>> cvs this really hasn't come back near as much as the rest of the market great cash flow story. it should be $90 in a few months, maybe a few quarters >> joe, lastly with you. less than 10 seconds left. >> let's go with hess, scott >> good stuff. good to see everybody. kelly takes it over now. thanks, scott, and hi, everybody, on this monday. here's what's ahead. it's the rally wall street certainly didn't see coming. they've been caught flatfooted on parts of the rebound, but some parts of the market are now extremely overbought plus, we're used to just saying google it, but could we soon be saying isearch some say apple needs to buy a search engine. and private money flows. what that's telling us about companies going public

>> a statistically improbable rally. in that overbought territory, that's what traders call it when things go too far too fast one way or the other look at the dow now. up 235 points. at the high of the day, we were up 15 points we're going to put the s&p up half a percent in the nasdaq it gets a gold star today because it makes a new record high in today's trading. most of the dow's gains today. shares of aerospace giant boeing you can see up by $23, some new analyst coverage driving a lot of that. from the highs we saw last year down here, it lost 77% of its value. it has now rebounded from here about just 160% from here. remember, it was an $89 stock at the lows and three stocks to keep an eye on t thematic marathon oil, and beyond meat signing a new deal

for a distribution agreement with a chinese-based food distributor. that's powering new gains, so a lot to watch over the year last month pay surprising jobs gains has economists rethinking their job outlooks for the second half of the year and can the economy rebound. this as we just learned the u.s. officially entered a recession in february. steve lee joins me now with more hi, steve. >> kelly, two contradictory news developments there it is official, the national bureau for economic research, they're the ones who do this, they have declared we are now in a recession. the recession started in february 2020 when the last expansion hit its peak the nbr said the expansion lasted 128 months was the longest in history it began in june 2009. here's the statement, and it's an unusual statement from the nber they say the committee recognizes that the pandemic and the public health response have resulted in a downturn with

different characteristics and dynamics than prior recessions nonetheless, it concluded that the unprecedented magnitude of decline in employment and production and its broad reach across the economy warrants the designation of this episode as a recession, even if it turns out to be briefer than earlier contracted just a quick word. this is a very fast determination by the nber. the last two recessions, it took 11 months from the beginning, and the one before that, eight months before it declared a recession. it's only four months now. it happens, as kelly just told us, as economists are cheered by the recent jobs report and they're thinking there is upside for the economy, goldman sachs writing, quote, we expect growth data in the u.s. and europe to turn more clearly positive in the coming weeks and j.p. morgan an writes, the latest employment numbers reinforce the upside risks in the second quarter so clearly, kelly, the nber looks in the rearview mirror mirror, finds for a whole bunch of reasons academic policy, and

we'll see how quickly or how fast or short or brief they believe this recession can be or will be because economists already are starting to upgrade. ubs, in fact, upgraded its second quarter growth forecast by five percentage points. still, a deep downturn expected in the second quarter. >> steve, i do think people should note that the recession starting in february is a little bit earlier than most of the shutdowns hit. we could go into all the signs there was already some weakness. people said it was maybe because china was already weak so feb now is the starting point. can you elaborate quickly on what people are saying for the rest of the year given what we learned on friday? where are we in terms of what gdp looks like >> we have a full screen in the back that is a public message to the control room, thank you very much, guys, that looks at the fed survey and growth forecast we do this every six weeks

what you see is they're now at a 29% decline for the second quarter, and that's a little bit worse than it was back when we did the survey in april. then you see a rebound forecast for the third quarter and the fourth quarter we don't get it all back, kelly. so net on the year, we're looking for a 5% gdp decline when you take in the huge decline and then you don't see the full year forecast on the screen there but net, if you add in the two quarters of decline and the two quarters of increase that we've had this year, the expectation is a 5% decline for the full year >> all right still pretty deep by historical standards, that's for sure steve, thanks so much. appreciate it. steve liesman with all the latest there on the econ front. the s&p is leaving strategists in the dust by extreme proportions. here's margie patel, asset

management and jason, this gap in the average estimate and where the market is now, i think, sis the widest in maybe 2 years. my concern is that as the street kind of catches up to where we are, that's an indication that the highs are in >> i think that's exactly right. if you look at the path way of forecasts, it's always falling behind where the market is as we talk to clients, what we're speaking to them about is trying to focus their attention a little bit more on some leading indicators or some inputs to some of these market levels for us one of those big inputs is interest rates. interest rates have gone up quite a lot, and what that's meant is some of this rally has looked a little more like 2018 than the early part of the rally in 2020 which has been cyclicals and small caps and survivors in the market so focusing on interest rates actually gives you some idea of what's going on out there. >> okay, margie, did you have

any thoughts on rates? we did see a move up 10% last week >> i think rates anything under 1% is really immaterial. i think these rates are very low and unlikely to go higher for the future in years. that means the independent is still over on the economic side for what the returns will be >> what would you recommend, margie, broad focus on the s&p are you concerned after this rebound we could have a sideways phase for some time? >> well, i think the fundamental growth in companies are still going to maintain the lead, so i think sectors like technology that are proven leaders are still going to hold that lead. health care is another sector we think secularly has a lot going for it, and some industrials will power the decline we're in right now. i think those stocks will have very popular returns and won't be too badly hurt from the economic slowdown from the

virus. >> interesting i want to ask you both about prospects for relief money, stimulus money that could be in the works by congress. tom block is saying today that protests, the fact the unemployment number has been a little bit better, clouds the suspects for the next bill jason, still, if that's held up by politics or because the economy has improved, what do you think that means for the markets, and does it concern you? >> i mean, it certainly concerns me in the context of fiscal response, but what we've really seen, in my view and thornburg's view, is the monetary response be driving the fed came in in early april to try to help out with some liquidity problems, and they ended up creating a water park so for me, as i look at their response function, it's not nearly as politically driven and therefore a much bigger part of what the market reaction is going forward. with regard to rates in those levels, i agree with margie in the context of the fed not allowing those rates to go much higher, and we'll get more data

on that or thoughts on that on thursday >> that's the first time i've heard someone say there is so much liquidity that it's a water park, but it's margie, a lot of people are pinned their hopes on this state and local bill we've seen states hemorrhaging jobs already and could get worse. i don't know where we are in the liability bill what's your expectation from the next big relief bill from congress, and what happens if it now gets held up >> i think the momentum on both sides is very strong for some kind of relief bill, some kind of billions of dollars who can say where it will be directed, but more fundamentally, when the fed came in earlier this year and actually backstopped the liquidity part of the market, the short-term part of the market, that was absolutely key for keeping the economy from collapsing all the trillions of dollars they put in really swamps what

the spending bill will be. i don't think that bill will be as important as what the feds have already done to allow companies to survive so they can survive and we have growth in a quarter or two >> final question, margie. is it your expectation the fed will back off here at this point are we just waiting to see how much everything they've already done does for the rebound are you pricing a lot on kind of the main street money that's basically just starting to flow through here, or do you think they start to back off >> well, the fed has already indicated that they're going to reduce very modestly some of their purchase schedules, and i think they're going to be watching very, very carefully, to be very proactive they don't want to repeat the mistakes they made in '08 to hold liquidity, and i think they're going to do what they need to do to provide the cash to keep companies from having a

liquidity crisis and making the downturn worse >> margie patel and jason brady, thank you very much. appreciate having you both here today. coming up, last week was the busiest week of the year for the private market, and the public market has been busy as well plus, to the extreme as stocks start to climb, a number of warning areas that they've overstretched territory. we're back in two. derek, seems like your team is operating just fine remotely.

yeah, everything is running smoothly with the now platform. (bling) see, incident resolved. how did you... gotta enjoy the small wins. you keep being you, derek. keep being you.

i geh. common bird.e. ooh look! over here! something much better. there it is. peacock, included with xfinity x1. remarkable. fascinating. -very. it streams tons of your favorite shows and movies, plus the latest in sports news and... huh - run! the newest streaming app has landed on xfinity x1. now that's... simple. easy. awesome. xfinity x1 just got even better with peacock premium included at no additional cost. no strings attached. just say "peacock" into your voice remote to start watching today.

welcome back after the busiest week of the year so far for ipos, another eight companies are said to go public this week, and just in the past hour, the company lemonade announced its ipo plans, hoping to raise $100 million. i'm joined by ceo of equity's end. it's good to see you welcome back >> thanks for having me back >> what do you think is the main takeaway from the flurry of activity in may, especially, as investors started to do a lot of trading in these private shares? >> you know, i think there's a window that both the investors as well as thei issuers are

seeing i think we had obviously a very, very tight market at the end of march, early april where there was just a lot of questions that were unanswered. i think what we're seeing now with the positive news coming out of big cities like new york is, okay, well, it seems like in these localities, we do have a little bit better trend on the numbers, and i think what that means for issuers is i have a window in june and the back part of november, where if i'm going public now, if i have a relationship with the current administration, we have to get moving we have seen a movement in the market that i don't think will last the next couple months. >> interesting why don't you think it will last >> i think if you look at election years, you have volatility leading up to the election, and volatility is a killer for ipos. in 2020, which was going to see

companies like air bnb, which was hit pretty hard by the covid pandemic but what we're seeing on the flip side of that is there are a lot of benefactors, and i think those companies will try to take advantage of the opportunity >> do you think the companies trying to go strong right now are the ones that are really weak and need the funding? >> i think there are a lot of companies that either go public right now or wait it out until 2021, 2022 i think the strong companies, the ones that can weather the storm in the private market, if they had all their ducks in a row and they were ready to go public, it's a matter of kind of pushing it back three months or pushing it forward three months. i think we'll see that group of companies go public. outside of that, if you're a weak company, unless you've got profitability going for you, unless the new normal post-pandemic world is going to

be in your favor, i just don't see how a money-losing company is going to be received by the public markets no, i think it's a strong ones and the ones that are really making a bet that covid is going to change the way work operates from now onward. >> yeah. and as you say, the bar to go public has just increased as a result of this, and there are some industries, workplace productivity, there are a ton of b biotech companies going public this week. >> that's right. i think what we're seeing is the bar to go public is going up again. investors want to see either a ton of growth or, ideally, growth and profitability, and frankly, i think there are companies that can deliver that. i think the question is, you know, we just saw lemonade being reported who is going to go public soon, it's a tech insurance company, but they don't make money either the margins remain in the right direction, or you've got

investors hungry for growth, how will they receive a company that has growth but not profitability. i can see a company that trades in ipo stock, we've seen a tremendous amount of demand on both the sell and buy side in the last two months, about 40% higher that's not a single day event, that's not a single week event, we're talking about a monthly average. that has just continued to go up, so personally i think there is a loft investors waiting fire lot of good opportunities to come around, and we'll have to see if the ipo markets continue to deliver in what i think will be a two to three-month period >> final question. i'm curious how the pricing looks in the private market. a airbnb, for instance >> they have what's called a private sentiment index, and

what you see there is effectively a market index, and it is at an all-time low especially the last two years, and if you go back, it's a five-year low, and what that means is trades are still getting done but the buyers are seeing a lot of the power. they're driving the price down, which makes sense if you take a look at what's going on in the world. a little bit different from what's been going on in the public market because there is no fed in the private market >> interesting atish, thanks so much. it's always good to check in with you atish davda on what looks like a busy week in the public market at least 200,000 people expected to go back to work. a look at what it means for the economy and what comes next. another apple analyst on the streets says maybe it's time for the company to buy its own search engine. which one? he'll join us. you can watch us live d anon the go on the cnbc app

we're back in a couple echnology for smarter trading decisions. fidelity.

welcome back to "the exchange." let's check on the markets for you. the dow is up 363 points this hour, about 50 points high off the recession. the s&p is up half a percent, the nasdaq lagging again by about .4 of 1% it's a strange mix if you look at the sectors behind me in terms of the leaderboard energy is in the lead with a 3% gain we had opec saying they're going to extend the 10-barrel-a-day cut. real estate up half a percent. sensitive place there. meanwhile to the down side, only two sectors are lower today and their technology down a third of a percent and materials down two-thirds of 1% kind of a mixed bag, but broadly speaking, still a strong market. we're looking at shares of michael's up 43% today, just upgraded from overweight to

neutral on j.p. morgan an about optimism of the economic recovery four industries, meanwhile, hitting a 52-week high on an earnings and revenue beat. they saw a fast-paced sales including first time buyers. thor is up 14% dunkin' donuts announced they will hire 20,000 new workers and the stock is also getting an upgrade due to keybank let's get to sue rivera. hi, sue. >> hello, everyone, here's what's happening this hour mourners in houston are gathering around george floyd's casket as a six-hour public viewing is underway ahead of a private memorial tomorrow. derek chauvin charged in floyd's death is said to appear in court this afternoon, and we have learned that george floyd's brother is set to testify to a house panel on wednesday a campaign spokesperson says

former vice president joe biden does not believe the police should be defunded, but biden supports the urgent need for reform through funding of community policing and workers began removing 200 tons of charred scaffolding from notre dame in paris it melted the top of that cathedral through a fire last year that's the news update this hour, kelly. i'll send it back to you >> thank you very much, sue herrera. apple begins to reopen its doors. what will apple do after taking such a hit the sectors and the opportunities are ahd.ea stay with us original crown molding, walk in closets... we do have a ratt problem. opportunities are ahead. stay with us the sectors and the opportunities are ahead. stay with us just give it time. ♪

at least geico makes bundling our home and car insurance easy. it does help us save. ♪ round and round! ♪ with love we'll find a way, just give it time. ♪ ♪ round and round! ♪ what comes around, goes around. ♪ for bundling made easy, go to geico.com can i find an investment firm with a truly long-term view that's been through multiple market cycles for over 85 years? with capital group, i can. talk to your financial professional or consultant for investment risks and information.

talk to your financial professional or consultant this virus is testing all of us. and it's testing the people on the front lines of this fight most of all. so abbott is getting new tests into their hands, delivering the critical results they need. and until this fight is over, we...will...never...quit. because they never quit.

. welcome back to "the exchange." after being shut down for three months, new york city is entering phase 1 of its reopening plan today contessa brewer is live in brooklyn for us. contessa >> reporter: hi there, kelly nearly a million people laid off in this city due to the coronavirus crisis, and the mayor estimates as many as 40,000 could return to work today. retail is allowed to have in-store pickup or curbside delivery, but as you can see in brooklyn, there are windows boarded up to protect against damage during civil unrest manufacturing can welcome employees back today, and nearly 33,000 construction companies are allowed back in action

today. it's a big boost for construction supply companies that laid off workers and saw business dwindle during the closures >> i'm just happy to see the people coming back, because, you know, you miss one or two paychecks, try to get unemployment, a home, it's tough. but it's getting back to see everybody in brooklyn getting back in the work force is a good thing. >> reporter: masks, hand sanitizer now part of construction supplies that get delivered. and the mayor and the governor say they are monitoring to see whether they can keep the viral case load under control under this limited phase 1 before they launch into phase 2. kelly, it's loud with the sound of construction around here. >> yeah. whoever thought that would be so reassuring quick question, contessa companies under phase 1 are still -- there's not any major breakthroughs for the office, right? they're still saying, basically, i think 25% capacity

>> reporter: yeah, they're asking companies to keep their workers at home if they can and work remotely. they're also saying if you need to bring people back, we want you to do it in a staggered way so they're not all hitting rush hour at the same time. so, for instance, the mta was expecting some 85% of pre-pandemic levels this morning for the rush hour on the subway. they had seen it plummet to 90% during the height of the coronavirus. wow. contessa, i want to ask you about las vegas where there were crowds this weekend. >> reporter: we saw some videos posted on social media that really raised some questions about social distancing, but remember, the guests are not required to wear masks in these las vegas casinos. they're being offered. we know the people who stated the wynn were offered constantly throughout the resorts masks, and when they turned them down, they said, okay, it's your

choice i saw a video that had millions and millions of views saying they're exceeding the standards laid out by game regulators in terms of sanitation, masks for employees and social distancing. >> i was shocked when you told me last week they didn't require masks and i'm still sort of confused by it we'll have more, though, contessa we'll follow it in the next couple weeks as it plays out there. contessa brewer is in brooklyn with all these new efforts and there is 10,000 square feet of rentable space for the state of the current real estate, i'm joined by the empire state realty trust. thank you for being here >> thank you for having me >> i guess your foremost concern has to be what does going to the

office look like in the covid era as people gradually do start coming back, and what does that look like? >> i'm in my office right now. i've been in the office regularly. i think that it's important to note we'll have safety protocols. we've already reentered employees of tenants into our buildings in connecticut our motto here is be smart, be safe we have expectations of tenants and vendors. we have ppe for our front line personnel. we have ppe for our cleaning people and we have requirements of our tenants and their employees as well we certainly have more cleaning. we've got decals to show where people are supposed to stand for elevators. the good news is we've always been modernizing our portfolio, so even in the empire state building, even down in the observatory we have merf 13 filters, we have atlas air which is proven to remove 99.2% of covid virus from the air, we

have freshened ventilation we are number one in the industry as far as sustainability we have the lowest carbon footprint per square foot than any new york building, but we have the real estate playing out for us in terms of the office. >> you're doing things like temperature checks and food pickup will be different, all those things i wanted to ask about some of your tenants, though you pointed out that one of your tenants stopped paying rent in april. have they restarted that process yet? >> we received their rent for april and may, and i believe june, today. >> interesting what does that tell you? >> it tells us -- look, we started out with receivables at 69% for the month of march we had a lot of different people come at us requesting abatements, deferrals, not pay our number one focus is on the local businesses and the local retailers who are really hurt by

the shutdown we have used them from our perspective to focus on the fact that if they need help, we will give them help and the fact is, we defer their rent, they go to a percentage rent when they reopen and we'll go to full rent when things are restored to normal but tenants that can pay their rent, we expect them to pay their rent we are beyond what we expected to receive for the month of april, may, and the june collection is already ahead of where we were in may so we think people are getting back in line new york city, subways -- i read the subways are clean. we have people commuting by train. the trains are clean very happily, order has been restored i don't think we've gotten beyond the issues that have raised the concerns, and that means marches are not process. the world needs to change and it doesn't just change with point

and click. we need tangible, logical eng e engagement with government to inform by the reality to improve a lot of people who have suffered enough and treated improperly in this country >> you're also bringing up an issue of how desirable manhattan in particular will remain as an office destination that does seem like an open question there is two hits here one is what kevin o'leary keeps saying on our network, which if he can reduce his office usage permanently across his portfolio, he can save a lot of cash, so there might be companies smaller in terms of their office needs, and the other issue is kind of specific to manhattan if people feel they want to be in a suburban office setting again, does that put down pressure on demand >> there is always a yin and a yang between new york city and the suburbs. number one, work fromes good for sustaining. you cannot build

look what happened with school from home. it doesn't work. if you want to have teams, if you want to have engagement, if you want to create new business, you need to be in the office but i think that will come out more clearly as time goes forward. i think people want to be back in the office. we know frankly people want to be back in the office. they don't want to die from covid. as far as the looting that occurred, this was a small group of extremely well-organized criminals. the protestors have been, with rare exception, peaceful, logical, not quiet, very loud, and they're protesting about things which matter and which are important and they have a right to be heard. most of the boards that you see in new york city today, in manhattan, do not cover stores which have been looted the looters were very specific they cover stores that don't want to be looted. now that the curfew is off, now that we can see order has been restored, i think people will come back to new york.

don't write off new york new york comes back from everything >> we'll leave it there. anthony malkin, thank you for your time today and insight into what's going on. >> thank you very much >> he is the chairman and ceo of empire state realty and trust. millions of jobs have been lost since america went into lockdown and exercised social distancing guidelines. how it could affect loss olif fe and loss of jobs if the pandemic returns. stay with us (vo) at audi, we design cars that exhilarate with versatility, whether on the track, or the everyday drive. today, that philosophy extends to how we connect with you. we call it, audi at your door. whether a remote test drive,

shopping, trade-in, or even service pickup, audi at your door can do this and more at participating dealers. the premium audi dealership experience, on your terms. audi at your door. what do i need from a partner right now? an insightful outlook that comes from experience navigating multiple bear markets. can i find a partner to help guide me through this uncertainty? with capital group, i can. talk to your financial professional or consultant for investment risks and information. i opened a sofi money account and it was the first time that i realized i could be earning interest back on my money. i just discovered sofi, and i'm an investor with a diversified portfolio. who am i?! i refinanced my student loans with sofi because of their low interest rates. thanks sofi for helping us get our money right. ♪

welcome back to the exchange cities across the country, including new york, are reopening after being shut down for months due to the pandemic my next guest said the economic toll of these shutdowns have been too high and that targeted shutdowns could extend future pain joining me now is greg ip, chief commentator of the "wall street journal. greg, it's good to have you back what are we learning about the

shutdown toll in the first place? it makes a lot of sense, people lost their jobs, but explain what you mean. >> it's obvious people lost their jobs, but it hasn't been obvious why they lost their jobs we know in pandemics, a lot of people won't go out, they'll stay home just because they're afraid of getting infected so there's been a debate on, well, a lot of these states and countries that haven't had lockdowns, their economy will suffer just as much because of that social distancing if you look at the research coming out now, it's just not true in my column i specifically focused on a study of a group of researchers at indiana university they looked for things like google data on unemployment, and they found when states had stay-at-home orders and they closed non-essential businesses, that had a clear and dramatic impact on unemployment they think about 60% of the job losses we've experienced are because of state-mandated closures >> so, in other words, what we're learning is that the state-mandated closures had a huge impact on the number of job

losses but do we know if they necessarily were better in containing covid than voluntary measures >> we don't know that yet, and i think that's going to take more research by the way, it might be the case that accepting a very large economic cost might have been worthwhile depending on the value of the lives that are being saved. but i think the more relevant takeaway from this research, kelly, is lockdowns are a very blunt instrument and they don't take into account the many different risk profiles that we now know from research are true. to take one example, since a very large portion of deaths take place in nursing homes and other sort of assisted care facilities, focusing your resources on those organizations and the people who contact with them would have produced a lot more benefit in terms of health without all the concomitant loss of economic activity >> explain, for example, in the future, when we start to talk about a second wave or even these kinds of breakouts that are start to go happen in different parts of the country,

what would a more targeted reaction look like that could do more to preserve employment? >> first of all, we have limited testing and tracing capabilities, but knowing when those hot spots emerge would be of value also we've learned that outdoor activity shows much less risk of transmission than indoor activity, so you don't, for example, have to close all the parks, the walking trails and hiking trails. another thing we've learned is that children really do seem to be at much less risk of getting the disease and possibly of spreading the disease. it probably wasn't necessary to close all the schools as much as they have. but we do know that's had a big negative impact on the livelihoods of people that serve the schools and the children themselves >> you should see the information i got about all the new policies and procedures, and i think to myself, you know, is it worth it? what's kind of the bare minimum

that would accomplish 90% of this without all the rest of it? am i insane for sending him there in the first place i know these are the questions that everyone is grappling with and it's people's individual decisions that are going to account for how many of these industries go back to full employment >> that's exactly right. now, look, there's a completely normal and desirable human instinct that at the early stages of a disaster when there is so much uncertainty, you overreact in terms of being safe after 9/11, the bush administration grounded every single airplane in the skies because they didn't know whether there was still terrorists on airplanes that were out there flying we now know that there weren't, but nobody second-guesses that decision it was the fog of war. it may have been necessary in the early days when we knew so little about the transmissibilty and lethality of covid-19. now we can be much more targeted in the steps that we take. >> quick question, let's say

you're governor of new york, greg, and the case count starts to rise again. what would your measures look like knowing what we know now? >> i think you throw in a lot of testing and tracing capability doing something like what south korea has done, like voluntary isolation of people that are sick and you don't close every business nearby, you focus on the ones where there are risks perhaps you can contain it to the zip codes where they know there is high mixing of individuals, but you don't necessarily extend it to the entire state >> i should mention you guys also have a really interesting front page story today that points out transmission within homes where you have multiple generations living or homes that are crowded with more than one person in a room, implying in the article maybe it's a good idea to take those people out of those homes and place them somewhere else could that be the kind of policy -- i don't mean forcibly

take them. i think you would have to say, yes, i want to go somewhere for care so i don't infect the people living here >> i think so. that will have to take into account that a lot of people are reluctant to be separated from their families and collusion should be a very last resort in these situations just going back in history a little bit, we now know that when elderly people would be taken to the hospital because they were sick, they would be sent back to the nursing home where we know it was a very bad thing to do, knowing what we know now at a minimum, we can avoid those kinds of mistakes. >> absolutely. we can hope. greg, thank you so much. greg ip from "wall street journal" with the very latest there. forget google or bing, how about isearch? one company said apple should consider buying its own search engine and that's bad news for apple. they'll explain ahead. the dow is up again. walgreen's, dow inc.

american express and travelers all up again we'll take a look. for investment risks and information. find a stock basedtech. on your interests or what's trending. get real-time insights in your customized view of the market. it's smarter trading technology for smarter trading decisions. fidelity.

michael vasquez! come over here. i've heard such good things about you, your company. well, i wouldn't have done any of it without you.

without this place. this is for you. michael, you didn't have to... and, we're going to need some help with the rest. you've worked so hard to achieve so much. perhaps it's time to partner with someone who knows you and your business well enough to understand what your wealth is really for. welcome back to "the exchange." google pays apple nearly $8 billion a year to be the default search engine on its products. but what if google and its competitor microsoft bing decided it wasn't worth bidding for those devices to avoid the fallout, my next guest says google should just make its own search engine we' tony, let's start with what would prompt a move like this and why wouldn't google want to

pay apple and microsoft for a search engine anymore? >> thanks for having me. google pays 8 billion a year and it ultimately generates, we think, $25 billion a year for search on ios, on apple's operating system the reason it pays that much, we believe, is if it doesn't, someone else like microsoft might. the worry, of course, if you're apple is, let's say one day micro soflt says, look, search isn't that important to us we have other priorities, in which case there is no counterbid, and google could turn around and say, hey, we're only going to pay you half a billion, apple, and that would be very risky to apple hence, could you have a stocking horse, is there something apple could do that would provide an inexpensive insurance policy to keep google and/or microsoft at the table bidding for this asset to be the default search engine

on ios >> who is this ultimately meant to be in the interest of toni, is google making sure they're the default on my iphone because they want to reach me, and will they ever decide it's less important to them it seems like a really important market for them -- i don't know what apple's share of the u.s. market is, but to make sure they're in front of all of those customers. >> yeah, so we believe that mobile search is about $50 billion a year for google and about half of that comes through apple devices. so that's the price that google is paying to have access to that and -- but it's not explicit, you know, bid per se we believe it's really predicated on someone else willing to pay more, because right now apple doesn't really have a way of monetizing through search it doesn't have a search engine.

i suppose it could do partnerships with search engines, but there are really only two major search engines, which are microsoft and google even dot on the technology on the web crawling technology the notion ultimately is that this is a really tricky three legged stool google said, we could get away with paying less what would apple do to provide some sort of insurance policy. that's where we're coming from >> i also wonder what happens if google said, with don't need to be on -- the user experience for me on apple, the risk is i'm

forced to use their software products we have seen this with apple maps i've switched off of mapple's mail app to the iphone app o on search if apple with something bing or duck, duck go, would that push me to buy a google phone at some point. i don't want to lose the i message blew thing they've got us all locked in with that. >> potentially, they do. at least the work we have done, we think bing -- microsocft had invested a lot to bing if you run quieries on bing, the

come back identical. it's difficult to determine if it's been run with bing or with google look, there's the debate google could say we have the best search engine around. why should we pay 8 billion, whatever is on the apple phone, people will change it. the risk is there's a great inertia and if bing is pretty good and looks similar or duck duck go is good and looks similar, to google, that's a risk they run maybe people will stick with whatever default is put on the phone right now, they're saying, it's worth our paying $8 billion a year that's 8 billion in loss profit to google to ensure we have access to that search stream >> absolutely. it's fascinating one final question that comes back apple is trading around $331 this afternoon your price target is 285 do you feel comfortable with apple at these levels?

why don't you think that's justified necessarily? >> kelly, the market has run up 35% off its lows we don't change our price target every couple of weeks and the market has gone up 10% when we last set our price target it was above apple's. as the market goes up, the currency for all stocks go up. i would just say that the price target is somewhat dated set at a market level that's lower. we think is risk we wardthroug the product launch in september, october of the new iphone is positive >> all right if i see apple duck duck go headline, at least i know what's going on thank you smouch >> thanks for having me. coming up, stocks are climbing higher once again with the nasdaq at a fresh all time high with the recent rally and number of sectors are very stretched. could that be od fgoor long term

investors? we'll have those details, next navigating multiple bear markets. can i find a partner to help guide me through this uncertainty? with capital group, i can. talk to your financial professional or consultant for investment risks and information. talk to your financial professional or consultant hey! lily from at&t here. i'm back and while most stores are open, i'm working from home and here to help. here's a tip: get half-off the amazing iphone 11 on at&t, america's fastest network for iphones. second tip: you can put googly eyes on your stuff to keep yourself company. uh for example, that's heraldo. he's my best friend. oh, sorry nancy, i forgot you were there. get the amazing iphone 11 for half-off on at&t, america's fastest network for iphones.

ever something's gone mogotten into the office.m, i hear you. feels like there's no barriers between departments now. servicenow. the smarter way to workflow.

welcome back stocks are rallying with the s&p higher with the sixth time in 7 trading days it's flat on the year and the nasdaq is up 10% all but two of the major index etfs are at extreme over bought levels joining me to explain more about that is paul hickey. paul, welcome. tell me about sort of who all is over bought and by how much. >> i think the better question is who is not over bought. over the last week were we looking at the s&p 500 stocks. since march 23rd, only one stock

is down and only eight stocks are up less than 10% just about everything is over bought at this point we had a situation, 86% of stocks in the s&p 500 were trading one standard deviation above their 50-day moving average which is the level we consider overbought, so to speak. you see a high level there we have only seen 80% of stocks at over bought levels three other times. february '91, june 2003 and october 2011 a month later you saw the s&p down twice but up once three, six and 12 months later we were up every time with better than average returns.

as we learn from the markets, it seems strength begets strength maybe have a small correction but continue to move higher. i guess that tells us all we need to know about how strong momentum can be for the market and the back half of the year. >> i think so. what you tend to see is you have can have corrections in price and time sometimes it takes time for the market to work off the extreme moves and rest for another move higher obviously, looking forward here, just a lot of them depend on this what happens with the virus going forward in the summer and into the fall. right now the market is pricing in a pretty, an eventual recovery to normal anything that takes us off could

be problematic the history suggest, like you said, exactly, strength begets strength >> we only have a bit of time. the only thing ma makes me nervous is how positive everybody seems to be on the market i want to mention a couple of stocks that you mentioned that could be attractive here sonos and copa airlines. you can pick one but if they all share a characteristic, are these places they can look if they feel like they missed the rebound? >> a lot of consumers have gotten stimulus and jobs market is better than we thought. you're seeing some consumers are flush with cash here and they can't go anywhere. what will you do you'll improve your entertainment at home. that's the stock it's almost a play at home there. finally, they were copa,

airline. the latin american airline is still down over 50%. it has very strong balance sheets it has the best potential to make it forward and pick up share from competitors run into problems >> we got it all in. thank you, sir >> all right >> that does it for the exchange i'll see you over on power lunch with tyler mathison. welcome. we'll see you in just a moment not here in the kitchen with me but on power lunch good afternoon i'm tyler mathison welcome. the reopening rally continues as new york begins phase one of its formal reopening the dow is up 300 points the nasdaq hits a record high on track to close at a record for the first time since the weather was cold back in february. take a look at boeing. that one is driving the dow higher