Power Lunch - Yellen’s Warning to China, Solar Eclipse Excitement 4/8/24

Episode Date: April 8, 2024

Treasury Secretary Janey Yellen is in Beijing today, with some tough words for China. She says it needs to change its policies on industry and the economy. We’ll dive into that.Plus, everyone’s talking about today’s solar eclipse. And lots of people are traveling to get a better look at it. We’ll tell you about the sudden hotspots that aren’t typical travel destinations. 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. Walking on the path of totality alongside Deirdre Bosa, I'm Tyler Matheson. Treasury Secretary Janet Yellen in China today with some tough words for China, saying it needs to change its policies on industry and the economy. And we'll get into more on what she wants China to do or not do coming up. Plus, everyone not just Tyler's talking about the solar eclipse today. And lots of people are traveling to get a better look. We'll tell you about the hotspots, which aren't normally vacation destinations. But first, let's get a quick check on the markets, and we've seen them fairly flat today. After more volatile last week, you can see the down industrial's up about 1 tenth of a percent,

the S&P 500 and the NASDAQ composite up a similar amount. Shares of Tesla, though, they are surging. Let's see, what are they up? Nearly 6 percent, Elon Musk teasing a Tesla Robotaxie, tweeting that it would be unveiled on August 8. Gold and Bitcoin, both rallying today. Gold hitting an all-time high, just shy of $2,400. and Bitcoin rallying back to above $272,000 now at 71, 699.

We begin, though, with today's trip to China by Secretary of Treasury Janet Yellen. Our Sarah Eisen in Beijing and sat down with the secretary for an exclusive interview. And Sarah joins us now. Sarah, some tough words, but also a sense that maybe the relationship bilaterally is in a better place than it has been in some time. Hi, good to see you, Tyler, from Beijing. And yes, the Treasury Secretary did say, undeniably, she said it's in a better place, that relationship than where it was a year ago. Look, she's made all the front pages of all the state media newspapers since she's been here. And she's been on the ground in China for four days.

Here's today's paper. And the headline reads, U.S. Finance Secretary visits China, reiterates no decoupling. And part of the message was that in our interview, our exclusive interviews, she did say she does not want to discourage American companies. from investing in China. Didn't want to discourage investing in even production and manufacturing, even though we've seen some factories and some companies pull out of China. But she did have this harsh message, which she was scolding them for, flooding the world with cheap green technology products,

like EVs, like solar panels. We talked about it, and I asked her why it was such a problem and how it works. Some of the techniques that they use subsidizing their firms very heavily and then supporting them even when they're losing money, when demand is weak relative to this great capacity to supply products like solar panels. Prices just plummet and it can drive our firms out of business. And this is something that's unacceptable from the U.S. point of view. And many of our allies feel the same way. So I think that they understand it. It's been part of their industrial strategy.

It reflects the importance that they attach to advanced manufacturing. It also reflects a shortage of demand in their economy so that they're investing heavily in manufacturing. manufactured goods that can be exported. And these are things that really can lead to trade tensions going forward, which we would like to avoid. Well, I was going to ask if you actually expect them to do anything about it. Already, there was a headline today that the Commerce Minister in China said that those

accusations are groundless. Well, I do think that they understand where we're coming from. And they have agreed to continue an intensive dialogue. on this issue. I think they understand that it's important, and they do have tools that they could use, perhaps that would take a while to have an effect. Like export restrictions? Well, I'm not thinking so much of export restrictions as some shifts in their macroeconomic policy and a reduction in the amount of particularly local government subsidies to firms in these

industries. I asked if we could see tariffs on some of those products, if they don't do anything. She said everything is on the table, but she's clearly hoping that they changed to focus more in consumption than manufacturing. And here's a good way to put it all in perspective. If you look, the Atlanta Council broke down the growth in EV exports from China over the last three years. They have surged 1,500 percent. It's real. And the solar industry is an early, example of how damaging it can be for industries around the globe, including China. If you look at two big China solar producers, their stocks have underperformed the entire market. They're down double digits this year.

I'm talking about Longhi and Trina, all sorts of worries about overcapacity, putting pressure on prices, and just manufacturing solar panels where there isn't enough global demand. This glut is weighing on these companies. And that's what Secretary Yellen said as well. It hurts the Chinese companies and economy and not just potentially threatens the U.S. companies. As far as EVs, guys, I saw firsthand just how popular they are here. About a third of new car sales in China are EVs, and these dealerships and showrooms are all over the place in fancy malls, surrounded by Western brands. I even went into one of the new robocars it's called.

It's a collaboration between the Chinese auto giant Geely and Baidu. self-driving car. It talks, you talk to it, it talks to you. I didn't drive it, obviously, but got into it. And look, you know, at $30,000 is a starting price. It's why so many American and European automakers feel threatened by this. And it was cool. And I have to say, I was asked earlier about the quality. It didn't look cheap. It didn't feel cheap. It was very fancy. And I think this is what Yellen and others are so worried about, in particular, EVs, but also solar panels and just these low prices and having U.S. companies struggle to compete. Sarah, is there or is there not legitimacy in the Chinese rejoinder to American

accusations that they're being protectionist and subsidizing their own industries, that we in effect do the same thing? We had subsidies on EV purchases for a long time and probably still do for all I know. There are billions of dollars flowing to semiconductor manufacturers through the Chips Act and in other ways that we subsidized. the very industries that China would like to break into here in the United States, for example, selling EV cars here. So it's legitimate, and clearly that's what's happening. We did talk about this with the Treasury Secretary.

Here's the big difference, Tyler. Part of it is just how dominant the Chinese industries are. So solar panels, 80% of the world solar panels are supplied in China. And Secretary Yellen said it's important to have that kind of diversity of supply chain, number one, where it's not just coming from one place. Clearly, that is a risk. So that's one of the problems. And the other problem is the U.S. is a consumption-driven economy.

So us subsidizing industries where we want to see manufacturing in green technologies is a far cry from China, which has been practicing industrial policy and supply-side stimulus for years and flooding the market with overcapacity. The other criticism would be that what they're doing is they're supplying too much more than the world can handle and has demand for. And that's not necessarily what the U.S. is doing. They're trying to just get them to be U.S. made. So there's the distinction there in terms of the subsidies in the U.S. But no question.

Other economies have called out the Inflation Reduction Act as protectionist for prioritizing the U.S. and industrial policy and the semiconductors. We are trying to do the very same thing. But I think what Treasury would argue is that from a much smaller scale, we have to keep American companies competitive against the Chinese manufacturing, which has been their entire economy. I sense that's right, that it's a difference in method, it's a difference in means, and it's a difference in scale of what China is doing

compared with what the U.S. does. But I appreciate your taking the question. Sarah Eisen, a terrific interview, and we'll see you when you get back. Thanks a lot. Thank you. All right, for more on what Secretary Yellen's visit to China will mean for the future of U.S.-China relations. Let's bring in to Wardwick McNeil, managing director and senior policy analysts at Longview Global. He's also a CNBC contributor.

Let's talk about Chinese EVs, which are, I think, they have the largest EV manufacturing company in the world, surpassing by sales even Tesla. how long can the West and the United States in particular stiff arm these automobiles from coming into domestic markets? Well, that is a key question, Tyler. I think if we look at Sarah's interview with the Secretary, which, by the way, Sarah's done some really fantastic reporting on this trip, Secretary Yellen said, look, we don't stop Chinese cars from coming into the U.S. There is a 25 percent tariff on those vehicles. but, you know, if you want to sell into the market, you can.

Look, I think when we look at the technological advancement of these vehicles and the cost of these vehicles, at some point the question becomes when will American consumers start to demand other cheaper options if we really want to transition. So I think our policy will remain in place for quite some time, but this really falls on the back of consumers. And in this period, Tyler, voters, as to whether or not the, they want to see some greater, cheaper options in the marketplace. Right, but even like a Gile, right, which now owns Volvo, you could argue, they're making more moves like this. And something that's been really interesting to me, Dwardwick, is the partnership between

auto manufacturers and technology companies. Xiaomi is a smartphone company that has been able to develop an EV. We just had this report that Apple is shutting down its car project. What's happening differently in the Chinese economy to allow for the, faster development and more cooperation between tech and auto. Yeah, the Gile situation is great. Xiao Me is where I really want to focus, Deere, because when you listen to what happened in the rollout last week with Shao Mi,

Shao Mi was very clear that in their company, there are so many Tesla engineers and former employees from Tesla that's helping them to do this. And so this is what we've been saying all along, that as long as the Chinese market needs you and sees value for you as a foreign company, you're welcome. But the minute there's the ability to compete and beat you, then I think you have to really ask yourself, what's your long-term future in China?

And Xiao Mi literally made the case last week and talking about how many of Tesla's engineers find themselves over in Xiaomi's production. Yeah, it's kind of incredible what it's been able to pull off. broader question in terms of bilateral relations. Yellen is very popular among the Chinese population. Sarah's been telling us that on social media, they're tracking her every move from which Sichuan restaurant she's going to to which brewery. But our guest last hour, Derek Scissors, he was saying that investors should prepare for rising tension

because he said there isn't anyone to follow Secretary-Treasery Yellen, who's as popular as her. In fact, he said that Gina Raimondo should be there instead. So what does that look like a few years from now? Yeah, it's a very good point, DeJune. I'll tell you, look, I don't want to take anything from Secretary Yellen. She's had two trips. They've been really good trips. They've been pushing what we know as the San Francisco agreement between Biden and Xi to keep high-level dialogue open. But in many ways, this is low-hanging fruit. She is a known dove in the administration. China knows that. This is an easier conversation for them to have with Secretary Yellen. What we have not seen, what I would know, love to see is a step back and say, how is the entire bilateral relationship help? And we have not had a senior level secretary of defense to his counterpart level dialogue on the mill to mill side. We have real problems right now in Second Thomas Scholl and the South China Sea with the Philippines and China, literally at loggerheads. The Philippines is a treaty ally. And so we really have to

take a step back and say, yes, there's been some progress over last year. Last year was a very very low bar to measure, but we still need to see progress in other parts of the relationship. Mill to mill in particular is something that I'm keeping a close watch on. Would you quickly address the question I asked Sarah, and that is whether there, how much legitimacy there is to the Chinese rejoinder that, by gosh, you guys subsidize your businesses too. And Sarah pointed out that it's a question of scale. It's a question of method.

It's a question of industrial policy. How do you see that? Yeah, I'd see it exactly the way Sarah sees it, the same way the secretary laid this issue out. But that's not to dismiss their concerns about RRA, Thailand. You know, many of our allies have issues with the RRA. And the Chinese have been pretty impressive the way they've tried to handle this. On the one hand, there's been a carrots and sticks approach. On the carrot side, they say we're going to have this balanced growth dialogue with the U.S.

But I don't think that the balance growth dialogue would do much to change China's behavior here. But they've also filed a case with the WTO saying precisely this, that this is industrial policy, and we would like to see the U.S. change their behavior. So, look, I think there's some legitimacy to that argument, but scale, scope, degree to which it happens, and the actual lack of a domestic base of consumption for all of that supply really is the different. DeWardwick, thank you. Always great to see it. DeWordwick McNeil. Appreciate it. Thank you, Tyler. Thank you. One part of the plan to keep the United States more competitive with China is spending billions of dollars to revitalize the chip manufacturing industry in the U.S.

Today we're learning of another $6 billion being spent. Megan Kassella has those details for us. That's a little twist, though. It's not an American company. It's not. Hey, dear dress, so the latest winner of that chipzac money is actually Taiwan Semiconductor. They'll be receiving $6.5 billion in grants and up to $5 billion in loans from the Commerce Department. Now, in response, TSM is expected to invest up to $65 billion, if not a little more, in Phoenix, Arizona. They're going to be focused in three fabs there on creating those two nanometer chips. These are the most highly sophisticated ones that power AI systems, and it makes them all the more strategically important for the U.S. as it aims to compete with China. Right now, the U.S. make zero percent of these leading-edge chips in America.

And TSM is saying that they're going to start making this in America at scale. So it's good for our economy, but quite frankly, it's good for our national security. Now, the goal with all of these awards and TSMC's is the fifth so far, is to make the U.S. less dependent on China and other countries for these chips. U.S. officials want to move quickly here, but TSM and Intel, some suppliers and others in the past, have all previously had to announce delays because of labor issues. So while there's $50 million included in this grant money for workforce training specifically, it's still an open question whether TSM will be able to meet their goal of having all three fabs up and running in Arizona by the end of the decade.

Guys. And Megan, there's only really three main players globally, right, who have the ability to manufacture these high-end chips. It's Samsung, it's TSM, and it's Intel. Where does this leave Intel and their ability to really develop a new business for them and compete against a Samsung and TSM, which have well capitalized in years and years of R&D experience? Absolutely. This is a challenge for Intel, even though Intel we've already seen got a really sizable award from the Chips Act already. They are going to be competing now to be doing this on U.S. soil.

TSMC is doing this at scale in a huge way in Taiwan. If they're able to successfully bring that over to the United States to use some U.S. workers and some immigrants as well, then that's really something that's going to challenge Intel and say, we're the dominant player already overseas. We're now maybe going to be the dominant player in the U.S., and that just makes it much more difficult for Intel to really get a foothold here. Right. I suppose the government says as long as it's in our territory, though, it's a win. Megan, thank you very much. Thanks. Coming up, the Fed's hesitance to hike rates, fueling some fear in the market.

Now with the makings of a pullback in place, has the character of this market changed? Sure, are the bulls still in charge? Plus, further ahead, a moment in the sun, the eclipse capturing consumers complete attention, as well as some of their wallace. We will discuss when Power Lunch returns. Welcome back to Power Launch, everybody. Stock's basically flat today after a bit of a rough week last week. So was that just a brief pullback in a continued market rally or has something actually changed?

Mike Santoli's been pondering this question and joins us from the New York. exchange. Mike, what do he say? Well, Tyler, in terms of magnitude, not much has changed. It was about a 2% decline in the S&P 500 from peak to closing low last week. That's really nothing after a 28% ramp. However, it was the first 2% decline that we have seen along this rally since October. And the other piece of it is we've gone the longest stretch between making new record highs as we have since January when we first clicked to a new high. Now, it's only been a week and a half. So we're talking about, you know, slicing the story pretty thinly here. But there are reasons to wonder about this because we have potentially some pent-up capacity for volatility.

We do have treasury yields and oil prices, both threatening to break out of the top end of these sort of comfortable ranges that they've been in since December. Of course, we are also dealing with slightly less favorable seasonal patterns, especially in election years. And, you know, when we've had a 10% rally through the first quarter as we did this year in the S&P, it's always meant that ultimately there were higher prices by the end of the year. but in no case did you avoid a 5% or 4% plus pullback along the way, all of which is to say you should expect perhaps a little more of a two-way market here. Earnings are going to come through pretty soon. We'll see if that's the test. Inflation is obviously by very good reason for it to be front and center because the Fed told

you that even if the economy is good, they're going to be cutting rates at some point this year if inflation cooperates. So if they're not cutting rates, yeah, it might mean the economy's strong, but it also probably means inflation has been stickier. So it feels like it's just a little bit of a trickier backdrop for those reasons. You know, I think back to the there is no alternative era in investing when it was the only place you could really make money was inequities. And now that feels different to me. You can actually make money in bonds.

You can make money. A 4.4% yield on a 10 year and what you can get in a CD is not bad. And gold is at a record high. And Bitcoin is back at 71,000. So there are alternatives. Well, there certainly are alternatives. There's no doubt about that. I've always been of the mind, though, that even when we were saying there is no alternative back in the 2010s, investors didn't really behave that way. It wasn't as if they were shoveling money into stocks at a massive rate. Only 2013 did they really do that. And it was a matter of the market went up and it kind of did your allocation for you in stocks. But the broader point stands. I mean, you do actually have different pieces of the portfolio doing work for you right now if you are diversified. All that said, $150 billion in net new money into equity funds so far this year. So when the market goes up 20%, people don't want to hear about 4% in bonds.

No, absolutely. Thanks, Mike. Yeah. Our next guest says she wouldn't be surprised to see a flat market or even a pullback, but she's quick to point out that the Fed's no cuts or less cuts scenario is due to a strong economy, which is a good thing. Let's bring in Stephanie Link, chief investment strategist and portfolio manager at High Tower and a CNBC contributor. As we go into earning season, what do we have to see? Obviously, beats, but forward guidance as well.

Is that what's going to sort of provide the next leg if interest rate cuts are uncertain now? Yeah, I mean, I think that the market is digesting the cuts, right? Is it zero? Is it one, two, or three? Personally, I do not think it's going to have a material impact, even if they did three on the economy. When we just raised interest rates of the last 18 months by 550 basis points. So 75 basis points of cuts isn't going to do anything. but psychologically certainly that would be positive. But again, the reason that they're actually being a little more hesitant on cutting rates, it's really because of the growth that you mentioned. We're going to grow 2.5% in GDP or something close to that in the first quarter.

We just grew 3.4% all of last year. And at the same time, I know inflation is stubborn at 3, 3.5%. But we're down from 9.1% from the peaks. We've absolutely made progress. So we have to all wait and see. We're all data dependent. But the economy is growing for the right reasons. The consumer is doing well. The job market over the last 12 months, we've seen 250,000 on average jobs produce. That's very healthy. Wages are up 4%. If you want to switch to another job, you're getting 10%. Manufacturing. You guys just did a great segment on all the onshoreing and supply chains and manufacturing initiatives on the fiscal side. That's leading to better ISMs. We're just starting to see better ISMs in new oil. orders are going up as well. And then lastly, housing is bottoming. I mean, everybody, we were all watching housing last year, which saw recession last year. But yet the stocks did quite well, but we're now starting to see the results in permits and starts doing better.

So you add it all up. Yeah, earnings, I think, are going to be just fine, eight, nine percent. Our expectations high? Yeah, they're high. But I do think you're going to see not only top line better, but margin expansion. And you're seeing a broadening out into other sectors doing just as well in terms of earnings delivering. So I think you continue to have this broader market. Lots to be excited about. Well, Stephanie, what about some of the other stuff kind of just under the surface that Mike

and some of our other gas have been pointing to? Higher oil prices, gold at record highs, some of the geopolitical tensions. And Jamie Diamond's shareholder letter this morning, he was a lot more cautious. Yeah, well, so there's plenty to worry about absolutely. I definitely give you that, Deirdre. But what happens is, like, I worry when I don't work,

because that means I'm being complacent. I always want to know what's out there that could actually surprise us. We kind of know all of this stuff as of now. And yeah, sure, certainly. Energy bothers me a bit. And I actually do think maybe the headline on energy for CPI on Wednesday could come in a little hotter because of that. But the core number, I think, is going to show some progress.

And I think that'll be encouraging. Geopolitics, I don't have an edge on that at all. But that's been with us for a couple years now. and we're able to see last year, 26% growth in the market and year-to-date 9 to 10% this year. So, yeah, a lot to worry about, but a lot that's going well. And if we do see a pullback, I want to be a buyer. You like banks, some of which report later this week, more broadly financials. Why and which ones?

Yeah, so it'll be really interesting on Friday. We get J.P. Morgan and Wells Fargo, and I do think the numbers are going to be good. I do think you're going to see better net interest income for both companies. You're going to see much better controls on expenses as well. And you're going to see capital markets inflect, I think. And that's just at the beginning, Tyler. So JP is a little expensive for me. It always is.

It should be because they are best in class. But I think if you can get Wells Fargo at 1.1, 1.2 times book value, that's very interesting. A Doug Bronstein on the board. He came from JP Morgan. That's sort of interesting. But I own Bank of America because it's the cheapest of the three at one point one times. And I book, and I do think they're going to benefit from better wealth management, better capital markets, better expense control.

In fact, I do think they're going to continue to take share in capital markets. And then Morgan Stanley I own, we have a new CEO we have to get through. But I do think the valuation, especially relative to Goldman Sachs, has narrowed pretty substantial. They have a nice sort of annuity business in their wealth management area. Stephanie Link, thank you very much. Appreciate it. And ahead on the program, the race to clean up the toilet paper industry in today's clean start. We'll be right back.

Welcome back, everybody. Stocks are flattish today, but bond yields are moving higher ahead of some key data that come out later this week. Rick Santelli joins us now from Chicago with more, Rick. Yes, and it isn't only data, Tyler. Starting tomorrow, we have $119 billion in supply, $58 billion threes, $39 billion, tens, $22,000. and 30s and will make a big difference, especially with the CPI-PPI presence amongst the supply. If you look at the last three sessions, what should jump out at you, and you see two tens and thirties there is that this is the second consecutive staircase session, where we're trading

higher in the previous days high yields. Now, granted, we reversed a little bit on the longest maturities like 20 and 30-year bonds, but that is a very aggressive formation, and we continue to hover at the high-yield, closes not only for 2024, but going back towards the end of November. And if we look at the difference between tens and boons, it is really carving out a spot about 200 basis points. Our tens are 2% higher than European tens. And this is something to pay close attention to. These are the widest basically we've seen since October of last year. And finally, the dollar yen. Yes, we can't continue to look at this without knowing that the constant low,

value of the yen, of course, is going to figure prominently into that export economy, but at a time where they're going to be snugging up rates, we are now in the 14th, 1-4 consecutive session where the dollar yen is closed above 151. Those are levels we haven't done since 1990. These are 34 years since we've had this many closes at that level, and it will continue to be something big in terms of Bank of Japan's influence on all the other major central banks. Deirdre, back to you. Rick and Natale, thank you very much.

Let's get over now to Brother Coombs for a CNBC News Update. Hey, Deirdre. President Biden is in Madison, Wisconsin this afternoon to announce sweeping plans to provide student debt relief for an estimated 30 million Americans. Proposals are aimed at canceling runaway interest for those who are eligible for certain forgiveness programs and people experiencing hardships that prevent them from making payments.

The Supreme Court struck down the president's original plan to cancel up to $20,000 in debt for about 43 million eligible borrowers. Hamas has reportedly rejected the latest Israeli ceasefire proposal in Gaza. A senior Hamas official told Reuters about the decision just hours after the group said no progress had been made in the negotiations. It also came as Israeli Prime Minister Benjamin Netanyahu said a date has been set for an invasion of the southern border city of And the CDC is asking states to be ready with rapid tests for bird flu. It comes after Texas reported a human case last month and a person who had close contact with infected dairy cows. Despite the call to action, the agency says the risk to the public remains low.

That said, they are saying don't have raw milk or raw cheeses or things like that. Just to be safe. Bertha, thanks very much. Up next, the eclipse economy hype around today's solar event benefiting some travel stocks, that story when Power Lunch returns. Welcome back, everybody. The solar eclipse working its way across North America right now from Texas to Maine. Millions of Americans standing outside, hopefully with approved glasses to catch a glimpse. One of them is NBC News's George Solis. Hi, George. Hey, good afternoon. On board the historic intrepid where history is being made as this partial solar eclipse begins.

one of the best views in all the five boroughs right here on board the entrap. Take a look at everyone here trying to grab a good seat for the partial eclipse. Keep in mind, we are not in the path of totality. That's not stopping people from having a good time. Here in New York City, we're expecting about 90% coverage, which, hey, is still pretty good when you think about it. And last I checked, as I look up and put on my special glasses, yeah, it is definitely starting to take effect here. And again, very important to wear these glasses when looking at the partial eclipse. Best I can describe it for anyone that's not able to view it, think of Pennsylvania.

That's the effect that we're seeing right now. So you can see the moon being, you know, blocking, starting to block out the sun right now. And it is just something remarkable. Obviously, the cosmic ballet that we've been referring to, one of these phenomena once in a lifetime events. The next one, not taking place for another 20 years over North America. Here earlier, we actually spoke to an astrophysicist

of all people here on board the Atrepetit who told us this is like the Super Bowl for them. So many things that they're looking to study, so many things they're hoping to learn. As we look at the path of totality where things were going, to get dark, how animals react, how the climate reacts. It really is quite a phenomenon. As you can see behind me, as you see this crowd starting to grow, a lot of people taking very special interests in this cosmic convolence. I can only imagine how early humans reacted when something like this happened, which they didn't understand. It would be a totally unsettling.

Who got the idea that the intrepid would be a great place to watch an eclipse, which it is, but it's kind of interesting. You know, it's just such a great historic place to watch. I mean, you're high up. History was made here. You get to view this historic moment. And we're just about an hour away from actually watching this eclipse take shape here. They knew here at the museum that they have a lot of history, a lot of celestial history here, which makes it a perfect background to have an event like this. And so they actually printed up about 6,000 or so of these glasses for a viewing party. People here on board the deck, there's going to be people below us trying to get a good glimpse of this. So yeah, I mean, we can

imagine a lot of places over the city trying to get a good glimpse at this. But here on board the Intrepid, I have to say, not just a good view, but it is just really, really cool to be up here. Yeah, that's really cool. George, thanks so much. George Salis, NBC. I guess that's a space, too, versus like one office tower. If you're on 50th Street, you look up, you're not going to even see the side. Exactly. So I can accommodate a lot of people. Well, the eclipse is turning some unlikely tourist destinations into hot spots, but just for the day, C. Mamode is looking at the travel impact of all this eclipse excitement. And here's where like Airbnbs will shine too, right? Because these aren't normally places that gets a ton of tourist traffic.

That is the story, Deidre. It's been seen as a big opportunity for the travel industry. We're seeing prices soar across the nation, millions of travelers traveling to these smaller, lesser known places along the path of totality where occupancy levels are higher than what we would see during big holidays like July 4th and Memorial Day. Take a look at Geneva. Ohio, Oswego, New York, Rockwood, Maine, Kingsland, Texas, which has a population of 7,000 homes there on average are going for $1,300 tonight. That's according to AirDNA, which does compile data from Airbnb and Verbo. Navidcana B. Riley says the eclipse will likely be a bigger win for the home rental

companies because they have more exposure to smaller towns than the hotel operators. He adds that the eclipse coinciding with spring break also means potentially longer length of stays for families. The number from Expedia reveal in over a thousand percent spike in searches as Americans look to experience this once-in-a-lifetime event. And it's not just lodging. Delta, running two special flights today, hurts seeing a 3,000 percent jump in bookings over the weekend. So it's no doubt being seen as a sales opportunity for the big travel companies, because now following two very strong years for the sector this year, not so much. So they're trying to grab onto this opportunity. That's really amazing how it's rippling through the economy.

me that way. Seema, thank you very much. Yeah, thank you. All right, coming up, a new spin on the old TP roll, a startup is using bamboo, bamboo to help clean up the toilet paper industry. You don't want to miss this, folks. We'll be right back. Well, most of us use this product every day, even though it is a big threat to the environment. I'm talking about oil and gas. We're talking about toilet paper. American TP is mostly made of wood pulp, which comes at the cost of Canadian forests. But there's a growing business trying to clean clean it all up. Diana Oleg explains in her continuing series on climate startups. Hi, Dai. Hey, Ty. Yeah, toilet paper wipes out thousands of acres of Canadian forest each year, and the demand

for it is actually growing, but so too is demand for more sustainable alternatives, and the competition is on a roll. Some of the most popular toilet paper brands on the market, like Charmin, Scott and Cottonell, score an F on sustainability from the National Resources defense counsel because they are made almost entirely from wood pulp. But new products from Whole Foods, Green Forest, Who Gives a Crap? And a startup called Real Paper are transforming an industry that is ripe for disruption. We use bamboo for our paper. Bamboo is a grass, not a tree, is one of the fastest growing plants in the world. And so we've found it's the best sustainable resource to create high quality paper good items. And Van Himbergen says bamboo's

longer fibers make it ideal to balance softness and strength. It's a small change that is people can transition to something more sustainable that can have a meaningful impact. Consumer demand for environmentally cleaner products is rising fast. That has investors more interested in some of these startups and their potential payoff. This is a very large category. There's some major companies playing from Kimberly Clark to P&G and others. And certainly when we invest, we say, hey, is this a very large category? There's some major companies playing from Kimberly Clark to P&G and others. and certainly when we invest, we say, hey, is this a business that one of those players one day may want to buy? In addition to Bluestein, Real Paper is backed by squared circles, montage, Great Oaks, Trousdale, and Mandel.

Total funding so far, $14 million. Now, Real Paper has to ship its bamboo in from China, which of course burns fossil fuels. So the company purchases carbon offsets. Ben Hembergan says bamboo farms are now being developed out of degraded sugar plantations in Central America, so the hope is that they can soon get it from a closer source. I must say that the brand name, Who Gives a Crap, is the most inspired branding I think I've ever heard of. What about using a bidet as a better solution to all of this, which doesn't involve any plant product? Well, it is obviously a cleaner solution, both physically and environmentally, but then you get the argument, well, what about using water?

I looked it up, Tyler, I looked it up. A one shot of the bidet is one-eighth of a gallon of water, whereas to make one roll of toilet paper, it takes not only a pound and a half of wood pulp, but also more than six gallons of water. So if you're not in an area that is drought-stricken, it's much better to use the bidet. If you are in a drought-stricken area, use a sustainable TP.

Okay, so when I go back to California, the bidet, no, the bidet is not the better option. Is that right? Because there's drought. Exactly. Exactly. We deal with that. I learned a lot from that. Diana, thank you. Everything you want to know. That was good stuff. Still ahead on the show. Pilots, power, and precious metals. We'll get the trade on United, G.E. Renova and gold and three stock lunch. That is next.

Time now for today's three stock lunch here with our trades is Victoria Green founding partner and chief investment officer with G-squared private wealth. Hi, Victoria. First up, United, the airline having to delay two new routes amid restrictions while the FAA carries out a stage. your view. Shares of UAL, they're up about a percent today. Victoria, what is your trade here? For me, UIL is a cell here. I think they're facing a lot of institutional problems. They hired so quickly, they expanded so quickly, and now they're kind of having to pay the Piper. FAA investigation is not over yet, but let's like step back. Let's say they were operating amazingly. They're constrained by routes right now. They're constrained by lack of planes. They have salaries and labor, which is their number one cost, is going to go up.

We estimate about 15 percent because of all those nice new contracts they signed, and then fuel costs, which had been a bit of a tailwind of margins, likely going to bite them. So if you're not flying more routes and you're not flying more people and they're not paying more money to fly your routes, how are you going to earn more money? I just don't buy into United right here. It's a sell. Let's move on to GE Vernova, new energy company spun off from General Electric just last week. The trading higher today after it got its first upgrade to overweight from neutral. J.P. Morgan, the source there, shares up about 6% today. Your trade on this one. For me, at the hold, I see some potential here, but they do face a lot of

of headwinds, especially in their wind division, not to make a horrible pun done win there, but their offshore win has been a huge problem for them and they need to fix it, they need to get that working better, they needed to actually make money. They talk about in their Investor Day presentation, they're starting to limit the losses there,

maybe profitable in 25. There's a lot of potential, but like almost every GE spin-off, they've all talked about a leaner, they're gonna increase productivity, and some of that they really have to execute. And so we'd like to see how this company performs as a standalone,

the power unit, 50% of it, It looks like it's going to continue to generate solid free cash flow, but it's around that specifically the wind sector onshore and off that we have some questions about if they can achieve their growth targets. For me, it's a hold and see how they do here. Okay, Victoria, last one, gold hitting an all-time high, sitting just below 2,400. Is it vulnerable to a setback now? What's your trade? I mean, for me, gold's a buy. I'm gold 3K all the way. And so for me, I look at this like potentially, it's the 1979 run-up. Look, gold moved up almost 170 percent in 1979 alone.

It has the ability to do it. Gold has been trading in a huge base, right? We were stuck from 19. It was 1900 back in 2011, 2000, basically when we ended last year. We traded in that range for a very, very long time, 10, 12 years. We finally have broken out. There's legs for this. Then you push higher.

Plus, you're getting so much buying from central banks. You're getting buying from international emerging markets, investors that are concerned on inflation and currency devaluation. I know we're very stable here in the United States. The rest of the world can face some very extreme currency fluctuations. which we're seeing this flight to quality in gold. And I know it's run a lot, but it's done this in the past. And history says it has further to run.

So I see this going to 3,000. Victoria, thanks for all your insights, Victoria Green. And we've got more power lunch after the break. We've only got about two minutes left in the show. Several more stories you need to know about. Let's see if any can eclipse what has come before. J.P. Morgan's CEO, Jamie Diamond, highlighting AI, as the first topic of his annual shareholder letter closely watched,

Saying it's going to have as profound an impact on society as the printing press, electricity, and computers. Obviously, time will tell here, I wouldn't bet against it. He says that they now have more than 2,000 AI and machine learning employees. Those are not cheap. Everyone's looking for those in Silicon Valley. Nowhere will it be more important. I mean, maybe more important in medical and health care, but in banking.

Yeah, absolutely. Huge deal. Meanwhile, the White House announcing a new student debt relief program that aims to provide relief for millions of borrowers that finalize the proposal. would mostly affect those with so-called runaway interest or balances that ballooned due to unpaid interest, as well as borrowers who have been paying down loans for 20 or more years. Well, this is obviously one that's going to be interesting to watch legally because the prior attempts to get rid of student debt did not fly with the Supreme Court.

And South Carolina winning the women's basketball title, completing an undefeated season in the process knocking off Caitlin Clark in Iowa. Next up for Caitlin Clark and South Carolina's Camilla Cardozo who was a beast on the boards among others. The WNBA draft which is next Monday. Dawn Staley, the coach of South Carolina

incredibly gracious with respect to what Caitlin Clark has meant. Yeah, and you said you were gripped by that game. Yeah, it was really good. It was a really terrific game and really fun to watch. Thanks for watching Power Lunch, everybody. Closing bell starts right now.

And stay on the path of totality.