Power Lunch - power Lunch 8/19/22

Episode Date: August 19, 2022

CNBC’s Tyler Mathisen, Melissa Lee and Kelly Evans take you through the heart of the business day bringing you the latest dev elopments 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 https://pcm.adswizz.com for information about our collection and use of personal data for advertising.

Welcome everybody to Power Lunch. I'm Tyler Matheson. Kelly will be back in just a sec. Here's what's ahead for a busy Friday. We got pink slips. A new survey says that half, half of all U.S. companies plan to cut jobs. But others are hiking pay. We're going to take a look at the uneven jobs market ahead of this make or break moment for return to office plans. A lot of people being asked to go back to work in office after Labor Day. Plus, generational plays from Gen Z to boomers. Different generations have the same goal to make money. Our Market Pro has a list of stocks to buy for the short, the medium, and the long term. Kelly?

All right, Tyler, thanks. Hi, everybody. The S&P is on track to snap a four-week win streak right now. It's down about 1%. The Dow's down 235 points. It's technically the outperformer. The NASDAQ, the worst performer, although it's off-session lows. It's down about 2%.

Dollar Index hitting a five-week high. set to post its biggest weekly gain since April of 2020. That's a bit of a headwind here. General Motors reinstating its quarterly dividend, which it's suspended at the start of the pandemic. It also plans to increase its existing buyback program watching shares of GM today, up 2% for the day. Tyler, up almost 9% for the month. All right, Kel, there's no question the market has had a very impressive run since the lows back in the middle of June. More than 12% for the Dow, 15% for the S&P, and a whopping 19% for the NASDAQ. Now, the question now is why and whether it can last. Our next guest is worried the rally will come undone, especially after next week.

Here to tell us why is Scott Nations. He's the president and CIO of Nation's shares in the author of a new book, The Anxious Investor. That might describe all of us, mastering the mental game of investing. Scott Nations, welcome. It's always good to have you here. Why do you think this market is on thin ice, if that's a phrase I can use? and what happens next week that may confirm that? Tyler, I think the rally, much of the rally from the bottom,

while impressive, was really phony. And it came because rates finally decided to ease a little bit. Why did rates ease? I think it's because we got fixated on gasoline prices. We saw gasoline prices come back a little bit. And while that made it a whole lot easier to fill off the car, you know, gasoline, Tyler, is only 5% of the CPI basket. If you look at other components, food is three times that, and food is expected to increase this year by about 10%.

Housing is eight times, and Kay Schiller was up 10% year-to-date in May. And then look at what the Fed is likely to do, what Chairman Powell is likely to say in Jackson Hole and what they're likely to do the rest of the year. We expect another 125 basis point increase in the Fed funds rate by the end of December. And so even though the tenure yield is still at 3%. I mean, good luck hanging on to that level if we add another 125 basis points to the Fed funds rate. And that's all really, really, really tough for stocks. Yeah. So you think another 125 basis points, are you then suggesting a fifth, a half point in September,

a half point in November, and a quarter point in December? It's something like that. You know, right now the market is 50-50 on whether or not that September. increase will be 50 basis points or 75 basis points. But the market is pretty well aligned with the idea that we're going to get another 125 basis points by the end of the year. And so that's, that's going to be tough. So if you're concerned about the durability of this rally, does, do I infer from what you're saying that you expect the market to go down as we head into the year or tread water as we head into the end of the year? In other words, how do I make money?

between now and then, or how do I preserve, conserve money between now and then? I would stay away from high beta names. I would focus on names like Staples. If you look at, for example, the XLP, the Consumer Staples, ETF, the 10 biggest names are all companies that either make the stuff that you have to have or they sell the stuff that you have to have, like Procter & Gamble and Colgate Palmolive, Coke, Pepsi, or cigarette makers. And so low beta names, defensive names are where I would focus. But, you know, Tyler, you also, you're kind enough to mention my book. Investors have to look at their own biases because in situations like this is really when we can fall prey to them.

We overreacted, investors overreacted to gasoline prices falling. They started hurting when it came to all the meme stocks, particularly Bed Bath and Beyond in the news this week. And so there are a bunch of these biases that I talk about in the book. I actually talk about 15. And Tyler, unfortunately, every single one of them hurts investor returns. Not a single one makes you a better investor. And when you say herding, you're saying H-E-R-D, not H-U-R-T. I mean, you're saying the sort of the madness of crowds getting behind things.

I couldn't agree with you more. And I'm as guilty of it as the next guy. When everybody seems to be nervous, I'm nervous. When everybody sort of seems to have their foot on the gas pedal, hey, I'm along for the ride. So I want to ask about gas prices because there's clearly a very vigorous debate about whether gasoline and oil are going to stay at current levels, fall from current levels, or go back up as we get into the winter months. And while gasoline or fuel may be just 5% of the CPI, you got to concede that it is a very potent 5% because people are confronted with it a couple of times a week when they go to 50%. their tank. They see the numbers changing in front of them. You may not remember what you paid for a box of Cheerios. I guarantee you it's a lot higher than it was a year ago, but you may not remember

it the way you remember gas. So it has an outsized psychological impact. A hundred percent. And that bias is availability bias. It's easy for you to recall what's going on with gas prices. You probably don't have very much idea whether or not your house has gone up or down in value over the past few months, but you know what gas prices have done. And you're right. Energy prices are a big component in everybody's budget. And so we do focus on them. The problem is we over, emphasize them when we focus and we think about the availability. So, but back to your specific question, if we think about where crude oil was before the beginning of the year, and it was about $78 a barrel, maybe that's the target. So crude oil might have another 8% to the downside, and that

would get us over the or past the bump that we saw in energy prices because of the unfortunate war in Ukraine. Yeah. Here's my advice for the winner with gas prices where they are. Split the difference on the thermostat, you and your partner, your spouse, your friends. Just split the difference. I may say, let's put it down at 64. And my beautiful, wonderful wife, Joe, may say, no, no, I can't handle that. Split the difference. Scott Nations. Take it easy, man. much, Tyler. All right. It works now, too, with the air conditioning. Yes, it does. Could it work in the office, she asked. Hmm. As the debate over whether or not we're heading into a recession continues, one argument that's been made is that the jobs market is too strong to support a huge slowdown in the economy. But what happens if the rosy employment picture starts to shift? A new survey from PWC finds it's shifting now with layoffs, hiring, freezes, and rescinded offers becoming more common.

Joining us now is Bouchon Setti of PWC. He's got some number. and analysis. Bouchon, it's great to have you. And where are we seeing a deviation from trend here the most starkly? Thanks, Kelly. And what we're really seeing here is that executives in our survey of over 700 U.S. leaders in early August are saying they're focusing on growth. They're leaning in on growth. They're looking at where they can drive additional revenue, additional profitability, additional customer acquisition. And that is confusing, given where we are with GDP and other indicators. What's also confusing is whilst they're looking to attract and retain additional levels of talent, they're also looking to correct and manage headcount. Over 50%

are saying they're going to be making layoffs this year, but they're also looking to grow and access specialized talent. So this paradox around the job market continues with really a tale of two sets of workers. And anecdotally, you know, I hear it from people where they say, you know, on the one hand, my firm seems to be, you know, not that confident right now. On the other hand, you know, I hear people getting raises and promotions, and they're increasing, you know, certain types of benefits that they're offering us. So they feel very confused about whether they should be kind of bracing for impact or asking for a raise. Yeah, and I think one interesting data point there is organizations are still optimizing a level of investments.

They're looking to invest in digital transformation, conducts M&A, activity, lean into things around customer experience. All of that needs specialized, strong talent. Cybersecurity Kelly came out as one of the top risks that executives are concerned about. There isn't enough cybersecurity talent out there. So the ability that attract and retain and develop talent into those specialist roles is really, really important. But we also got to manage the inequity of potential layoffs or potential kind of fear and anxiety in an existing workforce. What are the size of the companies you questioned here? They're all industries, all sizes, many of them include many large organizations that have announced earnings that have been in use around return to office and those areas.

And we're really seeing, you know, in terms of sectors, we're really seeing challenges in areas like tech where they're saying we need to we need to grow. We need to have specialist talent. But we also need to manage headcount because we have we have hired. If you look at health care, they still have a burnout and a talent shortage of trips about how do we find workers, how do we increase pay? How do we kind of bring people back to work? Bouchon, I'm curious as well if you can give us some insight about remote work. As Tyler mentioned, Labor Day is coming. A lot of companies are bringing more people back.

How is that going to change the dynamics for those employees who would rather a remote job if they can find it somewhere else? and for those who are going to have to get used to this new reality. Well, what's really clear is worker preferences have changed. Hybrid is here to stay. Most organizations are figuring out how to make hybrid work. In our survey, two-thirds actually want people backing the office more often. That doesn't mean five days a week. It could mean two.

It could mean three. But they're also understanding that some people want to work remote on a permanent basis and 70% are actually increasing permanent role. So again, it looks confounding. It looks confusing. But organizations are having to pull every lever they can so they can get kind of access to talent, but also drive the creativity and the innovation and enhance the human connection, which is a reason why many want people back in the office.

All right. Bouchon, we'll leave it there. Thanks for joining us today, Bouchon Setti from PwC. Already coming up, a new era of NFL streaming. It begins next week. Amazon is home to Thursday night football. marking the first time in league history that a streaming service will be the sole carrier for a package of national games. We're going to take a look at what's at stake and what you're going to need to get used to.

Plus a C-suite shake-up at Foot Locker sends the stock higher. It is one of the big movers we're trading in today's three-stock lunch. Before the break, three names hitting all-time highs today. Hershey, Consolidated Edison and Southern Company. A new era for the National Football League begins on the, Thursday when Amazon broadcasts a preseason game to begin its exclusive Thursday night football package, the privilege for which Amazon reportedly is paying a billion dollars a year. For more on how Amazon will be changing the game literally, let's bring in CNBC.com's Alex Sherman.

Alex, welcome. Good to have you with us. Now, I think everybody gets the idea that the package is going to be on Amazon, but there are a lot of viewers who are maybe not technologically proficient. I'm thinking of my father-in-law. I like him. He's great, but he does not get how to find Amazon Prime on his TV set. Do I have to subscribe to it? I get it if I'm an Amazon Prime customer. Where do I find it on my set?

So it depends on what user interface your father-in-law has. You already lost them. Exactly, right? User interface. User interface, right? Yeah. So let me simplify this. Most remote controls come with a button that has a microphone on it.

So if he just says into the microphone Amazon Prime Video or Thursday night football, he will be able to tell if his cable provider, which I assume he has legacy cable if he's watching you on CNBC. Every day he watches, Kelly. Exactly. Every day. Many of these cable providers now have Amazon Prime Video baked in. That's where the user interface comes in. So Amazon has struck deals with a lot of the major pay TV providers, including our parent company Comcast, where you can get the prime video through your set top box.

It will just throw you to the third party and you'll be able to- So start there. Start by talking to your thing. I don't even have one of those at home. Do you have a talking one? I have a talking one. I don't have a talking one. I don't know.

I can say, get me Kelly Evans. And up you come. If I don't have that, I've got to go to my smart TV function, right, and click on the icon. Correct. So you'll either go to your smart TV, which has its own user interface, or perhaps you are like the tens of millions of people that have an Amazon fire TV or a Roku or an Apple TV. On Apple TV, and I go there. Okay. Exactly.

That's not him. But so we've confused about 80 million people now, but they'll find it. They will get there. I've got to, so overcoming the user interface issue is one hurdle for them. They have probably the greatest football announcer, in my view, ever in Al Michaels calling the games for them, along with Kirk Herbstreet. Are they going to have some breakthrough technology? They're going to do something different, a wrinkle that's going to make their broadcast stand out. So I was able to see a demo of what is coming.

And part of this great aspect of streaming does allow Amazon to do some things differently than what we've seen. The thing I'm really most excited about is this idea of next gen stats that are going to be baked into the broadcast. This will be particularly easy for folks that have an Amazon fire because it comes with a remote control where all you need to do is kind of click. the down button. It says it right on the screen. Click down to watch next gen stats. But the players will be wearing AWS chips, Amazon Web Services chips, that will allow you to be able to figure out things like what is the quarterback's time to throw and how has that been changing during the game or what is a player's yards after contact. I'm a big 49ers fan. So I really want to see like how long is it going to take Trey Lance to throw the ball every down? These staff,

were really never available to fans before, and now they will be rapidly updating during the course of the game. So for football nerds, I think that's really exciting. I think, I think I'm drafting Trey Lance first in my draft. I'm not telling anybody in my fantasy draft. I may go there. I may go there.

All right, so let me ask you a final question. What if I, people tell me this all the time, what if I just don't have the bandwidth, to get the stream. without buffering or interruptions or things like it. What if I'm not there yet? So if you are in a local market, those games will still be broadcast over the air.

You can actually watch on a digital. Seattle and Chicago, if I live in Chicago, I'll get to see it. Exactly. But it's only for the two teams playing. So, you know, the bulk of the audience on any given week are local markets. So you can do that. But Amazon is preparing for a raft of potentially unhappy people. voicing their concerns on Twitter in week two, that first game of the regular season they have,

where people realize that they don't have a strong enough bandwidth to stream. It's not Amazon's fault, per se. It's just that their home internet may be strong enough. So those customers may have to make a decision if they can to upgrade their speed or to find an alternative way of watching the game. And of course, that involves you can go to a bar or, again, you can get the games. No, no, no, no. You upgrade your Comcasts.

You know, you get that broadband. You have the contest. Yeah. You got one you can talk to. It's quite the plug for our parent company. Yeah, exactly. All right, Alex, we will all be watching on that Thursday night. We'll try and find it.

I know I can find it. I know where it is. And maybe I'll go over to Jim's house and help him out. All right, Alex, thanks, man. Thanks. See you soon. Let's check out shares of Moderna. Now they're down 15% this week.

The CFO is leaving. They have waning demand for COVID-19. vaccines, we're going to take a closer look next at biotech as a whole. And we'll take you out to Pebble Beach for the classic car auction where inflation is showing up there even, sort of. Robert Frank is there live for us. Robert? Well, Kelly, these cars behind me literally rolling onto the auction block right now. And the big question here in Monterey is whether classic cars are an inflation hedge or just another risk asset that is headed for correction. We talked to the collectors themselves on whether they would rather be buyers.

or sellers this weekend. Coming up after the break. Time now for our weekly ETF tracker. We're looking at biotech ETFs this week, which had outflows of about $50 million. Profit taking could be a factor here. We've seen some strong performance since the June lows. There was also some stock-specific news.

Illumina got hit hard after those results. Remember, Moderna down 14% this week. So as for the specific ETFs, I shares biotech down 3%. This is the performance now. The spider biotech ETF, down 7% this week, although it's still up 25% over the past three months. And Kathy Woods' Ark Genomic Revolution ETF is down 13% this week. And again, usually flows follow performance.

So no wonder we're seeing right across the board here. The data comes from our partners at track insight. More information is available on the F.T. Wilshire ETF hub. Now to Sima Modi for the CNBC News Update. Seema? Kelly, good afternoon. A British National who was a member of the Islamic State terrorist group has been sentenced to life in prison for killing four Americans and taking over two dozen hostages. The member was found guilty in April on charges related to the death of four Americans, James Foley, Steven Sotlov, Peter Kasig, and Kayla Mueller. Three men, including a mafia hitman, had been indicted in the 2018 killing a notorious Boston mob boss,

James Whitty Witte, Bulger. Nearly four years after Bulgars killing, the men were charged with conspiracy to commit first-degree murder. Worker was 89 years old when he was beaten to death. He was placed in general population less than a day before he was killed, a move that sparked heavy criticism. And NASA said to announce they have identified regions near the lunar south pole as potential areas for astronauts to land. It's part of the moon mission targeted for 2025. This will be the first time astronauts will set foot on the moon since NASA's Apollo 17 mission back in 1972. Tyler, back to you.

Almost impossible to believe it's been more than, it's 50 years now since then. I thought the exact same thing. Seema, thanks. All right, classic cars have been racking up double-digit price hikes and record sales, as volumes, a growing number of collectors view them as inflation hedges. Robert Frank is where he belongs. He is in Monterey, California, with some very beautiful cars and some very affluent customers. Robert? That's right, Tyler. Well, behind me, these cars are headed onto the auction block. More than 400 million cars slated to sell just this weekend. We talk to the collectors. We're going to tell you what they say now about whether these cars are truly an inflation hedge

or whether they're more like speculative stocks that are going to be sensitive to interest rates. Here's what they said. They're on a kind of unusual trajectory right now. I think the really great ones will continue to go up and the not so great ones will plummet. Everything's going up, whether it be classic cars, vintage, exotic, it'd be, you'd be hard pressed to be able to find one at retail anywhere. A year ago on my birthday, I bought that car and it's a year later and I'm selling the car because we still have a very strong market and a ground swell of interest in vintage cars. And guys, we just ran into a well-known collector. great Reggie Jackson. He thinks right now is a good time to sell. I've been through the good

and the bad. I've been fooling around here for 50 years, you know, and I've caught a couple of the waves, but I've missed it too, you know, just like everybody else. You know, so I would say it's a good time right now because the younger crowd seems to be getting involved in him and wanting to put their money in a place where they think they can create some investment. Mr. October is selling seven cars, but he won't be carless. Tyler, he still has about 40 cars still in his collection after selling these seven here at Meekam auctions. Reggie looks terrific. I mean, my goodness, he must be up in the 70s. He looks good. What is the car right behind you, Robert? This is a Ferrari 812. What's interesting about this car, like a lot of the newer Ferraris, this is a fairly new car, but selling about 30% above the current sticker price. and one of the things driving these classic car prices is to buy a new Ferrari today,

you're going to have to wait at least a year, maybe a year and a half. So the, quote, pre-owned used Ferraris are selling for so much more like this car. Wow, isn't that the truth? All right, Robert, thank you very much. Enjoy the day. Ahead on Power Lunch, raising children was always an expensive proposition, but inflation is making it even more so. We'll have some new eye-popping numbers.

And we are looking for, opportunity, no matter your time horizon and our trader is going to give us some stock picks. With the short, the medium, and the long-term power lunch will be right back. Welcome back, everybody. 90 minutes left in the trading day and week. We're pretty much near session lows here and looks like we're going to snap a win streak for the S&P. So let's get you caught up across stocks, bonds, commodities, and how to position your portfolio no matter what life stage you're in. Let's check on the markets first. The Dow's down 283 points right now, and the NASDAQ's down right around 2%, which is near session lows. Russell,

is actually doing even a little bit worse today. But most important news is that the Dow and S&P are on pace to snap their four-week wind streak. In terms of what's working, safety trade leading the market today and for the week, we'll call it Hutt, health care and utilities. Healthcare and the green by a third of a percent utilities trying to go positive. The semi-stocks are among the worst performers. AMD, NVIDIA, Lamb, Micron. This is just in the session today we're seeing declines of about 5%.

These can't seem to make up their mind lately. In the bond market, a clearer signal, though a different way than we started the week. We're ending near 3% on the 10-year, even though we started sub-280 on some bad data that came out Monday. But the tone has firmed up as we've moved throughout the trading sessions. In terms of energy, closing for the day, there we're finding some stability. Crude hanging on to this $90 level for WTI. We are closing the week with slight losses, though. But no losses for shares of Occidental.

Huge news here. Now about a 10% pop after U.S. regulators have now authorized Berkshire Hathaway to buy up to 50% of the common stock. Berkshire filed this application with FERC, the Federal Energy Regulatory Commission, back in early July. They wanted permission to make the purchase they've received it, and you can see the shares responding in kind. Now, short, medium, very long term. Investors have different timeframes when it comes to deciding what kind of stocks belong in their portfolio. Some are a six-month trade, some six years. Some are great forever investments.

Let's bring in Lee Munson now. He's the president and CEO of portfolio wealth advisors, and he's got some names for the three different timeframes for us today. Lee, welcome. Where do you want to start? Let's do short term, because that's the most fun, right? Between now and the end of the year. So if you're not a person that's really bullish on inflation coming down really fast,

the first thing I'd look at is Coca-Cola. Coca-Cola is a nice easy trade. It's not that volatile. You know, it's like a lazy Friday trade. It's got a 2.7% dividend, which keeps some people in there. Number two, it's a staple. So if we continue to have some inflation concerns, the other thing is Coca-Cola is near its all-time high. Pretty much everybody has made money.

Now, let's go also look at AutoZone. Just compare AutoZone with Carvana, and you'll see what I mean. Carvana, it costs thousands of dollars every time they sell a stock. Carvana doesn't have profits. AutoZone, they have the thing called profits. They had a good quarter. they're going to do a billion in buyback. And also, AutoZone is near its all-time high.

Everybody in that stock has basically made money. So as inflation comes down, use car inflation, old stories come down, AutoZone might have a little oomph. Again, these are just short-term fund trades, but I think that's where you got. AutoZone, not AutoNation, right? AutoZone. Yeah, yeah. Okay, let's move on to the midterm picks, and there are two financials, Bank of America and Goldman.

What is midterm to you? and apart from an election cycle, and why the financials? Well, you're going to have, in my opinion, what do I know? I think we're going to have three plus inflation. And it's not a matter of it that's three or four percent over the next two or three years. Are you expecting inflation be over three percent,

or are you expecting it below two? If we still have this nice inflation at three plus percent, the banks are going to be able to get a spread between what they lend and what they borrow at. Bank of America is a big player. I've been long, big money center banks since, you know, the outbreak of COVID. I think that's where you've got to put your money if you're looking for something over the next few years versus a growth trade, which is still going to be held back by that higher inflationary print, even if it comes back. Goldman Sachs, it's cheap. You could have bought it, you know, near book value earlier this year.

Advising billionaires is never going to go out of style. I think that once we get it next year, we're going to have merger acquisition activity. These are classic names. They're the big guerrillas in their field. And again, it has to do with longer-term rates, you know, rates being a little higher for longer. Lee, then, let's move on. Long-term trade, very long-term. How do you define it?

What do you like? I thought you'd pick names like Coca-Cola for the long run. So I'm curious what you think fits the bill. Well, the first one I want to talk about is Amazon. And, you know, people say, oh, Amazon, what are you talking about? When I look at all the 13 Fs of hedge funds with the greatest of all-time traders, you know, the older guys that want to protect their money, I'm always seeing Amazon in there as opposed to, you know, a hot stock pit.

Amazon is a bet that you never bet against the U.S. consumer. They just control U.S. commerce. It's like standard oil 100 years ago. It's standard commerce. And even if 50 years from now, they become Sears and Robux, when you have a company, like that that controls something, I want to hold that longer term. And you know what? If they slow down on growth, they're just going to pull a Microsoft 20 years ago and start paying a dividend. Now let's get on to the big one. Disney. Come on. This isn't hard. Disney is classic because you've got parks,

right? Which is kind of like Warren Buffett's, you know, seize candy. It just prints money and you can raise park tickets any time you want. And then you've got streaming that people just don't get. is there, let me just jump in before you, you know, talk about just, is there a chance, though, Lee, that their content will go out of style? Now, you could say, maybe for political, for cultural reasons, maybe there's just more competition, maybe, you know, there's other children's content as well. What makes you so sure that this will be a durable franchise for the decades to come? Because babies are everywhere. Every year, I see more babies. You're preaching to the choir. to stop. I don't know if there is everywhere as they used to be. Well, put it this way. You, when you're a parent and you're sitting there with young kids and you want to sit on the couch and turn something on and close your eyes and take a nap and hear the sound of little giggles,

grandparents and parents are going to choose content that they're familiar with and that they trust. And they trust the Disney brand, right? They trust it because it's family oriented. everybody's familiar with it, and you can have a shared experience with familiarity. Now, listen, my kids watch Netflix too, but these are shows that I've never heard of, I'm not aware of. And so I think you have to think about multi-generational and the ability for pricing power and streaming.

They have the content that people just, and let's also not forget, you've got a problem with men, age 18 to 54, that are out of the workplace, they're sitting around, and they're watching Star Wars all day long. I don't think that's gonna get old, Because we teach our kids what shows we want to put on. And listen, it's easier to watch a Disney than some other new content. So Disney and Amazon would be your Buffett-like plays.

Lee Munson, thank you very much. I'll never forget my son, Mac, and the narcotic effect that Finding Nemo had on him. And I remember this one distinctly, Joe and I could go up and have actually a cocktail with some friends. He was just transfixed. I'm going to try that one tonight in that case. No, maybe not. No cocktails. All right, as extreme weather events become more common,

the best way for cities and towns to react is to know what is coming. But predicting the weather is difficult to do. A new technology aims to help them get those localities prepared. Rising Risks is coming up on Power Lunch. Almost one year ago, the remnants of Hurricane Ida rolled up the East Coast, causing catastrophic flooding across parts of Pennsylvania. New Jersey, largely unexpected because general forecast did not show how much rain would fall and how fast it would come, and I've never seen anything like it, to be honest with you.

But no more. Diana Olyke looks now at how major companies and local governments are using unique new weather prediction technology to safeguard their assets in her continuing series on the rising risks of climate change. When Tropical Storm Ida blew into New Jersey almost a year ago, the state was woken. unprepared. After all, it wasn't a hurricane. But the deluge was incredible. It rained four inches in one hour during Hurricane Ida, and we had a total six and a half inches of rain in one storm event. The city of Hoboken, just across the Hudson River

from Manhattan, is only two square miles, but home to more than 62,000 people. It is increasingly prone to flooding, so the city had been putting protections in already. This looks like a pretty garden, but it's actually just a big drain. Yeah. This park sits atop a massive cistern that can hold 200,000 gallons of water and is managed remotely, so water can be held or released when necessary. But to optimize the system, they need to know what's coming. So just after Ida, they started working with Tomorrow.io, a unique weather technology company that goes well beyond just forecasting when it's going to rain.

So everything is fully proprietary. We tell organizations, cities, governments, enterprise businesses, how the weather is going to impact their operations in advance so that they can actually make changes before it's too late. Hoboken will ultimately have five resilience parks like this one managing more than two million gallons of water on a daily basis. But what this new technology allows it to do is move from water management to emergency management. They're able to provide insights on when a storm event's going to occur at what intensity for how long. and they can do really block-by-block forecasts. The firm works with clients well before they start forecasting the weather

to show them specifically how future weather will impact them, from operations to supply chains to staffing. Having such precise data of when, where, and how severe weather will strike a region can ultimately save companies hundreds of thousands of dollars in resources and waste. Some clients include the U.S. Air Force, the NFL, Raytheon, Uber, Ford, Delta, and JetBlue. We'll take an airline's operating protocol, specifically uploaded into our system,

and then we have our own proprietary insights dashboard that tells them exactly when it's going to happen. So we'll tell an airline over the course of the week, these flights are going to be at risk of weather, and if you need to de-ice your planes, this is the time to do it to avoid delays or any safety impacts. Climate security is also fast becoming part of global security, as cities, governments, and businesses start to build climate adaptation systems.

Climate security is the new cybersecurity. That's why Tomorrow.i.O. is sending its own satellites into space, which will send back data far more frequently than government weather satellites. That's going to completely revolutionize weather forecasts for the entire planet. Tomorrow.io is not the only company in the space. There's also dark sky, which was recently bought by Apple. But these new companies are nothing like the legacy names, This is whether intelligence, modeling, planning, and of course prediction, all of which takes place before a drop of rain ever falls. Tyler.

You know, more and more companies are required now to disclose their climate risk. So how will this, this breakthrough in technological forecasting, play into that? Well, companies will now be able to show how they could mitigate this risk by having that planning, having that high technology before any of these catastrophes ever happen. So they can go to their shareholders or their customers and say, we're ready, this is what we're doing. And this is going to save us money in the long run. Diane Oleg, have a great weekend. Thanks, you too. Thanks.

Coming up on Power Lunch, we'll spill the tea on three of today's big movers. Foot Locker, Deer, and Coinbase. Three Stock Lunch is coming up next. Time for today's three-stock lunch. And we're looking at three names in the spotlight today. Foot Locker shares are soaring after reporting a smaller than expected. comp sales drop and profit was above estimates. The retailer also appointing a new CEO. We'll talk about them, also deer trying to reverse course heading into the afternoon after reporting and earnings

missed this morning. They lowered the high end of their income outlook and Coinbase falling after a sudden drop in crypto overnight, sending Bitcoin below 22,000. Let's bring in Craig Johnson. He's the chief market technician at Piper Sandler. Craig, let's start with Foot Locker. What a day. Yeah, what a day exactly. So despite the downgraded outlook, the shares are up over 20% on the day and investors really are focused on the new CEO appointment. Now, technically, you got to look at this chart. We've come right back to the downtrend resistance line. We kind of went through the 200-day moving average just a little bit. But the shares, you know, Kelly, you're now pretty short-term overbought. So the way we look at this right now is in the

short-term investors are sort of betting on the come with the new CEO here. But I suspect we're going to get a better opportunity to buy this at a cheaper entry point in the coming weeks. All right. Let's move on to deer, which is the next one. In terms of deer, the price action, quite encouraging after the earnings sprint and the guy down. But again, we're a little bit short-term overbought. This would be a stock that I would sort of fade in here right now. I had a great opportunity to talk to our options desk and, you know, writing some calls around the $400 range would make some sense. So for us, write some calls, fade the stock. We'll get an opportunity to buy it again at a lower price in here.

And then that brings us to Coinbase. What do you do with this one, Craig? Well, this is one that I think it's a very interesting stock. I've liked the stock for quite some time. Yes, it's gone lower. But now let's just look at the recent price action. Now, we've got a crypto weakness happening. And from talking to some of the experts in the space, there's a variety of reasons as to why you're seeing crypto weakness from some concerns about exchanges in Korea to Canada legislation and those kind of things. things and also sort of a risk off mood right now with the S&P sort of stalling a little bit here short term at the Twitter day moving average. But technically, I kind of like the price action. Looks like a short term sort of bottom getting hammered out. We've gotten right back to that

slightly above the 50-day moving average. And from my perspective, I'd be a buyer of it down here from my perspective. So let me get a quick question in. I mean, we see Foot Locker going up 20% on the day on news. But a lot of the talk this week has been bed, bed, and beyond. and other meme stocks. How do you think about those, Craig? Or do you even bother thinking about them? No, I think about it. I get questions about these meme stocks

at a regular basis. And from my perspective, I just don't want to chase some of these names. If you're looking at companies that have got small floats and they're starting to get those short-squeeze scenarios coming on, I think you have to avoid them.

Those are kind of whittle-maker-type stocks if you're trying to short these names. So I try to avoid them. And that's not really institutional type play anymore. And finally, Craig, thought on the market, breaking a four-week win streak here, growthy names doing pretty terribly, 10, you're about to hit 3%. Yeah, so we're still constructive on this market. And right now, the rally we've seen taking us right back up toward the 200-day moving average,

I think it's going to be like, as one of my good friends has said, it's going to be like a rusty door. We're going to have to push at it a few times, but I think it will ultimately fall. And again, I'll just tell you, we've got a 4775 year-end objective. I think we're going to reach that. And the breath thrust that we're seeing in this market remains terrific. And it's not at any sort of indication of stalling out at this point in time. So we're a buyer on these little dips and pullbacks here in the market right now, Kelly.

Whoa, 47-500. Nice move. Craig, thanks very much. We appreciate it. Thank you. Craig Johnson. Shares of Bedbath and Beyond are down nearly 40% today after Ryan Cohen liquidates his entire position. meme traders with diamond hands left holding the bag.

We'll put the story under the microscope next. Welcome back, everybody. Stocks are fading as we get an hour away from the close. The Dow is now down 329 points, about a percent. That is the low of the day after some pretty good sessions over the past several weeks. This one, this week, looking not quite so good. Kelly? Yeah, I would just add that we know it's very light volume, very thin trading.

interest rates are up. That's the clear story as the 10-year nears 3%. Yep. Stock story of the day, bed, bath, and beyond shares cratering 40% after Ryan Cohen's R.C. Ventures sold its entire position. The stock fell about 20% yesterday, but it rocketed higher this month in general, fueled in part by the meme craze. According to CNBC calculations, Cohen made about $59 million before brokerage fees. And he came in and he got people on the board of that company, some of his nominees. He was, I think, the second largest shareholder of the company, and now he is a zero shareholder of that company, which does not have a large market value and has quite a few challenges ahead of it. Oh, I mean, its structural challenges are quite clear.

And so any hope that whether it's this company or AMC or all the rest of it, that there might be either some kind of Midas touch in terms of the actual way the company is run or even just in terms of the share performance now looks a little diceier. Yeah, and all you have to do is look at that chart of Bed Bath and Beyond. And you can look at a meme stock in real time. Yeah. Up, down, up, down. And that's the way it happens. And about the only thing they can do is issue equity. And absent any word on that front about them doing so, here we are.

And before we go, according to the Wall Street Journal, it now costs $300,000 to raise a child, citing data from Brookings. A middle class family might spend more than $18,000 a year on average, taking into account food, inflation, housing, haircut, sports, the whole thing. Calculation uses an earlier government estimate as a base-class. line. We leave you on this note with intention because Ms. Evans is leaving us today to give birth in a couple of weeks. We wish you all the best. $18,000. Yeah, no problem. Actually, I'll be at work on Monday in that case. You better be. You better hang on to the job. We will miss you so much. I know I will and every, all the viewers will too. You know, it's, it's a weird, I really appreciate it. I'm excited and nervous all the, all the emotions. Emotions for this article as well.

I'm not allowed to say, I hate this stuff. It's just, you know, I know families who have tons of kids, they have one income, they figure out a way to make it work. Absolutely. It's worth it. It's the whole point. Well, look, have a wonderful time off. Thank you. Thank you.

Thank you. And to your family. I'm going to try that microphone feature for finding Nemo tonight. All right. Give my best to Eric and everybody. Thank you so much, Tyler. Thanks for watching Power Lunch, everybody.