Power Lunch - Raimondo's China Trip, Tiger Attacked 8/28/23

Episode Date: August 28, 2023

Commerce Secretary Gina Raimondo is visiting China, just as the nation’s real estate market takes another hit. This is the third trip to China by a Biden cabinet member this summer. Is anything actually getting done? We’ll discuss. Plus, hedge fund Tiger Global is defending itself from what it’s calling “misinformation attacks” by a disgruntled former employee. We’ll dig into the allegations, but also look at what might be an even bigger issue: its recent performance. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Good day, everyone, and welcome to Power Lunch. I'm Tyler Matheson. Contessa Brewer joining me today. Coming up, Commerce Secretary Ramondo visits China as the country's real estate market takes another hit. Big company in trouble over there. Third trip by a cabinet member to China this summer is anything actually getting accomplished. We'll explore that. Plus, a hedge fund defending itself from what it calls misinformation attacks by a disgruntled employee. We'll dig into allegations, but also look at what might be in any. even bigger problem, and that would be Contessa, its recent performance. Tyler, let's get a check on the markets right now, and we're looking at green across the board. Dow industrials up a third of a percent. You've got the S&P 500 up a quarter percent and an ASDAQ composite of 51 points or

three-tenths of a percent. Okay, 3M, a big contributor to the Dow's gains after reaching a settlement on litigation related to earplugs. We have more on that coming up, but you can see 3M shares up 5 percent. Amgen, another Dow stock in the news. The FTC is suspending its challenge of Amgen's deal to buy Horizon Therapeutics. That will give the agency time to review concessions Amgen made to help the deal go through. It's off by a third of a percent. And Horizon Therapeutics up five and a half percent, Tyler. Contessa, the big story we're following today is Commerce Secretary Gina Ramondo's visit to China beginning today.

Secretary Blinken, Secretary of State Blinken, went in June, Secretary of Treasury Yellen in July. So let's bring in Eunice Yunnan now live from Beijing. Eunice, is this parade of U.S. cabinet members to China having any concrete results, or is it just a sign, I mean, maybe a positive sign that the two sides are at least continuing or maybe even beginning to talk? Tyler, I think it depends on your definition of concrete. For the first day of her meetings here in China, the Commerce Secretary had said that the overwhelming message that she has been receiving from the American business community, is that there needs to be more channels of communication between the U.S. and China. So she said that after four hours of discussion with her Chinese counterpart, she was ready to announce different ways in which the U.S. and China would engage.

So one, it was a commercial issues working group. A second is an export control enforcement information exchange, which would be more of a dialogue. She said this is going to be the first first held Tuesday in Beijing, technical discussions on protecting IP and trade secrets, and then an agreement to meet at the secretary and ministerial level at least once a year. Now, since she's arrived, her message has largely been that the U.S. and China could continue to have a very strong trading relationship despite the tensions and despite her department's export controls. Before she arrived, she had also made a point to reporters that the export

controls really only impact from their assessment about 1% of trade between the U.S. and China. She also told her counterpart that $700 billion of trade and stable ties are profoundly important in her words. At the same time, she said to reporters today that several sticky issues did come up in those discussions. For example, the ban on some sales for Micron, a scrapped merger with Intel or for Intel and a Chinese expert curbs on two key metals for the chip industry. Now, the Chinese commerce minister had said that China was ready to work to foster, he said, a more favorable policy environment. It's still unclear, though, as to how much leeway and compromise both sides are willing to give on some of the core policies that have really been

a point of a contention between the two countries. state media has been saying and complaining that the Chinese concern is very, very serious about the American export curbs imposing on investment into Chinese advanced technology. And also what I thought interesting about Raimondo's discussions with the Commerce Minister is that she directly addressed the issue for the minister, to the minister saying, in matters of national security, there is no room to compromise or negotiate. Guys? Thank you.

Thank you very much, Eunice. Let's talk a little bit about the most troubled sector of the Chinese economy, as we perceive it, and that would be real estate. Evergrand, really sort of a problem child in particular there. That's stock plummeting today. Oh, absolutely. The stock plummeted at 1.87%. And this is after about a 17-month hiatus of the stock price because the company hasn't been filing its financial results.

It did file its first half financial results. And they weren't very pretty better than the year prior, but still a loss of $4.5 billion. So a lot of trouble there. The company also had said that they were going to hold a creditor meeting today where, where the creditors would be able to look at the offshore debt restructuring proposal. They said they just a couple hours before had decided that they're going to postpone it by a month. The company argues that it does allow the creditors to assess and evaluate the situation much more accurately. But because it was pulled so last minute, it really rattled a lot of investors given all of the nerves as it stands as it is.

All right. Thank you so much. Eunice Yunn, reporting in the middle of the night in Beijing for us. We appreciate it. Eunice, once again. Our next guest says he's not expecting major breakthroughs to occur on Secretary Ramando's trip. It says it could be more important to the Chinese than Secretary Janet Yellen's trip earlier this summer. For more, let's bring in our friend Dennis Unkavik, partner at Meyer Unkavik and Scott. Dennis, you make the case that Secretary Romando is not just your sort of ordinary commerce secretary, but is invested with kind of special authority and power. Explain. That's right, Tyler.

For years, Commerce Department was basically a, this is American business. We want to make friends, and they even ran things like the oceans. But what they have become recently is the box in which export controls are imposed or not imposed on foreign countries. And so in the past,

if you had a level of treasury and state and defense up here, commerce was down here. Now I think she has an enormous amount of power, which is why I think the Chinese are at least happy to have her at this point come to China. Well, where do you think, Dennis, they could find common ground? Contessa, I think the Chinese have very little leverage at this point over the United States. They cannot. I think the last thing that Yunus said a minute ago was, the Commerce Department will not discuss export controls as they apply to national security. And so that is really the most important thing that I think has come out here.

The Chinese economy, as was pointed out a minute ago with Evergrand and the rest, has very serious economic problems. And so at the end of the day, the Chinese have got to give something up to the U.S. because I don't think the U.S. is in a position to really offer them anything. So let's talk about what Secretary Romano, as reported by Eunice just said, and that is that, hey, let's not lose track of the fact that the export controls affect or touch really only about 1% of U.S. China trade. But it's an important 1%. Are we, I guess my question is, are we keeping those export controls in the proper perspective vis-a-vis their size in the trade relationship? Two things. I think in the past we didn't take very seriously the importance of export controls. And so a lot of the problems we have in the microchip industry that we're feeling now, we're there.

The second thing is, is that those limitations on export controls are not really negotiable. Well, we removed export controls for 27 Chinese companies. That's a step in the direction that China wants. our economy may only be 1% related to microchips, but the thing that the U.S. has decided to do under Biden is to be more aggressive, Contessa, in making technology the leading edge of America's economy. And I think that's why it's not a 1% issue. It's much larger. And the Chinese, as you know, have cut off people like Micron who were selling chips to them and replace them with Chinese suppliers. So I really don't see a very good way forward at this point.

Let's talk about the Chinese economy more generally. As you assess it right now on a scale of one to ten, with ten being very troubled and one being sort of not troubled at all, where would you put the Chinese economy right now? I'd give it an eight and a half. So you see it as deeply, and these are structural flaws, or are they circumstantial flaws or a little of each? Well, Tyler, a third of their economy is based

on real estate. And you mentioned a few minutes ago, Evergrand, they lost $83 billion in two years between 2021 and 2022. They've only lost $4 billion this year. But that is a third of their economy. If they don't get their economy working from the real estate standpoint, there's nothing else they can do to really buffer it up. I was saying you only lost $4 billion compared with five minutes. It's like saying I only threw four interceptions in this game. Last week, I threw six. I mean. It's relatively, I guess it's a relative mark of progress, but not a particularly encouraging one. You know, it's interesting.

In addition to the high-level cabinet secretaries we've seen visiting China, we've also seen American CEOs making this trek to China and trying to work on their relationship because they have got business in stake. And some of the companies that I cover closely rely on their revenues from China. Let me just ask, do you think when you're looking at the outlook and the tension that exists between these two nations, do you think that investors should be wary of where their money goes if it's being put in to work in China? Contessa, I think you follow Tesla. 40% of what goes into the Tesla electric automobiles is from China. So, yes, if somebody's not already concerned about the percentage of the China involvement, they should be.

So I think if I'm an investor looking at China today, I'm going to be very wary. All right, Dennis, thanks very much. As always. Good to see you, sir. Thank you. Dennis, Uncoveck. Coming up, 3M helping to lead the Dow higher, even though it's agreeing to pay a $5.5 billion settlement. We'll get the latest on that.

And a check on the bond market today, the 10-year yield, falling to just a little more than 4.4. two today coming off those 16-year highs. Up next, we'll hear from someone who says yields, stock prices can rise together. Power lunch, we'll be right back. Welcome back, everybody. 3M reaching a settlement in a long-running litigation involving earplugs for the military. Sima Modi joins us now with the details. Hi, Sima. The largest mass tort in U.S. history involving 300,000 plaintiffs who alleged 3M's earplugs were defective and led to hearing loss. Three-M's board. meeting today to discuss a settlement which reports suggest amounts to $5.5 billion

Wall Street had estimated between $5 to $20 billion. It follows a separate $10.3 billion settlement involving water utilities that sued 3M for contaminating public water drinking systems with toxic chemicals known as PFAS, which have been linked to health risks. Final approval is still pending as well as lawsuits revolving around personal injuries. As to how 3M will fund these settlements? Well, the company's on track to, spinoff its health care division by the end of this year, and JPM Morgan is betting 3M will receive

about $7 to $9 billion from this transaction following the spinoff. Analyst at RBC, UBS, excuse me, expect 3M to lower its dividend, which currently pays a nice yield of 6.1%. Leadership, guys, is also in focus. Last week, 3M's current chief financial officer, Monish Patawala, added president to his title, and RBC writes that this arguably positions him as the heir apparent. to CEO Mike Roman, who has been at the helm since July 2018, so roughly five years. And during that time, we've seen 3M shares fall about 50%. Tyler and Contessa? You know, Seema, are they talking at all about whether insurance will kick in and pay for part of the settlement?

You know, not yet, Contessa, but it's a great point. I think longer term understanding how insurance could be one vehicle it uses will certainly come up in discussion. Right now, it's looking towards that spin-off. first finalizing the settlement, then looking at the spinoff of health care, and again, the dividend being very much in focus as well. Only asking, because then I'll need to follow up with the insurance. With the insurance store. Seema, thank you for that.

3M helping to leave the Dow higher today. But the Dow and the major averages are in the last few days of a down month. One big reason. Fears of rising interest rates. Traders now pricing in nearly a 20% chance, the Fed will hike rates again in September and concerns the Fed could keep them higher for length. longer. Well, even though the 10-year yield is near 16-year highs, our next guest says,

rates are not too high. He says rallies can and have happened along with higher interest rates. Let's bring in Peter Anderson, Chief Investment Officer of Anderson Capital Management, ranked among the top-performing managers of U.S. growth equity for the second quarter of this year returning. I'm looking now 46%. So that's notable, Peter. It sounds to me when I'm reading through your thesis on a lot of this, that you must be watching CNBC's coverage and reading through the financial press a lot and just yelling back at the talking heads. Well, thanks for the candor. You know, I have always marched to a different drum, the beat of a different drum. And this past year has been no difference. You know, I am on record for saying

there was not going to be a recession, and I still am in that camp. Also, rising interest rates, I have been pounding the table for that. I know all the theoretical textbooks tell you about the simple dividend discount model as rates rise, stock prices decline, but it's an oversimplification. So it's a more complex problem to look at. And this time I was lucky and happened to call it the right direction for the past several years, actually. I mean, you say luck, other people in your shoes would be very quick to claim credit. If you're a voice crying in the wilderness, then how do you see positioning your investments

for the second half of this year, Peter? Well, to continue crying in that wilderness, I'm singing the same song, actually. I haven't made many changes to the portfolio. You know, some of the disappointments, it's just incredible, I would say, this past month, you know, with Nvidia, I was heartbroken that after it reported such strong, insanely good results. I went to bed that night thinking the next day was going to be one of the happiest days my career in terms of investing because I have a large position in Nvidia. And as we all know, it just kind of flopped. And the market is filled with illogical reactions like that.

Even Palo Alto, remember that two weeks ago? These things have been driving people crazy. And I think it's just emblematic of how frightened we are about the interest rate hikes and where poor Powell is and how he's trying to navigate that and saying a lot of words but not saying too much. So this is all something that you have to take in stride and going through the rest of this year. I don't presently think I'm going to make any changes in the portfolio. Did you just add Super MicroComp? I had recently added that, yes, over the past two quarters.

And, you know, that has been a, it's also very related to InVIDIA. A lot of investors are not realizing that, and it has been off the radar screen. But as Nvidia goes, so does Super Microcomputer. So that's been a bit of a disappointment, too, for this past month. but I have a conviction that, you know, AI, oh, here's the other thing. So what people said was when Nvidia didn't pop the next day, they were quick to make the conclusion that AI is over. You know, it just was a flash in the pan, and I couldn't disagree more. I mean, AI is just beginning, and it's our urge to have these immediate ramifications of news reflected in stock,

And I think you just have to take a breather sometime and say, look, we don't get it right all the time. But over the long term, I think we should be optimistic. A lot of people, I take your point that some people were saying AI is over. But there's another group who are saying that maybe Nvidia has had its best, most sprightly days. Remember that on the prior two earnings announcements, it gapped up something like 25, 28 percent each time. This time that did not happen. What does that tell you from a technical standpoint? I know that's not your necessarily your discipline, but what does that tell you about the stock's performance going forward? Can you expect it to do what it's been doing, or is this a time where it's going to be a little more flattish? I tend to think that we are in the first inning of artificial intelligence. We might not have it right, Tyler, in terms of the actual eventual solution. solution to discovering how human thought can be replicated by machine. But until we solve that

problem, the only game in town is throwing more computational power at this. And I think we're just beginning to see, even with Nvidia's incredible numbers now, I think there will be actually more incredible as we go forward because there is no other solution and more and more companies are realizing that at every level they can improve their operations. Now, certainly with manufacturing, it goes a little bit more subtle in terms of how AI can work. But in terms of service, I think we're just at the beginning. So I would expect continued strong numbers with Nvidia. So you run, as I recall, a pretty concentrated portfolio, maybe 20-some stocks.

Am I remembering correctly? Well, that's way too much for me. Actually, about 14 or 15 stocks. 14 or 15 stocks. So what percentage of your total portfolio is represented by Nvidia? now and at what point would you say that's too much yes uh actually i let these stocks run unless there's new factual information i usually start with a 5% position and then let the stock run so believe it or not invidia uh became 20% of the portfolio and even somebody as highly convicted as myself

in that name uh realize that that's just way too much risk on one name so i reduce it to about 10%, but that's unusual for me to reduce just because of weight risk. Normally I reduce, I just sell. I either hold the position or sell. But with that situation, it was so unusual that I do feel like I had to be a little more cautious. That's a really interesting insight, Peter, of how you think and how you work and that you're willing to let those stocks run. And in this case, you're so convicted or bad term, convinced that, you know, we don't want to talk. I say, convinced. convicted in, it associated with Peter Anderson. So convinced in the Stux long-term prospects that you would stick with it.

That's correct, yes, absolutely. And, you know, I do have a physics background, a background that I never thought actually would be utilized in investing. But here we are now talking about artificial intelligence and mathematical modeling of drug discovery with a company like Schrodingers, which is another holding. in the portfolio. So all these things that I had thought I would forget are actually coming back to annoy me in a way, but it's actually favorable now in this environment. All right, Peter, yeah, you never know where your training is going to come in helpful. Peter Anderson is always good to see you. Thank you. You're welcome.

All right, all week long, mad money will get you ready for back to school with a special series dedicated to Jim's Rules of Investing and his most important market lessons. has the perfect syllabus for investors of all levels. It kicks off tonight at 6 p.m. Eastern Time. Don't miss it. Back to School Series all this week on Mad Money. We'll be right back. Welcome back everybody to Power Lund. Shares of Hawaiian Electric rebounding today.

Dom Chu has the details for us, Tom. This is a complicated story. It's very complicated and nuanced right now, but in many ways it's also the opposite because of the actions that have been taken so far. So what we're seeing right now is this surge that Tyler mentioned. It's up just around 42% right now. At the highs of the session, it was up around 52 to 53% shortly after the opening bell. So this is the electric utility at the center of the controversy surrounding the tragic and deadly Maui wildfires.

Well, it's fighting back against a lawsuit being brought against it by the Maui County government. That suit alleges the utility company is responsible for the deadliest wildfires. fire in America in over a century. Now, Hawaii Electric said that while power lines had been downed by high winds and likely caused a brush fire near Lahaina earlier in the day, which was later fully contained by firefighters, power to those lines in the area had then been turned off and were off for hours when a second fire broke out later on that afternoon. The cause of the fire is still under investigation by local state and federal authorities. Hawaiian Electric has now told federal authorities that it has records that demonstrate no electricity

was flowing through the power lines when that second fire broke out. And the company's CEO, Shelley Kimura, said in a statement that they believe the Maui County complaint is factually and legally irresponsible. Now, we should point out as you're seeing here that despite that massive rally that we're seeing today, the shares have lost around two-thirds of their value. in the last month on that souring investor sentiment around its potential future liabilities tied to those wildfires. But this is a very interesting development in what's now a legal situation between Maui County and Hawaii Electric. And there obviously has been,

there have been precedents where utility companies, Pacific Gas and PG&E were found liable for fires. But one of the differences there is that they were blamed for having faulty equipment for not going in and maintaining and upgrading the equipment when and where they should have. In this case, they're really saying you should have known that the winds were so high that it posed a threat. And the utility in Hawaii saying, wait a minute, but if we didn't keep the electric on, then the water pumps don't run, and you can't fight, which was a problem too. Well, it wasn't just that too. It was also that, first of all, the investigation we should point out is still ongoing.

Yes. The idea right now is that there was a fire that was contained fully. by the firefighters and everyone else, they had basically established that it had been extinguished. And that fire was not the one, says the firefighters, that led to the main fire that destroyed so many homes and so many lives. When that second fire started to flare up and happen, the crews at Hawaii Electric had told authorities that this fire was going. And at that point, Hawaii Electric says that they had already shut down power to all the lines in the area. and that they have proof or documentation that no power was flowing through to those lines. So was it really their responsibility or was it really the cause of the fire?

That's still being determined by a number of regulators right now. And by the way, on the federal side, the Bureau of Alcohol, Tobacco, and Firearms is now involved as part of this investigation process. They have electrical engineers that are working to establish what the chain of events was and what actually caused the fire. But again, this is an interesting move in the stock only because it is a massive move higher, but it's nowhere near where it was before these wildfires broke out. So there's a tremendous amount of stress being brought on this company. And we already know what the ratings agencies have said about what the potential stress could be on their balance sheets in the future. So this is a scenario where we are talking about a tragic event and the deadliest wildfire in about a hundred people.

100 years plus in America, but now because of the moves that have happened so far, there is now a scenario developing where the company is blaming the county because the county had already proactively blamed the company for what happened there. We will be continuing to watch the fallout from this for months. And hundreds of souls still unaccounted for. Absolutely right. All right, Dom, thank you very much. Let's get to Julia Borson now for the CNBC News Update.

Julia? Contessa, President Biden won't spend the anniversary of the 9-11 terror attacks in New York, Virginia, or Pennsylvania. Instead, the White House says he will observe the anniversary at the military base in Alaska with service members and their families. It marks the first time a president has not attended any of the observances. He will make the stop in Alaska after a visit to Vietnam following the G20 summit in India. Spanish prosecutors opened an investigation into the country's soccer team. Chief for kissing a player on the lips shortly after the women's team won the World Cup. She has said the kiss was not consensual.

Meanwhile, the soccer chief's mother started a hunger strike to protest what she calls his inhumane treatment. The official results are in Sony's Grand Tresmo, unseated Barbie at the box office, bringing in just over $17 million to Barbie's $15 million. However, Grand Tresmo did include earnings from Thursday night pre-shows and other preview screenings, which helped it capture the top spot. Contessa, back up. Barby at some point has got to give up the number one slot. You know what I'm saying, Julia? Thank you.

Yeah, it's lasted for a while. I had on Power Lunch. Trading Places. Open AI says it needs more office space. Uber reportedly is looking to unload some of its own square footage. Could this be a real estate match made in Tech Heaven? We'll bring you those details when we return. Stay with Power Lunch. Time for today's tech check and a little bit of intrigue.

in the San Francisco commercial real estate market. Who's looking for more space and who's leasing it to them? Dear Draboza has more on this. Hi, Deirdre. It sounds like a realtors matchmaker paradise. It could be. Very much could be. Well, a source familiar with negotiations, Contessa, tells me that AI darling,

OpenAI is in talks to sub-lease nearly 3,000 square feet of space in the city from Uber, who has been quietly marketing one of four new buildings that is making up its Mission Bay Camp. but it's not far from where I am right now in the heart of the financial district. Now, this is intriguing for a few different reasons. One, it would represent a major expansion from OpenAI's current headquarters, really underpinning the enormous growth and funding that ChatGBTGPT has seen this year. Two, it feeds into this idea of an AI boom rescuing San Francisco from its so-called doom loop

of record vacancy rates, crime and homelessness. Open AI is, of course, the busiest generative AI company out there. But there are others here that are scooping up commercial real estate in the city, like Scale AI with a more than $7 billion valuation whose headquarters I visited a few weeks ago in downtown San Francisco. Now, third, there's this idea that ChatGPT would be taking the space from Uber. And perhaps that says something about changing sentiment in tech at large. Now, years ago, when Uber was planning this huge new campus, the gig economy was humming. And it was seen as one of the most attractive places for investors to find growth. Over the last few years, so profitability has become the priority, and you've seen layoffs and reduced office space, leading to Uber putting up one of its buildings for sublease.

Generative AI, meanwhile, has really taken up the mantle of growth and disruption and certainly investor dollars. So, guys, it needs the space now to accommodate that. Mission Bay, it's close to where the Warriors play, too. So bonus for employees. They could go catch a game pretty easily. Yeah, slip out and go to the ball game and see the best player in pro basketball, Steph Curry. Hey, let me ask you this. You said it was 3,000 square feet. I mean, that would be just a really a cottage in Nashville. 300, thank you. Oh, 300. That's several cottages in Nashville.

Because I think it says $3,000. Maybe I misheard it. So it is a big piece of property. We're not talking about it. It's a whole building. I'm looking at 3,000 square feet. Contest's apartment is bigger than that. Yeah. Here's the question that what does it say about that you mean you said you sort of set this up with there's so much vacancy in San Francisco where the neighborhood that it's going into. Does it do anything for the most problem ridden parts of San Francisco? It's a good question. No, it's not it's not the tender line. But we've been talking about this whole idea of cerebral valley, which is centered around this neighborhood. Kate Rogers actually lives. It's called Hayes Valley. And you've seen a lot of AI companies move in there and you've seen it become an attractive place, but there's just not enough space there. So this is interesting. Opening AI currently, it's in the mission, which, you know, it's close to some of the most

problematic parts of the city. Moving over to Mission Bay, it would be kind of interesting because, again, it's where sort of you've seen big companies like Uber build new campuses. It's really come from nowhere from the ground up. So it's moving away from sort of the areas that have the worst representation. But again, it's just kind of adding fuel. There's other AI companies that are looking for space in the mission in Hayes Valley, where you see some of the homelessness and crime really take root.

So again, if you talk to the people that are optimistic, they say this is just the start. If generative AI is going to be as big as everyone thinks it is and companies are building here in San Francisco, which certainly there's evidence of, then this could just be the beginning. All right, Deidre, thank you very much. And 300,000 is a lot more than 3,000. Appreciate it. Sure is. All right. Still ahead, damage control. The investment firm Tiger Global claiming it is the victim of misinformation attacks, saying a disgruntled former employee is to blame for a series of unflattering reports about its business. We'll get the latest details when

Power Lunch returns. Welcome back to Power Lunch. The investment firm Tiger Global says it's been targeted by a series of misinformation attacks and that it's likely coming from someone with a specific agenda. Leslie Picker joins us now with the details. Hi, Leslie. Hey, Tyler. This is a pretty wild story here. According to Tiger Global, this all stems from a disgruntled former employee. It's been going on for months behind the scenes.

A source sent me a nine-page single-spaced, anonymously written document that alleges to be a draft for the New Yorker. It's not. Supposedly a predecessor of this PDF had been circling the rumor mill for months, and this version caught fire in the hedge fund community, which has been sharing it virally. The piece essentially alleges everything from internal strife within Tiger to limited partner rebellion to regulatory issues, among other things. Tiger calls all of this, quote, a pack of lies in a letter to its investors, which was obtained by CNBC and confirmed by the firm who declined to comment beyond the contents of that correspondence. Tiger says it's been, quote, engaged with experts to assist in responding to these malicious attacks.

The letter goes on to tell LPs, quote, unlike the anonymous coward, spreading, this false narrative on the internet, you know who we are, and we are here and ready to answer your questions. Now, in terms of performance, it's worth noting that the firm has actually rebounded from a very tough 2022 after last year's losses of about 56% in its public portfolio. A person familiar with the matter tells me that Tiger's portfolio is up about 20% through July. The firm's biggest public positions, according to its 13F, are meta, Microsoft, and Apollo, each of which is up more than 30% year to date. The firm is essentially a microcosm of being levered to tech and growth,

and therefore it's susceptible to swings from monetary policy. That was the case last year with higher rates. And then AI hype this year has helped driven it to the upside guys. Leslie, is there any indication it's done any damage to Tiger, this anonymous correspondence letter? There's no indication at this point in time. AUM is down relative to where they started the year in 2022. But in talking to sources, that's largely due to. to performance, that they haven't actually seen as much in the way of withdrawals.

Now, that said, this is a very reputation-oriented business. So, you know, when it comes to investing in certain startups, when it comes to generating fundraising, which they had a first close for their venture fund, but it's only the first close. So theoretically, they'll be out in the market fundraising for more on the venture side of things. It possibly could come up in these conversations. So it was important that they really send a letter out to their LPs. and have that, you know, more kind of putting their foot on, you know, foot down that this is all

lies, according to the firm, and not to make too much of it. All right, Leslie, thank you very much. We appreciate it. And be sure to join us for the Delivering Alpha Summit on September 28th in New York City, just a month away. Visit CNBC Events.com slash slash now delivering alpha. And if you can't wait that long to hear from some of the biggest names in investing, scan the QR code on your screen. We're going to leave it up there for just a few seconds. I'm going to talk slowly here.

And sign up for Leslie's Delivering Alpha Newsletter. This week, she has a rare interview with Six Streets, Alan Waxman. You can also sign up at CNBC.com slash delivering alpha newsletter. 3M is one of the best performers on both the Dow and the S&P today. Higher on reports, it's ready to settle the earplug lawsuits. We'll trade that and other movers of the day in 3.3. stock lunch. Our lunch will be right back. All right time for today's three stock lunch. First up on the menu. Now, we've talked about it

earlier today, 3M up about 5% on news. It is tentatively agreed to pay $5.5 billion to resolve lawsuits regarding earplugs in the military. Let's get the trade on that and other names in the news. Our trader today is Danielle Shea, simpler trading VP of options. Daniel, what do you think of 3M? So when you're looking at 3M, Tyler, you know, this one has been in a downtrend since September of 21. And when you look at it on the longer term charts, you know, you have that 200 simple that's a pretty strong area of resistance. And that's going to come in right around 110. So, you know, yes, it's up today.

It's looking pretty strong. The news is positive. But when you're looking at this overhead resistance, you have to keep in mind that 110 is a pretty strict line in the sand. So, you know, I think that you could trade it on a short term base. up into that zone. But I would rather short it from there because of the longer term downtrend. I will say above 115, that's where I'm wrong and that's where we have a trend reversal in play. Danielle, up next we have pharma giant Amgen. The FTC says it will pause its challenge of Amgen's takeover bid of Horizon Therapeutics, a deal worth nearly $28 billion. And the pause will give the

agency until September 18th to wait a settlement case. What we're seeing right now is that AMGEN is lower by a third of a percent, but we saw Horizon up on the day. What would you do with Amgen? So when you look at Amgen, I like the longer term up trend in this stock. They've done relatively well with earnings. And this quarter in particular, they have this nice breakaway gap post earnings. Now, when we have a breakaway gap like that, I typically trade it to the upside for about a week, a week and a half. Now, this one has traded higher for nine days before it started pulling back. So I think it's pretty typical what it's doing here. And when you have that post-earnings pullback, you generally want to wait for a nice support zone.

So I think that looking at about 247 is a great area of support to start buying this along with the uptrend. But I will tell you that if that breaks, your next level is going to be 238. So I think you buy this one along with the trend. It's just a function of where it holds when this pullback ends. All right. Let's move on to the crowd strike, down about 3% today. Downgrade from Morgan Stanley ahead of its earnings saying consensus estimates for a rebound seem high in light of a more difficult demand environment. Pick that one apart for us, Danielle. So when you look at CrowdStrike, this space has had a really challenging time over the last year and a half.

I do like the stock on a long-term basis. I think that they have done really well on earnings, especially recently, even though the technicals aren't as favorable. Now, with today and the pullback, it's just barely clinging on to a critical zone of support right around 144. So 142, 144, it's got a hold there. And if it doesn't, it's going to find a full. flush down into 131. So I would like to buy more of this. I do own the stock. I think, you know, obviously the lower, the better as long as it's holding critical support. So I would say it's good for additional buys between 131 and here, but just be cautious because we have earnings coming up and we have a market maker expected move of about $11. So I think it's pretty possible that it could fall down into that 131 zone, especially with the earnings report upcoming.

All right, Danielle, thank you very much. Appreciate it as always, Danielle Shea. Thank you. Coming up, the salt shortfall, the deduction tax cap that was supposed to generate revenue actually is costing the government billions. We'll discuss that and much more when Power Lange returns. We've got three minutes and five seconds left in the program. A bunch more stories you need to know about, so let's get right to it.

The so-called salt cap is back in the spotlight as a new study says that loopholes have cost the government billions of dollars, salt meaning state and local taxes and the deductions that used to apply to them. Robert Frank joins us with more. Hi, Robert. Hey, Tyler, well, that's right, the $10,000 cap on state and local tax deductions. That is known as the salt cap was supposed to raise around $100 billion a year in tax revenue. But a new study out this morning from the tax policy center found that loopholes are costing the government about $20 billion a year in lost revenue. So it's only raising about 80% of its total projection. The reason is that 36 states allow owners of pass-through companies and partnerships to avoid the cap on their state taxes. That means

the pass-through or the firm pays an elective tax gets the full deduction, passes that deduction onto the owner. As a result, the wealthiest business owners are avoiding this cap while wage earners and property owners are footing the bill. What else is new, right? Well, this all comes to a head after Congress, after the election, when the cap and all the provisions of the 2017 tax cuts for individuals are set to expire. The question here is do they close the loophole and keep the cap, let it expire? Either way, this is not raising as much as they expected, guys. Is the tactic sometimes described to as payments in lieu of taxes? Is that what we're talking about here? It's called a pass-through entity, but basically you're right. That entity pays a voluntary tax,

an extra tax that it wouldn't otherwise owe, and the states have allowed that to then be passed through to the owner. But that's exactly right, Tyler. And deductible in one way or another. Okay, Robert, thanks very much. Appreciate it. Well, from taxes to insurance, the Wall Street Journal highlighting how an increasing number of homeowners decided to forego home insurance altogether, instead, gambling that the likelihood of a disaster isn't high enough to justify the cost of a policy. What we're seeing is in a survey that was done by Munich Re and the Insurance Information Institute that 12% of homeowners say, no thanks, half of them, their household income is less than $40,000. So they may own the home outright since they don't have a mortgage, but they can't afford to pay the insurance on it and instead just keep their fingers crossed.

And if the house was destroyed in a flood or a hurricane or something like that, they would just walk away from it. Yeah, that's exactly right. It's shocking, but given where we are with the insurance industry and everybody is seeing their policies go up, it is problematic. All right, movie theaters are going to try just about anything to get people to watch a movie. Now a small chain in Britain is letting people bring their dogs to the theater. The first movie they're offering this for is Stray's live action comedy with the dogs, voiced by Jamie Fox, another canine and Will Ferrell, among others. And we should note it is distributed by Universal Pictures. Folks, that's going to do it for this part.

And Universal Pictures, of course, part of Congress.