Power Lunch - Power Lunch 7/21/23

Episode Date: July 21, 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 Sima Modi today. Welcome, Seema. I'm Tyler Matheson. The Dow trying for a perfect 10, 10 winning sessions in a row. If it can hang on, that would be the longest winning streak in six years. For earnings in the Fed allow for even more gains next weekend beyond. We'll explore that today. Plus, it's a societal and cultural event of the summer. Barbenheimer can two Blanc Buster movies save the box office, or will strike resentment lead to another. disappointment for the movie industry. Plus, before we get to that and more, let's get a look at the markets with all three major averages higher today and for the week. Top of the agenda is going to be

artificial intelligence at the White House today. President Biden speaking a short time ago and meeting with leaders from some of the biggest companies involved in the space, the goal is to agree to some rules of the roads as a technology evolves. Joining us now is Aymann Javors and

Steve Kovac. And Aiman will begin with you What are some of the big takeaways from this agreement and does it allow both the White House and these big companies to continue to work together? Well, it does. That's the idea. This is just a starting point, SEMA. The idea here is that these are voluntary agreements between the companies and the White House. No force of law behind this at all. And if you listen to what the president said in the last hour, a lot of what he was talking about there was trust. And you can see why that's where this deal starts because the U.S. government certainly has an interest in these AI systems being trustworthy. And of course, there's a corporate incentive that these products be trustworthy. If you're going to try to sell them to people, you want people to believe that they're trustworthy. So they do have an incentive. These executives do, as you see them in the Roosevelt room there a short time ago.

The executives have an incentive to make sure that their products have sort of the good housekeeping seal of approval, for lack of a better metaphor, in terms of safety. And so I think that's what this was all about. It was a meeting of interest. The government and the companies both have some common interest here. Where it's going to get tricky is where those interests start to diverge. And, of course, that's where you get when you come to regulation that has actual teeth, Seema. So, Steve, who was there exactly?

And what does it say that the White House would convene this kind of group to discuss these sorts of safety issues? How, in other words, how concerned is the administration about AI? Well, we have executives there. We have Nick Clegg from META. He's the top policy in comms person. We have executives from Anthropic, that company we were talking about earlier, this week, meta, I already said, Google, Amazon as well. So look, these executives, what it means is, like to Amos point, there is some common ground here, especially disinformation. One of the key

proposals that they agreed on here is some sort of watermark, for lack of a better term, to prove that content you might see online or elsewhere is AI generated versus, you know, organic. So that is a good thing. That's something everyone can agree on. But look, this is not over. This is a prelude. to actual legislation. We know Senator Schumer, the majority leader in the Senate, is actually working towards this, whereas maybe they weren't as aggressive going against social media companies.

There have been a lot of ideas, a lot of hearings, no actual legislation. This, they seem incentivized to actually do something about, in part because there's a huge competition we have with China and elsewhere. So do these executives want to get ahead of legislation? Absolutely. So they've been saying this since day one. You know, several months ago, it was down on Capitol Hill when Sam Altman, the opening I see.

was there. And the senators in that committee, they were just appalled. They couldn't believe they would have a tech executive there saying, please regulate us, please regulate us. Of course, the caveat, the asterisk there is, regulate us the way we want to be regulated. But they are getting ahead of it. It's also a PR nightmare because if they break something, it's very fundamental. And then they're in the same trouble they were in over that we've seen over the last decade or so. We're looking at some of the stock performance of the CEOs who were at that meeting in the White House. Is this what Wall Street wants to see, Steve, the fact that both the White House and these tech companies are getting on the same page? Because others would say this could

actually lead to more regulation, which slows down the advancement of AI. It's definitely going to lead to more regulation. But look, what Biden and the administration and the lawmakers have said is they don't want to fall behind here. But what does the market like? Well, let's look earlier in the week what the market reacted to. They reacted to Microsoft putting an actual price on their AI products, $30 per user per month to use that AI. co-pilot in office. They like to see new product innovation. So over a week ago when Google added new features to its chat barred, you saw the stock go up 4%. So we're heading into earnings season, Cima. And so many of these companies have seen their valuations get really expensive.

They're going to have to start justifying those valuations in this coming earning season to prove that it's not all hype. We actually have some teeth behind what we're doing. So, Aman, recap for us, what came out of this? What agreement was reached? Well, it's an agreement on a number of fronts. You know, Steve was talking about the watermark issue. They're also agreeing to allow testing and inspection of some of these AI applications before they release them into the wild, so to speak. So there are a number of bullet points here that were reached.

And if you listen to the president, he gave us a little bit of a roadmap to the future here and talking about what he wants to do in meeting with G7 U.S. allies around the world in terms of this issue as well, because it's not just a U.S. issue, of course. And then you also got the sense that he's contemplating more executive. executive action, executive orders here on this, things he can do within the executive branch just by Fiat without waiting for Congress. So I think those are the two most likely next steps here is some kind of global consensus building around this and the U.S. administration taking steps on its own. I just, it's hard to see Congress doing anything meaningful on this anytime

soon, given the current very narrow divide in Congress. Building a coalition there is going to be very, very difficult anytime before 2024. So a good start, but still a ways to go. Yeah. Yeah. Even and Steve, thank you. All right, take a look at shares of America Express, folks. The stock falling today, even though record credit spending boosted its earnings.

But some feel the company's guidance was a little cautious. And as a result, that stock is falling today by 3%. It could be one of the factors standing in the way of a 10th straight up day for the Dow, even though right now the Dow is up by a quarter percent. But with earnings season still, young and the Fed meeting around the corner next week. Can the Bulls keep this run going? Let's talk to Dan Greenhouse about that. He's chief strategist and managing director with Solis alternative asset management. Dan, welcome. Good day in the house.

Thank you very much. Nice to have you be here. Has the market gotten a little too hot for your taste, or is it, are you pleasantly surprised by what's been going on? Yeah, I mean, it's certainly been quite a run that we've been on. I don't think anybody would really dispute that. The problem with that observation is that has no bearing whatsoever on whether the market should go up and down today, tomorrow, or the next day. I think there's a lot being priced in right now in terms of earnings season. I've been pretty vocal that I think this is going to be a terrific earning season, certainly relative to expectations, which had gotten particularly dour.

And I think the macro sort of top-down way of looking at the market is better than the bottom-up. And I think the market is starting to sense out some of that better than expected performance. A lot of forecasters and market strategists like you had been looking for a recession. right and but but they keep talking about it but it hasn't come it hasn't come or now it feels like if it comes it's gonna be a mini A little nice little recession lead sure with the caveat that I don't think there are any strategists quite like me Yeah I think certainly this is the moment around the middle of 23 was when a lot of us had thought that a recession might be here Right but as let's call it six months ago it was pretty clear that wasn't gonna be the case a jobs market had been resilient and all the things that we now know to be the case, look like it probably would be the case six months ago.

I think the issue you have now is, okay, we've had terrific market performance, certainly market cap over equal cap led, but all those indicators are still suggesting that there's trouble down the road. And that's the dichotomy that I think we have to wrestle with over the next six months. So then how does Fed Chair Jerome Powell address that sort of delicate dance next week at the meeting where we're expecting a 25 basis point rate hike and then the ECB to act as well? Yeah, listen, at this point, it seems like another rate hike. is baked into the cake.

But I think most investors should be of the belief that one more hike, two more hikes, is largely irrelevant. The issue now, and really has been, how long are they going to leave rates up at this elevated level? That's considerably more consequential for the economy and ultimately the markets than whether they hike one or two more times. So even after that inflation number,

you think one more rate hike right now? Still warranted? Forget what I think. They've effectively told us that they're going to do one more. So whether I think they should, and the network is littered with people saying they should or they shouldn't, they've told us that they're going to. But again, I think 25 basis points,

whether it's 5.5.5.5.5.75 is largely irrelevant. If you leave it up there for six months, that begins to have a consequence on the economy at large rather than whether it's one or two more hikes. A number of big companies reporting earnings next week, tech, oil, hospitality. But when you look at the S&P 500, one-fifth that companies have reported earnings thus far. And, in fact, profits have declined by 7% compared to last year.

Yet these stocks are up. What are we missing? Well, listen, so far, earnings are coming in better than expected. But I think when you read through the reports, you mentioned a number of sectors. You look at the home builders. You look at the airlines. You look at the banks for sure. I'm hard-pressed to even find commentary that anything is even marginally wrong, let alone

recessionary. The best quote I've come up with this season is the CEO of PNC Bank, who, when asked by Mike Mayo about the landscape, basically cut himself off and said, we're not even seeing a soft landing, insinuating that the economy is still accelerating. Now, that is not a tone that's echoed everywhere, but it is a microcosm of the better-than-expected nature of the demand environment that you see from the home builders and from the airlines and the hotels.

It's really remarkable. I know we've said this a thousand times, but it bears repeating, it's really remarkable. It makes me think that any CEO then who acknowledges some type of softness in the consumer, as American Express CEO alluded to on the call, the market will move on that. Well, we did see General Mills,

that long ago suggested that some of the price elasticity that have worked in consumer package goods favor was wavering a bit. But then Pepsi came out and said they weren't seeing that. That elasticity, elasticities were still working in Pepsi's favor. And so I think the general mills of the world and maybe American Express, which I haven't been fully through yet, still seem to be the smaller part of the market. The larger commentary from these companies is still the economy is doing quite well, even with mortgage rates at 7%, even with interest rates in the five's, it's been special. Any particular, very quickly, any particular sectors of the market that you would lean toward or away from? Well, for Solis, we've been busy in the energy sector for several

years. We still are. I can't get specific, but we've also found a lot to do for the last couple of years on the consumer side of things. I mentioned a number of sectors that are doing quite well. You mentioned the Barbenheimer. These are not the types of things that suggest that the consumer's in trouble, and I don't see anything on the horizon, the immediate horizon that suggests that's going to change. Dan, good to have you here. Thank you guys. Thank you very much. Dan Greenhouse. Coming up, a frank talk on banks, the Big Banks' overall crushing expectations this week, despite many expecting a rough start to earning season. How are the regionals, though, holding up?

We are going to speak to the CEO of Huntington Bank shares. Plus, the aforementioned Barbenheimer box office. We've got it all. Barbies, bombs, and blockbusters, two of the most highly anticipated movies of the year. Weeks of viral hype leading to this. Will it live up to the expectations? We're going to discuss when we come back. Welcome back to Power Lunch.

Huntington Bank shares slightly down today, but up roughly 5% for the week. The Regional Bank posting its second quarterly results this morning, beating expectations, earning more from rising interest rates, and seeing strong demand for commercial loans. Joining us now, and a Power Lunch exclusive is Stephen Steinhauer, the Huntington Bank CEO. Stephen, thank you so much for joining us. I was just looking at your earnings presentation, and you really highlight how deposit growth has outperformed your peers. What strategies have allowed you to differentiate yourself from the others? Well, we've had great innovation in our deposit products over more than a

decade, and that has differentiated in a number of ways from our competition. We also have a fabulous marketing team, and colleagues, our colleagues are perennial JD Power Award winners for service. So that combination of trust and confidence in the brand, great customer service, and differentiated product has been very powerful, as we've seen this past quarter. Stabilization and deposits. That's what Wall Street wants to see. But what about lending activities, Stephen? Because whether you speak to a big hotel or a commercial real estate operator, they're really suffering because they're not able to take out a loan. When do you see activity or demand changing? I think it's going to take a period of time yet. First of all, I think the

questions about what the regulators are going to want by way of capital. Basel 3 implementation, T-LAC, total loss of absorbing capital, things like it. They have to be answered for investors to feel confident in the sector. And I think as they are answered, the underlying performance, at least in Huntington, has been exceptional on credit. And we're very confident in the portfolio of loans we have, including our commercial real estate loans. But you have to eliminate some of these uncertainties. You mentioned a moment ago...

And then it'll put us in a position where we can open up. You mentioned a moment ago... As an industry. You mentioned a moment ago that you have had some differentiated products or approaches that have enabled you to attract deposits. Could you be a little more specific about what exactly those differentiated products are? And is it as simple as outpaying the competition for deposits? No, our checking account products have been differentiated for, again, a dozen years. And while the industry's made some moves recently in the last year or two around things like overdraft,

we put 24-hour grace overdraft in 13 years ago. And so there are a series of features and functions, Tyler, that distinguish our credit or our checking products. And standby cash would be an example. It's available digitally to our customers, no charge if they honor the terms of three monthly payments after they do a take down. So it's a way to be a more consumer-friendly banking experience,

for the people. Let me just ask you, you're out there in the middle of the country in Ohio, what are you seeing in terms of business conditions? We just talked a moment ago about the idea that the notions that we were going to have a recession in the midsummer of 2023, basically off the table now. What are you seeing? Well, Tyler, our customers are telling us they have a good view of the second half and they're optimistic. They're going to have a good year, some will have a great year. But this is, not an imminent recession. They're working on 24. They're doing things like managing their supply chain. That's better. Working on margins, making sure they pass through inflation, making good

progress there. So there's an optimism yet about 24, albeit the sales pipelines, the backlogs, are not as firm at this point as they might have been a year ago. But businesses are generally doing well. That's reflected in your stock price. It went from 15 back in March to 9 in May. Now you're leveling out at around $11 a share. But I'm just curious, looking to next week, Stephen, the Fed is expected to announce some new banking capital requirements. How could that affect Huntington? Well, it's likely to be an increase. We're $190 billion bank, and they're going to take it down to $100 billion. They'll have a multi-year phase in. But we've been building capital very significantly throughout this year. We've got a CET1 at 982 now. Our capital range was 9 to 10 before what

whatever this next round of requirements will be. And we'll just continue to earn money and build capital. It's like the old-fashioned way of banking. And we're in a position to help our customers, and we've got a growth momentum going on in the businesses. We're optimistic about 24 as well as the second half. Good to hear your optimism. Stephen, we appreciate your time.

Steve Steinhower, CEO of Huntington Bank. Thank you. Thank you. All right, coming up, the gig is up. Lift seriously underperforming rival Uber this year. So what does this say about the new CEO's first 100 days? We've got that and more in today's tech check. Love it.

Welcome back to Power Lunch, everybody, checking the markets right now. We are closely watching the Dow to see whether it can hang on for a 10th consecutive up day. Right now it's doing it higher by 78. I probably just jinxed it. It's like the guy saying he hasn't missed a free throw all game. And then, of course, he misses the next one. Slightly higher right now. I guess that would be the S&P after the big loss yesterday, driven by Tesla.

that would have been NASDAQ, excuse me. And we want to show you shares of intuitive surgical, lower following earnings. The company said it is seeing slowing growth in demand. For weight loss surgeries, as customers are taking weight loss drugs, instead, can you say Mungaro? Let's go to Contessa Brewer now for a news update. Well, Tyler, I would give you the news, but I don't know what the news is, to be quite honest with you. There we go. Police are now sharing more information about the man accused of ambushing police officers earlier this month in North Dakota.

Authority said today the suspect searched for the internet for terms like explosive ammo and kill fast as well as for what crowded events might be happening. Police say he was using a special trigger that allowed him to fire rapidly when he killed one officer and hurt to others as they investigated a routine car crash on a busy street and a civilian also got hurt there. The United Nations aide chief warned today, many people could die as a result of Russia withdrawing from the Black Sea grain deal. The wartime agreement allowed for the safe passage of ships on the Black Sea. Grain prices already have spiked as a result. Russian officials claim today the country is negotiating exports of food to countries most in need. And President Biden went against the recommendation of Defense Secretary Lloyd Austin today as he tapped Admiral Lisa Franchetti to lead the Navy. If she's confirmed, she would become the first woman to serve on the joint chiefs of staff and head a U.S. military service.

Seema, Tyler, sometimes you just need a little help to get the job done. You know what I'm saying? You went with the flow, though. I did. Contessa, thanks. Right ahead here on Power Lunch. It's all about the box office. We are going to explain the viral, viral hype behind Barbie and Oppenheimer, the double feature coming out this weekend and discuss what impact the rider's strike could have on sales.

Power Lunch. We'll be right back. All right, welcome back to Power Lunch, everybody. The box office going into the weekend, not with a whimper, but with a bang and Barbie. Viral sensation around the two new blockbusters, Barbie and Oppenheimer, not much in common on the surface, really even below the surface, and in some ways diametrically opposed. So what is the connection? Well, start with TikTok means, and CNBC.com's Sarah Whitten is here to explain. How did these two unlikely characters get paired in the popular culture? Yeah, opposites attract this weekend at the box office. Bombs and bombs shells, that's what we're seeing.

Barbenheimer is what happens when Barbie and Oppenheimer arrive in cinemas at the same time. We are already seeing fans attend screenings dressed head to toe in pink and wearing suits and hats ready for these two films. It's a trend that we saw with minions, The Rise of Brew, back last July, when we saw thousands of teens show up to these screenings wearing suits and going for this communal experience together. This not only generated ticket sales, but also a large concession sales for these cinemas. With Barbenheimer, instead of there being a competition between these two films, we are seeing people want to go see both on the same weekend. More than

200,000 moviegoers are projected to attend same-day showings, according to the National Association of theater owners. And that is kind of crazy. I mean, we've seen theater owners come out and say that they are adding more shows because there is so much demand for both of these movies. Already, Barbie has tallied $22.3 million for Thursday night showings on its way to go more than $140 million for the weekend. We're seeing those expectations continue to grow every hour. As for Oppenheimer, it's snared $10.5 million during its Thursday showings and as much as $15 million with some of those Wednesday showings thrown in there. We're expecting around 60 million for that film, which would be a very big opening for the Christopher Nolan feature. The two films together are expected to do 200 million

with added showings from The Sound of Freedom and Spider-Man across the Spider-Verse as well as the New Mission Impossible movie. This could be the biggest weekend of the year with over $300 million in box office sales. That's, I mean, just incredible. Does that really tell us, Sarah, that all the viral hype, the social media campaigns, that will actually translate to sales? Absolutely. No, we're definitely going to see more and more people at the box office this weekend for that communal experience, to dress in pink, to wear those fun fedora hats, and to go see these movies. All right, Sarah, thanks very much for more of the impact on the box office. Let's bring in Daniel Loria of box office media. Daniel, you and I are wearing our pink ties, an homage to Barbie. Of course. On Fridays we were pink. Pink Friday.

I want to, this graphic over here is really great. Whoever did that, I deserve some congratulations. It's really clever, Barbienheimer, the box office. How big a deal is this? And is it likely to save, Dan, in some ways, what has been a relatively lackluster year for the movies? I think it's been a topsy-turvy year for the movies. We've had movies that perform very well, like the Super Mario Brothers movie, like the Spider-Man across the Spider-Verse movies. and disappointments like Indiana Jones, right,

like The Flash that didn't work out very well. This is an important weekend at the movies because we're not talking about a movie, right? We're not talking about one auditorium. We're talking about the entire auditoriums in a complex. There are so many titles that are out there, not only Barbie, not only Oppenheimer. You've also got Mission Impossible, Sound of Freedom,

for different moviegoers to go enjoy. So for the first time in a long time, the conversation isn't about just going to see A, movie. It's about going to the movies and being part of that experience. But could this be it? Now with the Hollywood strike, writers and actors as well, is this the big moment for movie theaters? And then once the momentum starts, where do we go from here? With no films being created right now? Well, there's no films that are currently in production, right? And that's going to alter, I think, the 2024 schedule. Now, actors not being able to promote films is probably going to impact the

2023 box office. But the rest of the year's slate, most of it, is ready to go. So the films are going to continue that positive momentum. Now, the promotion, that's going to be tricky. That's why it's so important for a weekend like this one to really make a statement with moviegoers that the experience is what's worth it. And I think movie theaters all over the country, all over the world, are working really hard to get to that level. Who are the targets of these two movies? Because you can't imagine two targets that would be more different. One is technical or super technical, The other is gray, black and whitish. One is a very about a nuclear genius.

The other is about a plastic doll. Right, and I don't know which is which. There is a nuclear genius, Barbie, by the way, not that I own it. But, no, I think the interesting part about the demographics is we get into a conversation that we like the box in demographics to films. Where the reality is, my colleague, Jackie Brennaman from the Cinema Foundation, always reminds me, is that movies have overlapping demographics. You see that opening weekend audience from Barbie, those numbers that Sarah Whitten was saying,

those numbers aren't just a single demographic. It's many demographics coming out. It's not just young girls. Exactly. It's a lot bigger than that. And that's why we have that Barbenheimer double feature phenomenon. Now, something to be careful with right now, I have a good friend of mine. It's a mother of four.

Three of her girls are under the age of 10. Barbie's rated PG-13. So it might not be that family-directed general audience movie that. a lot of people expected. Maybe it's a little bit older. That's going to cost it some ticket sales, but Warner Brothers knew that coming into it and developed a movie that gave its writer-director, Greta Gerwig, the ability in space to present something new and different. There's plenty family-friendly titles for Barbie fans for their younger girls to watch at home. This one's a little bit different. We know both films. They cost a lot to make. How do you think movie

budgets get affected going forward? This idea that you kind of have to go big to make a big winning too. Well, you know, there's a movie right now, having a great grassroots success all over the country, Sound of Freedom, there's a culture war conversation there that I don't want to get into the rabbit hole. But that's not a big budget movie. That's a movie that was able to tap into audience segments through grassroots marketing. So yes, I mean, big budgets and big marketing helps, but organic marketing helps as well. Word of mouth. And that's, I think, something that Barbie has been able to tap into. Barby has not, so many movies, so many movies are part of Big Long franchises.

Barbie is not yet a franchise, but I'm sure they plan for it to be a franchise. What else is in the pipeline for the remainder of 2023? I would guess that most of the, the strike is going to affect mostly 2024. Most of the things that are going to be released

this year are in post-production. Absolutely right. So right now what movie theaters are looking at to be the big performers are movies that won't need talent, won't need actors to promote. IPs like Marvel, right? Those superheroes sell themselves.

It's like selling Coca-Cola, right? You don't need star power for that. They're not as much. Because you can't do the red carpet thing, can you? They can't do it, but they're superheroes. In many ways, the superheroes are the stars, right? So the Marvels is coming out. There's a lot of momentum for that.

A lot of anticipation for Wish from Disney, an animated title over Thanksgiving. That's the type of movie in this context of the strike that I think we're looking at to really help push that box office forward. Daniel, stick around. Let's dive a little bit deeper into the stock impact of the releases. Barton Crockett of Rosenblatt Securities joins us now. And Barton, I'm sure you've

been listening into the conversation. I mean, how much should we expect this to be a win for the movie theater stocks? I mean, just yesterday we saw Netflix post its biggest one-day loss of the year. The studios and the movie theaters need some good news. It's been a really tough stretch for longer than I think anyone expected. And this is a weekend that they've been hoping they've been praying for. and that we're getting keep our fingers crossed. We have to see the numbers come in and we have to see the holds, but it couldn't look better right now versus what we have been seeing. What's the outlook for AMC specifically?

Well, AMC is not a stock I cover, but I do think that, you know, obviously the overall box offices was going to be helpful for the theater stocks. My colleague covers IMAX with a buy rating, and I think that, you know, the box office recovery here is, you know, certainly something that we hope has momentum, we hope sticks around. Certainly, I think we see better positioning from an IMAX, which is skewed towards the biggest movies. Not Barbie in this instance, unfortunately, they have Mission Impossible and I think some Oppenheimer. But in general, the biggest movies are the ones that are, you know, what are able to cut through kind of the inertia, why people have so many

things that they can, you know, think about what they want to do between, you know, the internet and the more experiential kind of travel and entertainment that people are doing. And so these big movies, sometimes they break through like The Spider-Man, and hopefully we'll see you with Barbie here. Talk to us about the studios and what is the future of the studios, the Warner Brothers, the Paramounts, the universals, the Disney's, because it has been, as you point out, a tremendously challenging time that began back in the pandemic and so forth,

but also because of the changes in the way theatrical productions are presented to the public. Yes, look, I think that's a great question because the economics of making a movie are very different today than they were, you know, let's say five years ago before the streaming thing took off. So it used to be that most of the money that profit you get from a movie would be home video, selling those DVDs, and then selling the rights to other TV networks, the premium networks, like, like the HBOs of the world, and later on, you know, the free networks like the FX. And what we're seeing with streaming is now the model is you do the big movie in the box office, then you keep it in-house, which kills the DVD sales and means you don't get that TV licensee from another TV network. So the profitability of movies is much more challenged, which, you know, box office, you know,

can be there. It's a little bit hit and miss, obviously. but I think the overall economics of, you know, movies are more difficult than they used to be. It's more an expensive you need to cover with a streaming business where right now the MO is cut cost because we're losing money. So difficult. You know, the future I think for content is that this transitions to basically support for streaming. And streaming, you know, could transition more towards the big tech platform.

So could I imagine a future where you see a big studio presence, a big, a big, presence at Amazon, a big one in an Apple. Yeah, that could happen. It's kind of, I, you can't, Dan, you can't get away from the analogy to the record labels and to the, and to the artists there, the way their business changed. And the money is now made, but is made in a different way. And sometimes you're not receiving dimes or dollars. You're receiving pennies per play. Exactly. And that's on streaming, where the money's made in the record industry, still is in the live performance. Is in live performance and merged Taylor Swift. And it's very similar at the movies right now.

If we look at the showtimes and our parent company, the box office company, tracks showtimes all over the world. And here in North America, U.S. and Canada, 45% of the showtimes this weekend are for Barbie and Oppenheimer. That's nearly half of every single showtime in this country in movie theaters going for these two big tent poles. This is your heiress tour for movie theaters, right? This is the Taylor Swift equivalent.

That's what this weekend is bringing. Now, of course, we have to look at that 45% understanding that Oppenheimer is a three-hour-long movie. So it's not going to bring in as many showtimes as we do. Exactly. So that's a little bit skewed in that way. Barbie's taking the bulk of it. But that's where the industry is going. Now, there are some drawbacks to that.

We want to see more diversity in the schedule. Different movies coming out the same weekend. That's exactly what we're talking about right here, right? Different movies appealing to different audience segments. I'm afraid that we might lose sight of it. that if we continue in this one tent pole to carry the market. Love the pink tie, my friend. All right, Barton, great to see you. Dan, great to have you with us. My son saw Oppenheimer last night, three hours of it. Wasn't quite the action film that he likes. Let's just leave it

that way. Good for you. All righty, still to come. The Lyft CEO's first 100 days in office, our own Deirdre Bosa sitting down with David Risher for a frank talk about the company's future. We'll tell you what he said in today's tech check. We'll be right. back. Welcome back to Power Lunch, everybody. Time for today's tech check. Dear Deerbosa is bringing us her interview with the CEO of Lyft, reflecting as he approaches his first hundred days in office. Hi, Dee. You know, Tyler, the competition in ride sharing. It used to be extremely fierce, the stuff of books and TV series. I well remember myself covering that hashtag delete Uber campaign that saw Lyft capture more market share that eventually led to the ouster of Travis Kalanick as CEO.

These days, however, the competition feels a lot less fierce. To the point where I asked lifts still relatively new CEO, David Risher, if they're still in competition. Here's what he said. No, we're in competition with Uber. Yeah, for sure, for sure. You know, look, being number two is not a terrible thing. Pepsi's a pretty big business. You know what I mean? So you can have a great, great business and be number two. Over time, I hope we do such a good job that, you know, our positions switch places,

but that's not really the goal. The goal is better every single day for riders and drivers, and the better we do, the more our share will go up. So Coke and Pepsi, Uber and Lyft, two dominant, one more dominant than the other, pretty interchangeable players. Rish your guys said that he hopes consumers can have both apps on their phone. Uber now, here's the irony of it, they probably need Lyft as a quiet, smaller number, too, so it can continue to gain market share and be that dominant player without all the

regulatory scrutiny. But, and this was an interesting point I thought that Mike Santoli brought up in our chat earlier. Intel and AMD used to have a similar dynamic. AMD, the smaller, unthreatening player until all of a sudden it wasn't. So this has been quite a long journey. It will continue, but we're at sort of this lull in the ride-sharing space where these companies, remember, raised billions and billions of dollars. In the case, the Lyft, more than $7 billion, and its market cap is less than $5 billion now. So hasn't

exactly rewarded investors, but certainly consumers, you could say, have benefited. One that I like to look at, Deirdre, and you might appreciate this, is Marriott v. Airbnb last year, Marriott vastly outperform the vacation rental operator, but this year, Airbnb's up 70%. But when you look at Uber versus Lyft, you know, clearly Uber is winning the race. What else does Lyft need to do to convince investors that it's got the right growth plan in place? I mean, I don't know that they want to diversify and make any big changes in the way that Uber went into food delivery. What you hear from David Risher, what you see from the team is really just focusing on that core. They don't want to diversify. They want to focus on ride sharing. And I guess it raises the question, how much can this company be worth? Remember, it IPOed at $72, I think, or $76 a share. It's now trading, I think, below $10 a share. So it's been quite a come down. Even Uber has only recently surpassed its IPO price. So it's this question that I always raise, are these really disruptive, innovative companies, or are they kind of utilities that will create value over time, but may not be.

as disruptive as the VC world in particular once thought they would be. He said, among other things that he has to compete every day and get better every day. There are lots of ways that Lyft can and does compete, you know, quality of service, timeliness, cleanliness of the cars, owners. But the other one would be price. Did you get a sense from him that on those metrics of competition that one is more important than another, in other words, that he's going to emphasize lower price over, over other things.

This is a really important point for Wall Street because when he came in and I sat down with him, right when that announcement hit, when he was going to take over for the founders, one of the first things I asked him is there going to be another price war. And he said essentially, we're going to compete on price,

but now 100 days on, I asked him, do you continue to do that? Because that has won them a few points of market share says they're going to compete on other things like what you were talking about, Tyler, product stuff, ways that they do airport pickups. But we're going to be talking, you're going to hear a lot more from him.

So tune into that tech check. special edition. That's tonight, 6 p.m. Eastern, 3 p.m. P.T. And we'll go more into his strategy and how he plans to take on Uber or just how he's thinking about this space in general. Looking forward to it. Great theater. See you then. Thanks, guys. Coming up here on Power Lunch, lading investors to water, growing concerns over lead contamination pushing Wall Street to look at water treatment stocks. We've got those details next. Welcome back. Consumer awareness growing around toxic chemicals being increasingly found in water.

With the latest U.S. Geological Survey finding, 45% of U.S. drinking water samples had at least one P-FAS chemical. Separately, that WS.J investigation alleging major telecom companies have used toxic lead cables that have potentially contaminated water sources. Wall Street analysts are now expecting demand for water treatment technologies to increase, with the infrastructure bill earmarking about 10 billion towards spending tied to PFAS cleanup. Jeffries, analysts there, pointing to companies like, A.O. Smith and Penteer, which both specialize in residential filtration systems that can reduce PFAS levels, as well as ZILM. That's the leader in this space, recently acquiring Ivo. And I can tell you, Tyler, from following the story with 3M and others, there is a lot of interest now from people just trying to figure out, am I drinking clean water? And if not, what products can I use?

Are the clean water solutions mostly to be household, mostly going to be household by household or locality and water system by water system? That's a great point. It's both. One is going to be used at a commercial level. to help the water utilities upgrade their systems if they do in fact have water that is contaminated. But I think there are a lot of households who are saying let's just take this into our own hands and find the products we can use at home to reduce those toxic levels as well. So it's going to become a growing market. You're seeing private equity and venture capital. So putting more money into startups that are coming out with new products as well.

It's not easy to extract these toxic chemicals. Yeah. Seema, thanks very much. 12.1 million dollar poker jackpot, not as big as the 720 million dollar mega million jackpot, but still a huge payout in the World Series of Poker. The winner, take all. joins us now. All right, welcome back to Power Lunch, everybody. Look at this, the moment Daniel Weinman's life changed forever. He won the main event of the World Series of poker, taking home the first prize of $12.1 million. He beat out, get this 10,000,

42 other players in the biggest main event ever. Each of those players, and he'd up $10,000 to play. You can see he has totally overcome there. That created a prize pool of just short of $100 million. So whether you think poker's a sport or just a game, the money, the money is very real. Joining us now is Daniel Weinman, winner of the 2023 World Series of Poker main event. Daniel, congratulations, to put it mildly. It is a long slog.

These are kind of marathons, aren't they? Absolutely. I mean, the World Series of Poker Main Event is a 14-day long tournament, I believe, from start to finish. There are a couple off days at the beginning, but it is nonstop 12 hours a day for the last 10 days. How many hands do you have to play? I want to say the final table itself was one of the shortest in history, only about 160 hands. But over the course of the whole tournament, it's probably in the neighborhood of two to 300 hands. hands a day, so probably 3,000 hands for the entire tournament. I'm going to ask a dumb question as a, I mean, I played poker, but not. It's certainly at any competitive level. How much of it is luck and how much of it is skill and how much in this particular occasion was luck versus skill?

I think it's a great question. I think that if you ask just the poker layman, he's probably going to say it's 95% luck. And over the course of one tournament, that's not too wrong. I mean, out of 10,000 people, was I the best poker player in this tournament? Absolutely not. Was I a very good poker player who was the luckiest, for sure? In the long run in poker, I would argue poker is 99% skill.

It's been 17 years since the last record was set. How does it feel to win $12.1 million? And what are you going to do with it? It still doesn't feel real. It was still this week. I think it was Monday the tournament wrapped up, and I still kind of am expecting to wake up any moment. I don't think it's going to change my life all that much.

You know, the money is incredible. It's an amount of money I've never really considered, but I don't see myself quitting my job. What is your job? I think it's... What is your job? I am a software engineer at a tech startup in Atlanta, which is actually in the poker industry,

so combines the two things I know the most about. Yeah, I was on some chat groups earlier today. Did you make a deal with the runner-up, Stephen Jones, as a way to hedge your bet, or did you walk away? with 100% of your winnings? We ended up not making a deal, but I did manage to hedge some of the winnings away from the table. Can you explain what you mean by that?

I ended up selling a portion of my equity in the tournament to a few investors. So by the time Stephen Jones and I ended up playing one-on-one for the title, it was a $6 million difference between first and second, which just seemed like an irresponsible amount to gamble. for even because one-on-one poker involves so much luck. So I was able to figure out the equity that my chip stack was worth and sell some of that to outside investors. That's very, that's very interesting. So, so is there a moment in time? How many, let me ask it this way. How many of the players there play poker full-time professionally as opposed to a person like you who has a full-time job and

plays poker as a as a side passion? I would say about 20% of the field are full-time professional poker players. I still would want myself into that category. I like to joke that poker is still my job and my software engineering job is my hobby. But I would say a good 80% of the field are kind of guys who enjoy playing poker with their friends and either win some kind of win a tournament to get into the main event, or raise money from friends and family to play. Daniel Weinman, thanks very much for being with us.

Congratulations once again. Stakes were high, and he did it. Yeah, he did it. And thanks for watching Power Lunch, everybody. Great to be here. Closing bell begins right now.