Power Lunch - Meme stocks, a regional bank CEO and trading high short interest stocks. 8/9/22

Episode Date: August 9, 2022

What the big run-up in meme stocks says about market sentiment. Plus, the CEO of Valley Bank on whether he’s seeing signs of recession. And the high short interest stock that our trader says is a buy. Hosted by Simplecast, an AdsWizz company. See https://pcm.adswizz.com for information about our collection and use of personal data for advertising.

Welcome everybody to Power Lunch. Glad you could join us. I'm Tyler Matheson. Kelly will be right back with us in a sec. Here's what's ahead this hour, a double dose of power players. First up, we've got the CEO of Valley Bank, the stock up 12% over the past month, outperforming the bigger banks. We're going to talk lending, the consumer, and why rates, bond rates, other kinds of rates are falling even as the Fed hikes their principal interest rate. Plus the Vivid Seats CEO, the company reporting a rise in revenue and upping its guidance. will get his take on discretionary spending in the face of this slowing economy. Kelly. Yeah, we're excited to hear more about the consumer, which is showing signs of life in areas, Tyler.

Stocks, though, are mostly lower, and the NASDAQ is the biggest lagger today as we hover just off session lows. The NASDAQ's down 1 and a quarter percent. The chip names in particular weighing here, the S&P down half a percent, a multi-day losing streak, about four days it's trying to avoid now, and the Dow is down 39. Now, let's look at some of those chip players like Micron, which today is, off 5% after issuing a revenue warning of its own just a day after NVIDIA's yesterday. The SMH ETF is off 4.5% today down around 228. Now elsewhere, Norwegian Cruise Line is the worst performing stock in the S&P.

They say they'll continue to be unprofitable in the third quarter and return to 2019 occupancy levels. They say it's still a year away. The shares are down 11%. It's dragging down Carnival and Royal Caribbean as well as you can imagine. And there's the pressure on Carnival and RCA. Dale, Tyler, down 5.5%. All right, Kel. If you think the moves in the semis and the cruise lines are dramatic, take a look at some of the meme stock, shares of pandemic darlings like AMC, Bedbath and Beyond game stock.

They are down a little bit today and not insignificantly, as you can see right there. But over the past week, Bed Bath and Beyond is up more than 60%. AMC, up over 30%. If meme mania is back, what does it tell us about the state of the overall market? Let's bring in Ed Yardinney, my friend, longtime friend and president of Yardini research. Ed, good to see you, sir. The return of the memes suggests to me the mania of crowds and little more. Yeah, I think it's a phenomenon that clearly is associated with social media.

It's easy to get a flash mob or a flash crowd together with social media. And this is kind of the analogy that I see between what's occasionally. happens on social media and what we're seeing happening in the stock market. I think there's a lot of speculators that feel like they can get together using social media and move a stock one way or the other, having nothing at all to do with the fundamentals. So it is a mania. Yeah, I was going to say, is there any connection to the fundamentals of the stocks we mentioned there, AMC, Bed Bath and Beyond and others, number one, that's number one. And number two, I wonder why the meme, I hate to call them investors because I don't really think that's what they're doing. But the meme players keep playing

the same stocks. Why don't they move on to something else? It's a really good question. I don't really have an answer to that. Maybe they're kind of stuck on these names and they figure they've already got everybody focused on these names and it's easy to get everybody. Stuck on you. What's that? Stuck on you. Stuck on you. It's the old. No, I agree with it. Stuck like glue. Yeah, right? Yeah. I think that's got to be it. Yeah. So, I mean, you look at these things, not as people who are playing them.

This is a game. This is not an investment strategy, right? Right. Yeah. Yeah. Yeah. I mean, it's in many ways sort of an outgrowth of social media and gaming. And, you know, if you can make a quick buck or, you know, a lot of bucks in short time

playing this mob flash mob. phenomenon, then why not? To focus on a few stocks makes sense because you can really move them. If you start to diversify the portfolio of meme stocks, that might wear off. Lionel Richie is who I couldn't think. The brain is. I think I had a different song in mind. And I always look at it as well as a sort of emblematic of what's going on in markets. We know a year and a half ago, two years ago, the meme stocks told you there was way too much liquidity in the system. What is it telling you now? may very well be saying the same thing all over again. The S&P 500 bottomed on June 16th.

And I think the reason at bottomed is because investors started to conclude that maybe we've seen peak inflation. Bondhill started coming down. Commodity prices started coming down. So all that kind of made sense. But that also alerted speculators that maybe it's safe now to come back and play the game and that there is enough liquidity to do so. So we began the hour by sort of posing the question, why are bond yields slumping while the Fed is signaling that it is going to continue raising rates? Yeah, well, you know, a long time ago back in the early 80s, I started talking about the bond vigilantes. And the bond vigilantes were very vigilant. At the beginning of the year, bond yields went up dramatically, mortgage rates went up dramatically. And that certainly has helped to slow the economy down and create a housing recession for all the time.

practical purposes. But now what? I mean, now the bond yield has come down. They're not being very vigilant. It's not as though we are, you know, slam-dung cashier that inflation is coming down. And yet we've got this drop in bond yields. The only thing I can really explain that with is the bond market must be perceiving and things are going to get a lot weaker, which is certainly wasn't confirmed by Friday's employment report. And I think foreign investors are kind of viewing the United States as a safe haven. I kind of coined a new phrase here. TNEC. There is no alternative country. And when people look at all the geopolitical mess we're in now, they want to be in the U.S. and the dollar's been strong and they've been putting

into fixed income. Teneck right next door. Nice town. Ed Yardini. Thanks. Always a pleasure. Good. And if investing in meme stocks makes you a little nervous, our next guest favors some more traditional names he thinks will hold up well if there is a recession. Michael Errone is chief investment strategist at State Street Global Advisors. It's good to see you, Michael. I mean, Ed was painting, I think, a little bit more optimistic take of the macro backdrop. And I don't know if you need to kind of weigh in on the recession question in order to pick stocks right now. I don't think you need to weigh in on it. I do think the interesting thing here is that we know that the economic data, the labor market

data and the earnings data are going to kind of bottom. And before that happens, markets will begin to price in a recovery. So in many ways, I think invest. this cycle's been going at warp speed. And so I think in some ways, investors should be thinking about the recovery playbook, even though the economic labor and earnings data hasn't bottomed yet. So what will do well in the early parts of a recovery? Wait a minute. Wait a minute. This is interesting. Can what does well in the early parts of a recovery also be true if we have, for example,

the postponement of a recession? In other words, what do you think the next six months are going to bring? I do think that that's possible, and it is somewhat unclear in terms of this idea that if the Fed keeps raising rates aggressively, I do think a recession is inevitable, but it may not be imminent. And so as long as corporate profitability continues to be strong, which we have seen, labor market, certainly Friday's job report was outstanding. And they continue to spend in terms of capital expenditures. I think that some of these kind of cyclical stocks, particularly value-oriented ones, can hang in there and perform well. And you have several names here. One of them we just talked about Honeywell because it could be a beneficiary from some of the inflation reduction act stuff. 3M as well. Walk us through these.

So we put a few stocks together today, one energy, two industrials and a bank. So those are all, again, if investors begin to price in a recovery before the, data bottoms. These, I think, will all be winners. So Occidental Petroleum, for example, will continue to benefit from high revenues. They're reducing debt. They're buying back their shares. So that's still trades despite its good performance at a reasonable multiple. 3M, Kelly, 3M has increased its dividend for more than 20 consecutive years. And it's got a healthy 4% yield. Never mind the fact that it just beat its earnings, both top line and bottom line, and is going to spin out at its health care division. So this is another stock that should do well. And then finally, Honeywell, you had just put it on the previous segment, should benefit from the Inflation Reduction Act.

And again, another company that beat on both earnings and revenues. And I think will benefit from an increase in spending in the aerospace and defense industry. Yeah. As you look at, let's flip over to the bond side. And as you look at where yields are and you look at the invest. And you look at the version that is there between the 10 and the 2s and the 5s. What does that tell you? I mean, you say a recession is inevitable but not imminent. Does that confirm your view? It does. So what it tells me is that bond investors are pricing in a recession. And Ed Yardini just mentioned it as well, and I think many others. If we look at short-term yields, they're rising because the Fed is going to raise rates aggressively, the jobs report the other day,

a lot of the inflation data continues to suggest that they have a lot of work to do. So short-term rates are rising still. Long-term rates are reflecting, they reflect three things, Tyler. They reflect growth expectations, inflation expectations, and term premium. Let's put that aside for a minute. Well, growth expectations are falling pretty quickly, and I do think that that's important. So we just did an inflation impact survey of individual investors. the majority of them expect a recession in the next six to 12 months.

There you go. Michael O'Roney, thank you very much. We appreciate your time today. Thank you. Thanks for being with us. All right, coming up, shares of Valley Bank of 12% over the past month outperforming the big banks. The CEO will be with us to discuss lending, the consumer, the decline in rates, even as the Fed hikes. Plus, we are trading at Dick's sporting goods, urban outfitters and cracker barrel, three stocks with a large short interest,

as a percentage of the total float. Find out which is a buy in today's three-stock lunch. And as we head to a break, a look at some of the stocks, hitting new 52-week highs. Yes, that happens in today's session, including McKesson, Vertex, and Sintin. Welcome back to Power Lunch. Shares of the Mid-Sized Bank Valley National

up about 12% over the past month outperforming lots of big names in the S&P financial sector by almost six percentage points. But it's been a tough environment for banks to navigate. Interest rates continue to drop in many parts of the market as the Fed continues to hike. Joining us with a look at the landscape and consumer and lending is Ira Robbins, Valley Bank CEO and chairman. Ira, welcome back. Good to have you with us.

You know, we talked a little bit a moment ago with Ed Yardini, who said that a recession in his view was inevitable, if not necessarily imminent. I wonder what you think, and I particularly wonder if you're beginning to see any in your portfolio and business, any of the telltales of recession, namely, businesses cutting back on loan demand, not borrowing as much, loans either delinquent or in default. What are you seeing there, if anything? I mean, if I was to listen to everyone on TV and read the newspapers, I would think recession is imminent tomorrow. But when I look at the underlying performance of our organization, loan demand, which was up over 20% this last quarter, a commercial pipeline, which is up over $200 million from going into the third quarter versus what was going into the second quarter, I would say the numbers don't support internally here at Valley, what a lot of the rhetoric is on the street today. So who's borrowing? Who's increasing? Where's the loan demand coming from? I think for us, we're a commercial-focused oriented bank. So the commercial demand is still very strong. The consumer demand has definitely subsided a little bit today.

And I think what we're seeing today, especially on the residential market, is probably where we were two or three months ago. That said, that's a decline of about 40% from where we were January and about 60% year over a year. So there's definitely been a decline in the consumer demand for loans. But that said, it's begun to plateau. So tell me why mid-sized regional banks seem to be outperforming the big boys, the chases, the, the Bank of Americas and so forth. What's your hypothesis there? I think a lot of those large banks are really consumer driven where Valley is a relationship-focused commercial bank. And relationship-focused commercial banks seem to be doing very, very well today. The commercial customer still has a lot of

liquidity, still has a lot of capital X demand that they're looking for, and demand is very strong within that specific segment today. So I think that the regional bank space is going to continue to outperform the large money center banks as well as some of the small banks. a recent merger acquisition of Bank Leumi. Why and why now? Why did you do it? Yeah, I think as we think about the future, you know, funding is going to become a greater and greater issue for the banking landscape. Bank Laume had a significant amount of tech business from a vertical perspective. And at Valley, we think it's very important that we continue to diversify the funding book across the entire organization. I think the market has

generally seen a lot of liquidity in the banking space. And as that begins to come out, go into treasuries, which is obviously impacting the overall yields on some of the treasuries, demand is going to outpace the funding that sits in the banking space today. So for us to diversify funding source becomes very critical. And Ira, just to circle back, you know, can you talk about those commercial customers and how solid their demand is, what that pipeline you think for loan growth looks like? Because the confusion people have about this recession in this economy is the fact that the consumer has slowed like you acknowledge.

So tell us what's going on elsewhere. and whether you think it's sustainable? I mean, I really do. I think the projects that I see them looking at when it would be term financing for certain equipment seems to be very, very strong at our organization. So I think a lot of companies are looking at clean and environmentally friendly manufacturing,

and there's significant demand for that type of product from a consumer perspective. As you see, Congress is beginning to think about subsidizing the demand for some of that as well. And our manufacturers are looking at producing some of those products. It's going to increase inflation without any question. but there's strong demand for that. Let's put some numbers, if you don't mind,

everybody talks about how in periods of rising rates for banks, it can help net interest income and net interest margin. Tell us about what your experience has been in the most recent quarter on those two fronts. I think banks in general did very well this last quarter. From an index perspective, banks outperformed estimates by about 4% this last quarter. Valley alone, we were up 14% on a lean quarter basis on our earnings per share. where loan growth was over 20% for us, and margin expands at well over 25 basis points as well.

Typically, when interest rates begin to rise, banks begin to ignore some of the benefit from right off the bat. That said, there's usually a lagging impact from a funding perspective, about two or three quarters later where the cost of deposits tend to really increase. So right now, really is a sweep spot from the bank perspective as to where credit hasn't a necessary turn yet if we are going to go into a recession, and margins are really strong. And profitability as a result has been fabulous for us. And I'm curious if you guys are experiencing what we're seeing on the macro level,

Iro with a lot of wage inflation. You said you have good at sort of profit margin growth right now, but what's that going to look like? And with productivity, I don't know if you saw the numbers this morning. It's just terrible. And I don't know if you have any hypothesis about that. I would argue a lot of that's based on how people are working today. Maybe impact on their productivity, but I don't want to go necessarily on record as saying that overall.

What's your work-from-home policy there at Valley? Look, we have to be flexible on understanding what the competition looks like today as well. You know, for us, like I said, demand has been super, super strong. We've had to really increase wages as a result of that. Affected July 1st, we increased a 5% across-the-board wage for everyone making less than $75,000 within the organization. Last year alone, our average annual salary went up 11%. And we continue to have to make off the annual basis. adjustments on a month by month basis. All this is going to be inflationary as well. And there is

still significant wage demand from my perspective. Wow, 11% of smart. That's amazing. All right, Ira, thank you so much. Good to see you again. Great seeing you. Thank you so much for the time today. Ira Robbins with Valley National. Up next, the Modern Family Office. These firms are investing north of $100 billion in startups last year. They're taking on the likes of the VCers. We're going to get an inside look at how family offices are shaking things up in Silicon Valley. Plus, today's working lunch. We're getting up close and personal with San Francisco Fed President Mary Daley. Power Lunch is back in a moment. Welcome back to Power Lunch. Family offices recently passed hedge funds in terms of money managed. We're talking about more than $6 trillion. Fortunately,

Robert Frank is here to take us inside this sometimes secretive and shadowy world of cozy called family offices, Robert, and now they're pushing to the VC world. Yeah, Kelly, these family offices gotten so big, they are now taking on the venture capital industry. Their investments doubling last year to over $120 billion. As you can see, more than 2,300 deals. That's 10 times the level of 2014. Now, part of the reason is that family offices are exploding in size, but they're also shifting more of their fortunes into private companies. For the latest family office investor, we talked to Michael Hyatt. He is a serial tech entrepreneur and family office founder. Five years ago, he invested in a Canadian storage company that had only

$5,000 a month in sales. Now it's called GoBolt and is valued at over 600 million. My principle is if you find an entrepreneur you really like, don't be afraid to give that entrepreneur the biggest break they'll ever have because the payoff. be enormous. And that's what I did. I find people I really like and I want to roll in the boat with and I give them the biggest break and I bring money and capital and gravitas and then I help them build something great. And it's worked out for me three, four times. And direct deals like that now account for about 20% of family office portfolios. UBS says that's going to grow to over 30% in the next five to 10 years surpassing equities. You can see our full interview with Michael

Hyatt on CMEC Pro. So it's interesting to see them looking to put more money into startups. It's not like there wasn't already a ton of competition. You know, he made this great investment, but VCs have been trying to do this for literally decades now. Yeah. And entrepreneurs love family offices more than VCs because there's no real timeline. VCs typically have a eight to 10 year exit. You know, family offices actually love timelines that are 20, 30, 50 years, so it's more patient.

And the decision-making process is much faster. Wow. So the entrepreneurs, you're right, they have choices. There is competition, but many of them are going to family offices also for the advice that entrepreneurs like Michael can give them. Fascinating. All right, Robert, thank you very much. Good to see you. Good to have you in house. Well, let's get to Kate Rooney now for a CNBC News Update. Kate. Hi, Tyler. The Biden administration is preparing to move forward with a plan to stretch the limited supply of monkeypox vaccine doses. It would allow providers to use one-fifth as much per shot. This comes a week after the Biden, administration declared monkey pox a public health emergency. Police in New Mexico are stepping up security at Albuquerque area mosques and Muslim community schools as investigators hunt for the suspect who gunned down to four Muslim men over the past nine months. The city will also be working

with the police departments serving the University of New Mexico and the Albuquerque public school system working to ensure students are safely returning to their respective campuses. And EC Miyaki, who built one of Japan's biggest fashion brands and was known for his boldly sculpted signature pleaded pieces has died of liver cancer. Miyaki was 84. Tyler and Kelly, back over to you. All right. Thank you very much. Kate Rooney.

Ahead on Power Lunch with meme stocks going viral yet again. And investors potentially looking for riskier bets are highly shorted stocks on the table as well. We'll discuss that in three-stop line. Plus, slumping in the seat. Ticket prices higher than ever, but sellers like Vivid Seats lower for the year. Will the push for experiences over things get their stocks back on track? The CEO joins us next. Welcome back, everybody.

90 minutes left in the trading day. We want to get you caught up across the markets on stocks, bonds, commodities, and a look at consumer spending with the CEO of Vivid Seats. But with the Dow, pretty much at fresh session lows here. Let's start with Bob Bassani at the New York Stock Exchange. Bob? Low's for the day and the S&P is faring a lot worse than the Dow today. And essentially, we've been moving sideways for a number of days.

I just want to show you the big semiconductor names that are out there. Micron, remember, has had a tough time this year. It's down about 35%. But on the comments they made yesterday, down 4.7% today. And Vidi is down another 4%. It could have been a lot worse. Just remember, a lot of people were saying much of the worst-case scenario was already behind. us, but you see some of the semiconductor capital equipment names like applied materials,

ASML Holdings, Lamb, LRCH, down even more than that at this point. So keep an eye on that. Airlines have been really strong recently, and they've had a great run. They're giving back a lot of the gains today. Some of the other travel stocks are down. Norwegian cruise lines. It's some very disappointing commentary. That's down 10 or 11 percent, and that's affecting Royal Caribbean as well. One of the bright spots is energy. We've stabilized in oil in the last two or three days, right around $90 here. So you get a little push up once you get oil a little more stable for some of the energy names like Devin, Hess, Exxon, and APA, the old Apache. But by and large, we're about where we were, oh, about six or seven trading sessions ago, Kelly, and a lot of difficulty pushing the market forward when we do have the good news or the good sense that we're going to see some kind of modest recession or very much.

mild recession. That's the story the bulls are pushing. At the same time, they can't answer the fundamental question of where inflation is going to be. So you're sort of at a stalemate at this point in the S&P. Kelly, back to you. Yeah, I'm watching the energy trade for that reason. Exactly. We'll talk to Pippa about that, but if we see pressure coming back on the consumer from gas prices. First, though, let's get to the bond market where Rick Santelli is watching yields ahead of that CPI report in the morning, Rick. Yes, that CPI report's going to be important. You know, this morning, we saw some major and non-farm productivity, but that still brought us to a minus 4.6 for the second quarter

preliminary improvement, but still really nasty productivity. We know that negative GDP back-to-back and rising job levels, solid job creation could only mean one thing. Productivity is not good, and most likely I don't see any improvement on the horizon. But for tomorrow, it's going to be a big day for the July read for consumer price index. And there's two areas that I think investors should pay close attention to. If you recall last month, the headline number was up 1.3. 1.3 was a 42-year high back to 1980. But tomorrow, expectations are for up 2 to 3 tens.

So it's doubtful we're going to challenge history. But where we could challenge history is the year-over-year headline. It was up 9.1 last time. That was the highest in 41 years back to 1981. expected to be up 8.7. There could be surprises. And how did the markets react since then? Well, those data points for June were released on the 13th of July. Here's a two-year note yield since that time. You can see how it's turned back up to a higher yield, whereas the 10-year has gone somewhat flat, and that really does encapsulate the flattening slash inversion going on because long rates are super glued,

but yet short rates continue to move higher. Kelly, back to you. Right, Rick, thank you very much. And now let's turn to energy, which is kind of a linchpin between inflation and the markets. And we're seeing some stickiness around that $90 barrel level. Pippa Stevens has the latest. Hi, Kelly, yes, we are. Oil is moving between gains and losses today in choppy trade. Crude did bounce off the lows after Russia's state-owned pipeline operator said oil flows to Eastern Europe have been halted due to sanctions preventing the transit fee. But this was not enough to counteract demand slow down fears and oil is finishing modestly lower. WTI is at $90.36 for a loss of half of 1% with Brent crude right around $96. Nat gas is making back some of yesterday's slide with European gas also on the move.

And that huge swing in prices amid Europe's energy crisis is hitting consumers. Energy firm Cornwall Insight released new figures today forecasting the price cap levels for the year. UK come January, they see it surging above the 4,000 pound mark for the first time. That's more than 200% above what households paid this year. And this comes after the UK energy regulator said it would adjust the price cap every three months instead of twice a year, Kelly, due to volatile markets. Pippa, what is the point of a price cap if they just keep raising it? Do you say 2,000 pounds?

200% above what it is this year. That's come January. and they keep raising it because the prices keep going up. And so they're passing it along to consumers at a faster rate than they were previously. And that's leading to more and more calls about a crisis for consumers, particularly around the poverty line who just cannot afford an energy bill that's more than 4,000 pounds. Wow, we see social media campaigns, don't pay UK, things like that as well that are just starting. PIPA, thank you, our PIPA Stevens.

Let's turn back here to new spending data from the U.S. showing a bit more resilience. we're not facing nearly the same energy crunch. New data from Bank of America show total payments were up 7% in July from a year ago, and card spending per household up more than 5%. That's amid all the talk of recession and, of course, gas prices that are just in July starting to abate. Now from our next guest, a large part of that spending may be going to concert tickets. Vivid seats today reported a strong quarter, raised its outlook, and with us is Stan Chia. He is the CEO.

Stan welcome. People paying, I mean, how is inflation factoring into all of this? Hi, Kelly. Thanks for having me on. Yeah, look, I think when we look at consumer spending patterns, you know, I think we're very proud of the fact that we're the only live events marketplace that has a rewards program for every single fan. And we're continuing to see strength in the business as folks, I think, try to move towards experiential things over materialistic things. We just reported, you know, in the second quarter, the largest numbers of orders we've ever done in a quarter. And I think that speaks to the strength of the business and also consumers desire to go to live events. So why is it that Norwegian is out there saying they're not going to go back to pre-pandemic levels for another year?

Stock's getting hit today, and it's a different story for you guys. What's the difference between showing up to a concert and booking a cruise? Yeah, look, I would tell you, when we look at our business, you know, the underlying strengths of, you know, artists wanting to get back out there and tour, the teams wanting to get fans in the stands. and then just the fans desire to be at live events where, you know, it might be a once-in-a-lifetime chance to see Elton John on his farewell tour. Maybe this is the last time you'll catch Adele performing at Caesars. You know, any of these events, which I think have a more impactful experience with consumers, I think that continues to lead us to believe that users and consumers are willing to spend on live events, perhaps more so than other discretionary categories.

Adele, didn't Adele sort of not show up for one of her things? I can't remember, but yeah, in Vegas. Yeah, there was one number that keeps getting cited in the reports, and that is Marketplace GOV, $815 million. That was a big number, a big increase over the past. What does that number represent? Is that the total value of the ticket sold? In other words, if I see on your site that a ticket for Sebastian Manuscalco is

is $1,700. And so that's, is that the Marketplace G-OV? Yeah. Hey, Tyler. And yes, Sebastian, that's going to be a great show. You should definitely go check that out. I did. I went and saw it.

And I bought them through you guys. So I was a happy customer. I love it. But the Prudential Center didn't know how to handle the crowd, but it was all right. It's not your fault. That's their fault. Yeah. When we look at Marketplace G-O-V, you know, we had a great quarter, almost up 20% year-over-year.

and Marketplace GOV for us is everything that you see there on, you know, what consumers pay in aggregate that we've sold for the quarter. And so what's your, what is your take out of that? What is your revenue out of that total revenue? Your total revenue was, I forget, $125 million, something like that. I can't remember for the half. Yeah, we did just under $148 million in revenue this quarter on that $800, over $800 million in GOV.

What is, what is the, strongest part of the business? Is it live sporting events? Or is it the return to concerts, comedy? What has surprised you there? Or is one stronger than the other? Or is it everybody just wants to get out and go? Yeah, I think we've seen a pretty concerted uniform effort from consumers to get back to events across all the categories. For us, we are certainly seeing strength across live events in concerts. We're seeing them in sports. We're seeing the return of, I'd say, the performing arts as well. And sometimes it's, you know, really great news like, you know, Soto going to the Padre is driving a spike in demand there. So I think we've seen across our

platform again, just great strength across the categories. And we attribute a lot of that with us to the fact that, you know, we've got a great rewards program out there to continue rewarding users to come back to our platform for future events. There's nothing like a live event. And I have to say nothing like a live event. at Jones Beach. That amphitheater there is one of the great viewing places ever. Stan Chia, thanks, man. Thanks for having me, guys. Yeah, see you soon. All right, coming up, John Ford, John Ford, is going to bring us his interview with San Francisco Fed President Mary Daley, getting everything from the economy to equity and inclusion working lunch is next. We will be right

back. All right, Friday's strong jobs number, renewed concerns about how the high demand for labor is adding to pressing up on inflation this week. John Ford brings us up close with a Federal Reserve official whose relationship with work started very early. John? Yeah, Tyler, Mary Daley is president and CEO of the San Francisco Fed. She also dropped out of high school to work at age 15 after her parents got sick. Daley went on to earn her GED, bachelor's, master's, and doctorate in economics. She learned to thrive despite the odds until one day, early in her time as an economist, the Fed, one of her superiors put up a barrier that stunned her. And then someone told me that I wasn't going to be able to go in front of a specific group

because I was gay. And it might be an embarrassment or it might not sit well because maybe the people we were going to speak to you didn't really love gay people. And it was the first time in my life where, I mean, I've been odd for a long time, right? I'm lower income, I'm from the wrong side of the tracks. I'm gay. I dropped out of high school. I mean, I got a lot of weird.

I'm short. You know, I got a lot of things that don't make me fit. But that was the first time that someone had directly told me that because of something I was, I was going to be constrained. And it stopped me in my tracks. I called a friend of mine. And I said, I don't know what's happening to me. And she happens to be a black woman.

And she said, oh. The first time someone stopped me and told me I wasn't going to be able to do something because I was black or I might not fit in because I was black and they said it out loud to me. It's like you've been hit by a car. You know, you're stunned. And for me, that was the hardest moment in my career. A couple of allies at work came to her defense. She did speak to the group and it went well. Today's challenge for Daley is different as she and other Fed officials study how to bring down inflation without sparking a recession.

One puzzle. Is it possible for Fed policy to reduce? reduce the number of job openings, a precursor to spiking wages, without also causing unemployment to rise. It's never been done before, but Daley said this time might be different. Now, low-wage workers are the ones really seeing rapid wage growth, and that's because restaurants are competing with hotels all in this reopening phase. If you've been to an airport, it's hard to get in line for something because the food counters are understaffed. TSA is even understaffed. A lot of lower wage workers have other opportunities now.

And one of the main ones is in warehousing and distribution, right? So that's been a booming sector, and it's just increased the job opportunities for lower wage workers. The thing that makes the matching efficiency not as challenging this time around, though, is if you can work at a restaurant, you're pretty diversified. You can go and work in a warehouse or distribution job without a lot of extra training outside of the on-the-job. trading that they provide. So workers are pretty mobile across these lower wage sectors, and that means that they can get these jobs pretty readily, which would be good news for matching efficiency. Well, unlike a lot of economists, Daily, has personal experience as a lower wage worker

and being part of a marginalized group. We'll see if the Fed policy she's advocating can cool the economy without severely hurting the most vulnerable guys. It's an inspiring story, and I guess it tells me once again. Don't tell me I can. can't, let me show you what I can do. I mean, that, and it's often that kind of jolt that is the most inspiring thing you see in business. Indeed. And one of the things most resonant with her is the people who helped her at various stages in her journey. One was a teacher when she was in high school who had a friend who sort of encouraged her back into the educational process, which she views as so important for helping people to thrive in this net stage of the economy.

I mean, the fact that she not only got her GED, but do you know how she became an economist, John, does she talk about, did she have a particular interest in that? It's just such a look at her at the top of the field now, right, as one of the Fed officials that we talk about, who's moving all of these, as everyone's watching the yield curves and verdant, she's one of the people we're talking about. Well, her initial degrees were in economics and public policy. So her concern for people living in all kinds of circumstances, all, you know, both sides of the tracks was a part of that.

She's also doing a podcast called ZipCode Communities, where she actually goes in and talks to people who are working in a community in one of the nine states that the San Francisco Fed covers. So continuing to look into the real impacts on the ground of what the economy is doing. Yeah, she probably represents more of the country than anyone but the president pretty much. It's a big, big portion. John, thank you very much for bringing that to us, our John Ford today. Still to come, trading on the short run.

We'll highlight stocks with huge bets against them, and our trader will tell you whether or not to buy now. Welcome back. Time for today's three-stock launch. Lunch and on our menu today are three stocks with high short interest as a percentage of their float. That's Dick's sporting goods at 27%. Urban outbitters, 25%, and Cracker Barrel at 16%. Each of these are also more than 30%. percent off their highs. Let's trade them with Victoria Green. She's chief investment officer at G-squared

private wealth. Victoria, it's great to have you on board. What do you do with Dick's sporting goods? We're a buyer of this rally of Dix. We actually think the company's in a really good position. They've been modernizing the last five years. They're very tech forward. They have its ambin bus channel. So you want to pick it up curbside, one-hour ordering. And they hit a great market. They have a lot of high-end products like the golf simulators, the baseball simulators. They have trained staff to help you pick something out. So we've seen that high-end part of this market be more resilient. So we think their revenues are actually a lot better. Plus, they've ripped the Band-Aid off first quarter. So kind of got all the bad news out there, let everybody know, yes, things are more expensive. Yes, wages and labor

cost a little bit more. So I am still a buyer of Dix even after this bounce. Yeah, and they're really once sports authority went away, they have that sort of sports superstore, at least in the east, largely to themselves. Let's go to urban. They've got 8% of the market. Yeah, let's go to Urban Outfitters, let us know what you think there. Apparel has been a tough place to be. It has, it has, and we are still a cell of Urban Outfitters. I think this downtrend is intact, and I don't think they're going to be able to break out of it. It's all about the inventory game right now, and they're going to have struggle to get inventory

off the books. Barclays estimates the last three quarters, their sales to inventory has been negative growth. That means the inventory continues to build, and as we know with fashion, it changes. It changes seasonally. it changes over time. So they've got to use promos and increase marketing expense to get this inventory off their books. And it's going to be a struggle and a drag on margin. So I know it's a highly shortest thought right now. I know it's in this downtrend, struggling to break out, bouncing around 20 to 18, and I'm just not a buyer. I'm still a seller. Yeah, tell us how you

really feel. Oh, wow. All right. Love it. What about Cracker Barrel, Victoria? Oh, Cracker Barrel is going through an identity crisis. And so I'm a seller of Cracker Barrel right now. They want to be this home country value store, but now they're adding pricier options to their market. They are well endowed. They've got a lot of 65-year-old. Well, sorry, the senior part of their market is very strong versus other competitors. So they face pressures from potentially people on fixed income, as well as they really can't figure out their customer base. They want to grow.

They want to appeal to millennials, but they're not tech forward. They're not very to go-friendly. And even they tried to add plant-based, and it caused it uproar with their current client-based. So they can't add new consumers, the millennials, and appeal to the vegetarians because that's alienating their base of seniors. So they're very dependent on the driving season. They've got a lot of stores across the interstate. So right now, I just think their model is struggling. They've got high commodity costs, 16 to 18 percent, commodity inflation is expected, 8 to 10 percent wage growth expected.

And I don't think they're going to see the sales growth. So I think this company needs to figure out who they are, how they're going to grow profits, and how they appeal across a mass margin. And I will say this as well, they're of value. That's how they market themselves as a value diner. But there's always a little bit cheaper options in the fast food. Sure. So they're not quite value enough to be value. But they're also not a trendy enough or high end enough that you're going to go out for a treat necessarily at the Cracker Barrel.

You're going to go to Texas Roadhouse or Outback. So they're kind of in this weird middle ground that I also think is going to come under pressure with inflation. Yeah. Did I hear you say Cracker Barrel and vegetarian in the same sentence? They did. And you should see it. It caused this Twitter and Facebook uproar because they added an impossible meat patty. And they thought they were being innovative.

And it caused that, you know, at the Internet, they went viral for all the wrong reasons. But yes, there was a vegetarian. I don't like Cracker Barrow. I think it was still, it's not fried, but it was close to fried since it's a fake sausage patty. Yeah. I kind of like Cracker Barre. I'm craving some right now. Joe, my wife loves it.

It's one of her favorite places. Thank you, Victoria. Victoria Green. For more high short interest stocks that could present opportunity. head over to CNBC.com slash pro or Cracker Barrow. All right. Up next, we'll put some interesting stories under the microscope for you. We'll be right back.

Welcome back to Power Lunch, everybody here. A couple of stories that caught our attention today. Ford hiking the price of its F-150 lightning pickup. The automaker citing significant material cost increases. The starting prices for the 2023 model will range from $47,000 to $97,000. Wow. That's up from $40,000. $2,000 to $2,000 for the 2022 model year. Price hikes come ahead of the reopening of orders on Thursday.

The company closed orders for the vehicle late last year. They can't keep up with demand. This is what we were talking about, I believe, yesterday with one of our guests, about price hikes, Tesla doing the same thing. Absolutely. The model Y, which used to be at the high 50s, now it's closer to 70,000. So a lot of these electric vehicles are under pressure. Cynically, I couldn't help but wonder if this would be about the amount of the subsidy they could be getting with the $7,500 tax credit. But I'm not sure they would qualify. The sourcing requirements are so high. Yeah, it's obviously demand and it is lack of supply and you have to wait a long time.

Yes. And finally, people are taking more vacation these days. But we're also spending more time on vacation checking into work. I mean, that's just what we do. We have these things everywhere. They chase you. They do. So you're working from home, but a recent survey from coronation.

Ferry found that 60% are still in touch with work during their vacations. And I saw Dan Premack doing just this on Twitter yesterday. He said, I'm on vacation. What did you do? Did you check in? Okay, well, I was with the kids to cover for the babysitter. So you come here to recover. If I touch this device while they're around, it's over. So I was forced to take a true break. Forced sabbatical. Yes. I'm pretty, what is that? Oh, she's talking to our producers telling us, she was checking the two, the two, ten spread. All right. The three's tens is about to invert.

Take us out of here. Thanks for watching, PyroLunch, everybody. Closing bell right now.