Power Lunch - Tools of the Trade, Big Screen Debut 3/22/24

Episode Date: March 22, 2024

This market has been chock full of surprises. Especially when stocks, bonds, technical and options trades are all telling very different stories. So we’re going to break down the trade on a single stock, using three different schools of thought.Plus, the Olympics’ opening ceremonies are hitting the big screen – literally. IMAX will air them on more than 150 U.S. screens this summer. We’ll discuss that and changing trends across the theater landscape with IMAX CEO Richard Gelfond. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Welcome to Power Lunch, everybody, alongside Contessa Brewer. I'm Tyler Matheson. Glad you could join us on a Friday. Coming up, The Tools of the Trade, this market has been full of surprises, especially when stocks, bonds, technicals, and options are all telling very different stories. So we're going to break down a single stock with three different schools of thought. More on that. Slice and dice it up. That's what we're going to do. The Olympic ceremonies are hitting the big screen. I mean, I'm talking the really big screen. IMAX is going to show the opening ceremonies. Only the most recent example. of theaters branching out beyond films and into events, we'll discuss the changing trends with IMAX CEO, Richard Gelfand. But first, we're going to give you a quick check on the markets. The three indexes are mixed with the Dow down about a half a point. S&P 500 is sort of flat the NASDAQ composite higher by 0.36%. But despite today's declines, the Dow is still remarkably close to that 40,000 milestone.

And three components really make a majority of the moves this week. You had Apple moving on the DOJ suit. As you can see, today, it's up three quarters of a percent. Boeing CEO facing some uncertainty. The stock up almost a percent today. And Walt Disney, of course, Disney is having some drama with its board. It's off by two-tenths of a percent, Tyler. And now CNBC.com actually out with a new screener highlighting the Dow names most likely to push us over 40,000 based on analyst price targets. They include, wow, interestingly, Boeing, United Health, Nike, Apple, and Amazon, Contessa. So let's drill into one of those key Dow components here, Apple. The shares slightly higher today, pairing back some of the losses we saw yesterday after the Department of Justice sued Apple in an antitrust case.

T.D. Cowan is out with a new note saying the case may not even reach trial until the second half of 2026. Chris Shankar wrote the note. He's a managing director at T.D. Cowan who covers semiconductor equipment and IT hardware. It's good to talk to you today. So why do you think that Apple buys a little time? just because the case gets pushed off and we may not see courtroom drama happen for another couple years, Chris? Sure, Condice. Thanks for having me. I think that timing is based on what you've seen happened with Google and Microsoft antitrust cases.

So it took like about a little over a year and a half for them to get all the ducks in a row before going to trial. So it doesn't necessarily mean that's going to be the case. But, you know, based on prior precedence, it seems like a likely outcome that takes a while before it goes to trial. Do you think that Chris, do you think that Chris is, do you think that Apple

could be facing some repairs or some remediation in advance of the legal path that we see ahead that could actually eat into its bottom line? No, you know, like if you're talking about like potential hits, I would say that until the, you know, the courts determine how to, you know,

impact apps. I don't see any risk to the actual numbers per se until you start having like a final decision outcome. But I think the risk is a regulatory overhang. There's always a slight negative for the stock. It could be a headwin for the stock. You know, if many investors think that this is going to start eating into their high margin services business, that could have a slight negative impact on the multiple. So I would probably say that, you know, in the near term or the short, the intermediate term,

I don't see the number is actually getting impacted, but the stock is a slightly different story. Okay. Well, what do you think the impact on the stock is going to be? You know, I mean, at this point, obviously, we've seen the stock has down yesterday, like, 2% or 3%, and now it's holding up pretty well. I think investors still trying to digest the news, and depending on how we look at it, you know, calling it a monopoly, and usually the trigger point is over 65% percent. If you look at the U.S., Apple's revenue share of iPhones, there's over 65% of smartphones. If you look at their unit share of total units in the U.S. is about 55 to 60%. There's probably over 70% for the premium smartphone segment. So it really depends on how we slice it and dice it.

You know, depending on how you look at it. So people are still trying to like, you know, digest that fat. And what do you think our upcoming catalyst that we could see that potentially could move the stock price higher? You know, I think from a capitalist standpoint of me, obviously I think you're going to have people expecting some kind of product and ounce funds in calendar Q2. Obviously, they have the earnings call like end of April early May. in June they have the worldwide dollar per conference. So there are definitely some catalysts in terms of like products and, you know, a portfolio releases in addition to earnings, you know, in terms of what the outcome of this is going

to be, it's very hard to handicap it. And I'll be really surprised if Apple talks openly about it on the earnings talk, given the fact that a lot of us still evolving and people usually don't comment on legal matters. Do you think that there is a chance that regardless of what the DOJ does and how, that path goes about regulating its competitive mode. Do you think that there is a case to be made that Apple loses share because its products are super expensive? And I mean, we just heard a guest on the exchange last hour with Tyler talking about how young

people don't have a lot of disposable cash, that maybe a more affordable option starts to eat into Apple's considerable success. Yeah, it's an interesting question. I mean, clearly, if you look at the hardware segment, the iPhone is the biggest cash driver, is the biggest cash car for them. And, you know, people have written about iPhone, you know, being kind of replaceable or things like that for the last seven and eight years, even talking about innovation, which has slowed down for iPhones, but you still seem like, kind of like the cadence of

iPhone adoption being pretty strong. I think the more important thing is I think the install base is extremely low, right? Over the last four or five years, I would say the churn from iPhone to a lot. Android has been extremely low. So it tells you like it's a very sticky install base. Clearly, the ecosystem plays a part, but the very fact that, you know, it is a high ASP product, but at the same time, it provides you a lot of benefits and features, and it seems like the consumers are willing to, you know, adopt it. Clearly, this year, we've had to see how the adoption rate is the user actually iPhone units might be down year over year. It's a combination of digestion and a few

other things. Hey, Chris Shankar, it's great to see you. Thank you so much for joining us today and giving us the deep dive on Apple. Appreciate that. All right, let's talk a little bit more about the Dow's recent push to 40,000 and the state of the markets in general. Joining us is Ron Insana, CNBC senior analysts and commentator, also chief market strategists at Dynasty Financial Partners. And Mike Bailey is a director of research with FBB Capital Partners. Welcome to both of you. Mike, let me start with you. In the last hour, Michael Farr, another Michael, called today's market bubbly but not a bubble. So I guess carbonated, but not overflowing.

What's your view? I think that's directionally correct. I think we're probably closer to a bubble now than we were, let's say, a year ago. I think the question is, you know, will it pop? I think we certainly saw a little bit of a bubble pop in late 21.

Everything was going out, there was irrational blueprints, et cetera. We have to scroll ahead and say, what's going on right now? Are there real fundamental reasons driving the market? Let's go to AI. Let's look at Nvidia. I mean, they are generating massive growth,

These are real dollars. They're real huge companies are buying these chips. There's a whole ecosystem around it. So we are seeing a lot of dramatic growth out there. Yes, that is driving earnings up. This driving stock prices up. Are we in a bubble?

I don't think we're quite there yet. But I think we're definitely getting closer. I think investors really got to be very careful about what they're buying. If they've got something that's really moved up, start to think about rebalancing. There may be, Ron, portions of the market that are in bubble territory, if you want to call it. others that are not so inflated?

Yeah, much of the market's not inflated, although we have seen a broadening of late, and so areas of the market that have been underperforming small caps and the like, but starting to turn higher. Bubbles a very specific word. It implies a lot of things, including public euphoria, you know, heavy issuance of new stock, which we've not seen yet. We've seen a little bit of it starting to take place now. Well, there's certainly euphoria surrounding AI and...

Yeah, although... A lot. I mean, what do you people go? How about Nvidia? Man, that's why people talk about. It's like CMGI 25 years ago. Well, no, I mean, CMGI had zero business being a public-contraded company. No, I understand that.

They were not real. They had one piece of Lycos that actually got sold to somebody else. But the stock performed as though. The stock was the darling. Oh, absolutely. David Weatherall was a billionaire. I remember we sat, Sue Herrera and I sat with him at a fidelity event and asked somebody was going to do now that he was a billionaire and he said he was going to get a plane.

You know, so it was that was froth. And that was even early. That was like 97, 98. Yeah. So bubbles. inflating. I mean, we're in the infrastructure phase of the AI buildout. We haven't reached the implementation phase, which is going to start coming, I think, in waves now. And you've talked to venture capitalists. You're looking at the implications for health care, financial services,

wide variety of different businesses. I was doing an interview yesterday at an event. And even, not just the news business, but the legal business, that profession, everything's going to be touched by it. The question is, how do markets respond? And when do we see the type of euphoria that we saw between 1995 and night all the way through 1999 into early, I don't think we're quite there yet. No. You know, it's interesting because we saw at the time in the 90s, the dot-com but early 2000s, but it turns out in the long run, if you look at history, that there was

a reason for that euphoria. It may have been too compressed and too focused in that moment, but over the long run, some of those ideas and the long-term confidence that the Internet was going to change the world and power other companies was true, and that's true of AI. What's interesting, though, is really old-fashioned investments. For instance, you look at commodities and what we're seeing with commodities, Ron, there's opportunity in the same kinds of investments our grandparents may have made. Yes, I mean, we've seen some agricultural commodities turn higher. We've seen copper and corn, you know, go up in tandem.

Energy has moved up a bit, although it's moderated lately. And so, yeah, I think it's like any other environment, you know, there's usually a multiplicity of choices to make when you're looking at the investment environment. You know, the difference, I think, between, as you say, the similarity with the 1990s is that, and I'll quote both Roger McNamee and David Faber. So Roger talked about how the U.S. economy thrives off of bubbles because we build out all this brand new infrastructure. There is a period where it crashed. In 1999, David Faber was talking about terminal values. Did these stocks reach their peak even before they saw peak profits? And that happened with Amazon.

It happened with a lot. Someone out of business. Pets.com is no longer there, but chewy is. Yeah. So we've seen, you know, we used up all the dark fiber that we thought was going to lay idle for decades. Instead, it's now we don't even have enough capacity to continue building out what we're doing right now. It's interesting, too, Mike. We talked to Black Rock's head of global fixed income yesterday, and he was saying that he really thinks that the rate staying high is very bad for a significant portion of the economy, small business owners, those who rely on community banking, that if what the Fed can,

cares about is this beautiful Goldilocks scenario of a soft landing that it's really important to navigate that interest rate, not for the big banks and for the big insurers and the like, but really for the engine that powers the center of the country. What do you think of that? It's a very fair point. I think as the Fed thinks about every part of the economy that it touches, it's got to go big and it's got to go small for sure. That trickles all the way down to community banks. A lot of those are scattered everywhere. They are kind of form of fabric of some of these small communities, so they are relevant. You know, I think at this point, there are still, they're working through these high rates. They're managing through. We've seen definitely

some big hiccups with a few companies here and there that we're generally doing things a little more extreme. So I think at this point, based on the track record, I think a lot of these community banks can make it through. If we get some surprise or a policy mistake, you know, if the Fed raises rates or does something really crazy, that would be a big problem. I think this point, especially for that part of financial services, were in pretty good shape. Michael, and you're happy to own list are Taiwan Semiconductor McDonald's and ADP automatic data processing. What do those three stocks have in common? Yes, so it goes back to the comment at the top about being in a bubble. Perhaps I think, you know, again, we're maybe getting

closer to one that really should force investors to think hard about valuation. So as we look at what we own, sort of owning companies across the board is good, but I think, you know, looking at companies that are a little bit cheaper is great. So Taiwan's Semi, you could argue this is sort of buying Nvidia without the boom and the bust. It's also buying it a much lower valuation. So we like that. Take a look at McDonald's against trading relatively light compared to where it normally does. Looking pretty reasonable. Some people are calling it McMackro. Some issues out there certainly seeing some pressure in the Middle East. A lot of customers out there struggling with higher prices after some price increases. So that's

an issue. I think McDonald's works through that. They're potentially gaining share outside the U.S. that's interesting. ADP, again, is trading a little bit higher valuation, but I think looking at this point, very stable business. I think we're in pretty good shape as far as a soft landing. Oh, by the way, if there is a hiccup in the economy, actually, ADP has outperformed its sector

into and out of recent recession. So I think a good few companies to own here as we debate whether we're in a bubble or not. All right. Thank you very much, Mike. Appreciate it. Ron, good to have you here. Thank you.

Thank you. Good to be with you. Coming up, tonight is the deadline for Congress to prevent a government shutdown. The House already voted, but still needs to get through the Senate. We'll give you the latest next. Welcome back with the shutdown looming. The pressure is on the Senate to pass the funding bill.

But in the meantime, a leadership challenge is emerging in the House. Emily Wilkins has the latest. Emily, hi. Hi, Contestell. Yeah, a lot going on on Capitol Hill. Let's start with that $1.2 trillion funding bill. The Senate is still negotiating an agreement that will allow them to get to that vote on the bill before midnight tonight. remember it's not a debate about what's in the bill we know it can pass it's just a

question of shortening that process and you're going to need all 100 senators to avoid a weekend shutdown now over in the house members are dealing with the fallout after that spending bill just barely passed this morning a majority of the republican conference voted against the bill protesting a lack of border security measures for funding for programs that facilitate and provide abortions now all of this could have an impact on mike johnson's speakership just before the vote Congresswoman Marjorie Taylor Green took the first step to oust Johnson, filing a resolution to begin the process. However, she did not take the second step, which would have been actually going to the House floor and announcing her intention to offer the resolution. And Green told me

that she doesn't have a timeline for when she's going to make that next move. It could be weeks, it could be months. She told me she wants to give her colleagues time to determine who might make a better speaker. I don't want to drive the House into chaos. I don't want to drive the House into chaos. I want our committees to continue to be able to do their work, investigations to continue, and important things to happen here in Congress. I also want our conference to have the time that everyone needs to think this over and have conversations over who can be our speaker and who is willing to lead our Republican-controlled majority in the House of Representatives to actually produce and bring Republican bills to the

floor. Lawmakers are going to have at least two weeks to do that. They're all going to be leaving D.C. today for the Easter recess. Once they get back, Speaker Johnson has indicated that he'll be taking up supplemental funding on Ukraine, Israel, and Taiwan. That's something in the past that Congresswoman Green has said will trigger that motion to vacate, guys. Okay, well, then here's the question. Given what the current leadership goes through when they take over leadership roles, who would want that job? Condessa, it's a great question.

And I ask Congresswoman Green, I'm like, do you have anyone in mind? And she did not give any names and it's hard to think of exactly who it could be. We saw so many likely candidates go through the process and not be able to secure enough support from the conference at this point. It is hard to think who else other than Johnson could do the job. Another thing for a lot of members, Republicans know that those three weeks that they weren't able to get anything done. They weren't able to agree. That did not look good. They don't want to be there again, especially not in the months running up to an election.

So I think there's a lot of concern right now for exactly how this might play out. And a lot of questions as to exactly how serious Congresswoman Green is about trying to hold everyone's agenda and go back to the drawing board for an uncertain candidate. Do we know whether she has any support for her resolution? Any others have signed on to it? I mean, Tyler, Congressman Green has said that she has support. You've also seen a number of other members kind of voiced some concerns with Speaker Johnson with the fact that he has had to rely on Democrats for voting. vote after vote after vote because he cannot get enough Republican members to support things. And the road is frankly going to get more difficult for Speaker Johnson.

We're hearing today that Congressman Mike Gallagher has come out and announced that he will be leaving Congress on April 19th, shrinking the Republicans majority even further and just making it that much harder. Remember that the spending bills might be done in the House now, but there are still several other must-pass pieces of legislation when it comes to security and when comes to FISA, when it comes to the supplemental. This is all stuff that Johnson's going to have to work to get done. And now he has a smaller than ever majority in which to do it. All right, Emily, thank you very much. Emily Wilkins, we appreciate it.

Coming up, big AI energy, the hottest topic in tech, also dominating one of the world's biggest energy conferences. Our Pippa Stevens was all over this year's CERA Week, and she'll bring us the key highlights when Power Lunch returns. Welcome back, everybody. A wild week for Treasuries, and Rick Centell, He's been covering it all week. Hi, Rick.

Hi, Tyler. Indeed, a wild week. And much of it started on Wednesday, of course, with the Fed meeting. And do realize, as we sit here at 459 in a two-year, we're down 14 basis points on the week. 421 where the tenure currently resides, down 10 basis points on the week. And as you look at a chart of twos and tens on one starting on Fed Day, you can see that we've never moved back up towards the levels we were at right before the. Treasury, excuse me, the Fed announcement and, of course, the Q&A. We had some good data yesterday and yields moved up, but they still couldn't overtake those

levels. And if you're a technician, another reason besides the potential of Fed helping the markets by an ease potentially in June is the double top. If you're looking at two-year, 472, 473. If you're looking at 10-year, 4-32. Those double tops are compelling, especially given the push that the Fed Day drop in yields buying spree has costs. And finally, whether you look at the Bank of England, leaning towards an ease in June. The ECB, definitely hinting ease in June. The Swiss already ease in the Chinese economy, well, I would say that it's not in terrific shape.

All that is combined to really boost the dollar. Now, one may say, well, we're going to ease too. There is a growing sense of the data could push eases off the table. Whether that's true or not, only time will tell, but the dollar index is fueled in part by the relationship between certain central banks more committed to easing and their economies potentially slower and their inflation outlook a little different than the U.S. Contessa, Tyler, back to you and have a great weekend. Rick Santelli, you too. Thank you, sir. A big week for the energy space here. Key players converged at the CERA Week conference. Pippa Stevens was there and now back with us to recap all of it. What did you learn? Yeah, so Sarah Week by S&P Global is really the most important energy conference during the year. It unites all the key stakeholders across all forms of energy.

And no surprise here, but AI was top of mind in basically every single panel, every single conversation, specifically around the power demand that it's going to take. Now, remember, load growth or the growth in demand on the grid has been essentially flat for years and years. And so these utilities plan very far in the future. And now, not only do we have the electrification of everything, EVs and heat pumps, but now all of a sudden, almost kind of out of left field, we have this huge surge in the need from data centers. And so that means that the conversation is increasingly becoming an all of the above energy approach. And kind of this understanding that we're not going to be able to get there with renewables alone.

Particularly for a data center, you need 24-7 reliable baseload power. And so your only green option for that is nuclear. Of course, we have batteries and renewables right now, but that's not going to get you the entire way. I was going to ask you, does this mean, it argues for nuclear energy? But nuclear power plants take decades to permit and build. Yeah, so we had Vogel 3 and Vogel 4 in Georgia come online. That's the latest reactor, full-size reactor. But there's a lot of buzz around SMRs, that's small modular reactors.

So those are much smaller scale, much cheaper in terms of the capital intensity. But, you know, maybe 20, 29, 2030 at the earliest is when those will actually come online. So in the meantime, there is this kind of disconnect between all these data center announcements and what's actually feasible right now. And is that going to slow the transition? They will become more efficient, you know, the longer they're online because this tech is always evolving. But still, it's a massive demand on the grid. Pippa, thank you for bringing us that. I appreciate that.

Let's get to Julia Borson right now for the CNBC News Update. Hi, Julia. Well, Kate Middleton sent a video message today to share that doctors found cancer after she underwent an abdominal surgery in January. This, of course, came as a huge shock. And William and I have been doing everything we can to process and manage this privately for the sake of our young family. The Princess of Wales says she is undergoing preventative chemotherapy. She asks for privacy. She completes her treatment and focuses on making a full recovery.

Russian state media reported explosions in a shooting at a music hall near Moscow. The reports came in around 8 p.m. local time claiming several people in combat fatigue. led off explosives and open fire with automatic weapons at the venue. State media says people were killed and injured, but right now it is unclear how many. And the House Republican majority is thinning again. According to two NBC news sources, Wisconsin Representative Mike Gallagher will resign from Congress early. He announced last month he would not run for re-election. Gallagher is the chairman of the Select Committee investigating the Chinese Communist Party.

Tyler, back over to you. All right, Julia, thanks very much. Julia Borson. Life is all about perspective and the same can be said for investing. Coming up, we'll break down the trade on a single stock using three different analysis tools at our disposal. Power lunch will be right back as we take a deep dive on a very popular stock. Welcome back, everybody. Shares of Reddit a little bit lower today, but still well above that $34 IPO price from yesterday's debut. But another social media stock has been stealing the spotlight meantime.

Shares of meta are on pace for their seventh straight positive month and their 16th positive one in the last 17th. And we want to dig into the stock with every tool at our disposal, fundamentals, technicals and options. So we gathered a panel of experts. George Ball, Sanders Morris Chairman, Dan Fitzpatrick, Stock Market Mentor President, and Mike Co., Open Interest Pro, co-founder and chief strategist. So we're going to start now with the fundamentals. And George, why don't you dig down on what you see. in META and what do the fundamentals tell you?

I hate to be the weather forecaster who is saying it's been around the family's picnic three days from now. But I would be a seller of META with at least part of my position if I owned it, but I would not buy the stock. I think the risk to its future earnings coming from a number of governmental and executive branch investigations is dangerous to the earnings growth in the future. Secondly, although it has and is spending a great deal of money on AI, the danger to its brands to Facebook, Instagram, to Messenger is too great.

Others may depletes in the future as AI becomes adopted by Facebook. Okay, thanks. All right, so let's go to the technical take now. That stock had a breakaway back in February. Dan Fitzpatrick, what do the charts tell you? Hi, Contessa. Well, I like meta from a technical standpoint. What was really meaningful to me was it started with this last big earnings gap. It was a breakaway gap from $390. And the fundamentals, you guys just kind of covered that. And I'm just looking at what the chart is telling us. and we've got a really strong up trend. If you just extend the 50-day moving average, if you look at this chart,

you extend the 50-day moving average. I can see support kind of like all the way to 500. The best thing for this stock would be to drift sideways a bit as opposed to just keep on going. But I look at the slopes of these moving averages, kind of like the Goldie-Lock slopes, not so steep that we're going to get a big risk, a big pullback, but not so shallow to where you're not making any money.

And so I really like this technically. And the fact that that gap held on huge volume, four times average volume and the stock continues to drift up, this is under big institutional accumulation still. And when institutions continue to buy, the stock continues to go high. We'll put it that way. All right.

Let's move on to the options play here. Mike, you know you see a possible big swing. post-earnings for meta, how would you play it? Yeah, I mean, we were just talking about the possible Goldilocks situation here and sort of steady as she goes. And that's really what the options markets is forecasting right now between now and April 19th. That's regular way expiration.

In fact, the options market only implying that the stock could fall within about a $30 band between now and then. But if you just look one week further out, that's to the 26 expiration, you're looking at a possible move of about $60. And there's a good reason for that. This is a stock that has moved double digits five of the last eight reported quarters. Most of those have been higher of late. So this is a stock that if you owned it, you could consider selling some upside calls against it until that 19th expiration.

But I probably would be a little bit more cautious going into earnings. Okay, so we have all three of you here. You have a lot of expertise among you. We want to get your trades based on your own investment school of thought. So back to the fundamentals now and beyond meta. George, talk about your fundamentals pick in. the housing space? I think that the home builders

are very attractively positioned. New houses are very cheap compared to use houses. There's actually a 16% greater value qualitatively quantitatively. You buy a new house than an old house. The home builders are still cheap.

The prints among them is NVR, a very expensive stock, $8,100 a share but statistically quite inexpensive, 16 times earnings. And I think that the future for the home building stocks over the next two or three years is really remarkably good. Even NVR at that hefty price. Yes. All right, Dan Fitzpatrick.

Let's move on to your technical pick. It's kind of crypto-adjacent. Yeah. Yeah, you know, I really like Coinbase. I actually consider myself a late adopter for crypto, but I really like it. And Coinbase, from a technical standpoint, is really solid, like from the get-go, from when it was initially offered. It lost 92% of its market cap.

I mean, it was a huge loss right along with the bubble popping in Bitcoin. But since that time, it has reversed into a real, real clear inverse. head and shoulder pattern. And that neckline was a huge breakout area. And since that time, the stock has just continued to move higher. I look at it as probably even running up to $430, which was the IPO high. It's got just kind of like meta, a pretty good slope. Here I'm showing you the weekly chart, and it's the 40-week or the 200-day moving average. We could see this stock even pulled back a bit. I'd love it, frankly, if it pulled back to around 200 bucks so I could buy some more. But if you just look at the zigzags on that chart, they're higher highs, higher lows,

but I would not be buying it right here. I would want to be patient and wait for a bit of a pullback. Up 233% one year, 262% six months. You think the momentum is built in here. Love it. Yeah, I do. And I'll tell you why. I know we're not going to get into the guts of Bitcoin, but Bitcoin is really approaching this having event now, where the supply is really going to be constrained more just because the reward for solving these blocks and all that is going down. And so what's happening is with the advent of these Bitcoin, these spot Bitcoin ETFs, we're getting much more demand, institutional demand for Bitcoin. And because of that, think about this, Tyler, it's causing a feedback loop.

Much more demand, constrained defined supply, unlike the dollar, at 21 million. And that's creating an upward lift of Bitcoin. Now, everybody's looking for alpha. Bitcoin crypto was a top performing asset class over the last 10 years, five years, three years, you name it. And so people are getting more and more interested in this. they're going to be coming in and buying it, which is also then going to cause demand to increase on a constrained supply. And so what's going to happen is, at least in my view, and what the charts are telling us is as the price goes higher, it kind of brings in a little bit of that FOMO,

which is going to push the price even higher. And that's where Coinbase really benefits. Okay, let's get to Mike Co. Again, your options pick came after the Fed decision this week. What is it? Yeah, I mean, right after the Fed decision, we saw options premiums, which were already very low, get even lower. So I think one of the things you definitely could take a look at, I mean, the S&P is up more than 10% year-to-date. Options are extremely cheap. You could just buy a downside put in SPI as hedge against your portfolio. For example, the April 500 strike put in SPI, that was about $1.5. When I was looking at it just a few minutes ago, that's about 30 basis points of the current price.

and that actually would give you protection that kicks in just over 4% to the downside. And it captures the next two PCE releases, which is, of course, as we know, the thing that the Fed likes to look at most when they're concerned about inflation. And if they pivot at all based on that three cuts that they talked about, this could be a good way to protect the downside in case we get a disappointment on that front. Mike Ho, great at see you on Power Lunch. We have George Ball and Dan Fitzpatrick as well. Gentlemen, appreciate all of you.

And coming up, talk about a big screen debut, live coverage of the Paris Olympics opening ceremony. and it will go up on more than 150 IMAX screens this summer. That's a party. We'll talk to the IMAX CEO about that and much more when we return. Welcome back to Power Lunch. We're just about four months away from the start of the Summer Olympics in Paris. Bien sur. And thanks to IMAX, you'll be able to catch the opening ceremonies on July 26th,

on the very big screen, live in more than 150 IMAX theaters nationwide. It's the first time ever that the global event will be presented live in IMAX. Richard Gelfand is the CEO of IMEX. So if people buy a ticket, Richard, for the opening ceremonies that they could see on NBC sitting in their living rooms,

they're going to buy a ticket on a Friday afternoon in the summertime. What's the draw for customers? Well, IMAX does an incredibly disproportionate share of the domestic and the international global marketplace, whether you could see it on TV or whether you could go there. Because the reason is the experience is so special.

And the IMAX platform is really known as a place to go for real advance and to experience things. So during the pandemic, a lot of films were streamed for free in the home. But yet IMAX did a lot of business. People wanted to go see it. It's a culturally larger than life experiential medium. So if you look at things we've been successful on in the past, whether it was a movie shot from out of space or documentaries on Mount Everest or Oppenheimer last year or Dune this year, when there's something really special, people gravitate to IMAX.

And, you know, frankly, we feel this year's Olympics is going to be incredibly special. for a hundred boats over four miles going through Paris on the Sen, all these athletes from around the world. I get it would be it's an incredibly immersive experience. And boy, who doesn't love Paris and who doesn't love IMAX for that matter. But I have to ask you, this is not like looking at a feature film where I can choose when I go. If I really want to see it, I have to make an appointment to go there at one o'clock on a specified day. and pay to go see an event.

And that feels to me like a big ask. Let me ask you, by the way, what's the price on the tickets? It'll be the typical IMAX ticket price, which depends on the market, but somewhere between $10 and $20 depending on the market. And will it be shot on IMAX cameras? Because I know there's been a lot of focus on, for instance, Dune 2 being shot almost entirely in IMAX? IMAX, which makes a difference when you're using the IMAX technology in an IMAX screen.

Will we get some of that for the opening ceremony? I think the technical details, some are still to be ironed out. But I think the point is that it's a cultural moment and a cultural experience. Yes, you could sit at home and watch it, but my answer to that would be if you went to a baseball, why go to a baseball game? You've got to schedule that. You've got to go to the game. Why would you do that?

because it's a cultural moment and experience. And it's going to look way better in IMAX that it does on your computer screen or your television. And you'll be there with lots of other people. And it's a once-in-a-lifetime kind of unique thing. And, you know, that's what IMAX does best. And that's what people go to. And I could give you all kinds of examples.

So, you know, I'm just, I think they're going to gravitate to it. Can we talk a little bit about what Taylor Swift has done to the future of movies? I mean, with that, I know we've been talking about it for, it feels like a year, but when you're talking about ticket prices going up and you're talking about investment and experiences, the fact that this, her concert movie has done so incredibly well, do you think that for IMAX and maybe for other movie theaters as well, but for your company that these sort of iconic entertainment moments that people want to be in an audience and share with other people, is that the future? Well, it's not all of the future, but I think it could be part of the future. I think, as I was saying, IMAX is a content platform that enables you to experience something in a way you otherwise couldn't do it. So even this year, we released a Queen concert from 40 years ago. We remastered it and put it in IMAX.

And we did $5 million over just a few days in re-releasing that. And as a matter of fact, we'll be announcing a couple other things. soon, I think definitely alternative content is part of the future. I mean, and the Taylor Swift concert wasn't only in the U.S. Remember, we're in 90 countries, and I think that that's part of what made it special because they couldn't go to the concert, they couldn't see her. By the way, which is back to the analogy about the Olympics, how many people could really go to the Olympics in the United States in Paris?

They can. So, yes, you could get like a different quality of experience at home. And for most people, that'll be interesting. But if you really want to see it really special and feel like you're there. And we also did a Talking Heads concert recently. Yeah. We did an Andre 3,000. I do think it's part of it.

Does the prospect of like the sphere in Las Vegas, which is now taking experiences and putting it on steroids, Does that up the ante for a company like IMAX? I think it, in a way it ups the ante, but in a good way, because we're so far ahead of what anyone else is doing in out-of-home entertainment. And, you know, for example, if you look at our revenues last year, they were close to 2019, whereas the movie industry in general was down about 20%.

People want and they crave something really special. And I think the sphere is amazing. But there's only one sphere, and I went there. It cost, you know, $500 to go there. IMAXs are all over the world. So I think it will teach people to seek out better experiences. And I think IMAX is the one that fills that void right now. It's so great of you to join us and talk about the Olympics coming up.

And, of course, our parent company, NBC Universal, is very instrumental in bringing that to the audience here in the United States. Richard Gelfand. Thank you so much for joining us today. And as we, you're welcome. And as we head to a break, we are going to celebrate Women's Heritage Month. We're doing it all month long, sharing stories of some of our CNBC changemakers. Here is Laura Modi, Bobby, CEO and co-founder. In the very definition of change is to be different. I've embraced what it means to be a different leader and as a female in a predominantly male space, I've had to see that as the potential legacy that I get to leave, to change an industry and a culture. For Bobby, that meant doing

so much more than powdered milk to fundamentally change the face of what it means to be apparent in the U.S. today. Time now for a quick, and I do mean quick power check on the positive side of the S&P, FedEx beating on earnings thanks to fewer expenses, narrowing its profit forecast. On the Negative side, you got Lulu Lemon, part of yesterday's bullfight. Weak guidance there pointing to a slowdown in North America, and that, folks, is your power check. Lulu Lemon down 15%. We'll be right back on Power Lunch. Well, a legal battle is heating up between sports betting giant Draft Kings and sports merchandise giant fanatics over a senior executive leaving Draft Kings for Fanatics. Draft Kings suing Michael Hermelin for stealing corporate secrets, strategy, and VIP

customer list. They say he tried to coax other employees into leaving in their legal briefs. Fanatics just filed a response brief in federal court in Massachusetts last night, accusing draft kings of character assassination and targeting Hermelin in an attempt to scare other workers considering jumping ship. They say there's a culture of retaliation. Well, Fanatic says since it announced in 2021 it would launch a sports book, 186 draft kings employees have applied for jobs with them. The industry is competitive. Gamblers are promiscuous and they chase promotions and odds.

The most lucrative players, the VIPs, get a specially special treatment because they're trying to engender loyalty to the sports book. Well, Fanatics is a newcomer to sports betting, but backed by a customer database of 100 million people. In the industry, it is largely seen as a formidable potential competitor. And Draft Kings is arguing in court that Fanatics is just trying to clone its business, its VIP business, especially which draft kings vehemently denies. How big is Fanatics now as a gambling presence? Fanatics has started to operate in a handful of states, but of course what they think is when they get licensing,

they're going to be able to win over the customers they already have to the sports book. Very interesting. All right. Good story. Thanks. I love the word promiscuous. I'm going to use it as often as possible. Thanks, everybody, for watching Power Ons. We hope you have a great weekend. Closing bells start right now.