Power Lunch - The Fed's Market Impact, Super Bowl Countdown & Challenges for Regional Banks 2/7/24

Episode Date: February 7, 2024

CNBC’s Tyler Mathisen and Kelly Evans take you through the heart of the business day bringing you the latest developments and instant analysis on the stocks and stories driving the day’s agenda. “Power Lunch” delves into the economy, markets, politics, real estate, media, technology and more. The show sits at the intersection of power and money. “Power Lunch” gives viewers a full plate of CNBC’s award-winning business news coverage, plus a healthy dose of personality from the show’s anchors and the network’s top-notch roster of reporters and digital journalists. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

All right, welcome everybody to power lunch. Good to be back with you, along with Courtney Reagan. I'm Tyler Matheson coming up. The bundle is back. A major partnership in sports streaming is ESPN, Fox, and Warner Brothers team on a new streaming service. The details on that, and we will talk to the person who was in the booth for the biggest streamed sporting events so far. Mike Tariko will be here. The way on the future of the industry, the Super Bowl, the Olympics, and much more.

Cort. Very excited for that one. Plus, New York Community Bank continues to tumble as it struggles for survival. viable. But the bigger question for investors, are the issues that are taking it down going to hit other banks as well? So we're going to talk to regional bank CEO about commercial real estate and much more. But first, let's give you a quick check on the markets here at about 2 o'clock with two hours left to trade. All major averages are higher. The NASDAQ is leading the charge higher by about 1% followed by the S&P 500, higher by about 910th of a percent. Dow Jones Industrial

average adding 177 points. That's good for half a percent at this point. All right, let's check on those shares of New York Community Bank. There you see them one month down very dramatically. So dramatically, I can't even read the numbers. But they're higher today by 4%. As you see, they're up 19 cents a share. Losing two-thirds of its value in the past month, there's the number for you, even as the company tries to reinsure the markets that it has ample liquidity. To talk about that and more, let's bring in Leslie Picker. Hi, Leslie. Hey, Tyler. Yeah, NYCB shares recovering earlier losses. It was double digits earlier today. That's on the prospect of the bank offloading some of its risk exposure and a revamp of its governance. Bloomberg reporting citing people familiar with the matter

that NYCB has been reaching out to investors to find some capital that can be injected into a portfolio of residential mortgages. And those headlines come after an hour-long call with the bank's executive chairman appointed just earlier this morning who touted deposit stability amid the stock's recent sell-off. We've got a couple of, you know, tough punches to the gut, but we're strong. And as I said, you know, look, look at the deposit to this organization. I mean, does anybody think that they could be higher today than at the end of the year, given what we've been going through here?

I mean, come on, that's, if that doesn't tell a story about the strength and resilience of this company and the people that, work here, I don't know what does. The company said overnight the deposits were up from your end at $83 billion. Moody's, of course, downgraded the NYCB's issuer rating to junk last night, citing the bank's, quote, unanticipated loss on commercial real estate, which is a significant concentration for the bank. Moody's also says New York Community Bank Corp's recent turnover in risk and audit functions

at a, quote, pivotal time means the bank faces high governance risks. amid reported regulatory pressure, and shortly before reporting last week's dismal earnings that really kind of started this whole free fall in the stock price, NYCB's chief risk officer and chief audit officer departed the bank. NYCB said on this morning's call that they're in talks to fill those roles. However, the lack of initial disclosure surrounding those departures, coupled with concerns about the bank's CRA exposure, still has investors on edge, guys. Very interesting, Leslie. And of course, March marks the one-year mark since we sort of had that

that mini financial crash there with some of those regional. While we have you, if I can, can I ask you about Bill Ackman reportedly launching this new fund for retail investors. What do we know about it? Yeah, so the prospectus is out there. They already have a publicly traded fund, but that is listed abroad. That's listed in the UK. So this one would be a specific fund that can be marketed for U.S. investors. It has to follow U.S. rules, the prospectus is out there. We can expect kind of more of the same in terms of some equity holdings. He usually runs a pretty concentrated book, although I believe for a U.S. listing, it can't be quite as concentrated as it can be, say, in the U.K., where their current publicly traded vehicle is located.

We don't know size. It wasn't disclosed at this point in time in terms of how much they're targeting a listing here. But, of course, Pershing Square, known for kind of creative listings. They're also, you know, they did the SPAC, the largest SPAC ever, which ultimately, you know, didn't consummate a merger. Then they did the Spark, which was kind of a reverse way of doing a SPAC now, a new U.S. listing. So kind of the latest iteration in Bill Ackman's, you know, utilization of the public markets in terms of various unique ways to do fundraising. All right. Leslie, thank you very much. Leslie Picker reporting. Let's dig in more now on the challenges facing regional banks, the cratering of New York Community Bank, once again,

raising concerns whether other banks may face similar issues. Joining us now is Wafed, Bank President and CEO Brent Beardall. Brent, welcome. Good to have you with us. It's been, by any standard, a rough year for regional banks, maybe not including yours particularly, but it's hard for the stocks to make much progress in this environment. What do you say to investors who are concerned about the regional bank space generally? And how do you definitely, and how do you differentiate your bank from those that have run into trouble? Tyler, good to be with you and some very good questions. And investors rightly asking those questions.

And I would say regional banks are really very strong today. Obviously what happened last spring, that was a crisis of confidence about the depositors. Were their deposits safe with regional banks? And there was an over-reliance on uninsured deposits on the banks that failed last year. And that simply is not the case now. If you look at New York community, I think three quarters of their deposits are insured deposits. And really, it comes down to a credit quality question, something that we've all been asking the question since a pandemic started. What would happen with the values of commercial real estate?

And then even if you look at commercial real estate, one of my personal pet peeves is that is far too broad of a category. We need to ask what types of commercial real estate. And within commercial real estate, I think the real question is how much office exposure and what does that exposure look like? Well, there's commercial real, as you point out, there's commercial real estate, and then there's commercial real estate. There's offices, industrial, retail, apartment buildings. With specific reference to Wafed, how much do you have of your loan book is in offices? A great question. For Wafed, we are only just under 5% of our portfolio as office. And I'm very happy to tell you that we don't have a single delinquency in office. And we run current

valuations on that portfolio. And right now, I think our loan to value is 64%. So I feel very confident where we are, right? But you never know. And the one thing that really feels good about office now, compared to a year ago or two years ago, you're getting more people coming back to the office. And, you know, it is interesting how we get so worked up about certain segments. If you go back to when the pandemic started, one of the segments in commercial real estate, everyone was worried about was hotels. What's going to happen in hotels? Nobody's going to hotels. No one's traveling. And who would have thought three years later, hotels are back to booming. In fact, many of our hotel operators are reporting profits that are 20, 30 percent greater than

where they were in the pandemic. So something tells me that we'll figure a way as a country to figure out what to do with these office spaces. Brent, I know we talked through this a bit in the first question about sort of regional banks in general, but maybe we can focus on Woffed. If I'm an investor, and I'm still a little worried about what happened last March when I'm evaluating where to put my money if I'm interested in a financial company, why does a company like Woffed makes sense when I could put it in one of the big six? Yes, I understand deposits are insured, but that doesn't necessarily prevent a rational run on a bank again, does it? You know, it's a very good question, and I think you have to understand the underlying fundamentals. At Wafed, we've been around now for over

100 years. We've seen cycles. Cycles go up, cycles go down, and no one's immune from cycles. The question is, what is your margin for air? And we keep an excess amount of capital to be able to cushion ourselves for that problem. And if you look at our credit quality, I think we were eight years before this last year. we had to charge off this last year, but before that, we were eight consecutive years of net recovery. So it's all about credit quality and how comfortable are you with the credit quality. And I am happy to go into great detail about the credit quality of Woffed. I think you can sleep well at night with Woffed in your portfolio. Let me turn to the recently you've gotten approval to close a deal with Luther Burbank,

which is a banking entity in California. A couple of questions here. Number one, this was a deal that you announced in November of 12. 2022, as I recall, it took a long time to get approval. Was that approval delayed because the FDIC and regulators were looking more closely at regional banks than they might have previously? Absolutely, it was. So to give the listeners some perspective, we're a $22 billion, bank. Luther Burbank is $8 billion, so it will take us to a $30 billion bank on a combined basis. And as you call out, we announced the transaction in November of 2022. So 14,

months and we've had so many questions, why the delay? And quite simply, the FDIC and the other regulatory agencies, they're being very thorough right now. The last thing they want to do is allow a merger to happen and the resultant institution wouldn't be strong. So we were very gratified that after all of the homework that they did, that they saw fit to approve our transaction. This is your first foray, correct me if I'm wrong, into banking in California. So the logical question is why this bank, particular, in particular, and why did it take you so long to make that leap into California? What was holding you back? Because Wafed is big in the Pacific Northwest, Idaho, even down into the southwest part of the country, but never California until now. What held you out of California

and why this bank? Yeah, so for us, it was about finding the right opportunity. And as I mentioned earlier, we are very conservative from a credit perspective. And as you know, California has a history of not always being conservative from a credit underwriting standpoint. And so when we found Luther Burbank, we found a lender that is Uber conservative. Their average portfolio on their multifamily loans, which is a majority of their loans, is 54% loan to value. So think about that.

On average, their borrowers bring in 45% equity. They're very, very well run. And for us to bring California, which is, as you know, the largest state from a GDP standpoint and to kind of fill out the western region of the United States, we're thrilled at the opportunity. And really, we all talk about, okay, the two big to fail banks and why is there a reason that, you know, mid-sized banks deserve to be here? The reality is people are looking for a relationship bank, and mid-sized banks can fill that need.

And the other thing that I think I'm duty-bound to talk about is commercial real. estate. Why do mid-sized banks invest in commercial real estate? Because the communities we serve needed. If we're not investing in making those loans in commercial real estate, then who does? And if we back out of it, think of the costs that go up for all of us for everything we use that involves commercial real estate. Very interesting. Brent Beardall, good to see you. Please say hello to our former colleague Brad Good, who is now one of your associates. We appreciate your time. Good to see it, my friend. Well, breaking news on the federal budget. Let's get to Megan Cassella. Washington for the details. Megan, what do we know?

Thanks, Courtney. The nonpartisan Congressional Budget Office is out with new projections saying that the federal deficit should hit $1.6 trillion this year and it'll rise to $2.6 trillion over the next decade. Now, those numbers are just slightly smaller than previous projections due in part to the Congress's debt ceiling deal, which clawed back some federal spending and higher economic output fueled in part by an increase in immigration. Now, those deficits, of course, are still quite large, especially as the cost of servicing the debt continues to rise. As the deficit rises, the share of debt held by the public will hit 99% as a share of GDP in 2024, and it'll rise to an all-time record of 116% by 2034. As for the economic outlook,

CBO sees growth slowing this year to 1.5% mostly due to higher interest rates, but the agency sees the Federal Reserve cutting rates likely later this year, and as those rates fall and inflation falls back to the Fed's 2% target, then GDP should average roughly 2.2% through 2028. Guys. All right, Megan, thank you very much. Megan Kassella from Washington for us. Coming up, the stream dream team. Disney Fox and Warner Brothers Discovery team up to launch a massive new sports streaming bundle.

The bundle is back. A move with the potential to significantly alter the future of the sports broadcast industry. We'll discuss that further ahead. And as we head to break, a quick check on the market. the Dow is up $199, almost 200 points, a half a percent right now. Welcome back to Power Lunch. Bon yields holding steady today as Fed officials continue to dial back market expectations. On rate cuts, Rick Sinteli joins us now from the Windy City with more.

Hi, Rick. Hi, Courtney. Indeed, it's been an interesting day in the Treasury complex. If you look at an intraday of 10-year note yields, the same maturity that we auctioned a record amount of size into. $242 billion today. There was great demand. But as you look at that chart, we're hovering in the middle of today's range

and all yields on treasuries. Tews through 30s are slightly higher. Despite a very, very good auction in tens, I gave it an A minus. As you look at a year-to-date of tens, remember, we settled at 388 last year. We settled at 388 the year before. So we're elevated. The high-heal close of this year so far is the yield of 4.18%. That was on the 24th of January.

We have come close several times, but yet we can't seem to really back away very far. Many traders are using 410 as a pivot. Now, one of the main reasons, unfortunately, the 10-year note auction went so well, and everybody is talking about it, is the fact that there are so many regional banking issues today. And to that end, let's look at the regional banking index. This is year-to-date, and you can see how dramatic the slide has been. And as everybody has been mentioning, it also harkens back to last March. As you can see on the chart, the primary drop that occurred.

Silicon Valley Bank, signature bank, we all remember those. But ultimately, a bit of nervousness. Ten-year note auction was a welcome site for solid demand, with tomorrow's 30-year completing $121 billion in supply. But many investors are a little nervous that some of the issues of flight to safety may exaggerate some of that demand. And Tyler, back to you. Rick, thank you very much.

Stock's making gains today with the S&P 500 nearing 5,000 for the first time. That is despite Fed officials continuing to try to reel in expectations on the timing and frequency of rate cuts. Here's what Minneapolis Fed President Neil Kashkari said on Squawk Box earlier today. Sitting here today, I would say two to three cuts would seem to be appropriate for me right now. But again, I don't want to prejudge things, but that's my gut based on the data we have. so far. Our next guest is expecting those cuts to have a summertime kickoff. Let's bring in Sarah Malick, Newveen's chief investment officer. Sarah, welcome. Good to see you, and thank you for joining us. Good nice to see you. So you expect rates to take off later this year. Where do you think the

S&P will end the year? I mean, usually election years have 10-percentish returns. What do you think this year? Well, our price target for the year is actually 4950. But you know, look at year-to-date, it's been, the strong economic data and technology earnings that have driven the markets higher, we're actually trading at about a 15% premium to average on the S&P 500. And I see three headwinds in front of us that may keep us around this level of under 5,000 or around there. And that's what's the catalyst to take stocks higher from here? Also, yields are now crossing 4% and Fed Commentary.

So just starting with Fed Commentary. We came into this year, markets were expecting six to seven rate cuts. Our view has been three to four rate cuts starting this summer. It looks like we're moving towards that direction. Tech earnings have been very strong, about 60% growth, the year-over-year earnings for the big tech companies versus overall S&P earnings running more 4% to 5%. With all of those companies reporting,

I'm not sure what the catalyst is from here. And then, of course, a headwind with yields over 4% on the 10-year. So let me come back to you and invite you, if you're of a mind, to change your year-end outlook on the S&P 500. it's now at 4993. Your call is 4950. It's obviously gone up about 4.7%, almost 5%, already this year. Does that make you double down on your 4950, which would suggest basically flat for the rest of the year? Does it make you want to go, eh, I can go to 5100. Do I hear 5200? Do I hear 5,300? Do I hear 5300? What? Well, for now I'm sticking with it because the key to the S&P this year is going to be, can the economy hold up in the face of the

higher interest rates and inflation. Key to the economy is going to be consumer and employment markets, which do remain very strong. Consumers have been spending, but we are seeing higher delinquencies with the consumer, higher credit card delinquencies, higher auto delinquencies. If we do get closer to that recession later this year, that will create more volatility for the market. And let's not forget, it is a big election year, not only in this country, but 77 countries going to the polls this year. 60% of GDP will be voting this year. Markets tend to get more volatile, the closer the races in the U.S., I think we are going to have a close race in the U.S. So I see more volatility ahead from here.

I don't think every month is going to be as easy as January was. Sarah, if I can sort of wrap together some of your thoughts here, you've called out strong economic data, particularly when it comes to employment and the consumer, at least in the spending, though I hear what you're saying about possible delinquencies. If that's true, and the economic data is still strong, why do you then think that we need three to four rate cuts this year? So I think the Fed will focus on keeping real rates stable. And so the other side of this equation is, of course, inflation, which had been looking pretty promising with PCE coming in fairly soft. But then, of course, wage inflation in the payroll data was up to six cents of a percent, which is worrisome. But of course, inflation has moderated overall. I think the Fed cuts to just keep real rights stable for now. And there's no need for them to rush to cut. But if they don't cut at all, then technically that would be continuing to tighten conditions. And I don't think that's their goal either since

inflation is moving in the right direction, but they want to see more evidence before they start cutting rates. Where are you looking to put money to work or where would you advise clients if they have sort of cash on the sidelines and they'd like to try to make some money, even if the environment is dynamic with this upcoming election here in the United States and other turmoil around the world in both elections and frankly geopolitical concerns in the Middle East with what's going on in the Red Sea and Israel and Hamas? Yeah, definitely a lot of issues to consider, but you're right, a lot of cash on the sidelines

still sitting in money market funds and Teeville. So areas that we're looking are more conservative and resilient in an economic slowdown. Infrastructure stocks tend to be more resilient because what's within them is waste management in utility sectors. We also like dividend growers, companies that consistently grow their dividend over time. Switching over to fixed income, municipal bonds look interesting because states are so strong right now with rainy day funds and then higher quality fixed income like investment grade. I think that's where cash goes at first to get out of those T-villes.

to potentially higher return areas with limited additional risk. Kelly, we're here. She'd be excited about that munibon recommendation. Sarah Malick, thank you so much for joining us here today on PowerLunch. Thanks for having me. Well, further ahead, snap slats. The social media emplomiting after missing on revenue and issuing week guidance. We'll trade that name and others in our three-stock lunch.

Come hungry. Welcome back to Power Launch, everybody. Solar stocks moving sharply higher today, led by N-phase, which is up nearly 20 percent. after the CEO says things aren't going to get worse. Pippa Stevens joins us. Now, that seems like a rather damn with faint praise kind of approach to this. Well, that's the thing, though, after multiple... It's not going to get worse.

Yep, after multiple quarters of missing expectations and doing really quite poorly, that is actually almost a godsend. That's the good news. Yeah, and so that's, you know, it's looking good enough, and things aren't getting worse. It starts to sound pretty good. So, doctor, I'm not going to get worse, right? But clearly, I mean, the street is taking this in stride. The stock is up.

You see there 18%. And actually the best performer on the S&P today. And so basically what they said is that they think Q1, so that's the current quarter, is going to be where the inventory glut bottoms. And then it will start to look better from there. So they've been shipping less product into the channel to kind of correct for this oversupply. And so in Q1, they're still going to ship less. And in Q2, they're going to ship less.

But not that much less than they would otherwise. And so they say they've now kind of righted the ship or almost righted the ship. Of course, they cut 10% of their staff back in December and announced this restructuring. And I spoke to CEO, Badrake Kthandaraman last night, who said that he thinks, he thinks that they've taken all the necessary measures to have a better 2024. However, and this is the big, however, that's on the supply side. The demand side is, you know, they can't fix the demand side. And the backdrop there is that higher rates have made rooftop solar less appealing.

And so they've taken all this action to fix supply, but, man really remains the overhang. And, you know, this quarter, the revenue was 300 million. Thereabouts a year ago, it was over 700 million. So we're talking about a big decline here, and then, you know, a long way to get back to that 700 number. And more comfortable oil prices for consumers doesn't help them, right? In other words, if oil price was 100 or 120, the demand side would get fixed. And it's especially true on NAC gas. Yeah. So it's more of a direct comparison Right, right, right. Which is now under $2 per M&BTU.

And that's one thing he said in Europe, their revenue was down 70% quarter over quarter. And he said that there's less of this, you know, there's less fear around the energy situation about even Beijing of Ukraine. When Europe saw their gas prices skyrocket, that's no longer happening. This energy crisis is no longer looming over consumers. And so there's less of an incentive. And yeah, when that gas is lower, your energy, your utility bill is going to be lower. And it's that threat. And you go, well, then why would I, why would I transition?

away. Right. Exactly. Wow. Very interesting stuff. Hi, Pippa. Thanks. Thank you. Well, let's go over to Kate Roodie for our CNBC News update this hour. Hi, Kate. Hey there, Courtney. The Senate is voting now on a key procedural vote to move forward with the full national security supplemental aid package, including the border bill. It is expected to fail after Republicans reversed course and came out against it. Majority leader Chuck Schumer has said that he is going to bring that bill to the floor and the one that doesn't include the border package. Also, Israeli Prime Minister Benjamin Netanyahu rejecting this afternoon a proposed ceasefire term from Hamas. While negotiations continue, he said they are going nowhere and said the only solution is complete and total victory over Hamas. And the amateur photographer

who snapped this picture of a napping polar bear curled up on an iceberg just won this year's People's Choice Award for Best Wildlife Photographer for the year, according to the natural history Museum in London, which runs the contest. It was among 50,000 pictures submitted for review. The image was captured off the coast of Norway, guys. Look at that. Cozy polar bear. It's a great one. All my fellow Norwegians taking care of the Bears. Exactly, Tyler. That's special for you. That's special for me. I was there last summer. Did you submit that photo? Great. Gorgeous place. All right, Kate, thanks. After the break, Super Bowl Sunday just around the corner. Two teams, huge money on the line. Taylor Swift, a lot on the line here.

and giant stars like Taylor are expected to be in attendance. Because she's coming all away from Japan, I think. This all comes during what could be a transformational period for the sports entertainment industry. We will discuss with the great Mike Tariko next. Welcome back, a huge shake-up in sports entertainment. Disney Fox and Warner Brothers Discovery teaming up to create a supersized sports streaming service. Julia Borsden has more of the details for us.

Hi, Julia. Hi, Courtney. Well, it's a skinny bundle for live. sports. Three media giants teaming up to sell streaming sports to cord cutters and cord nevers. Disney Fox and Warner Brothers Discovery's joint venture doesn't have a name yet, doesn't have a price tag or CEO, but as soon as this fall, these three companies aim to together launch a streaming sports bundle of linear networks, including all of the ESPN, ABC Fox, and TBS, TNT, along with certain digital sports content and services, including ESPN Plus.

Now, this is separate from Disney's plans to take its flag. ship linear ESPN product direct to consumer and from conversations with potential strategic investors in ESPN. So the big question is, how much could this accelerate cord cutting? That depends on how much the service costs. With Disney is expecting to make as much on ESPN as part of this bundle as it does from pay TV packages, we can expect a price tag in the range of $40 to $50. Now, Morgan Stanley, though, says it sees the larger risk in the potential escalation of the tension that the media giants have seen with the pay TV distributors, which we saw manifested in the charter Disney dispute last year, saying the pay TV distributors,

quote, may push to have greater tiering flexibility, for example, selling their own sports first bundle that does not broadly carry other basic cable networks. We'll surely hear more on this from Disney CEO Bob Eiger in our exclusive interview that's coming up this afternoon in closing bell. Lots of questions here. I mean, this is sort of really, reconstituting, is it not, what you get with a bundle in the cable universe? I mean, we're going back to the future here a little bit. I mean, I guess one of the reasons a lot of people cut the cable or cut the cord is, for example, they don't want the sports channels, and so they don't watch sports, so they don't want to pay for it.

So this lets them tailor their consumption better. Yes, I mean, look, it's a re-bundling, but what we have missing from this new bundle, is Comcast, which is, of course, CNBC's parent company and has a lot of sports rights, including many that are on Peacock, Comcast streamer, and then also Paramount. We saw Paramount shares take quite a tumble today, Paramount Global, because, of course, they have Paramount Plus. So those two companies are excluded from this new bundle. So it is a re-bundling, but it is also skinnier than other bundles. It is focused just on sports.

Yes, you'll be able to watch Fox or ABC and get some reality TV or some sitcoms in there as well, as well, some news. but it is not the full entirety of all those cable channels that you get if you pay for traditional pay TV. I don't know who it was. You said you can never be too rich or too thin, so I guess skinny is good here. Let's talk about, just very quickly, will this consortium of products get together to bid jointly on sports rights or is that a whole separate issue? No, they will not be bidding together on sports rights. They will be negotiating their own rights deals for their own platforms. And yes, the NBA rights are up for grabs.

Those negotiations have already started. But so they are going to be bidding separately for sports rights. And then just taking their effectively linear TV feeds and putting them into this new skinny bundle that will be streamed direct to consumer. All right. Julia, we look forward to your interview later today with Mr. Eiger. We appreciate it, Julia Borsden. For more now on how this streaming deal impacts the sports media landscape. Let's bring in a person who knows that landscape very, very well.

Mike Tariko, commentator for NBC Sports. Mike, let's talk Sunday Super Bowl, but let's put that off now. In light of this new package that's coming out today, you just were the anchor on the largest streamed sports event in history for Peacock, the Kansas City was a Buffalo game a couple weeks back. Talk to me about this new package, how the world you live and work in is changing. Let's bring Julia back. I was interesting.

I was taking notes as Julia was answering questions, Courtney and Tyler. So it is something of interest to all of us. I think as providers of content, which is what we do, it doesn't change our jobs significantly right now. As it plays out, maybe there's an adjustment down the line. But I can go back to the game you referred to as the wildcard game. There was about seven below outside Kansas City play in Miami, one of the coldest games in NFL history. Yet we didn't do anything different other than stay on through some commercial breaks in the fourth quarter and provide more content about the game, more content about the playoffs.

And that game was, as you mentioned, the largest streaming event we've seen in America so far. So I think we're at a time where things are evolving and moving. Tyler, for the two of us, we've come a long way to the transistor radio. We sure have. Trying to listen to a baseball game is with it. Mom, I'm asleep. Don't worry about it. And trying to listen to a game.

Now it's the kids take the phone to bed and watch the games if they love sports. But we're in an evolving ecosystem. As Julia mentioned, David Faber was mentioning it earlier this morning. This is a changing time. Things are going to move around. I think as content providers, our job and our team at NBC Sports, do the best job you can and know that the delivery options are evolving and adjusting. And the people who are in the floors above us who are the ones in charge,

we're going to figure out ways that we get to the consumer, the best product out there. Mike, it's exciting to have you on the program, an honor to talk to you and ask you a question. You know, Super Bowl, obviously, right around the corner coming up. I don't know if you're going to give us a prediction, but other expectations for the game. First time, it's being held in Las Vegas. Yeah, according to me, so you know, Taylor Swift's going to be there. I don't know if you've heard that yet.

I've heard this. It's the conversation that comes up every hour. Think about where we've come. Las Vegas, Nevada, and gambling and the NFL were in complete opposite sides of the room. Sure. Now, not only is there a franchise there, but the biggest event in sports, the Super Bowl, will be there in Las Vegas. We did two games there this year.

I can tell you fans come from all over when their team is playing the Raiders to experience what Las Vegas is all about. And I think it's going to be a Super Bowl week unlike we've ever seen before. The number of people who go there on a regular basis, the celebrity factor around the game, then the celebrity factor inside. And the league hits a grand slam is they deliver two really good teams, who are well known. I think it happens at a very interesting time because sports gaming and sports gambling is as much a part of the story of the NFL as it ever has been. And now here we are

in the capital of sports gambling, Las Vegas, for the biggest event the NFL has. I'd love to follow up on that with you because I find as an old school kind of guy, you and I grew up and gambling, as you said, they were at other ends of the room. But now the professional leagues most especially have in some ways hitched themselves or gotten married to the gambling, the bookmakers. I wonder how comfortable you feel that marriage is. I mean, on the one hand, they're cautioning about the evils of gambling or the dangers of gambling, should I say. On the other hand, they are really in partnership or in league with the gambling companies. They absolutely are, Tyler, no doubt about it. We've come a long way from it. It's

It's a guy in a corner bar with a brown bag and some money handling the wagering for the game. And you go to a pay phone with you can't even find a payphone anymore and make your wager. Now you pick up your cell phone and do it in the States where it is legal. And you've seen all those places that were showing on the screen. The books in Las Vegas become part of the entertainment for some folks more interesting than going to see one of the shows at night is to hang out of the book and make a bet. Though Roger Goodell at his State of the League press conference on Monday was asked this. and did mention that some personnel who worked for the league were in some ways hit whether they lost their jobs or were suspended or other items because of their involvement in gambling.

They've tried to make a very clear line between your job at the National Football League and gaming. And they're trying to maintain that we've seen players who have been suspended from their teams for gambling on other sports but doing it in an NFL facility while they were on their phones. So the league is trying to draw a big, bright line between the ethics of the game and the ability to ensure a clean product and gambling. Now, only time will tell if they'll be able to maintain that. They're trying to do it best they can. And by bringing all the advertisers, you can't watch a commercial break in the NFL without hearing about a gaming service or those type of things. No.

Yeah, we can't talk about it in the broadcast. We can't say, hey, the chiefs are a seven-point favorite, and they're up by six. We're not allowed to do that. At some point, I think those lines will blur a little bit more. But that's the way you can't talk about the over-under or the fact that Kelsey, the over-under on Kelsey catching a pass or whatever it was. You're enjoying from that. Let me pivot, if I might, to the Olympics, which is probably, I don't know.

It's the next big thing on your county. You probably have some golf events and some horse racing events, as I know your schedule. But let's talk about the Olympics. I am fascinated by when and how you. prepare for all you have to know because it's not just one team and one game a week. It's hundreds of games. It's hundreds of athletes in unfamiliar sports from all around the world. What do you start doing and when? When will you, when is Toreko shutting the door and diving into the Olympics? Are you doubting that I'm not a breaking expert? I can't right now give you full

details on breaking, which is known as break dancing, which is going to be in the Olympics this year. We have an amazing research team. The Olympic researchers over the years have been an extraordinary part of the sports media landscape. Many of the leaders in sports media, even today, started out as Olympic researchers. Our Olympic research team produces volumes of reading and different documents that will be pouring through the Olympic trials for the marathon happened last week in Orlando. So I started watching that. You just build and build and build and get to July and get to Paris. And I think what's going to be great, Tyler and Courtney, is not just the competition, not just the fact that we'll have people in the stands watching. Paris is going to be

a co-star of these games. And these scenes that you see right now along the send, a lot of those are going to be the backdrop for some of the big events, whether it's the palace in Versailles or the Eiffel Tower for beach volleyball. Paris is going to use the iconic landmarks that make the city so special as part of the backdrop for the games. So we're excited about the preparation for that, building up towards that. And since we're talking streaming, I might as well mention that every event's going to be live on Peacock as we go through the Olympic Games. So that's part of the magic of what does streaming do for sports fans? You watch Peacock, you're going to see every event of the Olympic Games.

So we are preparing slowly but surely, and I promise when I visit May or June, I'll have a full breaking breakdown for you. Awesome. That is pretty amazing. And it is wild that not all the athletes, of course, have yet been chosen to participate in their sports, right? So you have to wait to really study up to see who makes the final cuts. Very much so. Actually, Courtney, one of the best parts of our summer are the trials in sports, gymnastics, track and field, swimming.

Those are all be on TV in June. And that's where you make team. You say sometimes, Courtney, those are the hardest things to do. make Team USA to get to the Olympics. So we look forward to all of that. Absolutely. Just fascinating elite athletes in Paris is going to be a beautiful backdrop. Mike Tarrico, thank you so much for joining us.

Great to be with you. I'm very concerned that Tyler knows my schedule better than my mom. So I'm going to leave on that note. I'm watching you. I'm watching you. Got his eyes on you. Great to be with both of you. Thank you very much.

We'll still add. New York says congestion pricing is right around the corner. But New Jersey wants to slam the brakes on that program, all together. So who will get the green light from the court? Power lunch is back in two. Welcome back. Time for a quick power check on the positive side. Chipotle, Kathy Wood, naming the restaurant chain, a top pick after its earnings beat. She'll talk about that and more on last call tonight. Make sure to tune in. But then on the negative side, VF Corp. Shear sliding after reporting a larger than expected plunge in sales, that you're very quick

power check. And as we head to break, during February, we're celebrating Black Heritage. Here's Goldman Sachs global head of corporate engagement. I was a immigrant and we grew up in public housing. I think there was nothing about my background that it would have suggested that I would grow up to become the senior most black professional at Goldman Sachs or the second person in the firm's history to sit on the management committee

as a black person. But I think there's a universality about black history is American history and American history is black history and I think there's so much to be learned in that. Time for today's three-stock lunch, where we take a look at three big movers of the day. So here with our trades is Quinn Traytero. He's founder and president of Jewel Financial. Up first is Disney.

The media giant is set to report results after the bell today. And the results come on the heels of today's announcement that ESPN Fox and Warner Brothers Discovery will launch a joint sports streaming service later this year. We talked about it a bit earlier on the show. So Quinn, what's your trade on Disney? There's a lot going on here. Yeah, there is. Thanks for having me back. So this is a controversial one.

We realize that. but we remain a strong buy here on Disney. We're definitely favor the Mouse House, ESPN, the sports ventures. This is a turnaround story, but historically Disney has been a compounding machine. They obviously went through COVID. Earnings fell off a map. There was no return on equity. We think that's changing now.

We think with strong balance sheet return to profitability, we're going to see that. Expectations tonight are for about $23.5 billion. Whisper numbers of $1.07. We wouldn't be surprised to see a beat on top and buy. bottom. But I wouldn't chase the name despite its run here off the lows. Let it come back to you and build a position. We own it. Wouldn't buy it into earnings, but any weakness will continue to add. All right. Up next, Snap rhymes with dot, dot, dot, shares plunging today down more than 35% on a revenue miss. Weak guidance. Your trade on Snap. Piler, why didn't you say it? What is it rhyme with? Come on.

It's, uh, rhymes with flap. There you go. Yeah, this is a tough, And look, a lot of people thought this was a turnaround play. You know, this is a great example of not being swayed by the short-term speculative opinion and stay away from companies that have very poor balance sheets and struggling for profitability. This is just not a name for us at all. Thankfully, we're not in it. I think if you find yourself in a name like this today, it's easy to become paralyzed with a significant downdraft. We always have found it better cut it, get it off the sheets.

Don't worry about it. Move on. Find a new opportunity. It is no touch for us here. All righty. And finally, Uber, beating analyst estimates as revenue and booking C double-digit growth. So, quit, what's your trade on Uber? Uber's a favorite. We love Uber here. It's hard to chase. Look, off the bottom of 23. This has gone straight up. So I think you'd be hard pressed to just run out and buy shares here. But nonetheless, even though it has run up, it's trading 36 times forward earnings, which would look rich. But those earnings if they hit growth targets are set to appreciate by about 75%. So still some upside value. But again, kind of like Disney, which has had a decent runoff, the lows already.

I think you have this on the pullback buy list. Not a fan of the debt on Uber, but $6 billion in cash. So we like it. All right. Positive on Disney. And on Uber here. Quint Tatro, thank you very much for joining us. We are on S&P 5,000 watch.

More power lunch, though, after this break. Well, check out the S&P 500. It's about to become the S&P 5,000. We're so close, less than three points off from that big, nice round number. We always like that. Although usually it's the Dow hats that you see with the traders. One of the solar names, one of the reasons why was the leading number we talked about it just a few moments ago. Thanks everybody for watching Power Lunch.