Power Lunch - Power Lunch 11/27/23

Episode Date: November 27, 2023

CNBC’s Tyler Mathisen and Kelly Evans take you through the heart of the business day bringing you the latest developments and instant analysis on the stocks and stories driving the day’s agenda. “Power Lunch” delves into the economy, markets, politics, real estate, media, technology and more. The show sits at the intersection of power and money. “Power Lunch” gives viewers a full plate of CNBC’s award-winning business news coverage, plus a healthy dose of personality from the show’s anchors and the network’s top-notch roster of reporters and digital journalists. 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. Coming up, the end of the busiest and most important, part of the year for retailers. We'll look at the numbers from Black Friday's weekend and start our series breaking down all the different parts of the retail sector today. Which big box store is best positioned? Plus, meta shares have been a rocket ship this year, second best in the S&P 500. Trailing only in VDIA. We'll look at the stock and the company as a war.

Wall Street Journal article makes some unpleasant allegations. But first, let's get a check on the markets, which are close to session highs, although we were briefly green on the Dow earlier. We're down 48 points right now. The S&P is down to the NASDAQ, the outperformer. It's up 25. And shares of Amazon are higher as online Black Friday sales jumped and beat estimates, according to Adobe.

Amazon shares are on pace for their highest close in a year and a half. And speaking of Amazon, its deal to buy eye robot is now being questioned by European regulators. The EC saying the deal could restrict competition for vacuum cleaners. I robot down 18% on that news, you're just under $34 a share. And as shipping and inflation, shopping and inflation are top of mind, shipping too. President Biden is about to speak at the White House. He is expected to discuss ways to improve the supply chain and lower costs for consumers. Let's bring in Aymann Javvers now for more.

Amon, what triggered this speech? Hey there, Kelly. Well, we're expecting to see President Biden shortly for the first. ever meeting of his newly created White House counsel on supply chain resilience is what they're calling it. Biden is going to announce 30 new actions. The White House says are designed to strengthen American supply chains and tackle inflation. That's the economic and the political imperative behind this new plan. The Biden administration says inflation is coming down quickly, but they want to do more and they want the American public to see them doing more ahead of the president's

re-election campaign next year. So to that end, the White House is using just, just about every element of the federal government to focus on supply chains, break down bottlenecks, and bring down costs. As a part of that effort, Biden plans to use the Defense Production Act to make more essential medicines in the United States and mitigate drug shortages. He's going to beef up the government's ability to track supply chain data with new analytical capabilities at the Department of Commerce and Transportation. The Department of Energy is announcing $275 million in grant selections for investments in clean supply chains. communities affected by coal mine or power plant closures.

USDA is making investments worth $196 million to strengthen domestic food supply chains. And the Department of Defense is going to publish its first ever national defense industrial strategy. So all of this is part of a broader White House communication strategy around inflation, which has been hurting the president's approval numbers. We even saw the White House tweeting about the lower costs of Thanksgiving dinners last week. The president's Republican opponents, of course, had been hammering a war. at Bidenomics saying it's the president's policies that are driving all these costs up,

guys. So that's the incentive to have this event today at the White House. To what extent is this an effort to distract, I guess, from the policies that the GOP attack that they say have caused inflation, whether it's monetary policies on behalf of the Federal Reserve or the fiscal expansionary policies that the Biden administration has largely pushed? So is it a distraction? That's number one. And number two, it's easy to dismiss commissions and panels and so on and so forth. But I got to say that two leaders of this, Lail Braynard and Jake Sullivan, are probably as high as it comes in the administration. Yeah, absolutely.

So you could say this is an effort to distract or simply provide better headlines out there on topics that they want to have headlines on at the White House. The irony here is that the attacks from Republicans against sort of binomics are that it's, you know, the government itself that's causing the problem. It's government regulation that's causing the problem. And then the Democratic approach here to solve that is to use government to solve the problem. And so what we're seeing is all these different federal agencies in their own ways being tasked with tracking supply chains in their areas, whether it's defense or agriculture or commerce generally and being able to then do things to break up some of these bottlenecks. So the democratic approach to this is to use government to try to attack some of these bottlenecks. Republican approach to this is to get government out of the way. That's sort of classic Democratic versus Republican thinking on the economy. And we're going to see that on display at the White House just now.

Well, there was no question, but that our supply chain came under question over the past couple of years and probably need some attention. Amage Avers, thanks very much. And we'll be awaiting those comments from President Biden. In meantime, let's stick with the economy and the consumer. Despite facing those higher costs, Black Friday shoppers spending a record 9.8. $8 billion in U.S. online sales this year. So will those strong numbers continue today? Cyber Monday, what used to be the mythological, maybe biggest day for online shopping. Courtney Reagan has more. How is it looking on, what do we call it, Black Monday? Yeah, Cyber Monday. It does look really busy here, Tyler, and today is expected to be the biggest day in the United States for online shopping orders than Adobe actually sort of upset forecast after seeing the strength over the last four days.

Now expecting consumers will spend between 12 and 12.4 billion dollars today. That's up about 6% year over year. And these orders here behind me at this Walmart digital distribution centers are being filled within about an hour of being placed. Walmart says the Fortnite figurines which are selling for just 10 bucks are already sold out. They were $52, a gaming office chair, Ninja Power Blender, and Shark Robot Vacuum also selling fast. Third party logistics provider radio, which fulfills online orders.

For companies like PVH, Children's Place, Cigna and others say that they are seeing similar strength online as others. We expect a similarly strong day as I think we were a little worried on Wednesday and Thursday. It looked a little soft. And so seeing the consumer really come out for Black Friday and the weekend gives us good hopes for today. Now, Ship-op also fulfills orders for other retailers, including Alta, Target, Macy's, Saks, Fifth, Avenue, Neiman Marcus, and many others. And its CMO, Casey Armstrong, says that Cyber Monday is starting off, quote, very strong. The third-party logistics provider says that Black Friday weekend sales were up 92% for the retailers that it fulfills for year over year. Here's a live look at Shopify merchant sales around the world right now on this Cyber Monday. Shopify says global sales grew

22% around the world on Black Friday with shrink in clothing, personal care, and jewelry. So so far, are looking good for many merchants and many data providers that we've heard so far after a pretty strong weekend as well. Back over to you guys. So Courtney, I guess things are looking pretty good. I mean, people have been questioning the consumer. There's no reason to question him or her right now, is there? Yeah, I mean, a lot of the data that we got is strengthened both on store and online. Of course, today we are talking about online because it's Cyber Monday. Many of us are back to work. But on Black Friday, Sensormatic, which is sort of the main

in-person traffic tracker show the in-store traffic was up 4.6%. Retail next says it was up 2.1% by their measurements. Yes, traffic doesn't always translate to sales, but that was much stronger than expected. MasterCard saw strength online and in-store. Yes, inflation is an issue that we've been talking about, but I think it's important to point out that Adobe says, look, for the retail products that it tracks, in aggregate, its prices actually are down. 6% in October from last October. So if you do adjust for inflation, it says sales actually are even stronger and that higher demand really factors into that rather than higher prices. All right, Cort. Thank you very much. Courtney Ray, again now sticking with retail. It's difficult

to lump the entire group into one. It is so slivered. We are seeing an extremely complex time for the consumer, higher prices, changing trends. New ways to spend, each subsector of retail being impacted differently. So this week we're going to break out each piece of that economic ecosystem to figure out what's working and what isn't. Today, let's look at the big box names like Target, Walmart, and any others you want to lump into that category. Bob Durbel, is Senior Managing Director of Retail and Analyst at Guggenheim Securities. Bob, welcome. Good to have you with us. Thanks for having me. Which of these big box dudes do you like the best in terms of a stock investment, not in terms necessarily of their business prospects right now? I mean, we have

buy ratings on both Walmart and Target. And Walmart is just, they've had a tremendous run over the last few years and they continue to execute at a high level. I think from the stock perspective, we'll probably favor Target a little bit more right now. Just as it hasn't had the run. Exactly. It hasn't had the run. You know, I think there's a lot more skepticism around, you know, the outlook for Target. You know, there aren't as many sort of great things to say about target. But from our perspective, I feel like it's a really well-managed business. You know, they've seen a lot of ups and downs over the last few decades, and they'll manage through this one as well. It's funny we're talking about this because I mentioned this morning. I was at a

target Saturday morning. I just had to pick up a few things. And it was quiet. I thought it was still going to be busy. And I said to the cashier as I left, oh, well, you know, yesterday must have been busy, right? And she said, no. She said it was the quietest Black Friday she'd ever worked there. And that for periods of time, it was quote unquote, boring. I mean, that's not to say they couldn't be doing quite well online, or maybe it was just my store, who knows. What do you think is going on there? Well, I mean, I think a couple of things. I think it's a really long season.

And I think all the data that's out is very encouraging. We're off to a great start. I think you have to participate in the early, you know, promotions and a lot of the action that's going on. But, you know, from our perspective, you've got a lot of days left. You have a lot of weekends left. It's like the longest period between Thanksgiving and Christmas, right, that we could have? Yes.

And I think one of the things that Target has seen, you know, might be the, answer to that question is that target has seen, you know, more sort of buying closer to the need, right? So, like, you know, the weekend would be good, but then, you know, maybe it's the third Saturday before Christmas, you know, when you go a little bit further and closer to the period, you know, there's no question. The traffic trends have been challenged at target, you know, but from our perspective, I think you get to balance, you know, where the business prospects are and where the stock is. Has Black Friday lost its juice? Well, I think, I think what's happening is there's a much better balance of, you know, earlier, you know, start earlier in

November. You might have a few weeks of the promotions that go on. And then you've got sort of online versus stores. So, you know, Black Friday specials were available earlier in the week. Like, I think it's on the channel is the way of the future. And as long as you have the online option, there is no, there isn't that same sense of urgency, it would seem to me, to get in my car, fight the traffic and go to a store on that Friday. Correct. I mean, I totally agree with that. And, you know, and I think sometimes if you just have to have it that day,

maybe that's the way to do it. Or if you're not a big online shopper, you know, you like going into the stores. You know, there are people that still love shopping in stores. Yeah, no, I like going to stores. I really do. And the same cashier told me in the mid to late afternoon, traffic started to pick up because people then just wanted to get out of the house and have that experience. But it wasn't driven by, hey, I need to get this doorbuster.

I just want to ask you about some of the other things. Do we talk deflation? I mean, one of the things as we look through the Black Friday number, it's up 1.1% in store, 2.5% overall. Both of those are negative in real terms. Is that because of heavy discounting, or what do you think is going on there? Well, I do think deflation, you know, let's separate it for a second.

I think on the food and consumable side, there's still inflation, but there's disinflation. You're seeing increases in price, but at a lower rate. The concern is deflation is right around the quarter, that we're going to see lower prices. you know, maybe this quarter into 24. So that piece of it is something where there's been a lot of pressure on the consumer. The other side of it is that the deflation in the hard goods and, you know, sporting goods

or when you think about the other categories like that, the deflation that's present there, you know, that's also moderating a bit, but that's present and that's been the case. So I think the outlook would be something of, you know, deflation is probably a good thing for the consumer. and the more deflation that we see in the near term will put more money back into the pockets of the consumers so they could have a better season and buy a little bit more. How about those beauty and cosmetics names that we hear about? They seem to be sort of the unstoppable force here.

You know, it's interesting. The CFO from Macy's Adrian, and Adrian Mitchell talked about beauty is the new food, right? Like that was the quote. And I love it. You can go without food, but you can't go without mascara, right? Yeah, okay. And so that's what I say every morning.

That was his line to us. when we were talking through, you know, the quarterly results and the trends. And we've really seen that in a lot of retail, that, you know, you've seen it at Coles, you've seen it at Target, throwing Macy's. You know, some of these guys really have had solid beauty trends. And, you know, and I think that's a category where when people are making decisions on what they're going to buy, and the female shopper might sort of spend a little bit more on the beauty side of it. Back to the point about whether Black Friday has lost some of its Jews.

Remember a few years ago when a lot of stores, I believe Macy's, some of the others as well, they were all open on Thanksgiving Day. They were advertising. They were going to be able to 6 a.m. Thanksgiving morning. Come on out. Then there was the pushback. We're going to open at 6 p.m. And you can get your.

Bingo. That doesn't seem to be happening as much anymore. No, I mean, I think some of the larger retailers have taken a stand, I think, Target. I think, you know, Mr. Cornell has really taken a hard stand to say, we'll never be opened again, you know, sort of on Thanksgiving. And, you know, I think never's a, you know, never's a long time. Exactly. That's a big. Until the next CEO comes in.

Exactly. And so, but when you think about it, you know, over the years, I mean, there used to be stampedes. There used to be, like, it was like the doorbusters were. People getting hurt. Exactly. And now I think that's also e-commerce being inserted in the Omni-Channel strategies being developed to really.

Just a quick follow up on that because this is very same question came up in my house. And the question was, did they stop doing Thanksgiving Day so much? because consumers weren't showing up for it anyway? In other words, was it out of the kindness of their hearts or because it just didn't make financial sense and wasn't necessary anymore? Yes. Yeah, both.

Yeah. I mean, no, I mean, I think a lot of it, when you think back over the last years, I mean, last year or was it last year or two years ago, when there was the concern because of the supply chain, I know that's a big topic right now, you know, that there weren't going to be enough products or if you had, you know, you had certain lists for your children

that you had to get it earlier, you weren't going to get it at all. You know, there's a lot of different factors that drove it. I think a lot of times I think the retailers have become much more conscious of their workers as well and the families. And, you know, and I think there were a lot of different factors in it. But I don't hear too many people really complain that not running out at 4 o'clock for a door buster deal on Thanksgiving these days. Yeah, I don't hear many people complaining about that. Bob Durbel, thanks.

Thank you. Thank you. Thank you. Coming up, META has been an outstanding stock this year, up 180 percent. But it's not without critics. We'll bring you the latest allegations that its algorithms show you what you want to see, whether it's appropriate or not. The impacts for teens and all the rest of it.

Plus, we are still waiting to hear from President Biden on plans to improve the supply chain and lower costs for goods. Power Lodge will be right back. Welcome back. Meta put on the defensive in the wake of a Wall Street Journal expose that revealed Instagram's algorithm delivered risque footage of kids and overtly sexual adult videos to adults who follow children. Julia Borson has more.

Julia. Tyler, that's right. The Wall Street Journal reporting that test accounts that it created were served risky footage of kids and sexual adult videos alongside ads from major brands. The Wall Street Journal set up these test accounts to follow young gymnasts, cheerleaders, and other teen and preteen influencers. Then they were served up risque and inappropriate content mixed with ads for Bumble Pizza Hut Disney and others. Meta responding that the prevalence of inappropriate content and Instagram is

low and that they are invested in continuing to reduce it, saying, quote, these results are based on a manufactured experience that does not represent what billions of people around the world see every single day when they use our products and services, saying we tested reels for nearly a year before releasing it widely with a robust set of safety controls and measures. In 2023, we actioned over four million reels per month across Facebook and Instagram globally for violating our policies. So the question is whether this response to the work meta is doing is enough for advertisers. Bumble tells us in suspending ads across meta platforms and match has halted reels advertising, while Disney said the company has been working with meta to address this issue.

So one fundamental challenge for meta of reels in particular, this relatively new format, is the fact that Reels promotes videos from sources that consumers don't follow. Tyler, Kelly. What does that mean? It promotes videos from sources consumers don't follow. Give me an example. So the difference is in your news feed and Instagram or on Facebook, you're going to be mostly just seeing content from people you choose to follow. So I might follow some friends, some stores, some brands, some influencers. And I'm going to see content in my news feed on Instagram of people that I am opting. into. But Reels is just sort of designed to be more a mix of things, more like TikTok, a lot of

content from people you don't follow. So the chances of getting inappropriate content might be higher if you're getting content that you're not already following. So it's just a different type of format and much more similar to TikTok than the rest of Mehta's formats. Is Meta answering the Wall Street Journal article by saying in part that that the that that they designed a test that was intended to make Instagram and Reels fail. Yes, they said yeah they said exactly that Tyler but also that they understand that this is you know that they need to constantly be vigilant and trying to crack down on these issues they mentioned the millions of inappropriate reels that they've pulled down but that it's not something that they've gotten to zero.

just yet. So they acknowledged that they had surfaced an issue, but they did say it was, quote, manufactured. I think manufactured is a key word there. I think you have to wonder, though, what more could meta, and I would say probably all of these platforms, be doing to make sure that brands, because this is really an advertising-driven business, brands do not have their content, their brand advertising alongside inappropriate content. That's a key piece of this. And we saw something similar rise with Twitter. I'm sorry, the platform firmly noticed Twitter X more recently. All right.

Thanks very much, Julia. Julia Borsten reporting for us. Appreciate it. Now, despite those issues, meta stock has been hitting highs. Right now, just a couple dollars below the all-time high it hit on Wednesday. The stock has tripled over the past year. And in 2023, it's the best stock in the S&P 500, not named NVIDIA. Our next guest has ridden it all the way up.

What does he think of it now? Let's bring in Jeremy Bryant, and senior portfolio manager with gradient investments. Jeremy, welcome. When do you hop off the bandwagon? No need to jump off completely, but you can slow it down a little bit, which is what we've been doing most of the year.

In the second half of the year, we've started tailing it back a little bit, frankly because at the end of last year, it was 12 times earnings last year. That was insane, to be completely honest with you. Then, now it's sitting closer to 20 times earnings. So the numbers have come up pretty aggressively, over 76% in the estimate for 2024 earnings this year.

But as a result of that, now it's also more expensive because the stock has done so much better. So what we've said is just take that back a little bit. There's no issue with taking a little bit of profit and rebalancing that into other things that could be the next meta for the next year rather than trying to rely on this to be continue at the same pace. So are you trimming your position or getting out of it completely? And where do you think you can spot the next meta? No, I mean, you know, so we are not taking it out completely. We own it and we're going to continue to own it here for a while,

simply because they're doing the things that kind of changed the story a little bit, right? They have become more cost rational. The metaverse isn't using quite the quagmire that it was before with regard to the KAPX line. So in that regard, we can now take that out and, you know, having 200% return gives us the opportunity to take shots at things outside of the quote unquote magnificent. The stuff that we're looking at is now, you know, the next discounted valuations, whether that's medical devices, these kinds of things that in certain elements of financials that, hey, could have a rebound potential and have a revaluation to back to their historical, maybe above their historical averages that create that next wave of performance. As an investor, does the Wall Street Journal article that we just talked about with Julia Borson enter into your thinking at all? Yes. And in the way that I'm thinking about it is much more what will advertisers do if inappropriate content is next to their brands. Right. I mean, that's something meta will have to address. There's no question about it. And they have to ensure that the advertisers, I mean, the advertisers are lifeblood of the business. Right. So if they're unhappy and if they're seeing things that are inappropriate for them, they're going to move to other sources. And so meta is going to have to pay attention to this. But we are going to look at it much more from a business fundamental case and a fundamental point of view and understanding

are they making the changes and the adjustments they need to in order to satisfy the advertisers to continue on the platform. All right, Jeremy, thank you very much. We appreciate your time today. Gradient Investments Senior Portfolio Manager Jeremy, Brian. We appreciate it. And coming up, capture but don't release, we'll take a look at one company utilizing a new, all made imperfect technology to remove carbon dioxide from the atmosphere. That's today's clean start. And we're still awaiting President Biden. We will be right back.

All right, welcome back, everybody. Time for a quick power check. On the positive side, international paper, that stock is higher. As you see, thereby, almost 4%. The cardboard boxmaker potentially getting a boost from the strong online sales this weekend. On the negative side, you've got Albemarle. It is down about 5%. This comes as China's lithium prices sat at around a 26-month low because of over supply.

That is your power check. As we look at the Dow, it's down about 50 points, taking a little bit of a breather today. But NASDAQ is higher by about 1-10th of 1%. As we finish out what has been, by any standard, a terrific month of November for equity investors. Let's go out to President Biden at the White House talking about supply chain changes. life. The President of the United States, Joe Biden. Thank you very much, Pete, and it's good to see you all. I, you know, we always talk about the big issues, the big things.

But sometimes the big things work or don't work based on whether or not the little things are in place, the mechanics are in place. Secretary Buttigieg, thank you for being here today and help us launch this this new council, excuse me, council on supply chain resilience. I grew up in a family like many of you where when grocery prices went up, the price of a gallon of gas went up, there was a conversation at the kitchen table. I mean, literally, not figuring. Those conversations have been going on, the kitchen tables all across America for a while

now. A conversation, a conversation about whether we'd have enough left over at the end of the month, for my dad to be able to, you used to say, have a little bit of breathing room. Well, this past week, as Americans gathered around their own kitchen tables for Thanksgiving dinner, that was our goal, to get them a little more breathing room. And together, we made progress. You know, from Turkey to air travel to tank of gas, cost went down. They went down.

And if people making a lot of money, that doesn't matter a whole lot because the cost are relatively small compared to wealthy incomes. In fact, as a share of earnings this Thanksgiving, dinner was the fourth cheapest ever on record. I want you all know that. I look at all the press. The press is particularly excited about that, I can see. But look, all kidding aside, that's not all. On Thanksgiving, two years ago, 100 container ships were waiting in the docking to ports.

They were lined up, 100 long out into the ocean. This year, there were less than 10, meaning that today, As folks start their holiday shopping, shelves are stocked, meaning that if major appliances like a stove or a fridge broke down over Thanksgiving, you can replace it faster and 9% cheaper than did two years ago. These savings matter. There are so many families, especially at this time of the year. And there are no accident when it comes down to supply chains.

Do you ever think we'd be talking this much about supply chains? No, but I'm serious. It's critical. Everybody's beginning to figure it out. The average person knows what we're talking when we talk about supply chains. But when the supply chains were disrupted, we knew what trouble we had.

Before the pandemic, supply chains weren't something most Americans thought about it, talked about. But today, after years of delay in parts and products, everyone knows why supply change is so important. That's why I was in my first month in office, I signed an executive order bringing supply chains home.

Home, home to get goods moving again. So it started here. We had the basic product here. Less than a year later, I signed the bipartisan infrastructure law to make a generational investment in every part of our supply chain, from our roads to our bridges, to our ports, to airports, to our internet. Less than a year after that, I signed the Inflation Reduction Act to grow the industries of the future right here at home,

including electric vehicles and clean energy. And the Chips Act, the Chips and Science Act. How on God's name can you lead the world when you don't lead the world in science and development? To make sure we never experience another shortage of semiconductors. You know, America invented these chips. I know my staff is tired of hearing me say this in my cabinet, but these small computer chips the size of a fingertip, they affect nearly everything in our lives,

from cell phones, the automobiles, refrigerators. If you don't have them, you don't have those things. But over time, we went down from producing 40% of the world's chips, to just doing 10 percent. But not anymore. All over the country, semiconductor companies are investing hundreds of billions.

Let me say hundreds of billions of dollars to bring chip production back home here to the United States. Over the last three years, all the leaders around this table, these two tables on my right and left, have also worked to lower costs for American families, from cracking down on foreign-owned ocean shipping companies that had raised their prices as much as 1,000 percent while racking up enormous profits,

teaming up with truckers to create registered apprenticeship programs and move a record level of cargo around the country, helping family farmers and family farms access fertilizer and they need to grow food so many of us and so many of us enjoyed in Thanksgiving. Folks, the result, today our supply chains are stronger than ever. with backlogs, bottlenecks, and shipping rates at a 25-year low.

We've created 14 million new jobs, including 800,000 manufacturing jobs. The unemployment rate has stayed below 4% below 4% for the longest period, longest stretch in over 50 years. And wages for working families have gone up while inflation has come down 65%. Giving families a little more money in their pockets and a little more breathing room for this holiday. season. But we know the prices are still too high for too many things, that times are still too tough for too many families. But we made progress, but we have more work to do. Let me be clear,

to any corporation that's not brought their prices back down, even as inflation has come down, even as supply chains have been rebuilt, it's time to stop the price gouging, giving the American consumer a break. Look, that's why I'm tackling junk fees. These hidden charges that companies sneak into your bill to make you pay more money just because they can, and you have no alternative. Junk fees take real money out of the pockets of average Americans.

They can add up to hundreds of dollars, weighing down family budgets and making it harder for family to pay their bills. And they feel like they're being played for suckers, which they are. Over the past two years, my administration has taken steps to crack down on unfair and deceptive junk fees. From banking, hotels, retail housing, rental housing, cable networks, the Internet, concerts, airlines, health care. For example, some banks and credit unions were charging as much as $30 for basic services

like, I want to check my balance, cost you $30. Retrieving old bank records, it costs you that much money. Looking at the balance on a loan, they charge you that money. And we took action. The action we've taken, all that is now illegal, illegal. Overdraft fees were also down nearly 50%, which means savings of a hundred, average, $150 for 33 million families across the country. And credit companies, credit companies have been charging an average of $31 whenever you call

and you can't, whenever you can't pay your bill on time, whenever you're late. You know, we're taking action to cut these fees as well to no more than $8 penalty. But you know, MAGA Republicans in Congress are pushing back on our efforts to end these junk fees. Folks, these rate funds may not matter to the wealthy, but they matter to working folks in homes like the ones a lot of us grew up in. That's what this is all about, the American people. And today, we're coming together to ask a simple question. What's next? What can we do?

What must we do to keep making progress? to keep our supply chain stable and secure in the long term, to keep preserving that breathing room, a little bit of breathing room for American families for the seasons to come no matter what challenge we face. And thanks to the folks assembled here around this table, we're making progress on two key fronts. First, we're doubling down on our work at home,

starting right here, right now, with the launch of a new Council on Supply Chain Resilience. I'm charging this group to ensure that our supply change remains secure, diversified, resilient, and into the future. I'm also directed my cabinet to create an early warning system that uses data to spot supply change risks to our economic security, our national security, our energy security, and our climate security. And I'm proud to announce that I'll be invoking what's known as the Defense Production Act to boost production of essential medicines in America by American workers.

Because you notice people had to get certain kinds of shots. It was not available. We had to get it overseas. Well, that supply chain is going to start here in America, here in America. We're going to help ensure American families have reliable access to medicines they need. Second, we're doubling down on our work with global partners. Two weeks ago, I signed the first of its kind supply chain agreement with 13 countries in the Indo-Pacific. This agreement is going to help us identify supply chain bottlenecks before, before they become the kind of full-scale disruptions we saw during the pandemic. We all saw what happened

then, semiconductor supply chains from Asia and America, from Asia to America, shut down. If this agreement had been in place back then, we would have had to avoid that. And auto companies could not have had to lay off so many workers because they didn't couldn't get the computer to build the vehicles. On top of this, I also signed the first ever presidential memorandum on worker rights globally, a move that's going to address forced labor, promote worker health, worker wages, worker unions, as we build out our supply chains. Because we know our progress depends on our workers, including union workers. They, they keep our supply chain secure and our economy is moving. So we have to do more and do more.

empower them here at home and around the world. Fortunately, we've been able to push back on Republican, MAGA Republicans so far. But they haven't given up. They haven't given up. They still want to undo this progress we're making. They're proposing cuts in investments in roads, bridges, the internet, high-speed internet, the very things that provided from, anyway,

across the board. And the cuts that could result in loss of jobs and infrastructure and manufacturing. And they want to go back to the bad old days when corporations looked around the world to find the cheapest labor they could find to send the jobs overseas and then import the products back to the United States. Now, we're building the products here and exporting products overseas. We're not importing jobs.

Folks, we're not importing anything other than what we make. We're making it here and we're sending it overseas rather than going to the cheapest jobs. place we can go to have it made. Bottom line, they want to make the whole supply chain more vulnerable. Their plan would offshore jobs raise costs for seniors by repealing the insulin price reduction, the caps on out-of-pocket drug expense, and the ability to negotiate lower drug prices that I secured in the Inflation Reduction Act. Their plan would cut Social Security benefits.

I thought we had this, they agreed not to do this a couple of times, but they're back at it, benefits, average benefit cut would be 13% for people, for, for, for, for, for, for, for, for, for, for, for, for, for 13% those have been cut. The plan would also cut Medicare while providing more tax giveaways to the wealthy and the biggest corporations. And my predecessors once again, God love him, call for cuts that could rip away health insurance for tens of millions of Americans in Medicaid. They just don't give up.

But guess what? We won't let these things happen. Let me close with this. You know, we face some pretty tough times in recent years. But in America, there's no surrender. There's no giving up. There's no stopping. America never gives up.

I've long said, we're the only nation in the world that comes out of every crisis stronger than when we went into it, that crisis. I truly believe that 50 years from now, when historians are taking a look at this, looking back at this moment, and they look back on the world. we're doing to build the economy from the bottom up and the middle out to strengthen American supply chains and manufacturing workers all across the country. They're going to say that this was the beginning when America won the competition of the 21st century. I've never been more

optimistic about our nation's future. We just have to remember who we are. You've heard me say it before we are the United States of America and there's nothing, nothing beyond our capacity when we do it together. So folks, got a lot of work ahead of us. I'm confident we can do it. We've done a lot already. So just keep at it. We're going to lower prices for average Americans all across this country. Thank you. Thank you. Thank you. Thank you. That was President Biden speaking about the supply chain and about the cost of living for Americans. For more, let's turn to James Pethakoukis from the American Enterprise Institute. As we look just, Jimmy, James, for some reaction and kind of context around the president's comments. Why now do you think?

Well, inflation remains, I mean the economy broadly, but inflation specifically remains a huge concern for Americans. It's a huge drag on the president's approval ratings. So I think any time where he can announce some sort of initiatives which seem to deal with that, because there's only so much he can really do, he's going to take that opportunity. But I think you saw in that speech sort of the inherent tension inside binomics, which is a desire to sort of lower prices and have cheap goods and services. Also, you don't want to have a trade regimen like we've had in the past, which is optimized low prices. You want to have tariffs on certain things.

You want to buy American. You want to reshore industries. Those things and low prices are in tension. I just don't think either they don't get it or they're not going to acknowledge that. Let's talk a little bit about his focus in the middle of the speech on what he called junk fees. And he said, among other things, that companies that haven't started to cut prices as inflation abates should do so. Is it really up to the federal government to tell, for example, a cable company, a bank, what they can charge for an overdraft fee? It's certainly an ambitious conceptualization of the role of government is to go through all the many sectors of our $25 trillion economy and try to find places where you think these companies are behaving unfairly.

And the fact that we were, the fact that this is something the administration is attempting to do, I think it's a wisp of desperation because obviously they can control monetary policy, right, which is the main inflation fighter here. So what else can they do? Well, we can go after overdraft fees or credit card fees. When if they really want to do something big, again, they would think about their trade policy, which is not a trade policy that can cert that really cares a lot about low prices for consumers. consumers. So how would you fix that trade policy? What would you propose they do?

Listen, there's a lot, listen, there's a lot of areas. You still have effectively tariffs on European steel and aluminum. There's these, there's these, this thing called the Jones Act, which I'm sure people have mentioned before in the show, which, which you have to use US flagged and sailors for sort of, you know, domestic shipping. You have, you have tariffs on baby You have tariffs on clothing. You could imagine a speech like this saying, listen, inflation's come down. Now, we're going to go through U.S. trade policy and look for all the barriers, tariff and regulatory barriers, which makes it expensive to import goods and services to this country.

But that's not the core of binomics, which is really a continuation of President Trump's protections policies, which you see both in policies that have stayed the same, plus these additional by American policies, which have been part of the Infrastructure Act. So this isn't an administration that's focused on those things. Talk to me for a moment about those tariffs that the previous administration put on China. And the current administration has basically kept them in place. Right. Good idea?

Not a good idea. Right. Well, President Biden talked during, I think, listen, I mean, my opinion, you want to keep these tariffs very narrow on things that have something to do with national. defense or maybe some sort of key components. Of course, you can also stockpile key components for medicines and things like that. But the point, if I understand the Biden trade policy, it's about jobs here at home. It's about reshoring production here at home, which is fine, but there's going to be a tradeoff. And that tradeoff is going to be what things cost. That's just the way it is. And that speech sort of ignored that tradeoff.

Yeah, or there's incentives. So to hide the cost, we'll give you an incentive. Anyway, we could go on. James, thank you for joining us. We appreciate it. James Pethukas with AEI. And coming up on closing bell overtime, the gentleman you just saw introducing the president, Transportation Secretary, Pete Buttigieg,

with more on the administration's efforts to improve the supply chain and lower costs. You'll get into all of this again, I'm sure. ahead on Power Lunch, buy now, pay later. It's paying off. New data shows BNPL use on Black Friday climbed 47% year on year, sending shares of a firm up 9% today. We'll trade that and a few others in free stock lunch. Welcome back to Power Lunch.

Bond yields are falling today after the holiday weekend and the five-year, well, a couple of auctions we had. Let's get to Rick Santelli in Chicago for more. Rick? Yes, and it started out with week housing for October, a downer revision to September on new home sales, and that was just the beginning. Look at an intraday of two-year note yields. We are making low yields across the curve as we speak.

Look at a two-day. Look at how much lower than the previous settlements we are trading, and the same for a five-year-old. We had $109 billion cumulative auctioned off between twos and fives. As you look at the intradate and two-day, this notion of trading below previous days' lows is really energizing the market on the by side, pushing yields even lower. And if you look at where the tens are in the grand scheme of things, well, we're hovering near two-month lows.

And when we consider that tomorrow will be the last of the $39 billion for $148 billion in supply, demand hasn't improved slightly, but only slightly. Kelly, Tyler, back to you. All right, Mr. Santelli, thank you very much, and more power lunch after this short break. Welcome back, everybody. Time for three-stock lunch. We take a look at some movers of the day. First up, Affirm shares up 9% today after data show consumers are embracing buy now, pay later so far this holiday season. And here with our trades is Michael Landsberg, Chief Investment Officer at Landsberg Bennett, Private Wealth Management. Your take, Michael, on Affirm. I'd be running. I mean, this is like the lowest part of the credit spectrum.

They're seeing buy and out pay later are increasing while credit conditions are deteriorating. Stocks up like 100% in the last 12 months to only be down 85% in the last two. Hopefully nobody owned it this long, but if I didn't, I'd sell it or probably short it at this point. It's just too much trouble for you. Too much too much more. I don't know how they're going to make any money, Tyler. I look at it.

Revenues increase every year for this company. They've never made a nickel. I think two presidential elections from now, they may be profitable. It just seems like a long time for a strategy to play out. Wow, you short it even. Wow. All right, let's see what you do with Kraft Times. Those shares are popping earlier but are now lower after announcing a $3 billion share buyback.

You know, pretty sizable for this kind of environment. What do you make of this? I mean, the issue I think with Kraft is they, you know, volumes have been declining, you know, mid single digits. But it's been an anemic grower for the last five to ten, five to seven years. Just not a lot going on here. And I think this kind of clow with the glucagon-like peptides, you know, from the OZAMPic Monjaro folks, that's a problem because we all know, you know, ketchup and condiments are not healthy. They're chock full of sugar. So I wouldn't want to own this here either.

I think there's better opportunities. Yes, the dividends high, but cash is paying high. So I don't have the headache of owning. If I want some yield, I'd rather have cash than have craft. So you do see these weight loss drugs as a real threat to some of the food companies and the grocery companies? Certainly, I think I look at behavior. These things have seemed to basically go on and dominate wherever they are, whether it's cardio, whether it's kidney. And some of these foods that are typically unhealthy, I think people may look and say, gee, do I need to eat that as much?

And is this a good thing for me. And I think that's a problem. Yeah. Cachup on fries is still pretty good, I've got to say. And it's spectacular. It's pretty good. Yeah. All right, let's move on to Pinterest on the move today after new street research initiates a buy on the stock.

seeing an upside of more than 50% even though the stock is already up 30% year to date. Michael, what about Pinterest? Yeah, we like Pinterest here. Adding, obviously, e-commerce to make it attractive to third-party advertising. That's a smart move.

Obviously, anytime you can partner with Amazon, that's a good move, because Amazon seems to be the driver here. I think we're going to see some margin expansion over the next couple of quarters. I'd cautioned by getting too optimistic because obviously, you know, Meta told us we may see a little slowdown

in advertising, but I think this is a good move for Pinterest. They are a, you know, kind of a high single-digit grower. They earn money, which is, you know, a nice thing in the tech space is you got companies that are earning money. Their earnings are growing. So I think it's an opportunity here. I may be on a pullback to be able to start to look at the stock for the next one, two, three years. I think it's a good story. Michael, any thoughts on the consumer as we get our data points from kind of the kickoff of the holiday spending season? I think the consumer's in rough shape, Kelly. It's not to say they're not going to spend a lot of money over the holidays, But credit card, you know, a trillion dollars now in debt.

I think people are having more problems making, you know, ends meet. And what a firm tells me is they can't get the money from regular credit cards, you're going to go to a lower, almost a subprime environment to get the money. So I think that's a problem. And I think that's ultimately what we're going to see is I think the lower end consumer, they're really tapped out. And I think there's 40, 50 percent of the folks in the country, they're having problems making ends meet.

It doesn't mean they're not going to spend for Christmas, but I think January, February, March, you're going to look at a real slowdown in the reach. detail space, a lot of places I'd avoid. A lot of places you that avoid, like a firm and many others. Michael, thanks so much. And Heinz. Yeah, and Heinz. Hold the catch-up. Yeah, we appreciate it. All right, Michael, thank you very much. Yeah, interesting, interesting weekend. Do you shop this weekend? Technically, yes, I was at a target, but what about you? I did. I was watching a lot of football games. Thanks for watching Power Lunch. Closing bell starts right now.