Power Lunch - Rising Rate Reaction, and From Pigskin to Pokémon 3/3/23

Episode Date: March 3, 2023

Rates are on the rise. The 10-year yield is now above 4%, while mortgage rates are back above 7%. All while Fed officials are saying “higher for longer.”How will this all play out for the economy and the stock market? We’ll ask the experts what it means for you & your money.Plus, we’ll speak with a former NFL player who’s now making millions selling Pokémon cards in his second career. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

And welcome to Power Lunch alongside Kelly Evans. I'm Dominic Chu in for Tyler Matheson today. Coming up on the show, the rates are rising. The 10-year yield above 4%. It was at one point. Mortgage rates jumping above 7% and Fed officials saying higher for longer. So how will this play out for the economy and the stock market? We will, of course, discuss, Kel. Plus from pig skin to Pikachu, the former NFL player who went from trying to catch the ball to trying to catch them all. How does someone make millions on Pokemon cards? We'll talk to Blake Martinez. First, we'll get a check on the markets, though, as stocks are higher across the board,

and all three major averages are looking to end the week with gains, the NASDAQ leading the way today up 1.7%. All right, now let's head over to Christina Parts of Nevelas with a look at the NASDAQ trade and some of the day's big movers. Good Friday afternoon, Christina. Yes, happy Friday. So let's talk about shares of Apple because they are moving higher, up almost 3% higher after Morgan Stanley raised its price.

target to $180 a share. That's 20% upside from last night's close. Shares are about $150 right now, but don't expect an overnight sensation. They say over the next 12 months, Apple will benefit from pent-up iPhone demand. You've got two new product launches, improved service growth, and the potential introduction of an iPhone subscription program, which is rumored to mean you rent the latest phone and you pay a monthly fee. But rumors so far, shares, like I said, are up about 3%, but still down roughly 9.7% just over the past year. C3i shares are soaring today after impressive Q3 earnings report the stock up over 30%. The enterprise AI firm posted a smaller than expected loss with revenue that beat the street. Plus, it's sitting on a cash pile of just over

$770 million with no entry for debt on its balance sheet, so there's some spending wiggle room while it tries to capitalize on this AI momentum. Lastly, shares of networking chipmaker Marvell are roughly 6% lower. One of the worst performers on the NASDAQ today after revealing it's still working through some inventory corrections in data center storage and enterprise.

And that led to a weaker than expected forward guidance. The CEO said on the earnings call that he expects the headwinds to subside later in fiscal 2024. You know, all of that good material, Christina, and all anyone's talking about it, the fact that we're matching. We're almost doing this yesterday, too.

You know what? It's just a sign of great minds. I agree. Great minds think alike. Bertha and I were matching in our reds yesterday. I mean, this just, it happens. There's these vibes that we get. We're around each other so often, so it inevitably happens.

And they're like, you're too early for St. Patty's Day. I think it's green for the markets personally. That is true. Christina, thank you very much. Christina. Yeah, let's say that. Let's get right to the high anxiety. over high interest rates. The 10-year yield going above 4%. Mortgage rates above 7 yesterday.

Bostick and other Fed members sounding hawkish. Larry Summers now calling for a half-point hike at the next meeting. It's all adding to the higher for longer narrative. Jeff Cox's finance editor for CNBC.com and he's here with us. And yet, and yet just as we're reaching this fever peak, Jeff, now we have the 10-year reversing lower today. Yeah, markets are just trying to figure out what's going on here. Bostick actually very doveish yesterday, and that set the markets on fire. Interestingly enough, markets paid attention to a guy who's not a voter and ignored a guy who is a voter, Chris Waller, who came out and said, hey, look, I don't really, I'm really getting scared some of this inflation data. I think, you know, we're the very good chance that we may need to be higher for longer and get more aggressive with rates. But, you know, like the old Simon and Garfunkel song, a market hears what it wants to hear and disregards their ask.

That absolutely seems to apply to the last couple of sessions because even looking at the Bostic comments, you could have read it differently. and then Waller, like you said, look at stocks today. They're shrugging it off and the 10 years dropping. It's a little weird. Yeah, it's a crazy thing. I think, you know, the big thing we got a Fed meeting coming up in a couple of weeks. Hopefully that will sort some of this out. I think Fed officials right now are kind of trying to get markets away from this idea of 25 versus 50.

What are they going to do? And they're trying to get people to basically look at, hey, check out the dot plot. See what that's going to be because what really matters is where we're heading long term. And I think what you're going to see is a more hawkish shift long term and maybe kind of put some holes in this really, this risk-on narrative in the markets now. It's also about the long-term versus the shorter term, right? So we talk about the 10-year yields and you bid up the prices and the yields fall. You bid up the prices because maybe you don't have as much fear of inflation or growth for that matter, longer term down the line. Meanwhile, you play that two-year side of things, the one-year side because that's going to be kind of where the terminal rate is going to.

going to be by the time this is all said and done. So you wonder if it's a push and a pull about whether there is going to be an economic slowdown. And it's just a question of, is it beyond this year? Well, I think the market's big bet that the Fed's going to blink at some point. They're going to see the data and they're going to say, okay, we can't go as high as we want to go. Interestingly enough, a year ago at this time, the Fed put the SEC out. And they had the terminal rate at about 2.8 percent a year ago. Now, the market's now pricing it at a terminal rate almost double that. I think things have changed. Do they still think the Fed's going to blink, though?

Because it almost feels like the biggest development since Jan 1 is the market, as Steve has pointed out, coming up to where the Fed really was. And yet the curves are so. It's almost like they're saying, we believe you, and we kind of understand that you're going as high as you're going, and maybe you're going to 6%. And we think at some point there's going to be a nasty downturn as a result. Well, at least the market has gotten away from pricing in this rate reduction this year. I think, you know, at least they've realized that.

But I still don't think that they think the Fed's going to go as high as they say they're going to go. And I mean, there's certainly some precedent for that. If you just sort of look at Fed guidance over about the last three or four years, it was like, you know, we're going to keep raising rates until we tame inflation, and then we're where we want to be and we're not going to raise rates anymore. And then Jay Powell coming out and saying, we're a long way from neutral, and then we're on autopilot. And there's just, you know, so much skittish Fed policy and so much skittish guidance

that is really hard for markets. That's why John Taylor was saying we should, they were starting to look at things like the Taylor rule again. There's so much confusion. We'll hear from the Fed share next week, by the way. was just reminding me two days. And Jason Furman out with that op-ed today in the Wall Street Journal, also calling for a half-point rate hike. And saying, actually, if the Fed was really data-dependent, they'd be going up like 250 basis points from here and doing something really crazy. So there's so many different voices that these guys have in their ears right now.

And the market's just, you know, the market wants to go higher, so it's going to go higher. This is wisdom, by the way. Dan Suzuki, I just keep thinking last hour, saying the Fed is a lagging indicator that reaction. to lagging indicators. That's the only thing I worry about. All of this date of the inflation data, Jeff, as you know, why do we get to 9% CPI last year? It was from stimulus six, 12, 18 months ahead of that date, you know? It's just, it feels like we're overreacting to kind of the recent past. Well, that seems to be sort of the thing to do. And, you know, we talked, you and I had talked about this, the credit to false swaths market right now. Actually, credit spreads are blowing out,

I mean, who even knew that there was still a credit to falsewast market for treasury bonds out there? the U.S. And there is. And we're up to pricing, according to MSCI, up to like a 13% probability of a default. Around 12%. Yeah. For all those newly minted treasury mom and pop owners across the country. Bond insurance.

Yeah. Watch your maturity dates. Jeff, thank you very much. We appreciate it. Jeff Cox. All right. Well, speaking of, and despite those rising rate stocks are still higher for the week, the Dow's first winning week, by the way, if it holds the sway in a month.

Stock's moving yesterday after Bostick, Rafael Bostick of the, Atlantic Fed said he favors more 25 or one-quarter point rate hikes, but can stocks really continue higher if the Fed keeps its foot on the gas or the brakes? I guess I was going to say it seems like the breaks these days, right? So joining us now on set is Rodensana, Contrast Capital Partners, co-CEO. He's also a CNBC contributor, a familiar face for years at CNBC. Yes, I didn't want to say that. I don't want to date you there. Also remotely here is Eric Friedman, chief investment officer over at U.S. Bank Asset Management Group. Ron, Eric, thank you both for being here. Maybe we'll set the stage first on a macro level with you, Ron. This is a market, and we've had

this debate among many different people on this network about whether or not the Fed is being enough proactive in terms of its approach, or is it still being reactive to what Kelly points out, rightfully so, is backward-looking data. Yeah, I'm in Kelly's camp firmly. I mean, and she knows this. And what I just heard from Jeff about Larry Summers, which I missed this morning, and I didn't read Jason Furman's op-ed because I follow him on Twitter. They've been putting up, you know, Phillips curve graphs on Twitter and talking about wage inflation and all these other things. And the Fed need to be more aggressive. You remember four weeks ago, Larry Summers said that the Fed should not commit to anything in the future, one way or the other. Two U-turns in a row.

Talked about a Wiley-Coyote moment where the economy falls off a cliff. I don't get what's going on. I've got a piece coming out on Monday on CNBC.com talking about Fleetwood. with Mac and the Fed, never going back again. I think part of what they're higher for longer is is not wanting to go back to zero in as much as it's wanting to fight inflation. They're probably overdoing it on the inflation front. And we're starting to get hints from a lot of businesses that the consumer's slowing down while you've got real estate and manufacturing and recession. So look, from market perspective, very choppy, as we've said before, you know.

I mean, Eric, these are all interesting points. And the reason why I guess in some ways it's so important is because when it comes to how market professionals are helping clients navigate these waters and their money, it comes down to whether or not there is a strategy you can even put into place for this. And I wonder, Eric, from your standpoint, what exactly is that? What do you tell your clients who come in saying, hey, you know what, I don't know what to do with myself right now? Yeah, so, Dom, it's a question we get quite a bit and not to invoke another Fleetwood Mac song, perhaps the song we would use a Behold me, which is a reflection on what we do with cash right now. You know, you look at where we are with six-month and 12-month cash,

there's a real opportunity for clients to grab yield. And that doesn't happen very often. So really the way that we've been approaching it with clients is to say, look, probably have a little more of a defensive bias in terms of risk assets. Skew the portfolio towards more cash-flowing investments. You know, we're smack in the middle of a very well-defined range for both the S&P between 3,800 and 4,200, and then the tenure between three and a half and four to half. So to Kelly's point from the earlier segment, you're going to likely see some more concerns about inversion. We think there's a great way to play that, which is to move cash off the sidelines into more productive assets. So that's been something

we've been very consistent talking to clients about. It's really helped drive some real returns in their portfolios. You know, what's interesting, Eric, and I just want to point this out to you, I think I've had more conversations with folks in the last, call it maybe month or so, about people talking about laddering certificates of deposit and laddering treasury securities, three months, six month, one year, two year notes and bills, that sort of thing. Do you feel as though that's kind of maybe almost a contrarian sign if all these people are now talking about whether or not they want to go and ladder out their fixed income, risk-free investments?

Yeah, Dominic, it's a great point. I mean, there's really, what I would say, not a mutually exclusive conclusion about what this means for people's risk appetites. I just think that, you know, for years, we have been in a period where savers have been punished in terms of owning cash. And so, you know, recognizing that keeping some optionality in the form of cash that actually pays you a return, I think is a good thing. But to your point, there is the overreach that can always happen. That pendulum can shift way too far. And that's actually what we're looking for.

You know, we do think there will be some economic gravity that sets in later this year, that riskier asset classes probably get cheaper. but if people wait too long, of course, before the data turns, they're going to miss it. So we do think that being tactical is additive in portfolios, but again, the risk is that people do get too complacent, especially given the thought that the Fed may stay higher for longer, which is, we think, a proper base case. Welcome to the chop, Eric says. That is exactly around what you were saying as well. The choppy period that, you know, as we try to figure this all out, chop would be a good thing

based on what some of the forward data suggests. Yeah, and I'm not in the camp that thinks we're in a new bull market. by any stretch of the imagination. I think we're working off, you know, the bear market. And this can go on for a while, right? A secular bull market requires the Fed to be friendly and requires a tape to be much better than it is, requires earnings improvements, requires better quality earnings.

All these things that are currently headwinds have to, you know, kind of subside and turn into tailwinds for the market to really get a secular head of steam. That's a great point. We're coming down sort of in the profit cycle, not starting a new one. Ron and Eric, thank you both. Ron and Sanae and Eric Friedman. Coming up, Silvergate Capital, once a darling of the crypto community, now the stock is plummeting, down nearly 60% this week. Some are wondering if it will survive.

We'll tackle that in Tech Check. On the other hand, NatGas stopping its slide, rebounding 20% this week. We'll get all the energy headlines coming up on Power Lunch. All right, it's time for today's Tech Check. Let's get out to Deirdre Bosa for more on the drama and saga that is Silvergate Capital and it's very, very bad, no good week. Deirdre. Very bad, no good indeed. So let me put this in context.

If FTX was the biggest exchange to fall, Genesis, the biggest lender, Silvergate, may now represent the potential failure of the banking piece of crypto, and it kicks off a fresh new crisis in the space. Shares absolutely plunging this week after the bank said it had to delay the release of its annual report and was evaluating its ability to, quote, continue as a going concern. Now, insolvency would be a fresh crisis in this all. already fragile ecosystem rippling across the sector anew. And that is because Silvergate, it has functioned

as the so-called rails of crypto connecting the US crypto industry with the traditional financial system. So it plays a major role here. And major players on all sides, they are now quickly pulling away from that infrastructure. Circle, Coinbase Paxos on the crypto native side, JP Morgan on the traditional Wall Street side, which yes, covered the bank, now readjusting and downgrading

its rating to underweight and withdrew its price target. This all raises the question yet. Again, how many more dominoes are there to fall in the crypto space and how much more money can be lost? Well, still a lot. One corner that I have watched in question very closely over the years is stable coins. Its entire value is derived from confidence, a belief that one circle or one tether, one USDC or one UST is worth one US dollar. Now, amid the many crises of confidence in crypto, tether, take a look.

This is the largest stable coin by market cap, some $70 billion. It has shown some cracks. You can see in this chart that it has unpegged from the dollar a few times over the last 12 months. Circle has remained relatively more stable. But as we await their long promised audits, they remain vulnerable in a still very vulnerable industry. And Silvergate is just the latest to show that, guys. So, Deirdre, I guess, I mean, if you take a look at the way sentiment has played out here, we know that Silvergate has been a huge catalyst for this.

If there is something else, if you're going to look at this, If there's something else to keep a close eye on besides those stable coins, how about the more established ones? We've talked a lot today about the bitcoins and the ethers of the world. And even they have been showing some signs that the relative strength that we've seen, that full rush that we saw at the beginning of this year, starting to run out of some steam. Is this the beginning of this or is this just maybe some churn and chop like we talked about in the last segment? Well, I think the failure of so many other tokens has kind of underlined in a way the legitimacy of a Bitcoin and an Ethereum. That's what a lot of folks in the industry would say. And remember, these are decentralized coins.

And a lot of what we're talking about that is failing right now are centralized things. There's a lot of irony in that, of course. This is supposed to be a totally decentralized system. But that is why some would argue, at least the sort of evangelists would argue that FTX and Silvergate and Genesis are all going down. because at the end of the day, these are centralized exchanges or banks or lenders. Tether is that interesting one and stable coins, because again, these are also centralized. But you could argue that they're the rails even more than a silver gate, because this is how people get money in and out of different coins.

As to the question of Bitcoin and Ethereum, though, Dom, to answer you directly, I think Chop, who knows, there's so many more things that could fail in the system. But you would hear anyone in the space argue that at least these ones are going to be around. They could go further down, certainly. Dear, I'm just struck by the fact that this is really the first time we're talking about crypto kind of transferring to the real financial system. You know, up until now, we've seen an extraordinary drop of wealth without much broader ripple effects.

Silvergate is a clear example of ripple effects. I wonder if there are any others. Well, again, I point back to stable coins. These are essentially money market funds, and they hold huge amounts of short-term debt and treasury. So if they fail, that is generally pointed to as the black swanour. one of the industry that could actually, you could see these ripple effects in the traditional financial system because they are so integrated. But again, we don't really know the full

extent. They have remained relatively stable. But there are huge questions. There was even a piece in the Wall Street Journal today looking at some of the untoward practices that Bitfinex, the company that owns Tether has engaged in over the years. We know that it's under investigation by the Department of Justice. So this is certainly one to look at that is more integrated than any of the things I mentioned into the traditional financial system. That's an excellent point. Dear Richard, thank you as always, dear Jibosa for this edition of Tech Check. Further ahead on the show, an island of riches amid a housing slump. The most expensive real estate market in America keeps climbing higher and we're talking about Palm Beach. We will be there for a look next.

Plus, focusing on the human and human resources. We'll look at a startup that helps provide cost-effective and meaningful benefits to employees. That's today's working lunch. Welcome back to Power Lunch. Stocks moving towards fresh session highs with 90 minutes left until the closing bell, I should say. Let's get caught up on stocks, bonds, commodities. And we'll begin with Bob Bassani. Bob, what do you see in the action today? I see a powerful rally.

You know we move 90 points since this time yesterday. That's about 2%. And some stuff that was kind of quiet is showing some momentum. Just let me show you here. Now, Tesla's been strong recently, but META's been on a general downtrend in February. It's doing well. Ford was generally awful this year. It's been up every single day this week, Ford. General Motors is also showing some life today here. We see some new highs there, a small group, but it's almost all industrial stocks. GE's had a great run. Borg Warner, Ingersoll, Rand, even United. These are big internationals at new highs. And some of the other groups in cyclicals, material stocks are popping up near new highs as well. So some of the steel stocks, new core steel dynamics, a lind, a gas manufacturer. Mosaic, one of the big fertilizer companies in the world. That's not quite a new high, but almost. So new core lind, steel dynamics, new highs. As for the S&P, I just mentioned, we moved 90 points. That's 2% in 24 hours for the S&P 500, breaking out of that downtrend we've been into. People keep writing me this week about the VIX. We've dropped below 19 here. The simple answer, I call my volatility and friends say, why isn't the VIX strong with all this anxiety? Because the S&P isn't moving fast enough for people to get anxious to go out and buy a lot of put calls that would drive the VIX up.

So it's a little unusual to be below 20. That's about the long-term average for that. And sort of getting into complacency territory, in my opinion. But again, just not violent enough, not big enough moves in the SEP to cause a lot of panic is why the VIX keeps going down. Guys, back to you. All right, Bob is Sonny with the latest there on the market. Let's bring in Rick Santelli now out in Chicago, or at least for today, yields are falling. a bid for those risk-free assets, Rick.

Yes, we see stocks in the green. We see treasuries in the green. And that really comes to the time where many at the Fed are only seeing red. Markets don't seem to agree. Look at a two-day of three-year. Why did I pick three-year for a good reason? Because today and yesterday, both have intraday highs higher than 4.65%. And that's real important.

Open the chart up to October. And what you see is the cycle-high yield closed going back to October. 20th was right around 465. Why is that key? Well, because two years, the only one who's taken out their fall highs at a time where every piece of guidance from the Fed is higher rates. The market is bucking that trend to some extent. They converted curves. Now, if you look at what's going on in Fed Fund futures, this October, it's the fulcrum where price stopped going down and start going up. It's basically going to close on its contract lows very close to that, which means it's pricing in the most fed it has in this entire cycle. And finally, it's all about

jobs, jobs, jobs Friday next week. Traders already talking about it. Look at two tens and thirties on a year-to-day chart. You see where everything starts going up? Yeah, that was the last jobs report. Can't tell you how important it's going to be. And one report really can change everything as evidence by that chart. Kelly, back to you. Rick, thank you very much, Rick Santelli. Let's turn now to energy prices. Oil, slightly higher, Nat gas, two of 20 percent. this week. I saw Carter Worth. Pippa just getting a little bullish on oil. And we do know it's been so surprisingly bearish so far this year. Yeah, very bearish. And today's action actually driven by more rifts reportedly at OPEC between the UAE and Saudi Arabia. So earlier today,

we saw prices fall when the Wall Street Journal reported the UAE was thinking about leaving OPEC. Then prices rebounded and turned positive when Writers reported that that's not true. But beyond whether or not this report is true or not true, it does speak to a very tense relationship between the UAE and Saudi Arabia. It's been going on for some time and it's really not showing any signs of improving. Now, moving over to Nat Gas, it is surging today back above the $3 premium BTEU level. You can see on the chart that the meaningful climb higher really started at noon. That was when we got a forecast that said that March would be on the cooler side. And of course, the weather has been a key driver of this market. We also have Freeport ramping up.

And then we also had more call activity, and that can be a leading indicator for where futures are headed. So a bit of a boom here for NACAS up more than 22% on the week. So, I mean, this is also, I mean, and we've been kind of using you in a number of ways on the energy front. I got to bring up what's happening with solar stocks. Sure. Because first solar, it was the earnings report. It was the kind of forecast and outlook that went along with it. Now we got an upgrade today.

What exact? It doesn't be the biggest beneficiary of the IRA, right? But PIPA makes a good point about some competitors that this could incubate as well. The biggest and also the most obvious beneficiary of the IRA, with it up 200% over the last year, you really got to wonder, is it looking stretched at this level? And also all of the Bulls point to visibility into the future. But that visibility means we already know what's going to happen. And they are ramping up output in Ohio. They're building another factory.

But we already know that. And so is that already reflected in shares? If you can see the future, it's priced in. Yeah. It's there. It's available information at that point. All right, Pippa Stevens, thank you very much for the look there. Let's now get out to Bertha Coombs for the CNBC News Update.

Hi, Bertha. Hi, Dom. Here's what's happening at this hour. A powerful storm is hitting the eastern third of the U.S. with severe thunderstorms and strong winds. A suspected tornado caused extensive damage around Paducah, Kentucky today, ripping up trees and damaging some homes. More than 400,000 houses and businesses do not have power at this hour.

in Tennessee, Alabama, Texas, and Mississippi. Arizona's Democratic governor says her administration will not carry out an execution, even though the state Supreme Court has scheduled it. Katie Hobbs says a man convicted of a murder more than 20 years ago cannot be put to death until a review of the state's procurement of lethal injection drugs is completed. And one of the first black officers to lead a special forces team in combat, finally received the Medal of Honor today for risking his life to rescue injured soldiers

during the Vietnam War. Lost paperwork delayed Colonel Paris Davis's award for nearly 60 years. An honor delayed, but certainly very much deserved. Well deserved for sure there. Thank you very much, Bertha Coombs, for that. Still ahead on Power Launch, a three-stock launch, Deluxe Edition. We're going to dive into some key stock stories and get the trades coming up. Plus, from footballs to pokey balls, not to be confused with pokey bowls. We'll speak to a former NFL pro that is betting big on Pokemon and those cards. Power lunch will be back after this.

Welcome back. We're serving three stock lunch family style today with some key stories on our radar. And our team of reporters to give us the news and the moves. Welcome everybody. Then our trader, Danielle Shea, VP of Options and Simple. trading will give us our trades. Welcome, everybody. Parts and Ev, let's start with you and ZSkaler falling today, but they had a beat. What's going on? Yeah, you would think that top and bottom line beat would help ZScaler's stock price. But investors are more focused on billings weakness

given it's a great indicator for the health of a business. So it only grew actually 34% year over year with management pointing out customers are paying closer attention to their budgets. Sales cycles are getting a little longer and they're faced with lower deal close. rates. The cybersecurity company is also seeing a lower contribution from new customers, not necessarily a good sign. On the positive, federal deals are growing and bringing in a higher price point, so that could be a driver in the future. And like many other firms who went on a hiring spree during the pandemic, Z-scaler will be laying off 3% of its workforce, but that's roughly about 177 employees. And I'll just end on this, because it's important to talk about it. Some accounting

finagling. Z-scaler posted an adjusted basis earnings number. If you stuck with Gap, the common set of accounting rules. You'd see a loss of 40 cents per share for the quarter. So that's a little bit less of a beat. Wow. Bills are lower. Billings growth as well for the current quarter. The forecast came in pretty light. So Danielle Shea, what would you do with the stock? So Kelly, when you look at this stock, it's under a lot of key resistance and this entire space is under pressure. I think there's consolidation and it's going to continue to break out to the downside. I like this one for a trade down to about $100 a share. And I think ultimately it's going to wipe out all of its pandemic. Gains, which would bring it back to about $88.

All right, Danielle Shea, that's the trade on Z-Scaler. Let's turn it up to Costco now. Melissa Repco has the details there also wearing green, by the way, today. Yes, it's the color of the day, Dom. So three major takeaways from Costco here. Its net sales were up 6.5% year over year. But unfortunately, the company did miss revenue expectations despite that growth. Renewal rates for members hit an all-time high of nearly 93% in the U.S. and Canada, which was also good news for the company.

And more of those members are also opting for Costco's top-tier membership plan, which comes with a higher fee and, of course, more revenue for Costco. But its monthly sales trends are slowing, and it's seen weakness with big-ticket items like electronics and jewelry. One interesting area where it's seen a jump is Jasmine Rice. Costco said as prices come down on 25-and-50-pound bags of the rice, customers have been snapping those up. Interesting. Consumer staples on sale. All right, Danielle, what's the trade here for Costco? So when you're looking at Costco, I like this one for a long-term pick. If you look at the weekly chart, you can see a beautiful trend. You can see increasing dividends over time. And most

of all, it's very normal for Costco to fall on earnings. That of the last 12 quarters, it's only traded higher three quarters. So when I look at this stock, I say, you know what, I think this is a great bear market long-term buy because ultimately, I think slow and steady growth will take this stock back up to $600, $650 a share. Wow, 472 right now. Okay, let's turn to meta finally. Those shares are up 6% today. Why now, Julia, what's going on?

Well, Kelly, meta did slash prices on his VR headsets today, cutting $500 from the cost of its Meta Press Pro to $1,000. while the Quest 2's cost is falling from $500 to $430. All of this as meta hopes to drive adoption of VR, which is of course part of its Metaverse plan. But meta shares were actually already much higher before that VR headset news on two analysts notes that name Meta as a top company that will benefit

from generative AI. Barclay is writing that Meta along with Snap, Pinterest, YouTube, and TikTok will be able to take advantage the AI-generated content boom to improve the user experience and also their monetization efforts, noting that meta is likely working on a chatbot-like service for its messaging apps. Morgan Stanley calling AI a $6 trillion internet opportunity saying meta has a path for 6% plus incremental ad revenue because AI will improve meta's recommendation engine, increasing both engagement and ad impressions. Kelly? All right. So, Meta,

up 9% this week now. Danielle, you like it here? I do like it here, particularly coupled with a short squeeze that's ongoing in the NASDAQ. If you look at meta overall, we had this really nice breakaway gap after last quarter's earnings report. We have some consolidation and a nice bounce on a technical perspective that's breaking out right now. And we have some overhead targets at $200 a share. And then again, upwards at about 205-215.215. So what I like to do in the options market is trade this on a momentum-based. basis up to what I like to call the easy target where the previous resistance zone is at 200.

And if we could break further, then trade it up to about 210, 215 today. All right, at 185 today. Danielle, thanks so much for your time and for your trades today. Danielle Shea. Thank you. I'd also like to point out that both Julia and I didn't get the memo about green today. It's okay. There's still time.

I like Julia. The shoes in the pink. I'm in the red and the blue. Anyway, up next on the show, John Ford is bringing us his interview with the CEO of a startup who was expanding access to women's health services. That is our working lunch for this Friday. It's up after this break. The economic data is choppy, but the broader labor market is still tight, and employers want to provide meaningful benefits. Officially, in particular, today John Ford brings us up close with a five-time founder who is expanding access to women's health services for this edition

of Working Lunch, John. Yeah, Kelly. Hey, Gina Bortez, he's the founder and executive chair of Kind Body, which runs fertility and wellness clinics. Yesterday, Kind Body and announced a $100 million debt raise and a $1.8 billion valuation. Kahnbadi counts Walmart and Medtronic among its corporate clients. It's got 42 clinics across the country now, plans to use the capital to build out 10 more this year. Bartesey's used to being told no. She told me Kindbody, her fifth startup, is the first where fundraising hasn't been grueling. And that's something you hear a lot from women founders.

Before her career even started, she was told no about something else. Her dream of being a sportscaster. I went to Chapel Hill. The program there is radio, television, motion picture, our TVMP. And I have a Southern accent. And they were like, yeah, this is not going to fly on the national news. You're going to have to find something else to do. And so when I graduated college, I got into the advertising business. I was in the advertising and media business. I owned a media publishing firm, a magazine publishing firm in Atlanta. And then my first foray into Women's Health and Fertility was an online digital magazine called Fertile. authority. And Bartasi went on to found fertility benefits provider progeny, now a public company with a $3 billion market cap, among some other ventures. Now at Kind Body, she said she's finding strong demand for the services in areas outside of the largest urban markets. And when companies start funding fertility, even more demand materializes. We've already opened a new location in Rogers Bentonville area of Arkansas. That clinic is off to the fastest start of any of our other

clinic, certainly supported by the patient population from our partners at Walmart. At that location, we also see about 50% of our patient population coming from other consumers not affiliated with Walmart. So we see this pent-up demand. And again, historically underserved what we call fertility deserts. And so you're going to see, again, this need from the fertility population to seek more services supported by the employer population, Walmart, and a number of other large self-insured employers underwriting the sponsorship of the fertility benefits.

I asked her how hard the fertility benefits market is going to get hit as we get more slack in the labor market. Will employers feel less motivated to offer the services when they aren't trying to hold on to every single employee and when they have to trim costs? And she said she thinks demographic shifts, including older parents and non-traditional families, are going to put a floor under that. Makes sense to me. I think she's right. I guess it would just be a question of competition.

Yeah, and there are a lot of providers out there. She's got a track record that's made it easier for her, relatively speaking, to get funding. And, you know, it's interesting. We're talking about this debt funding. She said that was the best way to go because they're in position, having gotten some of these large clients where their cash flows are actually pretty consistent and comfortable. So now they can just use that to pay back the debt rather than give away the equity. So it's a nice position.

Walmart is like a founder's dream. Yes. That's amazing. John, she said, thank you very much. We appreciate it. And thank you, Dom. No, and thank you as well. Thank all of us.

We'll see you in an hour or two. Well, coming up next on the show, demand for Palm Beach homes higher than ever. Even amid this tougher market, as we just referenced, million-dollar homes are getting snapped up, including what could be. Again, could be the most expensive home ever sold in the same. state of Florida. Robert Frank, of course, is on site with the tour, Robert. Dom, well, there are 40 billionaires in Palm Beach, but only one of them is going to be lucky enough to have this, the only private island in Palm Beach. It just came on the market. We're going to take you inside, give you the whole tour, and more importantly, give you the

price tag. Coming up after the break. Welcome back. Time now for our weekly ETF tracker, and we're looking at the time. utilities this week where those funds had net inflows of about $328 million, according to our partners at Track Insight. Although the money poured in, the stocks didn't follow. Utilities were actually the worst performing S&P 500 sector this week and this year. I mean, it rates obviously a big part of that. You can see the big ETFs in this space. The sector spider, vanguard fidelity, all higher today, but down since Monday. For more information, visit the F.T. Wilshire ETF hub. Well, even amid a potential housing recession, Palm Beach, Florida remains the most expensive real estate market in America.

And Robert Frank is live. Of course he is. He is our wealth editor from Palm Beach. We're going to show him to you very big because he's in front of a very big house, Robert. Well, Dom, you know, Palm Beach right now truly is a rare island of strength in this real estate market. At the average sale price for a house in Palm Beach, now close to $13 million. That's actually up 25% in the fourth quarter. And the inventory of homes for sale right now still running about half the normal levels. There are no signs of anything slowing down here on Palm Beach Island. We've had record sales that have happened this week, off market sales that have just shattered records that we've never seen before.

And that just all points in the same direction. continuation and upward. And guys, the big test of this market will be this property here. It's the only private island in all of Palm Beach. Just came on the market, 25,000 square feet of living space, 11 bedrooms, 22 bathrooms. It's got two boat docks. It's got a tennis pavilion. It's got a gym, a salon, and not one but two pools, including this 98-foot-long pool behind me.

And guys, get ready. The asking price for this property, $2,8.8.000. $18 million, which if it sells for that, and Dom, you said it, if it would be the most expensive home ever sold in Florida. Come on. I mean, it's not a flip exactly, but 85 to 200 plus in that amount of time, is there anything that, I mean, I'm just skeptical. Is there any reason why you would think somebody would get that in that kind of time?

Well, remember, he bought it for 85 a year and a half ago, the current seller who's an investor, built a new house and we've seen properties. Tommy Hilfiger just bought a house in Palm Beach for 37. Three weeks later, Dom, he's selling it on the market for $48 million. It's $11 million more in just three weeks. This market doesn't make any sense. People thought it would start to slow down. We've seen the stock market slowdown, decline.

We've seen the real estate market slowdown. But Palm Beach right now just is not getting the message. It's really kind of an anomaly. So look, does he get $200? We'll see, but it's not out of reason given what we're seeing in some other recent flips. Do you need a bridge? Do you need a boat? How do you get there, Robert, real quickly? There's a bridge, or you can bring in your yacht and dock right here, one of two docks. Oh, the yacht, of course. They didn't think of the helipad, right? There could be a helipad.

Helipad, he's going to blow away. Robert Frank, thank you very much, sir. Great to see you. We appreciate it. After the break from pigskin to Pikachu, we'll hear about the business of card collecting from a former football pro. Welcome back. You may know our next guest for his tackling on the football field, but since retiring from the NFL, he's tackled a completely different career. We're talking about Blake Martinez. He started up a business selling Pokemon cards, and he's bringing in, yes, millions, millions of dollars. CNBC's Make It featured him in a recent article over this past week. Check it out on our website, by the way. Blake joins us now. He's a former New York Giants linebacker, former Packer, Stanford Cardinal guy, but your kids might know him as the founder of Blake's breaks. So Blake, take us through how you got into Pokemon and what exactly is the business model for managing inventories and

market risk around trading cards? Oh, you're going with the big hitters. Yeah, I started back when I was six years old, just like everybody else in the scene. COVID hit. Everyone saw a Pokemon card skyrocket trading cards in general. And so I went to my mom. I was like, hey, like, where's my Pokemon cards at? I think I got a million dollars in that binder. And she hits me with the, I gave him away about a couple years ago.

That happened to my dad with his comic book collection years ago. Go ahead. Oh, yeah. And so pretty much at that point, I had to start from ground. zero started watching people do box breaks it's where they open up a vintage box sell pack by pack um saw them doing it and i was like i think i could do this myself i think it's way more fun and so i think as i started doing it i saw it be more and more successful and i worked for myself for about a year and a half did about three million revenue by myself and then paired up

with one of my partners robbie and we started a business together and and hired whoever said yes at the time, grew the business from putting in 6K into the business to buy a set of Pokemon cards, turn that into 15K, and now you see actually at the end of this week will break $6 million in revenue as a company. And we're just moving full head of steam forward since then. Blake, is it as simple as just buying or sourcing cards and then getting somebody else to buy them? Is there a marketing effort that has to go along with it? Is there a scarcity value for certain things? Like, how do you manage around that? Yeah, and I think that's where I kind of went different kind of business models when I first started this thing. I had a huge

abundance of vintage boxes that I kind of sourced across the last couple years. And so as those things were getting sold and shows and things that I was doing, and that was getting depleted, I had to figure out a way that we can have this self-sustaining for a long time. And so I started getting into more of the modern product and finding different ways that made that more entertaining and more fun to do. The things we do right now is kind of a thing we call progressive bounties. And so we're selling these $5 retail packs and you have a chance to win $7,000 to $8,000 a product in every one of our streams. And so it allows us to sustain those very, very valuable 20-year-old packs, but also have an abundance of modern packs to continually run.

And then sourcing products, it's just doing things like this. Being on with the market myself out there, certain people that didn't really think about their products that they had in storage bins or their basement, whatever it is. And so they'll reach out to me. I closed the deal actually today with somebody for about like 50 grand worth of vintage stuff that drove out from San Diego this morning. And it's one of those things where you just keep finding little things here and there that you can slowly throw in over the next couple months as we keep doing our model product.

You played with both Derek Carr and Aaron Rogers, if I'm not mistaken, which one of them should go to the Jets? Oh. Oh, okay. Here we go. Now, hey, this is the question I get every day. In 20 seconds. I think Aaron Rogers will end up there. In my honest opinion, I think the phone.

I'm getting a thumbs up from Brian over here. Blake Martinez. It's a pleasure. Thank you, sir. Best of luck. All right, well, that does it for this on this Friday. Aaron Rogers, with Jets. Anyway, thanks for watching, Power Lunch.

Dumb's out of here. Closing bell starts right now.