i bought calls today >> farmer jim. >> kinder morgan the strength in its business is finally being recognized >> all right, the etf known as joe t. >> eqt natural gas price is up over 101% this month. >> bracing for apple can't wait the see what happens in the talk about it on to tomorrow's show. "the exchange" is now. thank you, scott he here is what's ahead the fed says it's transitory and investors are caught in the middle inflation will be to watch we'll discuss that and what else to look out for. the president unexpected to unveil a nearly 2 trillion dollar plan this evening and the keyword will be taxes. tax credits offset by tax hikes. we have the details. we start with the markets and dom. >> you totally piqued my

interest i want to know what all of those things have in common. i'll wait an see what happens in rapid fire later on today. the part of the market that's not on fire is pretty much all of it. the dow is down ahead of that big fed rate decision later on this afternoon market steady, almost in a holding pattern. no fireworks expected. take a look at the interest rate complex. 10-year treasury note yields that's highest level in a couple of weeks you can see the up tick. some traders are on 1.85%. that seems to be an area that the moving average has not dropped behind since august of last year. continuing to watch interest rates and the banks as well. the two stocks that will be a key focus for so many traders out there later on this

afternoon after the closing bell facebook and apple out performers over the last year and specifically this year, neither stock has really done anything to add to the market's dynamic one way or the other apple is pretty much flat on a year today basis facebook is up roughly 12% that's in line with the s&p 500. we'll see if there's any momentum that can be gleaned right now. two of the most important stocks in term of market waiting. we'll sfeeee if the well being affected i'll sepnd things back over to you. >> all eyes are focused on two words, inflation and transitory. corporate america is not totally on the same page take a listen. >> we talked over the last month or so about the increased inflation we're seeing

broad base, logistic cost, raw materials. we're seeing that impact our business and impact our view of going forward. >> inflation we planned for is going to be more not a lot more but more than we had originally foreseen. >> we're facing an environment where we see cost inflation. i don't think that cost inflation will go away overnight. >> the price increase we announced today which go into effect in september are designed primarily to cover commodity costs increases that are affecting those businesses >> what should investors do about this divide. it's great to have you both here i'll start with you because i don't think you're in inflation camp tell me why you think the price pressures will prove fleeting and how fleeting

>> there's a difference between inflation which is year after year increases in prices and a one time pass through of supply chain pressures which we do expect to see some of and the fed expects to see some of if you're going to see prices rise year after year after year, that's inflation that tends to have to be not just supply chain braven or commodities driven but a broad based phenomenon that comes with broad base wage gains. that's a more salient question for the fed in terms of thinking about inflation. the question is will it be repeated next year and the year after. >> i always look to the bond market for kind of keeping us on honest it says, maybe we're going to

get up to 2% but even a to year is not yet maybe we won't on a lasting basis. it's maizing to me because we'll hear from the president announcing the plan that's part of build, back better. we're talk about four trillion spend by congress last year. we have so far about 6 trillion announced in build, back better. a little bit of pay but why are bond yields so up moved by the cost pressure we're talking about or some of the spending side of the fiscal package why are they just shrugging it off here >> the higher inflation is being born out very clearly in the inflation expectations market. it's 240, above 240 right now. it's the highest level inflation rate has been in the last decade the last ten year yields are still quite low on an outright basis. just about 160 right now

a lot of the -- the recent rally what was interesting in a bond market is the rally was entirely driven by a decline in real yields and inflation breaking widen. why? there's pressures in the exact commodity prices are going up to exactly the same issues the ceos are pointing out to supply side disruption is leading to higher commodity prices >> this is such great point. why is it, let me get wonky for a second, why is the market telling you at the same time inflation will be 2.4% but the ten year yield is only at 1.6% is it saying that yes we're going to have the cost pressures but that's going to slow the economy. how the you reckon all of that in. >> that's a very good question real yields are very low term premium which has declined and that part has to do with the fed is purchasing assets i think at some point when the

fed starts moving away from massive purchase, tapering asset purchases then lit be room for real yields to rise. that's really what you want to see in a strong economy. you want to see real yields as well as inflation expectations start to rise at the same time >> all of a sudden they start talking about pulling out of the market and you get there pop in yields that says we have to take a higher term premium. we have some eye watering gdp figures we might get we have a lot of spending coming down the pike. how big is gdp going to be this year why isn't that likely to last beyond the middle of next year >> a lot of the fiscal support

legislated is transitory in nature it's one time payments to cons consumers, to state and local governments. it will produce a very larnl pop in growth this year and more focus is now what is the boom bust dynamic what comes next. we know there's a big reopening push it's well supported by fiscal policy and monetary policy what comes next? how fast do we moderate? ha is the underlying trend growth we know the demographics are still unchanged or worse than they were pre-covid. what happens to productivity growth and wa happens to this biden fiscal package i think more than a little bit is planned to be paid for through higher taxes the net impact is about what is the net pay for and what is the impact on prouktductivity and growth potential do we bring people back into the labor mark do we enhance competitiveness or sectors of the economy i think there's so many unknowns

about 2022 and beyond and a lot of caution still >> all right i haven't asked you both anything really about the language this afternoon. am i right to kind of dismiss that we could hear anything that could really spook the market. it just feels like we could have this conversation but i doubt the fed is going anywhere near it >> i think that's right. we're not expecting any mayjor changes or any policy changes at all at this meeting. would be if he takes baby steps towards suggesting that the market, that fed is ready to taper asset purchases in the future for instance, the words inflection point they might use words similar to that to suggest they are getting closer to tapering asset purchase any comments on vaccine as well

as improvement in the pandemic as well as for the clues for when they might taper asset purchases. >> i'm jotting all of this down. inflection point that's a good one. thank you both very much for the little preview we'll see what happens top of the hour really appreciate it let's turn to the megacap tech earnings that continue with apple after the bell the company is expected to report second quarter revenue thanks to surging sales of premium iphones and other devices. the stock has been slightly under performer the broader nasdaq my next guest warns there's little room threatening what should be a super cycle year let's bring in tim higgins he's a reporter for the wall street can you dwell on that point for a moment about the super cycle and the chip shortage. >> the super cycle is this thing that investors have been excited about for a long period of time. it's the time wen the new hottest iphone comes out and we

see new records and new profits and new sales that just blow the mind then covid happened. that's threw some questions over is the market going be there apple has really knocked it out of the point up until this point. now the concern is what is the second half of fiscal year going to be like is apple going to be able to kind of deliver that second half the way that everybody's models had predicted. >> what do you think pandemic impact is on apple we're digesting what it will mean norin the long run. a lot of thinking the pandemic would end. is apple the kind of company that will have longer benefit from some of the pandemic trends like its tech peers than we appreciate or are these supply chain issues going to be a head

wind >> that's a lot of what the investors are wanting answers to today. now with the iphone, the question is as we go back to a normal world, is that money going into the new iphone. i think we see that kind of dynamic in the market today between google and microsoft two companies that both did really well last night google is being rewarded because of that potential for money going into ads in a post lock up world and that's where investors minds are today with apple what's that new world look like for apple and tim cook will be under pressure to say. >> we have the earnings this evening. we have the epic trial coming up we have the privacy change which is the biggest deal for

investors? >> for investors, i think it's all about the future, the business it's about what's the next big thing. it's about the next six months the epic case could be important for apple but i don't think inver investors minds are there yet. it's something that could be years before it works its way through the courts >> thanks for now. we appreciate it coming up, president biden will also be calling on congress tonight to pass his 1.8 trillion dollar plan for children and families we'll look at what's in it, what may not stick and the interest across the market. pinterest is down double digits could the post-pandemic world pose a problem or is this just a needed reset that's all ahead on "the exchange." hey lily, i need a new wireless plan for my business,

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welcome back we're just hours away from president biden's address to a joint session of congress. he's expected to lay out his 1.8 trillion dollar american families plan. it's less than a month after he announced a 2 trillion dollar infrastructure plan and the key to making all this happen will be taxes joining me is dan clifton.

it's good to see you again welcome. >> great to see you. welcome back >> i was trying to catch up with this announcement today and put it in the context of everything that's opinion announced from what i understand we had four tral last year in covid relief we had the 1.9 trillion dollar stimulus package we have the 2.3 to 2.7 trillion infrastructure package that was announced last month and now 1.8 trillion american families plan and a lot of the tax hikes that have been proposed to pay for this what's interesting to me and you point out, for all of this, people seem to love it it was 70% public approval according to covid relief package. your political capital tracker shows biden is off to the best 100 day of any president going back more than 150 years >> yeah. >> explain all of that >> joe biden was elected with a very small mandate but a very important one and that was get covid under control and get the economy going. here we are, 100 days into his

presidency, he's probably going to have the best first quarter gdp offully president and we're very close to herd immunity given the number of people that have either had covid or now vaccinated we're now on the verge of a massive reopening. we just distributed $650 billion to consumers in first quarter. i like to say first quarter was all candy and no spinach now that the economy and covid is coming under control, biden is now looking for larger structural reforms that's really the basisof what he'll be proposing tonight two trillion on infrastructure over eight years 1.8 on the american families plan which is more social policy over eight years and looking to fill the gaps maybe that we didn't notice before covid but more child care, support for family incomes and this is a massive change that is something we have not

done in more than 50 years since the great society and biden is making a bet tonight the american public is ready for more relief. he's saying if now is the time, this is it and we're going to make a bet on that >> it's an interesting way to put it i'm surprised the boldness is being rewarded by the public and to some extent by the bond market can we expect stocks to go up op this the bond market seems not that moved or concerned as i was listening to our prior conversation to start the show, i was thinking to myself is it because to some extent they think these plans could curve growth some of it will break on growth. you have this weird dynamic maybe it curbs growth a bit in the years out.

>> absolutely. first is now we're introducing spinach. if first quarter was all candy, now we have spinach and that is tax increases. we'll have more tax increases next year than we'll have now fiscal spending from structure that structure takes so long for that money to come out we're not going to redo the electrical grid system in one year second is, it's very unlikely we'll replace the two trillion dollars of stimulus we did this year, next year. we'll have this mother of all fiscal cliffs coming at the end of 2021 into 2022. just to put it in context, we're expected to see the deficit contract we haven't really had a deficit reduction of more than 2% of dp in the last 80 years a will the of these plans don't fill that in third, we're raising taxes on the most productive parts of society. we're going to be raising it on

capital which is capital gains and dividends and on corporate income and multinational income. all of those are negative for growth in the short run. i think we'll see some transitory growth, some transitory inflation pressures i think the bond market is looking out on the other side and saying how much of this will be sustainable moving forward. it will take a while for these spending ing plans to ramp up >> the difference is how much of this will pass the covid bills have sailed through. how much of the infrastructure and now the families plan to you expect let's round it to $4 trillion. what do you think is the figure we will see signed into law? >> i think we can see something close to 2, $2.5 trillion of making it through. i have to tell you that tax increases will be paired down. tonight is an opening bid. i think lit be a lack of appetite when people start seeing of what we're trying to do on some of these tax changes.

very different than the covid package. here we are. we're at the next package. you'll see a lot of infighting between the moderate and the progressives and house and the senate because everybody has their view of what needs to get done it will be lhard to get those plans lined up >> i appreciate you illuminatin some of the junctures we're at i think from candy to spinnach s the main take away after this quick break, youtube is becoming more and more of a threat to netflix. we'll break down the numbers for you. plus, facing investors with the stock near all time highs and big battle with apple heating up facebook has a lot to prove when it reports today

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rallying today devon up more than 8% and diamondback up more than 5%. the roller coaster ride continues for reddit vision. the stock soaring at 17% i don't know if we call 17% soaring anymore. a volatile week it's been for mvis finally, shopify up double digits after doubling revenue and blowing past q1 expectations ch let's get toeover to rahel. >> federal investigators have executed a search warrant at the apartment of rudy giuliani he's been under investigation for years over his business dealings in ukraine. a north carolina judge has denied requested to release body

cam video of the fatal police shooting of andrew brown junior. the judge says it could harm the investigation. he wants the video to remain out of public view for 30 days researchers have found that wildfire smoke is up to ten times worse for your health than other sources of pollution that comes as the west coast prepares for another wildfire season during last year's season exerts say people were breathing in a year's worth of damaging smoke in one week. more on that tonight on the news with shepard smith that's our cnbc news update for this hour. back to you. netflix newcompetition, chinese ipos it's all coming up in rapid fire in just a plomoment tomorrow is the nfl draft. it's also the stock draft. it's back this year an

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. welcome back it's my favorite time of day

let's catch you up on a few stories that should be behind you radar. it is time for rapid fire. here is kate rooney. it's great to have everybody here let's begin with youtube we started to talk about this yesterday but the in your opinions last night really bear it out youtube is the world's biggest online video platform and by years end it would be raking in just as much cash as netflix does alphabet reported 6 billion in ad revenue netflix is down more than 6% what does that tell you? >> if you look at the two different business models, kelly, youtube is an advertising base on netflix's paid off of

subscribers. i do believe though that the pandemic did help youtube and those advertising dollars. there's a lot more eyeballs there. the same way it helped netflix one is based on advertising so you're going to gain a lot more as far as revenues there i'm a big fan of google. a big fan of you tube. if you look back on stock, yesterday, i was actually looking on the technicals on a name i was looking for a draw down of about 7% not on earnings. just on movement of the stock. earnings could have went either way. obviously, they traded higher. if you look at a chart on google, they had nine check backs on the technical basis since july they had one in september that was draw down of 18% i'm looking for a 7% take down to get you to that 50-day moving average. with the pop today it's more

like an 11% draw down. that's what i think is a good entry. if you can't help yourself, buy a little bit i'm waiting for better prices. >> i don't know if it's the pandemic per se. i think about how i use tv now if you could see some of the you tube videos i'm washing, it's like how to wash dishes. the water is just running and running. it's the place i kind of wanted to sit back and watch. sit back and watch a lot of content. >> i think that's key. they have a wide range of content from cooking lessons to how do i wear a sari they have been able to do that in a critical way as consumers change the way they consume content. it was a site started with amateur videos to transform a

site that activates and contributing content >> kate, the final word. >> i think it's a context of alphabet they are sitting on boat load of cash can't really do mma because of the anti-trust issues. they are looking for other leverages of growth. youtube is the only game in town the pricing power there for them they're able to stuff so many ads in five or ten minute video. i'm a visual learner i find myself googling and going to youtube to watch how to do anything >> anything i've had like a kids thing that has to be assembled i don't worry about the instructions anymore i flip on that youtube and it's like, it's such a better experience i think your point about pricing power is exactly right that's where investors are watching for any buzz word to date it's got to be pricing power and they have it let's talk about what's going on in the chinese ipo market as

well this is amid so much back and forth. companies from mainland and hong kong have raised more than $6 billion through u.s. ipos. it's a regard start to your including the threat of clie n - chinese firms being ousted is there a sense we better go now before things worsen or hey the trump administration is out. biden will treat us friendlier what do you think is driving this >> two things. u.s. china tensions have been escalating for years and first bilateral meeting between the united states and china didn't go as well as expected but delisting wasn't a topic that came up. plus you have a very hot ipo market and investorinvestors. lack last week china reported gdp growth of 18%. in terms of investors looking for that time of story, they

will get it with the chinese companies and with the delisting risk, not something that seems to be actively discussed looks like they are willing to come over here and list >> steve, just a quick final word would you be a buyer of r seller of chinese ipos? >> even if they delist, there will be a certain amount of time frame to do the delisting process. they do have the back up as you started with the lead on the story of going and litsing on the hong kong exchange i wouldn't run for the hills i think you okay and there's lot of green between now and the day if and when they were to delist. >> very interesting. that does tell us that's a big mentality shift. let o

let's move to the crypto headlines. people had high hopes with gary taking over as the sec chair investors are still betting on crypto all kinds of. dogecoin up 20%. mark cuban spoke about it on the ellen degeneres show listen >> i wouldn't say it's the world's best investment but it's a whole lot better than a lottery ticket and it's a great way to understand and start learning cryptocurrencies. >> what does the crypto kpl community think about all this >> you have elon musk calling himself the doge father which sparked a vital campaign on triter anything he says surrounding d d dogecoin seems to upset price. if you're buying one doge coin for fun, the risk doesn't seem to be too high the upside it's seen as gateway in the way that mark cuban is

describing to invest and understanding crypto kcurrency there are people saying this is fun. they're not putting their life savings into doge coin it kbcould be a good thing. >> you just might have -- i could see sort of two justifications for this. on the one hand if they have a vehicle like there it might keep people in more of the mainstream, so to speak, where they want exposure on the other hand they might think this structure is too complex for something like bit coin a headline like this might have sunk bitcoin but it doesn't seem to matter or register. >> every one knowsthat bitcoin is becoming more acceptable. bit y bitcoin is becoming more acceptable to all these major banks, to a will the of different funds, a lot of different corporations we hear it

it's transcendsing every investor base that you could imagine. having said that, though, i do believe there's still some regulation, head winds that are coming forth to your point, it's becoming so acceptable now people have said bitcoin is sort of their, i don't want to say their fathers, cryptocurrency but it's so mainstream now they are going further out in the spectrum for whatever it is that actually helps bitcoin become more legitimate so it's definitely a tailwind. >> let's talk some earnings before we have to go the shares of pinterest are selling off despite first quarter strong beat. the company warning starting in mid-march the easing of pandemic restrictions slowed growth and lowered engagement year of year. shares are down 14% since yesterday. again, hard to think this is a

bad thing. it might be a problem for pinterest. >> yeah. interesting because remember the comments from whirlpool ceo said as restrictions ease, consumer behavior will not change overnight. this report from pinterest suggests that consumer behavior is changing. they are spending less time online or perhaps not obsessing about work from home office or learning how to frame and all the other diy projects we were working on at home >> pinterest down 14%. you can buy apple before the earnings which stock would you rather >> would i rather. i do not own pinterest and for pint pinterest, user growth is more important than refr knews. i would not be a buyer of pinterest. i am an owner of apple i thought about buying more into the print. the services revenue just shy of 54 billion can you imagine, they got to 54

billion in services. that's going to grow with air tags now, latest, greatest and i know you saw my twitter this morning -- >> yourself just saying it because i help you find you cat. >> exactly i want to start slapping these on do something with chewb o, something on a pet scale these will be excellent things to find your pets, find everything else along the house. i would be a buyer of apple. i am i'm looking for a 180 price target on apple. >> i'm going to give you the final word on air tags or otherwise. >> i would also like an air tag for my dog if you think about the ad revenue we saw, pinterest has such a unique look you go to pinterest zernli sear for things you want to buy if nay can execute on that ad driven model and it's not necessarily advertising but sort of moving people into different

directions, prompting you with maybe you want to look at a throw pillow here is one to buy it seems like they not quite there yet. julia made a great point if they can start shifting you from looking at couches or pillows -- >> or weddings >> to buying and getting a slice of that. >> i'm looking at a couple of people i'm thinking about the wedding interest there will be there huge rush. drop in engagement is very interesting to me. i'll leveave it there thank you, everybody coming up, we're only about 20 minutes away from the fed's latest decision on rates according to one top strategist, there are three big fed fears out there. he'll tell us what they are and the one he thinks investors should focus on. take a welcome at share. this is the worst performer in the s&p. the solar energy player is on track for its worst day ncsie last june.

it's down almost 15% we'll be right back.

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the feds next move on interest rates can coming up at the top to have hour my next guest says inflation is a concern but not at top of fed's pri priority list what are you listening for in i'm listening for the inflation stuff. >> well, you just like everybody else remember during the climb to 2%, everybody thought we're going to go to 2% and beyond when the momentum was clearly in that direction but a funny thing happened beyond yields rolled over and i think it's one of these stories that people are not paying enough attention to and we just still think that the feds primary concern absolutely positively is covid-19 coronavirus in the return to nor normalcy we would say covid over employment and employment over

inflation. to use the old adage, goldilocks and the three bears. those are the three bears they are worried about. >> i have to stop at this bolded text and said this man can't have said this he said no signs of wage inflation. you see no signs of real wage inflation out there in. >> if you go back to january, february of 2020 we had a sub 4% unemployment and no real substantive wage inflation. if we see a federal minimum wage, we actually think that could hurt small businesses and you'll see unemployment go up. i think no one is talking about that we're not going to seefully kind of consistent wage inflation for several more quarters, if not years. i think that's the fed's ammo not to do anything into well into 2022, if not 2023

>> we were below 4% unemployment it was there it wasn't like we didn't have it it just wasn't popping it was kind of accelerating, right but now you have such a different labor force. >> it's like the whole notion of the transitory inflation it's a wonderful point we're having a hard time finding people to work in the service industry whether or not it's restaurants, bars, hotels. clearly wages will have to go up remember, the biggest part of the wage side of things are the white collar jobs in the more business jobs and we have seen, we have not seen a big inflationary stance there and trend for a long, long time. >> final question. we know inflation break evens. we were talk about the top of the show 2.4% this morning.

what does that mean for the stock market what does this whole discussion mean for the stock market? does it imply rotations or is it just full speed ahead? >> i think it's full speed ahead. longer term but the next couple of months could be choppy given how strong the market has been that's why we have been advocating all yearlong for equal weight in growth and value. as you said, you mentioned earlier, we said too many investors got out of tech too soon and missed this trade be diversified across sectors, by themes and remember the stock market is the market of stocks and you want to be an active investor in times like these >> you'd be buying boeing here in. >> we would be we own boeing. our favorite sectors are technology and consumer discretionary. >> all right thank you, sir we appreciate it

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welcome back facebook is on pace for its longer daily streak since january as it gears up to report today. the stock is up about 12% this year more than doubled from the pandemic lows and julia boorstin is here with key numbers to watch. hey, julia. >> kelly, despite economicen certainty and scrutiny facebook is expected to grow revenue 33% on a 33% increase on earnings. user growth in focus as a reflection of restrictions helping or hurting engagement and growth and expected to add 1.89 billion users for a total of 2.86 billion. investors will watch for commentary on momentum and the audio tools. zuckerberg announced yesterday

in a marketplace for matching creators and branded content and then apple's operation change. steve full with a buy rating saying quote we believe facebook's advertising business will eventually benefit from apple's changes to the detriment of smaller publishers. analysts will be looking for change in guidance and whether it releases numbers around the individual apps. >> do you think they would talk about when's happened in the last couple of days with an ios change >> i don't know. i mean, people are opting in and out and interesting to see whether they give us an indication from the first two and a half days of that operating system change out there and i would suspect they have been polling users trying to understand how people plan to behave with that option of opting in with ad targeting. >> i haven't gotten the update

yet. have you >> i haven't yet because i haven't been using facebook on the phone but i don't know i haven't decided yet. i want to opt out just to see what -- how different the experience feels. >> for you it is different you can call it journalism you got to -- market checks due diligence? we'll see what everybody decides. >> exactly. >> thank you for now. that does it for us. we're moments away from the fed decision and will join tyler matheson for that on "power lunch" after this quick break. it's the biggest thing that ever happened to small. visit your local mercedes-benz dealer for exceptional lease and financing offers.

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welcome to "power lunch. i'm tyler matheson with kelly evans. we are moments from the federal reserve's decision on interest rates. the s&p 500 just barely in the red. basically flat the 10-year yield about 1.65%. there's the benchmarks as we see market reaction from today's fed decision on interest rates let's get straight to the panel. led by mona mahijon, david kelly is chief global strategist and

jim karen is global fixed income portfolio manager. nod your heads if you agree the fed isn't going to do anything today. so, we can just end it right here, can't we i guess -- i guess, david, the real question obviously is, what is the text that accompanies this you suspect that the fed is going to have to take into account some of the more positive economic numbers that have hit the tape since the last meeting. >> yes it's going to be hard to stay quite so gloomy here the first thing is literal to have to do something about the statement about inflation. because twice in the statement they say it's running below the objective of 2%. so i think they'll change that i'm going to be playing

transitory bingo in the press conference to see how many times jay powell says transitory to describe inflation inflation is clearly picking up but the fed wants to give the impression this is because of a strong economy and the covid comeback and inflation will fade down the road but that's the question here. >> jim, is the fed paying too much attention to inflation and too little to unemployment or employment >> i think that's a good way to frame it because what we have to think about is we are having a strong economic recovery but falling below the fed's objectives and to way to try to understand that that's how they define success so talk about stable rices i think what the fed within the policy reaction policy is starting to change things and not about inflation at 2% but judging whether or not inflation is anchored. employment is really about it being a broad and inclusive goal

and an equity of outcomes across the demographics so effectively what the fed needs to see is a labor force participation rate to at least pre-pandemic levels. >> all right we are going to take a break right there? mona, i'll get you in in a few seconds but let's go to steve liesman for the fed decision. >> interest rates unchanged after the april meeting and not changing, continuing with $120 billion of asset purchases under the quantitative easing program and noting progress on vaccinations and saying there had been help from strong support, strong policy support an upgrade tlohroughout to the economy. the fed said employment strengthened which is an upgrade from the prior payment and the pandemic affected sectors remain