Power Lunch - Stocks Slide To Start September 9/3/24

Episode Date: September 3, 2024

Stocks are tumbling to start a new month of trading, as technology names struggle and new economic data rekindles fears around the health of the economy. The Dow is down 1.5%, the S&P 500 is down 2% and the Nasdaq Composite is down more than 3%, putting the tech-heavy index on pace for its worst day since Aug. 5′s global market rout. We’ll tell you all you need to know today. 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 the actual host of the show. Kelly Evans, I'm Brian Sullivan. Well, September is here, and so too is the September stock swoon. At least today, stock selling off the Dow is down the SP of the NASDAQ. NASDAQ off nearly 3%. I know lots to talk about. I'm glad you're here. Welcome back.

Me too. Good to see you. The NASDAQ is the biggest decliner today down almost 3%. Fears a slow in growth, a big reason for the slide. Two readings on manufacturing this morning weaker than expected. You can see bond yields lower as a result. And so our shares of Boeing. One of the biggest drags on the Dow.

That's unrelated, perhaps. But the 8% decline is bringing them back to their lowest level in nearly two years. Wells Fargo downgrading the stock to underweight, essentially a sell by another name. Caterpillar, Goldman Sachs, oil company Chevron. Caterpillars down 4.5% Goldman down 4%. Chevron being hurt by a big drop in oil prices. You got terrible China demand. Too much oil coming out of a rock.

Two big reasons why crude getting crushed. We're just over, like a couple of cents, over 70 bucks a barrel. This despite Kelly, global risk ratcheting up all over the place. And we were just at 80. If you blink like a moment ago, almost up there. Well, we got PIP on. And I know somebody that knows something about oil as well. It's a good day.

And he's here. It's a good day to have you here. Also, check out shares of Nvidia, which are down 8.5% right now to about 109. And a big reason for the NASDAX decline. Normally on big market days like today, we bring on market strategists, analysts, asset managers to talk about what's happening and what individual investors should do now. Today, instead, we're going to ask a little bit more closely, one individual investor who we introduced you to last week, Mina Bukai. She invested 10 grand into Nvidia in 2011, held it through all the ups and downs. It's worth $3.5 million.

Not to give away too much, Mina. It's worth about $3.5 million today. We know many of you have similar stories with Nvidia or other stocks. retail investors, Brian, have been instrumental in the huge market rally. We've seen the past couple years. Minabukai is here on set with us. Welcome. Thank you.

Congratulations, by the way. Thank you so much. Can we have some money? Can we pass the hat around? I mentioned, you know, we like to talk to the people who know. You are the people who know. What do you, what? So, Invidia, I say it's down 8% today.

What do you think about? You know, I'm a long-term investor, so it doesn't bother me because I believe in the company. I believe in the CEO. So it doesn't affect me. It doesn't affect you, but it does. So I do also stock trading. If I would not be here, I would have bought some selling puts. You would have sold puts today.

Okay. What did you? Okay, Invidia, we know. Everybody loves Nvidia now. You bought it in 2011. Invidia was like, no offense to NVIDia. A low-level chip maker for video game companies was less than a dollar stock, I think. Yeah.

No one cared about NVIDIA. What did you see in it? So when I started trading the stock, I says, okay, you know what? NVIDIA just started GPU and it was like booming and I says, okay, I believe into semiconductor because my background, I'm electrical engineer. Oh, you are a while. So I says, you know what? All this internet boom and iPhone boom happening.

So semiconductor is the way to go. But I am just learning training. So I was using the company who has a least amount of, you know, dollar value. Small. So if I lose money, it is okay. And since I was believing into semiconductor, I says, okay, you know what? Even though something goes wrong, I can hold that company. And that how I...

It was a 50 cent. You paid 50 cents, I think, for the stock. Yeah, I think with the split, yeah. Even more impressive to me than buying it a 50 cents is holding... Do you still basically expose the entire position today? So I did sold something like 10% of the position a couple of weeks ago, but beside that I'm planning to hold it. You brought your beautiful family here. Did they ever say when it was that, you know, because again, this is now a 10 for one split adjustment.

It's up to 1,000. When it was it 200, 300, 500, I mean, when were they saying, you know, Mom, maybe so. No, so, the short story, I was actually buying more Nvidia stock. And what I was doing it, I would buy and sell Nvidia stock. And when the, so I was a swing trader. So whatever profit I make it from that, I'll buy other semiconductor stocks. So I had purchased Broadcom. I had purchased, RLM Research, Applied Material, Micron, AMD.

So I am a hardcore semiconductor fan. Quickly before we brought in this out, you mentioned you, oh, by the way, you were an electrical engineer. Did you stop doing that for other reasons and start trading, or what was that progression like? So when my kids born and when they were started high school, I decided, you know what, I'm going to be, I want to raise nice family and I give up my career. Wow. So I have dedicated my entire life with the kids, 100%. I would say 110%. Because my son was a baseball player and my daughter is more into performing arts.

It's two different activity. My husband was a vandal on CPA, so he was very busy. He's a CPA. So I'm just guessing you're watching tax rates. Right now, you live in Florida, so you have no income tax rate on the state level. That's great. You do have capital gains. So if things were to change, I'm not bringing politics into this, but I'm bringing politics into it.

She would have someone realized capital. I was going to say, you would, well, you're not worth $100 million yet, but I have faith. But if capital gains rates were to go up, would you look at? to sell now? You know what? I don't, I, those, all those things, I'll rely on my husband. So he keeps on telling me sell, sell, sell. He's furiously nodding over there off camera. He will tell me sell, sell, sell, and I'll say, no, I'm going to keep my original investment. I'll sell whatever I purchased it in 2015, 2017, all those things I'll sell, but I'm not going to sell it yet. It's an individual account?

No. Is it in your name? That's why I'm saying. He's going to be like, sell, you'd be like, it's my money. It is a joint account, but I think he has full faith on me. Make sure he doesn't know the password. No, he does know the password. All right, let's bring in another great voice into this conversation. That is somebody well-known.

Gungent Banerjee, lead writer for the markets live at the Wall Street Journal. She's got a new article today titled Americans are really, really bullish on stocks. Gungent, welcome. Good to see you. Why didn't you use three release? I mean, with Mina's story, when you hear stories like this, it's hard not to be bullish on equities right now. Agree. And Mina, what a run.

Congratulations. Thank you. Mina has had diamond hands, and I think a lot of individual investors have had, too, because this rally has minted millionaires left and right the number of 401k accounts at Fidelity Investments that reached $1 million, jump to a record in the second quarter. So people are taking a look at their Schwab accounts, their fidelity accounts, and they are rejoicing during this rally. And I think that gives them the resolve to hang on during days like today and maybe even by the dip. It's interesting because if you look at the investor sentiment indexes, they're sort of in line with historical average, bullish, whatever. But to your point, the amount of money, both on an individual level and across the society that people have in the stock market is quite high. And what's ironic as well is that there's huge success in all the gloom and doom kind of discussion, YouTube channels and all the rest of it.

and people are always concerned the system is going to collapse, but as if they all know, and I remember famously, I think it was one of the big shorts had said, well, no, no, I'm worried about the societal collapse, but I'm obviously long the stock market. You can't be short it. And it seems like all of society has come around to that. It's so funny.

There is such a huge gap between what people say and what they do, because when you take a look at the data, they poured money into U.S. stock funds for eight consecutive weeks through late August, which means during that August freak out, they were buying. They were smashing the buy button when in video. was down 7% when the S&P 500 was down 3%. And I think that touches on a broader theme where individuals are just more bullish on the

stock market than they have been in the past. It's more entrenched in their finances. That's the big knock on CNBC, right? I don't know if you get this, right? I saw your video at the grocery store or whatever. You're like, all you guys do is cheerlead the market. I'm like, bro, because stocks go up 77% of the time. So you don't have to be some market math whiz to know that the past,

of least resistance for equities is higher, which is, by the way, is the reason stocks exist. If they went down 77% of the time, there would be no stock market. Interestingly enough, David Zervos put out a note about this from Jeffries, going back 13 years when he was talking about the Fed put in this idea that because the Fed is the backstop, and everyone always says, we wish, what's the real clearing price we want? But because they backstop much of what happens, there's a sense that the long-term losers are nominal debt holders and the beneficiaries are those exposed to equity, those exposed to the nominal economy and all the rest of it. And I was only going to ask Mina, now that Gunjad has said, as everyone is kind of at peak exposure to the stock market, do you, with all the success you've had, you mentioned trimming positions a little bit, but what's your overall feeling about the market at this point? I think it is very uncertain, so I'm very, like, you know, I, so right now, when market goes down, long term, I'm still bullish on the market, and I think if you hold the stock for 10 years, and if you believe in the company, I don't suggest that. you know, we have to buy any stock. But if you believe in the company,

if you believe in the CEO, and something like this is an opportunity. You can, if you have it in your list ready, you don't buy entire position, but I buy probably a little bit of that. That's how I trade it in my account. Yeah. But you have to be,

you have to have a faith on the company. Of course. Well, you had faith in Nvidia, and that faith was appropriately placed. But, Mina, you could have bought Intel. And Intel is lower now than it was in 2011. Why not the market leader at the time? Was it because Nvidia was a $5 stock?

Yeah. So initially, as I told you that, you know, I started learning trading, and Nvidia was the, it was a good, CEO was good, he was amazing. So I say, you know what? This is the company I should play with it. And then there was a time frame I was not trading because of the household responsibility. But then 2015, I was like completely trader. And thanks to CNBC, I was watching all the show.

In the morning, Spock Box, in the afternoon show, closing bell, Jim Kramer, power lunch. So my kids and everybody would say, Mom, what are you doing? But that's how I was getting my information. If there are any CEO comes, anybody, I'll stop and I watch them. So that's how I get into the... And there is, you know, I was telling a little bit of a story about kind of the Fed backstopping everything. But Gunjan, there's obviously a great story to tell about innovation and stewardship of capital and every... And in some ways the big tech platforms many people think are the embodiment of how easy and great those businesses were in terms of generating cash.

And the big question is kind of what comes next? And we always wonder and there always seems to be another thing and maybe it's AI and maybe it's something totally unpredictable, but that that has just been so rewarding for so many years now. It's really interesting. And individual investors I chat with, you know, they are all in on tech. Tech behemots are still the favorite stocks to buy on dips like today. You know, I had one investor emailing me when the stock market was going crazy just a month ago saying, I'm trying to buy more Microsoft right now. People are scrambling to buy Nvidia, Microsoft, Apple, on days like today. And I don't think Mina is alone. I think many of these individuals, they do care.

more about the markets than they did just a few years ago. It's just more entrenched in their household finances. I think it was Goldman. You would know this, Gungin. Last week, I think it was Goldman that had a note out that basically said stocks go up because stocks go up and the algos are going to keep buying me. And the algorithms, hedge funds, computers. They're just going to keep buying no matter what.

And I think the public has kind of caught on to that, that when there is a dip, don't worry, the computers literally and figuratively are going to save us. And they have been. I just do worry. Broadly speaking. At some point, General, you know, if you're how many blobs have we had this, if you're Helen of Troy.

There's not an idios. The woman or the company? You know what I mean? Like, I am old enough to remember. I'm going to date myself, Mina. 1999. Nothing can go wrong. The internet was being created.

Trillions being spent on fiber optics and global crossing. MCI. WorldCom. See school. But these companies have... They still exist. These companies have profits, though.

The tech giants today are not profitless companies the way they were in 2000. I think that's a key differentiator right now. I just wonder, as we've seen in anecdotally, I mentioned this before, but I was at a fundraising meeting once on the last couple of months where they were trying to figure out how to raise money from, you know, smaller donors. And someone said, well, you've got to go to the stock holdings because that's where all the money is. And what a tell that that is, that is much, people feel like their income maybe hasn't kept up. Inflation's been high, but they have made money in the stock market. And I think your data reflects that. Awesome stuff.

And by the way, thanks for flying up and coming in. Thank you so much. Isn't it better in person than like some Zoom? Absolutely. Thank you so much for having me. And thanks for sharing your story. And Kelly is taller in real life than she appears on television. So are you, by the way.

Thank you both. Appreciate it. Meena, Mekai, and Gunjan Banerjee. Thank you. No secret tech stocks have surged this year. And for the past really years now, but financials haven't been far behind for 2024, at least. We'll drill down on three key headlines in the world of banking, when Power Lunch comes back after this.

And welcome back to Power Lunch, everybody. Hope you are having a great Tuesday, at least better than the stock market, and that probably wouldn't be too hard. Check out the S&B financial sector. Now, for the year, that's year-to-date. It's done great. It's up 20% not far behind tech.

And today, let's be optimistic, right? It's the first trading day of the month. We've got a trio of bank topics to talk about, and so finance and banking reporter Leslie Picker is here on set, starting with the intriguing story of the rise of the credit union. It is intriguing, Brian. Is how dramatic I made that? I love it, because there is this kind of under the radar evolution taking place.

If you recall, credit unions were established about 150 years ago in rural America to create community-based lending for those without traditional access to banking. Throughout the last century, credit unions have operated as nonprofits exempt from most taxes. However, recently they've scaled to the point where they're buying billions in assets from community banks, a record trend that's become controversial. Critics say credit unions tax-exempt status gives them an M&A advantage, and their scale no longer justifies the $21 billion in annual taxpayer subsidies they enjoy. There's just something wrong with what are essentially non-profit organizations buying tax paying,

commercial and profit-making organizations. And I think it's time to reevaluate the tax exemption that credit unions now have because they're no longer these self-serving or membership serving organizations. They're growing and expanding, and they're essentially commercial banks masquerading as nonprofits. However, the credit unions say their tax-exempt status allows them to charge less for loans and pay more on deposits than traditional banks. Their advocates say doing away with a tax-exempt status would have a sizable impact on GDP, jobs, and credit access. The National Credit Union Administrator, which regulates the industry, told us that regardless of

size, credit unions tend to abide by their mission. Generally, credit unions do pay more on their share deposits and they pay and they charge less on the loans that they make to consumers. I think that that's a good thing for the American consumer. Still, the M&A trend continues. Harper says he's aware of 12 more potential deals that are in the works. Of course, not all guaranteed to be approved, but still would be a remarkable upside. I think a lot of people still see it as a good option, you know, and that they, if they behave a certain way, look, if they're different profit sharing rules, I don't, I don't want.

want to take a position one way or the other, but they seem to kind of balance out the options for the banking industry more so than trying to just ape them. But maybe I'm wrong about that. No, that's what the credit union advocates would say. They'd say that because of their rates and because the tax is exempt status allows them to have a potentially more beneficial model for the consumer, it creates competitive pressure on the traditional banking system to keep their loan rates lower. Still, there's a gap usually. But to keep them lower and to pay more out on deposits as well. So they say that that competitive pressure. Now, it's about a tenth of

the amount of assets in the credit union industry versus the traditional banking industry. You know, agriculture, obviously, being a long standing. There's different... Military. Exactly. They kind of feel, you know, purpose-driven. Okay, the next one, people... With this happened, we couldn't get into the... Okay. On social media over the long weekend,

people were exploiting... We were not doing this, by the way, the check fraud part of it. People were exploiting a chase glitch to get access to thousands of dollars. We just thought it was a little weird. We went to do the the card to get to the ATM, that they were like, oh, you have to go check your phone or whatever for an access code. And I didn't know if that was related to, anyway, tell us the story.

Well, no idea what you're talking about. You can think TikTok. And just because you see something on TikTok does not mean you should try it. This is like the Tidepod challenge, but for bank fraud, essentially. In that trend that went viral on TikTok, users deposited fake checks and withdrew cash immediately exploiting what turned out to be a temporary glitch in Chase ATMs. The Chase spokesperson told CNBC, quote, we are aware of this incident.

It has been addressed, regardless of what you see online. Depositing a fraudulent check and withdrawing the funds from your account is fraud, plain and simple. Those who attempted to take advantage of the glitch were soon locked out of their accounts reporting sizable negative balances, according to the New York Post. This is no catch-me-if-you-can type of bank fraud, because many of those who did it posted about it on social media. In other words, they will most certainly be caught

as Chase partners with law enforcement on any fraud-related issue. So they have a paper trail or a social media trail. This is going to sound ridiculous. I do feel almost bad for some people who got swept up. I know it. I shouldn't say that. Why? Because I know-

These are people that had accounts? Yes. So you're committing fraud on your own bank, on your own account. Yes. Every ATM has a camera. And you just logged into your own accounts. account. But they posted about it anyway. And then you post about it. It's not even that hard to find it. It's like the tide pie. I don't understand anything. Or the thing about people stealing cars.

Like, here's how you take a Hyundai. No, it's awful. Just do these wires. And I can't imagine. I just can't imagine it. But no one cares. You know what it is? Nobody's afraid of penalties. That's what it is. No, I think they just don't. I think you get swept up and you go, oh my gosh, this look, this is, would this actually work? Can they do it? And you see if it works. And the next thing you know, you get swept up in music. You don't get swept up in bank fraud. They thought it was free. Why'd you burn that house down? I don't know I got swept up. People were like licking polls during coronavirus because it was a TikTok thing.

They were eating tidepods and now they're committing bank fraud. It is, again, just if you experienced like we did a weird extra confirmation code to access your ATM, now we know why. Speaking of J.P. Morgan, a little downgrade action. Yeah, that's right. There was a Deutsche Bank note out today. And the gist of that downgrade, according to Deutsche Bank, was that a lot of the good news has already been priced into the stock. The note flags JPMorgan's premium valuation. Take a look at that. The firm currently trades a 2.4 times tangible book compared with 1.6 times its mega bank peers. The Deutsche

Bank analysts say that the premium makes sense given the upside potential for net interest income, solid trading recovery within investment banking and solid credit. However, they say in the note that it's, quote, hard for us to see further multiple expansion from here. In the same note, Deutsche Bank upgraded Wells Fargo and Bank. Bank of America each to a buy. For Wells, the case is for investors to buy in the recent weakness of that stock, which has been due to lowered net interest income outlook and uncertainty surrounding the firm's regulatory asset cap. However, the analysts say that positive themes, including Wells Fargo's investments in trading, investment banking, and credit cards should

provide a boost in the future. As for Bank of America, that's also a valuation play with Deutsche Bank telling investors to capitalize on the pressure on BAC from Berkshire Hathaway's, Selling of those shares. Love a good. Kind of a technical arbitrage. Love that. Potential arbitrage. Thank you very much.

Leslie Picker. We appreciate it. September trading off on the wrong foot. Our trader has a defensive play that's also an under the radar. That's also, I should say, under the radar. Market Navigator next. All right. I hope you're having a great Tuesday because the market certainly is not.

You know, September, traditionally the worst month of the year for the market. We're kind of off that way. It's one day, okay, but the NASDAQ is down 540. 7 points. 3%. This is one of the worst days of the year for big tech. I'm not exactly sure if it's top three. I'm sure it's close. We'll know by the end of the day. Either way, not a good day. S&P and Dow also down Dow is quote only. And if you're on the radio, I'm doing air quotes with my hands down 1.3%. So as we start off, what is seasonally a pretty tough month, we went looking for kind of a more defensive name. And our Kansas,

candidate today might help you clean up your portfolio with both strong fundamentals and strong technicals blended together. Todd Gordon is founder of Inside Edge Capital, CNBC Pro contributor. You saw the puns, clean up, blend Shark Ninja. Brian, that was a wonderful intro. Thanks for having me, guys. That was well done. Yeah, so this is a name that we just added to our portfolio. And I think it'll Collectively, if we talk about the reasons that maybe perhaps we're reentering the recession discussion, you know, it's easy to write off, obviously, tech, but consumer discretioner. And if you look under the hood, there are some good names.

Shark Ninja is a, as you said, it's a household appliance company that run two different divisions. Ninja and Shark. So Ninja is like food prep, blenders, ice cream makers. My wife has one. She loves it making protein shakes for the kids. And then Shark is vacuum, hair, dry. players competing against a company, English-based company, Dyson, which is very expensive. So, you know, they have aggressive growth plans. They partnered with Dave Beckham as a brand ambassador.

They just beat Q2 earnings, Brian. They crushed it. They broke through a big old two-and-a-half-month range, doesn't care about the broader market volatility we saw in August. They beat expectations by 19% on EPS. They beat on revenue. They grew by $4.5%. They grew by $4. 50% quarter over quarter on those earnings. They grew revenues, 31% from the same quarter last year. They're getting upgrades across the board. The breakout was about 92 and a half on the chart. We broke out on good volume and this is after earnings. So if we can hold the 92 and a half level, I'd like to increase the allocation of my portfolio. It's only 1%. I added it right at the end of August. I'd like to continue going with it. But look under the hood of the consumer discretionary names.

It's not just a large-cap consumer discretionary that's keeping this sector underweight. There are some strong names in there that might counter the recession argument. Yeah, and to your point, I mean, Dyson, an amazing company, premium priced. Not saying there's a knock. I'm saying it's a compliment to Dyson. Shark Ninja makes the shark. You know, it's the handheld vacuum cleaner, among other things. It sounds like you and your wife like the price point, which is not the Dyson price point.

Listen, I don't want a bad Mount Dyson, but I kind of had to buy two or three. My wife broke. They're a premium product, but they broke on me. You know, it SharkDinja is interesting. They have a very aggressive organic growth strategy. They're really permeating the social media networks. They've done this organically. You know, I'm not trying to talk this company up like this is an absolute home run,

but I think in a bumpy tape, counter to the recession discussion that so many are having, I mean, this company is right in the highs and if we can get some stability in the market, I think we can, I think we might be able to see higher prices here. 13 billion market cap, Needham, Massachusetts. It's got to be one of the top five best named companies. I mean, if there was a shark that was also a ninja, that would be sweet. Todd Gordon, thank you. Thanks, Brian.

All right, on deck. We are going to dig into crude oil because risk ratcheting up in many parts of the world, but oil keeps going down. We're going to find out why next. All right, welcome back, everybody. Stocks are not the only thing down today. Oil is also falling, and it's really, for a lot of reasons. I mean, let's dive into it.

Pippa Stevens here. Oil down 4%. Yeah, we're about to get under $70. The low today was $70.13. So there are a number of things driving this, but primarily today it's all about China, what Bob Yeager called a troubling trifecta of data out of China. So first we had weak housing numbers, not good for oil demand.

Then we had the passenger car vehicle sales, and it shows growing momentum in both EVs and hybrids. That comes after in July, the new energy vehicles are more than 50% of total sales for the first time. In China. Yes. Definitely not here. No, no, no, definitely not here. You know, my view. Yeah, and they have those subsidies in China, of course, but they are gaining on ice vehicles.

And then, of course, probably most importantly, is the weak manufacturing data for August at a six-month low and contracting faster than July. And so there's really not a lot to like here in the market. The summer driving season is now over. We have OPEC plus returning those barrels starting next month. And so really a complete lack of bullish catalysts. We'll see if they return those barrels. We'll see. They got a big meeting December 1st.

We'll be there. But you've also got a lot of other stuff. You know, I don't want to get into the weeds. Libya's got these issues. Iraq just got sort of reprimanded by OPEC for overproducing. Wow. So it's kind of this toxic combo of like slowing down in China. Their economy...

Plus supply leakage. I don't think we call it a disaster, but China is not good. Yeah, and for a long time now. And more supply. Yeah, exactly. And then, you know, we saw that brief, you know, fears around Libyan production, but now Bloomberg is reporting that a deal is imminent to bring those, you know, 1.2 million barrels per day back. And so it just seems like if you're, if there's no obvious upside catalyst here, people are on the sidelines and not willing to get in this trade. I think the upside catalyst would be, if there was one, would be, does OPEC change its

current stance. They've done it before. And remember, the Saudis are kind of doing their own cuts along with Russia outside of what OPEC is doing. Yeah. So there is, I mean, the Saudis have free rein to change their mind. And I think what's important there is are they going to change from a price perspective to a market share perspective? And if they decide to go, you know, we want to keep our market share because, of course, they took almost six million barrels per day off the market. And then that, the U.S., Guyana, Brazil all came in and filled that. And so they had, they did see some of their market share. So if they decide that's more important, then those barrels could come back.

But if they say price is more important, then we'll see. I think that's well said. I think that His Royal Highness should come on the show. Let's do it. We'll ask him directly. Tip of thanks. Thank you. Time for today's three-stock lunch.

Here with our trades is CNBC contributor, Michael Farr, chief market strategist with High Tower Advisors. Michael, it's great to see you again. Let's start with the stock we haven't gotten to yet, despite a huge drop today that's weighing on the Dow, and it's Boeing. Down 8%. Biggest drop in almost two years,

all on a downgrade from Wells Fargo. They're blaming limited growth prospects, cash flow concerns. What do you do with this beleaguered name? You know, Kelly, I think 100 years from now, they're going to be studying Boeing on how not to run a company, and please don't let this happen to you. I mean, you talk about a confluence of really bad luck and bad decisions on the part of management,

and the stock is dropping down $100 a share from $260 to $160, more or less, since the beginning of the year this year. It's been a disaster, and it doesn't look like with Starliner and other things that they're getting a second win. Kelly Ortberg, with his engineering background and did a good job at Rockwell Collins, might be the guy who can turn it around, but it's a turnaround. And, geez, if you can screw up a duopoly, you've got big problems.

I'm staying away from the stock. I have stayed away from this stock for years. The five-year return is horrible in this stock, so I'd continue to sell it. go put your money somewhere where it can go up sometimes soon. Well, maybe that's Micron because Michael, investors losing money in Micron again today. Stocks near against lows of the year. It was $144 stock earlier this year. It's back to 88.

What are we doing with MU? It's getting there, Brian. It's really getting there. It's getting killed with all of the chips. It's getting killed with the tech. I mean, we're seeing all of them kind of get crushed today, NASDAQ down so much. Micron is so deeply cyclical, I can't buy it because it's a buy-sell stock. You've got to buy this stock with an idea that you're going to sell it at the right time.

$100 billion in market cap, 10 times earnings. The numbers aren't awful, okay? You could be okay to trade it after the sell-off, but it's not one I don't think that suits a portfolio of a long-term investor and not a conservative investor. All right, not for it. So then what about Redfin, Michael? This one is not one that comes up a lot, but we have this upgrade from B. Riley. It's up half a percent today. They're betting on growth and profitability in a shifting market. And, you know, I'm curious for your thoughts on Redfin, but also what you think is going on with the housing market. And all of the housing kind of ETF stock are trading poorly today.

Well, they are. They're following the whole market down. You know, I think, Kelly, if you look at mortgage rates historically, they trade about 185 to 190 basis points over the 10-year, over the long. long term. So maybe if the 10-year Treasury stays where it is, you get to five and three quarters. I think people are still holding out unrealistically for a return to those 3% mortgage rates. I don't see that happening. I think people are holding onto their 3 and 4% mortgages and they don't want to sell and they don't want to trade. So we've got some pressure on that market. Redfin is a really cool idea. Really cool idea. It is the kind of no-load index fund, A cheaper approach to real estate and retail real estate, residential real estate, may work.

But they don't have earnings until 2028. So that's a no for me. Wow. If you wanted to speculate with it. I know. No worry. I mean, they're not making money. They're losing money still.

You think it's going to be four years? You've got to get people to change the paradigm. Is the company still saying it's going to be four years? They've been around for a while. Yeah, no, it is. And that's according to facts. So that's the consensus by analysts. there that cover the stock saying it's going to be 2028 before they have a profit.

That's hard to buy. I mean, maybe, you know, you get a big growth company and a great spurt and you can make big money by taking big risk. I like making slow conservative money. I'll get rich the old-fashioned way and let my money just kind of accumulate and grow in the stock market, not trade it too much and not pay too much in taxes. I think every one of the names today is kind of going to be a trade and going to be a long slog. All right. Got to correct you, Michael. Making money the old-fashioned way is inheriting it. Yeah, but I've already screwed that one up.

I'm still hoping for that great uncle, buddy. I'm waiting to find out that he's out there somewhere. When he sells the B&O Railroad to those three hotels, he owns on Baltic, you're going to be just fine. You'll get his monocle collection. Michael Farr, thank you. Crossing my fingers. There we go. All right, let's get over to Bertha Coombs.

She is a CNBC News update for them. Hi, Brian. The State Department says the push for a ceasefire agreement in Gaza is not over, and the U.S. will continue to engage with regional partners to finalize a deal. The pressure to reach a deal has only heightened with protests breaking out in Israel after the bodies of six hostages were recovered from a tunnel in Gaza over the weekend, including the remains of Israeli-American Hirsch-Goldberg, Poland. At least 12 people died after a boat carrying dozens of migrants capsized today in the English Channel. rescue operations are underway to find two people who are still missing. The UK says more than 2,000 people have arrived in Britain on small boats over the past week

as the government struggles to tackle illegal immigration. And a World Health Organization review of 63 studies finds that there is no link between cell phone use and brain cancer. The panel of experts looked into whether the exposure to radio frequencies commonly used by phones should lead to the disease, and they found it did not increase the risk, even with prolonged use of 10 years or more. Of course, these days, Brian,

I don't think anybody puts a phone to their ear anymore. Everybody has pods. True. Only while driving, Bertha. Only while... You see that on the turnpike. Oof. You see this, too, people watching...

I see that. I see that. While driving, watching. Oh, that's not a good sign. No. It's going to be a worse problem than... Yeah. Bertha, thank you very much.

All right. Disney yanking ESPN stations off of DirecTV. It's all over a fight over their contract, leaving millions of viewers in the darkest college football and NFL football kick off on Thursday. We'll get the latest on this big money media fight when Power Lunch return. All right, welcome back to Power Lunch. Shares of Disney are a little bit lower today. By the way, the entire market is down today.

But Disney is also in a dispute with DirecTV, pulling its channels from DirecTV, preventing customers of DirecTV from watching college football. And tonight, maybe the finale of The Bachelorette. Julia I know. Julia Borsson has been following the story and spoke earlier to the head of ESPN. Julia. Well, Brian, in the middle of the U.S. open ahead of Sunday nights college football game. And before the NFL season opener, Disney pulled us ABC stations, ESPN, and other networks from DirecTV's more than 11 million satellite subscribers on Sunday.

Now, the contract dispute between Disney and DirecTV speaks to Disney's growing focused on streaming amid cord cutting. That cord cutting is prompting distributors, including DirecTV, to look to offer smaller and cheaper bundles to their customers. Direct TV says, quote, Disney is again taking an anti-consumer approach, demanding that customers from DirecTV and other TV distributors be forced to pay for channels they don't watch. ESPN chairperson Jimmy Petaro telling me that they have been flexible and what? direct TV says is flat out false we never want to blackout it's not good for either side it's not good for the customer of course we did everything we could we worked very hard to reach agreement we were unable to get there and we were unable to get there because direct tv has refused to acknowledge or recognize the value of our content with the monday night football and esp and less

in a week away, the pressure is on both sides to get this deal done. So the real question is whether DirecTV ends up adopting a deal similar to what Charter and Disney agreed to last year. That incorporates access to streaming services for Charter's customers. Back over to you. I mean, listen, there are the interesting, many angles about this, Julia, which are interesting, but the fact that the DirecTV people had been through this before, that the way the companies are accusing each other of playing hardball. And the net outcome, which is probably, I mean, does it just push people towards the streaming product? Like everyone loses.

Well, but does Disney lose? If people go, well, you know what, maybe it's time to just jump for that bundle or what have you and not have to deal with this, you know, the drama of the distribution, Julia. Well, look, I think right now, the real question here is where else would customers go? The longer this drags out, the more likely it is that DirecTV's customers look for other options. The live sports this time of year are really must-see. I mean, that's really what's driving this negotiation right now. So I think that's the key thing to watch here. And the fact that there are skinnier bundle options, whether it's Hulu with Live TV or YouTube TV, there are skinnier streaming options.

And then there's this also question of sports, right? So venue, which is the streaming sports bundle that ESPN was meant to be part of, it was supposed to launch this year. But it is not launching this year because of that legal battle. But there is an ESPN direct-to-consumer service. The ESPN flagship is what they're calling it so far. And that's set to launch a year from now. So a year from now, there will be even more options for cord cutters. No, and it seems every time I turn around,

someone's mentioning some new cheap streaming bundle that's out there. And I'd love to know. One seems to be more an advertising product. Anyway, Julia, thanks. We appreciate it. We'll see how that fight drags on. As we had to break a quick check on the markets with the major averages on pace for their worst day in about a month since August 5th.

NASDAQ's down 3%. We'll be right back. Welcome back. We see the NASDAQ down 3% today under pressure as we see all the major averages, but the NASDA in particular, chips including Nvidia are down sharply. InVIDIA was down about 7% last check. And Alphabet also down sharply, the worst of the mega caps today down three and a half. Let's bring in Deirdja Bosa for more. Deirda, what can you tell us? Well, the stock is underperforming today, Kelly.

But zoom out and you can really see that it has been a laggard for months, It's not on 4% today on the session. That's a lot for a company of this size. Over the last three months, so Alphabet shares lower than 9%. The rest of the Magnificent 7 have fared a lot better. We like to point out valuations as well, and here Google is also coming up short, way behind the other Meg 7. The catalyst for today's move was a Morgan Stanley note that lowered its target on Alphabet

to $190 from 205. In it, they look at different remedy scenarios in the DOJ Google ruling, and they conclude that long-term uncertainty will keep the multiple lower and range bound in the 17 to 20 times earning band. That said, the regulatory pressure, Kelly, that is only set to increase in the weeks ahead. Tomorrow, Google and the DOJ must submit a proposed schedule for those remedy proceedings and then appear for a status conference. Early next week, a second DOJ lawsuit is set to begin.

Now, the most extreme scenario, a breakup of Google's business, that isn't seen as the street as likely, but investors, they're certainly getting jittery over the consideration, the considerable time and resources that must be spent to fight these battles. And that's part of the reason you're seeing the stock down so much today. Wow. And, you know, is it going to be overtaken by AI, right? Deirdre, you and I talked about it. Where's the best restaurant near me?

Don't need Google. Or will it be thrown off the AI race, right? This is the most important platform change, the existential question for Google search. I mean, that is certainly factoring into, and that's what investors are fearful of. Speaking of fearful, Deirdre, Deirdre, thank you very much. Dow is now down more than six. hundred point. Not a good day. It's not horrible. I mean, it's one and a half percent NASDAX down three, but it's not a great start for September. Not a great

omen and we get big jobs report on Friday. Right. I'll see you tomorrow. Thank you for being here.