i own it and buy it here even though it's pulling back. >> jim, you've got 15 second leave us with a fat. >> i think waste management, believe it or not, people are recycling again! newspapers, waste management, wow. it's making it on the back end. >> all right we'll take a quick look at stocks on our way out here s&p is in positive territory keep our eye on things that are happening on wall street that does it for us. "the exchange" is now. thank you, scott, and welcome to "the exchange," everybody on this wednesday. i'm kelly evans. the market handoff one strategist says the rotation is ahead and one that says good-bye to fed independence and hello to growth. we'll explain. >> plus, the trillion dollar cushion. consumers are sitting on a lot of cash right now. how that will impact the holidays the recovery and the next covid relief package, and bill gates shorts business travel self-pickup perks up target and the bank of google has arrived

it's all ahead this hour and let's start with the market. dom chu has the state of play for us. >> kelly, that cash that you mentioned on the sidelines is still not making its way wholesale into the market at least in terms of trading. as you can see it's a green day but very modestly day. the dow industrials up a whopping seven points. the s&p 500 flat and the nasdaq returning to some outperformance if you want to call it that. take a look at one of the parts of the market that's making a fresh record high. that is to do with the retail and the consumer side of things. this etf, the spdr and retail etf ticker xrt is up 2% buoyed thanks to some strength in retail names but this is an equally weighted index meaning it's not just amazon that dominates it a lot of other smaller retails so we'll put a little yellow star up there for them retail etf a record high and the stock of the day, at least one of them so far, we're taking a

look at what's happening at general motors, up 4.5%, a lot of real optimism come back about the electric vehicle strategy and everything else. by the way, this move since the pandemic moves is over 200% gains here for general motors, and by the way, if you're looking for the record price, that was $46.76 way back in 2018 by the way, this is the best level going all the way back to some of those areas this in 2018 we'll keep an eye on that, kelly. general motors, a big stock and moving it back over to you >> i thought for a second you were going to say the record price was 46 years ago because that's how it felt for gm lately, dom. it's been -- it's been a tough space and they are absolutely crushing it now. it's a nice turnaround. >> remember, ten years, right, ten years since the ipo so we'll keep it there. >> fair enough we can't go back 46 in that case our dom chu kicking things off for us today. pfizer one-upping moderna

saying its vaccine is actually 95% effective. sources are telling our meg drill that they could be meeting to approve the vaccines in early december why the delay? hi, meg? >> reporter: every day we get a new piece of vaccine news. pfizer now has the final efficacy results from its covid-19 trial and the numbers are even better than the interim look they took last week now they say the final case count shows the vaccine is 95% effective at preventing cases of covid-19 and really encouraging news that efficacy was also seen against severe covid-19 and also for all age groups, people ages 65 plus on 94% efficacy being presented from getting symptomatic covid. the company saying the vaccine appeared to be well toll rated, safety concerns and they passed a two-month safety milestone that they needed to to be able to file for fda emergency use authorization which they plan to

seek now within days can, and i am hearing from multiple sources that the fda has asked a panel of outsides advisers to mark off december 8th through 10th for potential meet to go talk about covid-19 vaccines, and there they could talk both about pfizer and moderna's vaccines, and, of course, this is a key step ahead of the fda potentially giving authorizations to these vaccines to clear them for the market so we could be talking about a month from now seeing the first two vaccines coming on to the market and starting to get used. kelly? >> meg, in all seriousness, can't they meet this weekended are they waiting -- we just got final data from pfizer i suppose, but are they waiting from the same from moderna before they gather in what is going to be about three weeks from now you know, time is of the essence. >> it is, and i asked the same question december 8th feels like an eternity from now, but actually when you think about what needs to happen for the fda to hold this meeting and then to

potentially clear the vaccines i mean, it's incredibly fast faster than really we ever see them go. the companies have not yet filed, so they need to prepare their application in addition to all of the safety and efficacy data, they need manufacturing data to submit, so that application is going to go in from both of these companies, pfizer within days can, moderna within weeks the fda needs time to evaluate the data itself, prepare briefing documents for the committee to look at and then the committee will meet and that's why we're talking about december 8th for this to happen. >> fair enough i know in the grand scheme of things it is quick the best news is just simply the efficacy and shares of pfizer and bion-tech up today our meg tirrell with the late for us. keeping our eye on dow as it inches back up towards 30,000 today. get this, the dow is up 12% just since the start of the month it's on pace for its best month since 1987 we're now up more than 60% from the march lows the s&p is on pace for its best

november since 1928, and that has one of my next guests worried. joining me is jamie cox, the managing partner at harris financial group and mark dietrich financial strategist with lpl financial ryan, it was your concern i'm talking begun regarding how strong stocks have been this month. >> well, that's right, kelly you know, first off, thanks for having me back i was on with you guys a month ago. historically, october, election year, you sea weakness and november is strong i don't think anyone expect pedestrian november to be quite this strong and as we speak the russell 2000 is having its best month in history, so, listen, we've been bullish at lpl research and have been with you guys for a while it seems like this move is a little extreme when you're bullish you're not so lonely. look at the put-to-call ratios, flows, maybe the rest of the year you can have a little bit more strikes and santa claus comes to town. it doesn't feel so lopsided now to bebullish and potentially a well-deserved correction makes a lot of sense to us here.

we would be active buyers of it as we continue to think this bull market has a lot of life left it just feels people are too excited with the incredible gains we've seen so far this month. >> jamie, do you concur with that, or do you think that the kind of market we're seeing can keep going for a while and also, i mean, what about the fact that often these kind of bursts of strength can over the longer term lead to more strength >> well, kelly, you know, the virus is the economy, and what we're going to see over the next couple of months could be pivotal. we see the vaccine actually delivered. it's being talked about, and i think that's going to irkey markets. it's going to keep us going for a little bit longer, and i do think that markets are probably going to take some of the high-flying stocks and rotate them into things that haven't been doing so well over the past couple of months you look at banks today. banks have finally gotten a bid over the past couple of weeks. these are very good and the indicators that i look at to say, you know, gosh, you've seen all these terrible things happen with people losing their jobs,

potentially losing their homes, and if we have this particular vaccine come through and people can get back to normal, then you can see the stocks that have been beaten down, catch a bid and just like ryan said there could be a small correction, but i don't think it's going to be a complete selloff i think it will be more of a rotation type of selloff where the value type of stocks catch the money that rotates from some of the higher flyers look at lowe's, for example, have you to be perfect in you're one of the work-from-home stocks or a major beneficiary from the pandemic, and you'll see that being the case for the next couple of quarters where the comps will be difficult for some of the large-cap text and others, and i think that by and large you can see banks, utilities, some of these other, you know, not so sexy sectors do well. >> fair enough i know you're looking at the dividend growth strategies, the likes of chevron, multi-nationals. a lot of people are starting to think about how they could benefit from the change in administration there ryan, i'll give you the final word then because, you know, i

do think you're right to point out just how extreme this market move has been so just give us some additional context on what that could auger for the next weeks and months. >> you know. let's not forgot december historically is a strong month you've got this interesting dichotomy and you mention the strength we've seen, right just after the election, over 65% of all the component of the s&p 500 made a new monthly high. had a does that mean that's incredible strength, kelly. back to 1990, it's only happened eight other times. one month later you tend to get a pullback but one year later s&p has been higher every single time so we talked about it. the strength we saw after that election with whoever won, whatever the sentiment, whatever, you know, the senate says and house says, the market is telling us that is incredible strength, likely a little pullback but it probably means a year from now we're sitting other and we'll still have a bull market and much higher equity prices. >> yeah, and hopefully an economic boom at that point. it's just amazing how it's held up in the face of the pandemic

worsening for now. gentlemen, thank you both. jamie cox, ryan destrich joining me to talk about the market today. we do want to get out to the bond markets are the new single 20-year bond are up for auction. rick santelli, how did it go >> reporter: it did not go well, the seventh auction of 20-year bonds. i gave it a "d" as in dog. the-year-old 1.422 was higher than the high when the auction buttoned up. higher yield, lowest price and the heist yield than any of the previous auction and the size of the biggest at 27 billion but no matter where you look there was weakness the bid to cover 2.27, the second lowest. 61.2 indirects was the second lowest if you look at 15.3 directs. that was the best -- best of breed. it was higher than the six auction average and 23.5 dealers take a bit more than we'd like them to take in the final analysis, the indirect bidding was weak. there's your foreign central banks. the direct bidders that were strong, kind of mutual funds,

insurance companies, hedgies and that gives you a lot of clues because they are more comfortable with t.yields are starting to creep back up, and that's never good for a 20-year auction. kelly, back to you >> yeah, there's ten-year in the green now. up 80 basis points thanks for pointing out indirect that's definitely a bee in my bonnet until we can sort out what's happening with foreign demand here. rick santelli out in chicago today. coming up, consumers have a trillion dollars in excess savings and if and when they spend it could determine the economy's next move. bank of america out with a warning about what they are calling the most disruptive generation ever and investors should take know as it could spell trouble for some key industries we'll have that just ahead stay with us back here in a few minutes on "the exchange. when i was in high school,

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welcome back with the dow up big this month and closing in on 30,000 investors are looking for the next catalyst with the huge rally we've had off the lows my next guest is looking attin could sumer savings saying americans are sitting on a whopping $1.3 trillion in excess savings since the pandemic started and whatever they end up doing with that cash is the key to what lies ahead for stocks and for the whole recovery in

2021 for more let's bring in the chief investment vat gist at wolf research. chris, great to have you first of all, where is the savings coming from, and who has it >> yeah, so the savings is coming from the lack of spending during the pandemic, right, so instead of going out and doing sporting events and going out to restaurants and to force people to stay at home and they save the money. the other element of the 1.3 trillion of excess savings is coming from stimulus checks that are saved. consumers received the stimulus checks and didn't feel out to go out and do the types of things they did in the past and they stuck it in the piggy bank and that leaves us with a huge pile of cash that's sitting in bank accounts right now >> and i've heard retail analysts talk about why they are not more cautious about the holiday season you know, we've spoken about this in the last couple of weeks on the program and there are some folks who are skeptical that this applies to americans writ large in other words, they think it's just kind of mostly sitting in

the checking accounts or bank balance sheets of the wealthiest americans. how disbursed is it and what are your expectations for how it gets spent >> near term we think many of the trends that have persisted from the retail sales reports from yesterday will go on, right, online spending, at-home food, things of that nature. looking beyond that, the upper end of income folks tend to spend the most amount of money so the top 10% of income folks spend 40% of the dollars so i think it's skewed towards the higher end with that said, consumer confidence, higher stock prize, all that tends to benefit all income levels, but if we h to say one area would be traditional for would be the higher end of income folks. >> so what do you make of the drop in consumer confidence lately you know, we're all watching it as and a leading gauge or a coincident one of the stock

market the stock market seems to be shaking it off right now, but would you expect consumer confidence to rebound? does it depend on what happens with the next round of covid relief and what should the next round of covid relief look like if we're trying to help out those most hurt by the pandemic without accumulating more cash on the balance sheets with those who might not need the excess now? >> over the near term, the trends are working on the virus. we all know that and that's likely to lead into more of a stockpile cash and that's likely to push a stimulus bill through congress, and we're not expecting one until later december, if not january, and that stimulus, when we get it, will be geared towards the lower end so check unemployment benefits being extended. at the same time, folks, because virus trends are worsening aren't going to go out to restaurants or entertainment venues or vacations can or stay in hotels and there will be no business travel so upper end money will be saved as well, so our sense is that looking out a few months we'll have $1.5

trillion, $1.6 trillion of excess savings and once consumers feel confident about a vaccine, and we've had extraordinary positive news recently on the vaccine front, once they feel the trend is going in a tailwind i think consumers will come out and spend. i think we'll start to see that at the beginning of the holiday season and it will go to the same patterns online. >> that's exactly my question is when do we see the shift which predcates the whole trade from the whole trade to the reopening trade and maybe the start of the holiday season which puts a little more importance ton than normal chris, thanks for joining us >> thanks so much. chris seneca with wolf research talking about that $1 trillion savings cushion. let's turn now to boeing shares of the company spiking earlier on news that the faa has cleared the troubled 737 max jet to fly again they were grounded in march of

2019 following two devastating crashes but independent regulators say design changes and enhancements in training make the jets fit for the skies. it could put an end to the difficult era for boeing shares have fallen 20% since the jet was ground 20 months ago the stock is up 130% from its 5 it-week lee in march and with the pandemic grounding travel and the overhang of max issues, boeing shares are still down 30% year to date. coming cup, the market handoff is coming. we'll see where the money will flow. those details ahead. don't forget twah o tcus live on the go using the cnbc app. "the exchange" is back in a couple at fidelity, you'll work with an advisor

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(music) anncr: give customers access to precisely what they want, when they need it the most. with adyen, the payments platform that delivers convenience for all. adyen. business. not boundaries. welcome back to "the exchange." are clinging on to small gains, dow up 150 points at the highs, up 12 right now. 29,796 so a couple hundred away from 30k nasdaq up 30 and in terms of the sectors it's the eopening trade. the industrials, financials and energy are your leader health care and utilities are the biggest lag yards right now. here are some of the individual movies la-z-boy is up on a beat on the top and bottom line and strong comps. current order levels are resulting in an unprecedented

backlog. a good session for la-z-boy. shares of good rx is underweight. the another 6% on top of yesterday's 22% decline and jonas says tesla is on the vernal of a profound shift from selling cars tesla is up 20.5% after yesterday's jump on news that it will be added to the s&p 500 the u.s. dollar under pressure as investors flock to other markets. the dollar index is down 10% since late march and legendary investor stan druckenmiller says it could be on a three to

five-year slide but my next guest says the dollar is ready to slide dave, you're the only person who thinks that the dollar is going higher explain why. >> kelly, thanks for having me back yes, i wouldn't go so far as to call it a big real, but i certainly don't see the death of the dollar as many of you are -- of your other guests alluded to and a number in the hedge fund role are playing for us. i think you picked that 10% move at the sort of peak of the nastiness when stocks were down 20% to 25% of the year, and what i think is interesting is what happens at different stages of the cycle, an at the beginning of the cycle when we get all the uncertainty and stocks are down, everybody floods to the dollar the dollar becomes not just a safe haven but a place where people go because real rates are still too high the fed needs to do a lot of work and it's the only way to

de-lever a portfolio if you have a lot of asset and a lot of liabilities and your assets go down you need to get rid of the liabilities somehow. you can either default on them or pay them back and most liabilities are -- that's the initial stage. once the fed kind of gets things going we get that dollar weakness we get the dollar weakness in stocks back up and then there's the third fades which is when the economy is actually organically growing and expected returns on risky investments rise, people flood back to dollar investments and they put money to work in the united states and that's when they start to see real rates rise, not real rates from the fed but real rates from the economy and that becomes dollar supported. i don't think a lot of people get that nuance, but i think it's a very important one. we saw it in the last cycle as well starting in 2012 and '13.

>> there are a ton of calls right now about gold shooting higher, about copper, about the precious metals, about stocks. a lot of of this goes back to concerns that the chinese have stopped buying, treasuries and the concern of the size of deficits we're running but to stick with the investment side, you would not be in the biden camp do you think that kind of steady if not strong dollar is a headwind to those asset classes or a headwind to stocks or no? >> again, it depends on the point of the cycle that we're in this handoff where organic growth takes over and fed policy and support takes a back seat, then i think you can have dollar strength and equity market strength and gold becomes an asset that's not -- if you think you can earn positive real

returns after inflation-adjusted returns on caterpillar stock or moderna or pfizer or any of the stocks you guys are talking about every day, if you think there's a positive real return on capital investment for those companies, you're going to be better off there the point is the fed is there to support. they drive risk-free rates down. they get everybody thinking there's going to be a lot of inflation or a lot of growth, and most of the time we've seen in the last 30 years when they do these things they end up getting the growth, not the inflation. the only time we've really had our major inflation problem in recent history is in the 70s and that was much less about fed policy than a completely different labor market where boomers were coming in and we had huge excess demand. >> yeah. it's a bold out-of-consensus call, and we're always all ears for those. dave, thanks for joining me to explain. it really appreciate it. >> thanks, kelly good to see you.

>> rethink the dollar narrative that you might be hearing. let's get to sue herera for the news update. delta airlines says today it will continue to keep middle seats empty on its planes through the end of march united and american have been selling middle seats since july. recent research though is showing advanced air filtration makes airline travel safer than previously believed, but delta says it wants to provide what it calls added confidence and reassurance. carnival is cancelling all its planned u.s. cruises through january as it works to meet cdc anti-covid requirements. it plans to gradually resume cruises starting with voyages departing from florida and then texas. and as u.s. covid deaths approach 250,000, overworked and emotionally drained nurses in nebraska are sharing photos of themselves holding signs urging and even pleading with people to wear a mask.

>> you are up to date, kell. i'll see you back here in an hour back to you. >> yeah. can't imagine how exhausted everybody is, sue. thanks very much appreciate it. our sue herera coming up sales in the luxury market are looking low brow today bill gates has a warning for the travel industry. pickup is huge for target and why alcohol, meat and auto, all of those industries should be worried. we're back in a couple don't go anywhere. before money, people traded goods. tools, cattle, grain, even shells represented value. then currency came along. they made it out of copper, gold, silver, wampum. soon people decided to put all that value into a piece of paper, then proceeded to wave goodbye to value, printing unlimited amounts of money as they passed the buck to the future.

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welcome back let's catch you up on a few stories that should be on your radar today. it's time for rapid fire here to break down the head lyons robert frank and dom chu welcome, guys. let's talk some target they just delivered a monster third quarter crushing estimates. same-store sales nearly double expectations, and this year alone target has added $6 billion in market share. a big reason is delivery and pickup here's what the ceo had to say on "squawk box." >> our numbers compare very favorably to our peers in fact, in most cases we're growing at two, three or four times the rate of our peers from a physical or a digital

standpoint so we're picking up share across the marketplace. we've seen that all year long and we think that's going to continue, not just in the holidays but as we look to 2021 and beyond >> and when asked about the future, cornell said, well, if he could package certainty, that, dom, would be the target's top-selling item. >> what doesn't want certainty brian cornell and the folks at target are trying to do the best they can at an uncertain time but being as scaleable as they possibly can and that's devoting resources towards omni channel and digital commerce and another thing that target is doing is to open up ate lot more parking spots in their physical location in terms of buy online or pick up in store or in this case pick up curbside. that curbside order pickup up 50% over the past quarter is a huge move here, something a lot of other brick-and-mortar retailers are trying to do

this is target really navigating the covid pandemic really well. >> dom, i wrote about my experience at whole foods in the same way lately. i just discovered the prime now app. i mean, yes, it's another app. i already had whole food and amazon app and this is another app but i can just, you know, drive up right outside the store and they load the stuff in the back trunk for me. i wave and shout thank you and i'm on my way. >> it's fantastic, and this idea as well for many of these brands, it is about trying to leverage their kind of acknowledgement with the public as best as they can. target has done a great job during not just the pandemic but even prior to that of building brand awareness for many customers. they are in a commoditized business but a lot of people are turning to the target brand as opposed to destination as opposed to others getting a lot of market share. kell >> robert, what would you add? >> yeah, look, i think this is where the well-capitalized companies that can invest in technology like target and this

curbside pickup is traffic i've tried it at target and what was interesting is how across the board increases, so you look at electronics up 50%. apparel is up 10%. home goods up 20%, so it was -- it was that they were bringing in more customers in different ways but also the people who are coming in the stores, they were just selling them a little bit of everything and a little more of everything, and i just think, again, this is a example where the biggest most capitalized company, whether you're talking about retail or restaurants, are going to do the best even after covid. >> yeah, and, again, you know they are taking that share from a lot of the mom and pops that weren't deemed essential they can't be open right now one of the most unfair things about the pandemic but to target's credit it's absolutely adapted to what people right now. let's move on and talk about travel and bring in seema mody andrew ross sorkin asked bill gates how the pandemic will

affect society and the bill crop air and philanthropist had dire predictions for the future of business travel. >> my prediction would be that over 50% of business travel and over 30% of days in the office will go away it will be a very high threshold for actually doing that business trip. >> seema, i'm going to go out on a limb here and take the under on this call, at least on the business travel side maybe he's right about, you know, the way that working in the office will change, but, you know, we talked to the hotel ceos everybody understands the first time a company loses a sale because their rival traveled to meet the client and they didn't is the last time they do a zoom instead of getting on that plane. >> exactly, and in fact earnings calls from marriott, hill op and hyatt suggest that group bookings are already on the rise for the end of 2021 on the

expectation that by then a vaccine will be widely distributed and available. so i'm not sure everyone will agree with bill gates' forecast. now, of course, he is referencing the fact that perhaps some of the work-from-home strategies used by corporations, some of that will be permanent for some teams but there are sales executives and consultants that are really just waiting to get back on the road when they can >> robert, what do you think >> yeah, look, i think bill gates doesn't run a company, and i think, you know, for types of meetings that he has to go, to he mentioned that usually he goes to this pharmaceutical meeting five times a year where he just did it by zoom, but an executive of microsoft said we do expect travel to resume to previous levels. they didn't give a time frame, but i think you're right the armies of sales people that will once they can get on a plane to get new business and attract -- and get the current business, i think that's the part that, look, is it 50%, is

it 70%, is it one year, three years? eventually business has to get back on the road. >> yeah, and i absolutely think that some small fraction of it will go away from the kind of conferences or things where, you know, but maybe 5%, 8% robert, i was shocked he said 50%. i mean, listen, by the way, he might not run a company right now, but he runs an enormous philanthropy that does business all over the world, so in that sense i would imagine he's somebody who is in the skies all the time or maybe he's just on the private jet, i don't know. >> yeah. no, you think about his friendship with warren buffett who, of course, sold all his airline stocks early in the year, a call that many people criticized shortly after in the spring when those airline stocks rebounded, but now actually it looks like the right call, and -- and, you know, he does know so much not just about american business but about the travel business, so you're right. i don't know if it's 50% or 60%.

it will will take a long time to come back, but i think it does. >> yeah. i hope so. i don't know i just think so much more is going to go back to normal as soon it is a can, whenever that is, as soon as it can. seema, stick around for the rest of this. again-z, a great headline from bank of america saying the youngest generation are the most disruptive generation ever that's according to a new report that the bank put out today. they are saying that people born between 1996 and 2016 belong to a socially involved generation that largely lives online which we already know. again-z's buying power is set to surpass millenials in ten years time which will boost e-commerce and industries that could take a huge hit, alcohol, meat, cars, travel and fast fashion. for instance, we know only half u.s. teens can drive seema, why do you think travel takes a hit here is it. >> that's an interesting one i think in general this generation is so much more tech savvy. they are using social media at a

faster rate and are using it to make big buying decisions. that's where perhaps comes into play and alcohol and meat are focused towards vegans and beyond meat burgers versus other types of meat and these are habits that are really starting to come into play for this generation. >> i wonder if there's an eco-sustainability issue where they think travel, you know, that's wasteful. >> yeah, and it increases your carbon footprint, right. if you're driving in a car. >> exactly. >> flying in a plane, you're going in a luxury crowds somewhere, you're burning some type of fossil fuel or using some type of fossil fuel to drive the electricity behind it and maybe there's sg angle behind here. we've been hearing so long that the younger generations are at a comparative disadvantage for earning power and wealth, the fact that they are saying only ten years from the catchup in terms of millenials in term of their spending, i just don't see

it happening if the old stories were true about how tough the younger generation has in terms of guesting good jobs and finding ways to actually create and make wealth. >> interesting robert, i also thought, i mean, i think the number was about a third of teens are interested or a third of the generation, i don't know exactly how they got this information, but it's not a big share, and that's the definite change. >> yeah. look, the phrase that caught me, i have two daughters in this generation, and when they said socially involved, financially conservative, it i think that phrase really struck home for me you know, they are very activist in their buying in the companies that they support, but they are quite conservative in the way that they look at luxury spending at wealth they are not as aspirational as previous generations, but i think this goes to dom's point in that they really care about the extent to which they consume could harm the planet and could

even harm society for an inequality point of view very conscious about their buying and expressing their values through what they buy and right now buying less because to your point they don't have much money yet. we'll see when they get to peak earning power whether that changes. >> and that's going to be tough, kelly, for the cruise lines that have been putting a lot of money towards sort of getting that generation on board, all it be they are not sailing right now, but when they do get back to sea in early 2021 or that's the hope, they are hoping it's that generation that will start to consider this as a travel option we'll see. >> absolutely, and just to kind of put a point on it so decline in underage drinking from 12 to 17-year-old boys has gone down 10%. the decline has gone from 25% to just under 20%, so as things stand they say more girls drink underage in the u.s. than boys guys, there's a lot for me to

wrap my head around here and a lot more maybe investors to think about in these industries in the longer run. let's close it out and talk about what some of the changes we're she go in luxury this one is not so much generational it's geographical. we're speeding up the importance of the chinese consumer. luxury spend down 20% and it won't return to pre-covid levels until 2023 according to a new report and they are saying mainland china will account for half of all global luxury sales in the next five years. >> robert, we've seen brands obviously catering to the chinese. i wonder, and i know i raise this a lot, but, you know, in the long run who you sell to is kind of -- kind of dictates your values and i wonder if there's kind of a collision coming at some point in this industry or not if they can just kind of keep finding some way to kind of delicately navigate between china and the u.s. >> you're so right who you sell to not only dictates your value but it dictates your products they have got three things going

on in luxury right now you've got to shift away from baby boomers to geny and jen z, and that means that all the products that these companies sell have to change and that means price points have to come down so you're selling lower price points and you're selling more locally oriented goods and if you look at what lvmh is doing when it comes to solving china, they are producing a lot of products based on the chinese zodiac and based on a lot of chinese pride symbols and colors, and they are winning in that market. it also means that you also have to put a lot of physical stores in china because even with the shift to digital more than two-thirds of luxury sales, even five years from now, will still be from a physical location, so you look at companies like tapestry which are still kind of u.s.-oriented. they are going to lag behind whereas lvmh and richm ho nt,

they will succeed because they are better in china. >> dom character the last word to wrap this up for everybody. >> if the chinese consumer becomes anything like the u.s. consumer, yes, china will be a massive growth market. >> they still have some runway in that regard at least. thank you all today. robert, frank, seema mody and dom chu joining us for this edition of "rapid fire." coming up after this quick break, we're on the trail what have authorities call the money mule, fraudsters who exploit the most popular apps to send and receive nemoy. a cnbc exclusive investigation that you don't want to miss and we'll bring that to you next for over 30 years, lexus has been celebrating driveway moments. here's to one more, the lexus december to remember sales event. lease the 2021 nx 300 for $349 a month for 36 months and we'll make your first month's payment. experience amazing at your lexus dealer.

. welcome back the government's paycheck protection program designed to

help small businesses navigate the pandemic has been ground zero for fraud nearly 100 people around the country have been charged so far with attempting to steal more than $240 million and now cnbc has learned that some of that money is being laundered through popular apps used every kay legally to send and receive funds. here's kayla tausche on the trail of what police call the money mule >> i've never seen in my 28 years of experience the amount of fraud that i've seen currently. ♪ >> reporter: in this music video l.a. rapper nuc lizzel brags about getting rich by grabbing unemployment benefits and said it was made for entertainment purposes and he's facing three felony charges for obtaining $1.2 million, some transactions made on cash app. >> faster payments means faster

fraud. >> reporter: secret service supervisor roy dodson says fraudsters can easily exploit cash app vemmo, papal and bell to move money back and for the and the 2020 cares act a big target the secret service has 100 pending criminal investigations into covid-related fraud and they increasingly involve one of these apps how easy has this type of fraud become to conduct for these criminals? >> extremely easy just because of the online application process that's in place, that ability makes it something that they can do remotely and then direct that to different money mules across the country. >> here's how it works criminals illegally apply for and obtain funds from a program like the paycheck protection program. once the money hits, they bounce it to another account and then another, obscuring the money trail, making it harder to trace. thousands of law enforcement working across the country may be no match for the scope and

speed of the fraud under way. >> we have seen an explosion of fraud. now you get to hide behind a digital device. >> reporter: detectives of the coral springs, florida, police department say criminals are also moving money using the apps targeting people hit hard by th through cash app, or free money, just direct message for details. >> they'll get you hooked. that $1 you send me, i can make it $10 they'll be like, okay, what is there to lose? >> reporter: in these surveillance video, a suspect is cashing out money at a florida atm. police say the money came from fraudulent checks, with funds sent through cash app by an unwitting victim. >> you send money, they could disappear. they'll block you and you cannot talk to them anymore >> it's made it very easy to steal a victim's funds and then transfer it, not only to one location but then to another and another. >> reporter: was it inevitable when those programs got passed that there would be fraud, or was there something that

congress could have and should have done to put guardrails and oversight in the programs to keep this from happening >> it was inevitable, just the amount of money. you're going to have different criminal organizations and individuals, basic scam artists that are going to try to take advantage of that. >> reporter: cash app says it is investing in fraud-fighting resources like new staff and technology paypal which owns venmo says it's aggressive fighting fraud to try to detect unusual payment patterns on the platform and for zell, it would decline to discuss specific anti-fraud techniques but said once consumers report suspicious activity, kelly, they partner with banks and credit card unions to shut it down >> disaster loan programs, they are so open and inviting to

criminals. >> one of the hallmark of these programs is also a loophole, agencies do not want people applying in person or on paper because of the pandemic, so they've made the applications very easy. you can access them online that means there are fewer checks and balances and that pretty much anyone can pull up the website, fill it out and submit it for money. >> kayla, thank you. it's a great investigation really important stuff, especially as we look at potentially another round. kayla in washington. google is making another splashy move speaking of paypal and square, we'll tell you how and pow big of a threat it could be to the competition.

welcome back to "the exchange." we've got negative for all three major averages the dow was up 150 points at the high, down 50 right now. the s&p is down 0.25%. it's good year for the digital payment stocks with square triple since january but

competition is about to grow google getting more serious today about taking a slice of that market. kate rooney joins me with the details. hi, kate. >> google is getting into banking and it's taking a page from venmo and square's book by allowing friends to send money they have a peer-to-peer feature that's taken off paypal and square, as people flock to digital payments during the pandemic the app connects to google's other suite of products. people can link their gmail and google photo accounts to get spending trends and the ability to search through photos for receipts google said they will, quote, never sell that information to third-parties or share the rest of the information for ads they are partnering with citi and stanford credit union to offer checking and savings account and a optional credit card

>> thank you very much kate, by the way, i mean, i don't want to embarrass you, but you did win the cnbc virtual 5k, did you not? >> kelly, you're a former midfielder, you'd be neck and neck thank you. >> no way. not these days kate rooney, out west for us very good. that does it for "the exchange". coming up on "power lunch," we'll speak with marcus lemonis, the ceo of camping world about his new series "street of dreams" and the state of the nser i'll join john fortt after this quick break.

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humana - a more human way to healthcare. welcome back to "power lunch," everyone i'm kelly evans. here's what we have on tap the dow giving up an early rally despite more progress on the vaccine front as we sit near record highs with all the good news priced into this market the california exodus. it continues as venture capitalists and co-founder joe lonsdale moves his firm and family out of the golden state to go to texas he'll be here to explain why and marcus lemonis