Power Lunch - The ‘Just Right’ Jobs Report 9/1/23

Episode Date: September 1, 2023

The economy added 187,000 jobs in August. Not a lot, but not too many either. While the unemployment rate moved higher, but not too high. Markets seem to be betting that this won’t force the Fed into another interest rate hike. Is that the case, or overly ambitious? We’ll debate. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Hi, everybody, and welcome to Power Lunch alongside Seema Modi. I'm Tyler Matheson. Glad you could join us on this holiday weekend Friday. Don't you love those? Coming up, another job's number, 187,000 jobs added in the U.S. economy. That's a lot, but not too many. The unemployment rate did move higher, but not too high. Markets off their best levels of the day, but seem to be betting this won't force the Fed into another rate rate height. Seema. And Tyler's summer may be over, but this recent rally is not. Green across the board with. the exception of the NASDAQ, which is down just fractionally. All three averages finishing lower for the month of August, though. But the NASDAQ, especially strong comeback in the last week from the mid-month lows. We'll look at the September setup for software and semi-stocks. And big news today from Walgreens Boots. CEO Ross Brewer is leaving effective immediately.

She took over the company more than two years ago, and the stock has lost roughly half of its value since then. Now trading at its lowest level since 2009. All righty. Let's get some further reaction now to that so-called Goldilocks jobs data. The unemployment rate up to 3.8% in August from, I think, 3.5 in July. Non-farm payrolls increased by 187,000. So will these numbers keep the Fed from raising rates at their next meetings? Let's bring in Carl Rickadonna. He's chief U.S. economist with BMP Paribaba, and Ron Insana, chief market strategists with Dynasty financial partners, also a CNBC contributor. Carl, let's begin with you. There was sort of something for everyone in this jobs report. There were numbers that went up a little bit that make you think that the Fed is going to sort of pause in September. What do you say? Yeah, there was definitely some hot and cold elements said to this. So I think everyone will kind of focus on their own particular angles of the report.

But, you know, when we look into the details of the report, you see back revisions, but a longer work week. So I think net net, this was actually a stronger than consensus expectations report, even though we saw that rise in the report. the unemployment rate. The rise in the unemployment rate was really just a flood of participants re-entering or entering for the first time into the labor market. It wasn't the kind of bad kind of rise in unemployment that would be softening of labor conditions. So this is just a flood of participants who didn't happen to find jobs. This shows that the economy still has a lot of momentum heading into the back. So if this is a stronger than expected jobs report, does that then translate into the idea that the Fed will be more aggressive in its interest rate policy and raise rates maybe

in September? Or do you think they pause? I don't think for the September meeting. I think they will pause in September. I think there's enough. We said something for everyone. I think there's enough here for the moderates to make a case for another pause or they can bill it as a skip if it's a close call like they did back in June. I think this will keep the hawks on edge that maybe they need to do more, but they won't feel the urgency to do it in September. So instead, the market pricing will continue to toy with the potential for a, you know, a November increase. But ultimately, I think that we are losing momentum. And by the time November rolls around, it will look like they've done enough.

Ron, even if the Fed does keep rates on hold, we're still living in an environment where interest rates are high. How does that get priced into the market? And can this market rebound now as we enter the fall? Well, yeah, Sam, I think it already has. I mean, you know, if you look at the S&P, the NASDAQ, and the NASDAQ 100, we've already put in a years worth of good work without having the Fed really alter monetary policy in any way, shape, or form, and still have that worry that they could go again. I doubt that they will, as was just stated.

And I do think that the employment report this morning may have been a little bit weaker under the surface. You know, when you look at the household survey, it was over half a million people who lost their jobs. Yes, they may have been reentering the workforce. But it's a different look. The downward revisions were significant in prior months. And so I think, look, I think it's going to be a shopping market. I don't think that, you know, with the VIX at 13 and with still some, you know, existing concerns about where we go from here, the markets will probably chop around based on, you know, digesting the gains that we've seen thus far. But I don't think the Fed has much ammunition to raise. And again, I went Goldilocks on the economy two months ago, and that's still where I am.

And you were right about it. I mean, Carl, if you look at the economic data, a very different picture than what we've seen from the retailers that have reported earnings this week, from Dick's Sporting Goods, Macy's last week, talking about a cautious consumer. Yet the economic data has held up a little bit better than expected, especially when we look at those consumer spending numbers yesterday. So what should markets believe or lean on economic data or what executives have been telling us? Well, I think it's a confluence of the two, really, but when we look at the data, the July data, for instance, for consumer spending, really showed not only strong consumer spending,

but strong in the discretionary category. So very much the opposite of what you hear from Macy's and Target and whatnot about more price-sensitive consumers. Instead, we saw a pickup in discretionary spending categories. They were some of the hottest components of that data that was out earlier in the week. So that tells you there is still some fuel. Maybe it's the last hurrah,

the last party of the summer, before people buckle down this fall, because I do think there are some real headwinds. We have the student loan debt payments resuming, the excess saving story seems to be largely exhausted at this point. And so there will be some headwinds that materialize later in the fall, but it's not happening just yet. And GDP seems to be on a very strong footing right now.

And if we can look back a little bit further a week ago, when we heard from the Fed chair in Jackson Hole, he raised the concern that even though we are starting to see some improvement on the inflation side, if the activity metrics continue to run hot or show some signs of a potential re-acceler, the Fed may feel the need to step back into the game here. Now, I don't think that's the case, but reports like today with a decent non-farm payroll gain and aggregate hours worked showing some signs of re-acceleration as well,

this is going to keep some of those more hawkish-leaning policymakers worried that they haven't gone far enough. But at the same time, you said a moment ago, you seem to suggest, I want to turn back to Ron and Son in just a minute, that a November hike is no sure thing if you continue to get sort of... It's no sure thing, but the debate is still, you know, it is not clear one direction or the other. So my baseline expectation is that they're done, but I think the hawks are going to see a lot of data, including look at, for example, the Atlanta Fed GPD now Jacker running this

HAA. That's where I was going. The baseline expectation run in Sana is that they're done. You think they should be done as well. Yeah, and look, the Atlanta Fed GDP now number, which shows a 5.9% annual rate of growth. I think you really have to dig into the composition of that number where you're seeing better than 11% growth in investment, in manufacturing capacity, in infrastructure, in industrial capacity, all of which is quite good. Yes, maybe it costs a little bit more to make things in the

United States, but what they're making, the products that are coming out of this, are inherently disinflationary or deflationary over the long run. So the composition of growth, which is favoring investment over consumption, though consumption is reasonably strong, in their market. that estimate is actually quite good. I don't know why the Fed needs to freak out about growth with inflation coming down, the labor market slowing, and the economy settling into maybe a more sustainable rate of non-inflationary growth, which, like, Tyler, as you and Seema both know, like, I've been preaching this since the end of the pandemic. It was going to take a couple years to normalize. What we're doing right now is normalizing everything, interest rates, inflation,

growth, the labor markets, all of that took time in a post-pandemic world in which there was also a war ongoing in Ukraine. All right, Ron, Carl, the law firm of Rick Adana and Insana. Thank you guys. Have a good weekend. Yeah, I don't know who we work for though. Gentlemen, thank you. And now let's get the traitor reaction to this morning's job support and what it means for the bond market. Rick Santelli standing by in Chicago with that. Hi, Rick. Hi, yes indeed. It's been a wide. It's been a wild week. Look at a one week of two-year note yields and realize they were at 508 Friday last week.

They're down 24 basis points at unchanged on the day. Now look at a 10-year. A bit of a different picture. They're up on the day by about seven basis points, and they're down six on the week. They've almost got back to unchanged. Is this the top? Everybody asks, my models show that the long-dated yields could keep moving up.

However, if you look at a 20-year chart for it, got a 20-year chart for some long perspective, whether it's the two-year or the 10-year, they could both be double-tops right now. So it's a very questionable time indeed for what's going on in the interest rate complex. Let's go talk to Jason, shall we? Hi, Jason. How you doing, Rick? All right. So what did you think of today's number from a perspective of volatility in the markets and what might be ahead for equities and equity traders? Yeah, the jobs market, I've said the jobs number today really basically took any likelihood of a rate increase. off the table for September. The market responded positively. We were up 25 points in the spools

this morning. We've kind of settled back down to an unchanged area right now, but overall, I think it's really good for the market. We entered September, which tends to be a seasonality-wise, a very poor-performing time for the market. So I think with the rate hike off the table, it gives the market a chance to, you know, to go higher. To let it simmer. And it gives the chance to the Fed to look at more data points. And when it comes to the Fed and the Central Bank, I don't know about you or the traders on the floor. I get a sense that they would like to be done. They really would like to be done. I'm not saying they're not going to monitor the situation. What bug me was yesterday's year-over-year average hourly, excuse me, yesterday's year-over-year numbers with respect to the

PCE Corps. They're sticky. We haven't been below 4% since September of 21. Our traders talking about a stagflation component? It's a great question. So not hearing it, that's great information. No, because most of the sources I talked to on the banking side, that's where we're whispering. Do you think we have a recession? I think everyone just wants the Fed to kind of stay out of it and let the market go where it's going to go, less hands involved, less tinkering, the better.

Now what about volatility? We all know that the VIX, the big successful contract here, is still a good contract. but zero days to expiration, in some ways, have changed the market. Your last thought on how the volatility indices are painting the rest of the next four to six weeks of the markets. Yeah, the VIX is extremely low right now. We're sitting at 13 points in the VIX, and we see a lot of interest in zero-day at zero-day expiration options.

You know, August saw 10 of the most volume traded in the zero-date expirations we've had so far. so people are still placing bets on where this thing is going to go. Excellent. And it's a great tool to hedge. And hedging's always a good thing. Tyler, back to you. And I hope everybody at Anguard Cliffs has a very happy Memorial Day. Labor Day.

Labor Day. Labor Day. That's the beginning of the summer. Labor Day, my friend, but that's fine. We appreciated Rick Santellian, the same to you. Okay, some tennis fans were not feeling the love last night when they lost the U.S. open right in the middle of a match. Now they're trying to figure out who's at fault in the dispute between Disney and Charter.

Let's bring in Julia Borsden for more. Hi, Julia. Well, Tyler, nearly 15 million subscribers to Charter's Spectrum's paid TV bundles lost access to Disney's 19-owned channels, including ESPN and ABC, is the two giants battle over licensing fees. Now, Disney says, quote, the rates and terms we are seeking in this renewal are driven by the market phase. but Charter says that it is willing to drop ABC, ESPN, and Disney perhaps for good because they say Disney's offering their other channels directly to consumers on their own and that they're also demanding higher license fees despite overall viewership declines. Charter is proposing a hybrid linear digital partnership in which, among other things,

Disney will allow Charter to offer its ad-supported DDC apps as part of Charter's linear TV packages. Now, Disney has not responded to this proposal just yet, but Lighthead's Rich Greenfield says that this standoff is worse for Disney than it is for charter. And Raymond James, writing, quote, we long suspected there would be a huge number of customers that would gladly drop ESPN and other Disney content for significant drop in their bill. But warning, quote, we believe there will be a rather swift loss of cable subs, and there will be a negative impact to charter revenue and earnings in that.

least the third quarter of this year, as well as potentially into the fourth quarter as well. So the question is what precedent the outcomes of this standoff set for the other media giants negotiations and how consumers looking to watch the U.S. Open or college football this weekend decide to react. More cord cutting, guys? It's really amazing. We're looking at those stocks there, Paramount, down 7%. Warner Brothers down 10%. Disney down to our parent company Comcast down 2% as well. So as you say, it's a charter Disney spat right now, but it certainly is a tell about what is afflicting or affecting the cable markets.

Yeah, and I've been talking to a number of analysts, and a number of them have been saying that this could really be a watershed moment for the linear TV business, Tyler, this question of whether this really pushes the end of the TV bundle, as we know it, because Disney is planning to take us to. ESPN direct to consumer. And we'll see if this dispute ends up accelerating the timeline in which they do that. Julie, another story you want to get your thoughts on the XR Swift because we now have numbers on how many people want to see Taylor Swift in a movie theater in October. Well, we have some preliminary numbers and they are massive. So AMC reporting that it's already

sold $26 million in tickets. I had to check my nose because it sounds crazy. $26 million in ticket sales. It is already one of the top-selling pre-sale movies ever, according to Fandango. And I just have to point out that AMC has told $26 million of tickets. Cinemark will not tell us yet how many movie tickets they've sold. Regal, all of the major chains are selling tickets. And this is a movie that will not launch until October 13th. So really massive numbers here, huge demand. The demand is so huge, in fact, that the Exorcist film that was scheduled to be released

the very same day from Universal and Blumhouse has actually been moved up a week so it doesn't compete directly with Taylor Swift. You got to love it. And you just, Tyler, you just know she's surrounded by such a smart, savvy business team. Yeah, it doesn't matter if your concert series is over. We will find another way to monetize it. I'm going. I mean, my husband was so mad that we didn't go.

I told him it was way too expensive, but now we'll go for 20 bucks to watch the whole concert in a theater. Sure. Sounds good. Julia, thanks. All right, coming up here on Power Lunch, August was a rough month for tech. If you're just going by the numbers, the Vanek Chip Index, down nearly 3%, for example. With a month finishing strong, so what does that mean as we head into September? And don't forget your chance to cramp.

Jim Kramer's final back-to-school episode airs tonight at 6 p.m. Power Lunch, we'll be right back. Welcome back. Tech stocks taking a bit of a breather in August with a NASDAQ down 1.5%. Can the 20-23 rally pick back up in the fall? Deidre Bosa, joining us now with the September setup for tech. And Deirdre, we've been seeing this market broadening out in terms of leadership, in energy and industrials.

Is there a chance we could see the same in tech? Yeah, we could see certain parts of tech accelerate. And we know that so far this year, chips have really had their time in the sun. So now investors, they may be looking to software for reacceleration. A couple of earnings last night underscoring a theme that we have seen emerge over the last month or so. Software versus semis, told through MongoDB and Broadcom today. The latter was up nearly 6% given up some of those gains, but that was on a strong beat while Broadcom lower by about 6%.

MongoDB's results in consumption-based model bode well for peers like Datadog, Snowflake Confluent. There was also the Oracle upgrade in Shopify, which surged on its Amazon partnership, propelling the software space at expectations that the rate tightening cycle is over, and there you go, guys, the rotation to growth and software, that could have legs. The bar for semis, meanwhile, seems to you have only gotten higher. InVidia's massive beat and raised the last quarter had a more limited effect on the stock and broadcom's in-line outlook.

It just wasn't enough for the street. This could all suggest to shift in the AI hype cycle at large as well. The upside for chips, the picks and shovels of the boom, that may already largely be priced in. So now investors, they could be looking for leaders in cloud data management and new AI products and apps through software names. Now, we showed you this chart a few months ago when chips were getting all of the attention. It looks at the mobile shift as a roadmap. Investors, they piled into semis first, and then they looked to infrastructure, and then software

and services. Now, it seems to be playing out in the generative AI cycle as well, guys. So we saw chips at the beginning of the year, and now perhaps we might be in the next phase of it where investors are looking for monetization in actual products and apps. It's an interesting call. I mean, what I hear you saying is that the brightest days for Nvidia may have come and that the future is already priced in and that what we're going to see is software ascendant. Software infrastructure. Infrastructure is sort of next in that chart, and that would be the data dogs, the snowflakes, the MongoDBs still remains to be seen. It could be a

player that we don't even know yet. But you're right, Tyler. Maybe the pricing and maybe the upside has been priced in for chips. In video, though, you've got to be careful, right? Because this may be the exception. Yeah, maybe the exception. They're so hot. They're such a darling. And they have so much market power that it would be very hard to bid it. But again, Deirdre, have a great weekend. See you next week. You too. All right. Coming up, Walmart's next frontier sending a message to rivals like Amazon with a third-party online marketplace. We got exclusive access to its first ever seller summit this week. And we'll share the details when Power Lunch returns. Welcome back to Power Lunch, everybody.

Shares of Walmart have been in a slow and steady gaining mood this year, up 13%. Now the company looking to grow its marketplace business, hosting a big event in Las Vegas for third-party sellers. Melissa Repco was there, and she joins us now with a look at what she learned there. Hi, Melissa. Welcome back. Hi, great to be here. Yes, I spent the past couple of days talking to both sellers who are signing up for Walmart's Marketplace, and also a lineup of Walmart executives who kind of pulled back the curtain on their strategy to grow online sales and the role that marketplace will play in that.

One of those executives I spoke to was Tom Ward. He's a chief e-commerce leader, and here's what he said explaining their initiative. Customers are continuously looking for more and more assortment. They want more options, more choices, more value. And so the reason we're at conference like this one is to help underline to both our seller community, what Walmart can bring to them and what together we can bring to our customers. Tom Ward spoke to me about how he really wants to expand what Walmart sees as the endless aisle. So having more of that stuff that people sometimes go to Amazon for,

that's everything from clothing to things they need around the house. It's all about having a ton of stuff and then converting that into larger e-commerce sales. One of the things that I have found in dealing with Amazon is the notion that I can go on there with the number of a specific light bulb that may be for an outdoor light. It's this big of a bulb. And they've got it. They've got it. Is Walmart trying to do that?

Yes, that's what they're trying to do. And the value of doing a third-party marketplace is that they can take a little bit more risks with what they stock up on. So not only are they trying to get some of those obscure light bulbs like you mentioned and parts, but they can also branch out into higher price point items, Things like Dyson Airwraps or even Rolex watches are now in their marketplace. What? From Walmart? Yes, from Walmart.

And here's the thing is they're not buying that inventory. They're relying on sellers. So if it doesn't do well, they don't have the same kind of markdown risk. Instead, they just have an abundance of options that shoppers can find on their website and associate with the Walmart name. So the Rolex would not be coming from Walmart proper. It would be coming from a partner of Walmart's because Rolex controls the supply. Exactly. It's from the seller. And those, of course, are authorized sellers. And for a brand name like that, you're right. There's more control there. But here's the sweet spot, too, is that the sellers that were at this summit being encouraged by Walmart to join the marketplace and expand their assortment are also potential customers because Walmart is also selling them fulfillment services, much like Amazon. And those fulfillment services are higher margin types of businesses. So they're both expanding Walmart's potential online business, but then also paying Walmart to pay. and ship their boxes.

The question is, is this all enough to really try to steal market share from Amazon? I was reading your report, Walmart annual sales, one-fifth of Amazon's last year. Yes, it's still, you know, when you look at Walmart, they're still a very distant second when it comes to e-commerce in the U.S. But they're trying to make some of those incremental changes, and one of their biggest differentiators is their stores. And Walmart's keenly aware of this. I spoke to their head of Marketplace, Manish Jonja, and he was telling me that, you know,

one of the things that they're trying to do is lean into the fact that a lot of those third-party sellers want to be vendors for their store. And on the stage at the summit, one of the big surprises was they brought one of the sellers, solo stove, which sells fire pits, and they said, you know, we're going put in a purchase. I have one. Yeah. Oh, wow. There you go. I don't know if you got it from Walmart's marketplace, but pretty soon you'll be able to get at Walmart stores because they are going to become a first-party supplier. And putting that story up there is something that Amazon simply can't offer is having those stores where you can maybe make it on a store shelves. Really interesting.

It's a smokeless outdoor fire pit. It is a really good product, I have to say. Especially for the summer. Right, when it's 90 degrees. It's great to have a smokeless pit. Melissa, thanks. Appreciate it. Got off the plane at 1.30 at Noirth last night.

Still standing. Love that. All right, time now for our ETF tracker. This week, we're looking at marijuana stocks as the federal government moved to classify cannabis as a less dangerous substance. That led to huge jumps. and the stocks and funds in that area. Advisor shares ETFMG and Global X marijuana focused funds,

all up big on the week. But when we switch that to a look at the percentage off the highs, you can still see there is a long way to go. The data comes from our partners at track insight. Sima? Let's now get to Steve Kovac for the CNBC News Update. Hi, Steve. Hey, Sima.

Yeah, Ukrainian President Vladimir Salinsky is reportedly expected. to attend the annual United Nations meeting in New York later this month. Albania's ambassador said Zelensky will take part in a UN Security Council meeting on Ukraine, which is set for September 20th. Meanwhile, the Ukraine government said today its troops broke through Russia's first line of defenses in several places and made notable progress on the southern front in the last 72 hours. Also, the Pentagon unveiled a new website billed as a one-stop shot for publicly available records about UFOs. This is pretty cool. The site will house photos and videos about resolved

cases as they are declassified. It briefly crashed when it went online Thursday, but it's back up and running today, so start downloading. And finally, Canadian authorities told drivers to keep their windows rolled up and beware of a swarm of bees accidentally released during an incident outside of Toronto earlier this week. Yikes, apparently crates carrying some five million bees slipped off a truck during transport Wednesday. Local beekeepers were brought out to the scene to help get the bees back to their rightful place. Seema, back to you. That is scary. That's like my worst nightmare. It's like out of a movie, really. Yeah. Steve, thanks. Ahead on power lunch, tensions with China, the Commerce Secretary's trip to Beijing and Shanghai

ending on a positive note, but concerns from American corporations looking to conduct business there remain? Can our relationship be repaired? And what would it take? We'll discuss when power lunch returns. Chinese stocks falling this week and capping off a tough month as data continues to show China's economy further slows. This as Commerce Secretary Romando's trip to China ends without concrete deliverables, one of the outcomes, a working group to discuss trade and investment issues. Let's bring in Democratic Congressman from Illinois, Raj Christian Murthy, who serves as ranking member of the Select Committee on the strategic competition between the United States and the Chinese Communist Party. Congressman, welcome.

Hey, thank you so much, Seema. We've seen over the last couple of months a number of high-ranking U.S. officials, not to mention a number of CEOs, going over to China to mend the relationship between our two countries, but the relationship remains challenged. What do you make of that? Well, I think it's going to continue challenge unless the Chinese Communist Party curb some of its economic aggression, whether it's intellectual property theft, or whether it's dumping or any number of other irritating moves that really cause a lot of distress. On top of all of that, they're raiding American companies in China, detaining employees and making it hard to do

business there. So given those challenges, I still think that Gina Romando's trip and others are very important because we need to continue the dialogue and communicating. All that being said, actions speak louder than words. So I'm looking forward to more of those on the part of the CCP that help to improve the relationship. The council that you co-lead just a couple of weeks ago launched an investigation into BlackRock and MSCI on alleged funneling of investments into China. Can you tell me how the companies have responded and where that investigation is right now?

They are cooperating with the investigation. providing information to us about their investments. It all started when, you know, essentially there are concerns about investments in certain companies in China where those companies could be harming our national security or by hurting our values by continuing their assistance in perpetrating the Uyghur genocide. So we're continuing the investigation. We look forward to more cooperation by these companies and others. Congressman, one of the issues that was much discussed during Secretary Ramando's trip to China was export controls covering sensitive chips or chip equipment manufacturing gear. We had a guest on earlier this week who said that the

export controls are one thing, but don't lose sight of the licensing, and I'm not sure, I'm no expert on this, so you're going to have to steer me through it, that the licensing provides some wiggle room to get around some of the export controls. Am I on to something there? How can you enlighten us on that? You may be, and I think that that's why it's very important for the Biden administration to continue to tighten their controls. Chairman Gallagher, Mike Gallagher, the Republican chair of the committee,

as well as myself, wrote a letter recently to Gina Romando, asking for a tightening of the export controls to cover any loop, or areas where the Chinese are trying to do workarounds with regard to our export controls. I mean, in a way, it seems like, Congressman, your efforts run counter to what the administration is trying to achieve right now, which is to create a space for productive dialogue with the Chinese. Would you agree? No, not necessarily. I think that the Biden administration is walking and chewing gum at the same time. On the one hand, they are tightening export controls. they're making it tougher for the CCP and its affiliated actors to use technology that we produce

against us. And on the other hand, they're engaging in dialogue to see where we might be able to curb their economic aggression. And I think you have to have both. Do you believe, I mean, there are some people who say that the Biden administration has been even tougher than its predecessor with respect to China. And they certainly have held on to to the tariffs, or at least many of those, do you think that's a good policy? I think so. We just had a field hearing in Wisconsin at a semi-truck trailer equipment manufacturer, and what they explained is that they were basically getting driven out of business by the Chinese dumping their chassis on the market at a cost less than the raw materials used to produce

And so that's when the U.S. put tariffs on those Chinese chassis products, enabling this Wisconsin manufacturer to then rebound. And that is essential for them to thrive and for other industries to survive as well. As we watch for, you know, where this U.S.-China business relationship goes, one area of interest, I know for you as well, has been a TikTok ban. We've been talking about this for over two years yet we've seen no action. What is the holdup do you think? I think that part of it is there are different committees of jurisdiction and surprise, surprise, different committees in Congress have different ideas with regard to how the legislation should be shaped. That being said, I think there are a lot of people in Congress who want to see the ownership of TikTok changed

from a CCP-controlled entity, namely bite dance, to some other entity. I don't think we necessarily want to see TikTok go dark, but we don't want it to be controlled by an entity that must give user data to the CCP upon request and where the CCP is embedded within the company and its leadership. Yeah, we'll wait for more on that, especially when Senate returns next week. Congressman, thank you for joining us. That's Congressman Raj Krishna Murthy. Already coming up, turning the tables. Corporations have been profiting off of our personal data for years, but isn't it at time that we started getting paid for it? A new startup says yes and is now making competitive offers for personal information. We'll hear from the CEO when

Power Lunch returns. Personal data is both the lifeblood of digital advertising and an important ingredient in the future of artificial intelligence. But whatever happened to the dreamy idea that we could own our personal data and maybe even profit from it? Today, John Ford brings us up close with an entrepreneur whose ambitions almost killed him, but he came out of retirement to make data ownership real, John? Yeah, Tyler, that's what he's trying to do. John Roa is founder and CEO of Caden, a company with a tempting promise. What if you could curate a data dossier on yourself, anonymize it, and collect monthly payments from selling it on the digital market? Well, it's real enough that Roa was able to raise a $15 million series A round in this tough environment this month.

Yahoo co-founder Jerry Yang and Starwood co-founder Barry Sternlich are among his backers. Raw has tasted startup success before. His digital design firm ACTA was bought by Salesforce in 2015. But while building ACTA, Raw spiraled into a drug-fueled party lifestyle that almost literally deleted him. I woke up in a hospital on a Monday morning after four days of bad behavior and didn't know who I was, where I was. they thought I'd had a stroke, which thankfully I hadn't, but that was the first, that's what it looked like and sounded like, had no memory whatsoever. I knew what the question was.

I knew what a name was. But I had no idea what mine was. They would say, what city are you in? They say, can you list it? I would say, sure, New York and Miami and London. Do you know which one you're in? No idea. And I was going through what's called disassociative of amnesia, which is basically a defense

mechanism of your brain to get you to stop when you're going to kill yourself, right? Right? When you're just, when everything is going wrong, this is, you know, one of those, those emergency breaks. He wrote a book about it called A Practical Way to Get Rich and Die Trying. He escaped to a Greek island, swore off startup ambitions and drugs. He got centered, got engaged, got new priorities. Then he got this idea, which he was totally not planning to do, but wealthy backers told him he should.

And if he did, they'd invest. So John decided he could build Caden and this time do it clean, do it right. There are other companies out there promising to let you monetize, your data, everyone's data is clearly worth a lot. I argued, though, it's really tough to accurately calculated what my data is worth. Here's what he said. Now, to an advertiser, it's probably pretty valuable, right? If I know where you're traveling to next, I know you've bought a flight to Paris, and I can tell you about a hotel, that's probably worth a ton of money, right? But you're right. In general cases, in the isolated kind of incident to the user, it's not all that valuable. And so what we had to

solve for at Kaden was figuring out how to not just look at it in the aggregate, which has been done for 20 years, right? Put billions of people's data together and make it valuable. We had to figure out from a unit economic standpoint how your data can be worth 10, 20, 30 bucks a month to you, and therefore to us, or to us a multiple of that. Data Cpogo and Tapestry are all startups with different methods of monitoring your digital life and cutting you in on monetizing it. John Roas says Caden has figured out the healthiest, most transparent way to do that. We'll keep an eye on it. So how do I get paid?

Yes. I'll get paid if I'm on their register of people. The idea is you plug in certain services, say Spotify, Amazon, they monitor what you listen to, what you're buying. You get to pick, though, what's included and what's not. And based on the combination of how many things you put in, how much you're spending, your overall demographic, You get paid. So they could monitor my Instagram use. They could monitor my Spotify.

And they could see what I pause on on Instagram. What do I click down on? The idea is your name, though. Tyler Matheson does not get attached to it. They're not saying, who wants Tyler Matheson's data? They're saying, okay, there's somebody out there who listens to a lot of Lil Wayne. And, you know, they don't know it's you. They don't know.

Makes you feel better. It makes me feel better as a consumer. If I am going to sell my dad, at least not only am I getting paid for it, but it's anonymous as well. How far are we from a world where this actually becomes a norm? I think we're pretty far. You've got a number of competitors, and I think we're not yet at the point where it's proven whose method is the best. John has a track record of being an entrepreneur of working with data.

He's got some good backers here, though, so we can make a run at it. Yeah, Barry Stern-like, some prominent individuals and $15 million so far raised. Did he say whether his experience with drugs and that episode, ever came up in his negotiations for new funding? Well, he's been very open about it. He wrote a book and he... So everybody knows. Everybody knows.

He's an open book, literally. Yes, literally. And he went to a Greek island, like, opened up a restaurant, was like, entrepreneurship is bad for me. I'm not doing it anymore. And had to convince himself that it could be done in a healthy way. When I asked him at the end of the interview, what's next? He was like, well, next I'm getting engaged.

And so that's what's really important. I was like, okay, what's next for Caden? Man with a plan. Love that. An inspiring story. Thanks, John. Thanks for bringing it to us. The maker of lucky charms is having an unlucky run.

Shares of General Mills hitting a new 52-week load today. Consumers spending less time eating at home as they head back to the office and school. Coming up, we'll trade it in a fresh three-stock lunch. Back to this break. Welcome back. Time for today's three-stock lunch. Walgreens Boots Alliance among the top losers in the S&P 500 today and for the week. after announcing its CEO has stepped down less than three years on the job.

Under her leadership, the drugstore chain made acquisitions to transform itself into a full-service health care provider, but the stock not responding down more than 6% today. Here with our trade is Quinn Tatro, founder and president of Jewel Financial in Quint. Not a great day or year for the stock. I mean, basically, it's never a good look when the CEO that's brought in to turn around the company leaves. you know, with a very short period of time. This is a difficult one because from a fundamental perspective, this company looks good. I mean, it's now trading below book value, has an enticing 8% dividend.

Unfortunately, there just is no rush here. So I think if somebody's out there and saying, hey, I want to buy this, you know, incredibly attractive valuation-wise, there's no reason to be the first mouse. there's an old saying that the second mouse gets the cheese. So we got to see who comes in, who turns around the company. Even if you miss the first initial move, it's okay to wait. In retrospect, did they overpay for Village Medical when they bought it for $9 billion? It's like an urgent care or a quick serve medicine, I suppose.

Oh, it's hard to assume they didn't. I mean, yeah, there's no question. You look back and you say, you know, you have to question all the previous decisions and all the financial maneuvers here. Yeah. All right. Up next we have General Mills hit a fresh 52-week load a day. Not much crunching this one. It's down about 2% for the year.

The cereal maker lower by 21% for the year. Quint, what do you think of General Mills? I mean, not the products. You've got to love the fruit loops, but... Yeah, this is a tough one because we actually own this in our dividend model, and we would continue to add this here. Unlike, you know, Walgreen Foods Alliance, this one gets more attractive the lower it goes. It has a decent balance sheet for a staple, a nice 3.5% yield, and the dividend payout ratio is healthy at about 50%.

But I'll put my fundamental geek hat on for a minute. You look back over the last 10, 15 years. This company's been able to compound their return on equity by about 20%. And since they're retaining half of that, that means they're growing their intrinsic value by 10% per year, even though the stock's not reflecting that due to inflationary pressure, supply chain, you name it. So this is a name if you are looking for a good staple with a decent yield, you could start nibbling in here, leave some room because you're not going to time it perfectly, but we like this one a lot. Keep that geek hat on because we want to take a look at Lulu Lemon that posted earnings that beat Street expectations yesterday. It also upped its guidance for the year on strong China growth.

The stock up more than 5%. at the top gainer on the NASDAQ 100. And interesting to see a retailer talk about strong international sales, Quint. You know, it's a shame we couldn't get the video working because I'm sitting here decked out in my Lulu Lemon outfit today. You know, just because of this, we're big fans. We own the stock. It was really nice to see the second, you know, quarterly earnings report.

They had a really nice report last quarter. There was a lot of speculation because of the retail softness that's going out out there. You can look at this stock and say, wow, this isn't cheap, trading 30 times. But the company has no debt. They've got about $800 million in cash. And again, what's happening? Well, they're taking market share and they're growing those earnings and they're raising guidance. So in a soft retail environment, this is one where folks who have to have, you know, the exposure in their portfolios for allocation reasons, they're going to shift out of the laggards. And they're going to go into this winter. So even if the 5% move today, I'd still be a buyer of the stock here. Stock at 404 share. Quinn, thanks for your time, Quinn Taitro. And today's big move and Lulu helping to rearrange. are stock draft standings, defending champ Ryan Reynolds and the Mountain Goats moving into second place,

passing Erica Sullivan and the team from Rutgers. But they're all chasing WWE superstar Charlotte Flair, who is up 50% thanks to what else, NVIDIA. We have time, Tyler, for a couple more stories, and after a strong start to the year, hospitality and travel stocks are giving back some of the gains in the month of August as occupancy data shows the number of Americans

checking into hotels continues to moderate. Expedia, Airbnb, ending the month, month of August down roughly 10% while booking holdings saw its stock rise thanks to better than expected earnings. Among the worst performers, take a look at host hotels and Sunstone. These are hotel reeds that have high exposure to Maui. Both stocks falling 13 and 14 to 10% as we watch those recovery efforts continue on the ground. Again, Maui, is this in any sense a seasonal phenomenon? Do hotel stocks and Airbnb decline in August because that's sort of the end of the... You're right. Part of it is that. of it is also more people are traveling to Europe, so the U.S. travel market has been pressured

by that. All right, Seema, good to have you with us. Great to be here, Tyler. Good. Good stuff. Have a good long weekend, everybody. Whatever you're doing, do it safely. We'll see you next week. Thanks for watching, Power Lund.