why this matters for the space economy. Leaving kind of the comfort of going to and from the space station, which is incredible, but if we're going back to the moon and Mars, we're going to have to get out there farther into space

where you've got more micrometeorites, you've got higher radiation environments, and there's a lot to learn about that. You're probably need some new spacesuits. You're going to want to get outside the comfort of your vehicle and explore the moon and Mars. You're going to need new forms of communication when you've got tens of thousands of people in space.

There's a lot of real development to do. And that's what Polaris program is about. It's a joint partnership with SpaceX where we're testing all these things out. Now, this is a five-day mission. They're flying higher than anyone since the Apollo era, so more than five decades. They will do this first-ever private spacewalk. But given the Boeing Starliner Astronauts saga, I also asked if that's impacted the way the crew is thinking about spaceflight and the risks of testing new technology.

I think we are certainly needing to continue to explore. We can't stop making progress and continuing to push technology. You know, there's so many critical objectives on this mission, and I know we're really excited to get to them. I also know how much work the entire SpaceX team has put into ensuring there's absolutely nothing we haven't assessed and looked at. And of course, they are testing these new spacesuits. Sarah Gillis, who was just speaking. She's one of two SpaceX engineers in the crew. This is the first time ever, SpaceX employees will be on. Over time, 4 p.m. Eastern, the whole interview will be there.

See you then. Thanks, Morgan. Thank you for watching Power Lunch everybody. Flooding bell starts right now.