weeks. >> less than 20 seconds left go ahead >> short book, xpo logistics report monday. you saw what happened to fedex and ups. >> you finished well thanks for watching. "the exchange" starts now. thank you, scott hi, everybody. happy friday i'm kelly evans. here is what's ahead under pressure with costs going up all across the economy, companies are forced to raise their prices or shrink their profits. we'll you which parts are safe just the beginning dan says evs are one part of the auto tech revolution that will impact every aspect of our lives. we'll ask and amazon seems to be the king of everything these days apple's eu problem and the april fool's joke that went over

poorly we start with the markets. >> inflation markets are under pressure as well not by that much fractionally speaking, the dow industrial, the s&p, nasdaq all moving to the down side here roughly half to two-thirds of 1% the s&p 500 at the highs was still down 13 points at the lows down roughly 33 points it's been energy and communication services within that tech neemedia realm. technology per se and health care, the two under performing sectors so far over the last week, a very big divergence happening within certain parts of the tech and media telecon.

berkshire hathway. it's down about 1% so far today. it did hit a record high in trading yesterday. it's up about 47% over the last year that outperforms the s&p 500 tomorrow is the big annual meeting for first time ever, it will be second time it's done virtually but the first time ever it will not be held in omaha, nebraska. it's going to be l.a., virtual berkshire is near record highs we'll see what happens a lot of folks like to watch what comes out the annual meeting. back over the you. >> i will catch every utterance while we still can thank you very much. the catch phrase that every one in corporate america has been talking about let's follow the money commodity prices have been

soaring this year. look all around. you have oil, copper, alualuminm shipping issues only made things worse. just this morning, good year, k colgate causing a hit. we also learn that thanks to stimulus checks household income surges 21% in march. what happens as the boost from government stimulus wears off. whether consumers keep paying up or whether they push back and hurt corporate profit margins. there's a lot at stake and joining us to discuss, vice chair and emily reuben is a financial adviser. charlie, it's great to see you again. the value trade, tech versus value has been topic of

discussion for us all year you have the kind of inflation piece of the puzzle moving your way. where should investors put their money now. >> naunthank you for making tha link it pushes up interest rates and the dollar that a growth company is going to earn 10 years from now is not worth so much our value stocks are making that dollar today in the past couple of years, we had almost negative real interest rates and that dollar ten years from now was almost worth more now as we get more and more inflation, the company is making money today become relatively more valuable. the other thing that value stocks have is assets today. those growth stocks are going to have to be building those plants and equipment over the next five years at higher and higher costs versus the value stocks that own the pp and e

>> that's an interesting point people go tech companies have all the money in the world look at amazon and google this week those are a couple of companies with actual profits. where do you have people invest? >> e think it will be this reflags trade. financials and energy which we'll bo doet well as this increase growth environment that we're hitting. they have been behind s&p since end of 2019 by 13 and 46% respectively we think there's some value there. the other thing he mentioned was negative real yields we think that's important when thinking about inflation because with inflation increasing and interest rates still at lows,

real yields are even more negative and that's not good for investors. there's a lot of excess cash on the sidelines and we're advising our clients to put some of this excess cash to work because it will be drag on their this is n investors think they can make money. they are in crypto and tech and spacs. that said, some of the names you like have done pretty well >> mosaic is up 54% year to date is that too much to swallow at this point or could it still have a lot more upside >> there are a lot of these value names that look that i can they have done wonderfully since september of last year but if you look at the ten-year chart, they haven't done well at all. it's trading right around book value. they have a lot of winds at its back right now it's getting expensive to bring

fertilizers in from moracco. >> what about the fed? granted he's hawk but it seems to upset the market when he start talking about the need to talk about the taper is that something that you think enhances the attractiveness of financials and energy? does it become a head wind for the market or is it a non-event? >> rising yields are good for financials and energy which is one of the reasons that we think they are attractive right now. we don't expect the fed. they are saying leave rates lore for longer and that's what we expect. we think that inflation headline cpi could get above 4% temp

rarply pents up demand is meeting constrained supply we're comparing to a year ago when the economy was shut down we agree it will be transitory and on the path to a sustainable recovery >> kcharlie, don't we have to wait until the autumn to see whether the supply chain issues get themselves worked out. all of these workers as those boostless jobless benefits end, as it expands. won't we have a clearer picture in about four to six months time of what's really going on with the economy than all these weird pent up numbers we're seeing right now? >> sure. we're lapping weak numbers from a year ago but we won't be in november i think we'll have over 4% cpi in november and you can't just add new copper mines you can't add new lumber mills this supply problem don't just rev up 20% higher capacity we'll have very tight markets,

in my opinion, for the next three or four years. labor prices are headed north. minimum wage numbers are going up and are going to stay up and these deficits we're running right now don't go down to zero. there's going to be a lot of inflationary forces in place for several years to come. make sure you're careful about your bond exposure bonds get killed in this environment. >> we have to go but emily i want your thoughts on that i know you're a bit more dovish on inflation what are you telling people about bonds? do you think they are too rich here in. >> inflation and higher yields have ban head wipd for bonds it could be a tail wind as reflation risk reduces if you look back at history over the last 100 years, bonds have only -- u.s. government bonds have only been down over three-year period, .4% of time and only by 2% if you hold on the your bonds

long enough you're likely to get a positive return. when looking at their place in port portfolio, they are good for income although not as much as we would like right now. diversification certainly which is important particularly equities versus fixed income have only simultaneously gone down over a 12-month period 1% of time we saw how complementary they were in a huge year like last year >> every time i hear that, i think back to when people in '05 have said home prices have never gone down. i absolutely take your point over the last ten years time and again people have sold their bonds too quickly. we'll lever it there thank you so much for the discussion today charlie and emily. let's talk about the auto industry which is changing rapidly. moving away from gas powered engines and toward self-driving electric vehicles.

that harolds major economic impacts according to my next guest. stocks in this sector have been hit hard this year names like blink all seeing big drops. lords town down near 50% for this date. dan is a pulitzer prize winning author it's great to have you you trace out this whole issue very well. how quickly can we transition to auto tech? it's almost as if investors are losing a little patience maybe with the narrative >> we saw the stock was enthusiasm frenzy on those e electric car things. it's a trend in the new map and my article is this plays out over -- it's really two decade thing. it's accelerating because of the policy drivers for electric cars

because three things that come together here. electric car, ride hailingutonos that's ha what gets you in the world of policy. 50% more is being spend e spent on electric car promotion that's being spent on roads, bridge, highways and ports you have general motors saying they will try to have no gasoline cars after 2035 and california saying you can't buy one. there are lot of forces. i think it's something that plays out over two decades electric cars are about 3% of the market so far. >> it's interesting to read your piece and think about back when oil was kind of the moets important sort of supply issue you had tensions with the middle east and all thoese pressures created a whole different set of politics we're talking about the key relationship between the u.s. and china and that would be a whole interesting area to delve

into i thought would you even be writing about oil. would you care about the oil market anymore >> i'm still writing about oil >> it's not the same now as the old saying goes, chips are the new il data is the new oil. that's what i kept thinking as i read your piece. >> it is true. what's the biggest shortage is shipping container -- ships with containers and computer chips. oil, partly what changed to oil is the u.s. has gone from importing 60% of its oil to being energy independent there's a sense we're not vulnerable to it there is this greater stability. clearly, right now, what we're seeing is a convergence of geopolitics and flu new supply explains we worry about battery security

rather than energy security. >> it's fascinating. he doesn't dance around the issue in the way the two nations confront one another yes they have other businesses they do chemicals and so forth what do you do you have the whole esg revolution where people aren't going to own anything that doesn't comply with the environmental standard the company itself is trying to p p pivot. what is a company like exxon do and what should investors do do they stay away from it. >> obviously, it would have ban pretty good trade for investors. oil demand will probably still increase until 2030. it's not going away.

you saw exxon came out with this big program for carbon capture i think all the companies are moving towards this notion of energy management has to be part of the business. >> you think of these practictioners as being in a very good position to be leading that change. dan, thank yous so much. always good to get your perspective. coming up, if you're in the market for a brand new home, prepare yourself for some serious sticker shock. rising lumber and land costs are pushes pricing way up pmplgts from prime video from ads to the cloud business, amazon seems to

be dominating everywhere as one analyst put it, whether this is a permanent pull forward in demand. we're back in a moment ♪ ♪ i had the nightmare again, maxine. the one with the lollipop— no, the other one. where the children go to the candy store, but it's out of wonka bars... it's ok, wonka. there are proactive ways to help keep customers supplied and happy. they're called digital workflows. they've made us more productive. and reduce risk. in fact, and i don't want to sugar coat this... whyever not? everything should be sugarcoated! this whole factory needs digital workflows. digital workflows give employees what they need to perform at their best...

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was expensive these day, try building one diana joins me what what is pushing costs up to eye popping levels >> kelly, material and land costs for the home builders are off the charts adding to your cost for a newly built home let's start with lumber that seems to set a new record daily. up nearly 70% in the last two months up 340% from year ago. lumber doesn't just go into framing a house. it goes into added costs for cabinet, doors, windows, flooring then you've got your gypsum. that's dry wall. prices up 7% from a year ago st steel mill up 18% since march. copper set a new record high this month what do you put all this pricey stuff on you put it on land the price is up 11% so far this year compared with the same period last year that's because demand is so high, supply is so low

new lot supply down 20% from a year ago all this according to zonda. the inventory is tightest in decision, baltimore, san francisco with baltimore and nashville seeing the biggest drop lot supply in 90% of the to markets draptracked is consider significantly under supplied and that is why you are paying more for a new home >> i hear about it all the time. some who are involved in building a home but just you are aware in town the costs of every aspect of putting one up mortgage rates are up. we know they are still historically low is that having any impact on the housing right or all these other factors far more important >> it actually helped fuel some of the higher home prices we're seeing now in the existing home market especially because with mortgage rates in fall were at such record lows that gave people additional purchasing power. they were able to get into b

bidding wars now you're seeing rates shift higher and higher. we did see pending and new home sales and closed home sales for existing homes dropped a bit over the last two months we're seeing those buyers pull back part of that is supply but it's these higher prices. for new home, the builders are still seeing huge demand you have to wonder if those higher mortgage rates aren't a factor for those people who are paying that additional price premium already for newly built home perhaps it's having an effect on existing home sales. not smouo much in the home mark. >> thank you so much mpl we know about the chip shortage hitting the auto industry but there's another shortage in the car world that many haven't been paying attention to when the rubber meets road, consumers may end up paying more that story is ahead. cable, credit and cooling

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welcome back let's get you a check on tennessee markets. the dow is down 275 points tat

the lows he is considered a hawk. it's not necessarily indicative ov what the overall fed is thinking the dow is off 186 that's half a percent now. let's back out for a second as we close out the month of april and look at who led nus dish was the big winner up 26% twitter shares are down double digits on disappointing user growth and weak guidance twitter is down 13.5%. overstock is higher. the stock up 67% this year a volatile name but never disappointing on that front. let's get over to rahel for a cnbc news update >> derek chauvin's criminal trial was the first inmin minnea to be broadcast live and lit not

be the last. allowing live broadcast does remain in effect court officials will allow live coverage when the other three officers go on trial in august starting today, new orleans is dropping capacity limits for businesses, restaurants and bars although social distancing must be maintained and city is keeping its mask man date. you can see how businesses are roping from florida to california tonight on news with shepard smith. one quarter of a billion dollars. that is what sony paid paul simon for his song writing catalog. that's less than the 300 billion plus bob dylan received. kelly, back to you >> we talk about spotify and how much they pay artists but if you

can sealll for that much money >> yeah and good music never goes out of style. the eu versus apple. a shot to get back to the office and a marketing stunt gone wrong. it's all coming up in rapid fire it's friday and that means it's time to look ahead for what's in store for your money next week here is your friday "fast forward. >> it's that time of year again. the berkshire hathaway annual shareholder meeting kicks off this weekend with warren buffet taking stage on saturday investors will be watching what he has to say. it's vegas and vegans for earnings draft kings and beyond meat reporting. pandemic peleton out with results. it's down 32% in 2021 as the cou country reopens. we'll get results from uber

and lyft climbing as people leave their house again. employment data for the month of april is out on friday that's your "friday fast forward. ible at 40,000 feet. instead of burning our past for power, we can harness the energy of the tiny electron. we can create new ways to connect. rethinking how we communicate to be more inclusive than ever. with app, cloud and anywhere workspace solutions, vmware helps companies navigate change. faster. vmware. welcome change.

it's that time let's catch you up it's time for "rapid fire. here is robert frank, cnbc corrector, joann stern welcome. i don't think i've seen you on "rapid fire. this is like match made in heaven >> i haven't seen you in a while. >> yeah, exactly tim, how much fun was the stock draft? >> it's nice to be a first place. it's a long season it was significant that's must watch tv >> you mean because your stocks are doing so well or you just got to go first? >> it's always a good time it happens to be nice when you're in first place. it's day one and i'm in first place. i'll take it >> first topic was amazon which was picked it's primed for even further

domination after smashing first quarter estimates and reporting record profits jeff bezos revealed more than 175 million prime members streamed tv movies amazon also secured a ten-year deal to thursday night football beginning in 2023. that's not all look at their ad business. revenue surged 77% to nearly $7 billion last quarter we're talking about amazon's video dominance. we're talking about youtube's dominance and netflix is not in the conversation anymore >> yeah. here's another amazonian figure. jeff bezos added about $5 billion to my wealth he's worth about $207 billion. right now in the sort of race against elo fn musk he's up by 2 billion. if he had not divorced, he would

be worth $265 billion. it's just not just the amount of wealth that's incredible but you look at his physique lately. when he retires at the end of this year, he'll have more time to spend his wealth and on his physique he's got a great life lead amazon will be doing great without him. it's great set up. >> i wonder if this is the worst time to be taking over they joke how a new ceo want to kill the stock price that's going to be hard to do in this case. >> right what does he climb in there's no hill to climb. to frank's point, maybe he's got to build up his biceps and thaes his challenge for the next couple of years. i think the sdreeming point was significant over when we heard

about the netflix earnings this week netflix is saying t ing they ha killer quarter with the pandemic they are looking at slower subscriber growth. one of the things they say is that doesn't have to do with competition. i've had some doubts about that. there are so many streaming players now. it just seems like that eats into the time we spend on netflix and if more they are making decisions what am i going to describe to >> tim, here is what i wonder. look at the performance of twitter there week look at pinterest. these are clear reopening hangover stocks. what happens with amazon can they be a permanent pull forward or will they face a reset? >> i thaought his face was still i think it's frozen. robert, i'll give you that question and we'll move along. >> look, the 175 million subscribers is amazing there's a lot more competition if you look at the number of markets that amazon went into

just in the quarter, it was global payments. it was global procurement. it was the nfl it was teaming up with the yankees. just the businesses that they launched in the quarter, alone, would each be yun kunicorns andt ipos on their own. streaming faces competition. the markets they are going into and will just dominate because they enter them is just staggering every single quarter. >> all right tim, since you're back let me ask you, would you rather talk amazon or apple, my friend >> okay. let's talk apple european regulators say apple abused its position as gate keeper of its app store claiming it has a monopoly. they opened an investigation into a app store last year

aing denies the ability to offer consumers other ways to sign up. apple has fired back calling the eu's case quote the opposite of fair competition it claims to help spotify by providing access to its platform and services is this argument going to work >> i think it's the argument we'll be hearing across apple's regulatory and legal issues. we were headed into the epic, the federal epic case that's coming up this next week i think we'll hear a lot of the same arguments from apple, which is one, we provide this platform and we have allowed these companies to be extremely successful two, some of these restrictions have allowed these companies to make even more money that i know would have made on our platform. i don't necessarily buy these arguments. i think there's certainly a gatekeeper aspect and many believe a bully aspect in this

sense they own the store they set the rules and they have been pushing their weight around >> tim, is apple a stock you'd be a buyer of here sgla look, the only thing i care about with apple is what they told us yesterday is there's 205 billion cash in the balance sheet. they have 660 million paid subs. they have a billion installed base and a 5g cycle that is a su su su su super cycle. apple is a bully and they can be a bully. this company is innovating the services business grew 26% the dynamic of the services business including podcast and streaming is drawing and becoming more important. these are not great headlines. apple will have to figure this out and there may be other people coming after them there's been for years it's not a reason to sell the stock and you're buying weakness on apple the next time you seep it >> you'd be selling what

berkshire, i bet we'll hear more r more from them if you plan ongoing into the office, you might need to bring that vaccination card because a new arizona state university shows that more than 60% of u.s. companies plan to require proof of vaccination from employees. it's a bigger number than i would have imagined. the responses900 firms across d sectors. 40% said they would require all to get vaccinated. 31% said they would encourage it consider that 42% of companies won't allow unvaccinated people back in their buildings and a third say disciplinary actions are on table what are your thought s on this robert >> this will be a tricky issue you have that controversy in florida where the governor said and now the legislature will prevent companies from preventing nonvaccinated employees from returning to work

and the question about the constitutionality about the legislation and whether companies can indeed require employees to be vaccinated and come back to work. most companies when i did reporting here in new york say we are strongly encouraging. what does that mean? does o does that mean they can or cannot walk through the door with the employee badge if they have not been vaccinated beyond the constitution legal issues, test a dpe o question of what companies really do when the rubber hits the road and non-vaccinated employees who want to come back to work and what do they say i suspect they will let them in and i suspect they won't go the legal route but this will be fought out in the courts >> tim, what would you add >> i was allowed back in the office, you wouldn't have that goofy frozen picture of me you had before >> is it because you're not g getting vaxed, what's the issue? >> i'm vaxed and proudly vaxed

it comes down to where employees want to grant flexibility in the future 2021, i think there's lit employers can do to push on folks. i don't think most employers will ink providing some flexibility in the workplace especially for those that can be location independent is a perk. i think there's a lot of businesses that rely on people being in the same place. they want their people back. >> what if there are events or restaurants or other types of gatherings going through the same process saying you must be vaccinated it seems to raise the issues robert was describing. >> i was thinking about what's the encouragement that will come from the companies i think that's one of the most interest things. what can they do to encourage employees without saying you

must get vaccinated whether it's time off to get the vaccine, time off in other areas like you're saying, perks to go to the parties, go do these sorts of things. then for employees, just lilivig your normal life >> you don't have to offer a lot to get people to do things others if they are more opposed, that's a different story >> just ungrading the coffee in your office might be enough for people >> that's kind of where my head was going. exactly. okay finally the sec is probing whether volkswagen violated securities rules with the volkswagen april fools stuff it leaked a false report it was considering o change its name and claimed the whole thing was a joke to call attention to its electric vehicles. the stock shot up a% 5% on the

news >> misrepresentation no matter the intent is something the sec is focused on. there's a difference between cracking a joke and having investors on the wrong side of the joke i think the highlight here is that vw is a leader in the ev space. they are focused on it priced into their stock. yes, i think you have to be careful about the communication of the markets i'm all for clear communication. >> robert, to me, it's strange because i would imagine once it became clear this was a joke, the stock would have given back the gains. is the sec implying the 5%, is the issue the 5% that day or 5% permanently? you know what i'm saying

i guess it's because people thought they were serious. >> it's confusing what they would charge them with this is a waste of sec time. the only thing they are guilt of is cal dendar abuse. i wasn't april 1st it was march 31st. it wasn't april fools. you got your calendar wrong. you should be ashamed. get better calendar maintenance. the sec especially is a time with so much froth and investor deception in the market, this is not where they should be spending their time. >> i'll counter that >> i think they should change their name to swvolkswagen i like the name. >> i hope the sec punishing here only for the reason this teaches every company to stop with

april's fools jokes. that's my wish here. just please stop this is what it take, i'm sorry, volkswagen >> that's true good taking one for the family thank you all very, very much. next, from ketchup to chicken, a lot is out of stock you can add rubber to that list. the ceo of bridgestone joins us to discuss next. if you wake up thinking about the market and want to make the right moves fast... get decision tech 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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bridgestone already in. >> thank you for having me it's a pleasure to be with you so, i think generally i have to say we haven't been affected by this very, very difficult overall global supply chain disr disruption i would say knock on wood but so far, 2020 and 2021, we have been watching the situation very carefully. my team has done a great job monitoring raw material, a, b, c, d and flagging the ones we have we had some critical points but we never had to stop production unlike others and things are not bad. we clearly need to continue to monitor the situation but so far we haven't been affected >> it brings up an interesting point when there are the shortages and bottleneck and supply problems it's an opportunity for companies to

differentiate themselves they kept their work force on board. they were able to did ifferentit themselves tell me about what you think you are doing better or differently than the competition and whether consumers will end up a lot more >> we have been very proud of being an essential business through 2020 crazy pandemic here. we have been up and running with our retail store, operations our commercial business which is tires for truck has opinion quite resilient in 2020 but to the extent it was actually up and that growth is continuing to 2021 the one that suffer add bit more is the consumer element of the business especially because of the oens that's balancing back quite well what we did, we clearly adapted very fast. especially in our retail stores we were able to deploy contact free services, assistance, pick

up and delivery. we would have deployed in any case but clearly the pandemic accelerated the trend. there's a lot of things we have done in businesses is very solid. 2020 was a reasonable year i would say all things considered and first quarter doing well >> people say rubber trees start producing seven years after planting and this could be a pl multiyear issue. what happens if the supply crunch gets worse over the next couple of years. is there anything you can do to get rubber elsewhere >> sure. first of all, we have plenty of supply and then i think we're doing well i think our goals to the mid and long term is invest in technology and put other way

so far, we have been doing pel >> all right thanks for your time today we appreciate it tomorrow is first saturday in may and the kentucky derby is back to its usual position frank holland is in louisville with what that could mean for the local economy, frank >> hey, good afternoon, kelly. we're here at churchill downs ahead of the kentucky derby. we'll look at the economic impact of the kentucky derby on louisville and how large public gatherings like these boost revenues for cities and how that might be changing during the pandemic orwh "e chgeexan" returns.

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normal derby, but after last year which was run without fans, it's one small step of normalcy for this region that's really been hit hard by the pandemic. more than $400 million economic impact this year the impact is expected to be a fraction, only about $35 million. it's hitting the hospitality industry the hardest hotel occupancy right around 65%. normally it's at 99% to 100% events like this also drive customers to the gig economy with ride share and airbnbs. it's also hard for local merchants who depend on the derby for a large percentage of their revenues. >> the millions and millions of dollars that it brings in, they have done so much for the city without that race, i know we would have a very difficult time staying -- you know, staying afloat and growing the way that we have.

>> this really impacts a lot of alcohol stocks as well the official bourbon sponsor for the derby says derby parties globally are historically a big revenue driver for them this quarter. looking ahead the pandemic impact on cinco de mayo parties. >> are there other ways, frank, in which this may not be back to normal this year for this race >> well, kelly, listen, it's half capacity. the economic impact is only a fraction so that's really being felt by a lot of people. also this year the kentucky derby really emphasizing the black history of this event. a lot of people don't know that the very first kentucky derby there were 15 jockeys, 13 of them were black and the winner was black so they have tried to put that in the forefront this year they are trying to raise money to preserve the heritage of

those black jockeys. >> wow, i had no idea. frank, thank you so much we appreciate it. next hour on "power lunch" the churchill downs ceo will join us to discuss the 147th run for the roses. here's a quick look at some of the gambling stocks this year draftkings which was mentioned yesterday is already up 21% year to date. caesars up 31% wynn is up 50% and mgf is up about 28%. that does it for "the exchange" today. thank you for tuning in. i'll joityr maisn lethen for "power lunch" on the other side of this quick break. hey lily, i need a new wireless plan for my business, but all my employees need something different. oh, we can help with that. okay, imagine this...

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petco. the health and wellness company. hi, everybody, welcome to "power lunch." i'm kelly evans. tyler mathisen will join me in just a moment. today we'll be talking to jonathan tisch, the ceo of loews hotels he's in the middle of several tough topics the dow could have its worst recovery have we reached the part where good is no longer good enough? it's been 24 hours since the stock draft and some of those names making some pretty big moves. we'll have more on that.

"power lunch" starts right now welcome, everybody, to "power lunch" for a friday afternoon. i'm tyler mathisen we're seeing the markets move a little lower on this final day of april let's bring in mike santoli for more on what we have seen in these days of april. mike >> yes, some month-end trimming, giving back a little bit of the gains we've had for the month of april. interestingly all the gains were piled up in the first half of the month. this right here is april 16th, exactly two weeks ago today we closed near 4180 and change. during earnings season we had great results but priced in. late january, also before that late october, as companies reported great numbers, the market did not do a whole lot. it was a pause twitter, big loser today the result