i will be cheering after the show. energy. i think it's a beneficiary of people talking profits as the moments roll on. >> general motors breaking out. >> jason? >> merck. >> stef? >> nike. >> nke. >> nke. >> what more needs to be said? have a great weekend, everybody. see you on "closing bell." "the exchange" is now. ♪ ♪ thank you very much, scott. i'm kelly evans, and here's what's ahead on "the exchange." a wacky jobs report this morning with may payroll growth blowing estimates out of the water, but household employment showing another sizable drop, so ton employment rate hit 4%, the highest in two years, yet stocks are loving it. the s&p hitting new highs after the report. we'll discuss all of it. possibly another promising sign of fixing health care. waystar is set to make its debut on the nasdaq. price is $21.50 a share, but

we're awaiting the first time. gauzy, yesterday, they traded lower. we'll talk to the ceo. we're starting with the story of the day. look at shares of gamestop, down 35% as roaring kitty trader keith gill says his best pitch of the stock has been halted 15 times. but gamestop, the company itself, also surprised the street by releasing its q1 results this morning several days early, showing a 29% sales decline from the prior year and announcing they'll sell an additional 75 million shares on top of the 45 million announced last month. more than 500,000 people are watching roaring kitty as we speak. let's get some analysis with dominic chu who is monitoring the street and will bring us the latest. chris murphy is back again with the options market. and igor has been tracking the short telling and will tell us how much pain has been inflicted on the shorts so far.

dom, kick us off. >> okay. so here's the current state of play. as you mentioned, kelly, 15 trading halts. so shares are paused right now. down 35% roughly at $30.12 per share last trade prior to that halt. again, 15 of them so far. each of these limit up, limit down lasts for about five minutes until things stabilize. this is all happening after roaring kitty, keith gill, the original stock trader, kicked off his live stream around 12:28 p.m. eastern time. the initial maybe call it 10 or 15 minutes ohher so, not really addressing anything gamestop specific, talking more about the nba finals and the kind of beer he was drinking at the time. now we have gotten some more, at least reiterations from previously stated positions from keith gill. that is to say, he believes that ryan cohen, the current head of gamestop, is the person that can

turn this company around. he believes in the fundamental story. he's talked a little more about that. what we also have developing right now is we do actually have a confirmation of sorts, if you will. we talked ad nauseam about the add that these screen shots keith gill put up of his alleged position in gamestop, that at one point in yesterday's trade was valued at roughly $557 million. well, what he did do in just about the last five to ten minutes or so is reshow everybody on the youtube channel a live shot mark to market of what his position is. that position currently stands, because shares are moving around or halted right now at around $320 million mark to market. almost equally split between gamestop shares and the call options that expire june 21st on those gamestop shares. in addition to what i want to say is around $29 million in a cash position. that is now what we know. so we can at least verify it.

at the very least we know that he's publicly put this out there, so if it changed down the line, we have documentation over a kind of fair disclosure medium if you want to call it. the other thing we are looking for is whether or not there will be commentary with regard what the future looks like for that position. we have not heard anything on that front yet. but, again, we're still in the trading haltd r right now, shar down 35%. we are still well above where we have been when the mean stock version 2.0 kicked off the middle of last month in may. we'll continue to bring more details as we know it here, but that's the current state of play. back over to you. >> dom, quick question. i was tuning into a little bit of it. he still believes in the company and that ryan cohen can turn it around. did he talk about a time frame for these shares? was he talking about two to three years, anything like that? >> we have not heard any specifics with regard to that. he has kind of talked a little

more around just the general feeling about how retail investors still have a voice, that this is something where you can make your call in it, that you can feel free to change your mind, which is what he's done at various points during the course of the mean stock craze going back to 20 1. but i have not heard an indication whether he's put a timeline on the holding period, but we do know that there is one there, at least one that he's publicly shown. whether or not it's truly his or not, that of course remains to be seen. but he has shown us a live shot of the mark to market moves oh of that position. just about equally split between stock and options. gamestop, by the way, has reopened for trading. it's now down $18.04 to $28.51, which represents a 39% decline. so that's the latest breaking news, kelly. back over to you. >> dom, just to reiterate, this was the first time that the community, let's call it, had heard from him in three years.

a couple weeks ago he indicated he had the position. they said why isn't he on youtube? he's trying to answer a lot of those who are suggesting there could be something illegal about this by multiit wiple times on live stream saying shares are moving up, am i allowed to say that? it also to me sounds like he knows part of his audience are people staying tune to find out if he's doing anything to manipulate the market. it sounded to me like he was trying to explain no, i'm just describing my position. no different than if stan miller came on and said this is why i like ali baba. >> it's been evident for people turned into the live stream, he is not addressing the stock head on per se when the stock is halted, as well. maybe it bears worth repeating

that roaring kitty was a registered representative market professional, so he understands a little bit about the nuance of what can be considered what hypothetically fraudulent versus expressing a market view to an audience, much like our guests do on cnbc. but this is one where we are in the middle of a lot of volatility today. a massive move lower. 37%. but it did close up 45% yesterday. so we're not even back down to where we saw things really happen at the top of this show is when it kicked off with roaring kitty kind of putting out there that there was going to be a live stream. >> dom, thank you very much. let's dig into the trading activity with gamestop. chris murphy joins us. great to have you back. where are we now? the fact that the company just released earnings this morning says what to you? >> well, you know, they're trying to take advantage of the higher stock price and i did

listen to a little bit of what roaring kitty was talking about. he's bullish on the actual management of gamestop, and they pretty much did what a smart management would do and take advantage of the higher price. that's the new information that we got today. the other new information that we got today is that he hasn't done anything to his position, so pretty much a lot of the stuff we were talking about two days ago still holds. >> the interesting wrinkle, the issuing would obviously be bearish for the stock in the short term. but this is why i'm asking about the length of the time he expects to be in this. if it's a couple of years, then presumably that would help his case. he didn't sound all that upset. he said all right, now we have a share sale. >> his biggest position that we're worried about does not have a couple of years, it has a couple of days. he has until june 21st to decide what he's doing with 120,000 calls. that's 12 million shares. if he gets exercised, that's

$240 million we saw on the screen, at least in this account. he's got $30 million. so that itself doesn't match up and it does make it seem like something has to happen with that position. >> correct me if i'm wrong, that price is $20. so we're still above that level, no? >> yes, but if the stock is above $20 on june 21st, he's going to get exercised and get long, the 12 million shares at $20. that's going to cost $240 million. the position is worth more than $240 million, but it still costs $240 million to exercise those options and buy those calls. >> in other words, this would seemingly be a great position to be in. as long as the stock is above $20 he can make a lot of money, but where he is going to come up with the money to buy the shares? forget about trying to sell them and capture that profit. >> he's pretty famous. i'm sure he can find a way to do it. we don't know what's going on behind the scenes. that's another piece of the

puzzle, whether it's otc position, whether it's some sort of partnership. we just don't know, but we do know that just looking at those calls, you know, he would need to either be short the 12 million shares, which we're not seeing in his position as well and have that collapse, to make that money. or, you know, he would have to have another avenue. >> it's not that he would want the position to expire worthless, ight? or in other words, he stands to make a lot more money if he can exercise them at $20 or higher. it was interesting to hear danielle shea yesterday say the stock always goes down after earnings. now that they have reported early, maybe it gets the negative catalyst out of the way, but sit possible the shares are below $20 by then? why are they trading so poorly? >> it's possible that the shares are below $20. if you look at the volatility priced into the options, you are

seeing everything trading from people buying $128 calls to people buying five or ten-strike puts. so anything is possible in this name. if you were hedging this and had this position, one of our clients had this position when the stock was $50 a couple of days ago, you might sell some stock, so at least you have a little bit of your position covered in case the stock does crash. from what he's telling us, it does not seem like he's doing that. >> it's halted right now. you had some clients you mentioned. what is your sense of how big money or institutions are playing this, are they in the long side, short side, is it a mixed bag this >> they're really not. i was saying if we were advising our clients in this game, the reality is, we're looking at non-farm payrolls and nvidia and our clients are asking us hedging questions. this is an interesting story, but it's not the type of what is a good strategy to come up with

in gamestop? i can't tell my clients, i think he's going to post on pinterest next and something else will happen. it's hard to add value on the institutional side in a situation like this, but sit very interesting to talk about. >> indeed it is. chris, i believe we'll have some more chapters still to come. thank you for your time today. now, reddit traders took on the henge funds back in 2020, and citron's ceo took a new position in the stock, but said last hour it's a small one and is different this time around and traders have learned a few things about short selling. joining me now with who's left or who is joining left on the short side, igor joins us. what are your thoughts here based on the events of the day thus far? >> i kind of feel like i wake up

and everything is happening again. we see the short interest in gamestop, we see activity. we've seen the short selling earlier in the year and a squeeze related short covering of 1.4 million shares. a lot of movement in the stock. >> we were talking to danielle shea yesterday she said it was a short squeeze, but now the stock is at 28. what does that tell you? >> look, shorts are down a billion yesterday, up a billion today. so you wake up crying, you go to bed today smiling. so we're seeing that some shorts are getting squeezed out of the trade. what's interesting there are new shorts getting in. some short sellers might not like the short the stock at $15, but at $35, it looked like an attractive trade. so we're seeing a mixture of shorts getting squeezed and new shorts getting into position.

we're seein ton more covering. >> would you summarize what's happening on the institutional or big money side of this? do you think a lot of people are looking at this as a juicy short or saying we'll just play this on the long side and try to pick up a few bucks? >> you had $3 billion worth of shorts. this is a wide breadth. you're talking about four, five times the normal shortage. we have -- we do the same thing on the long side, which is project 45 days in advance. so we are seeing active long holders, which is hedge funds and such, make up around 2% of the holdings. insiders and retail make up of 70% of the long holders versus 24% short selling.

this brings up the volatility. >> the live stream is now over. so the stock is down 40% at the conclusion of that. and you said the shorts have lost how much money on this? it's interesting, because keith gill succeeded in driving the stock higher and bringing in a lot of pain for the shorts. i don't know if that's turning around now, but how much do you think shorts have lost on the stock this year? >> the stock was at probably 33%. as of just before noon, just before 1:00, shorts were up a billion. they're down $350 million for the month still, so this is -- they're still down 75% of a billion for the year. so they're still suffering a lot of red ink. but at these high prices, these $30 plus levels, you're seeing

new shorts getting into this trade. >> that pop above $40 this week seems to have brought people out who said there's no way this is sustainable. what number roughly do you think we would have to have the stock fall back down to in order for the shorts to make money on the year? >> let's get back into forthe year, probably in the mid 20s, 25, 27 for the shorts to recoup most of the losses. we're still going to be some shorts that got in that are going to have -- on a kind of average basis, let's say mid 20s is where these guys start making back in even territory. >> only $3 above that level right now, so you can sense that the battle lines are being drawn, not to mention the $20 stock price options on the 21st. ihor, thank you so much. >> thank you. well, coming up, we'll talk good old fashion payrolls.

they did surge in may. the markets are taking it in stride, but what does it mean for the path of rate cuts this year? that's next. and another nasdaq ipo today. health care payment software maker waystar. we're still waiting on the first trade. the ceo will join us at that point. "the exchange" is back after this. >> this is "the exchange" on cnbc. you founded your kayak company because you love the ocean- not spreadsheets. you need to hire. i need indeed. indeed you do. indeed instant match instantly delivers quality candidates matching your job description. visit indeed.com/hire (♪♪) ♪ well i was raised by careful hands ♪

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welcome back. what slowdown? the economy just added 272,000 jobs in may, blowing past the 190,000 k expected. up nicely from the 100,000 we added last month, as well. but at the same time, the unemployment rate edged higher to 4% for the first time since january of 2022, and it all comes as we're about five days away from the fed's decision next week. so what happens now? joining me onset is our very sown steve liesman. steve, please explain to me these reports. they just keep getting weirder. what's going on? >> i think it was -- i forget who it was that i was talking to. listen, use the household survey for ratios, don't use it for levels. actually, that was a tweet series by jason fuhrman. i remember now. it is designed to give you ratios of how many people we

surveyed were employed, how many people were out of the workforce, how many people were participated. >> how many were men, women, this age. >> it is an unusual gap. i use a series that is corrected for the different and the concepts in there. and it's a 4 million job gap. it is the largest that we have seen over a period of time. >> this has been going on for a few months now? >> they went their separate ways about jupne of 2022. it's been growing like this and it's cumulative over time. but it doesn't say you should dismiss the payroll numbers, and the low jobless claims tell us that the job market is in good shape. >> i was going to ask which is the truer tell, and it sounds like -- and diandiana, should w take it at face value? it's a strong labor market, end of story. >> and i'm listening diana, because i really want to know

the answer, too. >> i do think it is a strong labor market. the acceleration in wages is something that was important where it occurred. it occurred in the service sector, in the parts of the service sector where inflation has proven stickiest. so that's a bit of a conundrum for the federal reserve. what the fed has to do, home maintenance, repairs, cleaning, the things -- and vehicle maintenance, as well. these are all things that have been pushing up inflation in the service sector, and the fed doesn't want to target wages, but we do know that labor costs play a bigger role in the service sector. and so this still keeps the fed on the higher for longer path. we expect december rate cuts still, and i think it's important, though, that the fed is also, you know, a little nervous about how far it can go, especially chair powell. there's members of the fed that were talking rate hikes last time. i think that will be sidelined as we see them pencil down their

trajectory on rate cuts. i think it will be between one and two cuts when they release their dot plot for the mont of june, which will come out -- they'll write it down after they get that inflation report that they're going to have during the middle of their meeting. so talking fed independence has gone to an extreme here, but i do think that it's important they're still seeing a stickiness in wages, and that means you need a lot of disinflation or deflation, drop in prices in goods. >> here's the wacky thing on top of it -- >> the wacky thing or an additional wacky thing? >> i won't ask you to comment, but the first text that i got when this crossed was from a trader saying no cuts before the election, that's out. off the table. also, the stock market's initial reaction was, now the s&p is at

all-time highs. everything that diane is saying, which is things -- we need more disinflation, and we're not seeing it. you think the market would be furious but it's celebrating. >> the fed is reluctant to move in the presidential election season. and that's looking when they move between january and october. they have moved and will move in september. i think the bar is somewhat slightly higher because it is election season, but i don't think the fed is reluctant to move in that time, and i think -- >> it does have to do with the election season. >> if you get three months of lower inflation, i think lagard has shown us a day. look at how well controlled the bond markets have been in europe after this cut. not only did they not go down and price in a whole boat load of addition al kutes, yields went up. lagard did this in a wonderful way that allowed her to reduce the restrictiveness in the

economy, which i think is a good idea for the u.s., even in the face of this higher payroll number. and yet, maintain a restrictiveness. here's the thing. we can have a discussion about this. powell doesn't think it's possible. i think you can navigate by the stars. >> diane? you can navigate by the stars, just not under cloudy skies. >> correct, correct. >> it was cloudy skies that got in the way of those stars, so you can navigate by the stars. i agree with you that the election is not going to determine whether or not, from our perspective, we have inflation cooling over the summer. not enough until the summer, but the data doesn't confirm it convincingly until october. so that's why we have our cut in december. it could mean a cut as soon as november. i think it's harder to do in sent and the timing. but i won't rule out the economy

getting weaker either, because i think we're starting to get -- the ice isn't cracking yet, it's not completely thin, but i think the fed is worried they're going to hit a trip wire. you always hear that word coming out of jay powell's mouth, that is when the economy does south, it sends to go south rapidly. since they are data dependant, they already baked in this willingness to wait until they see it inthe data. that's after the fact. that's part of the problem. >> way i describe it, diane, is "stuff happens." can i share with y'all some -- >> it's also cumulative, right? >> i want to share some of the data crunching. there's been a criticism about the strength of the job market by the growth of part-time employment versus full-time employment. it is true that over the past year, we've lost 1.5 million full-time jobs and gained 1.7

million part-time jobs. however, if you look at part-time employment as a percent of total employment, it is 17.4%. before the pandemic, it was 17.2%. okay? and let me just give you one other statistic. when you look at the more important number, the sign of economic stress, which is part-time for economic reasons as a percent of all part-time work, it's 15.4%. before the pandemic, it was 16%. so it's actually less stress. what i think is instructive about this, not only get kind of counter thing negative yield of the report is it shows that we are still in the process of restoring the job market from the pandemic. we lost a lot of part-time jobs. >> true. >> and we're now putting them back, and people are working part-time, not because they have to, but because this is the job that they are seeking in large measure. >> diadiane, last word. >> i'll add a little tweak.

we know some of that voluntary part-time work is due to women and child care issues, and we just wrote a piece on this. we just came out with the child care crisis -- >> don't get me started today. i'm barely holding it together. i've got one kid in finish school. carry on. >> so i'm singing to the choir. believe me, what we just put out, i have gotten so much flux from it. what we do know is it's delineated. women who are college educated and can work with some flexibility, they're doing better. even full-time women have reduced the hours that they work full-time at times because of child care problems over the course -- >> help me for my reporting, diane. are these -- >> -- in women of color and women are working an hour less today than they were in 2019.

that hurts their earnings and their ability to care and provide for their children. >> you might have to carry on offline. >> i was going to ask her if these are part-time for economic or non-economic reasons. >> depends on your definition of economic and noneconomic. >> for noneconomic reasons, but the voluntary part-time includes people that have child care problems. >> amen. going to leave it there. >> it's not quite voluntary. >> producers, we need five minutes for kelly to rant on air. kelly needs five minutes on her own. >> i'm singing to the choir with kelly. she's a stronger woman than i. >> no, no, no. i'm told we have to go. stocks are shrugging off the job surprise, and my next guest says that could because investors found enough weakness under the hood. let's talk markets with julie beale.

julie, with apologies for the delay, can you explain to us why stocks are at all-time highs after this report? >> well, i think investors are still confident that we're going to be seeing rate cuts this year, and that's really all that need to go forward. my concern, however, is that we are at a relatively high level of interest rates. and so getting excited about 25 basis points, 50 basis points this year is a little bit like clamoring to get into a nightclub and get thing and there's no one there. the pretty girls show up later. you'll have to wait for the rate cuts to make a positive impact. no one owns a house with a 3% mortgage is that excited about a 50 basis point rate cut in six months. so we're probably good 200 basis points from the neutral rate. so a lot can happen between now and then, and that's what i think investors need to think about. >> that's the line of the day. it was a high bar. where are you on the market? do you think that -- what do you think that means?

>> so what i think is kind of interesting is if you look at the market, the ratio of cyclicals to defensive, cyclicals have been well outperforming because margins have generally been quite strong. my concern is that if there's any kind of weakness, if consumer spending falls back, if pricing can't be held, you'll see a rush for the xits. so for us as investors, to focus on the quality businesses that have more market control, that can weather that kind of change and it won't be as impacted if there is a major pe revision going forward. >> in other words, you think right now it's what they were saying last segment, they want an ecb-like outcome, basically a hawkish rate cut. what you are saying is don't assume that means the economy won't have this kind of melting point that powell might be worried about, that it can happen. so you're still kind of worried about that? >> yeah. i still have concerns.

the pockets of the economy that are doing really well, they are quite substantial. we know that what's happening with ai and hyper scalers has been substantial earnings growth. but that's not consistent across the economy. we know we have a consumer that has spent out all of their savings they accrued during the covid pandemic. so we don't have as much cushion as we typically do, right? we can only spend so much as consumers, and the government, we also know, has worn down their cushion. my concern is there's just not that much slack to withstand any kind of economic shock. >> i love the stocks. people can do their own homework, but we appreciate your analysis on this fine day. thank you for joining us. >> thank you. still ahead, your 401(k) doesn't have to be comprised of just stocks and bonds. the ceo of the second largest retirement services in the country explains his vision of a new and improved 401(k). take a look at some of the

active names. gamestop is currently down 41%, below $28 a share after roaring kitty ended his youtube stream. "the exchange" will be right back.

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hello, everyone, i'm tyler mathisen. here is your news update. mark meadows, who was donald trump chief of staff, has pleaded not guilty earlier today to nine felony charges for his role in the effort to overturn trump's arizona election loss. michael roman, trump's director of election day operations, has also pleaded not guilty. both are alleged to have submitted names of fake lectors from arizona to congress in a bid to keep mr. trump in office. a judge has set an october trial date. kia issued a recall of more than 460,000 suvs because of fire risks. the national highway traffic safety administration said the a-knob on the front seat could get stuck, which could cause the car to overheat and catch fire. the recall affects models from 2020 to 2024, and owners are

advised to park the suvs outside. after an abrupt announcement last week, it's the final day for the university of the arts in philadelphia after it ran out of funds and lost its accreditation. the faculty and staff have filed a lawsuit, and the attorney general is looking into the closure oh of that institution. kelly, back to you. >> tyler, thank you so much. tyler mathisen. waystar just started trading on the nasdaq. that's today's ipo. we have the ceo next. a long delay in getting this going. more after the break. stay with us.

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welcome back to "the exchange." shares of waystar started trading on the nasdaq literally just moments ago, opening at $21. it priced at $21.50, market cap is around $3.7 billion. joining us now is matthew hawkins, ceo of waystar. welcome. >> thank you, kelly. great to be here. >> you've done a ton in this space on health care tech. would you describe this as a payment or almost like a bill collection, i don't want to put it that way, but what does waystar do? >> we're a software company

purpose bill for health care to simplify health care payments. we help over a million providers over every setting of care, get paid faster, more efficiently, and more effectively than ever before using modern cloud-based software. >> you have to throw ai into the mix now? we were speaking with a company earlier this week, they use ai more to try to let patients know ahead of time if their insurance plan will cover services instead of the waiting game we have to play. >> we use ai today. we've been long-time users of ai to automate work, to prioritize and organize work for provider organizations, and to create operating efficiencies and insights for these providers. we believe we're at the forefront of the work we're doing there. >> the open for the stock was a nail biter. why go public now? what's behind the timing? do you feel good about how things are going? >> we feel great about this opportunity to debut as a public

company today. we are building a highly visible, recurring revenue focused business that drives profitable growth. we're excited about the opportunity to be a public company, because we think it helps us with awareness, helps us credibility, improve our capital structure and allow for further investment in areas such as generative ai, automake w-- automation work and so investing further to differentiate ourselves and we're excited about the opportunity to be a public company. >> you might be one of the biggest u.s. based ipos this year for health care. are you profitable? >> we are. we measure margins as a focus for our business that allows us to invest. and like i said, in innovation and growth and a great client experience.

with this ipo, we're delevering the company. we think that's very helpful for us to drive to profitability, and, again, characterize our profile as being double digit revenue growth that's highly visible anddurable. and then emphasizing profitability as part of that as we serve, provide organizations across the country. >> do you think it's such a frustrating space, the health care payments, the whole thing really. as you and other companies are deployed throughout the industry, how will that change or improve the experience for patients and for the providers, as well? >> it can be frustrating today, but what's amazing about waystar is we're bringing simplicity to this process with modern cloud-based software. we process over 5 billion insurance transactions each year, representing over $1 trillion of gross payment charges from insurance companies to providers. but with that insight, we're doing exactly what you

highlighted. we're enabling software to connect providers to patients and create a more elegant, transparent consumer friendly experience for patients, as well. we see that as being very important. we're leveraging artificial intelligence to accomplish a lot of this work as we harness the power of the waystar platform to create a way for providers to interact with patients to experience health care. >> we are cheering you on. matthew, congratulations, to you and the whole team. thank you for joining us. >> nice to be with you. >> matthew hawkins, ceo of waystar. speaking of health care, oscar health wrapped up its investor day. that was down at the new york stock exchange, unveiling a three-year plan to expand into new markets. bertha coombs spoke with the ceo. what the you tell us? >> he reaffirmed guidance for 2024 here at the nysc, and

investors were a bit disappointed. the company's ambitious outlook to grow revenues at 20% and achieve full-year earnings of $225 per share in 2027. this is the first year they're going to be profitable. the ceo said they'll do it by expanding their presence on the aca exchanges. they're now in 18 states, and building a new aca market for small and mid-sized employers where they can fund workers on ex-change. it's a model that hasn't worked very well over the last decade, but he says oscar's approach will be more focused. >> a lot of the players inform individual consumer health reimbursement accounts just on the banking account. we'll take the employer money and split it up among the employees. now we're going to juunderwrite the plan. >> the former aetna ceo says

that he sees oscar like a pirate ship ready to take aim at spanish ships loaded with gold. one of the shots was negotiating, saying the opaque pbm model is played out. >> start being legitimately straightforward with the customer base saying we're going to pass on all the things we've been able to create with the size of our organization directly to you. if they make that leap, either through insurance premiums or the pharmacy itself, then i think they can stick around. >> of course, the three major pbms, kelly, have put forward what they call more transparent pricing plans. not sure whether employers will take them up on that, but he's definitely feeling feisty and feeling like this is an area that needs disruption. >> it all does, bertha. thank you very much. we appreciate it.

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welcome back. a recent report from vanguard says that in two-thirds of retirement plans employer contributions exacerbate pay inequality. 44 of dollars accruing to the top 20% of earners, they say a dollar cap would be more equitable and maintain costs for employers. the head of the services provider in america has some jhesueson heoins us next.

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xfinity mobile just got even better! now, you can automatically connect to wifi speeds up to a gig on the go. plus, buy one unlimited line and get one free for a year. i gotta get this deal... i know... faster wifi and savings? ...i don't want to miss that. that's amazing doc. mobile savings are calling. visit xfinitymobile.com to learn more. doc? welcome back to "the exchange." let's talk about the last stage of that career on a jobs friday. retirement, my next guest has a couple of suggestions of his own about how to level the playing field for savers. joining me is ed murphy, ceo of empower. one of the biggest retirement services providers in the u.s. you guys have $1.6 trillion under management. >> we do. 18 million investors. >> wow. welcome. what do you glean from all of that data, all of those clients? >> well, i think the most

important thing for people is to save early, and i think the plans that we have in place today allow for that. there's 110 million savers in the system today. if you think about what's been saved thus far in retirement plans, about $9 trillion in defined contribution plans. and then when you add iras, it gets up to a total of $23 trillion. when you add public pensions, private pensions, $36 trillion is saved. we're off it a good start for sure. but there's more we can do. we need to get more people in the system. >> i'm of an age now where i can see, hey, it kind of worked, starting when i was 22 or whatever and putting that -- whatever i could put in plus the employer match, all the sudden, you know, all these years later, it turns into something. but you have to leverage all of that, right? the personal contribution, you have to be lucky enough to have an employer match. my siblings, they haven't been so lucky. what's -- what are the trends on that piece of the puzzle? >> yeah. i think one of the most important features is the

automatic enrollment, auto -- even automatic re-enrollment. if people are automatically enrolled into the plan, fast forward three years. 95% of them are still in the plan. >> uh-huh. >> if they only voluntary enroll, only about 28% stay in after three years. >> interesting. >> it's sort of the power of inertia. and so what we've been proposing to many of our 80,000 plan sponsors is to adopt these auto features because they work. and that's the point i'm trying to make. others have called it a retirement crisis. my point of view is we have all the tools at our disposal which include the auto features that i talked about, but also we know there are had 0 million americans -- 40 million americans that work for small business today that are not covered by workplace savings. >> i think with b that all the time. to be lucky enough to work for large companies that make this part of your benefits. what if you don't, where does that leave you?

>> between who congress has done and the private sector has done, there's a lot of focus on new plan adoption and trying to address this issue around coverage. and so secure 2.0 which is a piece of legislation that was passed provides a lot of incentives to small businesses, tax incentives, to set up these plans. and then i think what the industry has done has created auto iras, you have 17 states that have adopted auto iras for small businesses. and we've removed a lot of the friction, a lot of the impediments for small businesses who are reluctance to offer these plans because if you think about small businesses, it's typically eight to ten, 15 employees. the president or leader wears multiple hats. >> of course. >> if you can take the cost to set up a plan down, if you can remove the fiduciary concerns that they have about potentially being sued which congress has done that, and remove the friction, just make it easy to administrate these plans, you'll get the adoption. >> the only place where i differ with where it seems you're going

is by adding private equity. and the only reason is because this is an industry at a moment where high rates are kind of calling into question returns, the track record has been great. but did we need more -- do we need more data before we say put 10 or 20 -- do we need to wait another 10 or 20 years that make sure that's going to work out well in the long run and not be a quirk of the low-rate era? >> it's an interesting question and maybe a longer conversation. here's what i can say about alternatives inside defined contribution plan -- i think it makes sense. there's a lot of great companies that are doing a lot of good work on this. and if you think about it, 120 million americans that don't have exposure to one of the greatest performing asset classes in the last 25 years. and then if you think about the nature of corporations today in america, 80% of the companies that have revenue over $100 million are private. >> no, i do agree with that. >> how do we get exposure to that in a way that's safe, where, you know, the fees are

appropriate -- >> uh-huh. investors large and small are wanting more alternatives and 401(k) plans. we would love to see. that thanks for join me. ed murphy of empower. that's it for "the exchange." ♪ ♪ ♪ ♪ the biggest ideas inspire new ones. 30 years ago, state street created an etf that inspired the world to invest differently. it still does. what can you do with spy? ♪ ♪ [thunder rumbles] ♪ ♪

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oh no, a rash. maybe it'll go away. awww, how am i going to find a doctor i'll actually like? is that a qr code? dr. stafford makes you feel at ease. thanks rash! you've got more options than you know. book now. welcome to "power lunch," everybody. alongside kelly evans, i'm tyler mat matheson. we have two big or