Consumer Cracking or Cranking?, Beyond Meat CEO Exclusive, Gen Z’s Trade School Boom 5/9/24

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You're listening to The Exchange. Here's today's show. Thank you, Scott. Hi, everybody. Welcome to the Exchange. I'm Kelly Evans PERSON, and here's what's ahead. Is the consumer cracking or still cranking? It depends a little bit on where you look at who you ask. While several companies are warning of stress on the lower end, Bank of America is saying not so fast. We'll try to make sense of their data and ask the CEO of a low-cost grocery chain, legal what they're seeing from customers. Plus, shares of Beyond Meat are sinking after another ugly quarter DATE. Can the company gain back consumer appetite for its products? We'll ask the CEO in a live exclusive interviewthat is his first in four years. And Gen Z is increasingly choosing trade schools over traditional four-year colleges. And there's a way to trade that trend. You're looking at it. Shares are down

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today after a monster run. The stock is up 140% in a year. That CEO talks about what he's seeing. Let's start with the markets, though. Dom Chu, what are you seeing? We are seeing some markets that are near the highs of the session right now, so green pretty much, but maybe just fractionally so. So nothing terribly crazy. But still, in the midst of this winding down of earnings season, there's a lot more volatility, but markets generally on a macro level are holding up. The Dow Industrial's up nearly 200 points, about a half of 1 CARDINAL% gain, 39,252. The S&P 500 is at 5204, up 17 points or about one-third of 1% PERCENT. At the highs of the session, we were up 21 and then actually down around seven points at the low. So there's the range, tilting a little bit more towards that higher end of things right now. The NASDA Composite Index, again, a quarter percent gain up 39 points, 16,342 is the last trade there. There is still a big focus on technology, not Mag 7, but another name that's been riding high with the semiconductor trade, and that'srecently IPOed, and within the last year, Arm Holdings ORG. Those shares are down three and a half percent right now after a generally positive quarterly earnings report. Comparability for profit still being parsed out, but revenues were 47 percent higher than they were at the same point last year. And that was thanks in large part to demand from what else, AI-related products and chips. Armholdings ORG doing pretty well, but its outlook did disappoint some investors. That's the reason why it's down three and a half percent.But again, it was down 8 percent at the lows of the session. So well off those session lows right now. And there are a lot of earnings volatility stories out there today. Kelly mentioned Beyond Meat ORG. There's others out there with huge moves. And I know that we're going to be talking a lot about those in the next hour or two. But let me call your attention to two names that were from yesterday's trade. Shopify down huge yesterday on earnings.A firm also down huge on earnings. They're trying to find some stabilization right now and there is some point, Kelly PERSON, at which stocks fall enough to become at least more compel you, compelling risk reward value trades. Analysts have now taken up Shopify and Affirm Holdings today, some citing that near-term sell-off. So we'll see whether or not downside is enough to find some value in some of

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these beaten-up names. I'll send things back over to you. Will Roblox ORG be next? We'll find out. Dom Banks, we appreciate it, Dom Chu PERSON. A strong job market and wages have carried the consumer far longer than many expected. The big question is whether that trend can continue. For more, let's kick things off with Steve PERSON Leesman and the very latest look, Steve.

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The CNBC NRF retail monitor showing consumer spending moderated in April, but much of the weakness looks concentrated in the restaurant and food sectors, and some of it could be the result of seasonal factors. The retail monitor, which shows actual credit card spending from data gathered by Affinity Solutions, shows our headline index rising 0.3%, that's X autos and gas, down from 0.4% in March. The year-over-year declined 0.6% down from 2.7% to the plus side, with six areas down and six up on the month. Seasonal factors could be at play here. Easter was in April a year ago, but it was in March this year.And this April had two fewer weekend days. That could explain some of the weakness, but it's worth being mindful of whether consumers may be balking at higher prices when it comes to eating and dining out. By sector, building and garden supplies were up strongly, along with electronics and appliances and furniture and home furnishings.Gas station sales were also up a result of higher gas prices, but there's restaurant and bars and food and beverages both to the negative side. Unapplement remains low. Following a period where they were negative for two years, real or inflation-adjusted wages have been positive since May 2023, almost a full year. So consumers have the wherewithal to spend, but they may be shifting spending choices away from higher priced items towards those where they find more value. The U.S. GPE economy could be in the prices of some backlash by consumers when it comes to higher prices. At least that's the takeaway from earnings calls we've heard fromretailers and especially restaurant executives. That could mean to fall off in sales or potentially margins if prices fall. Kelly PERSON, back to you.

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Steve PERSON, thank you. And don't miss Steve's exclusive conversation with Minneapolis Fed ORG President Neil Cash Kari and Chicago Fred's Austin Goolsby PERSON. That'll be live together from Minneapolis coming up tomorrow 2 p.m. in fact. So there's a bird's eye view of the consumer from Steve PERSON. Now let's take a look at some of the corporate commentary that's been unnerving investors over the past week.Starbucks ORG shocked the street with a surprise drop in same store sales, leading to the stock's biggest post earnings drop since 2000. Meantime, McDonald's ORG missed on the bottom line, saying they're adopting a, quote, street fighting mentality to compete for value-minded diners.Different story, though, for Uber and Lyft ORG. Both of those CEOs saying they're not seeing any sign of consumer weakness among their consumers. Lyft ORG said perhaps the contrary. And on the travel side, Airbnb ORG gave weaker than expected guidance, despite seeing, quote, robust demand for travel, especially around upcoming events like the Olympics in Paris GPE.Planet Fitness, there's a mover today. Disappointing guidance after missing estimates on the top line, the company citing a shift in customer focus to get this savings. And believe it or not, to COVID concerns among consumers as well. That stocks up 8% though. And worth noting last week, Lifetime Fitness ORG posted better than expected results and strong membership growth,although their customer base, a little older and certainly more affluent. All of this to say, mixed signals on the consumer. But our next guess is coming in with the bird's eye view on spending and the changes they're making to attract value-minded shoppers. Joining us is Joel PERSON Rampled. He is the US CEO of Lidl. Joel, welcome. Hi. Please, you know, explain to us what you think is going on here with so much mixed commentary about the consumer.What's Lidl ORG's experience?

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Yes, well, every category of U.S. GPE retail is seeing inflationary pressure. Grocery is no exception to that. Lidl ORG is no exception to that. We see some of it coming from energy prices, some of it coming from transportation prices, well-known facts around fuel and driver shortages. All that combined is putting upward pressure on prices. What we're focused on is controlling what we can control. We're focused on being operationally excellent, finding costs, driving it out wherever we can, finding wastage, driving it out wherever we can. So we can counter that by putting downward pressureon prices by operating as efficiently as we can. What's the mix of price and traffic in your

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numbers these days? So what we are seeing is growth in customers. Our customer counts are actually very, very healthy.

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Where the pressure comes is in basket size, and we are always focused on keeping our prices as low as we possibly can. Everywhere we can take cost out, we try to turn that into putting pressure back on prices, particularly as a private brand-led company. We're very well positioned for that. Customers are really looking at the private brand versusled company, we're very well positioned for that.Customers are really looking at the private brand versus national brand equation much harder than they have in recent years. And so that's very favorable for us. We're able to offer the same quality or in many cases better quality at a much better price. For a legal shopper, that can be about 40% savings. And that's very favorable for us in terms of the price equation. Customer traffic equation continues to be very strong. Sure. So in other words,

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people's average transaction price, for lack of a better word, is it down? Is it flat? Is it just up

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slightly? It's under pressure, right? And we're having to do a lot of work to keep that, to keep that number where it needs to be. And it's logical because when you look at industry data, we've seen recently that the American family in a month has gone from visiting about 17 supermarkets a month a few years ago to almost 21 grocery stores a month now. So they're not doing that because they enjoy gassing up their car. They're doing that because they think they may be able to get a better deal by going to multiple different outlets. And the way we respond to that is we want to makeit very easy for our customers. We're not heavily promotional. We're everyday low price. Every single day they should be able to get our very best price on the items that they're looking for, the items that they're counting on us for. We heard from Planet Fitness ORG. They said they think

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there was a shift in consumer focus in the new year to savings. Dyn Brand ORG says the lower income

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consumer is more aggressively managing their check. That sounds like what you're talking about. Energizer ORG said higher income consumers are spending more freely than middle to lower income consumers are. Would you say that that's the same phenomenon you're experiencing?

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Are you benefiting from any trade down? So we're benefiting from that in a number of ways.

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According to federal data, the U.S. families are spending more of their disposable income on food than at any time since the 80s. So obviously in that situation, they're going to be much more focused on what they buy and how much they spend. We benefit from customers looking at us and saying, you know, particularly on the things that are most important, the things that disproportionately drive their decision about where to shop, which is fresh product, we offer exceptional value. When you walk into a little, that's what you see. Fresh fruit, fresh produce, fresh bakery, just beyond that fresh protein, those are areas where we really excel, and those are areas where customers are taking a really,

Speaker 13618.22s - 632.74s

really hard look. Right. And I would say that perhaps the deflation, well, I don't know if I'd call deflation, but the price hikes have slowed and that part of the grocery store and some of the more, some of the other supermarkets as well. I don't know if that's keeping people from maybe seeking out the value in Liddle ORG or if they

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still are. No, we see very strong customer traffic. Customers are still under pressure in a lot of categories. And again, the private brand equation for them is exceptionally strong. The things that we do every day to drive costs down and we're relentless about putting downward pressure on prices. Inflation pushes up against us. We push down. Sometimes we have to yield.We have to go up. But over time, in inflationary times and in less inflationary times, Liddle ORG will have the best prices. And our promise is you get the best quality, you get the best price. You don't have to compromise. We do that by being relentless about operational efficiency and by being a private brand company.

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I would say hearing what you're talking about, I put you more in the camp of experiencing some kind of softness amongst the lower income consumer then. Am I right about that?

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We talked about the number about spending the most of disposable income since the 80s. When you look at that cut by income quintile, obviously, it's very, very different in the lower income quintiles. Those numbers are obviously much, much higher. So those are customers, those are the customers where this idea of being really focused on, what did I pay last year, what am I going to pay next week, how do I really squeeze this hard? That's where that behavior is most concentrated and where it's sharpest.But we see it across the board. I was out touring stores yesterday in very different socioeconomic situations, very different average household incomes around those stores. And we see a very similar situation across all of them.

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That they're all still feeling the inflationary pressure. Joel, thanks for joining us today. We appreciate your time. Thank you.

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Appreciate checking in with you. Joel Rampled is the U.S. CEO of Liddle. We had a 30-year bond auction.

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Let's turn to Rick PERSON Santelli out in Chicago who's tracking that action. Rick?

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Yes, well, it's the last auction. It's the longest maturity, 30-year, and it was the smallest in size at $25 billion. And it was also the best of breed. The yield, 4.635 CARDINAL. The when issued market right at the end of the Dutch auction process was trading 4.642 CARDINAL. So it was in the screws, basically three quarters of a basis point. That is a positive. So pricing was good.All the metrics were quite stellar, except for one, bid to cover better than a 10 auction average. Direct bidders, best since July of 23 at almost 20%. Those are insurance companies, mutual funds, hedges, and the dealers taking less than a 10 auction average at 15.4. The only light spot was indirect bidders. That includes foreign interests. There were a couple of percent below the 10 auction average, but it really was best to breed A minus is what I gave it. And as you look at anintraday of 30-year bonds, you could see that the yield is falling, not only there, but across the curve, and the equity space seemed to have liked it just as well. Kelly PERSON, back to you.

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A sigh of relief. Rick, thank you very much, Rick Santelli PERSON. Well, you heard the sounds of weakness there from Liddle's U.S. CEO. What about the weakness the market's perhaps telling us about? The utility sector was the only S&P sector in the green in April, and it's off to a strong start again in May. Jim Kramer was talking about this last night on Mad Money. You can see the XLU, which tracks the sector up 11% year to date and up 3% just this week. Not traditionally a great sign. And at the same time, we're seeing some of those growthy names fading following earnings.We mentioned Shopify ORG earlier. It's Roblox today. Could this dynamic be a sign of more weakness ahead? Joining us now to discuss is David Bonson PERSON. He's chief investment officer at the Bonson Group ORG. No fan of growth stocks generally, David PERSON, but welcome.Do you have concerns about the market, broadly speaking?

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Well, first, Kelly PERSON, I want to say welcome back. You've been missed.

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It's wonderful to have you back on air. And I do have concerns about growth stocks, but not because I'm against growth. Growth is what you always want to invest in. It's just that the growth you're paying for, you're having to overpay. And a lot of the names we're talking about experiencing weakness. They can't be called growth stocks when the only thing that's grown is howmuch money they lose. Beyond Meat was a $240 stock. It's now a $7 stock. And each year, their losses went higher. And that's where some of the quality of the growth names is not exactly the same from some of these big tech names that are really big growth, really big moneymakers, but I just simply criticize their price, their valuation. I think that's a different category than the Shopify ORG's, door dashes, and yes, even beyond meat. And maybe there'd be two different ways to diagnose sort of the decline of growth stocks. One would be interest rates being higher than expected, maybe making them look a little bit less attractive, but that would ultimately be a sign that the economy was somewhat strong, hopefully. The other would be if the economy is slowing. And so their apparent growth is also not materializing for that reason.That would obviously be a bigger problem for the market. Which of the two do you think it is?

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I really think that in this case, it's simply the valuation. In other words, the bond yields haven't really moved for about a year.

Speaker 0930s - 975.92s

You know, it's gone a little higher than the 10 years now. It's gone a little lower, but it stayed here in this 4.5 range. So that valuation issue about growth, it relies on direction. And the direction hasn't worsened. It's just flatlined. It isn't like yields are strongly higher than they were, and it's putting downward pressure. The PE is actually higher. The market multiple is 21 times, 22 times forward earnings. And so I really do think it just has to do with the fact that you get to a pointwhere it isn't a good value proposition to buy something that is good today at such a high price that the expected rate of return over time is so minimized. I think that that's the economics you've run into with a lot of the leaders in the market. I mentioned utility stocks.

Speaker 13975.92s - 991.52s

I mean, where are you as a firm making the most money these days? Or is this an opportunity to find some stocks where you can get a good valuation on a pollback. What are you up to? Well, we're dividend growth investors, and so we tend to be rather

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bottom-up focused. And there are certain names in financials, consumer staples, energy, and health care that have all done very, very well for us. And frankly, the blended multiple of our portfolio is less than 15 and a half times. So I don't think there's the same valuation with a lot of the value and especially dividend-oriented sectors. But energy is still, to me, a very compelling space.It's not as cheap as it was a few years ago, but 40% returns year over a year can't happen all that often. But Kelly PERSON, I really think that you're right about utilities. People say the defensives are a bad sign, but consumer staples, utilities, health care, real estate, all trading together would be a bad sign. They're not. There's a real dispersion of results amongst those four more defensive sectors. I think it's a bottom-up market

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in dividend growth. So could utilities then be one of these, as everyone is saying, kind of electricity demand secular winners as opposed to a sign of a slowing market? Yes, I think that's right.

Speaker 161054.38s - 1096.96s

And I think that for us, American Electric Power, ticker AEP ORG, happens to be the only utility name we own. We have a good position in it. But that's not a comment on the sector. It's just that that's the name that we like with valuation and dividend growth we own. We have a good position in it. But that's not a comment on the sector. It's just that that's the name that we like with valuation and dividend growth we want. But I do think that electricity,but you can apply it to other things besides utilities, the same concept. It's the things that people have to have no matter what, where there's a good balance sheet, where there's recurring cash flows, you can count on it more. And you don't have to worry as much about what bond yields are going to do, what the Fed ORG's going to do, what the next CPI tape is going to print. It becomes much less headline driven and a little bit more fundamental. And you can take a little further timeline in the way you approach the investment thesis.

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Quickly before you go, we're showing your picks there, pretty much all of which are in the health care space. I don't know what, I just ask this question. What inning are we in or how much more do you think those stocks have to run? Because they're starting to sound to me, at least, like they're becoming consensus favorites. Well, Gilead ORG certainly is not. Gilead is down quite a bit

Speaker 161115.88s - 1145.84s

and is out of favor. And that's one of the reasons I added that name because I think you have a really juicy dividend, tons of cash on the balance sheet, really favorable financial metric of the company, and then you just need time for this investment. They've made it to oncology, and they're already a huge HIV drug leader to play out. Amgen ORG's definitely become more consensus, and that's too bad because I've had a free ride on that thing from about $60 up to $300.It's grown its dividend dividend 15% per year.

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And you're hanging on to it? Or so that we...

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Yeah, we do plan to hold on to it. Although right now, you really, not only do you have over 3% dividend with double-digit dividend growth, a lot of cash in a really diversified portfolio, but apparently their stage two results for this weight loss treatment went so well. It's going into clinical stage three. You get a kind of call option on them joining the whole ozempic fad. And so it's not usually an investment thesis for us, but we're not going to let go of it with that hanging out there.David Bonson PERSON, great to check in with you. Thanks for your time.

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Appreciate it today. Thanks, Kelly. Coming up, Beyond Meat ORG, you just heard about it. They are seeing

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red after reporting disappointing first quarter results. And they recently rolled out a healthier new version of their burger,

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try to learn back customers. After the break, we will ask the CEO how it's going in his first live TV interview since the depths of the pandemic. Plus, universal technical institutes treading water after results. The stock had a massive run into the print. We'll speak with the CEO about the quarter, the business, and the boom in Gen Ziersgoing to trade school versus a traditional college or university. The exchange is back after this.

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Speaker 131310.48s - 1344.36s

Welcome back to the exchange. Shares of Beyond Meat are falling 13% today after reporting disappointing Q1 results. The company posted wider than expected quarterly loss, plus an 18% drop in revenue year-on year, and that marks the eighth straight quarter of downward momentum in that category. Now, despite the weakness beyond singled confidence by reiterating their 2024 outlook, the brand expecting full year revenuearound $315, $345 million in line with 2023. For more, let's welcome CEO Ethan Brown PERSON, along with our very own Kate Rogers PERSON, who has been following the company closely over the years. Welcome to both of you.

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Kate, kick us off. Kelly, thanks so much. And Ethan PERSON, thanks for being here. Great to see you.

Speaker 191349.74s - 1354.54s

Great to see you. Thanks for having me. Appreciate it very much. So a lot is riding right now on the

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new Beyond 4 PRODUCT platform. That's your healthier, revamped rather burger that we told viewers about recently. So how is this being received so far by customers and why do you feel this will be the

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catalyst to turn things around for the company? Yeah, as the industry leader and the folks that are sort of first through the door, you are going to experience when you're doing something disruptive, you know, push back from the economy industry and in general turbulence for stability. And we have certainly experienced that. But what we did during that crucial period was to look very deeply at how to improve this very strong value process we already have around health. And what we did with the Beyond 4 PRODUCT is we put together a consortium of doctors, nutritionists,dietitians, and others to help us take our health value production to another level. And with the Beyond 4 PRODUCT, whether it's the use now of avocado oil instead of other oils, and this dramatic reduction in saturated fat levels, it's now with two grams of saturated fat, or the inclusion of red lentil proteins or fava bean, brown rice, and yellow peas, we created a product that got the excitement of not only the AmericanHeart Association, but the American Diabetes Association Clean Label Project ORG that all certified the product in various ways. And so we were able to communicate very clearly that these products, plant-based meats that we create, are extremely healthy. And if you want to do something, it's good for your heart, do something it's good for your cardiovascular system, handle anything around cholesterol, these are the products to be having, these are the products to have at the center of the plate for dinner, for lunch, et cetera, et cetera. So coming back with that very strong health message, which is extremely important to us,and the reception that we're receiving now from nutritionists and doctors, registered dietitians, that not only we increase the health profile, but we also developed even better sensory experience for the consumer. So we're looking forward to seeing how this

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rolls out so far so good. So this is also going to be a higher priced more premium item. As you mentioned, it's healthier. It's also going to cost it a little bit more. In this environment for consumers, does that concern you at all? And why do you feel they will opt to spend more on this?

Speaker 191484.48s - 1526.96s

Right. That's a great question. So if you look at what we're doing, and again, this is a very pivotal year for Beyond Meat ORG, you look what we're doing, we brought down operating expenses, we have consolidated our production networks so they're going to see a much better cost of goods sold and ability to control quality. But we're also raising price to bring and restore margin. And that's all toward our path to profitability. One of the key points of focus for the business is to bring the business into a profitable state.And so doing that from a pricing perspective was very important. We do believe because the product has such a strong value proposition that's not going to be an issue for consumers, we were probably the last in the category to do any pricing, yet we have now the most premium products. So we feel very good about it.

Speaker 131527.36s - 1549.5s

Ethan, it's Kelly PERSON. I was going to ask exactly about that, which is the gross margin was disappointing. It's under 5 percent now. It's razor thin and the losses are disappointing to investors. There are no buy ratings on the stock on the street and there haven't been since February of 2023. So when are you going to start to consistently post the kind of profitability where people might want to give your stock a second chance? Well, I think now is a really

Speaker 191549.5s - 1584.04s

important time to come into the company. I mean, we are, you know, crossed back over to positive margins. We're bringing operating expenses down. We continue to, on a year-over-year basis, improve the overall efficiency of our operations. And we have a very compelling value for the consumer, one that has the backing of all of these institutions, whether it's the American Heart Association, American Diabetes Association ORG,Clean Label Project ORG. So to the extent that you want to get in back into the company right now, I think it's an excellent time to look at it. We're certainly on a much better footing than we were 12 months ago.

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And Ethan, this is Kate PERSON. You've got your grocery plan with this new Beyond 4 PRODUCT platform. I'm wondering what the restaurant plan is to get customers ordering these again. That was a big part of your initial rollout and success was a lot of these fast food partnerships.

Speaker 191597.86s - 1669.68s

Will we see the new burger there anytime soon? Yes, you will. And so we have a version that we're rolling out into food service. I'm very excited about that. And we've had some really great meetings on the QSR ORG side, quick serve restaurant side here in the U.S. But I want to call attention a little bit to what's going on in Europe LOC because I think thatgets overlooked just because so much of our financial communities here in the United States GPE. Yesterday, McDonald's announced their famous meal program in Germany GPE where that's featuring the Beyond McPlant Burger PRODUCT, not only it's in two different builds, but we're also with them featuring the Nuggets. And so that is a big campaign. There's a lot of promotional support behind it from McDonald's ORG.If you look at the press release, the press release is entirely around how they're helping people to make these choices toward a plant-based diet in a way that's really exciting for us. We've been working very hard on a terrific partner for us in Europe LOC. And so I expect that you'll see continued activity, particularly in Europe LOC with our QSRs, here in the U.S. I do think you'll see throughout the balance of this year some additional activity from us. But right now we're just focused on creating great products and getting them to the consumer,whether it's in the retail aisle or whether it's in food service and making good progress on that.

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Wonderful. Ethan Brown, CEO of Beyond Meat ORG. Thank you so much for joining us. We really appreciate the insights.

Speaker 191675.5s - 1676.44s

Thanks for having us. Appreciate it.

Speaker 131676.64s - 1725.96s

Yeah, don't be such a stranger. First TV interview, Ethan, in four years. We really appreciate it. Thanks for joining us with our Kate Rogers today. Shares of U.S. Cellular briefly halted for volatility in the last couple minutes on a Wall Street Journal ORG report that T-Mobile and in Verizon, T-Mobile and Verizon are in talks to buy and split up the company. U.S. cellular parent telephone and data systems was also briefly halted. T-Moh's ORG portion of the deal could be worth more than $2 billion, according to the report. Shares of both stocks are sharply higher in the range of 5 to 6 percent.We'll continue to follow developments. Coming up, we'll get a gauge on both work and play with the action, the story, and the trade on Dropbox, ZipRecruiter, and Sphere Entertainment ORG. It's coming up in today's earnings exchange. Well, your resume is impressive, but what would you say is your greatest weakness?

Speaker 211726.32s - 1728.78s

I daydream constantly about living by the water.

Speaker 201729.14s - 1739.28s

The warm sun? Oh. In a dynamic city with amazing food and craft breweries, weekend events. Okay. With tons of jobs, less stress, awesomely affordable neighborhoods.

Speaker 221739.44s - 1740.84s

That sounds glorious.

Speaker 81741.26s - 1751.5s

Stop daydreaming and get to Tampa Bay GPE for high-wage jobs in finance, tech, and more. All under the warm Florida GPE sun. Find Florida's most bright opportunities at make-itampa Bay.com.

Speaker 131753.32s - 1798.04s

Welcome back to the Exchange. Dells putting together a nice 247 point gain this afternoon, while the S&P's up 19-502.7, we haven't been above that level on the close in a month or so. The NASDAQ composite adding a quarter percent, and the 10-year yield just stubbornly sitting around the 445 level. By the way, the Dow was on pace for a seven-day win streak. That would be its longest yet of 2024, just as we're talking about bare market. Shares of Robin Hood are also getting some attention today.They're giving up a 9% gain earlier. They're now down 3.5% despite reporting record EPS and revenue for the quarter. The company also saw $11 billion in net deposits, largest ever for Robin Hood. I know a lot of people anecdotally have been looking at their new offers on 401ks PRODUCT and other accounts. Here's what CEO Vlad Tennev said on the last call yesterday about his main priorities now.

Speaker 61799.14s - 1808s

We're focused on three things, winning the active trader market, growing wallet share with our customers, and expanding internationally. There you have it.

Speaker 131808.12s - 1836.14s

And while those shares are down today, they have nearly doubled over the past year, thanks in part to the boom and rebound in crypto trading. Coming up, we're heading to Iceland GPE for an exclusive look inside the world's largest carbon removal plant, the cutting edge technology that could eventually make its way to the U.S. and become as common as wind or solar power. We're back after this.Welcome back to the Exchange. I'm Bertha Coombs with your CNBC ORG News Update.

Speaker 101836.54s - 1912.36s

Cornell University President Martha Pollock has just announced that she will step down on June 30th. In a letter to the university, Pollock PERSON says that she made the decision to retire over December break, but paused the announcement three times since then because of events on and off campus. Pollock PERSON's announcement comes as universitiesacross the country and their leadership have been in the spotlight amid protests surrounding the Israel GPE-Gaza war. A federal appeals court has rejected Hunter Biden's appeal to get his Delaware GPE gun case dismissed. The president's son brought that motion to a three-judge panel which ruled that the issues were not appealable before trial.He can request a review from the full appellate bench or petition the Supreme Court to take the case. The trial right now is set to start next month. Hunter Biden PERSON has pleaded not guilty. Jury selection is expected to wrap up today in the trial of Bill Huang PERSON. Over the 2021 collapse of his $35 billion fund, Archegos Capital Management ORG, the prosecutors say caused over $100 billion in losses for shareholders at companies in its portfolio.Wang faces 11 federal charges, each carrying a maximum of 20 years in prison.

Speaker 131912.86s - 1965.9s

He has pleaded not guilty. Kelly, back over to you. Bertha, thank you. Bertha Coombs PERSON. College graduation season is upon us, but as the cost soars to attend traditional four-year universities, there's growing skepticism about their longevity. Recruiter.com's Evan Soane PERSON recently said on this show that, according to his listings, 30% of jobs now don't require a college degree.Previously, he said that number was in the 20 to 25% range. Combined that with rising pay and fields from welding to auto maintenance, and that has Gen Z increasingly looking to alternatives like trade schools. One publicly traded company benefiting from this trend is Universal Technical Institute ORG, with over 20,000 students at its 33 campuses nationwide. Shares are down today, but the stock is up about 140% over the past year. Jerome Grant is CEO of Universal Technical Institute ORG. He joins us now. Jerome PERSON, welcome to you.Thank you for having me, Kelly PERSON.

Speaker 21966.5s - 1972.44s

Any protests on your college campuses? No, we don't have any on our college campuses at all.

Speaker 131972.6s - 1978.96s

Our campus structure is a bit different. It's a single building with students coming in,

Speaker 21979.04s - 1983.2s

doing their work and quickly moving off into their work life and their family life.

Speaker 131983.42s - 1993.66s

To put a point on it, what is the most lucrative field these days if people were entering and looking for a way to kind of immediately achieve a pretty solid living? What are the paths they're really looking for?

Speaker 21995.12s - 2013.04s

Well, you know, within our world, areas like welding, renewable energy, and of course, health care are very, very strong in terms of earning potential. And I think that's one of the reasons why students are now starting to think more deeply about alternatives to a four-year education.

Speaker 132013.04s - 2018.68s

What is the cost, roughly, say, to become someone who could go and enter one of those fields, and how long would it take?

Speaker 22020.04s - 2045.7s

Well, for instance, welding is about a nine-month program. It's about $22,000 to become. So you're outworking with a great job within nine months. I think that's one of the benefits people see, which is you could be an auto mechanic within a year, a nurse within two. You can be out there practicing much more quickly than moving into a four-year degree.

Speaker 132046.04s - 2057.44s

Is there a mixed shift in the kinds of people who are coming into your colleges? Is there is from a financial point of view for investors as well, what do you think is driving enrollment trends and what should we expect to continue driving them?

Speaker 22058.48s - 2107.58s

Yeah, that's a great question. So we're seeing double-digit increases in enrollments in both of our units, both Concord Career Colleges and Universal Technical Institute ORG. Looking at the trade side, Universal Technical Institute has about half their students coming from directly from high school. About 35% come from unskilled labor or likely should have come right after high school but went out into the market. And about 15% come from the military.And we're seeing, you know, quite good results of students coming directly out of high school, which is underscoring that notion that students are making new decisions about what they do after high school. We're also seeing strong results in our military population as well. And so as people are rotating out of their military service, they're thinking deeply also about where they go for there.

Speaker 132107.88s - 2119.3s

Where are you seeing changes at the margin? For instance, enrollment of men versus women, age demographics, you know, those kinds of things. It does sound like it's not exactly the population that it might have been five, 10, or 15 years ago DATE.

Speaker 22120.2s - 2167.4s

Well, we have two very different populations. In the health care field, it tends to be someone in their mid-20s to 30 who's making their second choice in a career. Predominantly women, although we've got very strong focus programs on bringing more men into the health care fields. On the transportation trades and energy side, it's an 18 to 24-year-old primarily male that is coming in. And we're also making strong strides to bring more women into the area. And I think that's actually one of the dynamicsyou're seeing move most prominently. Five, six years ago, in that side of the business, there was maybe three, four percent. Now we're up in the six, seven percent range of women coming into it as they see more women making the choice to move into these professions.

Speaker 132167.78s - 2191.6s

Do you think, I mean, it's interesting to see the pop culture kind of grapple with this, as I believe it was a recent South Park WORK_OF_ART episode that showed lawyers and doctors or lawyers and white collar professionals hanging around at a Home Depot ORG trying to, you know, find someone to do to do work while they were out of a job. And this idea that AI is going to put a lot of people who had high-paying work, perhaps in a very different position going forward. Yeah, that's absolutely true.

Speaker 22191.6s - 2231.64s

And, you know, I get asked a lot about how AI is affecting what we're doing. And we see AI as an enormous enabler. You know, AI is helping us target those students better that may fit into the model of going into skill trades or health care. AI is helping our curriculum, help our students learn faster and more deeply, and get their questions answered more quickly. And AI is helping our employment community diagnose problems quicker, whether it's humans or automobiles, but AI is not going to fix your car.And AI is not going to put an IV in your arm. And that's where our workers come in.

Speaker 132232.04s - 2242.64s

Interesting. Just to circle back to the example of that welder, $22,000, nine months to get the certification, if that's what it's called. What do you think that wage might be for a person starting out? Do you have any idea?

Speaker 22243.86s - 2266.36s

But they're going to start out in the, you know, mid to high $20 MONEY range. But there's a very solid career path beyond that for them as they, you know, demonstrate their skills out in the market. And that's one of the things that we pride ourselves on is whether it's with our manufacturer partners or employer partners, is that is that we help them plot out those career paths as people prove their

Speaker 132266.36s - 2280.82s

proficiency throughout their careers. Yeah, and again, this constant kind of sort of theme in society lately where people say, sometimes it's just satisfying to fix something with your own hands and at least have a sense at the end of the day of completing the task. Jerome PERSON, thanks for

Speaker 22280.82s - 2285.76s

joining us. We hope to check back in soon. Great. Thanks for having me. Jerome Grant with UTI ORG.

Speaker 132286.3s - 2297.92s

Coming up, Congress has authorized billions to develop carbon removal plants here in the U.S. But what exactly would they look like? For that, we go to Iceland for a preview with our very own Diana Ollick PERSON. Diana, what can you show us?

Speaker 112299.58s - 2316.12s

Well, Kelly PERSON, it's going to look exactly like this, and we're going to show you how it all works and which major U.S. GPE companies are already buying in big. Coming up next on the Exchange ORG. Welcome back to the Exchange ORG.

Speaker 132316.24s - 2331.92s

The fight to stop global warming and a battle against pollution includes sucking carbon right out of the air. But how does that work and what does it look like as we think we might see more of it stateside? Diana Oleg PERSON joins us from Iceland with an exclusive look at the world's largest carbon removal plan. Diana?

Speaker 112333.66s - 2372s

Well, Kelly, direct air capture could become a trillion dollar business. And this is the newest from Zurich-based Climbork ORG. It's about 10 times the size of its previous model. The first section is now running and the whole thing will be done by the end of this year, eventually removing roughly 30,000 tons QUANTITY of carbon per yearor the annual emissions of about 7,000 gasoline-powered cars. So how it works is huge fans pull air into containers where steam is used to separate out the carbon dioxide. That CO2 is then pumped into water, kind of like a giant soda stream, and then piped into the groundwhere it eventually becomes rock. And this is just the beginning.

Speaker 182372s - 2386.2s

Every three years, we've built a plan which is at least 10 times larger that we've been building before. Just go ahead and extrapolate that. We will be quickly at millions of tons, and then tens and hundreds of millions of tons.

Speaker 112390.98s - 2416s

Climbworks just entered the U.S. market thanks to a half billion dollars from the Department of Energy ORG. It's one of 78 companies in the U.S. direct air capture space from small startups to big names like ExxonMobil ORG. ClimWorks is already selling carbon removal from what this plant is called mammoth to these companies at about $1,000 per ton. Now that's expected to drop to about $300 per ton eventually, but Mammoth has already sold one-third of its capacity before it's even finished.

Speaker 72416s - 2428.76s

They're expensive now, but they're coming down in costs, right? And so all the companies that are buying those removals, and that's many, many companies are buying removals at that high cost. That's allowing the companies to scale.

Speaker 112429.72s - 2444.04s

Congress appropriated $3.5 billion for regional direct air capture hubs in the U.S. GPE through the infrastructure law. Millions more, though, are coming from funds like the XPRIZE PRODUCT, Bill Gates's breakthrough energy, and the Chan Zuckerberg Initiative. Kelly PERSON?

Speaker 132444.24s - 2455.42s

How much do we know about how well this works? And does it require energy? Because that's a big operation behind you. Does it use carbon to reduce carbon? Well, it absolutely requires energy.

Speaker 112455.54s - 2479.38s

But in this case, it's getting its energy from geothermal. And I don't know if you can see all the way back there. If you see that large plume of smoke, that's actually steam coming from a geothermal energy plant. There are massive pipes that run way down there from that plant all the way up here into the Climborks FAC plant. And so it's powered with renewable energy.And you know why that works so well here in Iceland GPE is because we're basically standing on top of a volcano.

Speaker 132479.82s - 2485.16s

Right. And I'm curious in the U.S. Do you have any idea what that energy source would be for the plants under consideration?

Speaker 112486.7s - 2504.56s

Well, they could be using other forms of renewable energy like solar or wind or even geothermal in different parts of the U.S. We know that they're already going to be in the upper Midwest and starting in Louisiana GPE. So the goal, of course, is to not only reduce the carbon, but reduce the amount of energy used to fuel these plants.

Speaker 132504.72s - 2549.42s

Indeed. Diana from Iceland GPE, thank you so much today. We appreciate it. Our Diana Olik reporting. Coming up, three more names on deck. Speaking of reporting, we've got earnings, including this name, which our trader says, has a great new idea to suck up consumer dollars, but is trapped with a massive declining asset. Oh yes, that mystery chart answer and earnings exchange is next. Welcome back. More earnings ahead and we're looking at files, freelance, and fish. You'll see in today's earnings exchange. We've got the action, the story in the trade on Dropbox, zip recruiter, and Sphere Entertainment. And here with our trades is Lee Munson PERSON. He's portfolio wealth advisors, president, and CIO.Good to see you, Lee PERSON. You too.

Speaker 32549.72s - 2550.88s

Let's start off with Dropbox.

Speaker 132551.08s - 2563.14s

Its shares haven't recovered from that post-earnings plunge back in February. They're down 20% this year. Investors are watching enterprise demand for AI and new products to see if they can meet that lowered Q1 revenue guidance. Would you buy the stock here?

Speaker 32564s - 2597.5s

I want to wait until after earnings, and I'll tell you what the problem is. They lost 50,000 subscribers last year. The CEO blames the tech layoffs. Ask any staffing agency. That's just not something that I believe.Their big hopes are going to be on Dash PRODUCT. That's their new AI power thing. This is a pure play to see if AI and AI engineers can actually turbocharge a mid-sized tech companies' revenues. If I hear that Dash PRODUCT is a winner, if the word on the street is that it's a great new product, great. But if not, we get more delays on Dash PRODUCT. I'm just going to sit and not by the

Speaker 132597.5s - 2614.22s

stock. Yeah, I ponder the use case as well. It was sort of the cloud before the cloud, but now we have the cloud and we can work that way. Let's move on to ZipRecruiter, down 22% this year. Job openings are a key factor, but investors are also watching to see whether AI matching, there it is again, and offerings for employers could be catalyst. You, a buyer?

Speaker 32615.52s - 2654.94s

No, and I'll tell you why. Now, granted, if we start getting out this economic, funky environment and we start getting employment churn, ZipRecruiter ORG is probably just going to go up. But if you compare it to some of its rivals, like Manpower ORG, which actually has a upskilling strategy to get people better skilled, or Robert Half ORG, which is not a household name, but a big staffing company, half of Robert Hatt's business is in the highly skilled. So, and when you look at Stockchart ORG,those other two companies are just killing it. I think ZipRecruiter ORG's problem is that it's not on the highly skilled enough and it doesn't have a way of really upskilled. It's just a job board. Yeah, I agree. I always want

Speaker 132654.94s - 2679.92s

to extrapolate their comments to some macro observation. I usually find, well, maybe it's competitive. Let's see how Sphere is doing. We'll move on to that one, Sphere Entertainment ORG, up 17% in 2024. Investors are watching for experienced demand to see if there's any signs of weakness there. Those high-profile residencies in Vegas GPE continue. We mentioned Fish ORG earlier.But MSG networks still accounts for 50% of the company's revenue despite its sexy name change. Lee PERSON, what would you do with it?

Speaker 32681.18s - 2711.2s

I just want Sphere on its own. My wife came back from the first YouTube ORG concert. I get there Monday, I'm ready to buy. But then I look at it, and I realize, Madison Square Garden TV, I don't even watch the Knicks or the Rangers ORG. Why is it involved in this company?Secondly, it has declining earnings. It's a streaming story that's going downhill. And so I think Sphere is going to knock it out of the ballpark. The problem is I've got half the revenues going straight down. So I only care about how bad Mazas Square Garden ORG networks is.

Speaker 132711.46s - 2722.4s

But the next lead. You should see the New York Post ORG. I gave up on following the Knicks years ago. Now they're on this great run. Everyone's people are upgrading the stocks because of it. Maybe they'll get bailed out this year.

Speaker 32723.26s - 2745.02s

You know what? If MSG networks and the Knicks ORG work out, then great. But we just want to make sure that the bleed stops at the network so Sphere can just go print money. I admit, it's sort of a one trick pony, but every once in a while, I'll buy one of these stocks. This is that type of thing. And, you know, one out of five times I make money. So buyer beware, but we all know the sphere is phenomenal. It's something special, and it's kind of fun to see it. Would you know, one out of five times I make money. So buyer beware, but we all know the sphere is phenomenal.

Speaker 132745.26s - 2754.8s

It's something special, and it's kind of fun to see it. Would you buy, broader market leap, quick parting word. What's it doing? It's going to go back up. It's going down. What do you think?We're going up.

Speaker 32754.84s - 2757.94s

We're going to see 5,400 or higher sometime in the next whatever.

Speaker 132758.22s - 2782.38s

All right. The inflation story, it's delayed, not destroyed. All right. Lee Munson PERSON, thank you, sir. Always a pleasure. Portfolio wealth advisors.That does it for the Exchange today. Power lunch is up next. Dom PERSON is back and I'll join him on the other side of this quick break. You've been listening to the Exchange ORG. Make sure you're subscribed to get each episode every day. Same time.Same place.

Speaker 212784.62s - 2788.26s

Well, your resume is impressive, but what would you say is your greatest weakness?

Speaker 202788.6s - 2801.56s

I daydream constantly about living by the water. The warm sun. Oh. In a dynamic city with amazing food and craft breweries, weekend events. Okay. With tons of jobs, less stress, awesomely affordable neighborhoods.

Speaker 222801.56s - 2803.14s

That sounds glorious.

Speaker 82803.58s - 2813.72s

Stop daydreaming and get to Tampa Bay GPE for high-wage jobs in finance, tech, and more. All under the warm Florida GPE sun. Find Florida GPE's most bright opportunities at make-itampa Bay.com.