they're going to adapt. >> brian? >> spotify. >> stephanie? >> charles schwab. the mid interest margins have bo bottomed. >> joe snmplt >> tech resources. >> i look forward to seeing you at 3:00. "the exchange" is now. thank you very much, scott. welcome to "the exchange." i'm deidre bosa in for kelly evans. and here is what's ahead. we have the three names to pick out of the mag seven, and the names and areas beyond big cap tech where he's seeing opportunity. and plus, as we are gearing up for bank earnings, we are checking in with someone who runs the bank and has helped run some of the biggest tech companies. she's looking to transform the banking industry. she's here to tell us how. and ahead of cpi tomorrow, inflation concerns not slowing down norwegian's plans to

expand. the company just placed its biggest ship order yesterday. the ceo will join us live with the details and what he's seeing from the consumer. we begin with today's markets and dom chu has the numbers. >> so inflation concerns, as you point out, are part of the market narrative ahead of the inflation figures coming out later this week. we are seeing a decidedly more negative tope in the markets. the benchmark s&p 500 is at 5185, down about 17 points. at the high point today, we were up 22 points on the session. down roughly 42 at the lows. so well off the session lows, but still decidedly negative. the dow down 150 points, one half of 1% declines there. 38,739. and the nasdaq, 16,233, off about 21 points, leading if you will, or not lagging by as much, down about 0.1 of 1% there. on the inflationary concerns,

two key parts of the market in focus. one is in gold prices, one that is seen as an inflation hedge. gold futures right now up about 16.5%. 2384.50, the new high water mark for that blue line. so $2384.50, representing a new, again, record high for gold prices. it's been up three days in a row and ten out of the last 11. gold mining stocks over the course of the last year, down about 1%, but they have been picking up steam over the last couple of months with the highs in gold prices. another part to watch as well is n energy prices. a part of the market a lot of people say is a barometer for the overall health of the economy. crude oil prices taking a dip but up 5% over the last year. the energy sector up 12% in that span, but it's right here on this year-to-date period where it stands out. those energy sector stocks are the second best performing sector in the s&p 500 in 2024.

second only to communication services, and even slightly higher than technology. so watch that energy trade. back over to you. >> our next guest is one of those people that believe it's an important barometer. oil has been moving higher, even before the tensions in the middle east. up 20 p% year-to-date. my next guest has more on how he's positioned. dan niles, portfolio manager. dan, great to have you with us. talk a little bit more about this potential impact, does it complicate a soft landing narrative? >> i mean, it does and it doesn't. on the negative side, it obviously does ahead and feeds into inflation. so, you know, you transport all your stuff to your grocery store, you fill up your gas tank, you heat your home. so that's a bad thing for the inflation numbers coming out. but the fed's also, to some

degree, part of the reason why inflation is as high as it is, the consumer is pretty strong, you can argue that's because of the stimulus left over from covid. but you are spending more at the pump and spending more for milk and eggs, et cetera. so i think it's a push-pull on that, but i think it feeds into the narrative that the economy is pretty strong, and it's just one of the things you're going to have to deal with. >> dan, when do you start to worry if we see oil prices go higher? >> well, i think you look to the markets to understand that. but i think you're going to get an important gut check coming up when you get earnings that start in earnest later this week with the big banks and really kick in the week after. but you have heard from some companies that have reported already that are off order in the retail space that it is starting -- whatever it is, it's starting to affect the lower end of their consumer base.

so that's something i'm definitely paying attention to, as we get into earnings in earnest next week. >> dan, it takes some time for the impact of the entire commodity prices to trickle through and to be inflation data. do you think that investors should start to worry that this commodities rally could set back the fed's plan to cut interest rates? when do they start worrying about that? >> they're already started to worry when the payroll numbers came out last week with 300,000 jobs, people were looking at 200,000. the bond market sold off, the fed rate cuts is a coin flip between two to three rate cuts at this point. i'm thinking it's closer to one to two, because unless you see energy prices drop a lot, or the economy slow down a lot, you're going to probably see those expect tations getting ratchete back. this whole year, expectations have been coming down. start of the year, it peaked at about 7. now we're down between 2 and 3, and the s&p gained 10% in the

first quarter. that's fantastic, better than a typical year. so i think you've been sort of ignoring this, but our main thing is we're staying flexible and focus on the companies that will put up great numbers regardless with the election coming up and trying to avoid the more consumer facing ones. >> stay with us, dan. three-year treasury notes are up for auction and rick santelli is tracking the action. >> yes, deidre, it's been a big start to an auction. this is the first leg of 119 billion in supply, with 58 billion three-year notes. never had an auction bigger than 58 billion. but in 2021, we had many auctions equal to 58 billion. the yield, 4.548%. the minute the bidding ending,

4.528, it tailed two full basis points. now to be fair, the market has been rallying. the one issue market yields were dropping pretty much all morning, just like yields in fully traded treasuries. but the fly in the ointment is, we didn't trade where the result was for probably 40 minutes. so it still didn't price well. all the other metrics were basically below ten option average. generically, most of them were the weakest since december of last year, so not that long. but the point is, two basis point tail. you look at intraday threes, you look at where we've been and how we came into this week with yields starting to fall as we go into the big cpi number. but there's no getting around a d-plus, a very weak first leg of an action. even though the market is rally makes it much more difficult to move the painer to higher yield, it demonstrates that investors

were laying back with an eye towards tomorrow's possibility of any surprises on the consumer price index. deidre, back to you. >> we'll be watching that closely, thank you, rick. dan, i want to come to you on bond yields. we were talking about market resilience, and they have been so far, but we haven't seen as much resilience in the last week and a half, right? does that signify a bigger shift in market sentiment for character for the remaining year? >> yeah. i mean, i think -- here's the thing. i look at the tech bubble and you had a lot of sharp corrections on the way to that big increase. is it going to surprise me to see that? obviously, nvidia is down over 10% from its 52-week high. there's a lot more room to grow. i think the key really comes down to earnings. if i had to pick between more rate cuts, because the economy is slower, which means less earnings growth, or the exact opposite, which is the economy remains stronger, so companies

can put up decent numbers, i would rather take that scenario. ultimately, earnings are what drive stock prices over the long-term. the short term, it's all sentiment driven, nothing to do with stock prices. but over the long-term is what will drive these things. the ones that these stocks have had from their lows, if you get earnings disappointments, you'll absolutely get crushed. you saw that can tesla delivery number, people were expecting bad numbers, you got a bad number and the stock went down the next day. so i use that as a tell. you're not going to get away with saying things are bad this quarter, next quarter, but two years from now will be wonderful. i don't think that will fly like last year. >> i've been wondering if tesla was a canary in the coal mine. amazon shares, let's drill down on them. they have nearly doubled off of their recent low. they're closing in on a new

all-time intraday high. kate rooney has the details. >> a lot of love for amazon lately. we have seen a handful of price increases, reaffirming it as one of wall street's highest action pick picks. sell side firms are bullish, 95%, a buy rating, three holds, no sell ratings on amazon. it's one of the internet's largest, true alpha dogs, thanks to its scale in e commerce and morgan stanley point to prime driving recurring revenue, cloud adoption hitting an inflection point and advertising potential. jefferies says still plenty to be excited about and plenty of runway ahead. for amazon, all outperformed except nvidia in the mag seven this year. ai has been the story for other

big tech companies. few mentions of artificial intelligence as a catalyst for amazon stock. jefferies warns amazon needs to improve its ai offering to stay competitive. the downside risk, any threat to aws. slowing revenues would weigh down shares. and investors are watching the economic backdrop, as well. >> kate rooney, thank you very much. $188.65 is the record number to watch for amazon. alphabet hit a new all-time high today. dan, can you compare those two stocks for me. part of what kate was saying is there's a lot of reasons to like amazon, but ai isn't one of them. while people have knocked google for its ai narrative, how do you play them when you're just looking at generative ai

propositions? >> i would agree that people aren't focused on ai for aws. they are the biggest player in the outsourced cloud market. they have about a third of that market share. when companies want to host their ai apps, the first place they'll look at is amazon. you've seen that with amazon web services in the sense that the growth rate slowed from about 40% year over year in the fourth quarter of 2021. it dropped all the way down to 12% in the second and third quarter, and accelerated slightly, as you got -- sorry in the second and third quarters, it dropped to 12%, then accelerated to 13% going forward. i think you'll see some acceleration there. that's going to be helpful to them going forward. the bigger thing is the retail business. they overbuilt capacity during covid. we all wanted to go to real stores and too much capacity. now they're filling that up at

very low cost, so i see the eps doubles on a gap base is from 23 to 2025. so amazon and meta both were two of my top five picks. i still feed good about both of them. >> that profitability piece has been fascinating to watch. you know, my understanding that is that it's all about openness and choice, that when you look to google, they have the most choice. you even see a citadel securities moving its casting to google cloud. so it's the next leg of this race is taking place, who's best positioned? is it aws or a google cloud? >> well, you've got to remember, the big thing for google, we can focus on the ai side of it, but they have 93% share in search. so on the one hand, you can't say all these companies are

doing this great job in ai while there's perplexity or microsoft or openai, et cetera. and google with a 93% share and i think something has to give. that's their golden dwoos is search. last quarter, they missed their revenue numbers, and they missed their operating numbers on the top line. so you can't have it both ways, and that's why for google, i'm sort of watching and waiting to see what happens. especially when your accuracy of the results you get back when you usethat product isn't particularly good. >> you bring up a good point. does it leave it open for disruption. that's a great point. last question for you, dan. when we look towards the earnings season, how are you thinking about the magnificent seven, which carried the market or even the fab four, if you want to eliminate a few of them

versus the rest of the market this year when we have seen a broadening out, do you think that lasts? >> i think it 100% lasts. back to the tesla thing and your comment that was it a canary in the coal mine. i think you're 100% right in that it was a canary in the coal mine. expectations were really low. they missed those. the stock still went down, where last year, tesla's estimates were coming down by 15% last year, and the stock went up 100%. same thing with apple. estimates were coming down all year last year. the stock was up 40%. that's all you have seen so far in 2024, where both apple is down over 10%, tesla down over 30%. i think that's going to continue as we get into earnings season. bank results on friday might give us a tell as well. >> where are you looking outside of mega cap, what do you want to see when they start reporting this week? >> i just want to see the reaction.

to me, that's going to be very telling for the rest of earnings season. but to your point, i'm very bullish on four out -- i call them the fantastic four, superhero four, but i'm bullish on those four. i'm negative on tesla and apple, and google. and that's kind of how i got this weighting set up right now. because to your point, as you said earlier, the market is going sideways for last week or so. and i want to stay with the names where i think numbers can go higher. i'm also trying to balance the presidential election, just being the most contentious we have ever seen. lots of ad dollars flowing in, and they should help meta and other companies in that vein. >> will you looking beyond those mega caps, though? are you looking to layer down some of the cloud applications? what about semis that still had a good run to begin this year? >> you're right. but i'm looking outside of tech. so i have investments in

industrials and biotech, and so i'm really trying to move outside of tech, because i feel like in this whole ai euphoria that's happened, which is right ly deserved, a lot of these other sectors have been forgotten about. so that's where we're looking for different investment themes. >> it will be impacted by ai, as well. dan miles, thank you very much today. appreciate it. by the way, don't miss my interview with google cloud thoe c -- thomas kuran tomorrow. one money manager warned investors about apple and tesla. since then, they're the only two of the mag seven stocks to be lower. are they cheap enough to buy yet? and what affect would the fed's

higher for longer have on the financials. we'll have jackie reses after this. (sirens) [due at target in 5!] copy that. make a hard left down the alley. network's got you covered. [please confirm requesting back-up.] -changing route. -go. roadblock ahead. ...back up, back up... reverse! reverse! next level moments, we're 30 seconds out. need the next level network. [north corridor, hurry!] -coming through! -or 3, let's go. the network more businesses choose. transplant received. at&t business. (sounding horns) at enterprise mobility, we never stop looking

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giving millions of fans, like my dad and me, new ways of catching up on their favorite sport. >> >> welcome back to "the exchange." even with last week's pullback, my next guest says the record run in stocks can continue, as long as earnings deliver. and he has four names in four different sectors he sees well

positioned for gains from here. joining me is michael lansberg. michael, thanks for being with us. we had a very good first quarter. where does the market go from here? >> deidre, i think i'm excited that the market seems to be trading on earnings. we had a lot of expectations about the fed intervening, which was distorting what was going on fundamentally. but first quarter, we had 8% year over year s&p 500 earnings growth, over 30% in the nasdaq. that's a strong determining factor what's going to go on. earnings drive stocks, certainly the intermediate and longer term. >> isn't that a little to be determined? it feels like over the last few weeks, stocks have reacted to more to fed speak, commodity prices. how can we tell already that it's trading on earnings? >> i think the first quarter traded on earnings. certainly the fed speak has gotten involved with where we are. what happens is in the short term, there's a lot of

dislocation in the market because of speech here, off word said by one of the fed governors somewhere else. but longer term investors need to focus on earnings. the short-term stuff will play itself out. >> i was just talking to our previous guest at the start of the show. he was pointing to tesla delivery numbers and how the stock reacted pretty strongly and whether that's a canary in the coal mine. do you think that expectations are high going into earnings, and any stumble could throw off markets, especially from the big tech companies? >> i think tesla is a little bit different, in that -- we've been negative on tesla for over a year. the ev market is not as strong as many people think. the chinese have gone ahead of tesla. so i don't look at tesla as a harbinger of what's going to go on. i look at the rest of the market and say there's a lot of growth going on. i think nvidia's numbers are way

more important than tesla. and that ecosystem that nvidia has grown itself around is way more important than tesla, than i think is two years ago story. >> you said that nvidia is attractively priced for investors, not traders. explain that. >> i think if you look at today and go boy, the pe is really high, the earnings growth is so strong that if i look a couple years out and i want to hold it for two, three years, multiples are not very high, because the earnings growth is that exponential. everybody on the street, they were off by 50% last year in terms of how much earnings they did. so they continue at a good clip, and we'll look at 2026 and 2027 and say nvidia was pretty cheap in 2024. >> let's get beyond tech. dan niles is looking outside of the mag seven and tech as a whole. you have some picks in auto and

industrials. tell us about them. >> yeah. i like o'reilly automotive. it's kind of the anti-tech play. everybody has to fix their car. they have a nice balance between do it yourselfers and commercial. so i think they're not relying on one or the other. if cars break, and people need to fix their cars, they've been a good operator. it's basically a two-person show. i think auto zone and o'reilly are the two best. we favor o'reilly because of growth as well as valuation. i think it's a good story that continues to go on, it's not going to be outsourced by ai. you're going to be fixing your own vehicle, so a good stock to be in. pe is very realistic in terms of growth. >> tell me about this auto defense company. >> ryan metal is a german defense company. what we're looking at is a way to play the restocking of munitions across europe because of what is going on in ukraine.

so they have a contract from the german government. you're seeing more money being spent on things replacing what is being used in the war over there. this is a way for us to play something locally. much better valuations in u.s. defense companies. but they're on the ground to get supplies to ukraine more quickly. i think that's the way governments of europe will give supplies opposed to dollars in the ukraine situation. >> michael, appreciate your insights. coming up, muni credit is the best it's been in 20 years, but some areas are starting to see a peak. we'll ask the head of the funds muni team where that is going. that's up next. [alarm beeping] amelia, turn off alarm. amelia, weather. 70 degrees and sunny today. amelia, unlock the door. i'm afraid i can't do that, jen.

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visit indeed.com/hire and get started today. welcome back to "the exchange," everybody. i'm tyler mathisen with your news update this hour. former president trump lost a bid to they his april 15th hush money trial this morning, while he appeals a gag order in the case. an appeals court judge made that ruling and barring any more court action, it means jury

selection will begin next week. trump also lost a last-minute attempt to delay the trial by requesting a change of venue from manhattan. jennifer and james crumblee, parents of the michigan school shooter were both sent toensed to 10 to 15 years in prison. they are the first parents ever to be charged and convicted in their child's mass shooting. mt. etna is putting on a show, spitting out smoke rings in the skies over sicily. they are technically called volcanic vortex rings. rare but natural. nearly perfect circles of gas. mt. etna known to emit more than any other volcano on earth, inspiring locals to rename it the lord of the rings. now out to rick sen telli. >> muni money indeed. we have a special guest today. david hammer is head of muni

portfolios, and i would like to welcome david. how are you doing today? >> i'm doing great, rick. thanks for having me. >> all right. so as we heard deidre point out, one of the best landscapes in the muni space in 20 years, you've talked many times as we discussed today that many players are starting to step away for a variety of reasons, like banks and high interest rates and what it's doing to their portfolios in different ways. so as they step away, is this void worth stepping into? >> yeah, it is. the best credit conditions in 20 years. it's driven by expectations a few years ago during the pandemic that tax collections would decline by 10%, 20%. federal relief was crafted on that expectation, but tax collections, sale tax, income taxes, they're up 25% to 30%. it's been a big improvement to muni credit, but while fundamentals have improved, many investors have stepped back from the market.

2022 and 2023 and combined a record outflow period. very little oh of that money has come back to the muni market. a different story than investment for corporate credit or institutional investors have been quick to come back. so higher yields and wider spreads is what that means than other markets. >> we have april 15th coming up, david. everybody understands that's tax time. does that mean anything special for muni investing? is it some type of seasonal anomaly that occurs when people liquidate parts of their portfolios to pay their taxes? >> yeah, this is typically a seasonally weak time of the year. at the same time, we tend to see a big incross in supply. that's happened this year. it's pushed spreads a little bit wider. in addition to just interest rates going higher. relative to the peak a few m

months ago, this tends to be a good time to allocate some munis. i think tax efficiency is top of mind for investors today. another thing that we're recommending our clients do is look at their reallocation and think about harvesting tax laws. it's a good time considering locking in those losses, moving up in tax for yield. and we see a lot of opportunities to do that, especially more active strategies relative -- >> you know, it's always about risk/reward, david. you're telling me how to get better reward. how is that risk parameter, if you had to look at taxable securities versus muni securities in a risk profile, when you want to step up maybe to lowered rate of investment grade, how does that fair? >> so we like allocations that take advantage of the steep yield curve, and not rated bonds that we consider higher quality, high yield. a well structured portfolio, you

can earn about 5% tax free with a low investment grade rating today. an investor would have to earn about 8.25%, outside of the muni market that means taking more risk. so we like the return profile and the yield and we like the downside in the event that the economy does slow more than what's expected. investors are better protected, and historically has much lower default rates. >> real quickly, almost out of time. passive portfolios are easy. you know, you buy the etf, it's on auto pilot. if you have an active portfolio manager that you like, you get better results. what do you like and prefer and what are the opportunities in more of an active approach? >> yeah, i would start with the muni curve, which is upward sloping of 125 basis points of additional yield, moving out from 10 to 30 years. very different than, you know, other asset classes where yield curves are flat to inverted. we like a barbell strategy,

marry that with a longer term allocation. get about the same duration profile. with a pickup of 50 to 100 basis points in tax-free yield. in addition to that, some of the not-rated segments of the market that i mentioned specifically assets that are repaid through property taxes. there's been a big increase in house appreciation over the last few years. that's just starting to flow through. assessed values and property taxes. so we see a multiyear tail wind to some of those credits. >> thank you for joining me today, david. i look at the yield curve and i try to weigh all investments as many viewers do. there's definitely opportunities in the muni space, the taxable side of it versus more tax-free munis. certainly presents big opportunity. thank you for joining us today. deidre, back to you. >> thanks to you, rick santelli. let's get a quick check on shares of boeing. they're off by 2% on reports that the faa is investigating

claims by a boeing whistleblower about flaws in the 787 dream liner. senator blumenthal reportedly holding a hearing next wednesday with the whistleblower on the company's safety culture. we'll continue to watch that story. coming up, banks are off to a strong start this year, but can that run continue into earnings season? we'll ask banking investor jackie reses next. and norwegian cruise line just announced their largest ship order ever. that's later on in t sw. 'lbeig bk.heho

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welcome back to "the exchange." we're just a few days away from the unofficial start of earnings, all reporting on friday. my next guest runs a bank and is a former executival alibaba and goldman sachs. he has a unique perspective on the industry. joining me now in an interview is jackie reses, co-founder and ceo of her company.

thanks for being with me. >> happy to. >> most of us are looking for a soft landing or no recession. what does loan growth look like? >> yes. so we had muted loan growth for obvious reasons because of the rise in interest rates. i think we have had this unusual environment where we have had incredible unemployment numbers. we have actually had a pretty benign level of credit defaults. and so it's been a pretty robust environment for banking in general, with the one exception of loan growth, because we have sitting here with high interest rates. so we're at the point now where there's expectations of a rate decline. i think the fed is reluctant to move too quickly so we don't see an environment where they maybe make a mistake by a quarter or two. so we're sitting here towards the end of the year, and we have expectations that rates will decline and you would expect to see some acceleration of loan growth. >> on the other side of that is net interest income and higher

rates are more beneficial for that. how do higher for longer rates, what is the full impact of that? >> we have seen where banks have performed well as it relates to net interest margin, one of the main metrics for performance. what you typically see is that loan books rise faster than deposit books, so banks have benefited off the changes in interest rates that we have seen. >> last time i saw you was a few weeks ago in san francisco on the anniversary of silicon valley bank's implosion. we talked about that. what is your view on the health of regional and community banks, are they out of the woods? >> we have seen this mass amount of deposit movement into two areas. one is money markets, and i think that's a structural change happening in the banking industry. the second is a move from small banks and regional banks to big money center banks. i think the top 15 banks hold about 76% of the deposits in the united states. the top four banks have almost 50% of the deposits.

i think we have a real structural shift that happened in the united states as a result of svb that i don't think is coming back. each regional bank has to figure out their own strategy for how they try to win back some of that deposit growth in order to have the deposits -- to do the other side of the balance sheet, which is lend the money out in their communities. >> at lead bank, you serve local customers but you have also built an onramp for financial technology companies. is that a response to sort of the aggregation we're seeing of the bigger banks? >> it's not in response. we do have a really healthy community bank in kansas city, missouri, that we're really proud of. we have amazing customers, amazing board members. but we run a thin tech infrastructure company. we build all kinds of banking products and apis for consumer and tech companies that want to embed banking services into their business. so that's a business we have

seen a lot of small banks pursue over time, because they're except from the durbin laws, so they can build products that have different opportunities with regard to interchange. but we are seeing an environment where folks like us are seeing all kinds of regulatory challenges in the market. we are having an incredible opportunity as a result of that. there's an incredible flight to quality, and so at lead, we're certainly benefiting from that die nam nick the market. >> a lof of these fintechs built their businesses in lot of different times and has driven a re-examination of quality of partners that fintechs work with. is that raising the risk behind the scene? >> no, it should be mitigating the risk, thankfully. i think the regulators are being more aggressive about how they pursue the partnerships between fintechs and banks. most people don't realize that

fintechs operate on the rails of the banking system. that keeps us all safe and sound, because the rules of banking and the regulations around banking have been established for almost 100 years now. and so what ends up happening is that a lot of these banks that started to get into the business with fintechs were really out over their skis. they cropped up, built a partnership. you have these mass consumer companies in fintech that have aggregated tens of millions of customers with bank infrastructure underneath that's not fit for the scale and velocity of the transactions happening. so folks like us at lead bank, we understand technology, but we also, at the front and center of our strategy, are able to be safe, sound, work with companies that are the best this the industry who want to scale with the heavily compliant strong type of environment, because they know they have to be front and center in this regulatory environment. >> speaking of disruption, in san francisco, a lot of people talk about financial services as

being an area, an industry ripe for artificial intelligence and generative ai. who do you think is leading the way right now, the big banks or some of the smaller fintech players? >> they all have used ai in some form in the last ten years. you have seen any kind of financial institution use machine learning models. even algorithm lending, which the fintechs were probably stronger at. >> what about gen ai, can they harness that? >> they can, in everything except for credit, because credit has fair lending standards. the biggest thing that has to happen around ai is you have to be able to back test it. if you can't, you have to be able to prove that you're in compliance with some of the lending laws. the interesting thing with ai is that it's under bbounded. so you can do the math around some of the changes in platform

shifts in technology. but ai is the one recent change in technology that you can't do math on. the opportunity is all upside, and you've yet to see it really permeate the entire economy. i would liken it to the internet when the internet started, you couldn't do math with the size of the market transition is. and ai is the same, if not bigger. because of the expectations oh of what's going to change as a result of it. >> you are on the frontlines, as well. so jackie, thank you for being with us. jackie reses of lead bank. jackie is one of kcnbc's change makers. there's still time to register for the summit on april 18th where you can hear some of the women transforming business. just scan that qr code on your screen or go to cnbc events.com/changemakers. coming up, this name was $75 when it started trading two weeks ago. shares are down about 26% since

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welcome back to "the exchange." trump media, that was the mystery chart that we showed you before the break, hitting this level by going public, it has been volatile. corporate filings, which revealed the company's net loss of $58 million loss last year, on revenue of just $4 million and showed how much the executives are being paid in stock and compensation. for that full story, go to cnbc.com. coming up, royal caribbean, the worst performer down about 5%. norwegian and carnival down 3%, this after norwegian announced its biggest ship order yesterday. we'll talk to the ceo, that's next. [due at target in 5!] copy that. make a hard left down the alley.

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after norwegian's latest report revenue up 2023s 3 2%. they have struggled in 2024, down more than 5%. let's bring in norwegian ceo harry summer along with seema mody. >> harry, a pleasure to have you on cnbc. norwegian is called the biggest growth story in the cruise sector. walk us through this rational, why placing such a large order right now? >> first off, ladies, thank you for having me on this afternoon. it's a pleasure to be here. you know, we've seen cruise demand in this last couple of periods really at record levels. we're seeing record booked positions, record guest traveling, record prices and gives us great optimism for the future. you know, with that optimism, you know, we look forward to the future and say, okay what does the future hold for our three brands. and we think this new ship

order, which reflects new ships across all three of our brands, regeneral 7 sea cruises, oceana cruises and name brand norwegian cruise line is a reflection of that optimism for the future. >> so how do you address these concerns that more ships on the market will lead to overcrowding of the cruise sector and therefore you know put more pressure on prices over time. that seems to be why the cruise stocks are trading lower today. >> i think perhaps people are reacting to the large size of the order. but if you look at it, these ships we're placing will be over the next 12-year period. our actual compound growth over that period is only 4%, which is actually fairly modest growth considering the robust demand metrics that we have been seeing. in the past, historically, if you look at our financials between 2015 and 2019, for example, we actually were able to grow our capacity at 7% and achieve outsized revenue and ebit and the cash flow.

it grew by much more than the 7% increase in capacity as we were able to successfully absorb demand and get more efficiencies from bigger ships. and we're sure that that same trend will continue in the future, especially the unprecedented demand levels we're seeing today. >> harry, what are some of the changes you anticipate, eight new ships over the next ten years. what do you think customers are going to be wanting? are you changing the design or the offeringsthat you're going to be offering? >> yes, absolutely. we're constantly looking at our guest's experience on board the ship. we carry something like 50 to 55,000 guests every week across our existing fleet of 32 ships. we get great input from our guests what they like, what they value, what they're willing to pay for and we take all of those things into consideration in our new platforms. all three of our brands will have brand new from scratch greenfield platforms that will allow us to deliver excellent guest experiences and excellent financial results. >> zip lines, cabanas, spas.

the whole wellness trend is taking hold for the cruise industry. harry, walk us through what the consumer wants right now. we have this cpi report coming out tomorrow where there are concerns that the consumer is starting to pull back with inflation staying stubbornly high. >> you know, we have seen no consumer retrenchment in any of our demand metrics. our guests -- especially the demographic we're going after, seems to be robust. this trend to look at experiences over buying things seems to be alive and well. and we see robust spend not just on the actual basic ticket but on experiences on board, spa like you mentioned, shore tours in the gift shop, casino. people really enjoy the type of experience. you know, we've seen in the industry what we call a value gap that the value that a cruise vacation brings is so much better than what guests get when they're trying to book a land vacation. that value gap, especially in these times where perhaps some of u.s. properties have had a

challenged staffing up, we have had no such challenge. our ships are fully staffed. we have experienced crew members providing great experiences to our guests everyday. that value gap and the experience gap where not only are our vacations less expensive than hotels but also provide a much better experiences for our guests than the comparable land experiences. it's alive and well and people are seeing it. >> harry summer, thank you and seema, thank you for bringing that to us. we'll wrap up the show, but a quick check on markets. markets are a little weaker in today's session. the dow industrials down 4% of one .. that will do it for "the exchange." "power lunch" is up next. i'll join tyler mathisen for that on the other side of this quick break.

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rich is living life your way. and having someone who can help you get there. the key to being rich is knowing what counts. ♪ good afternoon, everybody. welcome to "power lunch" alongside deirdre bosa, i'm tyler mathisen. stocks falling today, but off the worst levels of the session. the dow down about 150 right now -- 158. the focus on two big market events tomorrow. the latest read on inflation, and the minutes from the last fed meeting. the other big market driver after the fed, chips. nvidia is lower by 3% today and down 13% from the high hit at the end of march. one threat to dominance, more companies are working on their own custom chips. google the latest to