morgan. >> i think that's an apt metaphor, tyler. we're seeing the semi stocks under pressure in the midst of that white house summit that's focused on the supply chain. nvidia is bucking the trend. also it unveiled a new cpu chip. that's actually putting intel under pressure, down 4% leading the dow lower as well. ty, great to be with you thanks for watching "power lunch. "closing bell" starts right now. welcome to "closing bell." i'm sara eisen along with wilfred frost. stocks starting the week mostly in the red following record closes on friday the major averages all lower the nasdaq is down a little more than half a percent as we head into the final hour of trade microsoft says it is buying nuance communications, a deal valued at $16 billion. it's the largest acquisition since it bought linkedin in 2016. the reopening trade taking a

step back today. cruises and airlines are lower, even as the united states did hit a vaccine record this weekend, 4.6 million doses administered on saturday. check out intel, plunging today on the back of in indi nvidia's day today 59 minutes left to go in the session. wilfred. lots of chip-paced news today. executives from the semi conductor industry meeting at the white house. they're talking with -- plus aphria down double digits. irwin simon will discuss the quarter and where he's looking for growth throughout the rest of the year. first of all, let's get straight to the big stories mike santoli is tracking the

market action. jon fortt has details. >> slow and softer actions today. as a matter of fact, if you remember in the very final half hour or so on friday, we did see some spurt higher and it even held on to most of that little upside air pocket. a lot of talk about how we're maybe in a tactical short-term culmination point for this rally. i have pointed out this is the upper band of this uptrend what's different about that versus these previous peaks in june is the acceleration to a much steeper rally that we had, kind of this matterhorn peak this gain is about 7%. it's basically the same as these other two low-to-high moves the past couple of months. there's a lot of clues out there saying that maybe the market should pause here, at least for a little while take a look at another sense of

maybe defensiveness entering the market here. biotech very weak today. you see right here back about three weeks ago these guys diverged this is a risk appetite play obviously. if you go for stable profits of big tech, you're not going for more speculative biotech but just to pull back in a lot of those hypergrowth sectors that had great runs in the first quarter, that's also the case with the biotech sector as well. take a look at bonds versus copper this is 10-year treasury yields against the price of copper. also this reflation trade that took assets in one direction reached its peak intensity in late february, early march here you have copper tilting downward, still sitting on massive gains. and the 10-year note has chopped higher but that was really when you had the steepest move. so a little wait and see in general as we wait for inflation numbers and earnings.

>> so, mike, the market is up a little bit today, as you said. but clearly obviously still near those records. if you look on a technical basis getting a bit stretched but it's also hard at the same time to see what the catalyst would be for a meaningful sell-off to kick into gear. >> the market has absorbed a lot of those mini shocks a lot of those sectors have corrected hard and people have rotated away into more stable areas. does it also mean just general fatigue. you're also seeing stocks on the upside usually something comes along. it's not about being able to identify the specific trigger, it's just that it's more susceptible to any kind of a negative tilt to the news or any stress in the system as opposed to knowing that big thing to be afraid of in advance. >> we do have an inflation report out tomorrow. that's going to be the data point of the week.

mike, thank you. mike santoli. microsoft $16 billion purchase of speech recognition company nuance communications. microsoft's ceo joining "squawk on the street" earlier today discussing why the deal is happening right now. >> we've already seen in the pandemic a massive acceleration of digital transformation. but coming out is real structural change across industries and in health care in particular so, for example, this particular opportunity when you think about the provider market, in order for us to keep improving outcomes and costs, digital cost is going to be key. >> jon, congratulations on the launch of your new show, "tech check. it was so nice of microsoft, so generous, to announce a mega deal in honor of the launch of the new show. >> yeah, it happened right in time you know, sara, i think the most interesting thing about this deal is not necessarily the

voice part of it, although that is what nuance does. i think the focus in health care, what that represents for this moment in cloud and ai is particularly important i mean it brings me back to 20 years ago when we saw oracle moving to buy peoplesoft, which is more of a very specific sort of enterprise solution i see microsoft now looking for industry-specific ways to apply cloud and ai in a way that's deeply relevant to a high value customer when you think about where the value is going to be in cloud and mega scale cloud down the line, you think about profit growth and not just revenue growth and market share, i think that's going to be an interesting area to focus on nuance has really narrowed down its product focus, spun off some businesses, focused in on health care and enterprise, but particularly health care it's seen a lot of growth there using voice as a way to gather more unstructured data and make doctors and health care systems more efficient

clearly microsoft wants to gain ground in that area through this acquisition. i think they're hoping to apply this technology to other areas, perhaps legal, perhaps accounting, other kind of industries that could use unstructured data going into a more structured context through the use of ai. it's going to take not just quarters but years to see how successful they are on that. when you look at the size difference in the cloud businesses between aws and microsoft, azure, it starts to make sense where they would focus on industry specific point solutions. >> jon, congrats again as well from the other co-anchor of "closing bell" on the launch of the show awesome stuff. i want to ask about the size of the deal and two particular questions on that. one from the perspective of covering the banks where it's so hard for the big banks to do any type of acquisition and there's a close regulatory pair of binoculars on any deal

any chance that this gets blocked or is this going to get approved and i guess when you're worth $2 trillion, $16 billion is pretty small. but does it mean sellers to microsoft get a very, very good price because relative to microsoft the deal is kind of cheap for them >> well, two things, since you asked two things one on the regulatory thing, of course i'm not a lawyer, but you look at this and microsoft is not in the position right now of being under intense antitrust scrutiny in an area where this plays. they're not the biggest player in the cloud they don't have a dominant position in health care in gem there are other companies that you could argue do so i think that bodes well for them where that's concerned if you look at where nuance has been trading over the past several months, it's kind of close to the peak, but not as high as it's been. so you expect microsoft to pay some sort of premium

you also look at -- microsoft has done very well over the past couple of years because of its focus on cloud and ai. it's getting that valuation benefit there. if it wants to continue to grow and buy what it sees as the businesses that will help power it to justify that valuation and perhaps grow beyond that, i guess it makes sense. >> jon, is microsoft alone in doing these multi billion dollar deals? we've talked about a slew of them not just linkedin, they're in talks with discord and a number of others. i know salesforce has been doing deals. what psome of the other tech giants where does this put microsoft in the race to scoop up these >> adobe has done some deals there are a number of companies that are quite launch that have done deals apple doesn't tend to be acquisitions they do a lot of smaller acquisitions but not big ones. amazon similarly, you saw them

do whole foods right now they're a bit more in the spotlight when it comes to antitrust scrutiny perhaps now isn't the time facebook perhaps in a similar boat but you do see these acquisitions happening, smaller ones in particular i think there's a sense amongst some of the bigger companies, particularly the ones that seem to be dominant, your facebooks, your amazons, that maybe now isn't the time to do something that could be categorized as industry shifting. at least not on the m & a front. >> jon, thanks for joining us. don't forget to watch "tech check" 11:00 a.m. eastern time tomorrow and forevermore. after the break, the battle of the chip giants intel dropping today we'll discuss that and today's chip shortage meeting in washington next. you're watching "closing bell" on cnbc.

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the global chip shortage has impacted a wide range of industries from autos to video games. this afternoon the white house convening a group of semi conductor executives to discuss the issue. kayla tausche with the highlights kayla. >> reporter: sara, the president had two meetings this afternoon. he had that meeting with semi conductor executives and also a meeting with lawmakers representing both parties to try to jumpstart negotiations on the american jobs plan that he put forth a couple of weeks ago. he wanted to tie the two issues together using the supply chain strengthening effort as a sort of galvanizing issue to shore up support for his infrastructure plan that has been panned by republicans for all of the various programs that it entails. but when asked whether it was window dressing, as some republicans have called it, the president said no. >> prepared to negotiate as to how -- the extent of the infrastructure project as well as how we pay for it

but i think if we get into serious conversation about how to do that everyone acknowledges that we need an increase in infrastructure it's going to get down to what we call infrastructure. >> reporter: so the infrastructure plan has a $590 billion component that specifically deals with manufacturing and research and development. within that, $50 billion allocated specifically for semi conductor supply chains, $52 billion for a range of economies, $50 billion for a new office at the department of commerce to monitor supply chain resiliency and an additional $50 billion for the national science foundation those are components that have bipartisan support but there's a question whether they need to be included in this plan. and industries who met with the president today, they were complimentary of the administration's efforts not only to allocate some of that funding or at least identify that that funding is needed, but also to broadly address the chip

shortage where they could. a statement that was out from the semi conductor industry association said that it was working with the white house saying funding the chip manufacturingin sent i'ves and research investments called for in the chips for america act as president biden's infrastructure plan would do will strengthen u.s. semi conductor innovation across the board so that all sectors of the economy have the chips they need. a similar statement out from the automaker industry as well so certainly industries are trying to work with the white house to identify some of these shortages which the national security council is trying to prepare a report due on june 4th for the president on that very topic. >> kayla, thanks so much for that we'll discuss that with our next guest. as well as nvidia announcing plans to create a chip using arms technology. it would be the largest chip

company to compete with intel. intel shares tumbling. nvidia is up by 6% today let's bring in stacy rascon. good to see you, as always was this news expected and do you think it is a big blow for intel as the share price move suggests >> i don't think expectations were very high applied materials a week or two ago, that's all people were talking about for a month. for the nvidia, i don't think there was a lot of expectations going into it. they did take up their guidance qualitatively for the quarter. in terms of the data center chip announcement, we've known they were working on something but didn't expect that they would be announcing it this soon. >> we do have another news alert on spell the news is coming fast and furiously. phil lebeau with the details phil. >> it has to do with the auto

industry intel is confirming that it is talking with companies that design chips for auto manufacturers. the idea here being that they will see if they can take those designs for those chips and manufacture them within intel factories. the hope if they can pull this together is producing those chips for the auto industry within six to nine months. guys, as you know, the automakers have lost about a half million vehicles in terms of production or that's the expectation for the first half of this year if they could have extra supply coming on six to nine months down the road, that would certainly help them as they try to make up for lost production in the second half of this year. guys, back to you. >> phil lebeau, thank you very much intel down 4.4%. stacy, does intel have the capability to do this? is that a big deal that they're sending a lifeline to the autos? >> six to nine months would be incredibly rapid for something in automotive. although it shows you how desperate the auto vendors

probably are so if intel can pull that qualification process in that time frame that would be a positive intel is a robust process and maybe if they could do it, it would be some indicator they could get some traction here but at the same time i think six to nine months is a fairly optimistic time frame so we'll see. but it does in some sense play to probably the current desperation of the auto vendors that they're willing to take a step like this they tending to be very cautious under ordinary circumstances when they're exploring new manufacturing options. >> stacy, on the topic of time frames as it relates to the white house meeting today, i mean how quickly can things be rectified in terms of making the u.s. more self-dependent, and do you think any of the announcements today make a difference >> you have to be careful. the situation about the shortages and the situation about the u.s. being too

dependent on asia for semi conductor manufacturing, those two have nothing to do with each other. they're two distinct and separate issues. the shortages are helping spur the broader conversation around more investments broadly in the u.s. for semi conductors to break that strategic tie to asia i think that's a good thing but they don't have anything to do with each other. it will take years it takes years the tools themselves have long lead times you can't just build factories and then wait around for customers to show up and build them they need to be built in conjunction so we'll need efforts around customer acquisition. you need staffing, education reform, there's a lot to happen here but it's important to decouple the shortages from the broader strategic issues but the shortages that are stimulating the conversation to get those critical investments made i think is a positive. >> nvidia up 6.5%, most of the others down.

stacy, thank you we'll talk more about the chip sector later in the show we'll talk to t.j. rodgers next hour with very strong opinions on this topic. after the break, the next chapter in the gamestop saga reuters reporting the company is on the hunt for a new ceo. we'll talk to the reporter who got that scoop next. >> as we head to break, check out some of the top search tickers. the 10-year yield still on top yields are slightly higher after a big auction this afternoon 1.67 also nuance, tesla, alibaba and microsoft. we'll rhtacbeig bk.

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welcome back take a look at signet jewelers popping after it expects same-store sales to rise in the first quarter. the parent company of kay jewelers and zale's giving an update today sales were helped by stimulus checks, tax refunds and overall enthusiasm surrounding the vaccine rollout, revising earnings higher for the first quarter and the entire fiscal year. on the flip side, shares of gamestop sinking today the company reportedly on the hunt for a new ceo joining us is the reporter who broke the story from thompson reuters. thank you for joining us and congrats on the scoop. what can you sell us about what you know about these changes

>> well, thanks very much for having me. i think it's important before i begin to take a little bit of a step back and put this story into context of all that has been happening at gamestop in the last few months. as you'll remember, this talk was trading at less than $5 a share a year agoand today it's trading at $136. so the market valuation last year, $250 million, now it's $11 billion. in january ryan cohen, the co-founder and former ceo of chewy and two former colleagues from chewy joined the board of gamestop and they essentially laid the groundwork for cultural and strategic transformation to be ushered in at this company. since then we've pretty much been seeing that gamestop is pivoting from a bricks-and-mortar retailer to a technology company and so this effort to find a new ceo is all part and parcel of that

if i can take you back a little bit last month we saw that the chief financial officer jim bell and chief operating officer left the company. at the same time there's been quite a bit of hiring as well where the company has hired a new chief growth officer, a new chief operating officer, a new chief technology officer and all of these people previously worked at amazon >> and svea, what's the timeline here when will the new ceo be in place? >> that is difficult to say. at the moment my reporting has shown that they are talking to a number of people they have gotten a number of inbound calls. and so this is a very attractive position and the people they're talking to i've been told are coming from the gaming industry, the technology fields, the e-commerce fields. so they have hired a recruiting firm to help them sort through

this we'll see where it goes. but certainly judging by ryan cohen and his determination and forcefulness, this may be sort of happening sooner rather than later, because certainly we've seen a lot of these hires made in the last few weeks. >> they should be perhaps looking on wall street bets as well for candidates. svea, thanks for joining us. much appreciate it. >> thank you. still to come, chipotle's hot streak extends another day and one firm gets bullish on online dating. we'll break down those movers next. later, top picks for the genomic revolution as we head to break, here's a check on bonds it's a top search ticker again on cnbc.com, but there it is the 10-year for you around 1.68%. we'll be right back.

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let's check some individual market movers for you. raymond james upgrading chip poelts to outperform from market perform. the firm sees significant upside as they believe chipotle sales have followed the recent improving trends in the restaurant industry. here's what the ceo had to say about the performance in the reopening. >> as we're starting to see covid move behind us, we're keeping most of that digital business, about 80%. and then as the dining rooms reopen, we picked up or regained 60% of what we lost when the pandemic started so really we're going to ending up bowing ahead of the game when pandemic is fully behind us. >> shares of chipotle today hitting an all-time high earlier in the session but they're still positive as we speak, up a third of 1%. btig bullish, upgrading

match from neutral to buy based on the stocks year-to-date pullback they initiate bumble at buy. the firm cites geographic sp expansion and growth bumble is down 3%. >> i read that note. only 30% of global singles apparently are online. 9% only using the paid product, so they see a lot of runway for growth there. up next on the show, shares of pot company aphria are down we'll talk with the ceo. as we head to break, check out shares of alibaba. it is surging despite that record $2.75 billion dollar fine from beijing it removes an overhang on the company, which has been weighed down by that cnbc sector sort is

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time for a cnbc news update. >> the governor of minnesota said that routine traffic stops must no longer end in the tragic deaths of black men like 20-year-old daunte wright. communities must have a chance to grieve but it must be done in peace. they believe that the officer who fired intended to use a taser, not a handgun. the minnesota twins have postponed their game against the boston red sox following that fatal shooting of wright in a minneapolis suburb the twins say it's not in the best interests of the team and the community for them to play today's game. in other news, across russia celebrations for the 60th anniversary of the first man going in space he made one orbit of the earth on this day. they put on a light show with 500 drones >> rahel solomon.

shares of aphria sinking today. the cannabis company noting a transitory reduction in demand as pandemic lockdowns hit sales. despite today's losses, sales have duloubled for the year. joining us is the ceo, irwin simon. so what happened quarterly loss and a big miss on companies. wasn't the at-home economy supposed to be good for cannabis >> so number one it wasn't a big miss we did $152 million in sales, $12.8 million ebitda and i think that was close to analysts' expectations step back for a second in the canadian market. ontario represents 35% the stores in canada have been closed really since december, january. the only way you could order cannabis was either online or you had to go to a store and

stand in line and put your order in so, you know, with that there was a lockdown in three of the provinces, which represent 85% of the population of canada. germany, which is a big market for us in regards to our cc pharma and a lot of the borders were closed in regards to us going out and purchasing medicines and distribution to drugstores again with covid, you know, in regards to foot traffic and that so listen, i come back and say all in all with hitting the markets that we're in today and with covid reacting the way it did, we had a great quarter. we went in and put in place a lot of cost reduction. we were cash flow positive our loss was contributed to amortization and the way our stock compensation is. so all in all, dealing with what we had to deal with, we turned out to be an okay quarter in my opinion. >> what about prices, because that was another point that

seemed to hurt the business, and that is lower prices for cannabis is that a trend? >> listen, i think what happened there, you know, impulse purchasing, as you pull up to a store and what we saw also, it's interesting too, because consumers were not purchasing online the only way you can mostly purchase online in canada is through one of the liquor control boards consumers don't want to give their credit card or are still concerned about purchasing cannabis online. in regards to going to the stores, you could do that. you could introducenew products so what retailers tried to do in some of the cannabis stores is drop the prices. that's the way that they felt they would get customers coming to the stores. i don't expect that to continue. our premium broken coastline is something that we've seen maintain price i think as we expand our product line, innovate products, come

out with edibles and other strains, you'll see pricing absolutely increase. you'll see margins maintain itself >> the tilray acquisition aside, you said you wanted to potentially look at more m & a what exactly do you have in mind there? is that acquisitions in canada or something more akin to the sweetwater acquisition >> stepping back, listen, i think we grow our market share in canada, we expand our product line into multiple categories. we expand into drinks. we'vegot a great size business in the cannabis business in canada in europe with medical cannabis expanding in different countries, whether it's france, the uk, spain, portugal, germany, et cetera, we've got a great-sized business in europe to grow our business both in medical and the opportunity for recreational in regards to the u.s. market, listen, we're seeing great results coming out of

sweetwater tilray owns a company. not knowing when legalization happens in the u.s., i want to continue to acquire certain businesses like a sweetwater or manitoba harvest that can parlay into the cannabis world once legalization happens with great margins, great growth and great distribution for us. >> well, the vote on aphria tilray is this week, which is a huge deal for you. i want to play you a clip of what the uber ceo said earlier today on cnbc. listen to this >> when the road is clear for cannabis, when medical laws come into play, we're absolutely going to take a look at it but right now with grocery, with food, with alcohol, et cetera, we see so much opportunity out there and we're going to focus on the opportunity at hand. >> the openness for a company like uber to get into cannabis

delivery, do you welcome that? what's your reaction >> listen, i absolutely welcome it and i think we have similar strategies ultimately there's many opportunities in the u.s. right now with food and drink and other consumer products. i know how to build consumer brands and parlay that into cannabis once legalization happens. i'd rather be building on the brands that i know i can get distribution into convenience stores, mass market, because we don't know once it's legalized if it's a one tier system, two tier system, three tier system or what legalization will look like sweetwater had great margins, great growth opportunities, that can parlay into the cannabis or trc market. >> is it going to come first in the u.s. or in europe? what's your expectation? >> if i was a betting man, i think you'll see legalization happen in germany, portugal before you see recreational

cannabis legalized in the u.s. >> all right we'll hold you to that i'm sure we'll talk to you in between. irwin simon, thank you for joining us. >> thank you very much. >> wilfred. >> thank you. up next, much more on today's chip news and a retail activist battle. those stories and much more when we go inde tsihe market zone next we are just negative on the s&p 500. strengthening client confidence in you. before investing consider the fund's investment objectives, risks, charges and expenses. go to flexshares.com for a prospectus containing this information. read it carefully.

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commercial-free of all the action going into the close. today we've got paul hickey with us good afternoon to you, paul. stocks under pressure after posting weekly gains last week the s&p 500 hit an intraday record high earlier before dipping lower. the dow, though, has been negative all session it's down 135 at the lows. had a decent final hour of trade. in fact we're going to come to that trend later paul, i might as well kick off with that. because we're seeing it today, we certainly saw it on friday. and the trend in the final hour has been impressive of late. >> yeah, you guys must be doing something right. what we've seen is the first quarter. we saw one of the weakest last hours of the trading session throughout the trading day two fridays and the thursday

before good friday we saw big surges heading into a weekend so that generally tends to be a signal of investor appetite to hold equities and be comfortable holding overnight and into the weekend. so that's a positive sign in our view. >> consumer discretionary, banks ahead of earnings, consumer staples, real estate, energy under pressure and technology is the laggard. what does that tell you? >> i don't know if there's a lot of evidence for the future in the sector breakdown today really i see it more as it's a slowing down of the market the market is definitely comfortable at these levels. there's not a lot of selling pressure you have a lot of push/pull in a lot of sectors more stocks are down than up it's a similar pattern where the overall market finds a way to stay supported in general, we all know there's going to be good earnings news on the way the question is good enough. and just no real incremental

selling pressure despite the fact that everybody, including me, thinks the market is getting a little extreme in terms of being on the upside of this trend. >> the top performer of the s&p is nvidia, up 6.4% intel also raising guidance. josh lipton with all the details. >> nvidia is best known for its gpus but now it's going start making server cpus as well those are the big brains in most computing devices. investors saw that at a direct shot at intel which did drop on that news. a tech analyst says what nvidia is focused on is more of a niche product and intel dominates 90% of this server chip market this comes on the day of that big white house chip summit. president biden's infrastructure plan does include $50 billion for the chip industry. if it did get the green light, who would benefit. they would look to the semi

equipment makers so applied materials, asml. if you build new chip making factories, you need new chip making tools >> paul, intel was just on the upswing. a lot of optimism about their new bold strategy to build found res and more manufacturing in the u.s. and now another blow from nvidia. >> intel seems -- every time they seem to have the wind turning to that yeir back, theyv this you're not going to get real strong growth out of it but they have a very capable ceo at the helm now and so i think you probably won't be hurt too bad here after this decline all the talk today is about shortages and shortages. we're going to have shortages for the next few quarters. there's a lot of investment being announced. you have taiwan semi conductor,

$100 billion over three years, intel announcing $20 billion samsung spending $116 billion to boost capacity between now and 2030 these are long-term trends but people forget back in the '90s you had boom and bust cycles in the semi conductor space. there's definitely short anages now. but those shortages with this increased investment are probably going to turn into a lot of capacity down growth. >> mike, where's smh sitting at the moment it pulled back late february time but back close to highs again? >> it's a couple percent below the highs, has not given up much of the margin of outprrms that it had before hahand in terms of very big picture what it means when there's an enormous amounting new capital investment in any industry, it's pretty hard for economics to work if that doesn't over time bring on more

capacity and maybe lower returns. obviously they're not going to be shared equally among all the different companies. obviously we're going to be using more, not fewer semi conductors down the road so it's not like cap ex in the oil patch but i think people should be mindful of that, that that's usually the dynamic in how these things play out. >> eight minutes left as we stand. s&p 500 just positive. uber shares higher after a big increase in demand last month. deirdre bosa has the details of that for us. hi, dee. >> wilf, demand is booming but supply remains a problem i asked the ceo if the $250 million in driver snincentives enough and is he prepared to spend more. >> absolutely looking to balance supply and demand. if we need to continue to lean in to bring drivers out into safe earnings opportunities, we'll do what we need to.

>> now, that could mean more costs ahead amid fiercer competition, and remember that pledge to reach adjusted ebitda profitability by year ending there's the existing cost of a changing regulatory landscape. i also asked about gig worker classification. >> we want to give drivers what they want. and over and over again, drivers in the u.s. or drivers in the uk, all over the world, they want the flexibility that comes with using your system >> now, we've heard that from uber before but a number of labor experts disagree with that flexibility point and the tide may be changing. a european rival is bringing on drivers as employees the ipo was a bust in part because of its practices were more in line with uber's

>> dee, thank you very much. great stuff on "tech check" earlier. we're looking forward to it tomorrow and forever more going forward. mike, quickly on uber's share price, again, it pulled back for a couple of months kind of has been plateauing as it were but only a percent or so from record highs. >> yeah, it's clearly been granted survivor status obviously through this whole crisis the company has proven it can operate through it and has an answer in the delivery business at least for continued top line growth point to point we're approaching the two-year anniversary of the ipo of uber. it traded as high as 46 in may of 2019 and here we are at 59. it's up off the lows but in general it's been kind of a sideways story relative to the overall market and shows you, i guess, the generous valuation it got out of the gate more than it does anything that uber has necessarily not done right along the way, even though big picture the business model is not fully proven in terms of bottom line

profitability. >> dow recovering, only down 27 points. first it took aim at kohl's and bed, bath and beyond, now they're taking on another retailer courtney reagan with the story >> hi, sara. so genesco is legion partners' latest campaign. they own 5.6% of the footwear retailer legion is nominating seven directors to the board, fiech of which are women. legion wants the current ceo to stay this is legion's second investment in genesco in recent years. in 2018 it got two members on the board, including one it's nominating again shares went up and len legion exited that stake. genesco is one of 35 investments since their inception in 2012, including bed, bath and beyond and onespan in 2020. you may not know the name

genesco but likely know its businesses, like journeys and johnston & murphy's. so the investor basically says that genesco's current board has allowed long-term underperformance in the share price and operations, misallocated capital, bloated expenses and overcompensated executives genesco disagrees with many of the points but it will continue to seek constructive dialogue with legion like it would any other shareholder. we're waiting on the official date of the shareholder meeting. back to you guys. >> it's so interesting, courtney, because you'd think retail has been so ripe for activists to come in for a long time and yet we haven't seen a ton of it. so these moves of noteworthy genesco is less than $800 million market cap so any indications for kohl's, which is the big fight legion is trying to take on, but that's

more like a $10 billion company. >> yeah, it's interesting that legion is actually one of the few activists that we've seen involved in retail to your point in the last number of years. yes, genesco is much smaller than kohl's and legion is going on as a four group consortium with kohl's. i'm not sure what the outcome would be it seems unlikely they would reslate an entire board either at kohl's or genesco, but they do have a history of some success in getting retailers to pay attention to some of their ideas. they have a 5.6% stake so they're a big investor and one that i think genesco needs to listen to as kohl's needs to as well at least to hear their ideas. really when you think about it, the goal foerch is the same, is to get that share price to go higher that would be the goal for the

company and the goal for these activists which of course are holding long positions. >> court, thanks so much for that worth pointing out both consumer discretionary and consumer staples are two of the best three sectors, up half a percent or 0.4%. two minutes left of the trading day. mike santoli, what are the internals showing you? >> very, very mixed under the surface. the number of stocks going down exceeds those going up if you look at the volume split, it's kind of even in terms of advancing and declining. the declining is actually outpacing 1.9 million versus 1.1 million advancing. the market has been slowing down, pausing, allowing a lot of stocks to correct, overall not costing the market much. you mentioned consumer stap les versus discretionary you will see the outperformance here of consumer staples this has been a very, very quiet perhaps early theme where you do

have a little more money rotating toward the stable and sort of quality sectors of the market, dividend payers, things like that. and then the volatility index has been a big story once it has broken below not just 20 but 18 and now 17 it has drawn in these funds that wait until volatility calms down before they take larger equity exposures. one of the last big groups that had not really been chasing this market higher. >> less than a minute to go. the dow has had a bit of a recovery we're down only 43 on the dow. the biggest drag is intel, which we've been talking about nvidia coming to take some business there boeing, salesforce, apple, also some weights on the dow. the biggest gainer is honeywell, home depot and nike. as far as the s&p 500 is concerned, you've got strengths in groups like consumer discretionary, financials and consumer stap 'lesstaples

we just crossed into positive territory, now negative. we're basically flat keep in mind we're trading at record levels. nasdaq down a fourth of a percent as technology lags names like apple, intel, google, amd all weighing there small caps down a fourth of 1% treasury yields a bit higher the dollar is weaker and bitcoin adds $300. wilfred. just negative it looks like on the close at the s&p 500. still settling so there's a chance it will dip back positive but at the moment down two basis points welcome to "the closing bell." i'm wilfred frost with sara eisen and mike santoli it does look like a negative close on the s&p by 2 basis points a decent final hour of trade as you can see there for the s&p 500. briefly green, not quite at the

close. nasdaq composite down a third of 1% at the close so small declines essentially to round off the day here on monday consumer discretionary the best performing sector followed by real estate. at the bottom of the pile was energy and tech and communication services, the only other two sectors in the red. coming up, we will discuss the white house's chip summit and what the government can do to revamp the u.s. semi industry and we're joined by t.j. rodgers. looking forward to that conversation paul hickey is still with uls and ali mccartney joins the conversation as well mike, i come to you first. with the internals, only slight declines on the surface but a couple of other cracks on the surface, including the vix picking up a bit. >> yeah, the vix did bounce up sometimes that's a monday effect after markets be closed for the weekend. it's just a market that really is in the very short term in a lull today was basically a push

between the bulls and the bears. the s&p has had this pattern of finishing higher than it opened almost every day so there still seems to be net demand to be involved, even though the market does look somewhat overbought technically even though it seems equity exposures are pretty high so i think that's where we get these opposing currents on a day like today before we're expecting a big rush of economic and earnings news, you get a little bit of a lull. >> ali, what do you expect for earnings season? >> we link the market is very biased to the upside and the earnings season appeared the numbers we're going to see are highlight that from a technical perspective we have 80% of the s&p trading above its 50-day average so anybody who knows the way systematic traders come in, that's a momentum to the upside. on the fundamental side, we are about to see the first earnings quarter since our country in

earnest began and commenced very effectively vaccinated people. and what's baked into earnings, as mike santoli just said, is about or actually slightly lower than the consensus earnings that we saw for the last quarter. that's pretty crazy, right so if you think about it, we're thinking about there's likely going to be about a 10% beat on average. the other thing that's quite interesting is if you look back at history, the outperformance in stocks tends to come after the beats are for multiple quarters and earnings. we saw a lot of beats last quarter. so we see again from both the technical and fundamental perspective, everything seems supported except for the fact that we all feel uncomfortable about where the markets are. >> on the flip side, paul, have expectations and share prices, particularly for some of the cyclical sectors and stocks, risen quite a lot in the last month as we approach earnings? >> well, so it's pretty

interesting. analyst revisions of been to the upside heading into earnings season typically when you see that, it tends to be a bit of a headwind. it doesn't guarantee the market will go down during earnings season but you're much more likely to have a positive reaction to earnings when you have expectations going down going into earnings season what's interesting about this period is that despite the fact the s&p is at record highs, as mike has been talking about, a lot of stocks underneath the surface hasn't been nearly as strong as some of these mega caps so we're working off a little bit of the froth that we've seep from late q4 and early into q1. last quarter we saw very small results relative to expectations, this quarter and very negative share price reactions, this quarter we're likely to see strong results relative to expectations but mob we'll see more of an improvement in those share price reactions because the stocks have -- some

of these smaller names have gotten beaten down a little bit. they're not nearly as close to their record highs as the s&p is overall. >> deal news today microsoft ha nohas announced it be buying nuance communications worth about $16 billion. earlier today microsoft's ceo joined cnbc discussing whether he's worried this deal will be a red flag for regulators concerned about privacy and data security >> on the aspects of regulation and privacy and security, these are super important topics obviously in this particular context of the deal as well as the segment in health care this is all about providers, patients, doctors and their data our job is to provide technology so that they can in fact keep all of that data secure. use even the ai that gets created on top of the data to benefit health care. this is not about an aggregation

play, this is about pure platform providers. >> i think it was notable microsoft finished higher, at least flat it did not go down with some questions about the price they paid, alli does this fit in with any of your themes in the market, whether it's deal making or health care tech >> absolutely. you just alluded to two of them but i actually -- i think this is a fascinating, fascinating buy. we look at ai basically as the next technological and industrial revolution, how it is going to affect everything from supply chain management, health care, delivery, you name it. and satya was talking about part of that. so when we talk about investing in secular themes and doing it in whatever way you can, either through private markets or public markets, this is exactly what we're talking about this is going to take a lot of these stocks that are looking for a catalyst to have the next leg up to that >> paul, what's your take on

microsoft specifically but some of the other big cap tech stocks which are back in vogue, i guess? >> yeah, so i mean microsoft is a name we like and we own it for our clients. what the interesting thing here is we've been so concerned about inflation and higher rates hurting these growth stocks for all of march what happened at the end of march, early april we saw one of the largest gains, month-over-month gains on record we saw a 40-year high in the ism manufacturing. we saw a record high in the ism services index and job growth gone and ppi hit the highest level since 2010 given the concerns over interest rates and inflation, that kind of data you would have expected rates to go higher yields have gone down on the 10-year during that time i think the market is at least coming around to the fed's view that inflation is temporary or the fed is so determined inflation is going to be temporary that they're not going

to do anything about it for some time and that helps breathe some life into these growth stocks and the tech sector, which is what we've seen over the last several weeks as the mega caps have started to rally and some of these value stocks have fallen out of favor temporarily. >> alli, i think you are a fan of value and small caps, even though they have been hit a little bit lately. is that still the case >> that's still the case actually we hadn't had a bias on value versus growth until about two weeks ago. given some of the intrasector things that we had been seeing in the market, which again mike has touched on all day and all month, we are. we are tilted towards cyclicals. we continue to like small caps a couple of interesting things were said in the last conversation, which is margins and inflation, right so i think we've all been talking about i'm privileged to have a lot of clients that run these organizations and they are telling me that their transportation and materials

costs are going up so what we need to see to keep this going and keep the cyclicality and growing there is to see the ability to continue to stay on top of pricing and to increase margins is significant. i think that we will see that and i think that that's fufrt go further going to push into expansion and value. you're going to see buybacks get fueled it's all going in that right direction. >> paul, i just wanted to ask about this apparent decline in market participation by retail investors in recent weeks, and indeed in volumes in general, and if that's a warning sign or not. what's your take >> yeah, so there's an old saying in the market never short a dull market. i think there's a reason for it if you look pback historically. if you go back ten years, more than 100% of the s&p gains has come on days when volume has been below average

so volumes have declined over the last week and that's raised some concerns that the retail investors tapped out or moved on to other things. but when you look at the statistics, all of the markets gains come on weaker than average volume since 2010 the s&p is up 225%. if you had only been exposed to the market on below volume average days you'd be up 1900% if you were exposed on above average volume days you'd be down so i wouldn't read too much into that, that the market is just slowly drifting higher rather than some sort of frenzy i think if you did see an explosion of volume, that would be a sign that people are getting too enthusiastic towards the market whereas now we're just seeing a steady trudge

higher. >> paul, alli, thank you for joining us good to see you. >> thank you. the big banks are set to begin reporting quarterly results on wednesday our next guest says consumer finance should be the star of the earnings season. she lays out her top picks which may surprise you. bplus genomics analyst, the stocks he's stulmo blish on. we're back in just 90 seconds here on "closing bell. with a bang, energy and change came to every part of our universe.

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joining us to discuss, betsy, good to see you, thanks for joining us. >> thanks, wilf, for having me on. >> first big picture question. to what extent have share prices and also expectations risen a little bit too much over the last few months, not the last few weeks perhaps where share prices have pulled back a bit such that it's quite a hard setup this earnings season >> oh, that's a great question but i have a slightly different point of view. i think that we are going to see ba bank earnings beat consensus we're sitting here several percentage points above consensus in our outlook and our expectation is that it's much

more likely our estimates are beat rather than the other way around. >> and your particular focus is toward consumer reopening names. even if the investment banks that did so well last year might have a good quarter too? >> yeah, that's right. look, there is many different cylinders that are firing here i've been looking at this group for many years in particular u.s. large cap banks almost 20 years. i have never entered an earnings season where there is so much positive going on. in particular it's around a handful of things. number one, consumer credit fantastically good consumers have also been very prudent with how they have been receiving prior stimulus as you know, jobs numbers have been improving here for the last several months so we are looking at consumer lending and consumer credit

being in very good shape in addition, we expect that that will drive bigger reserve releases than we have currently put into our models. and as a result, we get faster buybacks sooner. so putting all those things together, i think we'll see an uplift in the outlook for eps as we move through this earnings season most particularly to your point in consumer finance, but then also the capital markets, as you know, is very strong and our trading numbers, we have trading estimates up at about 10% to 15%, depending on what company we're talking about year on year we entered this year looking for trading to be down year on year, but that's been a turn-around in our view this past quarter. >> betsy, particularly within the consumer finance area that you like, which names look cheapest relative to your great expectations >> so our outlook, our two top

picks, synchrony financial as well as capital one. there's 12% to 15% upside in those names for our base case. for our bull case it's closer to 25% to 30% i do think the direction of travel here is toward the bull case i think we could end up with our outlook for 2023 estimates coming sooner in 2022. >> on the capital market side of things, betsy, i guess it's not all good news, particularly in recent weeks with the archegos blowup is that a story, obviously you can't talk for morgan stanley but perhaps for goldman sachs and the other banks that decided not to do business with them, but is that a story that we are all focused on in the media much more than the analysts or is it a significant issue from a risk management and bottom line losses >> i do cover goldman sachs and our view here is that for goldman sachs, we're going to

have an up year on equity trading year on year similar to other stocks i cover, jp and citi and b of a. the questions around risk management, i think this is a question that management teams are constantly being tested on, reviewed, dug into, and so i don't think that this would end up in a different situation than any others where you're going to see, you know, reviews and that kind of thing basically. that is really no different from any other quarter that we have as it relates to earnings, why i think trading is actually going to be up is look at what's been going on in the markets, the ipos, the spacs, the market valuation increase so those drivers are outweighing some of the challenges that you've mentioned. >> betsy, overall just given the remarkable amount of money that the federal government has

dispersed in stimulus checks and unemployment benefits, what do you expect to see on deposits and loans? >> so deposit growth is extremely strong now, that's not because anybody is necessarily doing a great job marketing themselves, right? it's because the government is creating money through the stimulus and the qe like you mentioned. so we do expect deposit growth will be in the mid-teens, maybe even the low 20s depending on the bank and so that should be playing out here that comes from looking at the data on a weekly basis and if we look back to the last couple of times that we had big stimulus checks go out and significant qe activity has been going on as you know for the past year, some of the biggest increases have been in the major banks like b of a, jp, citi, et cetera in terms of loan growth that is the one cylinder that is not really firing right now, and that's mainly because, to your point, if you are getting stimulus directly from the government, maybe you don't need

to borrow right now. so we are anticipating that loans will be shrinking slightly, most specifically in credit card, and we expect to see the best asset class for lending in auto finance. >> it's going to be a fun one from wilfred betsy, thank you for joining us. betsy graseck on the banks. let's go back to mike santoli for a closer look at expectations overall this earnings season. >> it's an unusual but not unprecedented setup where we've had earnings forecasts for the current year going higher versus lower. this is the historical path of earnings according to credit suisse and this is what we've sf seen for 2021. we have vaccines in here, the stimulus hitting and the upward revision from gdp numbers. so we did see this in 2018 but that was strictly a tax cut kind

of statistical effect. before that it was 2010 and back in 2003-04 so you often see analysts are behind and they have to raise, but that also could suggest it's in the price 2010 you had some choppiness after the first part of the year this is earnings revision so the number of earnings estimates going up versus down, this is a netting out of that and it's flattened out. that could suggest that we've seen the best of this upward revision so that's why i do think guidance and sector and stock specific factors might be a big deal this earnings season. >>if you just take today, we had two preannouncements positive signet jewelers read on the consumer upped its guidance. also nvidia upped its guidance and we saw very positive reaction in both stocks. so are companies fully giving guidance now overall have they been conservative >> i think they have been conservative by giving very little in terms of guidance. i think more will be giving more

specific outlooks this time. i don't get too caught up in whether that matters or not. the stock market is up more than 80% since companies stopped giving guidance. i don't know why people are consumed with the lack of guidance -- >> because it made analysts so wrong. >> but the market tries to split the difference and figure out whether analysts are slow or not. that's also why those great earnings beats in the third and fourth quarters did not get fully reflected in stock prices because they represented beating stale estimates arguably >> all right, mike, thank you. >> mike, great stuff thank you. up next, former cyprus semi ceot.j. rodgers will join us to discuss whether washington can be the solution to the global chip shortage. plus why a crypto fee fight could be a problem with the direct listing

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we have a news alert on pc shipments. josh lipton has the details for us hi, josh >> wilf, we do have news on pc shipments coming from gardner which is saying global pc shipments totaled 69.9 million units in the first quarter of 2021 that was an increase of 32%.

they say that is the fastest year-over-year growth since gartner began tracking the pc market in 2000 that's due to comparisons against a pandemic constrained market and they call out the current global chip shortage which they say is adversely affecting the supply chain once again. they say shipment lead times for some pcs extending to as long as four months. but they are saying global pc shipments jumping 32% in the first quarter. >> we'll pick up right there because executives from alphabet, ford and gm among those attending today's white house chip summit in hopes of addressing the chip shortage a number of the chip stocks finishing today in the red with intel and amd among the biggest losers though overall the group has been strong. joining us for more is t.j. rodgers, former cyprus semi conductor ceo. looking forward to talking to you about all this news in the

chip space first, from your perspective, why are shipments of chips so globally constrained right now >> well, now that i'm a retired ceo i can say the truth and that is all problems like that are because of management screw-ups. it's real simple obviously, obviously if you manage things right and have systems in place, it wouldn't happen and the industry is not there yet. this correction, this swift kick is going to cause them to improve things and this will get a lot better in the future. >> anyone in particular you're referencing when you point to mismanagement? >> well, okay, let me not be so strong in mismanagement. but yes, i will point my finger and tell you that the car companies caused this. all you have to do is be a chip ceo, which i was for a bunch of years. i'll give you one example how we were treated i got a call from japan, just

merged with a company, up to my eyeballs not getting enough sleep. you have a problem we need to talk to you about in tokyo tomorrow morning you know, i've got a merger. we don't care, show up, this will counting on your record so you get on the airplane, you fly all night long you get out in august with your suit sticking to your back, go into your board room and get the hell beat out of you by a bunch of japanese directors. okay, that's the story about the auto industry. and they treat chips the way they treat tires how much does it cost per pound? we want a lot but you hold them until we need them chips are the most complicated things on the face of the earth. a typical video game, if you had a literal blueprint of a chip would be a thousand times more complex than the blueprint of the empire state building. it takes real smart, real well

run companies to make them so when covid-19 smacks the system and everybody gets scared and are playing who's got the inventory game, when the music stops they push it back on the chip companies the chip companies say, okay, we'll stop making the stuff. the problem is the chip takes 60 to 120 days away to make from the time the round piece of silicon goes in and gets carried automatically through the line until it comes out then it goes around the world maybe only once if you're lucky for another two weeks to get turned into a chip, tested and shipped. there's no responding faster than that. so when they wait and get hit and they got hit with surprise demand, there's nothing that can get done. >> so it sounds, t.j., like you're not suggesting the government is to blame but the reason i bring that up is can they be part of the

solution how quickly can what was discussed today help give a solution to make the u.s., a, not face a shortage as it does now but also be more self-dependent going forward >> well, let me answer by a analogy. let's suppose there was a shortage of masks today. would you trust joe biden to do a study and make masks more efficiently or would you start going on amazon to finding a mask the answer is of course not, the government can't do stuff. this is one of the most complex industries in the world. and it suffers from meddling from the government. it distorts the industry and messes stuff up. there's smart guys, they're going to figure it out the auto guys will learn they have to treat chips with more respect. by the way, toyota did a good job. if you notice, toyota is one of the companies that didn't announce shutdowns what they did is they stockpiled

two to six weeks worth of chips, which is anti-japan thinking having inventory is not okay but when the cycle time to make stuff is so long you've got to do that, that's prudent management you'll never hear who pays for the inventory. all the government can do by politicizing the thing and having a democratic/republican argue whose fault it is is waste time and make people think they're doing something that mar matters. they can't. >> so you're against government intervention and wanting to spend more money t.j., i want to ask you another question unrelated but one about executives and roles of corporations and ceos right now. there was a call over the weekend, an emergency call on zoom with more than 100 ceos to talk about how they should deal with the new voting laws, especially out of georgia and coming out of other states do you think that ceos should be speaking up and speaking out

against these voter laws and getting involved more politically? >> two levels to that question would i do that? no way i run a company for my shareholders the purpose is to manage their asset properly and make money for them, period the milton freedman thing was right and that's what has to get done on the other hand do you ask me do ceos have the right to talk about a political view of their company, be it a conservative or liberal political view and lobby for that, they do. as long as they're open with their shareholders, the shareholders understand it's costing them money and there's a cost to running the business properly, distraction plus whatever you spend on it plus people that don't like whatever view you have and go to your competitors. so yes, they have the right to do it. but on that particular one, would i really go to a yale professor and spend my weekend on zoom trying to figure out whether or not i should politicize my company? no i already know that.

the company -- your shareholders have given you money they are goingto retire on tha money in many cases. and it's your job to watch that money right and grow it for them so that their retirement will be covered. and that's what your job is. then you vote the way you want to vote, you contribute politically the way you want to contribute companies can contribute politically. i just -- i just don't see this plitization as being valuable. >> t.j., i wanted to put it back to the chip shortage and the level of threat it is to the u.s.' national security, in particular how important while we do transition to perhaps having more self-dependency in this area, how important taiwa is to the u.s. and whether there is a genuine fear of intervention by china on taiwan that could trigger a much bigger

response from the u.s. than perhaps people might be figuring in. >> that was a long question with a lot of parts and only one part had a something that was a little bit scary to me and that was china/taiwan i'll get to that last. i don't think the governments ought to be involved in this thing. i don't think -- i know they can only hurt. i've been in this for years. i've had the privilege of testifying at congress five times. every time my testimony was the same i was invited by the contrarians and i got up and said why would you give american taxpayer money to some of the richest and most well run companies in the world? why would you do that? why is that fair or even reasonable and what came from that was a vote against me. and by the way, gordon moore is on the other side so it's nothing to vote against me and the government squandered a bunch of money and that much happened that's what's going to happen

from this. the second point, governments that throw money at chips do a crappy job they don't get anything done they have been throwing money at chips for year we're going to have silicon germany and silicon france it didn't happen they have a 10% industry china, oh, my god, what are we going to do about them they have been throwing money for years. they have one company called smic it's a don't care company. so chips demand the free market. if players intelligently acting in a free market aren't running chip companies, then the results won't be as good both europe and china have showed that. so that was the answer to all your question but the last part. i never thought a concept of china doing some sort of power grab and taking over taiwan. taiwan is a free economy and they have prospered on chips. and they have the right combination of chips to be free and have free markets work for them, but also have very low

cost labor and government policies with low cost capital, et cetera. the taiwanese semi conductor industry has become extremely important. losing that or losing control of that or causing that not to be free in the world would be a problem. the last point, we never have to worry about military chips that's all scare tactics i used to be the chairman of the sia and it always caused me to look at the ground when i would listen to somebody from the sia talk about defending our military, making sure we have the critical chips military chips are different they typically are at least 10-year-old technology and they're made for a different purpose and we will have forever all of them that we need that's not the problem but national security to me is more dependent on having state-of-the-art chips that make you a player in the chip world i don't think winning a war is the most probable part of our future security, i think winning

the economic war and being on top is the most important thing. and there we need a vibrant chip industry we're down to, i think, like 12%, but we make the most important 12% of chips in the world, the most advanced 12% i was on your show and that's why i was so hard on the old intel management when intel was giving up market share because they weren't executing because they're a national asset glad they have got a new ceo and they're working on it. so yeah, the only thing you said that even gives me a pause is if we ever lost tsmc in taiwan for some reason, that would be bad >> t.j. rodgers, always good to have you thank you for your candid thoughts >> thank you >> former ceo of cypress semis. still ahead, an etf up 160% over the past year but it has

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a modern approach to wealth management. did you know that petco, is now a health and wellness company? their groomers work wonders for my confidence. i trust their vets, and i'm known to have trust issues. they deliver high quality food the same day. i was outside digging, what'd i miss? just everything regarding our physical, social, and mental health. exciting. i'm gonna take a spin around the room. great idea. ♪ ♪ petco. the health and wellness company. welcome back time for a cnbc news update with rahel solomon. minnesota's governor has ordered a curfew starting at 7:00 p.m. central time that applies to counties in the minneapolis/st. paul region after an officer intended to fire a taser and not her gun when she fatally shot daunte wright during a traffic stop

before the curfew was ordered, the nba and nhl are postponing games scheduled to be played in the twin cities tonight. the minnesota timberwolves and brooklyn nets have not announced a new date for their game but the wild and blues will make it up at the 12th. britt reid has been charge with felony driving while intoxicated in connection with a february 4th crash that left a 5-year-old girl with severe brain injuries. and near atlanta traffic came to a stop on interstate 285. both directions were blocked for hours after that tanker truck hit an overhead sign workers are cleaning up 7500 gallons of diesel fuel that were spilled in the accident. wilf, apparently that's happened before, diesel fuel leak right there. i'll send it back to you a couple years ago. >> wow, rahel, thank you. up next, we will discuss the genomic revolution and the stocks that lead the way when we're joined by ark's genomic

analyst. wr we're back in a couple minutes

in the molecular diagnostic space it's probably one of the most important companies in the genomic revolution.

>> that was ark invest's kathy wood picking invitae joining us to discuss what other names in that space ark likes is genomics analyst simon bonner. thanks for joining us. >> by the way, you got it, it's genomics. >> yeah, it just didn't sounding right when i said that but my producer also said that he thought it was right. but you are definitely the expert, so thank you, simon. talk to us about invitae it's up 10%, is it still a top pick in your space >> absolutely. it's one of our highest conviction names within our portfolio but also our flagship fund one of the ways we've built out the portfolio is to understand the convergence between several different technology platforms

like next gen sequencing, lab automation and artificial intelligence, specifically neural networks. so it's at the center of combining all of these things together,ing agating all of the world's genomic and genetic information to transform and bring into mainstream medical claire genomics and make it as common as a cholesterol test or going in for a physical. so we're excited about the company. >> with a lot of these names, you guys own such big components and have had such great success and a lot of retail traders and others follow the ark strategy are you worried that your own ownership distorts some of the valuations, the prices for these companies? >> so i think, first of all, to your point on opening up the trading, i think it's one of the things that i certainly appreciate a lot is the transparency of the funds. we actually encourage folks to take a look and try to understand why we invest in what we do. and i think when it comes to the ownership limits, and especially

with how great of a year 2020 was, we're actually really excited that some of these companies are able to redeploy capital, grow into new markets, expand their opportunities and ultimately issue new shares that one can dilute our ownership down but also give a lot of investors the chance and the opportunity to get involved in what we think is one of the most transformative investment opportunities of the century, which is genomics. >> tell us, we've got a couple of your other picks here, simon. tell us about adaptive. >> so adaptive biotech is really interesting. a few weeks ago they got an emergency use authorization from the fda for something that is a first of its kind diagnostic test essentially taking the place of the serology test that we take a lot about for covid-19 so to diagnose a previous infection. but the really interesting thing about adaptive is they combine

their understanding of the human immune system that is brought in any time we get infected or have diseases from autoimmune to infection to even cancer and by applying a lot of sophisticated machine learning principles, they have actually been able to create a test that we think will be a platform for essentially all autoimmune diseases in the coming year. so many of these are, and i'll give examples, i'm celiac disease, crohn's disease have long diagnostic odysseys that take years to diagnose and we think this is a good example of a new class of diagnostic test that can be a one and done, what do you have, what have you been infected with, that's going to streamline a lot of health care provision when it comes to next gen diagnostics. >> adp up 56% over the last year so many of these charts look similar which means they have had tremendous run-ups and ark is in it which helps build the momentum and enthusiasm. but when it comes to the actual data, clinical trials, a lot of

these, especially gene editing, are in early, early stages, right? isn't that pretty significant risk here with some of these names? >> sure. if we take apart the portfolio, as you mentioned some of them are thuerapeutics names which ae with crisper gene editing which is how to treat the root causes of disease rather than mask the symptoms to your point many of these companies are earlier stage. what i would reminding people s when we are doing the valuation work of any of our funds, wee a six-point scoring system and one of the most important components of that is that 15% compound annual rate of return. so when we're looking at the valuations that we do out at five years, that's our guiding principle during volatility. we talked about it in the beginning of 2021, some of these valuations have kind of curtailed a little bit as investors have looked to see how these companies are going to engage the capital that they raised and put that to work. so i would just remind folks

that we're really kind of focused in on understanding the valuation framework as well and thinking about it in the context of our rate. so intelia, chris per therapeutics and editas are no different. we think about how they're leveraging sequencing, ai and crisper gene editing will have a more likely possibility of bringing many of those curative drugs to market. >> they certainly hit the buzz words. simon, thank you so much for joining us we appreciate it. >> thanks for having me. up next, we are looking ahead to one of the most hotly anticipated listings coinbase gearing up to go public this week but there's a potential threat bubbling up to e coanthmpy's enormous valuation. we'll tell you about it, next.

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- [narrator] take advantage of some of the lowest online tuition rates in the nation. find your degree at snhu.edu. coin base is set to go public later this week, and i highly anticipate a direct listing on wednesday kate with the details. kate >> hey, sarah, analysts do expect crypto trading fees to drop as that market matures, which could be a risk to coin base few reasons why it is so expensive right now, at least compared to trading stocks first, this is a brand-new market so some of the clearing

infrastructure isn't quite there yet. there is also no payment for order flow and there are higher costs for things like security and custody. the final thing which is basically holding bitcoin is more complicated and more expensive with crypto. platforms tend to charge between 1 and 2%, and they also make money off of the spread. in q1, coin base, for example, made almost all of its revenue on trading fees alone. analysts at new constructs highlight revenue concentration as a big risk here and predict a similar dynamic to what we saw with schwab, fidelity, all of the retail brokerage firms a couple of years ago with fee slashing to gain market share and to keep customers. back to you. >> kate, thank you so much for that still to come, some key inflation data on the docket platnsoroumot could have big imicio f yr ney. all the details coming up.

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final thoughts on the markets next, and a quick programing note for you on may 11 join cdc director rochelle walensky, plus leaders from pfizer, eli lilly. cnbc events.com/healthy returns

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look ahead to tomorrow including the march cpi date a key read of course on inflation. analysts expecting the annual rate to grow 2.5%.

and mike, 20 seconds sore left inflation tomorrow earnings dominate the rest of the week? >> yeah, they will i don't remember a big anticipated number where economists where everybody including the white house saying hey, don't pay attention to the details because it's because of base effects we'll see if the market they cans that to heart >> we know year-over-year is going to be a big theme. that does it for us. "fast money" begins right now. i'm melissa lee and this is "fast money. trader lineup, guy adami, tim seymour, dan nathan and karen finerman microsoft shelling out $16 billion for nuanced communication. so that got us thinking, what should be the next tech tie-up our traders have some ideas. we'll bring them to you straight ahead. plus, an all clear for alibaba. why one trader is calling the fine the best news we've seen in a while. and later, time to ante up draftkings falling 6% today. the stock is down nearly 26% in the past month so you double down on this