Teslas troubles. A reported investigation into self driving claims and whether it committed securities and or wire fraud during the criminal investigation. That is coming up. Looking forward to that. Morningstar is outstanding Portfolio Manager of the year. She runs a fund focused on Underappreciated Companies which pay reliable dividend. We will find out. Lets take on the markets first. But it the dow is up 122. Look at the others in the red. The s p down two points, the nasdaq down about a quarter of a percent right now. A lot of stocks are on the move following earnings. Jumping on an earnings beat in a phase 3 trial. After its first report of the company. Said a year from now and got it already. Trip adviser getting crushed on that lower guidance and the rejection on a takeout opera. 29 . We will trade more earnings, movers and lunch coming up. First, lets start with tesla as that stock is falling. 2 off of its worst levels of the day so far. I am looking at right now. It is so nice to have them in the studio. He is doing well, he is getting his microphone sorted out. Its going to be fine. We can hear you loud and clear. Three ring circus out here. A lot of movement. Lets talk about phil and what is happening with tesla. Lets start first off with the news this morning that pushed the stock lower. Ill couple of probes that is been reported. We have reached onto the s. E. C. And the doj to see if we can get some confirmation on this. We have not heard back. Here is what is reporting. Both the s. E. C. And the doj are looking into full self driving and autopilot systems. The question is, did elon musk wrist misrepresent the capabilities of those systems . Possible security fraud, possible wire fraud charges depending on what they come up with. Keep in mind a couple of things. First of all, tesla autopilot is different from full self driving. It is not fully autonomous. Neither system is. Tesla has told drivers stay alert, you have to stay aware. People sit there and say when you call it autopilot, you are pretty much implying that you dont have to Pay Attention. Then there is the question of what happens with full self driving. Full self driving basically comes down to this. You got a camerabased system using ai and teslas nerima. Put that altogether and they believe that they are making huge progress in terms of the ability of tesla vehicles to maneuver themselves through traffic. Even complicated situations. Having said that, the price has been going down. Its now 8000 in the United States port 99 a month, depending on which system you go for. At the last report regarding how many people had bought full self driving over the life of tesla, it is about 400,000. With the current number, they have never broken that out, nor have they broken out the revenue that they get from full self driving. Put all this together and it raises the question what can we expect from robo taxi when tesla makes an announcement on august 8th, which is what elon musk has said . That is the announcement. We do not know what that announcement means. Is it going to be showing us a vehicle with no steering well . Is it going to be announcing plans for future rollout of a robo taxi . A lot of questions and terms of what that means. Tweeted out that plans to roll out the next version of fsb. 12. 4 is the next version. By the way, i forgot to mention adam jonas is one of those who had said look, i tried this. There are a lot of advantages to the system. A greatly reduced my overall fatigue level. There is still a long ways to go to remove the Steering Wheel in my opinion. For what its worth, thats one analyst view. I appreciate the way that this comes down. This has been brewing for a couple of years. The prosecutors will need to demonstrate teslas claims crossed a line from legal salesman ship. Elon musk has been in the middle of these kinds of moments before. I have listened to almost everyone of their Conference Calls when they do their reports. He has asked about full self driving, he will clarify that we do need to Pay Attention of the driver. And it says in the tesla language. I have heard from people saying why are you defending elon musk . He has made that clear. His statements are out there but also people who will say yeah, but he said you could drive without any hands on the steering will add various times in the past and gave the impression that it is 100 autonomous. This is a sharp contrast. The name where we saw them putting on a video claiming that the truck was driving itself. That would be a great example of materially false statements with misleading people intentionally. How many years . Several years he ended up getting imprisoned for that. Will teslas claims for marketing rights to the same level . Teslas full self driving. They are moving forward with a plan to launch. Talking about in china. Joining us with that side of the story. Hey, kelly. It is great to hear your voice. The state backed media is citing sources today saying that chinese officials had told elon musk during his recent trip here that china welcomes tesla to do some robo taxi tests in the country and hopes it will set a good example if this would happen, it could be very beneficial for tesla because it would be able to experiment with robo taxi and in a more conducive, Regulatory Environment compared to the United States. At the same time, the state paper had flagged that the full rollout and a broader rollout of the software in teslas cars was not currently on the cards, saying that tesla still had to get approval for Data Collection as well as data transfers and it also laid down the announcement of a deal that between tesla on mapping. The accuracy for maps but not necessarily related to fsd. The messaging hear from beijing is that on the one hand, they are quite happy to have tesla here because currently fits into the National Agenda of becoming a tech dominant player worldwide. At the same time, looking a bit cautious about tesla. At the same time, we have seen china approve a similar driver for its chinese rivals. Anything like this currently exist in china . A lot of the chinese ev makers have leadingedge technology. When it comes to the idea of robo taxis currently in trial . Definitely. There are zones that have been designated in different cities where various Chinese Companies in the car industry have been rolling out and experimenting robo taxis. One that really stands out is by new. In the city of you could literally have a 24 seven service where people will call the taxis and have them pick them up and just drive them around the city. It is Still Limited because it is in designated areas but its something that the government is pushing. All right, eunice. This is interesting only because you both mentioned robo taxis. Phil, i want to bring this and give you the last word. Over the last several years, arguably 510, china has made no secret of the fact that they want to dominate in a couple of key parts of the world economy. That is electric vehicles and Artificial Intelligence supercomputing. Do they have the environment in china with less restrictions i hate to say that about a communist country, but less restrictions to allow this kind of development more so than we will have here because of the types of legal wranglings that we may have to go to for things like full self driving, robo taxis and everything else. Yes. I think that if the Chinese Government wants to make sure that robo taxi can truly work, they will, in my opinion, they will say whether it is a restricted zone or city, town, whatever it might be. You are going to work there. There are going to be some messy outcomes when robo taxi start to develop. That is the reality. You are not going to eliminate accidents completely. The question becomes who can withstand that messy, messy transition. If the Chinese Government wants to make it happen, they will make it happen. The question is, could they advance it quicker in the United States . Here in the United States, look what happened with one accident. What are the regulators do . Shut it down. Crews will ultimately come back in some fashion but its going to be a much more cautious approach. We would be much more reluctant to allow. If it runs over somebody in other areas. I think that the chinese really want this to happen. That is a much bigger conversation. Monday will not have more often. Thank you very much very much. Now down about 9 or so after the Ridesharing Company reported an unexpected net loss for the quarter. Has more in todays technic. Weve been talking about the robo taxis with phil and eunice. Could that be a threat huber and left . Not how far off this threat is but certainly, anxiety has been rising. It was the question on both earnings calls. It was the first question on the overcall and the anxiety really began when shares of lyft and uber fell just a few weeks ago. Elon musk said on that call of his robo taxi ambitions, operating the fleets you can think of tesla like some combination of airbnb and uber. Operate their own fleet, potentially replacing the existing ones. Let users lend other vehicles like they may lend out a room or their home on airbnb. Both lyft and uber were asked about it over the last 24 hours. Both shrugged it off saying they see robo taxi not as a threat but as an opportunity and they believe adamantly that they will be key partners in whatever shape or form it takes. This morning that it never underestimates. The Tesla Robotaxi is still an idea, far off. You have operating where i am. You see them on the road all the time and they are already partnering with uber. I want to bring it back to the here and now and talk about the bullishness that both lyft and uber expressed. They basically said we are seeing no evidence of a slowdown and the first to feel it. Said not only seeing a slowdown, we might be seeing the opposite. He said that they even saw an event over the last few months. They said that taylor swift concerts continued to push growth. They said they saw a huge eclipse bump that pushed up schedule rise by 20 yearover year. Said more premium rights and. Not seeing any evidence of a slowdown. Another important indication from Economy Companies with airbnb and instacart as well as slightly different categories i thought it was interesting how we talked about the instacart ownership. Have a lot of overlap. Is it beneficial for uber to come in the middle of that . Thank you for now, we appreciate it. Coming up on power lunch. This year, it is the j. P. Morgan Equity Income fund which focuses on evaluating sectors. We will speak to the winner, next. The way it came about was a combination of different aspects of my life. A guy like me became her uncles unhappy. Im sensing an underlying issue. Its tmobile. It started when we tried to get him under a new plan. But they they unexpectedly unraveled their price lock guarantee. Which has made him, a bit. Unruly. You called yourself the uncarrier. You sing about price lock on those commercials. the price lock, the price lock. so, if you could change the price, change the name its not a lock, i know a lock. So how can we undo the damage . We could all unsubscribe and switch to xfinity. Their connection is unreal. And we could all unexperience this whole session. Okay, thats uncalled for. Welcome back to power lunch. Announced its 2024 outstanding Portfolio Manager award winner and this years victor is j. P. Morgans clear heart. Claire has been the lead p. M. On the j. P. Morgan Equity Income fund and 2004. Its up nearly 10 over the past year and has continuously outperformed the large value category and the russell 1000 value index overall. We now have claire joining us for an exclusive interview. Claire, thank you very much and congratulations. First of all, not just on the performance but on the tenure at the fund as well, its not often you see some kind of. From the big picture perspective, whats been the key to your success over that runner decades . Thank you for having me. I think what is important is we keep it simple. Quality companies at a reasonable evaluation. At time of inception for going to the fund. And we do not deviate from that. I think what is important is we have a great team that works with me. Dedicated analysts and everyone believes in the strategy and everyone is confident and their talented investors. We go to market everyday looking for names that fit that category and we try to make as much money as possible. We do not change that. Obviously, in the past, time frames growth might be in favor but we really stick to doing what we tell people were going to do and i think that makes a difference over time. We always put these caveats on there just like the people in the industry do that past performance does not guarantee future results. If we know that you have had a lot of success in the past but might you be able to shed some light on what you and your team are doing in the future . And for listeners who are listening on serious, what you didnt see on the screen is that claire is actually going to step down from this role later on this year so shes going to cap his career off. Claire, as you hand the reins over, where is the next big value Dividend Rate for the next moment is 24 months . What is really important is the team thats in place, everyone believes in this approach. You are not going to see a flip or a change or a different approach. In terms of what we are seeing go forward. Obviously, people are talking about inflation. So much cost increases. We can focus on areas of the market where we see some value. Companies creating value for consumers. That would be a mcdonalds, walmart. So that continues or brands. That is like a philip morris. I would say within insurance, for example, we like the brokers. Weve got a capital like business model. We definitely like the brokers here. I would say beyond that, i would say managed care. If you look some of socks the way its been treacherous year today, the dislocation of Medicare Advantage is turns of pricing nothing has been difficult. What it means is there is opportunity there. That is an area that we are looking at as well. Last but not least, i would say the financials are broadly speaking. There are so many different ways that you can slice and dice that but i would say the banks, for example, obviously yearoveryear had great performance because of a near death experience that some banks had back in march of last year. You are capitalized. You see a bottling process and place. Expenses really well controlled. That could even be resides revised in the banks favor. A lot of different categories and subcategories that we are interested in. I am curious. There is a steady kind of approach. In the income, reinvesting the dividends is how you get the most bang for your buck. I ask because slightly unfair way, even as annually, do people still go that is great but i would still rather own a video, for example. I do not want to be in there with a growth stock. I am curious. I would say whenever i think about, we have this straightforward approach. And we stick to that. Theres lots of different ways to make money in the market. If someone looks at the approach and says this chip company or growth approach. Theres a lot of people in the market that are going to do that for you. What is important to us is when we talked to our management teams and we spent a lot of time talking to them, they do what they say they are going to do because that is the barometer by which were going to judge them and that is the barometer by which we can trust the capital. We hold ourselves to the same standard. If people are saying i want growth instead, we are pretty clear about parts of the market we can shop where we think were going to make you the most money possible. Following our mandate. People might decide theyre going to split their investment. By some of this, by some of that. I want investors to be happy. I know we have to go but do most of your investors actually use that income or delivery . I do know. You can pick the box to reinvest. A large percent is reinvested. Interesting. People love dividends but then reinvest them anyway. Then whats the point . To just on the stock. But dividends, i am a big fan of dividends. For me, its about the pay me now, pay me later. Its not even about the money that you get up front as the dividend. Some people take that money. To your point, i assume that money should go grocery shopping. You need the money. We are careful investors in that way. It is about that. Capital disciplines on company. If you are going to pay a dividend, we are trusting them to reinvest the money that we leave behind. I could see why people could continue to reinvest the dividend. I love that. For a lot of investors, you reinvest early for some and take the payouts later in life. That too. Claire, congratulations on quite a career. Glad to see this be the capstone in the queue for joining us today. Kind of you to have me, thank you very much. Jpmorgan. As e had to break, lets get a power check. On the positive side, they are higher after a strong earning feed. A range of 6 . On the negative side, there is Electronic Arts. They are lower after disappointing results. A couple of earning splits today we will have more on that name. That is your power check. Il right back. Welcome back to power lunch. Lets get a check on the bond yields. We go over to chicago and rick santelli. Over to you. Thank you. We had the second leg of our funding in terms of the long coupon maturities. Todays tenure was a mediocre option. If you look at the chart, starting earlier this morning, you could see that we have moved a bit higher in yield since the option at 1 00 eastern. Only by a basis point or so but it is important because as you look at a onemonth chart, yesterdays was the lowest close going back a month to the ninth of april. We are coming up a bit. It has technical significance because it is a around a psychological level. Last night, 3 30 a. M. , the sweetest central bank lowered rates from 4 to 3 3 4. This is important. That is the first time they have lowered rates in eight years and they have now had four consecutive quarters of contraction so technically, they are definitely in a recession. Back in the old days, we call a depression. Their infl