about that. we can't wait for that. shannon young is a partner. >> wynn resort. down too long. >> stephanie link? >> slb. >> see what the market does. s&p is negative as is the dow. take you into the final hour. "the exchange" is now. welcome to "the exchange." i'm jon fortt. here's what's ahead. the ten year up after the fed's key inflation reach and the prices mo prices moderated, but spending remained resilient and manufacturing increased for the first time in 16 months. our economy sees three rate cuts still on the table this year and she's going to make her case ahead of friday's jobs report. manufacturing in china also extending, breaking five straight months of contraction. is it a blip thanks to the lunar

new year holiday or is the country on the brink of a recovery. we'll discuss whether the bottom is really in. plus macy's pain is who's gain? the troubled retailer planning to close 150 stores over the next few years. we'll take a look at the company that stands to win those customers, but we begin today with the market action. let's get over to dom chu. >> it started off positive and we lost steam, jon, during the session as the early afternoon kicks off. you can see right across the screen we are down two-thirds of 1% for the dow industrials and that's 260 downside points and 39,546 the last trade. the s&p 500, the broader measure, at 52.37, that's one-third of 1% declines there and at the highs of the session we were up nine points in the s&p so, modest and down 25 at the lows. modest moves here, but still to the downside. the nasdaq composite the tech heavier index is just about flat on the session, down about 0.1%.

16,367, the last trade dthere. one place where there's a decidedly good amount of theme, gold hit an all-time high. 2258 is the last trade and they're up almost one full percent. we are not far from the highs we saw intraday and a sharp move higher there just off the session highs and we'll keep an eye on those gold prices, a narrative of more rate cuts down the line and perhaps more inflationary pressure adding with the safety trade haven element and gold is a strange beast these days and nonetheless, it is up big and check out what happens with mega-cap technology. a huge part of the story for the last several years and certainly in the first quarter and it's the reason why we had such a good quarter, names like alphabet, and amazon and the tactical picks for the second quarter and amazon is getting

tactical buy signal at wells fargo and both of those stocks are up and alphabet has been an underperformer and apple you guys know you'll talk about this later on down 1% and a number of analysts out there with commentary about whether or not apple can recover from this, this will be a big story and we'll see if they carry that trade in the second quarter, jon. i'll send things over to you. >> it's time for questions about apple. dom, thanks. yields look ahead toward big reports this week and our senior economics reporter steve liesman joins with us what's driving those moves, steve? >> jon, the combination of data, fed speak and technicals inside the bond market not calling into question the market's belief in a june fed rate cut. take a look here the probability of the june rate cut, trading money at the lowest levels we've seen after trading near 75% two weeks ago and 62% last week. so it's a sinking probability there. what's more, the futures market

is now growing in fact, more hawkish than the fed itself is. the january fed funds contract and that's above the median forecast of 4.6 for the year-end fund rate and it is a bit above, but it had been below for a very long time. all of this happening alongside a surge in yields of both the two and the ten-year. the two-year rising a strong 9 basis points where it closed on thursday afternoon. while yields started the morning higher, they got an extra boost from stronger than expected ism manufacturing data in the rear-view mirror and that is the february inflation report is apparently not looking as benign as some thought including the fed chair thought it might be. looking ahead the fed chair is looking at a weakening in payrolls with a strong 200,000 and it dipped a tenth to 3/8 and wage growth picks up month to month. you have the supply and an outlook for inflation that's uncertain and the fed.

the rise in yield is happening in the context, john, of improving growth which looks to be helping stocks in the face of these higher yields and just one more data point and the fed boosting first-quarter gdp to 2.8% that is up half a point on the stronger data, jon. >> steve, it looks like we went from good news is bad news on the economy versus stocks to good news is good news to maybe now good news is so-so? >> or what about this? what if good news is good news for the stock market and good news is bad news for the bond market? i will point out that you have these higher yields and they have been going higher. the stock market, yeah, it's off a little bit today, but not the kind of off year you would have with nine basis points and also take a look, john and what's happening and the dxy and the dollar up over 105 right now which is a pretty strong number, and i'll agree with dom, the part where he said gold is weird

these days, and it is rallying in the face of fewer rate cuts expected and it usually goes the other way and there's that dollar at 105 and the dxy index, john. >> steve liesman, thank you. >> my next guest believed that it would start rate cuts next year and the monetary approximately see would be a potential driver of the next bull run in equities. joining me now is stephanie roth and carolina simonetti at morgan stanley wealth management. good afternoon to both of you. stephanie, the economy didn't need a below trend growth for a soft landing, you say. what does that mean for the fed's flexibility on cuts? >> yeah. what we've seen is you can have strong growth and inflation that continues to moderate so we're getting the non-inflationary growth which is what we saw on friday in the pce report. the pce came in at 2.6%. the street was looking for 2.3%

and the surprise really was on the consumer side which came in really quite robust. so we've seen these trends where the supply side of the economy continues to rebound and that's allowed strong growth and inflation to continue to moderate. we very much believe that january was largely driven by seasonality and the fed is leaning on that, too, which is why the fed is still able to cut in june and we don't necessarily need to be scared of the stronger data points because inflation continues to remain quite modest. >> katrina, what does that mean for fixed income. i keep hearing that wealthy investors are looking to lock in these higher yields increasingly with longer durations. >> absolutely. jon, rates are on the way down. we might not know the timing and we might be unable to predict whether the fed will have three rate cuts this year or two rate cuts this year, but we know that rates are going towards the lower points and investors are

taking in these opportunities to lock in higher rates both on the municipal side and the corporate side and extend the duration because let's face it, the 5% money market is something that feels like it's been around forever, but it's only been here for a short timeframe, and we need to know that this is something that's not going to last. so both on the spac side when we need to take advantage of the buying opportunities in the quality sector. the sectors of the market that didn't have the run-up yet and also some decent amount of profit taking in the sectors and in individual positions that had big run-up and when our clients are asking us where should they allocate these profit taking proceeds we tell them, take a look at the fixed income and take advantage of the high rates. >> i'm still not bored with 5%. it's still exciting to me. i don't know. >> stephanie, the spending from

the consumer continues to be such an important part of the picture here, but i don't know, i keep looking over at the debt levels and the defaults that are starting to pile up, but then the jobs picture is pretty strong. so does that sort of keep things in balance for the economy? >> yeah. as long as the job market remains firm then the consumer will keep spending and they'll spend in line with the income growth which in real terms should be somewhere around 2% to 2.5% and the economy should hold up just fine and there was a pickup in delinquencies as long as the consumer is employed. what we've seen so far is the market has been incredibly robust and that should remain the case because profit margins are quite high and there is no reason for companies to do massive layoffs if the margins are quite healthy and in which case the labor market should continue to be solid. the biggest expense that the companies have are capital spending and employment and as long as the margins are healthy they'll keep spending on that and we should see that during the course of this year.

>> katerina, speaking of profit margins you are focused on stocks of companies that have shown operational efficiency and look to continue that. how are you filtering through that and what are you most focused on there? >> jon, there has been a lot of conversation about ai lately, and in our mind it's not just a gimmick. we see ai as something as this pivot that can really bring operational efficiency and repetitive positioning to the companies across the sector, specifically financial services in health care, in defense, in utilities. so when we look at the companies that are increasing profitability that are responsible with their costs and also that are delivering attractive valuations, in our view, this is where the portfolio should be positioned, and this is the good time especially after this run-up in the market that we saw in such a

short timeframe to take a look and make sure that our portfolios are appropriately balanced because this is really the key factor that is going to play a huge role in the long-term profitability and also the risk management side. >> all right. you said consumer staples, health care and utilities are the sectors you are most focused on? >> that's right. we also just increased our position in energy to overweight because of the consumer demand and attractive valuations. another sector to be considered. >> all right. thank you, stephanie roth and katerina simonetti. meantime, industrial giants ge and gom3m are spinning off. >> seema modi. >> nothing compares to being a parent. >> it's like your own spin-off. >> we need more of them,

actually. >> we've seen a number of spin-offs and they're all happening for different reasons. for example, 3m is spinning off its business due to the liabilities it was facing with pfas and earplugs and the company will receive $ 7 billion, and the company still owns a 19% stake in solventa which sell monetize over time and the industrial giant will welcome a new ceo next month and bill brown of l3harris will be taking a page out of larry's playbook and trying to turn around a great american company. simplifying ge's story has won him praise from selling biopharma to spinning off healthcare and now on the verge of divesting the energy business. shares have gained 40% this year. according to goldman sachs, david dubner who heads m and a restructuring, shareholder activism have all contributed to

more spin-offs this year. we've seen about 15 in 2024 spin-offs and that compares to the eight deals that we saw in the first quarter of last year. so we're seeing more come to the table. >> yeah. it's interesting. it's been such a moribund ipo mark, the idea that large companies would find this a comfortable market to spin things up and we saw intel do it with mobile and they're planning to do another one with the fpga business. it's operating clearly by different rules, i guess. >> it is. then there's western doij digital looking to spin off its business and activism playing a role there. so there are different reasons many companies are finding this to be a go-to strategy. one way to unlock value that they think is hidden from the market and another reason is to make it more appetizing to retail investors that want more simplified ways to invest and stock stories. >> i guess, like you seem to allude to right there, if you've

got a couple of pieces of the business that have different margin profiles or different growth profiles, it's an attractive environment to try to point that out. >> we keep saying bigger may not always be better and that's why taking a simplified approach may work out better over time and the data does support that from goldman sachs and it 10s to outperform its parent company by around 6%. >> they argue for getting smaller. >> it just depends. seasonality. >> seema, thanks. do not miss the exclusive interview with the ceos of ge tomorrow morning on "squawk on the street" at 9:30 a.m. eastern. now coming up, china manufacturing is growing at its fastest pace in more than a year, boosting the stocks in the best day in more than a month. does this mark a bottom in the chinese market? we will debate. plus macy's down sizing its department store footprint. does it open the door for the off-price competitors.

we'll look at opportunities and challenges ahead when "the exchange" comes right ♪ ♪ this is "the exchange" on cnbc. is increasing as more and more businesses move to the cloud. - so, the question is... - cyber attack! as cyber criminals expand their toolkit, we must expand as well. we need to rethink... next level moments, need the next level network. [speaker continues in the background] the network with 24/7 built-in security. chip? at&t business.

welcome back to "the exchange." the shanghai composite climbing more than 1% today, up 3% this year after they signaled the recovery there might be graining traction. according to a private survey,

china's factory activity came in at 51.1 in march, the fastest pace in 13 months. meanwhile, the official manufacturing pmi was 50.8, the strongest reading since last march and my next guest says this could mark a bottom for chinese stocks. joining me now with more is marco papic. marco, welcome. on top of this the chinese securities regulatory chair commission has a new chairman and that historically tends to mark a bottom. should we believe it this time? >> i think eventually the answer will be yes. my concern right now is while we have a pickup in manufacturing activity which is really a global phenomenon, by the way, you saw that in the u.s. this week week. the problem is it relies on total social financing and the psf number that we all watch when we think about china, it's

down 12% for the combined january and february month which takes on the effect of the new year and that's the problem because that's the lowest reading at this point, so to start to bounce back on rumors of politics support and we haven't seen any fiscal support thus far. so i think this rally will have to go back to the bottom of january and then i think you will have a great entry point later this year in chinese equities. >> you mentioned the comparison in manufacturing growing both in the u.s. and china. i wonder about the credit versus capacity comparison as well. i mean, we're seeing more and more consumers in the u.s. use more and more credit. that's spending beyond their means. is that a concern in china, as well? >> yeah, it is because they've been doing it for ten years. >> so this is a very important point. you nailed it right there. in the u.s. we've had ten years of deleverage. the private sector, by 2020 was

pretty much done with about a decade of deleveraging. your point that they're taking on credit, that's true and it is not yet in dangerous territory because in the u.s. we've only been doing it for four years. on top of that, the u.s. household has $3 trillion worth of stimulus. 2020, and 2021. in china, they are where we were ten years ago, and so they're in that decade of deleveraging and that's why we areconstantly being disappointed by their data, and that's why i think it's very difficult to invest in anything in china that defends into the economy and externally focused on companies that are selling abroad, they're benefiting from american consumption and european recovery and that could be an investment strategy, i think, for the remainder of this year and into next year. >> well, what's the strategy? what's the sense in investing in an externally focused chinese company versus investing in the market that that company tends to focus on? >> you know, it's like, for

example the situation in germany. right now the dax is at an all-time high, the german equity market even though german economy is in a recession. so you have externally oriented equity and indices, they can do well even if the domestic economy is suffering and in china's case there will be a lot of ev manufacturers and the battery supply chain alternative energy companies, they should do well anyway. plus, because of the situation at home, the currency maybe is quite weak which makes those companies quite competitive. of course, there are pressures and there are politics and protectionism and those are big long-term risks, but for the next six to 18 months these companies can do very well. however, for most investors listening to this, this is way too detailed of an investment strategy. i would just say, look, the bottom line here is domestic credit is not confirming a rebound in china and on top of that the government is imposing austerity kind of like we did in

2010 and 2011 when the tea party came to power. the same things are happening in china. they're trying to narrow their budget deficit at the same time the private sector is deleveraging. if you're trying to buy chinese equity, i would pounce on this tactical rally and i would wait for the fall to commit much bigger support for the real economy. >> that's part of what i was wondering about when you started pointing out those names and those industries that might tend to do well because it seems to me whenever there are some companies or industries in china that are doing well when the overall economy is not, that's just inviting the government, the communist party, slapping them down making an example of them. remember jack ma and remember when he used to dance? >> no, that's for sure. look, the chinese government has priorities. it's hard tech over soft tech. so it's really all about manufacturing. it's about competing with american and european manufacturers. so i would stay away from internet companies which by the

way, have done very well over the last couple of months in this rally and that's another reason why i don't think this current rally is really sustainable. >> so if you've been in those names you would suggest getting out of them or having a strategy to get out of them and into the more hard tech that the chinese government tends to view as more strategic if you're going to play in china at all. >> if you're going to play in china at all, that would be a good strategy, yes. >> what about the overall environment in the region? how -- how is that affected by these dynamics in china? >> you know, it's very interesting. japanese equities have been one of the biggest beneficiaries of just the entire thesis that china is uninvestable. you hear a lot from very large allocators managing hundreds of billions of dollars and they extracted china for a number of reasons and the thing that you're talking about, government interference and the free market and they focused on china as the

geopolitical rival. india, if they require an emerging market allocation. so on the we've seen's good performance over the last 18 months and i will continue, japan as an economy are gear for the conflicts that wooe in. lots of things are being built and you'll need someone to pick up the slack from china from that kind of manufacturing perspective, and i think that these dynamics will likely continue. india could be at risk, by the way. it is a very expensive market so if you're trying to pick and choose between emerging market and china actually puts a bottom with fiscal support by the government. look out for indian equity. they could start underperforming. >> okay. they have been performing well so we'll watch out for that, marko papic.

apple shares off their first shares since september and the company has yet to post a positive month since the start of the year. the fall is far from over and the details and where there might be more weakness ahead and as we go to break, here is a look at some of the names hitting all-time highs today including micron, general dynamics, alphabet, and stocks are lower across the board. dow, s&p and nasdaq near session lows. we are back after this. ♪

♪ ♪ welcome back to "the exchange." with major indices near session low, time for some show and tell where we show you a chart and tell you the story. this one has some suspense. disney shares slightly lower ahead of wednesday's annual meeting where nelson peltz hopes to win a pair of seats on disney's board of directors. the stock is coming off its best quarter since 2000, up 35% to start the year, but if peltz wins the proxy fight and ceo's

bob iger leaves as a result, it could mean trouble ahead. >> i think that would be a terrible outcome for disney. the future of disney is at stake here. that is why this vote is so important. bob is just in the midst with his leadership team of a massive transformation of disney. >> all right. now to tyler mathesonfor a c no nbc news update. >> welcome, everybody. iran's consulate in the syrian consulate of damascus was destroyed in a suspected israeli air strike. that was according to syrian and iranian state media. israel has not commented and has carried out strucks on government buildings for year. a senior commander in the quds force was killed in the strike. ed by tone visit the francis scott key bring next week. the president will get a look at the federal response efforts

there as the white house works with the state to re-open the port and eventually rebuild that bridge. and after an easter weekend storm, stranded motorists near big sur in california, traffic on california's iconic highway 1 is slow, but open once again. parts of the highway collapsed during the storm south of monterey sending chunks of the road tumbling into the ocean and leaving some motorists stranded overnight. the famous route, beautiful road has been prone to frequent closures from weather impacts in recent years. jon, back to you. >> even in not so recent years. tyler, thank you. coming up, macy's is closing a quarter of its doors as part of the turnaround strategy, between closures layoffs, and pressure from activist investors is the company's pain the competitor's gain? we'll tell you which brands benefit the most. and it's time to register for the inaugural change makers event in new york city on april 18th.

we'll hear from some of the women transforming business including commerce secretary gina raymund. to request an invite go to cnbc.com/changemakers. we'll be right back. and cultural treasures. because when you experience europe on a viking longship, you'll spend less time getting there and more time being there. viking. exploring the world in comfort. your shipping manager left to “find themself.” leaving you lost.

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welcome back to "the exchange." shares of macy's up a little more than a percent since it announced it plans to close 150 stores and that's more than a quarter of its u.s. looks and those closures could create an opportunity for other retailers to swoop in and gain market share. joining me to discuss who will come out on top, corey tarlo with jefferies along with cnbc.com reporter melissa repco. >> melissa, set this up for us. there are a lot of tj maxx stores close to macy's stores. tj maxx, tjx has been doing well. macy's haven't. when i think macy's i think mall malls and tjx strip malls. >> people like strip malls and perceived as more convenience to people and in of it comes down to real estate, location,

location, location. being in a place where they're grocery shopping like a tjx is more convenient than circling for a parking space like the mall where macy's is. the other dynamic is people are looking for a deal and a lot of the brands are similar at macy's and tj maxx and people are looking for cheaper. >> not everyone is doing and i don't remember which one it is, dollar general, somebody's closing a bunch of stores while somebody else is doing well. it's not all about mall malaise. what's the difference? >> i think without price specifically, this is a concept given their rather opportunistic buying model, the convenience and the small format of these stores. it generally bodes well for consumers across various income demographics because they offer a good, better best assortment at tj maxx that's relatively

close to a lot of consumers' homes in the u.s. and as you think about the prices that are 40% to 70% off conventional brands that you find at department stores it tends to make the value offering very attractive and given the value in proximity. >> melissa, it was dollar tree and family dollar that i was trying to remember closing about a thousand stores right now. how are they doing that while tjx is doing pretty well, i think. there are other retailers off-price that are doing particularly well and i can't remember which one reported earnings, you probably do. is it staffing? is it again, location, is it just the assortment that they're able to put out there? >> you have to think about the customer. compared to a dollar tree or dollar general, macy's has a more affluent shopper and understand bras like target or the higher end customer that goes to kohl's. corey looked at this and if you look at where the customer

shops, it's not that they're just looking for price they're looking for some of the more higher end names and so that explains why we're seeing growth of some retailers and closure of others. i spoke to target ceo brian cornell and hementioned macy's and the closure that he sees for target and he said this is an opportunity we've had before when we've seen boxes close like toys "r" us in the past and we've moved into those locations and this is playing out again, but with a different name. of course, macy's is saying as we close stores we will invest in ones that are better performing and we're seeing ones that are underperforming and already seeing market share to tjx and others. >> corey, is it me or is this a time of unusual volatility at the high end, low end for the consumer. aspirational luxury is taking a hit right now and a lot of luxury brands are having to focus in on that core customer who is still going to spend and we're talking about the difference here in discounters, as well.

>> well, one of the things that's been quite popular nowadays has been tradedown and you see it from regular specialty stores into off price. you're seeing it within certain channels like walmart where consumers are trading down from brands to private label. i actually just last week hosted meetings with walmart and target executives with investors here in manhattan and what we saw was even at those largest retailers consumers are continuing to trade down into private label at walmart, that's $100 billion business on a $600 billion enterprise and at target it's roughly a third of the mix and it's continuing to grow and these businesseser continuing to invest in private label and you're seeing tradedown from a lot of those higher, more luxury brands into this category that helps support better margins, too. so that should bode really well for both sales and profitability ahead for a lot of these retailers. >> corey mentions the good point that with discretionary spending that is under pressure and that

cuts across the board from everyone with macy's to walmart and it is because of having the stronger, private label brand and having more of a value reputation kind of like a tjx. some of the players like kohl's, he's saying we can grow as macy's shrinks. both noting that kohl's is under pressure, as well and it's seeing people buy fewer clothing items and fewer shoes and it's fair to say they're losing share to tjx, as well. >> where does digital and omni channel fit into the picture here? >> that's a great question, jon. i think that one of the most important things to note about digital and omni is that in the off-price landscape it's actually relatively non-existent. so burlington had an on-line presence and they actually got rid of it. ross is completely in stores and tj maxx has the modest online assortment that we have to make that accounts for a very small percent of the sales. in spite of the uptick that we've seen in digital, target

digital penetration has gone to the high single digits close to 18% or close to 20%. walmart's digital penetration has continued to ride. that's a $100 billion business offline. off price it's much less meaningful, why? because they want to drive brand-protected sales that is not necessarily visible entirely online to consumers broadly so that off-price can serve as an effective mechanism for brands that need to get rid of excess inventory. >> one size doesn't fit all. cory and melissa, thank you. for melissa's story go to cnbc.com. it's been a volatile month for apple and shares down 1% and saying street estimates for iphone sales and revenue could be 20% too high for the june quarter. how far can apple fall? that's next.

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welcome back to "the exchange." apple one of the worst performers in the magnificent seven this year and it might now be the fab four, down 12% in the past three months and more negative sentiment from wall street today, but could there be some upcoming positive catalysts for the tech giant in steve kovac joins us now for today's tech check. steve, on the one side, i won't say on the one hand -- >> on the other hand. >> we have iphone weakness. we have this doj suit. on the other side we've got high loyalty, wwdc, the developer conference coming up and apple tends to be very practical about trends like ai and we haven't really seen their play yet. >> we don't know and that's the big question looming ahead and this price target cut was 170 and they were as high as 185 recently and they're basically saying calendar year 2024, sales and earnings could be down and

they're saying that hasn't happened since 2016 and, look, a lot of it is happening in china. we know the economy's in rough shape over there. we know in the december quarter for apple, sales were down 13% overall and just drilling down on just the iphone in china, really bad data coming out for the first bit of the year. the most recent data and we have february numbers and iphone sales were down as much as 16% for february. we don't know march yet and of course, we'll get earnings in about a month or so here, but the thing is, when does china turn around and tim cook was out in china last month and met with at the business forum and opening up a new store. does the consumer turn around there? and the other question is of course, what is this ai announcement that we're expecting to come at wwdc and how does that drive again iphone sales? and then further out, september, we have the regular iphone event and the iphone 16, what can that do on the ai front that makes

people want to upgrade. not because they need a new phone, but because they want the new iphone and they'll upgrade sooner than expected. >> we've got the china situation that's not necessarily just about the chinese economy. we see some possibilities that that could be turning more positive, but also about chinese sentiment toward a company like apple. >> and a little company called w huawei is causing problems for apple, too and we've seen evidence that they're eating into apple's market share. for the first couple of years throughout covid, when huawei stopped making phones how many people were switching from android to iphone and now we're seeing it go the other way. luke points that out. don't count out zhao, which is also often referred to as the apple of china. so yes there could be nationalistic buying on that sense and also just literally, huawei fans excited that there is a new huawei phone that they can buy. that's definitely hurting them.

by the way, those are cheaper phones. >> investors who are wondering when there might be an entry point for apple, and i can't help, but notice that apple has some advantages in the ai era. one, everybody, google, microsoft want placement on the iphone and are willing to pay for it. >> a lot of money. >> a whole billions upon billions of dollars for it and also a lot of what these companies are doing is trying to vertically integrate in order to get better performance out of ai. they design their own chips and hardware and software when they make a move in ai, it could be very fast. >> and just that, then the question becomes as we heard two weeks ago that they're partnering with google when in china likely to partner with baidu. so what does that relationship look like? that seems like almost better for google than it is for apple and they're relying on that against google. we've seen alphabet shares recover in the last two weeks on this news that it either gives

them more exposure for gemini ai or they're going to collect money from apple as apple ends up licensing gemini for all these user, too. so that becomes a real question. what kind of vertical integration do they have and what is their own internal ai thing and we might not hear that until the next iphone cycle because i can bet you, they'll do something like, if you want the best ai stuff you have to buy the pro model. >> do you think apple will pay, though? >> i feel like it would be the other way around. we just don't know, but yes, of course, they want access to a billion plus iphone users and it's a good thing for them either way and they paid billions of dollars to all these other platforms in order to be dominant on this platform and that, by the way, doj is like that. >> doj doesn't like much these days and lots of big companies doing big things. steve kovac, thank you. >> thanks. stocks managing to eke out a gain with a nearly 18% gain. up, in, we'll get a look at the

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getting to bristol-myers yielding over 4.5%, $12 billion in cash flow, more than 10% of the market cap. a classic story we've seen over and over again. the negative story is well known. they have drugs going off of patents, and the sales will slow for the next several years so investors look elsewhere. what investors are overlooking is that they can use the great cash flow to make acquisitions you were talking about and the earnings growth will start to go up at the same time and when investors start to see that they will bid up the shares so you will get a double virtuous tailwind and can make 50% or 60% on that kind of name without really risking anything higher than 12 or 13, so we like that story.

>> the next by up, verizon up around 20% after posting strong subscriber gains in q4. warning that it took more than $50 billio should by here? >> they are making a good point but also looking in the rearview mirror. that 5g stuff is expensive but it has already peaked and so verizon because of this text capital grab has sold off with the other slow-growing stocks and it has a bottomed a couple of months ago selling at less than six times earnings, doing a little better at less than eight times earnings. the average multiple is about 13 or 14. if it could get back to the average multiple as the cash flow starts to increase because the cap spending is going do we can get paid 6.5% to wait and again looking at a non-

heroic gas of 50% or 60% turnover in a couple of years as the world returns to normal. no heroics here. >> for the final buy-in, hershey poured one out for the chocolate easter bunnies, down more than 20% in the past year in the face of spiking cocoa prices. nevertheless gaining back share after a few months of weakness with significant strength in salty snacks. are you bullish on hershey? >> i am bullish on hershey. a little heroics here. cocoa prices are just going up unbelievably. they make nvidia look like a slacker. up over 100% this year and that of course is hershey chocolate biggest raw ingredient cost. in the face of that, what that is doing is masking terrific

execution of hershey's. they are hitting on all cylinders but facing enormous rises in cocoa prices. if you could imagine cocoa rices moderating and god for bid going back down to where they were over the course of a year or two, hershey will continue to execute, investors come back, the multiple goes up and once again you've got a stock that has been left high and dry that can take off without a lot of huge risks in the downside. >> i hear you. nvidia is up 82% as well. boeing down more than 25% in 2024, set to undergo a management shakeup after that max nine door plug blowout was the latest in a series of quality issues. maintaining the rating citing robust demand for new aircraft. throwing in the towel here. you are not optimistic?

>> i am. i'd like to be optimistic. this is the kind of stock value investors would like because it is great market position and aircraft market as a whole is a terrific place to be. having said that, i don't think the company has got religion. clearly there is deep issues of quality and safety they are working on. they will change management, but they will not change until the end of the year? clearly it is a show me stock and the show won't even start until next year. i'm quite disappointed in a stock that i would like to own but i think the board of directors here really has not done its job in terms of making changes it needs to make. also telegraphing that things are different this time. >> we will leave it there. that will do it for the exchange. power lunch starts on the other si oisdef th quick break.

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