serving the community, serving the neighborhood... this is the dream that mom wanted. union pacific, general motors, freeport, we'll tweet it out as well. that does it for us. the exchange is now. thank you, scott happy wednesday. happy st. patrick's day. happy fed day. it is no doubt a big day for everybody because as the market

starts to throw a temper tantrum, fed chair jay powell may have to walk a very narrow t tight rope to get it right no rate hike expected today. this is still a crucial meeting. the bond market is starting to scream inflation but the fed seems unconcerned. the bond market is at a big move up 1% off the low if yeields lat year yields move up and high growth fast moving stocks like tech tend to move down. there you go just under an hour's time until that call. let's see how your money looks right now. dom is joining us now. >> so, we have a very stable market so far. what you would expect to see, you're not expecting to see.

performance in the dow up a modest .2. relative to the rest of the market the s&p is off one-half of 1%. big tech dominates that. the nasdaq composite for sure. speaking of interest rates we showed you the ten-year rates climbing to highs. what we don't show you is the move in 30 year. the u.s. treasury long bond, if you will 2.428% just off session highs. at that point we're around 2.447% in the overall rate for the ten-year or 30 yearlong bond this is 2019 back to what we saw this level for the 30-yearlong bond even longer term interest rates moving up in that regard and like you pointed out, tech and financials, two very important parts of the market. apple, micro soft, megacap

technology off 2.5% and 1.5% respect i havely gap apart. these ones tend to do worse when rates rise because valuations become a concern keep an eye on megacap technology and megacap banks as we head towards the big rate decision i'll send things back over to you. >> look how it just worked out you had two down and two up. you circled them and it all worked out it's amazing how that happens. you're cutting the corners on the green. laet's say laser focused on the bond market. where will stocks go ahead of the fed let's go to rick in chicago. rick, my parents always told me

not to confuse what i wanted from what i needed very different things. i'll ask you both, what is the bond market want from the fed and what does the bond market need from the fed? >> the bond market wants is a life of its own without some thumbs on the scale trying to keep rates lower than they ought to be. we're still buying 120 billion a month, 80 billion of treasuries, 40 billion of mortgages. what it needs? what it needs is a very difficult question to answer we need to ask investors what it needs because they are at the end of the food chain with regard to that meaning and what they want and what they need now are rates to reflect the real risk versus reward profile they do not. very quickly, 30s are now comping back to august of 2019 you're right, january of '20 for tens, the yield curve tends to

twos, five and a half year wide and if you consider right now that the fed is trying to in essence not take away some of the requirements for capital that were designed to prevent some of the negatives for covid when we're going through that period, the slr, that's called capital requirements that's supposed to expire at the end of the month that will throw a lot of additional treasuries on the market for sale off of balance sheets and, guess what, that's probably part of what's been pushing interest rates higher >> rick, what if we get this -- i don't think we will. you never know these are human beings and prone to change their mind like everybody else go from a dove to a pigeon will what the bond markets do t

then. >> that's not going be a combination. the two of them are not going to give up the dovish camp at this point in time and see everything that they have worked for. everything they have pulled forward. everybody they have i assisted be done with regard to fiscal stimulus they're just not going to clear the zone we see a real negative feed back loop like corporate securities are they going to ramp up the pressures. this is game of chicken between investors and q/e >> a trillion dollar game of chicken. a lot of birds mentioned there, doves, chickens. >> all this fowl language.

>> fowl language oh that was good. preesh it, buddy i got nothing for him the rest of the show. i quit what about other part of the market and your money. why don't we dive in julia coronado do you believe there's, as rick said, approximately a zero, no change at all of any hawkish turn by the fed today? >> i agree with everything rick said i think it's going to be very tricky at this meeting in some respects they have to sound optimistic at the same time they have to be very careful and not sounding very hawkish that will be very difficult because since the last time they upgraded the summary of economic

projections, you have gotten close to 3 trillion in fiscal stimulus this means they have have to upgrade their gdp forecast they will roprobably reduce the unploim rate what do they do with inflation the bond market is concerned about the what ifs what if they did believe and show in their estimations that inflation will go higher then they will have to adjust the dots to counter act the rise in inflation those what ifs are what the bond market is really concerned about. >> yeah. right now if you look at those and i hate talking about dot plots but i guess they matter. there's one dot above -- it's flat line for this year. pretty much flat line for next year with one dot up 25 base it's ridiculous. should they just put out the same statement the if they change the language even by a word here or a word there, the market will read into

it >> you have to really ask is it the bond market or the economy that needs the rescue. we have a richly valued bond market it's more rich around the world. i know that we had a 40-year bull market in bonds where yields always came down and rarely stayed up very long we had yield curves steepening and every economic recovery even prior to that secular bull market if the federal reserve wants to stop down on the long end of the bond market, target long term rates it will take a will the of fire power a lot of use in face of this we just now had, an additional 2 22 2.7 trillion. inflation for the rest of the year will be over three. you can see this already in pricing. that's not permanent when you have these sorts of stimulus efforts, there's going to be many times it's not going

be a permanent new rate of growth but they'll have to articulate that we can suffer through this as a bond investor for a while. they will do the right thing and normalize policy that's still way out there >> julia, i don't know if you ever saw the documentary man on wire walking between the world trade centers, i feel like jay powell is the certain walking the wire the fed balance sheet is double. six or seven unelected officials are running a balance sheet twice as big as 535 members of congress do you think jay powell has what it takes to get from one to the other without falling? >> i think in some senses what jay powell has is an embarrassment of riches. for years, decade even the fed has been hoping for more

effective fiscal support for the recovery, never got it had to repeatedly do q/e for the first time the fed has partner that will more effectively channel resources into the economy and all it has to do is say it's going to be patient. the fed has what powell has been reiterating lately which is different from the market narrative. they have a very disciplined approach to parsing out transitory versus trend movements and inflation. i think it's not that hard to walk that line because they can say we know he's already been saying, we know there could be some pops in prices here and there. we're focused on the trend the trend has been low for decades. we will definitely, they're definitely going to be more optimistic on the commeconomy. the fed into inflation over the longer term and therefore policy will be considerably more muted.

i don't think it's that hard to square this circle he can sound more optimistic and also say but remember, these trends have been very low and we're going to wait till we see it and react appropriately >> we're trying in monetary response to a global health pandemic, epidemic i don't know if low rates will put people back at work if their kids aren't in school. how do you i creancrease the jo rate when a parent says i can't go do school that's a different argument. your clients want to know how to profit off all this. protect their wealth, preserve their wealth, grow their wealth. how are you advising them to do that >> lots of moving parts but for one we are seein ing mean revern in markets covid is not unstoppable we'll get past this. some of the things that responded already like small cap stocks in the united states, rallied 90% from april lows.

they are good part of the world than other parts of market that have further to go u.s. real estate, latin america stocks, united kingdom stocks. 14 times earnings, horribly held by by domestic political issues unwinding. 4% yields and industry that's been highly exposed and battered by covid it's mean reversion of those things then you have to consider that rates were adjusted. we're seeing the valuation excess in tech roll off. it will be growth at the end of the day for the companies too. >> one final, where do you see the ten year yield in six months >> i forecast for the end of the year is 2% we're already at our forecast for mid year in both tens and 30s. i wouldn't be surprised if we continue to see rising yields over the next six months >> thank you very much

we'll let you go and get ready because the main event is coming in 50 minutes or so. thank you for your insight we have so much still to do here on the exchange when you think of a quote value stock, do you think of amazon? probably not you should, so says one analnalt less than an hour away from the fed meeting. ten-year yield not moving a whole lot. they are up a bit. we'll watch that because it matters if you don't care about bonds to your stock investment we're back after this. hi, i'm a new customer and i want your best new smartphone deal. well i'm an existing customer and i'd like your best new smartphone deal. oh do ya? actually it's for both new and existing customers.

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designed to put you in control. with real-time notification and a week of uninterrupted recording... all powered by reliable, secure wifi from xfinity. gotta respect his determinatio. it's easy and affordable to get started. get self protection for $10 a month. welcome back a lot of you inverss may be wondering what's wrong with amazon stock it was booming down lockdown shares are up only 2% in the past six months. basically flat amazon is one of the worst performers in e-commerce wayfair, etsy, shopify outperforming as much as 3 to 10 times as much. your next guest says amazon may be about to take off to 4 or 5,000 buck a share

let's welcome senior analyst good to have you on the program here you'll forgive me for looking down what the market focused on rotation, rates, reopening and tough e-commerce comps we believe investors may be missing one of the most compelling subscription within the i.t. sector and the path to 5,000 break it down. you know next quarter is the quarter they boomed. i don't know how they match those numbers. >> thanks for having me. i think what's missing when investors are focused on the macro environment and not fundamentals is that amazon has some really amazing long term growth opportunities the stock is trading at a pandemic low in terms of valuation as you outlined. in terms of recurring revenues, you have the commerce business

driven by prime subscribers and third party sellers that are locked into amazon's ecosystem then amazon web services is a cloud subscription business. all of that means high resengs rates, low turn, low customer ba acquisition cost >> quasi subscription. what does that mean? if you're paying prime every year, auto renew on your credit card, you don't think about it why quasi subscription >> fair question there are subscription elements specifically to amazon like prime. i'm talking about the whole business all of the spending that the prime members make they generate the vast majority of sales on amazon they are subscribers but a will the of retail revenues are not specifically subscription

revenues we think our qu aasi subscriptin because they are tied to prime members. >> what's the biggest risk to your 4 or $5,000 price target? >> honestly -- >> besides not getting it. >> i think largely macro i think investors are concerned that if the growth stock roll over continues that support levels are pretty far below where we are today obviously, we look at it more from a fundamental basis shares are trading at a five-year low. pandemic period low for sure on that basis we don't see it as a significant risk we hope it gets to 4,000 this year which is our 12 month price target we think 5,000 is achievable amazon will be generating a trillion dollars of volume within three to four years we think that's not recognized in the current valuation >> on a human note, reading your report, one thing that did

surprise me was you really didn't mention jeff bezos, at least not in the early pages i thought this is bezos' baby. sheer force of will from that door desk they started with in seattle. are you convinced that others in the management team can step in and fill the shoes of bezos o is bezos still the man pe hbehind e curtain? >> i think he's still involved he will be involved. he's already distracted by other projects we joke he will change amazon to aws. while that may not happen, it shows focus on amazon web services which could be the biggest peiece of the business i five or ten years. he's chairman. he will be involved in any big decision and i think he's already relegated a lot of the decision making to others at

this point >> all right,sir 5,000 long term price target a pleasure fascinating stuff. have a great day >> thanks. i want to get to market flash here shares of 3m are starting to trend lower and it follows some comments that were just made at a virtual jpmorgan industrials conference it plays right into what we have been talking about with the fed and inflation. we don't have the audio but we'll read it to you the cfo saying quote, we had started experiencing 3 kinds of inflation. raw material, labor and logistics. that trends of inflation continue inflation is creeping into head in few places. folks keep in mind the labor side of that, millions out of work because of the pandemic according to the government there's still 6.9 million open jobs in america. lit be a will the of competition for that work and 3 m laying it

out. just something to watch with 3m up there in scotch tape and post it notes coming up, in addition to impacting pretty much every aspect of our live, the pandemic shed light on a behavioral bias in investing maybe the t in nft should stand for taxes instead of token if you want to by crypto art, the tax man may cometh wondering what actually goes into your multivitamin? at new chapter, its' innovation, organic ingredients, and fermentation. fermentation? yes. formulated to help you body really

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all right. welcome back to the exchange here is how your money looks now. about half an hour before the fed decision and you have the press conference after that. the presser will matter more than the statement i'm going to throw that out there. dow industrial is up 56 points nasdaq down a percent. watch technology the federal reserve impacts bond yields if bond yields go up, technology stocks have been doesn't mean they will but they have been going down nasdaq down 1% right now you may not care about the fed you may not care about the bond market but if you own stocks, you need to care about both. that's the point industrials, financials and materials your leaders technology and utilities are some of the biggest laggard ons

on a sector basis. plug power need a stopper for the selling. shares getting crushed now kp company saying it made accounting mistakes. plug power down 13%. both higher. they out line plans to double down uber says it will reclassify about 70,000 gig workers as full-time employees. your disaster is a name we talked about in texas a couple of weeks ago n name to wash that's nrg the power company loses steam.

off 16%. it's posting a $750 million loss from the storm and from the texas blackouts having to go out there and buy power, lose revenue. it's withdrawing its previous guidance for the full year nrg. a name we highlighted a couple of weeks ago in houston down 16%. let's step outside of the world of money and business and get a cnbc news update >> the biden administration is sending 20 billion dollar to states to expand coronavirus testing in schools it's part of plan to get more schools to open five days a week before the end of the school year dr. anthony fauci and cdc head doctor laying out time lines for getting children vaccinated against covid-19 they expect young kids will get their shot by next year. high schoolers can look forward to their vaccinations much sooner >> for high school students it looks like they will be available to get vaccinated in the beginning of the fall.

very likely for the fall term. >> learn more about plans to get students back into classrooms on the news with shepard smith. tsome tell marketers in it can have been hit with a record 250 million dollar fine. it's for robo callers that offer health insurance the group made about a billion calls in less than five months in 2019. i'll send it to you. thank you very much. appreciate it. about 30 to 40% of kids never missed a day coming up, the bitcoin baa nan sa booms on. morgan stanley become the first big u.s. bank to offer some clients access to bitcoin funds. we have the exclusive details. right now it's show and tell or if you're on the radio, we call

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welcome back you can add another big name to companies buying in. morgan stanley is said to become the first u.s. big bank to offer clients access to bitcoin funds. sources saying there are some client eligibility restrictions but it's still another huge step

toward mainstreaming cryptos let's bring in banking reporter who broke the story, as we expect you to do you break news left and right and they pop up on tv. it's amazing what can you tell us, what decision, what changes are morgan stanley and its team making here? >> it's pretty straightforward all across wall street we have these wire houses. they cater to people in the single digit million dollar asset class, um class. for the most part these are people increasingly getting intrigued in bit coin. they look at the charts as we talked about it on your shows. they are intrigued and want exposure they want to do it through the wealth management platforms ta are well regulated and well controlled morgan stanley being one of the biggest, if not the biggest has

said, we are not going to decide whether or not it's necessarily good or bad thing. we acknowledge that clients want this and we're going to expedite this and allow this. we'll allow them to do three third party funds. two of them threw doubts these are mike's firm and another firm we'll allow people to hold close to a direct ownership in bitcoin which is a new thing for the world of wall street, for sure >> i assume they would only do that banks have a profit motive. just throwing that out there if there was client demand. >> client demand is the motivating factor. the sources i spoke to sited ta directly you have people clamoring for it it's not like there aren't other ways to get poexposure to bitco. you can do it directly, through coin base. you can do it through other things

yet, if you are a high net worth individual and you have your other assets being held in trust by morgan stanley or another firm, it's much more clear and simple and succinct if you own it together an it's par of a percentage for your overall holding. by the way, morgan stanley they are requiring people, capping people at 2.5% they think it's a good idea to have speculative investment in this but they want you to do it at a maximum of 2.5% >> still big story there broken by hue. always a pleasure to have you on good work. all right. from artist to athletes and musicians, it seems like everybody is talking about nfts. for the uninitiated, don't be afraid if you rr these are nonfundable tokens

way to turn something digital like digital art or a video highlight of lebron james into the block chain. you got to take note if you're using your super cool and using cryptocurrencies to by the token, you may be in for a rather unpleasant tax surprise from another three letter organization, the irs. robert frank has more on that. robert >> it is very confusing. let's say investors and collectors have poured over a half a billion dollars into these new nfts many could face big tax bills they are probably not aware of it's an obscure rule around cr cryptocurrency and disposition of assets. say you bought $100 and it's now

worth about $1800. if you used to buy nft, you would owe capital tax on the 1700 dollar gain as part of the nft purchase you could capital gain tax of $340 that's a short term game for less an a year, you can you would pay over $600 on that $1800 purchase the irs considers crypto a capital asset. not a currency if you exchange for any good or asset you immediately recognize a capital gain or loss that's the rule. experts say most people who are buying nfts today are using bitcoin or ether that's appreciated and not aware of this tax on top of that, most nft platforms that sell nfts are not reporting the taxes o the irs because they don't have the price history for crypto for each buyer lots of people are flipping their nfts for profits keep in mind, they would pay a

28% tax on that nft gain since capital gains tax on collectibles are higher than for other assets really two taxes to keep in mind here one is when you buy it and one is when you sell it. back to you. >> that's a big deal first off, they are not currencies i know i'm one of the few that says they are not currencies currencies don't act like that and the government said they're not currencies because the way nay tax it let's talk about a giant mansion in miami say you're super smart and bought a ton of bit coin at 1,000 bucks and now it's worth 50,000 you're sitting on millions in gains. you sell your bitcoin to buy a 5 million dollar waterfront home in miami are you subject to the 20% capital gains rates or higher on that 1,000 to $50,000 move in your bitcoin in that could be a multihundred dollar thousands

surprise tax bill. >> absolutely. that's why a lot of buyers are overseas buyers that are not subject to tax just about anything you do with crypto, if you're a u.s. citizen will be taxed because as soon as you exchange it for anything whether it's a hot dog or miami mansion, you're paying the capital gain that proves from the irs point of view it is a capital asset, not a currency >> really fascinating stuff. be careful, the tax man cometh take care. still ahead, covid not just impacting how we work and live and play but how we all invest the common behavioral biases affecting portfolios that were tweaked or exacerbated by the l lockdowns. with the price of nearly everything going up, up, up, will the fed shock the market and put on its fox hat or will the doves still fly.

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welcome back the investment profession is known for making rational decisions based on hard numbers sometimes. if the pandemic has shown us anything it's that things can get emotional in the markets, in our lives. wells fargo is out with a look at how extreme swings the upside or downside with create some behavioral biases. joining us now is veronica willis investment strategy analyst for the wells fargo institute. most of us who can or sitting at home and looking at our portfolios, most of which have gone up, what kind of mistakes are we making now? what kind of behaviors did we have before that maybe got exacerbated during the lockdown? >> i think the big one here is

that recency bias. a lot of people, myself included, are guilty of that one. that's where we believe the market will continue to behave as it has recently and use that as baseline for future expectations when the market is going up, you think it will continue to rise and the rise will be smooth. that's not what we're seeing we have seen volatility. make sure you're sticking to your plan and that you don't deviate from the plan to take on more risks than intending. >> listen, veronica, it's a lot of new participants in the market we love it we want young people because they grow up to be old that have been in the market since the railroads. everything has gone up lately. it's really easy to think that your super good at investing i hope we all are.

history says that's not the case >> i think that's where that overconfidence bias comes into play where you think you know everything and you're making the right decisions but i think the important thing here if you suffer from the over competence bias is to keep on educating yourself educated investor is a good investor we can all learn more about investing and knowing what we're holding, making sure that if we have plan, we're sticking to plan if we don't have plan then we're reaching out to figure out what that plan is and to make sure we are re-evaluating that plan when we need to >> well, you got the friend that jumps off the cliff into the lake without really pay attention to the risk. then we have the friend who are frozen and can't make a decision you can't be that person either.

don't do that. >> that's right. you'll be way too conservative especially if you're looking at a long term investment if you're investing for your retirement and if you have this regret aversion and too afraid to make the decision or you put them off and your portfolio may be too conservative and not allowing it to grow. i think you have to challenge yourself a little bit to get in the market and raeealize over t long term the market moves higher your plan is there to help you weather that short term volatility i think that's why it's so crucial to have that plan you are prepared when there's downturns. that's inevitable part of the market and usually a gd time to get into the market when the prices are low >> it's an moemotional game stocks are another form of money. great advice

have great day we'll talk to you soon thank you. >> thank you all right. you're welcome coming up, rates are on the rise builders are starting to feel a little more bearish and supply of homes are tight all that heading into the traditional booming spring has in season. are we near a tipping point after the buying panic of last year diana is here with housing red flags. as we head to break, it's women's history month. all month we're spotlighting some of our cnbc contributors and friends. karen firestone on what empowers her. >> empowered by the fact i believe in myself. i was one of few women who worked at fidelity but i thought i can put my mind to something i can research a company as well i can understand stocks. i can manage a portfolio as well as the guys. i just had to remind myself of that all the time because i was so dramatically out numbered

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all right. welcome back to "the exchange. fresh data out today that could be signaling a turning point for the housing market but in which way? diana olick now with the numbers. >> reporter: you can really see this coming given how much demand for housing pulled forward by the pandemic last year home prices are overheated mortgage rates are rising and the marktd needs more houses but the builders took a step back in february, both single and multifamily housing starts fell to the slowest pace since august but i want to focus on single family where we have the record shortage starts were down for the month and flat compared with a year ago. take a look at permits, an indicator of future construction down 10% for the month back to november levels. this number should have been higher given that we are coming into the usually busy spring

market higher mortgage rates with higher priuses are knocking some buyers out of the market it is worth noting that the number of single family homes permitted but not started to construction continued to increase and that's because builders are delaying some projects due to higher costs for materials and continued delay in getting the materials. of course these guys seem to have gotten it brian? >> yeah. speaking of inventory, no homes on the market, are people starting to put the houses on the market again given spring is usually the best time to do it or does that not matter anymore? >> reporter: they're not the realtors are saying they're not seeing more people put the homes on the markets they have to buy something if they sell something and they don't want to buy at a higher

mortgage rate and they're concerned they can't afford the other home when they move out and concerned they won't get the demand that they want. people are going to be coming in looking for lower prices you are seeing fewer homes come on the market than normally this time of year >> maybe bad news for realtors out there. thank you very much. that does it for us here on "the exchange. we'll see yomoowu torr dow 45 have a great day happy st. patrick's day, everybody. special needs... giving us confidence in our future... ...and in kevin's. voya. well planned. well invested. well protected. we see engineers simulating the future to improve today. at emerson, our digital twin software makes power plants smarter,

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get the food you love with perks from- - [crowd] grubhub. welcome to "power lunch. i'm courtney reagan. tyler will join us in a moment we are just moments away from the federal reserve's decision on interest rates and investors are waiting to hear from fed chair jerome powell about the state of the economy and the recovery stocks are mixed the dow under some pressure here

today falling by about 1%. the s&p 500 down by about .5%. that's as interest rates are on the rise this morning the 10-year yield near the highs of the session hitting 1.68%. >> court, thank you. >> let's get straight to - >> oh, well -- here i am. >> take it away. >> you said i'd be here shortly and shortly has arrived. thank you. let's get straight to the panel and talk about this. mona is a senior u.s. investment strategist, david kelly is chief global strategist and john bellows at western asset management folks, you know what i'd like to gun with here is this fed meeting feels like something may happen, that we have had quite a few where you knew that they were on a course, on a trajectory that the policy was set and we were going to sail along. john, set the background and

context for this meeting and tell me whether i'm right or not right that something tonally, textually may be different this time. >> i think there's been a big move we have a lot of fiscalpolicy, vaccines are coming faster and more successful than people anticipated and led to a big market move so that lot has happe happened and i think you are right to raise the prospect the meeting will reflect that. i think the fed will be much slower in terms of adjustment than the market has. the fed is making arguments for an accommodative policy and the arguments didn't change. the labor market recovery hasn' begun. it is not clear to gate higher inflation outlook. in contrast to the market and the big change in the outlook the fed's going to be slower and

going to be still worried about the big questions and so if they do make adjustment i think they're smaller than you might expect if you're looking at the market or thinking about the outlook. >> david, let's see if you agree with john there and follow with a similar but separate question. as the governors and the member of the fmoc plot their dots and make the comments or projections, do you expect them to really do what they believe or might they hold back so as not to spook the market and rather wait longer before they put pin os on the plot? >> i don't think they want to change the tune. they will have to use optimistic lyrics talking about inflation and growth in the pandemic i think they have to strike stronger notes with the forecast on the economy particularly on this year and the knife edge question is will they add or put

a dollar at above 0 to 25 basis points for 2023? i think it's a 9-9 vote and it's on a knife edge and possible to say given the outlook it doesn't say to keeping rates flat into 2024. >> take a look at the marketings right now because we are going to go to steve liesman for the fed decision steve? >> the federal reserve leaving interest rates unchanged but changes to its forecast. first the ones that didn't change, the median funds rate for the forecast sees no hikes through 2023 that's the median. there were some changes. get to them in a second. inflation at or above 2% through this year and 2.4% this year for the pce indicator. lowered the employment forecast. goin