Power Lunch - Stocks too cheap to ignore, Bitcoin hits a key support level & the shifting consumer 5/20/22

Episode Date: May 20, 2022

This week’s selloff is creating opportunity for investors and there are some stocks too cheap to ignore. Our market watcher has a list of names. Plus, bitcoin falls back below $30k and nears a key support level. And, is consumer spending near a peak? We have real time economic data from Mastercard. Hosted by Simplecast, an AdsWizz company. See https://pcm.adswizz.com for information about our collection and use of personal data for advertising.

Welcome everybody to Power Lunch. I'm Tyler Matheson. The S&P now 20% off its all-time high. You know what that means. It means that technically the S&P is in a, quote, bare market. Now, as stocks dropped sharply in afternoon trading, we've got our eyes on them. The recent selling so relentless that some stocks are trading like they're going out of business. But are they so beaten down that they're actually good long-term buys? These are some big names that you're going to want to hear about. Plus is the consumer starting to crack. Well, pen-up demand has led to a surge in spending, but are there signs of a peak?

We have real-time data for MasterCard. Kelly, later this hour. Tyler, thanks. Hi, everybody. Stocks are near session lows, but off the worst levels that we saw about an hour ago when the Dow was down more than 600 points. Right now, a 1.3% decline 420. S&Ps down 61. The NASDAQ's still the worst performer, down a little more than 2%.

And for the Dow, this would be its first eight-week losing streak since 19. 23. The S&P, as Tyler mentioned, today, ticking officially into that bare market territory, down 20% from the intraday highs in early January. The NASDAQ is back to November of 2020 levels. And Apple has been drifting lower all session. Many ways continues to be the tell of the market, down 2.4% right now, down about 27% from its highs. The semiconductor stocks, also some of the worst performers again in the NASDAQ 100, AMD, AMAT, which had earnings, Nvidia, all down about 7%. brought calm down 4%. And Ross stores the worst performing stock in the S&P

after that shocking revenue decline, decline in sales, soft guidance last night. This was the name after T.J. Max, investors were hoping would do much better than what they reported last night, a 24% drop for Ross today, Tyler. All right, Kelly, this week's sell-off has certainly been dramatic and painful

for many investors, but it's also created an opportunity. And our next guest says some companies are trading like they are going out of business, and it is a great time to pick them up at a discount. Joining us now is Keith Fitzgerald, principal at the Fitzgerald Group. Keith, welcome. Good to have you with us. Thank you very much. It's great to be here. You cite a couple of the stocks that are certainly household names.

They are in an awful lot of portfolios. They are former darlings, all three of them that are off 22, 44, 26 percent year-to-date. Let's start with Apple and why you think. the market has kind of got it wrong on Apple? Well, I do think they have it wrong on Apple. You know, you don't go to a store and have a 50% more sale. You go to a store and have a 50% less sale. You look for companies with great management,

products changing the world, and the pricing power to protect it. So people are changing their habits, Tyler, but they're not giving away their iPhones. They're not walking away from Apple products. If anything, that business is still firing at 34, 40, 50% growth in most of the business segments. So I submit, if you've got a long-term view,

This is a company that in five years or even 10 years out, you are going to kick yourself if you don't own, even if you have to pay for it today and even if there's more selling ahead. The second one was one of the darlings of the last year, the last couple of years. You know, a lot of people have you say, if I had only one stock to buy, it would be Nvidia. Well, now that stock is down 44% year to date. Story is similar here. You know, chips aren't going anywhere. where big data is the greatest single investing trend of our lifetime. Every business from your car body shop to your retailer to your fast food thing,

even your simple basic small businesses are adopting technology and adapting to it. So any business that doesn't have it is going to pay a terrible price. I submit these guys power, that entire movement, and it's time to buy the haystack, not the needle. And Costco is the last one down 26 or so percent year to date. I still go to Costco and it's still crowded. Well, that's the thing. If you do an old-fashioned parking lot counting, you know, I used to have to do this when I first came into the business, we would literally go to the shopping mall or to the stores, count the cars in the parking lot.

If you look around the town, you look around the cities, you live in, Costco's parking lots are still full. They've got an absolute bottom-line desire to help the consumer make every dollar go farther. The private label brands are just screaming off the shelves. I don't think you can find a better play like this, again, even if there's more selling ahead. We're looking at potentially the first eight-week losing streak for the Dow since the 1920s. We can throw out all kinds of statistics like this and other things that will curl your hair. What caused this to happen? Who's to blame if there is blame to be apportioned? Well, I think there's a couple things happening. This is a massive de-leveraging.

This is clearly falling right into the Fed's lap. They waited too long. The transitory call is going to go down as one of the worst financial calls in recorded history when the dust settles. I think we're going to be studying it for years. How did the Fed get so much wrong? And then Wall Street, of course, is preying on everybody else. They have got leverage up to their eyeballs. They're simply unloading that in the face of rising rates.

And finally, we've got a bureaucratic bungling. And I'm not going to be politically. This is not a party problem. This is a leadership problem from all directions. We have a group of leaders in the House, the Congress, the Senate, even in the White House, who I submit respectfully, don't fundamentally understand economics. So we have the very definition of inflation in a perfect witch's brew of a storm in front of us. Is this a partisan issue or just leadership as a group?

I want to be clear for the viewer. Absolutely. I don't do politics. I do money. My job is not to take sides. I don't have the luxury of doing that. I have to figure out how to navigate this regardless of who's in power. This is not a partisan issue.

I'm not going to go left or right. This is a leadership issue. It's an American issue. Millions of families are hurting and they desperately need to help. I would expect Washington to gather together, put all their differences aside and sit down, say, what is it going to take to fix this and really take some concrete steps that are not politically driven for once in our lifetime? Yeah. I wish I could say I expect that to happen.

Don't, but one can hope. Keith Fitzgerald, thank you. Thank you, Tyler. So how does this sell-off compare to other sharp declines we've been through? Joining us now, longtime market watcher Ron Insana. He's a CNBC analyst and commentator and a senior advisor to Schroeder's North America. All right, Ron, what is this, what isn't it, and what should investors do? It's a fair market.

Let's just put that one to rest right away. It's the result of the Federal Reserve raising interest rates. It's the result of the pandemic, the war in Ukraine, all the type of. of things we've been talking about Kelly since January that were possibilities that could occur and cause disturbances in the equity markets. It's not Japan in the 1980s. It's not the 1970s. This is a different piece for which we have no analog. The only thing we know, as long as the Fed's raising interest rates, it's going to be very hard for the stock market to put together a sustained bull market rally. So that's what this is, which is to say, you know,

It's the Fed tightening and draining liquidity out of the system. And here we are. What is it not? Well, you know, I've heard folks on our area earlier in the week compared this to Japan, which was a structurally very different market and had very different inputs when it had its bubble that lasted through the end of 1989. 1970s, we saw inflation take 10 years to reach 13 percent. And we've talked about this before, going off the dollar off the gold standard in 71, the Arab oil embargo, the Iranian hostage crisis, policy mistakes that occur over.

a 10-year period. This is just not the same type of issue. To me, again, and we've been talking about this, and we've slightly disagreed about this over the course of the last several months, we're not for the pandemic and the war in Ukraine. We wouldn't be having this experience, and the Fed wouldn't be, as some people claim, behind the curve. They're not. And I think any calls for even more draconian action by the Fed would only further exacerbate, not just downside in the equity markets, but would likely throw us into recession. Let me go back to the previous guest's feeling that the description of inflation last year as transitory, as a short-lived phenomenon, will go down in history as one of the worst Fed calls ever. Do you agree with that?

I mean, we cannot dispute now that inflation came on quick, I think quicker than the Fed thought, and it came on hot, a lot hotter. than it thought. And now it's lasted a lot longer than we thought. And so the Fed is doing what feds do when they get in this kind of bind and raising interest rates. But the Fed wasn't the only entity flushing money into the system. Now, it's not only that, Tyler, but I mean, you know, it's the revisionist history here, you know, kind of boggles my mind in the sense that we're on the fifth wave of the pandemic in the United States, obviously with a lesser, degree of severity than prior pandemic waves, but China's still locked down. The war in Ukraine, while maybe you were able to see it coming, has exacerbated disruptions in the food and energy

supply globally. So these are factors that are well beyond the Fed's control. We've talked about this now for many months, that whether the Fed saw the war in Ukraine coming, which it probably didn't, certainly not from a policy perspective, whether it thought China would lock down and go to a zero COVID policy that would completely and further disrupt supply chains. Again, probably at the time that we were debating this wasn't really in the card. So I mean, I think it's really easy to beat up on the Fed for keeping policy easy for too long. But I think the factors going into this inflation are so much different than in prior periods that the second guessing, the Monday morning quarterbacking, I think, is ill-conceived. So let me jump in here, Ron, because all of that would be well and good

if they hadn't expanded their balance sheet by $5 trillion. Yeah, I mean, look, there's no doubt, Kelly, that they probably didn't need to do some of the things that they did. But remember the panic at the very depths of the pandemic where the Fed decided not only to use the tools that they used during the great financial prices, but go well beyond that because credit markets were seizing up the stock market fell 34%. In 21 trading days, we were sheltering in place, working from home, going nowhere. I don't think there was anyone who could accurately have assessed what the potential for economic damage was, both in the short run and in the long run. So now we're unwinding this process, and we still have these other

problems, extant, which would include the war in Ukraine and the continued lockdown in China. Once those start to ease, if we get a break on inflation, the Fed might be able to dial it back. That would be good for the stock market, of course. We'll see where the economy takes. Everybody, by the way, we respect to the economy, is looking at today's data, the wrong data to look at. I think you're absolutely correct. lot of imponderables that have come to pass here. China shutting down yet again is another one. The war in Ukraine and the disruptions there from is another one. I'll throw another one on the table, and that is that the Fed is made up of policymakers. What are policymakers? They are human

beings. They remember experiences from their past. What happened the last time the Fed tried to raise interest rates in October, September of 2018? The markets had a hissing. fit. I almost said something bad there. Had a hissy fit. And politicians, oh, I'm getting so tempted here. It's cable, man. But you know what happened, that politicians

whacked him. And so I think that that human nature played in here too, and that Mr. Powell and his crew didn't want to raise interest rates, because the last time they did, they got their ass kicked. And yes and no. I mean, on the one hand, I would agree with you that there's probably a political dimension here. On the other hand, the Fed is now going well out of its way to prove that it's

apolitical and will raise interest rates as much as is necessary in its view to reinflation out of the system, irrespective of recession risk or some sort of, and I don't think this is imminent, by the way, systemic risk in financial markets. We've seen a ton of de leveraging already, so I don't think we're at a point where, you know, the next leg down is going to topple some major institution. You know, yeah, hedge funds going out of business and things like that happen during periods like this. But, but, you know, I would, I would argue that the Fed may now have shifted its mindset to exactly the opposite of what you described. And it's, and it's, you know, everything be damned, every one be damned. We're going to do this until inflation's gone,

irrespective of, of the economic and market consequences. Well, I don't, I don't doubt that at all. And I'm with you there. I think they have turned a very abrupt and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, I don't doubt that. resolute 180, but I'm saying why did they wait as long as they did to turn off the spigot of quantitative easing and of raising interest rates? When you started to see late last year, early this year, real signs of not transitory, but more enduring and hotter inflation than I think they expected. But be that as it may, they told me to wrap before I get into trouble. And I'm going to save Kelly and all of us here.

I want you to keep going. Yeah, so I don't have to go down with the ship either. That's right. Don't do that, man. All right. Feel good, Ron. See you, man. Nice.

Be well. All right, you too. Coming up, more subprime borrowers are falling behind on payment. It's not housing this time, but it is car loans. Surprise, surprise, surprise. Credit cards. So does this point to growing consumer stress plus stocks that may be too cheap to ignore? Disney and I always want us to look.

call it Dr. Horton. It's D.R. Horton, down about 40% from their highs. Darden off 30%. Are they goodbyes for the long term? Find out when Power Lunch continues. Welcome back to Power Lunch. I'm Christina Parts and Evelas. We want to get a check on shares of Tesla, which are among the worst performers in the S&P 500 today. Today's move is capping off a brutal week for Tesla, which is on track for its worst weekly decline since 2020. You can see the stock is down over 9%. Tesla is also no longer the the top stock in Kathy Woods' flagship ARC ETF either. May is also on pace to be its worst month for Tesla, down roughly 25% so far.

So from its peak in November, Tyler, the stock has lost more than half a trillion dollars in market cap. Pucket lit, right? My goodness. Christina, thank you very much. All right, let's move on now. Subprime borrowers are missing loan payments. It's a headline reminiscent of the housing crisis, a decade and a half. for so ago. But this time the missed payments are on credit cards, personal loans, car loans,

according to Equifax. Subprime car loan delinquencies hit a record in February with 8.8% of subprime accounts behind on payments by at least 60 days. What does this say about the lending environment and the consumer? Let's bring in our friend Greg McBride, senior vice president and chief financial analyst at bankrate.com. Greg, welcome. Good to have you with us. Let's let's sliver this out. I want to focus on car loans, and we're talking here about subprime car loan buyers. That's people with below sort of qualifying credit, high interest rate loans, and so forth. What percentage of the auto loan market do you know is made up of these subprime buyers? It fluctuates, and the thing is credit got a little bit loose here the past couple of years, Tyler.

And so you know, you saw more and more of these subprime loans being made. Still a very small share of the overall auto loan market. But I think the stress you're seeing is indicative of the fact that $600 a month car payment is a $600 a month car payment. There's no give there. So when budgets are tight, that's one that we're seeing increasingly becoming a casualty. Car prices went up. The used car prices went up. Hence the loans went up.

As we look back and we remember the, subprime mortgage market and the cracks in the mortgage securitization market, it did not take high default rates there to cause a systemic crack in the banking business. Is there that possibility here in the auto loan market and the day and a danger that there are going to be auto lenders, people who have auto loans who are going to find themselves underwater? Well, on the latter part, the being underwater borrowers that, yes, I think that's a likelihood given those inflated prices that we had seen. And the fact that a lot of borrowers, they may roll over negative equity or they don't have much in the way of a down payment. And so as the vehicle depreciates, those values may have been inflated.

But that doesn't change the rate at which they depreciate. So, yes, I do think we will see. In other words, if they were to sell that car tomorrow, they would not be able to pay off the balance on their loan. I think for a lot of borrowers, that's exactly right. Particularly if they bought within the last year or two when those values had been pushed up and were arguably inflated. You heard the stories about people could sell their used car for more than they paid for. Well, someone's buying it. And I think those are most at risk.

So who's going to be left holding the bag on people who can't pay their car loans? Who are the owners of those securitized products? Is it Wall Street? Yeah, Kelly. the, I mean, first thing is, you know, the auto loan market is much, much, much smaller than what we see in the mortgage market and the securitization in the auto loan market, much, much smaller than what we see in the mortgage market. So I don't want to draw corollaries there, you know, but subprime is the first place where credit loosens and an expand, last place where credit

loosens in expansion, but it's the first place credit tightens when the economy starts to slow and you start to see, you know, these increasing delinquencies. And I think a lot of those investors that might otherwise be buying those asset-backed securities, they're going to start to command higher yields and then before you know it, you have higher credit. Do you know, generally speaking, who those investors are? Are they, you know, hedge funds, real money? Are they banks? Are they auto companies, other kinds of financial institutions? It's a little bit of all of the above, but, you know, mostly the asset back securities, you know, really being bought by, you know, a lot of hedge funds, for example, that we're pursuing the higher rates of return. You don't see banks

dumping into that much. I'm sure we're going to find out more if these levels continue. Greg, for now, we'll leave it there. Thanks so much today. Thank you. Greg McBride. Coming up, retail unquestionably, the big story of the week with Walmart and Target, also warning about the consumer. Those stocks got hit hard. We'll look at the damage done to ETFs in that space. But there was a bright spot this week, despite all the selling, solar stocks didn't just hold up. They turned in strong gains. The tan ETF up 7%. More details coming. up. All right, folks, welcome back to Power Lunch. Time now for our weekly ETF tracker. This week, we look at consumer ETFs and whether it's the staples or discretionary items. We look at those

combined ETFs in this group seeing $440 million of withdrawals in the week that ended yesterday. Now, the 20 worst performing major ETFs this week? A retail and consumer-related. The earnings reports from Walmart and Target really accelerating the declines in those sales. sectors, both companies are concerned about inflation, a possibility of higher prices, margins, consumers cutting back on spending, squeezing margins. Now, let's look at the moves on some specific ETFs. The sector spider consumer staples one, it is down about 8 and 8 tenths percent right now. The I shares U.S. Consumer Staples one down almost 7 percent. Vanguard's consumer ETF, one week change, down nearly 10%. And there you see, Invesco's S&P 500 equal weight

consumer one down. 9%. These data come from our partners that track insight. More information available on the FT. Wilshire ETF hub. Let's go now to Frank Holland for a news update. Hey there, Tyler. Here's your CNBC news update for this hour. A union is warning of potential labor disputes that could disrupt the Memorial Day weekend. Mbvreys. beyond for Atlantic City if the casinos don't agree to new contracts by a May 31st deadline. The resort's main union for casino workers is now in the middle of contract negotiations with the nine Atlantic City caninos and is seeking, quote, significant wage increases in the upcoming contracts to help its members recover from the financial harm caused by the pandemic.

Elon Musk met with Brazil's president, Jarre Bolsonaro earlier today to discuss connectivity and other projects in the Amazon rainforest. wars. Bolsonaro said he hoped the U.S. billionaire would show the world during a visit of Brazil how the country protects the Amazon. He also said Musk proposed takeover of Twitter was a breath of hope. And in honor of what would have been Christopher Wallace, better known as notorious BIG and Biggie Small's 50th birthday, New York City will pay tribute to the legendary rapper. The MTA has announced that a metro card vending machines, that all metro card vending machines at select subway stations will be loaded with limited edition cards honoring the late rapper. Wallace grew up in

central Brooklyn. His life was tragically cut short at the age of 24 and a still unsolved murder. Now back over to CNBC's Big Papa. Thank you very much, Frank Holland. Ahead on Power Lunch, the spending shift. New data from MasterCard shows that consumers are looking to buy trips rather than t-shirts, experiences rather than stuff. But will that trend continue or will inflation, Kelly, send Americans back to the basics? Plus, speaking of buying, we've got a list of stocks that,

may be just too cheap not to own. A huge price to earnings discount, beaten up, growing earnings very well liked by analysts, the names and the trades ahead. We're back in two with the Dow down 516 points here on Power Lunch. Welcome back, everybody. 90 minutes left in the trading day. So far looks like we bottomed around 1 p.m. Eastern time, but anything could happen in the next hour and a half. Let's get caught up across stocks, bonds, commodities, and the shifting consumer. and we will start with Bob Bassani, Bob, with the markets looking to close out a pretty bad stretch of weekly declines here.

Yeah, unfortunately, it's the tech sector that's getting hit again today. I just want to point out that the lows here essentially for advanced micro and Nvidia, so big cap semiconductors a week. Apple and Microsoft are at their lowest level since June of last year. These are not 52-week lows,

but effectively Apple's 25, 26% off of its recent high. So if you go by that 20%, percent rule, those are bare markets for two of the big cap tech stocks that we're looking at. I've told people to watch the two sectors that are keep holding up well, and those are energy and big pharma. So again today, energy's outperforming, although most of these names are now negative. Exxon was at a 52-week high, but Halliburton, Marathon, the old Apache APA, Schlombege, these are oil service names for the most part, continuing to hold up well and outperform the market. The energy sector is basically flat for the week. And remember, we're down quite a bit on

the S&P. The other sector that is holding up is big cap pharma, and I don't mean biotech. I mean old school pharmaceuticals. Merck, Johnson and Johnson. These are two Dow components that have held up very well. Merck is about a 52-wick high a few days ago, Bristol and Lilly. Now the bears will tell you when those two sectors start falling apart, that's when you know you look for a bottom because then they sell everything, even the stuff that's holding up very well. On the S&P 500, just statement recently from S&P Dow Jones indices. If the index closes at 3837.24 or below, we will classify January 3rd, 2022 as the ending date of the bull market

and the starting date of the bear. S&P is currently 3825. So bear in mind there. They're talking about 3837. There is the key indicator. Guys, back to you. All right, Bob, we'll see if we stay below here for the close. Meantime to the bond market where we're seeing classic risk off

behavior lately. No more rising yields, Rick, they've been going the other way. Absolutely. Think about the type of week we've had in equities as we go through some of these charts. Now, as you look at a week to date of two-year, yes, it's down about three basis points on the day. But the key is, consider the week with equities. We're unchanged on the two-year, which is sort of your aggressive maturity, most closely tied to the aggressive Fed. Now, let's go further down the curve. As you look at a 10 year, 10 years are minus five on the day, down five basis points, which goes to your point, Kelly, but they're down 14 basis points on the week. So that is very key. And so far, they've held yesterday's low yield at 2.77. We really want to

pay attention to that in the last few hours today. And finally, these Fed Fund futures on the week. And remember, the lower they go, the more Fed they put in. The higher they go, the less fed they put in. We'll keep it easy. They're unchanged on the week. That speaks volumes. But maybe even more importantly, when was their low, which had the most significance to the most aggressive Fed? Well, it was on the 3rd of May.

What was the 3rd of May? Fed meeting. It is drifted. So we're now about 14 basis points higher, which means 14 basis points less Fed. And it doesn't, you don't need to worry about the numbers. What it means is we could talk about the Fed being aggressive and Jay Paul saying, Yes, I'm going to be crazy aggressive, but in the end, the markets have always seen who've gotten their way, and they've taken their foot off of the aggressive Fed, at least for these crazy weeks that we're witnessing in stocks. Kelly, back to you.

All right, Rick, thank you. Now to oil closing for the day in the week with slight gains. Pippa Stevens at the commodity desk. Pippa? Hey, Kelly, another volatile session for accrued, but it is eking out again here with U.S. oil posting a fourth straight week of gains. There are more developments on the Russia front with Finland's state-owned gas wholesaler, saying that imports from Russia will be halted starting tomorrow. The company said it had been preparing for this, and operations will continue as normal.

This comes just after Finland formally applied to join NATO. This is also the third country to be cut off by Russia. Gas Prom halted supplies to Bulgaria and Poland last month. Let's check on prices here. WTI is up half a percent at 112.7. brand crewed up a quarter of 1% at 112.33. And another day means another new record for gas prices, now at $4.59, according to AAA. And Mono County out in California, Kelly, now averaging above $7.

Ouch. You wonder if that's one reason why the old energy stocks have been performing well this week. Yeah, certainly higher hydrocarbon prices do make the solar names and wind more attractive. You know, utility bills are going up. And so solar companies say that even if they have to raise their prices because they're also suffering from inflationary pressures, as long as they raise them less than those utility bills, they continue to look attractive. So these stocks are getting a bit today with the solar fund tick or tan up about 6 and a third percent. All right, Pippa, thank you, Pippa Stevens. Now, despite all these inflationary pressures, the consumer is still spending. That's according to a recent report by MasterCard spending pulse, also showing a slight shift to spending on services like travel and travel.

experiences. Does that mean what we've heard from the retailers this week is not so much of a disaster. Brickland Dwyer is here. He's chief economist at MasterCard and head of the MasterCard Economics Institute. Brickland, this is an important big picture data point. Is this just a spending shift that we're witnessing more into services? Yeah, you know, it's fantastic to look at how the consumers evolved here. They spent a whole bunch of money on discretionary services during the crisis when they couldn't get out and experience the world. And then, as we've shifted back as restrictions have been removed and people have gotten back out there, we've seen that travel come back in force. And people have shifted their spending toward the

travel, toward that experience economy, which has been quite remarkable. So to what extent are they doing so? Does it fully offset the loss of spending on goods? And what would you say to those who look at Walmart and Target this week and conclude that the low income consumer is under a lot of pressure. Yeah, I think it's important to look at the full picture there. You know, consumers are grappling with higher energy prices, higher food prices. They're looking at equity markets, trying to figure out whether they're, you know, fighting with the bulls or the bears. But they're trying to figure out, you know, what does it mean for their individual pocketbook and how do they allocate their spending? And it matters what they just bought. And what they just bought during the

crisis was more TVs and things like that. And that has impacted their appetite to continue to spend on goods like that. But on the other side is they've been missing out on that economy, that experience economy, which is why we've seen the momentum in that space. So it's been that reallocation of spending into different categories that we've paid most attention to. You know, Brickland, I see what you see. I also see two things, a couple of things that are changing. One is that federal money is not flowing into the hands of consumers the way it was in 2020 or 2021. That's number one. Number two, inflation has gone a lot higher than I think anyone anticipated a year ago today or six months ago today. So when people come through this feeling, and the markets,

which had made people feel in 2021 very, very much more wealthy than they had in 2018, 2019, even 2020, of course, those have come down. So you have this collision of factors. So you have this collision of factors that I suspect is going to hit sometime after this spasm of, of experiential spending passes this summer and may drive the other way come fall and winter? I think the expiration of the fiscal stimulus is meaningful. That has happened over time, right? It wasn't, when stimulus comes into the economy, people spend it right away. You see that impulse.

When stimulus comes out of the economy, it's more protracted as people have different savings rates. And I think that's a really important point to think about here, which is just how much foregone spending happened during the crisis, what that savings level is amongst consumers. Who are those individuals that have the levels of savings? Because there are a lot of differences between lower income and higher income of the rate of savings there. So all of that plays into a big factor when we think about where spending is. going to come from over the next six months. I would just point out that the appetite that we've seen, you know, in experience spending is exactly the same trend that we saw before the crisis.

So this isn't a new phenomenon. It's not something that is kind of a fat or a whim. It's something that people wanted to get back to that we've seen that momentum for, and I think that's meaningful. It matters that people remain employed and they continue to spend. And, of course, during the pandemic, people saved a lot because they weren't able to go out and spend the way they had on experiences and restaurants. We had a guest just a few moments ago, Greg McBride of Bankrate.com, and he was pointing to

heightened delinquencies that he was seeing in car loans, personal loans, and late payments or delinquencies on credit cards. Are you seeing that at MasterCard? Well, you know, that's not a purview that we're looking at the Economics Institute, but we are looking at publicly available data for that and looking at, you know, just kind of the trends in where consumers are on that front. What I would say that it's important to watch is, you know, during the crisis, as you mentioned about the savings rate

and the stimulus that went in, a lot of folks paid down a lot of debt during that period. And so now we're kind of having that recalibration, both in terms of, you know, debt loads and how people kind of operate, you know, how much debt they're willing to take on. But also as we think about the combination of that, again, in that wallet share and that great rebalancing that's happening for consumers and what they're

spending on today. All right, Brickland, thank you very much. Appreciate it. Brickland Dwyer. Thank you. All right, Bitcoin falling back below 30,000 today, down nearly 60% from its high, but the charts saying it could be close to bottoming out. We'll take a look at those charts that coming up, and we're looking for opportunity in this sell-off, a trio of stocks that are down, but maybe not out, Power Lunch back in two. There they are. Disney, Darden, DR. Portman. Welcome back to Power Lunch. I'm Christina Parts Nevelis, and markets are continuing to trade lower, but we want to take a check on what's working today. Several cybersecurity stocks are holding up, even as other tech names sell off. Tenable Holdings, Sentinel One, Z-Scaler, and CyberArc are holding onto some of those gains.

You can see the green on your screen. And Paulo Alto Networks is on pace for its best day since February after the company topped earnings estimates and rates. it's full year guidance. So even on a down day, there are some bright spots. Tyler, I'm not Debbie Downer today. No, you're always smiling and pleasant. We enjoy that. Thank you very much. Thank you. You got it, Christina. All right, Bitcoin prices trading below 30,000 down about 3% for the week, closing in on a key support level. Kate Rooney, more on the Bitcoin shakeout. Kate. Hey, Tyler, yeah, crypto investor sentiment is still pretty sour, but the Bulls are hoping that recent selling is the shakeout crypto needs to find a bottom and reach what they call seller exhaustion, a group that FundStraq calls market tourists have been some of the biggest

sellers lately. The firm points to longer term holders. Usually that group is actually the least likely to sell, but recent pressure appears to be coming from that cohort specifically and those who bought at the top. All of this is removing some of the pressure and selling pressure from the market. They also point to more crypto redemptions, showing people completely. completely cashing out of that ecosystem. And the Bulls are hoping that investor sentiment has hit a bottom. One sign of that, Greas scales Bitcoin Trust, now trading at its biggest discount yet to the actual price of Bitcoin. Investors may feel not as comfortable right now holding crypto in their brokerage accounts, and there's a little less hope right now for an ETF approval.

Derivatives market's also showing a little bit of doom and gloom, the put-call ratio at its highest level. Since the big drawdown we saw last May, that's showing a bit more defensive, positioning and investors are now watching a key bear market support level. It's called the realized price essentially shows Bitcoin's cost basis across all coins. And according to Glass Node, that's now at $24,000. Key level to watch there. Back to you. Does that mean that at today's prices, most investors in Bitcoin are still in the green? So we had some stats last week actually showing that about 40% of crypto investors, Bitcoin investors in particular, are now underwater. So it's about 40% that have lost money so far. And if you look at the prices,

it's really been stuck in this range. And that's been the big question. Are people going to hold out and say, okay, I'm in it for a decade-long investment. There are people who are seeing more capitulation, which is basically a fancy word for saying that there's people just giving up and saying, you know what, I'm out of these markets. And we've seen that as the prices have been stuck. There hasn't been that rebound that we've seen. It's taking longer than a lot of people expected to get back to the all-time high we saw last year in the 60,000s. It's really been stuck around 30 or 40,000 this year. All right. Thanks very much. Kate Rooney. Appreciate it.

Now take a look at Disney down again today. Nearly half where it was trading at last September. Analysts still bullish on the stock. The company expected to grow earnings. Has it fallen enough? We will get a trader's take. And the key number we're watching on the S&P 500, which right now is down more than 20% from its all-time high. Will it close in big?

market territory. You got to stick with us to find out. Welcome back, everybody. CNBC Pro out with a list of the cheapest S&P 500 stocks that could be buying opportunities at these prices, each down at least 20 percent from their recent highs, but with strong, expected earnings growth and a lot of love from Wall Street analysts for today's three-stock lunch. We're going to trade three D's from that beaten down group, beginning with Disney, then to Darden and D.R. Horton. Let's bring in Lee Munson, president and chief investment officer at Portfolio Wealth Advisors. Lee, welcome. Good to have you with us.

Let's kick things off with Disney, which has been very beaten up, but has a lot of very, very good franchises. Disney is a value investor's dream. You've got parks, which is just a cash cow. There's a limited amount of people they can put in per day, and everybody wants to go to Disney. And if they need to raise prices, all they do is just flick a switch. and consumers will pay it. I think that it's suffering a little bit from the culture wars in Florida,

which, Tyler, I find ironic as a guy who grew up in the 80s. Remember when Disney was hassled because they wouldn't let two boys or two girls dance together at parks and stuff? And now we've come full circle in Florida. But I think the catalyst for the stock is not just that cash pakow of the parks,

but it's streaming. If you have kids under 18, you know what I'm talking about. You've got to pay the mouse every month to get Disney. Disney Plus. I think they have the ability to raise prices maybe in the next year or so. And this is just an all-around great long-term stock. You buy them when they're down 50%. I'm all in. Has its political brushfire with Florida hurt it at all among customers? You know, I don't think so, but I think it's definitely,

I'm seeing it hurt in the price of that stock. I think there are portfolio managers out there that are unsure. But when you look at the volumes, right? I was, you know, I was just in L.A. Those parks are full. People, and let me tell you, Republicans in Florida are still going to Disneyland. This is going to blow over. It's going to have very little effect on the long term. This is a tremendous buying opportunity. If it wasn't for this Florida issue, I think this stock would only be down maybe 30, 35%. But not 50. Let's get realistic. Yeah, still, some of these levels today, you know, Disney at 101, Tesla and the low 600, it's just Amazing. So what about Darden, Olive Garden Parent? What do you do with the stock?

You know, I have to tell you, it's not my first pick. I would stay away for a couple reasons. Where's the catalyst? Now, most traders are going to tell you that if you're long right now is you're betting on one thing, China reopening, Asia, getting back to business. So you have marginal profits to lead it higher. But this was really an opening, like a COVID opening stock, right? This is fast casual. Are we going to go into a world where there's no more mom-pop restaurants going forward? Also, there's so much evidence right now, clear and present danger of a wage price spiral, where, not everywhere, but in low wage industries. Darden is a poster child for that wage price spiral. Also, if you're going to buy a restaurant, buy some place that pays people better,

that has better purchase power. I'd rather buy some overpriced nonsense like Chipotle because they can raise prices overnight, and they can also pay their workers a little bit more. So I think Darden could be dead money. It's a quality company. I just wouldn't do it right now. All right. And there's Darden again down about 15% over the past few months and almost 30% this year.

Shall we move on to D.R. Horton? That's our final, or Dr. Horton? Yes, Dr. Horton. Well, I have to tell you, I would pick this, but there's a few caveats. To me, this is a related trade on the 30-year treasury. What do I mean by that? There's a lot of traders out there. They're trying to go long treasury or long things like home builders with the expectations.

with the expectation that the Fed is going to cut sometime early next year. I know it's crazy. We're talking about the Fed cutting rates that they haven't even hiked yet. But that's the mentality of this market. And home builders are going to be a big recipient of it. So just if you just are a value, if you just like low valuations, I think Darden is a great pick. Here's my thing, though. I'm all for home builders.

I don't own any. It's not really my client's cup of tea. They're retired. They don't like the volatility. But I would say if you want to do this trade right now, buy a quarter. of what you think you want to buy and start waiting for it to make money. I'm concerned that we might be a little early to the home builder and early to buying things like the NASDAQ, but it's time to dip your toe in. Come on. It's, I mean, you've seen the NASDAQ this

week. We're down 20% in the S&P. We've got 30% on the NASDAQ. You know, I think you could just buy anything, but just be cautious with DR Horton. Love it. So here, go in on a kind of dollar cost averaging basis, buy a little now and see what happens a little more in a couple of months. Lee Munson, thanks for the enthusiasm. We appreciate it, man. Very nice to see you. And for more S&P 500 stocks, it could be buying opportunities here at these prices.

Be sure to visit cnbc.com slash pro. Ahead. We're looking at one stock today that could be the biggest tell about the state of the economy. We're back in two with the Dow well off the lows down 357. Stay with us.

Welcome back, everybody. Here's your economy in a nutshell. Tyler, how many times have we been told this year that we should buy the stocks that would benefit from inflation and deer would seem the perfect example. It's down 15% today, as you can see here. It's now down 30% in just a month. Why? Corn prices have been surging this year. Wheat prices have been surging this year. So crop prices overall are up 30 to 50% if you look at some of these

numbers just huge. That should be generating record farm income, but it's not. You would think that farmers would be out there buying in anticipation of being able to sell their crops at higher prices. on the other hand, the story is that fertilizer is costing them a heck of a lot more. Exactly. There are shortages there. And so, and I think they're kind of holding back a little bit on major, because I just don't know where the economy is going to go, where the foreign markets are going to be as well. And Deer itself is struggling with supply issues, with labor issues. The stock is back to levels we last saw, you know, 2021, if you want to call it that.

So again, you can't do the knee jerk. Oh, just jump into anything. going to benefit from higher prices. No, very few people are benefiting from these higher prices right now. But you know, we began the program looking at, I believe it was three great companies, Apple among them, as powerful a brand as there is. We end the program with deer as powerful a brand as there is. Exactly. If they're not benefiting, all suffering in today's economy. Thanks for watching, Power Lunch, everybody. Have a great weekend.