>> chair powell, thanks for taking our questions over the past decade, the fed has invested significant resources in large scale bank supervision. it has completely overhauled that approach. and it has even created a special committee that looks horizontally across the largest banks to find common risks z. the fed not see that multiple banks had large exposures to archegos if not, why not? and then what regulatory changes would you like to see implemented to change that going forward? >> we -- we supervise banks to make sure that they have risk management systems in place so that they can spot these things. we don't manage their companies for them or try to manage individual risks in the grand scheme of these large institutions, the archegos risks were not systemically

important or were not of the size that they would have really created trouble for any of those insti institutions what was troubling, though, was that this could happen in a business for a number of firms that is thought to carry really well-understood risks. the prime brokerage business is a well-understood business it was surprising that a number of them would have had this. it was essentially, i believe, the fact that they had the same big risk position on with a number of firms and some of the firms were not aware that there were other firms that had those things wouldn't say it's in any way an indictment of our supervision of these frms in some cases it seems as if there were risk management breakdowns at some of the firms. not all of them. and that's what we are looking into >> thank you nancy marshal ginzer

>> hi, chair powell. i am wondering, are you planning to visit the homeless encamp men that's near the fed in washington that you drive by have you been invited? if you went, what would you be looking for there? >> i have not had the chance to do it yet. i have been very busy. i will visit it. i don't want to visit it at a time of a lot of media attention. i don't want that to be part of the story. but i will go visit it when it is no longer a news story. and you know, i have met with homeless people many times, a number of times, anyway, let's say. and i think it's always good to talk to people and hear what's going on in their lives. what you find out is, they are you. they are just us i mean, these are people who in many cases had jobs and, you know, they have lives and they have just found themselves in this place it's a difficult problem there are many, many facets of it, i am well aware that this is not something that the fed has all the tools for or anything

like that. but i will do that when the need arises and when it's not so much, you know, in the public eye. >> is there anything specifically that you would be looking to learn there >> not really. i mean i think i know what i will find there. i think you -- you connect with these people and again, what you find is, they are like you. that could be you. that could be your sister. that could be, you know, your kid. you always feel that way in that sort of an encounter it just -- it's an important thing to engage in, i think. and i think, you know, you know bring that understanding into our lives and frankly into your work, the work that we do as well >> thank you hannah ling. >> hi. i wanted to ask about digital currency you previously said a few times

that you think it is important for the u.s. to get essential bank digital currency right rather than be first w. countries like china moving very quickly on cbdc, i was wondering what you think the risks are of moving too slow on digital currency. >> right so i think the first thing to say is that we feel an obligation to understand the technology and all of the policy issues very, very well central bank digital currencies are now possible and we are going to see some of them around the world. and we need to understand whether that's something that would be a good thing for the people that we serve how would it work in our system in there are some very, very difficult questions to answer. but i think we -- and we are engaged in a serious program to understand both the technology and the policy issues.

i am -- i would say this we are the world's reserve currency and that means that the there are a is used in transactions all around the world, far more than any other currency. and that's because of our rule of law, our democratic institutions, which are the best in the world, our economy, our industrious people, all the things that make the united states the united states that's why we are the reserve currency and of course we have open capital accounts, which is essential where you are going to be the reserve currencurrency. so those are the factors that make us the reserve currency i am less concerned that someone of another country might have a digital currency first ask yourself, if you were a company doing international business would you suddenly start using thatcurrency to do your international transactions? or would you still do them in dollars? which is what everyone does. i am not so concerned about

that i am really concerned about getting it right it is a tricky set of questions in a we have to navigate in a world where we already have, remember, a highly evolved payment system we have fed now and other immediately available funds. pretty soon, everybody will be able to do what people do in other parts of the world, custom is just use their phone to make immediately available payments all the time it will be normal. and what would be the role of a central bank digital currency in that kind of environment far more important to get it right than it is to do it fast or feel that we need to rush to reach conclusions because other countries are moving ahead i mean the currency that's being used in china is not one that would work here. it's one that really allows the government to see every payment. it's used -- for which it is used in real time. it ismore to do with thing tha are happening within their own

financial system than it is i think to do with the global, sort of global competition >> thank you michael derby. >> thank you for taking my question i wanted to ask you another question about inflation it has to do with inflation expectations surveys and market indicators are showing market-year highs in inflation expectation ratings. i am wondering is that something you saw as consistent in your inflation outlook? does that worry you? or is this the success of the fed's inflation network, making it out to the broader public. >> right, inflation expectations before the pandemic hit -- here we think of survey, market-based survey being either households or economists and market base. you look at all of those and i would say that they were at the low end of what would have been consistent with a 2%

inflation target, particularly our 2% inflation target which calls for 2% average inflation they were at the low end inflation expectations actually went down a little bit at the beginning of the pandemic and now they have moved up back to levels broadly of where they were in 2018, in some cases 2014 and i would say more consistent with our mandate we want them to be we want them to be higher, you know, on a persistent basis. we want inflation to run a little bit higher than it has been running the last quarter of a century. we want it to average 2%, not 1.7% for that, we need inflation expectations well anchored at 2% we haven't seen that break evens have moved up in a way. they are based on cpi. but they are now at levels that are close to mandate consistent, whereas before they were below

we manage inflation expectations very, very carefully, as you well know. that's where i would say it is. >> one small follow-up do you have any red lines on inflation reading where if you hit a number encore pc that would be a trigger response from the fed. >> it doesn't work that way. you know, we're -- inflation measures are always going to be a bit volatile we expect -- as i mention, we expect core and headline pce to move up because of base effects. you know and we expect that to go away. we also expect these bottleneck effects to come in we don't know how persistent they will be we think it's of when they will pass through not whether they will pass through. but we can't be confident about the exact timing or the size of them they don't seem especially large at the moment but we don't know. you know, this is all about the reopening of the economy that's what is happening

we were in a deep deep hole a year ago now, with a lot of help from fiscal policy. some additional help from monetary policy, and you know, a great deal of help from vaccination, we are seeing a strong rebound in activity what's happening is it's -- demand can be spurred with fiscal transfers and the saved up fiscal transfers and people going back to work and things like that. the supply side will take a little bit of time to adapt. new restaurants will have to be opened the supply of various inputs into the goods part of the economy will have to be brought back up to speed you are seeing some of that. that will happen over a period of time. overcoming quarters. you will see some of the bottlenecks resolved but the last one may not be resolved for some time. >> thank you brian chung. >> brian chung with you.

hi, chairman powell. i wachted to ask about financial stability which is part of the feds's reaction function here. it seems to people on the outside who might not follow finance dily they are paying attention to things like dogecoin, gamestop does the fed see a relationship between low rates and easy policy to those things is there a financial stability concern from the fed's perspective at this time >> we look at financial stability for us is really -- we have a broad framework so we don't just jump from one thing to another many people just look at asset prices and look at some of the things that are going on in the equity markets which i think do reflect froth in the equity markets. we tri to stick to a framework for financial stable so we can talk about it the same way each time and so we can be held accountable for it one of the areas is asset prices some are high. you are seeing things in the capital markets that are a bit

frothy that's a fact. i won't say it has nothing to do with monetary policy but also it has at amount to do with vaccination, and reopening of the economy that's really what has been moving markets a lot in the last few months is this turn away from what was a pretty dark winter to now a vast -- a much faster vaccination process and a faster reopening that's part of what's going on the other things, though, you know, leverage in the financial system is not a problem. that's -- that was one of the four pillars asset prices was one leverage in the financial system is not an issue. we have very well capitalized large banks. we have funding risks for our largest financial institutions that are also very low we do have funding issues around money market funds but i would say they are not systemic right now. and the household factor is in pretty good shape.

it was in very good shape as a relative matter before the financial crisis -- sorry -- the pandemic crisis hit. there were real concerns with high levels of unemployment and loss of wages and all that that the household sector would weaken dramatically. that hasn't happened so with the fiscal transfers, money that's on house how would balance sheet, they are in good shape. you are seeing relatively low defaults and that kind thing the overall financial stability picture is mixed on balance it is manageable i would say. by the way i think it is appropriate and important for financial institutions to remain supportive of economic activity. again, 8.5 million people who had jobs in february don't have them now there is a long way to go until we reach our goal. so that's what i would say >> as a follow-up, you mentioned money market pressures the fed didn't make change to interest on reserves or excess reserves

what's the thinking kind that. sofr has been drifting close to zero >> the federal funds rate has been well within target range. and money market conditions are fine we have the ability to use our administrative tools to make sure that remains the case we do expect further downward pressure on rates through asset purchases and also the runoff in the treasury general account but at this point we didn't see a need to deploy our tools to support rates. and of course we will do so if the need does arise. >> thank you gene young -- jean young. >> hi chair powell i wanted to ask a similar question we are seeing elevated market valuing as and some economists are concerned that the economy might overheat, at least for a period of time so should the fed and other reg will iters be thinking about

tightening happen call requirements or extending oversight to the non-bank sector so that financial stability risk stays as low as it has been? thank you. >> i think capital requirements for banks are, to me -- went up tremendously, really, over the course of the ten years between the financial crisis and the arrival of the pandemic. and the banks really made it through a real stress test, very well and passed two of our stress test asks there is another one that's pending capital is in a good place as far as i am concerned in the banking system but to your point, what we saw was -- so, what kind of happened during the pandemic crisis that requires attention and number one is money market funds and corporate bond funds,

where we saw run dynamics again. and we need to -- we are looking at that. so we are looking at ways -- and people around the world are looking at ways to make those vehicles resilient so that they don't have to be, you know, supported by the government whenever there is a, you know, severely stressed market conditions it is a private business they need to have the wherewithall to stay in business and not rely on the fed and others to come in. that was that. the other is treasury market structure. dealers are committing less capital to that activity now than they were ten or 15 years ago. and the need for capital is higher because there is so much more supply of treasuries. and so there are some questions about treasury market structure ask. there's a lot of careful work going on to understand whether there is something we can do about this

because we -- you know, the u.s. treasury market is probably the most single -- single most important market in the economy in the world it needs to be liquid. it needs to function well for the good of our economy and the good of our citizens so it is not clear where that takes you, but we are taking a careful look and the treasury department is really going to be leading this. at treasury market structure and all the various aspects of that to make sure that we do have a resilient strong treasury market that can work even in difficult times. as you know, at the very beginning of this recent crisis there was such a demand for selling treasuries, including by foreign central banks, that, really, the dealers couldn't handle the volume. so what was happening was the market was really starting to lose function.

and that was a really serious problem which kewe had to solve through really massive asset purchases. so we would like to see if there isn't something we can do to -- is there -- do we need to build against that kind of an extreme tail risk? and if so, what would that look like >> thank you edward lawrence. >> thank you, fed chairman for the question-and-answer. there is so much fiscal thoughts from the federal reserve you said the vaccinations will lead to more normal economic conditions later this year when do you see the economy being able to stand on its own feet so to speak along those lines with the fiscal spends and -- that you talked about with transitory inflation, does more need to be injected into the system or will that affect the transitory nature of the inflation? >> when will the economy be able

to stand on its own feet i am not sure what the exact nature of that question is >> what i am saying is, you know, when will the -- when will you need to lower the amount of tressies you are bying, sort of taper off a little bit when can it stand without stlag support from the monetary policy side and then for the transitory. >> okay. so we have articulated our test for that, as you know. that is just we will continue asset purchases at this pace until we see substantial further progress and we are going to communicate well in advance of any decision and we are going to let, you know, the public know that that's what we are thinking. and so there will be a lot of warning and that kind thing. but it is about substantial further property toward our goals. that's all it doesn't have any external virus-related specific requirement. although i think that the virus will need to continue to be controlled for us to achieve those economic goals but it is really the economic

goals. your second question, just say it again i didn't quite get that question. >> sure. with all the fiscal spending that happened and the accommodation, does the system need more spending either from the fiscal side or accommodation? or would more spending affect the transitory nature inflation and put those upward pressures on inflation long term >> it is totally up to congress. we are not an adviser to congress you know, we don't -- we don't weigh in on specific fiscal bills or proposals that's really between elected parties. you know, basically, fiscal policy is the province of people who stand for democratic election and win, and they get to make those very difficult decisions and they need to be accountable to the voters. we didn't do any of that we don't have a seat at that table. we don't seek a seat at that table. that's really something for the congress and the administration to deal with >> thank you

greg robb. >> hi, greg robb from market watch. thank you so much for the opportunity. i wanted to circle back to the housing market it's just kind of informing confuse, the question and your answer, the housing market is strong, prices are up. and yet the fed is buying $40 billion per month in mortgage-related assets. why is that? are those purchases playing a role at all in pushing up prices >> thank you i mean we started buying mbs because the mortgage backed security market was experiencing severe dysfunction and we sort of articulated, you know, what our exit path is from that it's not meant to provide direct assistance to the housing market that was never the intent. it was really just to keep -- it's a very close relation to

the treasury market and a very important market on its own. so that's why we bought as we did during the global financial crisis we bought mbs, too not intentional low to send help to the housing market which was really not -- not a problem this time at all. you know, it's a situation where we will taper asset purchases when the time comes to do that, and those purchases will come to zero over time and that time is not yet >> thank you >> thank you and for the last question, we will go to mike mckey. >> thank you, mr. chairman since i am last, let me go back to paul's question, the first question, and ask you whether -- not weather you are thinking about thinking of tapering, but why you are not. we are seeing bank lending fall. the markets seem to be operating well are you afraid of a taper

tantrum or is it as one money manager put it, if you get out of the market there aren't enough buyers for all the treasury debt and so rates would have to go way up? bottom line question is what do we get for $120 billion a month that we couldn't get for less? >> it is really not more complicated than this. we articulated the substantial further progress test at our december meeting and really for the next couple of months, we have made relatively little progress toward our goals remember, substantial further progress from december, from our december meeting and then vaccination started to get more widespread. the economy reopened we got a really nice job report for march. it doesn't institute substantial further progress it's not close to substantial further progress we are hopeful that we will se along this path a way to that goal and we believe we will just is a question of when

so when -- when the time comes for us to talk about talking about it, well do that but that time is not now we are just not -- we are not that far we have had one great jobs report it's not enough. we are going to act on actual data, not on a forecast. we just need to see more data. it is no more complicated than that >> if you leave rates where they are, it doesn't change anything. but does it change anything if you tapered a bit? if you spent less, would you still get the same effect on the economy? >> if we bought less you are very faint so if someone has the volume, turn it up if we bought less -- no, i think the effect is proportional to the amount we buy. it is really part of overall accommodative financial conditions we have tried to create accommodative financial conditions to support economic activity and we did that. and we articulated, you know, the tests for withdrawing that accommodation. and we think -- you know, so we

are waiting to see those tests to be fulfilled, both for asset purchases and for liftoff of rates. and you know, when the tests are fulfilled, we will go ahead. we have done this before we did it in the last -- after the last crisis. you know, we will do it maybe -- we will do it -- as those tests are satisfied, we will do it and the only thing that will guide us is are the tests met? that's what we focused on, have the macro economic conditions we articulated, have they been realized in that will be the test for tapering asset purchases and for raising interest rates >> thank you very much >> thank you >> and with that, we have the final question and final answer from fed chair jay powell at his press conference there we did see stocks and yields rise a little bit when he made clear that it's not time to even

begin thinking about tapering. though some retraction to those moves when we did say we don't have to get all the way to our goals to taper asset purchases all be it making clear that is still sometime away. small moves. the margin went from 1.42, to 1.64, back to 1.62 comments about the financial market and housing prices, using the word frogtdy but making clear he is not concerned about bubbles or value and saying the central bank wants to get cryptocurrency right not rushing it ahead. >> the biggest takeaways were the first and last questions one, we are not ready to taper and when he was pressed on that, why are we not tapering we are seeing progress in the economy he said we are not close to substantial further progress it is hard to say what that

substantial progress looks like. he said he will give us plenty of heads up on that, one great jobs report is not enough. that's our cue that powell is going to stay in his current policy stance. he is going to continue bye ing- bye. >> with that, the indexes are down down 105 points on the dow splitting the difference between the highs and the lows of the session. let's bring in a former federal reserve governor audio and a former pimco chief economist and mike santoli, cnbc senior markets commentator joins us as well good afternoon to you all. sara, in terms your key takeaways from this, i guess it was more of the same, more of what we expected thus not massive moves in the market in reaction.

>> that's exactly right, wilf. you know, you saw chairman powell really not want to take the bait on any of those tapering questions he really wanted to draw a strong distinction between the fact there has been a rebound, but it's not a recovery. and he really leaned hard on the fact that this recovery is starting, but it is nowhere near complete and all the questions regarding, you know, pushing him a little bit on, you know, cutting back on mbs or, you know, maybe just starting to think about tapering, he wasn't going to take the bait. >> no. not on inflation either. everyone stay right here we want to get to cnbc senior economics reporter steve liesman who asked questions at the news conference your takeaway? >> i think the key thing is the fed upgraded the economy but left the highly accommodative monetary policy in place not giving any indication sara that it isb about to change that

policy any time soon the fed mentioned progress with vaccinations for the first time, said employment strengthened even that pandemic-affected sectors are remaining weak but they have shown improvement. all that said, powell was steadfast is fed is not close to a discussion of tapering >> it is not time yet. we have said that we would let the public know when it is time to have that conversation. we said we will do that well in advance of any decision to taper our asset purchases. in the meantime we will be monitoring progress forward our goals. we ar particular kated our tests. economic activity and hiring recently picked up after slowing over the winter. it will take some time before we see substantial further progress. >> i asked him about whether the virus -- if he could put dils on how the fed is thinking about the virus and infections he didn't give too much of a detailed answer there. he expects the virus to improve

along with the economy it doesn't appear at the moment that they have a specific metric around the virus or a timetable if the virus were to have a resurgence whether they would change monetary policy. >> there is a symposium that has a history of announcing policy shifts from the fed over time. it is just a guess he's not talking about it. what do you think? >> no. it is a smart guess. sara, times -- who knows why things happen in august? but they always seem to have happened there. >> it is a great month >> wilfred and i were born then. i think that's part of it. >> that could be but who knows. it comes around that it is august and the fed either uses the platform created with the backdrop of the mountains or whatever to do exactly the sort of things you are talking about. august is not a crazy time i just want to put an asterisk

next to that for one reason, custom is i wonder how much powell is going to be concerned if you look at the chart of infection rates. we had that resurgence back in november i think he needs some kind of all-clear, a call from fauci that says, jay, this thing ain't coming back -- you know how fauci talks. this thing ain't coming back you are good or some kind of downgrade of the pandemic from the world health organization or something that gives him confidence because you know, sara, as well as i do, the central bank does not want to reverse policy once it begins a process of taking back the easing that's out there in the economy. >> steve liesman thank you let's pivot back to the panel. paul mccully i know you are a fan of jay powell and the framework of the fed overall what did you make about his comments of frothy levels of stock assets and the housing

market should he be more concerned than he appears >> i think his mere use of the word frothy was his intent because he acknowledged that the overall architecture that they have is not flashing a yellow warning sign but the use of froth is going to be discussed in the marketplace. he's not saying he's going to do anything about it. but he's acknowledging the obvious. i think that's the tenor of the overall press conference which i thought was an exquisite victory with the first and last question with him saying i told you i would tell you when i was going to start thinking about tapering, and it ain't now and we have got a long way to run. but i will tell you when i do, and it ain't now i just thought he did a beautiful job. >> that message certainly came koos loud and clear. sara the one question i wish was asked that i think was looming in the background was does the fed risk looking out of step

with reality on the ground the more we get record numbers of ism on servicing or manufacturing, the housing market is on fire. we are now looking at gdp growth from 5% to 10% and a million job reports -- a million people being hired per month. at some point, if the fed in emergency mode of $120 billion in asset purchases and rock bottom rates does it risk being out of sync. >> that's exactly right. they don't want to be out of sync that would be something they don't want to get near at all. because that of course undermines their credibility he has to -- and the fomc have to say very close to the data. they have to watch it really extremely scrupulously to make sure that they in essence are able to maintain this stance and it is, as you say, a highly accommodative stance in the light of data that is coming in really better than

many of them expected. so that's why, really, you heard this whole rhetoric regarding, you know, yes, there has been a rebound. but the recovery is not complete yet. you here him talking about substantial further progress, leaning heavily into that word further. further. we need to see more. you see him again talking about this idea that he's not going rely on projections. wants real data before he moves. so they are really holding back, wanting to do that quite deliberately but you are right, they are going to have to continue to watch data, as they are, and make sure that this message is staying credible. >> mike santoli, a bit of up and down in terms of both stocks and yields during the press conference actually, as you were by the end, and more -- a bigger move coming in yields early this morning as opposed to during the fed meeting and press conference. >> right very much a status quo message

the market more or less absorbed that, the idea that basically there is an unchanging trajectory to this fed at this point. the intentions are pretty clear and dug in pretty well in terms of really waiting and being patient and seeing this recovery actually evidence itself as opposed to anticipate. market's job is to anticipate, look for the next turn and try to proactively seek the inflection points. powell has basically said, no, we sent you this framework in terms of what are going to be the inputs to a change in our policy we are to the there. the market kind of gets it there was a little bit of a listening of whether there be more of a nod toward a taper discussion then that came out of the market right during the press conference we are talking about extremely modest moves not really something that changed the baseline assumptions also you talk about the frothiness of the, ma. since the last fed meeting, the s&p is up a few percent.

earnings estimates are going up. the point being, nothing radically changed in terms of the market setup credit spreads were tight then they are tight now that would really lead to powell changing that message. i think they want to buy as much time as possible. >> dogecoin has had a moment here since the last fed meeting and even got a mention at the news conference, crazy paul mccully, the other big point and takeaway where powell was very strong was on inflation. he went to great lengths to explain why he thinks it is transitory or temporary and that it is not going to be sustained. that's their best guess at this point. and even went into the bolt necks as a reason to explain why. how big of risk is this potentially facing this fed and this economy do you think it is right. >> i think he's right. i think it is a very manageable risk i thought he did a good job of being up credibly transparent about the piece parts of this

reopening inflationary story pointing out that demand's coming on faster than supply and that we will see this outcome in outside inflation in the near term but he also stressed this we have a dynamic economy and the supply side will adjust. and he reiterated that in his view inflation that's problematic is a process that is self feeding and he sees no evidence of that. so i don't think that the fed's anywhere close to being behind any sort of 8 ball with respect to inflation they actually know what's going to happen. and they think that the economy will respond on the supply side. so i don't think there is any problem there to be concerned about. >> sara, quickly, we are nearly out of time but are we glossing over the comments about a digital currency was that basically as expected there? >> well, it was as expected.

i have to say that the fed has been looking at digital currency for quite a while. for him to be saying, you know, we have to continue to understand it is sounding a little bit like a punt this is an issue that has been looked at for quite a while. there are a number of committees around the federal reserve system taking this up. i think he -- you know, he could have shown a little bit more of his sleeve there in terms of what they are thinking about. >> we have the leave it there. thank you. we have a market flash big moves in the ev space, phil lebeau, what's driving it? >> wilf take a look at the ev infrastructure stocks, by this we are talking about blink, charge point, there is a blink check company that is going to be merging with ev go once that spac is completed. what you will see is that those stocks are moving higher they just moved higher within the last half hour in part because general motors announced

a ultimaty yam charged 360 app it will tell people where they can find charging stations the ev structure that is around the country. it has people excited about the possibilities when it comes to electric vehicles. we are talking about the buildout of the electric vehicle structure. this is one of the aspects of it that's why these stocks are moving higher. >> big moves, 6%, 7% thank you phil lebeau. up next, we will talk to jefferies iechf market strategist david deservous 20 minutes left of trade dow is down 100 points wn from last quarter but we are hoping things will pick up by q3. yeah...uh... doug? sorry about that. umm... what...its...um... you alright? [sigh] [ding] never settle with power e*trade. it has powerful, easy-to-use tools to help you find opportunities, 24/7 support when you need answers

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fed leaving rates unchanged but noting higher inflation. fed chair jay powell reiterating his stance that it is not time to start talking about tapering asset purchases or stimulus. let's bring in david zervos, streef market stat gist at jefferies. what's the market takeaway, the market take on this news conference >> i don't think there was a huge change either way it was very much i would say as expected one takeaway that i came away

with about 15 minutes in, sara was he talked about maybe not needing as many of those jobs back i think that's the first tile i heard him say that i think fed is a little scared that technology and the adoption of a lot of technologies during the pandemic and the success of companies in sectors might mean some of those service sector jobs, the 8.5 million we still need could be hard to get. that was interesting to me today. a little bit of skepticism usually he has been optimistic on getting those jobs back. >> that's a luscious green lawn you are sitting on. >> i foal like we interrupted his tanning. >> i have been on zoom outside all day. might as well do it with you,

too. 70s out here in new york >> what are you advising clients in terms of today's positioning in do you think today's meeting means you still believe stocks go higher. >> we are not advocating our usual rask parity. we still think bond yields have more to run, up toward 2% or more especially as europe reopens and the european fixed income markets have a little bit of a weakness because of that i think it is just janet and jay. those are your hedges. if something goes wrong i believe they are going to step in quickly and be proactive with policy measures that will soothe any market hiccups rather than have the fixed income be our hedge, because it is so expensive and the yields are so low, we caw them the js, janet and jay. it has been our trade all year

rain rate be up 12 rz. over 30, 35% i still like it. here in almost may and i still like it. >> you look like you like night david, we are out of time. thank you for joining us as always david zervos in a very nice looking back garden. still to come, the clash of two tech titans. apple and facebook set to report after the close. apple at 4:30, facebook at the top of the hour. we will break down what investors should be watching for next in the market zone. did you know that petco, is now a health and wellness company?

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minute to go in the trading day, we are now in the "closing bell" "market zone." commercial-free coverage of all the action going into the close. cnbc senior markets commentator, mike santoli, is here to break down these crucial moments of the trading day. today we have got josh brown back as well we will kick it off with the broader market we are on record close watch for the s&p 500, which is trading higher by just two points. but that will be a record because any positive close would do it. dow is lower nasdaq is slightly lower mike, just wanted to turn the conversation to technology we are expecting apple and facebook to report earnings after the bell nasdaq is a little bit lower. >> yeah. >> i always write down pearls of wisdom from your market notes. today, the nasdaq is acting a bit bashful right now. >> it has. >> what does that mean. >> we clicked to match the former highs of a few months ago. it backed off. it popped higher with the

overall market when bond yields came in right after the fed press conference started it shows you that this is just kinds of algos playing games here so it's sliding sideways, maybe just cooling off after everybody came in mid april including me saying things looked overheated and we are primed for a bullback instead we are going sideways. >> josh i wrote down a quote myself from your notes today indexes not doing much that's what i took down. talk us through that pearl of wisdom. >> so i do think there is large part of the market that for the last let's call it seven or eight years has been overly fixated on the federal reserve they try to parse all the statements coming out of various fed speakers they wait for days like today because there might being this

placed in a different sentence or annum lot placed differently than it was this the last report they may take off risk because of what i suppose they perceive as the outsized reward of leaning the right way before the fed moves the markets in that direction. you know me. i don't play that -- i don't play that nonsense we talk to 40, 50 families a week who are looking for constructive financial advice coming to us for the first time. and if we start hearing a lot about the federal reserve on that first call, we tell them, we are not a good fit for you. i do think indexes are stagnant ahead of this event. i really don't think that anybody playing that game is making people money or is particularly having any fun. so i try to focus on the individual equities, the stories they tell, look at the trends. i focus on price and when i see what i am seeing

in commodity-driven sectors, materials, droe bulk shippers, home builders, i don't need to hear whether or not the punctuation in a fed same has been moved from the second sentence in the fourth paragraph to the fifth sentence. i don't need it. it's not important to me so there were no surprises in this, like none whatsoever the fed is going to go out of their way to telegraph to us if and when there will be any sort of tapering. we'll have plenty of time to digest it before it even happens. that was the playbook in 2013 leading to the 2014 rate hikes so let's just be patient let them do what they are doing. every data point you want to write a blog post about, the fed sees that data point, too. you are not going to outthink them they have the job at hand and i am not really that worried about night a number of tech giants reporting earnings and revenue beats but moving in different

directions alphabet rising. microsoft sinking despite a beat and issuing better than expected revenue guidance they are boosted by surging pc sales during the pandemic. and amd started the session higher now trading this the red raised its annual revenue forecast on the call said they see kprochlt in the chip supply. between microsoft and google, those two stocks alone explaining why tech is the worst performing sector and communication services is almost the best performing sector massive moves in opposite directions both fabulous results. >> offsetting one another in terms of the aggregate index a mark of how good numbers have to be to really get investors incrementally excited at these levels that's how good alphabet's were. microsoft not so good.

microsoft having less leverage, too, and accelerating economic story this year. people are not afraid that the fundamentals are going to run away from them nasdaq is comfortable at these levels you have movements of individual stocks beneath the surface but it is not causing a re-evaluation or assess men of the big picture stories. >> facebook is higher. it is one of the names set to report earnings after the bell julia boorstin has a preview for us now. >> sara, more important than the numbers, 33% revenue growth projected on 38% growth in earnings, is what the company says about what's ahead. user numbers will be scrutinized as a sign of whether the economy reopening is going to help user growth as it did snap or hurt, as it did pinterest. facebook is expected to add 30 million daily active users and 60 million monthly active users. investors are looking for guidance on the impact of apple's operating system kang which will limit facebook's

ability to target ads. they are also going to be looking for more on the potential shopping as well as facebook is offering its creators to stay and create content on its platforms back over to you. >> facebook is up 1.5% as we stand. apple is just slightly lower, about half a percent lower josh what is your take on all four of these names, the two that reported last night the two we have got to come and the fact that google has kind of given up a bit of its gains during the session >> okay. so i guess we will start with google i'm long it's the best performing of all of these faang names year to date i have been in the stock for years. and i really feel that youtube, as much as alphabet shares have gone up, i feel loo youtube is still being undervalued. whenever i hear about the anti-trust threats, break up amazon, google i wish you would stands alone youtube could be as big as netflix in revenue they are on pace to

catch up i think youtube is an absolute monster for the next ten or 15 years. so i am sticking with that stock. i think on apple, really, what it's going to come down to here, what people are going to be focused on, as usual, is the phones and then i think on the q and a it will be interesting to hear if there are questions about the ongoing issues with facebook, threats to the take rate in the store. that's what i think could drive the stock significantly higher or lower those two issues then on facebook, there is nobody that can do what instagram does that's really the bottom line. there is no advertisement platform with that level of data on its users and all the threats, all the privacy stuff, all the political stuff -- the stock just continues to make new highs. the esg aspect of this just has not mattered i don't know what all of a sudden would make it matter. the last thing i want to say is, i would bet 500 sitoshis that

david zervos was barefoot during that last segment of clean it up. >> david should tweet us a picture. apple shares are sliding since start of the show, last 20 minutes or so down .7% ahead of their numbers at 4:30 spotify launched of the podcast subscription service yesterday. the ceo talked about it on "squawk on the street. >> we have two totally different revenue streams for podcasters and for music. the gross margin profile for podcasting obviously is a bit different. we are still very much in the investment phase in our podcasting stage but overtime i expect them to be a little bit better than what we have on the music side that's obviously going to contribute to a much better story overtime from spotify. >> that's the business headline from spotify the sports headline was he is making a bid for arsenal we will see if that

materializes interesting. podcast announcement yesterday we might be getting an announcement from apple later. >> muddle in the spotify story i think the street is split on the wisdom of going so heavy in podcasts noise in terms of subscribers versus monthly average users and the profit model is open to question people loved the idea of raising prices a while back but here foginess i guess among the usee growth story. >> down almost 13% with two minutes to go in the trading day. mike what do you see in the internals. do you down 122. a little bit lower. >> most of the day the volume spit split was positive on the new york stock exchange. it is still. some of the big cap growth stocks that are seemingly dragging down the overall index. still a cyclical tone. if you also want to take a look at oil it perked up as well energy stocks up solidly this week here's a year to date on wti

crude. you see it's kind of making another kind of a monthly high for april. not far below where we were back in march a lot of bullish talk on demand. have tilt index had been a little bit on alert mid 17s before the fed meeting remains around there knocking around this range, 16 to 19. [ no audio ] -- >> down 3%, those mega cap movers are driving the sector performance today. communication services the second best performer. tech the worst performer only better than communication services is energy, up 3% as oil prices jumped 1.3% today s&p 500 down .1%, just slightly in the red as we approach the close. the dow is down a little bit more half a percent now down 170 points or so, not far off its session lows which came close to the open this morning.

nasdaq down .3% or so. and the russel is just higher of the four major afternoons the only one just higher facebook has given up a bit of gains as we approached the close. up only 1.2% due report any moment. apple slid in the final 20 minutes of the session, d down .6% its numbers crossing half an hour from now. ten basis points on the s&p, half a percent on the dow and .3% on the nasdaq. >> no record closes but looks like we are holing the gains welcome back to "closing bell. i'm sara eisen along with wilfred frost and mike santoli, cnbc senior markets commentator. look at how we finished up the day on wall street, the dow closed lower by half a percent 161 points the big story there, weak earnings or at least reaction to earnings from amgen, which took 119 points off the dow microsoft, another 48. the s&p 500 closed down just a bit. it looked like we were going to close higher as a record close but couldn't quite get there energy the best performer.

technology the worst performer we will still looking at her best month since back in november with two days left of trade for the month of april the nasdaq down a third of 1%. we talked about some of the weakness in some of the tech names. a mixed picture. winners, google, amazon, mondelez microsoft, amgen, apple, tesla all some of the losers the russell 2000 small caps higher, the only one of the big four, by .1% now brace yourself for a bhild hour of earnings apple, facebook, ford, qualcomm. e-bay. all set to report results shortly. we will break down the numbers for you as soon as they are out. first let's talk about the market josh brown is still with us. shannon semi scioscia joins us first, mike, no real reaction i would say to the federal reserve, a lot under the surface when it comes to earnings

movers >> s&p 500 basically plat for the week, not just for the week, basically flat each day. the status quo of the fed basically tells you we are sticking to the story we have been telling you for months. that's not going to change things a cyclical tone underneath >> mike. >> the market is dealing with a rally. >> let's get straight to the earnings call come is out jon fortt has it >> talking about a chip supply constraints. but this quarter tells a different story. qualcomm revenue comes in at $7.93 billion. that's above the 7.6 expected. also opens comes in at 1.90 non-gap above the 1.67 expected. just as significant. the guide. wall street was looking for a midpoint of revenue at around $7.1 billion for the current quarter. qualcomm guiding to 7.1 at the low end, 7.9 at the high end

7.5 at the mid point significantly stronger than we were looking for i talked to the executives at qualcomm just moments ago about the quarter and the guide. first on guide the chip business is especially strong that's why the guide is so strong also, the licensing business strong as well there is a stronger mix in the chip business. that speaks to i guess some of this allocation of ships going toward the higher end phones that might bode well for apple come in just a few minutes also, i heard from the executives that china was particularly strong as well. though there is some variants across regions in performance. er with looking at smart phones in the consumer market depending on what is happening with covid. difficult to predict but it didn't prevent qualcomm from issuing this very strong guidance despite what we are seeing in the market overall, some variants in demands and some uncertainty in clip supply, very

strong results from qualcomm this by the way stephen steve mallen camp's last earnings report he said he was happy to have a quarter like this he is going out on of course i have the incoming ceo offer tech check tomorrow. >> we look forward to that interview. nice pop in those shares, up 5 for 6% in after-hours trade. we are still expecting facebook. moved up .4% even though the numbers aren't out yet shannon, your take on qualcomm, up 6%. >> it is a great print if you look at what has been happening with the supply/demand mismatch, we tin to see pent up demand with chip supply. with management's execution you are seeing them being able to pump out the chips and get them to the end user. i like the mix comments certainly always looking at when you are going to make your profit margins when you are investing in semis they delivered this this

quarterly report i think it bodes well for the next several quarters and for several of their customers as well looking forward to that apple report later today. >> on the back of strong amd, josh, do you like this name, qualcomm, now up 6.7% after-hours? >> there are a lot of chips stocks sara that have better looking charts that doesn't mean that qualcomm can't work but i think below 150 it is still suspect. this thing has a vicious breakdown in january which was actually a period of time during which most of its competitors or other names in the space were doing really well. i don't think it repaired all the technical damage that being said earnings are growing faster than the multiple on the stock 24 times is reasonable historically for qualcomm and for the space. if they can continue to put up reports like this i think ultimately it could break out. i would want to wait. ford earnings also just out. phil lebeau has the numbers. >> sara look at shares of ford the company beating on the top

and the bottom line. let's talk first off about the top line automotive revenue that's what the street is focused on, coming in better than expected at $3.5 billion. the bottom line, much better than expected. earning 89 cents share, the street was expecting them to earn 21 cents a share. if you see pressure on the stock it is because of the guidance. they ended the quarter with total liquidity of $47 billion but they are expecting to lose half -- half of their q 2 production due to the shortage of semiconductor chips they are going to be losing 10% of their second half production due to the chip shortage all together that's about 1.1 million vehicles that will be lost due to the chip shortage they are now expecting a $2.5 billion adverse effect this year that's at the high ends of their previous estimate, due to the chip issue, adjusted free cash flow for the year will be coming in at $500 million to $1.5 billion.

jim cramer is talking with ford's ceo jim farley as we speak. he will have more on the on mod money. no doubt, guys, that guidance is going to get a lot of attention as we are now seeing the full impact of the chip shortage. they are losing half of their planned production for the second quarter because they just don't have enough of these chips. >> down 2% facebook up 7% in afterhours the numbered cross as phil was chatting a big beat, similar to google, driven by advertising. revenue coming in $26.2 billion. forecast was $23.7 billion the advertising revenue at 25.4. the forecast there was for $23 billion. as i said, driven by that appetizing number. the eps beat on the bottom line significant, 330 per share the forecast was for 237 as i said coming through on the advertising line the daily active users and the monthly active users were basically in line, 1.88 billion

daus versus a forecast of 1.89, maus with 2.89, forecast was 2.86 essentially in line. but the revenues a nice beat the earnings, a big beat let's get to julia, who has been digging into numbers in a little bit more detail for us julia, similar themes i guess to google very big beat. >> yes, absolutely and of course there is a lot of focus on the outlook going forward. they say they expect second quarter 2021 year over year total revenue growth to remain stable or modestly accelerate relative to the growth rate in the, if of 2021. as we lapse slower in growth related to the pandemic in the second quarter. in the third quarter and fourth quarter we expect the total growth rate to desal rate as we lap periods of increasingly strong growth. they say we expect to face increasing ad head winds due to regulatory and platform changes

the ios 14.5 upgrade they expect that to have an impact this the second quarter they say it is factored into their outlook. one last thing, on expenses they expect expenses to be in a higher range of between 70 and $73 billion from the prior outlook of 68 to $73 billion wilf, i will continue to dig through. >> facebook shares up 5.3% after-hours. mike they say the strength was driven by a price increase 30% year over year increase in the average price per add and an increase in the number of ads delivered. it continues the see those prices driving growth through the rest of 2021 a strong report. you see the reaction. >> it shows you the phenomenal earnings leverage that's inside this company obviously you are comparing year over year to the pandemic quarter. but still, 48% increase in revenues 93% jump in earnings it shows you that a whole lot of it falls to the bottom line.

a new high thises a new all-time high for facebook it had been trading a little bit below the former high here but after hours with the 5% move you got to a record. >> focus on both the calls for facebook and apple today will be on the update to io 11475. in the guidance julia was talking about they have factored in the change. they did say the recently launched ios 14.5 will impact our next quarter shannon, what is your take >> i heard josh talk about how this is a name that nobody wants to own we owned it for a while. the best thing about this print, we were not surprised by the increase in operating he can pens and not surprised they referenced the ios 14.5 changes.

if you think about the beat, we view this as an area's going to continue to increase over the next quarters. for me, i got exactly what i was looking for as relates to some of the negatives and an even bigger positive than i was anticipating as much as you have to hold your nose it is a good stock to own over the next couple of quarters. >> the comps are so hard to read because they are off the crazy numbers from the depth of the pandemic last year but they warn about the momentum not being to keep up because of the crazy numbers in prices and add rates. what do you do from here with the stock traiting right now at all-time highs. >> sara, that's a great point. it is important for many companies. this is not just a facebook specific issue it is going hit twitter. it is going to hit snap. it is going to hit u tube and google because about there really was a three-month period of time where literally there was nothing to do other than

drink and be on these mobile sites. and they are not going to have that same level of engagement no matter what unless we have a new pandemic there is going to be a season or two of very difficult comps. i do think that that has the potential for keeping a lid on multiples. but i think if these companies can continue to deliver on earnings growth and to show that some of the pull forward in usage of their apps is sticking even post reopening, i do think they will be okay. but i agree you with that really is the thing that we need to think about for the second half of this year not -- it won't be an issue yet. but it will start to be an issue as people start to look out. >> josh, shonnan, thank you both very much for joining us today much appreciated as ever. the earnings action only just getting started apple's results set to be released in about 20 minutes we will have analysis of the numbers as they coach.

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2.972. that revenue also marks a growth of 42%, which the company says is the highest revenue growth since 2005 gmv was up 29% to $27.5 billion. the guidance, however, is mixed for the current quarter. so the revenue guidance is above the street but the earnings guidance is below the street the company talks about category greet within the nights. sneakers valued above $100 grew at a triple digit rate year over year again luxury watches in the u.s. accelerated as well. and trading cards in the united states gmv'd over $1 billion of active buyers in that category doubling shares of e-bay are down 5.5% after-hours. moving in the opposite direction, facebook, after reporting earnings, a beat on both the top and bottom lines. joining us now -- an analyst who

is bullish on the stock with a rice target of 240 what's your take >> i think this was a very high quality beat, one of the most highest quality beats we have seen from facebook, top line, bottom line, daus in line. information on pricing and ad loads. i think this was a high quality beat facebook remains one of the cheapest mega caps out there we like facebook even with the pop it is still cheap they are accelerating revenues for a mega cap, that's an impressive number. i feel this deserves a great rating right now. >> it is your top pick and you are bullish, what questions do you have that need to be answered on call i know there is interest in the

apple changes. do you think they will have color on that yet? >> i think they will have quantitative color on. my understanding is that facebook is well prepared to adjust to anything apple throws at them and i feel like they are being conservative around consumer behavior how many people opt in or out that's u.n. one topic. shopping and merchants those two topics apple and shopping and commerce. >> thank you let's go back the julia boorstin for more on facebook >> sara, facebook just posted its slide with a little bit more information about its daily active users revealing that daily active users in the u.s. were flat at 195 million they added no new daily active users in the u.s

monthly active users in the u.s. and canada grew by 1 million revealing a saturated and mature market since you were just talking about commerce, zuckerberg said they are focused on commerce and the creator economy. >> we will wait the hear more about that in the call. up next, goldman sachs chief economist on when he thinks the fed may start tapering the asset purchases and limb system plus. plus, we will get reaction from an apple who thinks the stock can rally 30% from here. 11:45 to apple earnings.

wrapping up his news conference had the last hour keeping interest rates unchanged but says he does see quote froth in the equity markets attributing it to factors like vaccinations and the economic reopening joining us now, goldman sachs's chief economist, jan hatzius i think the headline from the fed today was they are not thinking or changing or tapering back some of the stimulus or the

asset buying you know the market is going to get ahead of him on that when do you pencil that in i was suggesting jackson hole maybe in august. what do you think? >> i think in terms of signaling, seems like a reasonable guess we think ultimately they are probably not going to taper until sometime early next year but i think it is going to be a process in terms of communicating about it right now he's clearly not wanting to send any signals, nor talking about talking about it or thinking about thinking about it but i think there will be a process. so in the second half of the year, i think we will be moving in that direction. it could be fourth quarter i think that's possible. but our best guess would be that it is going to be early next year. >> obviously the other hot topic of discussion and questioning was on inflation he's also sticking to his guns there, saying, look, we think it is going to be temporary or transitory, we see it happening

abuse of the bottle necks in the supply chain and the great economic reopening do you think there is risk of materially higher and more sustained inflation rate coming down the road? >> it's not our expectation. in fact we have a vet similar pattern to the fed we think core pce is going to 2.4 or 2.5% in the april numbers. then we have it coming down to about 2% by the end of the year because the base effects the lapping of the weakness last year, that's going to be very transitory i think we will see some upward pressure, obviously, in areas of the economy that are really being helped by vaccinations, things like hotels, airline fares and so forth but i think that's also going to be fairly transitory then other factors like health care costs i think are probably going the come down somewhat i mean health care cost

inflation at the moment is relatively high but that's mainly for technical factors that are going to fade 2% by the end of the year is our expectation. in that kind of environment i think they can wait probably still a while before they taper let alone censignal any rate increases. we don't have that until early 2024 despite the fact we have a very optimistic growth forecast. >> what are you factoring in on the forecast side? more stimulus or tax hikes in will a surprise on either one of those things will that affect the leeway the fed has laid they are year. >> we do expect the biden packages that have been presented are going to be passed at least in part our expectation of total spending over the next ten years is something between $3 trillion

and $3.5 trillion. that's a big headline number but i think the impact is not nearly as big as the american rescue plan that was passed earlier because it's just stretched over a much longer time period and we do also expect some of the tax increases to go through. i think in 2024 -- sorry in 2022, i would expect a negative fiscal impulse to growth so a pretty substantial slowdown in the growth phase from the very, very rapid pace this year. and i think that's also one reason why the fed can take their time in terms of moving to the exit >> jan hatzius, great to see you. thanks for stopping by. >> thank you. we are moments away from fiple's earnings the nal countdown to those results when we return so you can quickly check the markets? yeah, actually i'm taking one last look at my dashboard

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we are back and awaiting apple earnings dan ives and ed lee from the "new york times," mike santoli as well all join us as we await this number. dan, we know you love this stock. what will you be looking out for? >> i think it is important to show the super cycle continues. in the march quarter as well as into june. and you combine that with services, i think the biggest product cycle year we have ever seen from apple. when they start to put a further stamp on that especially on

guidance into june, we see them at $3 trillion within the year >> it is moving higher in afterhours, up 1% or so. what are the key thing you are watching out for >> i agree with dan. i think they are expecting a strong quarter i like to look at the services revenue, that's the media side of things. but just because what we have seen in the trend, with google yesterday and facebook just now, there is more people spending more time on their phones. that's likely to sort of give an extra boost to that side of their business which is now their second largest business after iphone. >> wilfred one of the other questions is whether we will see the quinn up theel double, which means double digit growth in all four of its major product categories remember it has seen a big surge for pcs and ipad. >> quinn up theel. five categories. >> quinn up theel, all five of its categories we saw that last quarter

one question is are we going to continue to see the momentum in not just iphones because the economy may be reopening and people around going to be working altd home as much. >> we have ten seconds left until we expect those numbers to cross. there is the countdown shares are moving higher as we just said, up 1% or so in after-hours in anticipation of these numbers which haven't quite crossed yetity despite the clock as we speak -- there they are. josh lipton. >> 1.40. versus expect igss of 99 revenue beating expectations up 54% to $89.6 billion the street was closer to $77.4 billion. gross margins, 42.5% in the quarter. let's turn to the segments iphone 47.94 billion amps were closer to $41.4

billion. also is, 16.9 billion in the quarter. mac 9.1 billion this the quarter. same for ipad. 7.8 billion. street was closer to 5 on 6 billion. wearless and home accessories, 7.8 bm an crease of 7%. authorizes an increase of $90 billion to the existing share repurchase prom program. the company does not provide formal guidance at this time we will look for color and commentary in call >> josh lipton thank you very much dan ives everything you wanted to hear on the revenue numbers to sweeten it a $90 billion extra buyback. practice and dividend hike held us your first thoughts. >> if you looked up blowout earnings this the dictionary, it would be apple's march quarter i mean this is what i want to say is a dream scenario for the

bulls. in terms of what you see on iphones, service of course is on the buybacks well. this many shows -- many were skeptical about the super cycle. you look at this quarter, this sort of puts what i believe is the exclamation mark that the super cycle is alive and well. it looks like it will be apple's historic year where they will break 231 million iphones. i think it will get to 175, 200. this is the best quarter i have seen from appel in the last 18 to 24 months. >> why is apple jumping when microsoft didn't. >> all of the mega tech companies are blowing the numbers out of the park. some are responding higher others aren't. >> $12 billion rev beat for a three month period is extraordinary. i think again it is the margin of victory so to speak that apple put in there l apple shares basically flat since september 2nd.

in the mid 130s. actually went up above 140 at one point. the context was the stock was not overextended. >> josh lipton has comments from apple's ceo tim cook. >> i had the chance to speak with apple's tim cook about the quarter. iphone, $47.94 billion this the quarters about expectations of $41.4 billion from the steet tim cook told me iphone grew 6 of% driven by strong demand for the iphone 12 family its most popular iphone. extremely strong results in the iphone 12 pro and pro max. in the u.s. it is a highly competitive marketplace and you see iphone doing extremely well around the world to that point i also did ask tim cook about the things he's seeing in china. he told me we are seeing strengths strength across the product line

iphones did well, mac, wearless and accessories also did well. we had the top two selling mart phones in chain. cook saying we are seeing strong first time buyers on the mac it to run just south of 50%. in china he tells me it is higher, around two thirds people preferring to work on the mac. >> value comments from tim cook. edly, 6% growth in iphone. you heard come describe momentum in different parts of the world and different parts of the portfolio. not just in the phones what is your impression? why does this come as such a surprise to the street >> first i have got to the give it to dan ives on this i have been sort of a super cycle skeptic. but clearly there is a definite from cycle i think the color on the china

numbers is absolutely fantastic for apple. i actually thought they might have a blip from the last quarter and might sort of plateau. no seems like china likes apple products more than ever. also you know we are talking about in the context of pandemic that, you know, people were beefing up their hardware, eap beefing up their home electronics during this time i think it is ultimately going to help even when we get out of pandemic or mid pandemic, i think people are starting to realize how important it is to have a good ecosystem of products at home because even as people go back to the office they are going to spend some time athome. they are going to spend maybe two or three days a week from home and that's going to be part of their sort of new normal apple really wins out on this. i think compared to microsoft, i know that was an interesting comparison, apple is still consumer facing. ultimately that's what we are seeing in google and facebook and apple. there has been a super charged engagement in activity with

these product. that's reflected in these negatives. it is hard to find anything negative i am still looking but that's my take so far. >> dan ives who was your price target coming into this print. i know you have got to do the work and listen to the call but do you think there is a possibility you will up it after this beat? >> 175 our bull case is 225 when you look at these numbers it val dates the bull case th thth thesis china is the fuel in the engine in cupertino this is really playing out to be -- you have the biggest product cycle year ever for apple. it was a pandemic. a lot of skeptics. now they are just continuing to prove the skeptics wrong these are just jaw droppers. >> what is the risk here mike santoli? certainly we saw the stock underperform this year only up 2% going into the print. it is now up 4.2%.

is the risk that they can't sustain this kind of momentum there is a pent up demand around reopening? >> the risk would be any perception that there was a lot of pull forward of demand. the company itself says it doesn't not expect this run rate for iphone and mac $90 billion incremental stock buyback is in the zone to me it seems like a a stingy dividend how do we extrapolate the valuation? how much can earnings go up. >> they are facing off against for the knight and potentially in the european union coming soon charges on antitrust. we will leave it there apple stock surge 4% dan ives -- ed lee, appreciate it. still ahead much more

reaction to all of today's after-hours including what an apple shareholder wants to hear from this company's call apple, qualcomm and facebook are tenners, big moves of 5, 6% afr-hours. e-bay and ford lower we'll be right back. t your mone. an annuity can help cover essential expenses in retirement. have the right financial professional show you how... this is what an annuity can do.

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shares of apple moving higher after reporting an earnings beat moments ago. iphone sales a huge standout wretch at $47.9 billion for iphone sales overall, a whopping $90 billion for one quarter. founder and ceo of simple human joins us now good to see you. thank you for joining us i don't know where to start. it is a big beat on every line as we just mentioned the iphone is probably the stand out. what stands out for you? >> i actually look more towards the mac and the ipad businesses. we saw through 2020, as we assault expected q 2 as well extremely strong growth in those businesses fueled primarily pie remote work. i think the question we are all asking is will this continue i think we will continue to see these businesses grow in 2021. the new i macs are jaw

droppingly useful. the ipads are laptop replacements and remote work keeps these devices as well as iphone in high demand. it turns out that 51% of u.s. remote workers are buying productivity tools out of their own product. 70% more still plan to do so. >> it is interesting i think the markets had a hard time trying to fig out a out which stay-at-home work from home tech plays during the pandemic had staying power or which were representative of pulled forward demand like net flick. how do you determine the winners and losers >> apple is one of the most diverse businesses in the world. two developments are happening this year. number one, the m 2 chip being announced this summer for

inclusion in all macbook pros. they always knock it out of the park with their second generation products. second, i think the most intriguing development is apple are reportedly working on kproch improvements on i message. that makes apple the only company in the world that could actually beat facebook at their own game it could spell the end of one network built on advertising and the rise of another built on privacy. i think that's independent of stay-at-home dynamics. >> one wonders why they haven't announced. >> message sooner. low hanging fruit there. what's your outlook on the services a gem of a business demanding a high multiple. clearly growing very well. >> absolute. in particularly excited about the podcast subscriptions.

offer a billion iphones in the wild for apple that's a double edged sword. they have been able to continue to increase iphone growth recently but many of us are already satisfied with our phones i would expect to see replacement cycles lengthen. i think we could witness the transformation of apple from primarily a hardware business to a hardware and ecosystem business over the next five to ten years. >> thank you for joining us on the apple quarter. waiting for that conference call the stock is up 3.5% after hours. we are all over this wild afternoon earnings session. up next, facebook reporting a beat across the board just a few moments ago. those share hitting new record wghs, after-hours, up 5.4%. weill break down that report when "closing bell" comes back

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facebook shares hitting an all-time high after hours, up more than 5% on the back of earnings, despite the company warning of increased ad targeting head winds let's bring in sal rodriguez welcome to the show. the big headline of this report is that earnings and revenues surged on the back of a comeback in digital ad spending we knew that was going to happen, right, from the depths of covid and the crisis. what have we learned about where that goes from here, how sustainable it is? >> yeah, i think this quarter facebook showed that they were able to increase revenue significantly by basically further monetizing every single

user they saw them increase the average price per ad by 30% year over year and a 12% increase in the number of ads delivered. so they are basically monetizing everyone much more than before but the concern here for the second, third, and fourth quarters are what the impact of apple's ios 14 changes are going to be. because right now they are doing a good job monetizing everyone but when it is harder to personalize ads, we will see what that impact could be on the business. >> specifically what will you be listening out for on the call on that front of course they mentioned in the release that their guidance for the upcoming quarter has already factored in that update to io 1 in the guidance. >> yeah. i think any detail that mark or cheryl can provide as to how they are adjusting we have ideas about the kinds of things they could do basically, any more sales that can be done directly on facebook or instagram basically proving to facebook's advertisers that

hey our ads work, they are the best in the industry -- anything they can do directly on their own apps, that will give further assurance to investors about the status of the business so this is a big change for the entire industry. but if there is any business that can do this pivot it is definitely facebook. >> for more analysis of facebook's earnings, go to cnbc.com. up next, much more on this afternoon's biggest earnings movers apple, qualcomm popping. ford on.dropping call come is up 5.5% don't miss cnbc's stock drop tomorrow a special edition of "power p. eteh. 2 m.asrn time. as always it is going to be a good one don't want to miss it. "closing bell" back in a couple. h from fidelity. [ cellphone vibrates ] you'll get proactive alerts for market events before they happen... and insights on every buy and sell decision.

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a quick check on this afternoon's biggest movers apple spiking after a blowout quarterly report thanks to better than expected sales of ipad, mac -- all the items there. wearables was slight a beat. we saw the dividend hiked a little bit, but $90 billion buy back bigger than some 350 or so companies in the s&p 500

facebook shares hitting an all-time high. qualcomm getting a pop off the stronger than expected results ebay under pressure after the weak second quarter profit guidance and the stock is lower after the company warned it expected to lose 50% of the q2 production due to the global chip shortage. there are the share price movers, in either direction there. by the way, jim cramer spoke to jim farley about the chip shortage. >> the second quarter is the trough for us. this fire in japan is a big deal it's about 30% of the global chips for auto we got caught up in it we definitely have dual source coming out of this, but we have single source come out of these so we think this quarter is going to be the most difficult we think the chip shortage will extend in the second half. we may lose about the same as what we did in the first quarter. but then as we come into the

last part of the year, you know, we're really moving. >> don't miss that entire interview on "mad money" at 6:00 p.m. eastern. >> there's how you define transitory president biden gearing up for the big speech tonight plus, the big rngsameain ne to watch as we head into the fresh trading day. "closing bell" will be right back just over a year ago, i was drowning in credit card debt. sofi helped me pay off twenty-three thousand dollars of credit card debt. they helped me consolidate all of that into one low monthly payment. they make you feel like it's an honor for them to help you out. i went from sleepless nights to getting my money right. so thank you.

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today, alphabet, strong reactions and that leaves amazon tomorrow what's the set-up? >> you have to everybody is expecting big things from amazon when we talk about money going into people's pockets and checks being sent to households this is where it ends up not too much of a surprise given the snap back in the economy and all the rest of it that's another stock like apple that has been more or less

uneventful in terms of price for a while. multiple months of consolidation. so we'll see if there's a spark here tomorrow. >> but microsoft, you have to have a very, very big beat to get the immediate share price reaction we finished the day down slightly down on the major averages more analysis coming up next on "fast money." >> i'm melissa lee tonight's trader lineup, guy adami, and karen finerman and jeff mills we're tracking the action of apple, facebook, ford and qualcomm and just kicking off. we're bring you the trades straight away and powell stays put. did the fed give another all clear to the market. no jokes here, but mark cuban said to ellen degeneres that sent dogecoin to the moon. we have the two biggest companie