here's what. you go with prudential to protect, empower and grow. with everything you need to deliver, you guessed it... more. one more thing... who's your rock? learn more at prudential.com ♪ ♪ good afternoon, everybody. welcome to "the exchange." i'm tyler mathisen. here's what's ahead. busy hour ahead. wall street building on a record setting run. our market guest says it doesn't matter when the fed cuts, that run will continue. plus, we are awaiting reddit's first trade minutes from now. duncan davidson says if it prices at the top of the range, it could price for failure. it's estimated to open up to $50.50 in seconds. we'll see what happens when the first trade crosses the tape. and two reasons why netflix

will dominate the streaming wars. our analysts will tell you what they are. we begin with julia, who is live at the new york stock exchange, awaiting reddit's first trade. >> the first trade is expected any minute now. the trade is expected to open between $49.50 ad and $50.50, a 50% premium over the offering price of $34. it did price at the upper end of the range. we see a lot of excitement for snu over there. along with the ceo of reddit who we interviewed earlier today. now we're waiting for the first trade. tileer? >> we haven't seen this kind of excitement in a long time. maybe if reddit comes out of the box strong and holds its first day gains, this will encourage other companies to come forward, right, julia? >> look, there is a lot of hope that the ipo market will open

up. there was just an ipo yesterday that traded up over 70%. so the question is how many ipos have that kind of upside will encourage other companies to go public? and the numbers we saw back in 2021. >> you holler when the action comes. meantime, let's bring in duncan davidson to talk a little bit more about reddit and the overall ipo market that may ensue after this reddit debut. he was with us yesterday, and said among other things, if the stock priced tat high end of its range, which it did, that might take a little wind out of the sails on the open, i suppose was your argument. explain your argument and what you're seeing right now. >> well, normally, i want to see these things price about 20%, 25% higher when they open, which indicates a good spread. this is doing much better, so i share in everybody's excitement. what i'm worried about is that it might show some volatility as

a lot of the pump and dumpers on the reddit side jump in and jump right out again. so i'm going to watch the volatility. but regardless, this is a decent opening. if it does open here, which should spur other people to start joining the party. >> yeah. so where would you expect -- the history of ipos is a checkered one, frankly. many, many of them do not trade at their opening price in six months hence. what do you think might happen here with this one? >> either it becomes a stonk, which means a mean stock, which the retail traders go on and it flies high, or if it starts getting a lot of institutional holdings, which i hope it does, i would buy into this thing about six months out, because there's a huge overhang of private investors who will probably get out of the lockup and take their profits. so i basically would look at this thing as a long-term hold, but wait six months before jumping into the party. >> very interesting.

we're going to come back to you when this stock opens for trading, if you would indulge us by hanging on. we're going to turn now to dom chu for a market update. >> so tyler, it's record highs across the board here for the dow, the s&p 500, and the nasdaq has now joined that record high party. the dow up 320 points, three quarters of 1%. the s&p 500 is at 5254, up 29 points, about one half of 1%. and the nasdaq up three quarters of 1%, to 16,483. and it's been an up day the entire day so far. we were up 37 points at the high for the s&p, up 23 at the lows. one stock that's not participating in that record high run is apple. after the department of justice unveiled an 'tis trust suit issues. the shares are down 3.5% now, so the dow and s&p and nasdaq heavily weighted in two of those indexes is down big. but check out some of the other stocks that are perhaps in the

ecosystem benefiting from that. we know that the department of justice is going to focus on things like apple's dominance in smartphones, cloud gaming, smart watches. check out paypal holdings block, catching a bid, garmin, and take two interactive, both publishers of mobile gains that are seeing some benefit, at least from the trader perspective on some of the apple anti-trust stuff. so keep an eye on those stocks. back over to you. >> dom, thank you very much. meantime, the fed and the markets are aligned on three rate cuts, it would seem for this year. but our next guest think there is will be one more. he sees a total of four 25 basis point or quarter point cuts starting in june. he says the difference between the fed and his call comes down to one data point. we'll find out what it is in a moment from morgan stanley's chief globalist analyst and steve liesman.

you've been injured in a fed crackup. steve, put yesterday's activity into context for us, any sort of day later ruminations on your part? >> you know, i think this is reminding me a little bit of the december meet bring the market is going a little bit far on not very much, based upon what powell said yesterday. yeah, the three rate cuts survived the projections, but very slimly, tyler. it was one vote essentially away from being down to two. and look, the market could be right here, and seth carpenter, who i'm going to hear from in a second, could well be right here about his inflation outlook. but i still think there's some risk. if we don't get a better report, a better inflation report in the march data that we get in april, i think there's going to be some back tracking of the optimism out there right now. that's my take.

sorry to be like this on this fabulous day of a new ipo and the market having so much fun after the fed. but remember, the market -- the bond markets are backtracking from december. there's another discussion to be had, and i'll let seth speak, which is that the stock market seems somewhat disconnected from what the fed had been doing. >> seth, react to what steve just said. and i guess my question to you, you're holding to the idea of maybe three, maybe even four rate cuts between now and year end. if inflation continues at its current sort of trajectory level, which is a little hotter than expected, and in light of the fact that the fed increased, boosted its gdp numbers, that would argue for maybe a slower rate cutting regime rather than a more accelerated one. >> great question. it's great to be on with steve. he gets to make me look like the cheerful one, which is perfect from my perspective. we are looking at four cuts this year, the first to happen in

june, which, again, is consistent with markets. i suspect it's consistent with what the median person on the fed was writing down, as well. june is what, 2 1/2 months away. maybe a little bit more. go back in time to where we were 2 1/2 months ago, and the market was pricing in so many more cuts. so i don't know that you want to put too much stock right now on where the market is. and even the fed, we go back to last march. they misjudged where they were going to end up the year. they revised their forecast up two times, and then back down again. so forecast thing far out is tough. what makes us at four instead of three or two, june seems like the right time. the economy was stronger as you said, but powell, i think, correctly noted that a chunk of that is stronger supply side, more jobs, more labor force. so they seem comfortable cutting

in june, even before inflation gets down. and for us, our forecast for the second half of the year is faster disinflation than what i infer the market is thinking, faster disinflation than what the fed has written down. but that's a second half of the year phenomenon, and things have to be true for that to be realized. >> steve, i think i heard the idea that maybe the stock market, the equity market has gotten a little ahead of itself with respect to where the fed is. did i characterize you right there, steve? >> yeah. it's a bit like asking a guy two things. you know, what's your success rate with the operation, and what's your essentially the complication rate? they are two different things. i think if seth has a positive or a better inflation forecast than either the market or one that is better than the fed, that's one to go with, that's fine. but there's a risk around that

forecast. and that's more what i'm talking about. i don't have a forecast, but maybe i have an appreciation for the risk around that forecast not being right. i just wouldn't be all chips in on inflation coming down. we have had two bad months. i can explain january pretty well. i'm having a little trouble explaining february as a kind of, more of an anomaly. there may be a certain stubbornness. i hope i'm wrong in march. i hope seth is right, but i just want to say there's risk around the forecast here. i think seth knows that and appreciates that. >> seth, why don't you address that point and answer the sort of root question there, which is whether the market equities have gotten ahead of where the fed is forecasting. >> yeah. steve could not be more right. there are clearly risks here. there's the old saying that forecasting is hard, especially about the future. if you said to me am i 100% convicted that inflation is

coming down, the answer has to be no. so steve is spot-on there. however, there is an extra nuance here for equity markets. we are in an interesting, to say the least, cycle. and, you know, if the market wants to be positive, because rates are coming down, that makes a lot of sense, the normal relationship between interest rates and the equity market. but one reason why fed funds rates might not come down as much as we think could just be fundamentally stronger real side economic activity, which by itself should also be good for equity prices. so i think we need to think about all sorts of different risks. steve is 100% right. right now, the equity market is looking at so many different components and what's going on with inflation, and what does that mean for interest rates, but also what's going on with growth and earnings, and what does that mean for rates? >> one more thing, which is productivity. i mean, that's where -- if i'm

too pessimistic, i'll be proven wrong, but we've had three amazing quarters of productivity. it could just be all noise. it could be the beginning of something wonderful. >> all right. we're going to wrap it there. gentlemen, thank you very much, seth carpenter, steve liesman, appreciate your comments. stocks are continuing to build on yesterday's rally. the next guest says the fed doesn't need to start cutting rates this summer, or even this fall to keep the rally going. andres, welcome. good to see you again. it's been quite a while. probably prepandemic. explain your thesis here, that is the fed doesn't need to cut rates, the market can continue to make progress even if it doesn't. >> yeah, that's a perfect segue from the prior conversation, because the missing component here is earnings have improved significantly. now, that comes along with a

better economy, and obviously the fed revised gdp upwards this year. but ultimately, we might find ourselves next january with all-time highs and the fed didn't cut at all. the reason is, the economy continues to do well, and earnings continue to deliver that's where equities are going to be focused on, rather than just be fixated on where interest rates are. >> do equity investors like the idea, or can they -- they can live with the idea that, okay, the fed doesn't really need to cut, as long as they don't take cuts off the able. in other words, it's the anticipation of a potential cut that is maybe even more important than the cut itself. >> 100%. i think that if each time they're reminding us we're data dependant, wink wink, at some point we will cut. that might be enough. different story if they totally pivot to we need to hike.

that's a different conversation. but the december pivot towards, no more hix,kes, i think that's enough for the market to focus on earnings. so if earnings continue to deliver -- >> take us through those earnings and what your forecasts are for profits this year? >> i think consensus so far is pretty much right in the sense of improvement in operational leverage. we talked about productivity, especially in the technology sector that's the true ai play. >> how much is ai going to affect productivity and how quickly? >> great question. these things take decades to play out for the whole economy. but it happens to be that the driver of stock performance has been technology stocks the. and technology stocks are using ai, especially large-cap companies, are using ai today. so there that perspective, i think there is -- usually this is a little bit fluffy, but this time around it is productivity coming from these stocks driving the market.

that can continue for a while. >> how quickly do you see the adoption of ai tools and the benefits in terms of productivity for the non-technology companies, the industrials, the cyclicals, et cetera? >> i think that's going to take a long time. now, when i say a long time, it means maybe not a decade. remember, everyone said tomorrow the internet -- no, it took 15, 20 years for it to play out. it's going to take at least a couple of years to see caterpillar and ge using ai the same way facebook does. >> reddit has just opened. we're going to leave it here. good to see you, sir. let's go to julia now on the floor of the new york stock exchange. julia? >> so reddit has just opened at $47. that was a premium to where they were originally priced at $34. they're now watching the stock. [ applause ]

it is very loud down here. we heard from the ceo. we're going to try to get him to tell us how meaningful this is for opening up the ipo moment. but for now, we see the stock trading high now about $49. >> exciting moment there. $49 now. let's bring in duncan davidson to stalk a little bit more. welcome back. what do you make of a move at $47, an open ad 47 and a trade now at $49? >> well, as i said, i like it better when these stocks are priced 20%, 25% above the price. they open at 20%, 25% above the price. the fact that it's trading up is a very good signal. because often, people take their profits off the top, the thing fades and you have to get people to buy back in later. this is really good. we'll see where it ends up. i expect it to be fairly volatile today. i've been glancing at the wall

street bet site. you imagine the reddit community would support reddit. this morning, the sentiment has shifted to people talking about going in. so we're going to see whether they go in and flip it or hold onto the stock. >> why do you think the reddit community is down on reddit? >> i think because of who they are. in other words, if they can't drive it in a pump and dutch th -- dutch thing, they're not quite as excited. there are some people i like to listen to, i listen to their analysis. they like this company. they think this has 2 x baked into it. at least in the near term. >> moving up from the initial price there, now first trade was at $47, now in the 50s. you mentioned a moment ago that you would like to see the

participation of large institutional investors more than individual investors. explain that a little bit. >> well, they're the ones who will hold it. the retail investor go in and out, in and out. they try to clip their profits, they run their little schemes, et cetera. i would rather see this held. i think reddit is a long-term hold, as i said. it may have a problem when it gets to the lockup in six months. but after that, it has some good upside to it. they're on track to fix their profitability. they're still growing. they should have over a billion dollars in revenue next year. so i like this company. >> always great to hear from you, duncan. we'll leave it there and go back to julia on the floor of the new york stock exchange with the president of the nysc. julia? >> that's right, tyler. i'm joined by lynn martin, the president of the new york stock exchange. thanks for joining us. what does this mean? we see the stock is trading at

$53.50. what does thismean for the ipo market in general? >> i think the ipo markets are open. this is a great example of a company that's spent a couple of years focusing on their business, refining their strategy, and they're getting a warm welcome by the public markets today. it's great. >> you have a sense of listings picking up, i know things are slower than they were in 2021. what is your expectation for the next six months? >> we have a lot of companies that we're working with to get out in the second quarter. today was a big test, though. can a company go public? will the market embrace them, and it's a big day for reddit's community. so thrilled for them. >> such a big moment for that community, which brought 8% of the shares. were you at all concerned the fact that they didn't have any lockup period would mean they might sell today and create more volatility? >> i didn't really have a view. i was impressed with the way the

company has focused on their community and embracing their community through this whole process. at the end of the day, it's a free market. freedom of speech is something that reddit celebrates every single day. >> we now see the stock is up $55, way up from the offering price of $34. lynn martin, thank you for joining us here with reddit. we have snu, the mascot right behind you. guys, back to you. >> thank you very much, julia. the stock up in the $56 neighborhood at its peak now. that's about a 65% gain from the opening price or the price from last evening of $34. opening price was about $47. huge beat meantime on the sales of existing homes in february. diana has the details. hi, di. >> yeah, and the stocks are reacting. the home builder etf on pace for its third straight gain, hitting a fresh all-time high back to

its inception in 2006, because existing home sales surged 9.5% in february from january. sales still down 3.3% year over year, but that is the largest monthly gain since february of last year. sales surged the most in the west and south. northeast was on change, though. the realtors point to increased supply for the gain. inventory rose over 10% year over year to the highest level since 2020. but it's still at a low 2.9 month supply at the current sales pace, pushing the median price up to $384,500, which is the eighth straight month of annual gains and yet another all-time high for february. 20% of homes sold overlist price. important to note, these sales are based on closings, so the contracts were likely signed in january and february, the rate is now over 7%. first-time buyers did not surge with overall sales.

just 26% of buyers in february, down from 28% in january. 40% is the historical norm. realtors said consumers are now used to this new normal in rates, but now we're back over 7% again, we have to see how this keeps going. >> come back to the overall numbers on sales and untangle it a little bit for me. are we looking at a year over year gain in sales, or not? >> 9.5% monthly gain, which was much more. the street was expecting this 1% drop. so a big jump from january to february, but still down 3.3% year over year. >> in other words, you get a sequential month-to-month gain that is very big off of a low point in january, closings that would have been contracts sold in november, i suppose. but when you look at the year over year numbers, a decline, how healthy does that mean the housing market is, even though prices were up, i think i heard you say? >> prices are up, but it's about

affordability. mortgage rates are higher than they were a year ago. not by a lot, but they are higher. and also the inventory problem is still a problem, but we are still seeing -- we are seeing more inventory come to the market. so that's why they're accounting for this month-to-month gape. in the winter months, we saw more come on, and we are continuing to see more inventory come onto the markets. while buyers are still struggling, sellers are finally breaking out of that, i'm not going to sell because i have this low mortgage rate. they're getting used to the fact that this is the rate and if they are going to move, think have to get rid of that 3% rate. the department of justice going after apple, saying it has a monopoly over the phone market. we'll look at the fallout and what it would mean for apple's ecosystem. let's take a look at shares of reddit, open t at $47, now at

$54. "the exchange" is back after this.

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let's bring in our reporter from washington. >> hey there, tyler. speaking of apple shares, i just got off the phone with department of justice officials on a background briefing and asked them about the selloff we're seeing in apple shares and asked them what their message is right now to shareholders who are seeing value being erased today, and they said, look, we are a law enforcement agency. that's how we have to make these decisions in the long-term. competition actually benefits companies, and we're not out to get anyone. we don't have an ax to grind. so that's their message to shareholders as we see shares dropping today. so let's reset where we are today. the justice department, along with 16 state and district attorneys jgeneral, the lawsuit filed for the district of new jersey, and it alleges apple illegally maintains a monopoly over smartphones by selectively imposing contractual restrictions on and withholding

critical access from developers. the department of justice alleges that apple has broken the law, specifically section two of the sherman anti-trust act, in five specific ways. here they are. first, blocking innovative super apps. say they apple has disrupted the growth of apps with broader functionality than what's on the iphone. suppressing mobile cloud streaming services, that apple blocked these apps that would allow consumers to enjoy cloud-based applications without having to pay for the expensive smartphone. third, excluding cross platform messaging apps. they say that apple has made quality cross platform messaging worse, less innovative and less secure, so that customers have to keep buying these iphones. fourth, diminishing the functionality of smart watches. apple has limited the functionality of third party smart watches, so users face substantial costs if they don't keep buying the phones.

and number five is limiting third party digital wallets, that they are preventing tap-to-pay functionality. apple responding to these charges saying this lawsuit is wrong on the facts and the law, and we will vigorously defend against it. the court process is expected to take months, if not years, tyler. and there's been political overlay to all this. if joe biden loses to donald trump in the fall, it's a trump justice department that could be in charge of handling the end game of this case, not a biden justice department. not clear how that would play out. but trump doj investigators were the ones who began this investigation back before the biden administration. so this might span two, maybe three administrations at some point. back to you. >> off the top of your head, and forgive me if you don't know the number. i know that technology is an area of interest for you, but what is the market share of the apple iphone in the united

states and globally? >> yeah, that's a good question. i don't have that figure in front of me, tyler. but what they're alleging at the doj is that it's not just the phone itself, it's the app store that's really part of the key issue here, if that they're throttling the development of apps that could themselves rise to become apple competitors or challenge apple's pricing power. also, that they're charging developers of apps too much money. the fees are simply too high, and the cost then passed to consumers for the apps are too high, because of the exclusivity they have. between google and apple, the app stores there, that's pretty much the whole market, and they're saying what you have is a due duopoly with apple, and they say apple is abusing it. apple says we're not abusing it, we're just good at what we do. >> a.j. in our control room says apple has 64% of the cell phone

market in the united states. that's high in the u.s. probably lower globally. thank you very much. now to bertha for a cnbc news update. >> hey, tyler. house speaker mike johnson tells cnbc he plans to invite israeli prime minister benjamin netanyahu to speak to congress about the war against hamas in gaza. it comes after netanyahu spoke with senate republicans at a luncheon yesterday. chuck schumer rejected a request for a meeting with senate democrats. united nations general assembly approved its first resolution on artificial intelligence this afternoon. the united states sponsored measure applies the u.n. charter to ai development and will try to ensure the developing nations can take advantage of ai's benefits, including detecting diseases and predicting floods. newark air traffic control is being relocated to philadelphia as the faa tries to

address staffing issues and congestion in the busy new york tristate area. the changeover will happen in june, in time for the summer travel season. it comes as the faa tries to address a short fall of 2500 air traffic controllers that has resulted in mandatory overtime and sick day workweeks for many controllers. they're hoping that they will avoid what we saw last june, having gotten caught up in that when you just saw massive delays, particularly out of newark. >> thank you, bertha. coming up, academy sports and outdoors having its worst day in nearly two years, after an earnings miss. we'll be joined by the ceo to talk about what's behind that. and before we head to a break, reddit shares opened at $47, priced at $34, popped as much as 70 perse in early trading. up nearly 60% at $54.64.

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welcome back to "the exchange," everybody. shares of academy sports and outdoors falling after missing on the top and bottom lines for the fourth quarter. full-year guidance came in a little weaker than expected on the earnings call. the company is navigating through a choppy macro economic backdrop, putting inplace the building blocks for its future. those are the words from the ceo. mr. lawrence, happy you could join us. let's talk a little about your forecast, which i think may be what is causing the stock to stumble a little bit today. you've been working through a choppy macro economic backdrop. explain why that is, when a lot of the measures of the economic landscape are pretty positive right now, except for inflation, i suppose, which is sticky. >> i think if you go back and look at retail performance in q4 this year, a lot of retailers

saw a choppy environment. credit card debt is at a high level right now, inflation is still pretty high. so i think those have consumers a little more cautious. we were happy with our results in q4, but we see the consumer still under pressure and we think that will continue. >> so you brought down your estimates below where the forecasts are. is that a case of wanting to underpromise and then overdeliver, or sit a reflection of what you see in the business environment or a little bit of both? >> i think it's a little bit of both. obviously, one of our goals is to give the best guidance we can give in terms of accuracy, that's what we tried to do. i think it accounts for a continuation of the low end of the current trends, and implies that we could see the business grow more positively throughout the year. >> are there particular categories of sales within your

enterprise that are weaker than others, and if so, what would your hypothesis be behind why that is? >> we have seen some increases in some of the categories that have -- like our outdoor area. that business was good for q4. where we see weakness are in some of the long lead time businesses, like fitness equipment. obviously, if you brought a treadmill during the pandemic, you probably don't need another. so those are some of the softer categories for us. >> that's an interesting point. that might be a hangover from the, as you say, the pandemic when people rushed out, they came in and bought the fitness equipment, whatever it is, the home gym stuff, and now they just don't need to replace it. so let's talk about store openings over the next couple of years. you have a rather aggressive rollout here. will most of those stores be in your traditional sort of regional foot print or geographic foot print or will

you expand that out of the south areas? >> that's a good question. so we updated our new store guidance. previously, we guided 120 to 140 stores. we increased that to 160 to 180. half of those will open up. half will be in new markets. one of the things we opened up, about 23 stores over the past couple of years. we found that we can have more density as we go into a new market, that will help us see cluster more stores. so it's more of a refinement of the strategy, versus a wholesale change. but more stores, better balance across the gee yography. >> where would the new markets be? i welcome you to come to new jersey, we would love to see you come up here, because we need a little competition. so my question is, where are the new markets, and will you, in

those new markets, be competing directly with dick's, which is large, big here in the northeast for example? >> yeah. so we have seen it as an expansion of our current foot print. we're not going to jump wholesale to the northeast, it's more of an expansion of our base, more stores in virginia and west virginia. so it will be a couple of years before we get up to your neck of the woods. but we bounce up against a lot of competitors, dick's being one, as well as some smaller regional guys. but we feel like our value proposition really positions us well to compete. >> mr. lawrence, thank you very much for being with us today. continued success to you. >> thank you, appreciate the time. >> steve lawrence of academy sports. coming up, you think high yield bonds mean high risk? not necessarily, according to b of a securities, with bonds nearing their highest level since 2017. we'll tell you where the opportunities are next. a little fixed income.

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welcome back to "the exchange." it is march, so it is time to focus on your tax brackets. our next guest says there are tax opportunities that are even more attractive now that the fed has pushed out interest rate cuts. joining us for the latest edition of muni money is jared w woodard. thank you for joining us today. let's talk about where the tax equivalent yields are in high yield munis, as compared with comparable yields on high-yield corporates. >> yeah, thanks for having me. i think this is a fantastic opportunity for most investors right now, especially as you said, people start thinking about their taxes and where the

best tax receive opportunities are. for context when it comes to where people are positioned today, we've seen almost a trillion dollars in flows into parts of the exed income market, into cash assets, in 2023. people buying bonds, trashries, money market accounts to get yield and prepare for the risk of a recession, a recession that didn't occur, and not our expectation at bank of america. that means you have a lot of investors who maybe weren't in the fixed income markets or treasury bonds until recently, who may find when they pay their taxes, there's a significant drag, a big hit from those tax rates. high-yield munis in particular are really attractive for those tax efficient, tax advantaged deals. to right now, some of the high-field community etfs we like, like hyd, that have -- pay

you about 5%, and on a tax equivalent basis, are yielding -- you have to buy something yielding 80% to beat those yields. we think these an attractive opportunity right now. >> you have to go out into the market and you say to beat the tax equivalent yield on a muni by going into the taxable marketplace, i would assume that you're taking on a much higher level of credit risk. >> that's exactly right. that's another huge advantage, we think in this market. the fundamentals in the municipal bond market stay in local governments. fundamentals are very strong, and my colleagues call this a golden decade for the municipal market, given the strong fiscal position. to get an equivalent level of yield in the taxable market, you would have to go out in double b or lower rated debt in the higher corporate market, debt

levels that would have much higher default rates in a future economic stress scenario. so the high municipal etf can give you an equivalent yield with much lower expected stress or risk levels in the case of an economic problem. >> more yield, less risk. the one thing among the few things i know about munis, and fixed income, is this -- the one thing you need to watch if you buy a fixed income etf or mutual fund is that it's not merely the yield you should be paying attention to, it's the total run. if interest rates go up, the total return, the value of your shares goes down, correct? so what you make in yields you might give up in total return in part. walk me through that, assuming that interest rates are going to come down, not only would you get this yield benefit, but you would also get the booster shot of higher capital values.

>> that's right. there's the potential for some capital gains, some price return in the scenario you mentioned. that's not our core case for the reasons why we think these are attractive. but it's true, investors who have been positioning for rapid declines in interest rates in a recession or rapid rate cutting scenario from the fed have plowed money into treasury bonds, into money market accounts and other higher yielding cash accounts. we think that the time is right to move out of those maximum safety types of assets into parts of the real economy where you can get an attractive yield with an attractive level of risk, and not be making this one-way bet on the future path of interest rates. because what's just as important about these high-yield and other muni etfs is that they're connected to the real economy. you're taking a little bit more credit risk, but in return, you're not making all your fixed income portfolio one giant bet on the future path of interest rates and of inflation, and

given how sticky inflation has been, given how uncertain it will be, moving into the real economy is a smart thing to do. >> jared, thank you very much. well said. appreciate it. all right. let's take a break now. coming up, shares of paramount lower by 5% today and 20% so far this year as the company considers takeover options. but netflix shares are up nearly 30%, and bullish momentum on the street seems to only be picking up. we'll dig into those two, next.

municipal bonds don't usually get the media coverage the stock market does. in fact, most people don't find them all that exciting. but, if you're looking for the potential for consistent income that's federally tax-free. now is an excellent time to consider municipal bonds from hennion & walsh. if you have at least $10,000 to invest, call and talk with one of our bond specialists at 1-800-217-3217. we'll send you our exclusive bond guide,

free with details about how bonds can be an important part of your portfolio. hennion & walsh has specialized in fixed income and growth solutions for 30 years, and offers high-quality municipal bonds from across the country. they provide the potential for regular income are federally tax-free and have historically low risk. call today to request your free bond guide. 1-800-217-3217. that's 1-800-217-3217. welcome back to "the exchange." paramount shares lower as a bidding war for assets reportedly is heating up. the private equity firm apollo putting in an $11 billion offer for the studio and the studio alone not the whole kit and caboodle according to the "wall street journal." telling cnbc paramount will not

sell its studio business separately. this comes as an independent committee of directors met its january bid to merge with all of paramount. different story, though, for netflix. getting a boost over the past week on bullish calls from the likes of evercore and jpmorgan. keybank raising its price target nearly 22% writing in a note, pushing shares higher. joining us now, analyst behind that call. keybank's justin patterson. welcome. talk quickly. i know paramount is not a stock you follow, but i'd like to get your reactions on it. the action in it as it bears on media consolidation, something that everybody seems to be talking about these days. >> yeah. thanks for having me, tyler. again, municipal, my colleague, the media stocks but stepping back, expecting consolidation for a while with the industry. everybody went into direct-to-consumer offerings

like netflix to try to get that netflix multiple and a lot of companies have found this is a very difficult business model to get working. sure, higher than you expect in a cable world. you have to keep pumping out new content. that's costly. seen that damage. all on free cash flows across the industry so far. we feel that streaming players like netflix are in the poll position and need to make difficult choices. >> difficult. apollo offering $11 billion for a company paramount, for the -- for the studio, and the entire company is only worth in recent trading about $7.7 billion. suggesting the cake properties, cps for it is actually a drag on the company's value. turn to netflix while we're at it. what accused you to raise your price target? what do you they in performance

of this company making you as bullish as you are? >> a great question and a couple things, tyler. netflix viewership more hit content coming back again. garnered over 250 million hours viewed. thus far a healthy pick-up versus in q4 earlier in the year. and before you have returning hits like "squid game" and others coming back on the platform. we step back. look at data. see the content portfolio ahead. we see a business that supports accelerating revenue growth accelerating earnings growth, and that should drive equity returns here. >> when i think of stocks, i tend to think in terms of the stock that you sort of must have in your portfolio. i would say apple might be that kind of stock. i might say, might say microsoft that kind of stock. in the media world, is netflix that stock?

>> yeah. i think it is. step back, look where consumers are spending time or most of the news shows are hitting netflix at this point. always something new coming every week. that's happening around the globe. then we step back, this is all before netflix really ramped up its advertising business. we think sometime maybe later this year netflix takes another price increase widens that gap between the ad-free tier and the ad-supported tier and drives that trade-off of, do you want to pay for ads? okay. or do you not want to take ads? okay. you have to pay a lot more. a little more price sensitive, monetize you exactly the same way with that ad-free, ad-supportive tier. a lot of livers for growth. just getting started on advertising and we think that continues ahead. >> do you expect netflix, to be more aggressive competing for live event programming or the rights to the nba, for example?

i think of amazon. i think of apple-tv as maybe a little more out ahead when it comes to sports broadcasting. am i right on that? and would you expect netflix to get into that game more aggressively, quickly? >> yeah. you're right on that characterization. amazon, youtube. >> yeah, youtube. >> apple-tv, all that quite a bit of success within there. so far i would expect bigger players to keep writing the checks. netflix is more toeing the lottery if you will. none of us had a wwe on the bingo card entering the year. interesting to see how much watched tyson in a june time frame. and watch how it goes from there. >> justin, thank you. appreciate your time today. justin patterson. that does it for "the exchange." contessa brewer getting ready across the way i'll join her for her er lunch" in a moment on the otside of this quick break.

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personalized financial advice from ameriprise can do more than help you reach your goals. i can make this work. it can help you reach them with confidence. no wonder more than 9 out of 10 of our clients are likely to recommend us. ameriprise financial. advice worth talking about. good afternoon, everybody. welcome to "power lunch" alongside contessa brewer i'm tyler mathisen. glad you could join us. coming up, doj taking aim at apple. worst day stock since august. more on this in a minute. >> plus, ftc, long-awaited supply chain affecting walmart, amazon kroger