Power Lunch - Stocks Slide 7/6/23

Episode Date: July 6, 2023

Stocks are lower across the board today, with the Dow down more than 500 points at the session low. This morning’s jobs numbers came in too hot, leading investors to believe the Fed is going to get back to hiking rates.We’ll break down the data, and what it all means for you and your money. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Good afternoon, everybody, and welcome to Power Lunch alongside Contessa Brewer. I'm Tyler. Matheson. Stocks are selling off pretty hard today. The Dowdown more than 500 points at the lows. They're off that a little bit. Jobs numbers coming in sort of too hot for the market's taste and leading investors to believe the Fed is going to get back to hiking rates. Maybe not just in July, but maybe going on deeper into the year as well. Bond yields jumping, Contessa, on this news. Yeah, well, Tyler, you said it. Let's get a taste of the stock slide right now. Now industrial is off by a percent. You've got the S&P 500 down three quarters of a percent. And the NASDAQ composite off 283 percent. Energy is the worst performing sector. Exxon Mobile, warning that lower Nat gas prices will hurt its second quarter results. And there you see Exxon down three and a half percent.

Chevron following suit down two and a half. And Conoco Phillips down three and a half percent. And a firm also down big. Piper Sandler downgrading that stock to underweight. It really puts the price target at $11. because the big concern, rising interest rates will hurt the margins. And there you're seeing a firm holdings down almost 14% on the day. Let's get right to Bob Fasani for more on what's moving.

Bob. Hey, Katas, at one point, we were quite weak in the middle of the day here. We were at 4384 was the low for the S&P 500. We're well off of that. We bounced about 30 points. Look at that midday bounce there. Not a lot of volume behind this recovery in the middle of the day. I think that's a sign of seller exhaustion, not buyer enthusiasm.

Nonetheless, up market is definitely an up market, and we're definitely well off of the lows here. Take a look at the sectors, as Contessa mentioned. Energy's been weak, but not just today. It's been weak all year, frankly. Another group weak all year, at least since March, is the bank stocks, most of the big names down two or three percent today. Seemiconductors, which has been a market leader throughout the entire year, also notably weak on the day. Consumer discretionary a bit weak, and consumer staples holding up a little bit better. Banks have been hit on concerns about loan growth and about the interest, spread that is continuing today. I want to note some of these companies are really moving to the downside. Key Corp is very close to a 52-week low. I think it was 899 a couple of months ago.

You can see it's just over $9 right now. So keep an eye on some of that. Elsewhere, commodity stocks, all of them are down on the year. This is partly global slower growth concerns. China being a bit disappointing. Freeport McMaran, copper gold, mosaic, big fertilizers, Conigal Phillips, and the oil companies, these tend to move with oil. So when you see oil, here down 12% in the year. Conical Phillips down 14 or 15%. These stocks tend to move with oil. So where are we right now? The jobs numbers today that we saw the Joltz report kind of through the markets for a little bit of a loop. My attitude here, my interpretation is job growth is strong. That's good news, folks. This supports one of the key pillars of the soft landing that the

job growth market remains strong here. The worry now, the reason we're down is there is a concern, again, that further fed tightening is going to induce a recession. The market has had this long history with this happening with the Fed, so they have good reason to be concerned. But I would say we need a very serious uptick in inflation for the pullback that we're seeing, even if it was 5 percent, to turn into a very serious downturn. What would that be, Tyler? I'd say if we had to go back to zero on the year, that would be a pretty serious uptick in inflation necessary. And frankly, right now, I don't necessarily see it. I think we're talking about next week, 3 percent, CPI, 3.2 percent or so we'll see.

We shall see. All right, these next two percentage points between 4. and 2% may be the toughest part of the road so far. Bob Bazani, thank you to the bond market now, where the 10-year yield back above 4%. And the two-year, I think Rick Santelli, it was above 5% earlier today, highest level since 20-07, right? Absolutely. And you hit it, Tyler. You know, if you look at an intraday of twos, I want you to notice two things that are super important. Yes, the intraday velocity, we treated up to 5-11, almost 512.

And you can see it there. However, as if on Q, we're about ready to drop under 5%. Let's open the chart up, and I'll tell you why this is so important. If you look at this chart going back to the early part of March, we can clearly see that the high yield close for two years, the 16-year high-yield close was 5.07 on the 8th of March. If you're a technician, that's the whole game right there. to know an intraday high spike through there,

and now we potentially aren't going to close above it, would make the market look as though it's a bit of a double top. And you see it on the long-term chart there going back to the summer of 07. And it doesn't end there. If you look at a 10-year chart, Tyler referenced the 4%. He's right. We haven't closed above 4% since the 2nd of March. However, what's been going on in the last several hours is a huge fade,

as I just pointed out in two year no yields, as it's testing 5%, but the 10 year is basically still on its high yield. So we've seen the curve de-invert quite a bit. It's now at the least inverted since the, well, about two and a half weeks, let's call it. And why is that important? Because we may end up having a double top

on both sides of the curve. 507, whether we close above it or not, and then yields holding up 4. and a quarter is the high yield closes you see on the last chart there from October of last year. Many believe that all the months and months of flattening and inverting yield curves is going to make the steepeners, the pain trade. So watch the two years drift and the 10 years hold. Contessa, back to you. All right, Rick, thank you for that. Are the markets now overreacting to these hot economic numbers or wise to anticipate more Fed tightening to fight inflation and

thereby potentially bringing on recession? Here to talk about the state of the economy and the market, Brian Jacobson, chief economist with Annex Wealth Management. Brian, good to talk to you today. First, will you share your gut reaction when this data came in this morning? Yeah, it was a little bit of kind of shock and awe, almost like disbelief, especially that ADP number, about $497,000. You know, I was expecting to see a little bit of moderation there. Now, I do have to say that then some of the other data, like the initial unemployment claim, some of the Joltz data, those were a little bit more in line with expectations. So it was really an ADP one that really stuck out like a sore thumb.

I understand that you're really looking skeptically at consumer spending and at especially the travel and leisure sector when it comes to the contribution to the overall economy. Yeah, that's correct. And so like the ADP numbers, if you look at some of the details, the biggest contributor there was leisure and hospitality. And there's only so much heavy lifting that the leisure and hospitality industry can do to keep the broader economy from seeing negative growth. You know, look at the almost alligator jaws kind of shape that is developed between the ISM services and the ISM manufacturing. Just historically, how this is typically resolved is that manufacturing finds a bottom,

but services also finds the top. And then you get that gap to begin to close. And unfortunately, because of how big service sector activity is, you ultimately end up with eventually a recession. But we've been on recession watch for, what, over a year now. And are you still on it? Do you still think it's going to happen? And I guess the more pointed question is, how much more do you think the Fed will need to raise interest rates to get that last mile from 4% down to 2%, which is their target? How much more will they need to do that raise to do that? And will that, therefore, then occasion a recession? Yeah, so here at Annex on our investment committee, we do think that the Fed is probably hell-bent on hiking, if I can say that. probably going to hike in July. Now, the bigger question now is whether or not they need to do

additional hiking. We do still get the inflation numbers next week. So on July 12, on Wednesday, we're going to get the numbers. If that's showing, say, a 3% year on year, that might make it where they only really maybe need to do one more. And really, the messaging now is about how long do they need to hold where they are as opposed to contemplating another series of success of hikes. So as long as we do that, don't see the Fed pushing towards, say, 6% with the Fed funds rate, we think that we can continue with this roving recession where it was manufacturing and housing to somewhat of a stumbling recovery where you see a little bit more stability and perhaps growth out of manufacturing

and housing while services merely slows instead of actually coming to a grinding halt. All right, Brian, thank you very much. Brian Jacobson. We appreciate your time. Coming up on the program, more on the markets, which are declining today. as investors lash out, lash out over the economy still running a little bit hot. Plus, the U.S.-China fight impacting Amazon. The White House planning to curb China's access to cloud services like AWS. Amazon also dealing with another issue here at home. That would be sellers hawking stolen goods online and threading the needle.

Meta, looking to steal something of its own Twitter's thunder. We'll explain all of this when power lunch returns. Welcome back to Power Lunch. Treasury Secretary Janet Yellen beginning to, beginning her visit to China today. But as the U.S. tries to get tough, some companies could be caught in the middle, among them Amazon. Deirdre Bosa joins us now in today's tech check. Deirdre. So, Tyler, for Amazon, the China risk, its competition. The latest threat you mentioned, that may actually be self-induced with those potential cloud restrictions. But there is also a battle brewing for its core e-commerce.

Chinese companies have been quietly making inroads with American consumers, Pinduoduo's online marketplace, Timo. It only launched in the U.S. last September, but it has quickly climbed to the top of App Store charts. Timo is cheaper, aggressively promotional, program to sell you, useless stuff, and it's totally addictive. It's kind of like a mix between Amazon and TikTok. So that may not sound all that appealing, but American consumers, they are increasingly looking for a bargain, and they seem to love it.

It's also cracked that discovery function that has eluded Amazon for so long. And Tyler, I just did a check, and it is still at the top of the app store today, second only to, guess what, meta's new Threads app. TikTok is also reportedly getting ready to launch an e-commerce site in the U.S. as early as this month. So, guys, it's actually taken a very long time for U.S. e-commerce, for Chinese e-commerce platforms to crack the U.S. market. But there are certainly more signs than ever that it's doing so. You know, one reason I think, Deirdre, that Timo is doing so well is that they're offering amazing. bonuses for the people who already use it to get, I mean, I got a text from my 20-year-old niece going, Auntie, if you sign up, we both get $50. I mean, it would be no wonder that it would

shoot to the top of the app downloads. I mean, let's be clear, those promotions make zero sense, right? Contessa, like, they're basically giving you $5 for every $2 you spend or something like that, but this is sort of the old playbook, right? That's how some of the biggest app companies, like Uber and Lyft, we're able to gain the kind of scope that they have. Turns out that that's not exactly that profitable. You can't just turn a switch and it's all of a sudden profitable, but that is the playbook that TMA is using. So I know, I mean, American consumers,

they're going to take advantage of it for as long as it's here, but that could be drawing some people away from an Amazon. How safe should American consumers feel if they're doing business with a Chinese e-commerce company? Should they feel that their data is completely secure, as secure as or as insecure as it might be with an American supplier? No, I don't think so. They shouldn't assume that at all.

And they also shouldn't assume that these products are made using the same sort of standards that we're used to in the U.S. But again, a bargain is a bargain, right? Tyler, Contessa, consumers can be lured in by those bargain basement prices. And that's essentially what the Chinese e-commerce players are doing. I mean, remember that story for a few weeks ago, Sheehan, right? it's another Chinese retailer that's making inroads here. They had this sort of promotional tour for U.S. influencers that kind of bought into it.

But certainly the standards are not thought to be as up to par as they would be at a place like an airline. Bargain isn't a bargain if the product is crap, you know? Well, it depends on what you value. But the other thing is you have to wonder if Amazon is going to start making the counter argument about the environment, because of you were telling us about fast fashion and the way that so much of this ends up in the landfill, certainly if you look on Timu at the things that are going for $1, $2, $3, yeah.

It's what? It all ends up in the landfill. It's all junk. You raise such a good point, though. I mean, Amazon has, you know, the climate pledge. They are doing or trying to do things on the back end, more energy conscious packaging and so on. But again, I mean, it's interesting because it relates to this macro backdrop as well.

If you think that the economy is going to be getting softer and consumers are going to pull back a little bit, maybe they're willing to sacrifice things that are important when they have more money in their bank accounts. Deirdre, thank you for bringing us that. Appreciate it. Amazon, by the way, also has been blamed by a lot of bricks and mortar retailers for being an end market for stolen goods. Third party sellers, crucial to Amazon claim, they have been unfairly. swept up in the company's crackdown. CnBC.com's Andy Palmer is writing that story, joins us now. All right. So how is Amazon trying to crack down on that? Yeah, so we learned that Amazon

suspended dozens of sellers in recent months, who they accused are selling stolen goods from brands like curing, revel, lots of home appliance companies. And in what way do the third party sellers say, hey, this isn't me that's not stolen goods? I'm getting swept up in a wide net. Yeah, so we spoke to some sellers that were suspended who are saying that essentially they did their due diligence on these suppliers to the best that they could. A lot of these suppliers were companies that they had never worked with before, and many of them are based in Southern California and are saying, you know, hey, we were just sold these goods. We feel that we're being unfairly targeted. Annie, how big is the problem? It's a big one.

It's a big one for Amazon, and it's a big one for a lot of online marketplaces in terms of their ability. to be sure that the goods that they're selling on their marketplace are coming from legitimate sources. Where are these stolen goods coming from? In other words, how are they reaching the supplier who is the touchpoint on Amazon? That is a great question. And my reporting partner, Rohan Giswami, and I have spent two months looking into where these goods came from and trying to track, are they coming from, you know, cargo containers and what we learned. Did it organize crime? So it seems to be that way because the California Highway Patrol has gotten involved and raided some of these warehouses saying that it's stolen cargo. Interestingly, it seems to coincide with a lot of the big, I'm not saying that there's a causal relationship here, but the big retailers have been reporting a huge problem in shrink.

That is, the unexplained disappearance of their merchandise. Is there any indication that organized crime has been involved with some of that? So it's unclear whether this particular activity is tied to some of the issues that retailers like Lowe's and Home Depot are complaining about. But it certainly falls in tandem with this wider push for companies like Amazon to crack down. But if things are falling off the back of a shipping container, so to speak, that suggests to me that it is an organized operation, not random street gangs coming in and clearing out the shelves at Target or Nordstrom or whatever. That's right. And Amazon tells us that they're participating in some wider law enforcement investigations around these things, including active investments. I mean, to get your hands on 250 brevel toaster ovens, I mean, you have to have some logistics.

A source. You got to have some logistics behind the operation, right? Annie, thank you for joining us with that story. Appreciate it. Thank you so much. By the way, what is the back of a cargo container? I don't know. It's the part that opens up, I guess.

I was just curious about that. In all these cheap movies I watch, people are always getting shoved into cargo containers. Front or back, top. Who knows? Hey, by the way, don't miss Amazon CEO Andy Jassy live on closing bell overtime today at 4 p.m. Eastern. You won't want to miss his conversation with John Fort. Coming up, top states and the culture wars, many of the most controversial states at the forefront of social debates are still leading the way in terms of business friendliness. Those details are next.

plus the energy sector, the worst performer today. We'll take a look at the names that are leading the markets lower. That is next. Welcome back to Power Lunch. I'm Dominic Chu. Crude oil prices are wavering between gains and losses, but they were lower for much of the session. What's been weighing on overall sentiment is the ongoing global recession fear and that concerns that higher interest rates could hurt demand for oil.

But those prices have come, as you can see, well off the worst levels of the session, thanks to a bigger than expected drop in weekly oil inventories here in the U.S. The EIA said crude inventories dropped 1.5 million barrels in the latest week, while expectations were for a drawdown of 1 million barrels. It was, by the way, the third straight week of drawdowns, and that has brought inventories to their lowest levels since mid-January. Energy stocks are struggling in the day with the S&P energy sector, the worst among all the sectors, falling 2.5%.

A number of the big names paying the price today, ConocoPhillips, ExxonMobil, Hess, and Merrill, on oil among those down around 3% or more. Tyler, contested back over to you guys. All right, Dom, thank you very much. We are just five days away from learning which state will be named the top state for business in CNBC's annual rankings. Among the complicating factors this year, a culture war playing out across the country, and no state is caught more in the middle than Florida, where the governor is at war with the state's largest private employer. Scott Cohn puts together the rankings for us every year, as he has now for more than a decade. And he joins us from Orlando.

Hi, Scott. This will be our 16th year, Tyler. Can you believe it? Yeah, this culture war has become increasingly an issue as we do these rankings every year. We're in an area known as Lake Nona. And this pasture behind me, this was supposed to be the site of a billion-dollar Disney corporate campus with 2,000 employees. Now it's the latest casualty in Governor Ron DeSantis' war on Woke. Disney is Florida's largest private employer, 75,000 employees.

So when the governor takes it on... There's a new sheriff in town, and that's just the way it's going to be. And Disney hits back. Does the state want us to invest more, employ more people, and pay more taxes, or not? You would think that Lake Nona, with an empty lot where 2,000 jobs were supposed to be, would be devastated. But local realtor Will Huey says no. Their prices haven't dropped since that announcement.

And I think this place has been growing rapidly prior to this and independent of that project even being announced. If anything, realtor Laura Fangman says Disney's move is helping Lake Nona manage all the growth. It was a wonderful opportunity. But we also, with the rapid growth, we need time for infrastructure. But that's not to say there aren't concerns. 100 miles away in the Gulf Coast City of Dunedin, where DeSantis grew up, Chamber of Commerce, Chairman Gregory Brady, who's helped organize the local pride celebration, worries about Florida's reputation in corporate America.

I just wouldn't want us to lose any of those businesses because they deem the state to not be as friendly as it used to be. Back in Lake Nona, realtor Will Huey is hoping this will blow over. I've lived here my whole life, and there is a lot of high-paying jobs in Orlando. So to have more industry here, more high-paying jobs, I would hope that it's not a pattern to lose those. And that really is the crux of all of this. Both Disney and DeSantis declined to comment for this story. Disney has said that it was canceling the corporate campus here because of changing business conditions.

DeSantis has said that there's no evidence of anybody staying away from Florida. In fact, businesses and companies are still coming in, and he's not wrong about that. We look at all of these issues in our America's top states for business study. We look at life, health and inclusiveness. Also, though, we look at business friendliness. and we look at migration of people into the states as part of our workforce category. We unveil the top state where I will be. Maybe it's here on Tuesday on Squawk Box.

You can read more about our study right now at topstates.cnbc.com. There are some happy cows who love doing business right behind you there, Scott. Sum up, but once again for me, the general feeling in Lake Nona about Disney putting this project on hold. It sounds like they have a kind of. either a nuanced opinion or a conflicted opinion about it. Well, there's a lot going on here independent of that. You know, there's a big medical campus here on this. This is a planned community that's got a lot going on.

There's a town center, a retail development that they're building here. Disney certainly would have jumped started that. But the realtors that we're talking to say, look, this is a desirable area regardless. It's sort of one of the up-and-coming areas of Orlando. So they're not terribly worried, But again, the question is, is this going to be a pattern? Are there going to be more feuds here?

And so are companies going to stay away? And that's one of the things that we're trying to navigate as we determine the top states for business. And, Scott, when you're talking to the companies that have chosen to be in Florida, are they concerned about the uncertainty that comes along with the dictates by the governor's office and the way forward? Yeah, you know, we talk to a lot of site selection consultants that work with the companies as we prepare for this every year. And what they're saying is that they are looking at all of this. They're looking at the idea of, you know, our companies using some of this for gamesmanship.

But they're also looking at migration patterns. And that's where it gets kind of tricky because you have a lot of people coming to Florida, coming to Texas, despite some of these social pressures and despite the culture wars. So the question is whether this is going to affect them on balance. and we'll reveal that on Tuesday. All right, Scott Cohn, we're looking forward to it. Now let's get to Kate Rooney for a CNBC news update, and Kate, it's great to see you. Hey, content is great to see you. So, yay, the rapper, formerly known as Kanye West,

and his two Christian academies are facing a new lawsuit over the conditions at those schools. A former official and Donda Academy teacher claims in the suit that the schools had dismal sanitation, electrical problems, and empty windows because Yeh allegedly didn't let, glass. The former assistant principal also claims he was fired when he complained about those conditions. A separate suit filed this year claimed the schools also had no janitorial or medical staffs among some other issues. Multiple White House officials tell NBC News a bag of powder found in the White House, later confirmed to be cocaine, was actually discovered in the West Executive Entrance.

That contradicts some earlier reports that it was found in the West Wing lobby. Officials say the area is still considered heavily trafficked. Investigators are expected to wrap up their investigation by Monday. And the Powerball Jackpot has risen to a staggering $590 million. Nobody won in Last Night's drawing. The next chance to grab that prize is on Saturday. The cash option is valued at nearly $305 million. I don't know.

I mean, staggering, I'm going to say to that. We've seen it over a billion dollars at least a couple times now. I know. The cash option's also tempting. We've taken the annuity. It seems a little safer. I thought a lot about this. So hopefully Saturday I might go out and buy a ticket. If you're feeling lucky, you can't win if you don't play. We can split it. I don't know. We could more than split it and still come out ahead. Thank you, Kate. I head on Power Lunch. Alarm ringing endorsements following the scandal over FTX. It wasn't just Sam Bankman-Fried who found himself in trouble. The company's huge stable of celebrity endorsers also caught back back.

Now the FTC is taking a deeper look at the use of influencer and celebrity endorsements. We'll be right back on Power Lunch. Meta stock, relatively flat today amid a sea of red, as investors worry the Fed could keep interest rates higher for longer following hawkish minutes from its June meeting and a quite strong jobs report. The company just released its new Instagram. This is Meta, linked conversation app called Threads that aims to directly compete with Twitter. Meta hopes threads will capitalize on Twitter's troubles as many advertisers have pulled back from the platform since Elon Musk's takeover in October. Here to discuss how is Dean Crutchfield, CEO of Crutchfield Partners. Dean, as always good to see you.

Can threads be a threat, a real serious threat to Twitter, maybe even unseated? Well, I think that's a big question to ask. Look, Twitter's had a broken wing now for some months, and this is definitely going to have some blunt impact trauma. them. But hey, we all love competition, right? So this is a fight I'm looking forward to. And Yakorino's already come out with a swing saying, you know, we're often imitated but can't be duplicated. So she's already come out swinging. So this is a question of marketing and messaging and see who's going to be the winner. I don't think, you know, I think Twitter's going to survive here, but threads, of course, is going to have potential upside that is remarkable.

I heard one thing that was very interesting. I mean, I would think, I mean, I understand that you have to be a member or a user of Instagram to sign up for threads. Yes. And then it's hard to quit threads if you want to because then you have to quit Instagram as well, I'm told. That can create some of the, go ahead. No, that actually creates complexities, but we all know there's been a lot of criticisms about Meadow and how it uses the technology to track its people, etc.

So that's a tough question. It's going to have to deliver. But I think, you know, look, the threads is launched and they want Twitter users, of course. and there's 400 million of those, and they all quite like the platform, although advertisers are getting a little bit jittery over what's been happening over the last few months. The advertisers are uncomfortable with some of the discourse on Twitter, right? And what is it in threads that will cause it not to have the same, sometimes hateful, often toxic discourse that has come to characterize Twitter to many people's minds?

Well, I think that's, you know, there's two kind of key things. Apart from brand building, marketing, messaging and positioning, I think we're actually seeing some positioning actually happen right now. If you look at the official statement from Threads, it talks about, you know, share text and join public conversation. So that's one side. If you look at Twitter, it's more on the harder side of saying we're the town square for public opinion. So, you know, in branding, you've got to take a position that deposition's the opposition and Threads is doing that. But let's be honest, Threads is born. from Instagram. It was the Instagram team that developed it. And there's a fluid link between Instagram and the threads, as you've said. Well, Instagram's sitting on two billion active accounts. So there's potential of hundreds of millions of potential users that can join threads. So you could even say is threads really having to chase Twitter users? Obviously, it wants to. But there's enormous upside opportunity here. I think, you know, any CEO has to say, look, what are we doing well now that's blinding us from new growth? Well, Twitter's not been doing very well. So where's the new growth? Voila, Threads. So this is really what's going to be interesting to investors,

but most importantly, advertisers looking to get hold of that huge marketing opportunity that Threads has because of the relationship with Instagram. New York Times got a look at an internal presentation that showed that the U.S. advertising dollars were down 59 percent from the beginning of April through the first week of May. And Instagram, conversely, is one of the top platforms for sponsored content, according to Leader and Maverick. So when you're looking at the very tight, constrained ad market that we're seeing right now, do you think that there's any headwind for meta launching threads right now and trying to get advertising dollars for this new platform? Well, I think the key question here is scale.

You know, can they scale it up quickly enough to make that attractive? You know, we still have 400 million users on Twitter. That's a sizable number. So it's all about scale. So there's definitely going to be interest, but the reality is going to be, well, where's your scale? So we can really start exploring the opportunity. So I think advertisers are screaming for other platforms and channels to get their message out. So this is exciting, but it doesn't have the scale right now. Let's talk a little bit about other ways that advertisers expect to get exposure through influencers, we know that advertisers are starting to shift

their legacy ad budgets to this particular area, and now the FTC has come in and updated its guidelines so that these influencers have to make it much more clear that what they're sponsoring or talking about is actually paid content. Do you think that that's going to hinder the people who are choosing advertising through influencers? Well, I think so. I think there's two things that Instagram, sorry, Instagram, threads

needs to be doing two key areas apart from the branding and the marketing. It's one is about verification. You know, how can we trust the authenticity of the celebrity endorsements and influences? That's really key. And you've just said that there about the FTC making an inquiry. But also part of their marketing message and brand building is around guidelines and policies, you know, that maintain trust in the platform. but also avoid any, as it were, misleading advertising practices. And meta, you know, has issues on that front too. But I think those are two kind of more tactical initiatives,

verification guidelines and policies, and how to make that very clear in the proposition. And just, by the way, the FTC guidelines will apply to influencers on Instagram, on Twitter, on TikTok, on Snap, and lots of other platforms that are there. Dean, nice to talk to you. Thank you. Thank you. Bed, Bath, and Beyond filed bankruptcy. It's been selling off assets, including its brand name.

So why are investors still trading the stock? We'll explain. And as we had to break, you check on the markets here. Stocks in the red off the lows of the day, but you can see the Dow industrials down a percent. You've got the S&P 500 down 8 tenths of a percent in the NASDAQ composite down. 0.88%. Took me a minute there. Three earnings.

A far away. Three or eight. There's little numbers. Meme traders looking for any sign of life they can in bed, bath, and beyond, to the point they're betting money on a near worthless stock because of the word. Are you ready for this? Teddy, here to explain that. Christina Parts on Avelace.

Hi, Christina. Hi. So, what do bedtime stories of bankrupt company and memes all have in common? The speculated connection on Reddit, GameStop Chairman Ryan Cohen. So Bed Bath and Beyond, for those that need a refresher, filed for bankruptcy in April, was delisted in May and now trades as an over-the-counter stock that a lot of people usually aren't interested in because their bonds are pretty much worthless right now,

highlighting the lack of value, especially after overstock paid over $21 million for all of Bedbath and Beyond's IP. And yet, the shares on the over-the-counter market have soared almost 300% since its delisting, which is pretty uncommon for a banker of business to see such a spike, especially when shareholders are the last to be paid in any sale. The Reddit crowd, though, has a theory involving Teddy Holdings, which filed trademark applications to be an online marketplace for everything from towels to children's bedtime stories. It's also registered as a bank in Delaware.

The Reddit crowd noted that the address for Teddy Holdings is the same address for Teddy Publishing, which is the publisher of a series of children's books written by Ryan Cohen. There's the Cohen connection. He's a prominent figure in the meme stock world, although he did cash out of Bedbath and Beyond, just last year, and you made over, what, 50, you're seeing on your screen, $58, $59 million. And now, investors or the retail crowd are hoping Teddy may step in to somehow find some value in this bankrupt retailer. I called and emailed numerous going contacts in Canada in here to no avail. But what is this telling us right now?

Rumors, as we know, can move names. Meme traders are looking for the next get rich to the moon stock, hoping to connect dots that may or may not be there. Guys? It's a fascinating tale. It sounds highly conspiratorial to me. It is, but it's enough for the retail crowd to bring attention to an over-the-counter name that we are all familiar with, that we know has filed bankruptcy that Overstock is still

interested in the actual branding of the name. But, again, they're trying to find hope in a name that is practically dead and find value and hope that, you know, the savior Ryan Cohn will come in and save it. But he cashed out last year. There is a possibility, but I'm not sure what value is left in this name. I mean, but look at it. It's like a bargain. It's like something that you might buy on a website that is not great quality.

At 30 cents a share. But you're like, well, if I get it and something happens with it, woohoo, I've hit the jackpot. And if I lose my money, well, I didn't spend that much anyway. But isn't that how meme stocks had their beginning? Yeah. Well, that point. Christina, thank you. Thanks. All righty, Exxon Mobil lower after warning that falling natural gas prices will drag second quarter profits down.

On pace not for its worst day in nearly four months, is this then an opportunity to buy a blue, blue chip name on the dip? We will trade it in three-stock lunch next. Time for today's three-stock lunch. We have some blue chip names all under pressure as the market sees big losses. First up, shares of Bank of America. They are lower. despite announcing plans to hike its dividend by two cents. Let's trade that name and more with Victoria Green, founding partner, chief investment officer at G-squared Private Well. She's also a CNBC

contributor. Let's turn first to Bank of America, which is down 15% year-to-date. Is it a bargain or something to continue to stay away from? I'm not buying them yet. I think they are a quality company. My concern is just they had set out a target for net interest income growth of 8%. And it might be a little bit harder to meet because I heard it described very well that the raw materials for banks are their deposits and the raw material costs are climbing tremendously as they've had to actually start paying on their deposits. Long gone are the days that they can hold on to everything paying 0.1% interest on their savings account. People are moving their deposits faster. So there's a rising cost to deposits. And you might see some long growth slowing. So I think that interest income growth

of 8% target might be a little high. So right now I'm not buying Bank of America. I sit on the sidelines, and it's not something I think you need to be kind of bottom feeding for today. Victoria, American Express is down by nearly 4% after a downgrade from Baird from outperformed to neutral. The firm says the risk reward is no longer attractive, but it's up 15% year to date. Would you get in? Yeah, and I actually am a buyer here of American Express. It's one of my favorite picks in the credit card space. I think they just have a more loyal customer base, and they're not just credit cards. They have a huge following in the small business landing. in the small business card.

So it's not just high net worth individuals. They've expanded in. They're capturing the millennial market. They have a lot to love in the travel market, and travel is still booming. So I see them being able to grow, and they're on pace. They're 11, 1140 EPS for 2023.

And I see them being able to achieve their targets. I'm not as concerned. Their net charge-offs and their delinquency rates are still well below pre-pendemic levels, whereas their loan growth and their lending and credit card balances are above it. So I think all of those things are a positive sign of the health of this very well-run company.

And so Amex to me is a buy in the dip. And finally, let's turn to ExxonMobil slipping after signaling that second quarter earnings will be hurt by lower natural gas prices. Where do you stand on Exxon? And refining margins. It's 2.1 billion hidden refining margins, not just lower natural gas. So for me, Exxon's a sell just because this market is tightening and they cannot get out of this commodity downturn, no matter how hard Exxon tries, those record profits that I saw a year to two years ago, especially the refining profits were record levels. just hard to hold on to it. It's likely we see more earning revisions in the second half just because they cannot continue to produce at record levels when you can't get WTI to stay above

70. And yes, natural gas prices have approved, but it's improved from like a dismal to slightly terrible. It's not like gas prices are on fire right now. So I think they're just facing an uphill battle to grow their profits. They are still going to be able to cover their dividend. They're still going to be able to do share buybacks. But it's not like they're going to see these record growth states all the last two years, so I'm worried the stock's not going to be able to hold on to 100. It might slip below it. Victoria, we're seeing the broader markets down today in reaction to the data we got earlier. Where do you think we go from here? I think you do get a little bit of a suckback. Even though July is historically a strong, strong

technical months, I look at this market and say it's just right for a pullback. We'll see as we get into earnings, but expectations are not rock bottom anymore. It's going to be a little bit harder for companies to beat these hurdles. You have a Fed that is determined to raise rates. Again, another 50 basis points. They're not accommodative yet at this time. We're still seeing liquidity sucked out. The banks, if they show slowing loan growth, that's more and more liquidity. That's not available to the average customer that's trying to, you know, repair their home. And the one thing I want to point out, today's numbers, again, came from private payrolls. This is not the same data we've seen in the households report. The household unemployment number is the

one we've seen going up. So we have this dispersion and employment data of how healthy is it really? It depends if you're talking to the households and the individual or the companies who are claiming we're growing payrolls at a record level of us. Victoria Green, appreciate so much you're joining us. Thank you. Thanks so much, guys. 72% of Americans don't feel secure about their finances, according to a new survey from bank rate. When we return, we'll reveal the ambitious salary amount they said would help change the way they feel. We'll be right back.

All right, here we are. Welcome back to Power Lunch. We have only less than four minutes to go before the end of this show and a bunch more stories you need to know. So let's get to it. July brought skyrocketing prices for reinsurance. Insurance for insurers. Rate hikes as much as 50%. That follows steep increases in January, April and June. So you might be surprised to see reinsurers stocks underperforming the broader market, barely in the green year to date. But they had a huge run-up at the end of last year. KBW. insurance analyst, Mayor Shield, says these higher rates will translate to significant property insurance right hikes. That and insurers are under pressure, of course, from consistently bad weather, hailstorms, thunderstorms, tornadoes. And on the hurricane front, we just got an updated forecast from the University of Colorado saying it's going to be much more active. So the bottom line here is look out because when the rates for reinsurance go up, your rates for property insurance are going to follow. You just nailed it. How about that's what I do? Oh, yeah. All right. Can you put a price on financial security?

Apparently so. A new bank rate survey found that working Americans say they need to earn $23,000 a year just to feel financially secure. That's the magic number. The problem, the average full-time salary in the U.S. was around $75,000 per year as of 2021. $233,000 a year makes you feel secure in most parts of the country. And it depends on where you live, too. You factor in cost of living. Tech industry has seen more than 200,000 layoffs since last year, and data shows women workers have been disproportionately affected. Analysis from the website layoffs.aI found that 45% of laid-off tech workers

from last October through June were women. Well, of course, the men far outnumber them in this sector, way more than that. We should note that layoffs.aI used a list of names to determine the percentage, so that, of course, could lead to inaccuracy and selection. I wonder whether this is a case of last in first out, in other words, that female employees didn't have the tenure that some of the males did, or is it discrimination or what? Or that they take on different like HR and marketing rules that are seen as less crucial than, say, coding, that's right.

Or coding, so forth. All right, Las Vegas is losing some of its magic as a new era of entertainment begins. The famous tigers that were part of Siegfried and Roy's Act have now left. Las Vegas and are heading to two other sanctuaries in other states. Hard Rock is the new owner of the Mirage, which is a longtime home of Siegfried and Roy. It's making way now for a planned guitar hotel. It's part of a new era that includes a new sphere. That new sphere we mentioned yesterday at the Venetian. But this last vestige, there were displays or exhibits with some of those animals. Those are now a thing of the past. Vegas is great at reinventing itself. And it

And it keeps doing it to stay ahead of market demand. It gives the customers what they want. And speaking to the markets, let's look at where the markets are, down about a percent for the Dow and about three-quarters of percent for the S&P 500 in NASDAQ. Off the lows, we'll be watching more. Thanks for watching Power Lunch.