good afternoon, everybody. welcome to "power lunch." i'm tyler mathisen. glad you can join us. markets are higher today. maybe not surprising given the mixed inflation data. today's producer price index coming in lower than expected. much needed relief for markets after consumer prices jumped more than expected yesterday.

>> isn't it funny what a little green on the board will do? you just need a day in red to appreciate green. dow just turning positive. it's been down seven of the past eight sessions. then, that translates to a 4% drop so far in april. nasdaq getting a boost today from nvidia, higher for the second straight day after getting another positive analyst note. briefly it had dipped into correction, meaning down 10% from the recent high of $974 a share, march 8th, tyler. >> let's take a quick detour here and go to rick santelli with more on the ppi and the bond market. rick santelli. >> reporter: you know, tyler, today's bond market was mostly in short maturities that are aligned with the fed. yields were a bit lower. that's a good thing. if you look at an intraday chart of tens you can see the ten-year side of the equation yields were higher. not only were they higher today.

if you look at a two-day chart, they're building on what was yesterday's cpi. the short maturities paid most attention to the month over month data which reversed on headline the huge up .6% from last month. you can extrapolate and annualize. we played that game before. it didn't work out so well with other inflation metrics. three month over month data points are lower, but the three year over year data points on the charts, headline, 2.1 versus 1.6. strip out food and energy, 2.4 versus 2.1. strip out food energy and trade, up 2.8 versus 2.7. here's the biggest issue of all, whether you're looking at cnbc write-ups or bls themselves, gasoline, a lot of traders talking about gasoline and the seasonal adjustments going on. yesterday's cpi report, they showed gasoline prices up a little over 1%. the actual month over month

data, gas prices were up about 5.75%. what did today's ppi show? up 5.75-ish percent. seasonal adjustments whether it's a claims data, a jobs data, or inflation data, really makes traders wonder what the post world -- post covid world looks like in reality versus the seasonal adjustments. deirdre, back to you. >> actually, it's tyler and contessa today. but let me ask you a question, rick. where inflation is now, does the fed need to merely be patient and assume that keeping rates where they are for a little longer, a little higher, is going to wring the last drops out of inflation, or does the fed need to raise rates? >> well, i think the whole hypothesis of wringing the last few drops out is where the flaw is. how do we know it's not going to stabilize close to 2% but not at

2% and move higher down the road? there's a lot of issues where it's sticky, whether it's home insurance, car insurance. i know my premiums have gone up. do you really think they're going back down? to answer your question, i'm not going to guess what the fed is going to do. i'm not going to pay that game. what should the fed do? hey, 2% is their target. i understand that. but the big issue here is even if inflation gets close to that, they're going to have to be careful. i think inflation is going to be bumpy versus the way it was flatlining pre-covid. >> thanks very much. if we turn from inflation to another big issue for the market, earnings. bank earnerings kick off tomorrow. we'll hear from jpmorgan, wells fargo, citigroup. leslie joins us with more on what you're expecting to hear. >> this was a perfect segue to what you were discussing with rick because banks are in focus. there have been a huge shift in

expectations since the banks last reported in january. guys remember at that time, traders expected five cuts. now the market is favoring two cuts no sooner than september. for banks, higher than longer rates can be a mixed bag. they're hopeful the more asset sensitive firms, shorter duration loans on their books, will increase guidance on net interest. morgan stanley analysts say bank of america, wells fargo, and jpmorgan are most likely to benefit. higher rates can pose problems for banks in other ways. it makes debt service more expensive, and it may deter activity in certain corners of capital markets which were otherwise ripe for a rebound. how these pipelines are building for m&a, ipos, and so forth, will be a key topic of conversation on the analyst calls beginning tomorrow. so too will be dividends and

buybacks as banks have been stashing away capital to comply with the basel 3 rules. the sense is those will be watered down somewhat. the banks can return more capital to shareholders but we'll be covering it all tomorrow morning. >> such a busy day for you. when we're looking at the unexpected inflation readings today, how does that end up translating not just to what we saw last qatar for the banks but in the color they're likely to give in the earnings calls? >> we'll definitely be hearing these macro pictures and why that's important is banks have done reasonably well throughout this ycle. and that is partially thanks to the fact the economy has been holding up. regardless of kind of what inflation is doing, the higher interest rates have been okay for credit quality because the economy has been so strong. the second that that starts to deteriorate is when the high debt service combined with a weakening economy makes for some more troubled situations and

that's where banks start to really feel the brunt of the impact. >> we have heard from other experts that the labor market is part of a huge puzzle piece in why we're seeing the soft landing, why the rising rates have not been so problematic for banks in terms of defaults and things like that. it seems like it's a sweet spot. it's interesting to watch if there's any wobble, what happens. >> i think loan growth is something to pay attention to on that front. what consumer loans look like, what commercial loans look like. the analysts i speak to say expect a shrinking of the balance sheet given the state of where we're in. >> no big rise in defaults, is there? >> no, and in fact, a lot of the issues that we have seen are kind of compared to pre-pandemic levels. it's nothing catastrophic that we have seen so far. that said, if there are cracks that do start to really appear in the economy, that whole picture can shift very quickly. >> all right, leslie, thanks. inflation data, bank

earnings. what does it mean for the market and your money. let's bring in brent schuette. welcome. good to have you back. we talk here and i believe one of your thesis is that it may be difficult for the fed to cut rates, maybe at all this year. i would love to hear you elaborate on that. we're in this higher for longer phase. was the mistake here that the fed didn't go even higher? >> i don't think so. i just don't think inflation is dead yet. that's why we have had this consistent belief for the last few months despite the narrative to the opposite that inflation is not coming down. it's actually reaccelerating. you're seeing that across various segments. i think the market has ignored it because they want to latch on to the soft landing. look, nearly every inflation measure over the past few months is moving up, not down. the longer rates stay elevated, the more they work their way into the economy. i think the mistake we all made

or at least a lot of us made is we thought because there was a quicker tightening cycle, the economy would fall more quickly into a recession. that's not been the case because the consumer has that excess savings. a lot of consumer debt is in fixed rate mortgages, but you're seeing it start to impact lower consumers. you're seeing it pile up on auto loans, credit card debt. you're seeing increased delinquencies there. to me, there inflation narrative is the most important and i don't think the fed is able to cut aggressively enough to lower rates and again, the longer rates stay higher the more the economy reprices. and we're only two years into this post the original tightening. on average, it's taken 2 1/2 years with the longest being four. >> so let me come back to you. cutting rates is not a strategy for tightening down on inflation. the opposite would be true, so what do you recommend for the fed if the fed is hell bent on

getting inflation down very close to 2%, what is their next best step? >> i think right now to stay the course and not lower rates. look, i think the bar is high for them to raise. they made some mistakes in the past. i doubt they want to have egg on their face and start tightening rates, especially before an election. >> they have said expressly that they believe the peak in this rate cycle has been hit. >> 100%. i think the bar is high for them to tighten. look, i think the bottom line, and i keep coming back to this, is we're late in the economic cycle. we can all try to guess the timing of a recession, but we can all agree the unploemployme rate is low, wages are high. that's the top of what the fed likes. i don't think there are a ton of new people to come back in the labor market. and inflation is stickier in that scenario. as an investor you need to think end of the economic cycle, not going out and taking a bunch of risk or just make sure you're

taking risks you're comfortable with. >> you lead me to our next question. let's get to the news you can use. if you're an investor and want to make hay in this volatile time, some rocky road and getting inflation down and the guessing game around interest rate hikes or cuts, how do you invest right now and who benefits? >> i think the key word is investor. are you a short time investor or a long term investor? days like yesterday could continue. you saw the market falter. you saw bonds falter quite a bit. bonds today yield 4.55%. bloomberg aggregate yields over 5%. any investor should be happy moving into fixed income in these environments because the yield is high, and who knows what the next 3, 5, 7 years bring. the fed will be able to cut rates aggressively once we see the last inflationary impulse burn off. people are drawn to the mega cap

story. the commentary goes these are economically insensitive, they're longer term. they're higher quality. and therefore, you should invest in them. on days like yesterday, they outperform. the question you have to ask yourself is how much do you pay for that quality, and the other economically sensitive stuff, how well have they already done because people have not been buying them on days like that? i think that narrative shifts. so i think about investing through and on the other side and small and midcap, while not an instant gratification trade, if you're an investor, you'll be happy you're buying those during this time period in the next two, three, five years. because the market advance has been pretty narrow. things like small and mid have not been bid up. they're still below all-time highs and trade at historically low valuations given the fact people are aware of this but they're gravitating towards those mega caps which i think will become economically sensitive and people will wonder why did i pay this much for

those. >> brent schuette, thank you for joining us. appreciate that. coming up, there gold rush. gold prices up 13% this year as investors look for a safe place to put their money. is there still time to buy in? we'll talk about that. as we head to break, a quick power check on the positive side. you have shares of chip maker broadcom, among the s&p leaders after it was named a top tactical trade. on the negative side, carmax sinking after posting a big q4 miss. we'll trade that ahead in the three-stock lunch segment of this "power lunch." that's still ahead.

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and check in. they all choose the advanced network solutions and round the clock partnership from comcast business. see why comcast business powers more small businesses than anyone else. get started for $49.99 a month plus ask how to get up to an $800 prepaid card. don't wait- call today. welcome back to "power lunch." gold back in positive territory following the hot inflation data. the commodity is up more than 13% so far this year. here with more on the recent rally in gold, the stocks to watch, chris mancini, associate portfolio manager of the gold fund which is up nearly 10% in

just the last month. chris, we're seeing noticeable outflows in gold-backed etfs. so what's driving the price higher? >> right, that's a great question. given these outflows in the etfs normally what we see is the price of gold fluctuates closely with flows into and out of etfs because the etfs are the marginal buyer or seller or gold. gold has gone up not withstanding the outflows you mentioned. what that points to is there must be physical buyers of gold, we don't know where they're coming from. we know specifically central banks are buying. china has bought, but they bought consistently over the last few months or year and half. we don't know exactly where the other physical buyers are coming from. it could be high net worth individuals, it could be chinese retail, but there's good momentum. >> you say physical buyers.

we saw the headlines about costco doing all these business selling gold bars. is this what you mean? >> yeah, things like that, exactly. so costco we know is selling lots of physical gold. it could be high net americans, chinese, buying physical gold, putting it in a fault. >> what does the demand say to you? why are people doing this? the central bank, an individual, a family office. what is it expressing? >> central banks, what we know is when russia invaded ukraine, the united states and european governments essentially confiscated russians' foreign exchange reserves around $500 billion. and so china has $3 trillion of foreign exchange reserves. they don't want that to be confiscated. so they're diversifying out of dollars and into gold. and other central banks around the world are doing that as well because gold, you know, obviously cannot be digitally seized or confiscated. >> so they're taking dollars and

selling dollars and buying physical gold and storing it because you can't get to my vault. >> exactly. exactly. >> you can freeze my account. you can do whatever you want through the banking system but you can't come get my -- >> exactly. that's a huge trend going on globally amongst global central banks. that's one big driver of the gold price. the other might be that, you know, that individuals in china, for example, are seeing a faltering real estate market. that's where they held their savings. now they're saying real estate is going down, we want to diversify into a hard asset we can store and hold for a long time, hand to our grandchildren, something like that, and sock it away. they're buying physical gold. >> when we saw prices of gold going up, if you see it going up say 16% over the last year, prices of gold stocks, the shares, have gone up 30%. so outpacing gold. give us a sense of the companies you like that represent shares of gold.

>> right, so the biggest holding in the fund is agniko, a large canadian based producer. they have a huge presence in the gold belt, which is in northern quebec, a very safe jurisdiction. there's a great mining jurisdiction. there's a town nearby, so lots of good gold production relatively low cost, generates lots of free cash flow. that's like a solid core holding in the portfolio, pays a dividend. >> take me through very quickly if you might the arguments for the different ways individuals should buy gold. should they buy a fund like yours that invests in miners, should they buy an etf that invests in physical gold or buy physical gold? >> our fund provides leverage to the price of gold, like contessa was saying in this past month when the price of gold rallies from $2,000 to $2300, our funds are up a lot more than that. the reason is that you have

operating leverage in the gold mine. so if you want some juice, essentially some beta, you should buy our fund, the gold mining stocks. if you want to sock it away and hold it, again, like a chinese retailer or someone like that, i would recommend buying physical and just putting it in your sock drawer, putting it in a vault or wr wherever and holding that. >> senator menendez maybe. >> not like him exactly. maybe, but right, exactly. but maybe something along those lines. >> chris, thank you. appreciate you coming in. >> i'm just teasing. >> all right, two minutes for the first ever cnbc changemakers event in new york city next week, april 18th. you'll hear from some of this year's honorees redefining leadership, including drew barrymore, scan the qr code on your screen or visit

cnbcevents.com/changemakers to learn more. we will be right back. [thunder rumbles] ♪ ♪ ♪ ♪ the biggest ideas inspire new ones. 30 years ago, state street created an etf that inspired the world to invest differently. it still does. what can you do with spy? ♪ ♪ [thunder rumbles] ♪ ♪ (vo) what does it mean to be rich? [thunder rumbles] maybe rich is less about reaching a magic number... and more about discovering magic.

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here's a morgan stanley taking a turn lower this afternoon. leslie picker joins us with those details. >> hey, tyler. yeah, shares down about 4.2% on headlines from the "wall street journal" showing a wider probe into the vetting of clients in morgan stanley's wealth management. last november, there was a report done by the "wall street journal" showing that the federal reserve had been looking into some issues as to how morgan stanley was vetting clients who were at risk of money laundering. and today's headlines show and they cite people familiar with the matter that that probe has been expanded to encompass the s.e.c., the office of the comptroller of the currency and other treasury department officials. the issue, according to the "wall street journal" sources that regulators are looking at boil down to whether morgan stanley has been sufficiently investigating the identities of perspective clients and where

their wealth comes from as well as how it monitors its clients' financial activity. some of those probes are focused on the bank's international clients, according to the "wall street journal." i have put out a call tocomment. i have not yet heard back. their shares down now about 4.6% on this news. >> leslie, thank you for that. let's get back to the big story of the day, this morning's read on inflation which seems to be sending different signals than yesterday's consumer inflation number. rick santelli in chicago, and he rejoins us. hi, rick. >> hi. definitely, we need to talk to a trader. let's see what the people in the middle of this are thinking, especially after yesterday's hotter cpi and potentially cooler ppi. mike palmer, you saw the numbers yesterday. you saw the numbers today. what's your thoughts? >> i think inflation is the clearest catalyst we have in the market right now. we came in with a hot cpi number and saw the markets sell off.

today, the ppi number was a little less hot so we saw the market rally. flation is the event that moves the market and everything else is secondary to that. as such, we have seen the chance of the fed cutting, we talked about it being in march, there were chances, it seems like a big chance was in june. now it's looking 50/50 it will be in the late july meeting. that's still a big chance we cut before the end is year. if we go to the end of the year, we're at almost a 100% chance. we're not seeing huge moves on these inflation numbers but it's notable they're coming in hot. >> what about the vix? the vix has been above 16 briefly, not today but in the last couple days. it's hovering near five-month highs. your thoughts on volatility in general in the equities space. >> in the lead-up to cpi we had yesterday, even last week, you saw volatility kind of come into the marketplace. saw a lot of people buying protection. that made people also nervous about other catalysts in the market. for the most part, it was

inflation. in the lead-up to the next cpi, may 15th, i believe, i think people are going towant protection then, too, and be scared of these inflation numbers. >> all right. let's go into a very hot topic, especially in the last 24 hours. seasonality. seasonality is the adjustment process built into every number that tries to take advantage of things that happen on a perpetual basis, whether you shut down automotive industry for mate nns, things like that. the real question is do you think seasonality is different post-covid? >> i think it is an interesting thought. right now, again, we're looking at inflation. we only have the cpi numbers eight times a year, whatever the number is, ten times a year. these are now little events. all the seasonal adjustments. everybody is looking at all of them, wondering how accurate the numbers are. they're getting adjusted up, adjusted down. they're all catalysts, people care. it's hard for me to say exactly how accurate they are at all

times and what the seasonality does. i think if they were off, we would see an opportunity in trading. the market is absorbing this inflation without having big moves. >> excellent. real quickly, we have 20 seconds left. real quick answer. fed fund futures, are we going to finally retrain people to understand you can't look eight meetings down the road to think there's going to be something accurate there really? >> that's exactly right. anything beyond six weeks you're guessing. >> thank you. that's what traders think. tyler, back to you. >> rick santelli, thank you very much. >> meantime, natural gas down about 6% today. inventory concerns cited here. pippa stevens with the details. >> nat gas is hovering near a four-year low after today's report showed a larger than expected buildup of stockpiles. we have switched from withdrawal to injection season. meaning inventories are forecast to build even more, looking forward. the eia forecast prices staying

below $2 this quarter before increasing slightly next quarter. by the time november withdrawal season comes around, the agency anticipated the u.s. having the most natural gas in storage on record. as you see on that chart, not only is current inventory above the five-year average, it's also above the entire five-year range. now, after outperforming yesterday, energy stocks are in the red today with the natural gas producers leading the losses. that's apa, cotear, and eqt. nat gas, though, could help offset some of the innflashary pressures. >> hi, julia. >> federal prosecutors charged the former interpreter for the dodgers star shohei ohtani with bank fraud today. he impersonated him to get his bank to approve large wire transfers. in all, he stole around $16 million. prosecutors emphasize they

believe ohtani is a victim. they say there is no evidence he was involved. >> four railroads are trying to get an appeals court to throw out a biden administration safety rule. the rule announced last week requires two-person crews in most circumstances. the railroads filed identical suits in different courts this week. they called the new rule arbitrary. >> and the coast guard says palm leaves spelling out the word help led rescuers to three men stranded on a remote pacific island earlier this week. the search began after their niece reported they experienced mariners as missing. navy aircraft spotted the message and a short time later they were successfully rescued and returned home. the island is about 100 miles northwest of where they live. contessa, such a wild story. >> you just have to have such intention and resources. the ability to think that far ahead so you can get help and the fact it got spotted is amazing. thank you, julia.

coming up, andy jassy's balancing act. the amazon ceo viewing to double down on ai, at the same time, pledging to curb the company's costs. we'll discuss when "power lunch" returns.

shares of amazon hitting an all-time high as ceo andy jassy released his letter to shareholders. he said generative ai could be the largest technology transformation since the internet. he's committed to investing in it, but he's also committed to cutting costs. kate rooney joins us with a look at the state of amazon. >> yeah, so the state of amazon is really about that balance. ceo andy jassy is walking this tightrope of managing profitable, mature business and spending big to keep up in ai. he describes the artificial intelligence strategy as cooptician, fraor example, theye using nvidia chips and partnering with companies while building amazon's own competing

models. here's what he told andrew ross sorkin on squawk earlier. >> this is going to transform virtually every experience we know as a gigantic space and there will a be a lot of successful players in it. if you talk to enterprises or companies using generative ai, they are very excited about what we're building and more and more customers are moving toward services and we're going to have partnerships, we have very deep partnership with anthropic. quad 3 is the best model on the planet right now with the best performance and it runs best on top of aws. at the same time, we have a lot of experience building models at the company. >> amazon's $4 billion strategic investment in anthropic is another balancing act it has its minority stake with no board seat but it has run into issues when outright trying to buy a startup. he called eu regulators blocking its i-robot acquisition a sad story. in a nod to its commitment to

ai, they announced andrew ang will join their board. he's a pioneer in the space who led google brain at one point. >> the stock is hitting an all-time high. how much of that has to do with all the excitement around ai? >> there has certainly been a lot of buzz. it's interesting, there has been a lot of notes lately and calls from wall street sell side analysts talking about amazon being their top pick especially in tech. it has very little to do with ai. more about sort of the north american margins. some of the profitability improvement, cost cutting, things like prime and advertising, which jassy also said in his annual letter, it could be profitable as its own stand-alone business. the sum of the parts, where ai comes in more on amazon web services and its cloud business. mark mahaney had a note talking about that being one catalyst for the stock and he also talked about some of the dislocation where amazon is trading compare today where it was before covid.

about 30% below the average of where it was trading. part of it is dislocation, and then that cost cutting. that's really what wall street wants to see, where the silicon valley is you want growth, you want the moonshot bet with ai. he's really got to balance that staying ahead and staying relevant in ai, but serving what wall street is looking for, the cost cutting and discipline. >> thank you very much. still ahead, open ai ceo sam altman speaking with cnbc today. we'll tell you what he's telling global leaders and potential investors and what he needs for his grand vision for a global chip industry. stocks rising to session highs. we'll be back in two minutes. dow up .3%. morikawa on 18. he is really boxed in here. -not a good spot. off the comcast business van.

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global chip industry as they try to wrap their heads around the impact of ai. our cameras caught altman as he was exiting one of the meetings. what does he say we need? it's more than money. >> funding is part of it, but there's a very complex supply chain. there's a thing we'll need to figure out about how we're going to do security and policy for this. so it was a conversation like we had in many other countries around the world about what it takes to do this as a global effort. >> so here to tell us what happens when silicon valley meets capitol hill and the uphill battle altman may face are emily wilkins and steve kovac. what was he pushing for? what did the people on the hill want to hear from him? >> it's always interesting when sam altman comes up to the hill. certainly, he's no stranger to being around lawmakers, talking about policy with them. what i think was interesting about this particular time is it wasn't just necessarily about ai. which of course, kind of really you associate with sam altman

and also about chips and semi-conductors and the lawmaker he met with, karen sloan asked him all those great questions coming out of was todd young. a couple interesting things about the senator from indiana. he's one of four who is part of a senate working group on ai. they're supposed to be coming up with this ai report soon that will guide how the senate moves from a political way, plus his state also got investment in a semi-conductor facility coming to lafayette, so kind of on both of those items they have this potential student for a conversation about moving forward on national security issues, on semi-conductors, and on ai. >> it's interesting because while you have a lot of tech companies pushing back against more regulation of their processes, here you have sam altman saying we need more of it. how is that likely to play with other ceos who are trying to get -- we heard andy jassy saying ai is a big future venture. >> i have a more cynical view on

this. our congress can't even get it right when it comes to protecting little girls on instagram from feeling suicidal or depressed or something like that. so forgive me for being a little cynical that they can't even figure out they're not going to figure out the next generation thing. we had sam altman on the hill about a year ago, i was there in the room, telling senators, saying please, please, regulate us. the senators in the committee were astonished to have a big tech executive for once there begging for regulation. at the same time, these people have to know the appetite for actually passing something in our congress right now is next to nothing. there's -- we have seen this since the 2016 election and forward. so many ideas, so many bills. adam schiff yesterday proposed yet another ai bill, saying we need to be transparent if you're training these ais on copyrighted material. good luck seeing that do anything. i know i sound cynical.

>> because you are. >> let me add to your cynicism. i'm cynical too, when i hear a company saying we welcome sensible regulation. the operative word is sensible. we welcome regulation we welcome. >> i'll give you a good example of that. in europe they're trying to pass laws to give a deeper look into how the models are trained, more trans transparency, and in general, companies like google and microsoft and openai are more resistant to that. basically, regulate us, but the way we want to be regulated. >> how much is the appetite of the lawmakers to move forward on this have to do with how much they're getting in campaign donations? >> you cannot ignore the fact all these tech companies have been pouring millions of dollars into lobbying on the hill, that they have connections in some cases to various staffers. they have staffers who go on to be lobbyists. there's an interconnected system here, at the same point, i don't want to negate good points steve

is making, but part is the timeline. they spent six months trying to fund the government. that deserves its own analysis and criticism, but that needed to be done. >> do they have the basic understanding needed to establish a framework? >> i think there's a basic understanding there. it's a process. this is why a lot of legislation takes a long time to pass. because lawmakers have to become educated on annish aand comfortable on what they're voting for. what they're really doing, this first next step is going to be sort of giving the lay of the land. okay, senate commerce committee, here's your bucket of stuff, snalt homeland security, here's your bucket. but it's really going to be up to the chairs of the committees. you have seen at least for the commerce committee, maria cantwell came out with a bill, it is bipartisan, bicameral, but it's still working draft and the clock is ticking. there's so many things congress needs to get done that it's

difficult to find the time to move these big major bills that don't have a deadline attached or an emergency attached to it. >> we have to talk about the money. part of the reason altman was in the middle east before this meeting on capitol hill was to court governments and investors out there for this vision. you might remember i was on with you guys back in february where this report came out that he wanted to raise $7 trillion, trillion with a "t" dollars for this chip supply chain vision he has. it's kind of nebulous what it is. like he told our karen now on capitol hill, it's about more than the money. it's about the supply chain. also about this enormous energy usage that these data centers need to use that brings up climate change, it brings up where does that energy come from and other issues. >> how many committees need to be involved when you're talking about drafting legislation. thank you both for joining us. emily and steve. >> all right, still ahead, we'll trade big earnings movers in a fresh three-stock lunch. back in two.

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welcome back everybody. time for today's three-stock lunch. earnings season almost here. it's going to start early tomorrow. we're going to look at a couple of names that were just reported and one on deck with our trades is new construct's ceo, david trainer. david, welcome. first up this afternoon we have carmax. is now, david, the time to buy a stock that is down 10% today? >> we think so. i think carmax is going to be one of the winners in the used car industry. i think carvana is running out of capital, a broken business. it's one of the zombie stocks. carmax has a better scale. and it will make all the difference, so yes, now is a great time to buy that stock. >> next up you have

constellation brands, shares of the maker touching an all-time high. the company beat estimates on top and bottom lines. david, would you drink it or stick with water? >> you know, everybody loves liquor and booze. it's been a super popular stock in a super successful stock where now is the time to sell. the whole covid experience is a huge tail wind for all the liquor and the alcoholic beverage stocks and we think they peaked out. >> so dump it, all right. all right. let's go to the final name. we asked you to pick a bank stock you're watching and you chose zion's bancorp. why do you like this one? >> they have never been in the real estate. very high return, very profitable business, and still very cheap. we think this is a regional bank stock that's kind of been one of the babies thrown out with the bath water in all this sort of regional bank flare- ups. we think this is a diamond in the rough. it's been a great performer for

us already. we think it's going to continue to be a great performer, 50, 60, 100% upside. >> i don't know if you follow wells, jpmorgan, and the others that will be reporting tomorrow. if you do or even if you don't, what would you be looking for there? >> i'd be looking for sustained profitability. how their margins are holding up and what's become a tougher rate environment. jpmorgan has been one of our favorite stocks for a long time. it's a focus list stock. it's something i own personally. i think it's the best in breed. wells fargo and citi, eh. citi has been cheap recently that people have gotten bullish. >> thank you so much, david. we appreciate for your quick and concise answers. new construct's ceo. appreciate it. still ahead golf's most iconic event. we'll get to the key things to watch when we return.

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welcome back to power lunch. a little rain cannot stop golf's most iconic event. the masters tournament officially underway. dominic chu is here with us. give me a sense of how we are looking at the masters. >> right now first of all we should know because a lot of people are focused on tiger woods. he will tee off at 3:54 this afternoon, which pretty much guarantees he will not finish his first round. they didn't start until the 10:00 eastern time this time around. but right now ryan fox is minus 5, the leader board right now through 11 holes. bryson dechambeau is your leader right now. if you take a look at the reason why it is so important is because this is really the unofficial -- you should just make it the official kickoff event of the golf season. the most highly watched golf

event by not even a factor. you can't count the second place compared to what they have in terms of viewer ship. now some of the economic stats are pretty safe as well. this is a boom for the local economy in augusta, georgia. if you look at the way things are shaping up. first of all the impact has been estimated around $120 million for the local economy. the mastercard economic institute actually shows an 85% bump in spending in augusta on day one of the masters compared to what it was beforehand. that's how much of a big deal it is. and the merchandise sales, no official number. some people estimate about $70 million for the week. flight aware tracks over 1,500 private jets that are going in and out of the area. >> i know you've been there. have you been to that store -- >> the merchandise store, yes. >> that must do tens of millions of dollars of buy ins. >> i mean some of the estimates say $70 million. what's curious, i mean even when i'm there, i'm not going to tell you the exact amount. because i was there and i'm not

sure the next time i will be there, but i spent a lot of money there, no doubt about it. >> maybe you should disclose it, we are in transparency. you don't want your wife to know. >> let's just say i bought a lot of polo shirts, belts, dog collars, everything. [ laughter ] >> so dechambeau, is he a liv golfer? >> he is, one of the poster children for liv. >> is there still a controversy between the liv and the pga players? would the liv players just live to win here? >> you know, i think it's interesting only because the people who have done well in the past here, people like phil mickelson, liv golfer, brook koepka, liv golfer. >> and rahm is now a liv golfer. >> yes. he was last year's champ. >> exactly. >> scottie scheffler is the favorite right now. but they talked about this idea that he was unsustainable, this current path between the split. >> look at the odds on tiger woods winning here.

>> it is plus 15,000. >> and so let's see. like that would be a pretty good takeaway. >> scottie scheffler, all the money is flowing that way. >> he's been the best for several years. >> the number one golfer in the world far reason. >> dom, thank you. >> thank you for watching power lunch. >> imagine caitlin clark. all right, closing bell starts right now. welcome to closing bell, i'm scott wapner, live from post nine. this make or break hour will begin with a big sigh of relief for the bulls. stocksrebounding. this one softer than expected. we'll ask our experts over the final stretch what all of that means including former dallas president, robert kaplan. he's coming up in a little bit. in the meantime take a look at your scorecard with 60 minutes to go in regulation. got a very interesting final stretch underway because the cooler than expected ppi is stabilizing interest rates. that's good enough to get stocks a bit of a liftod