hello, everybody welcome to "power lunch. i'm tyler matheson dangerously close to kelly evans but we're okay americans now have more of their financial assets in stocks than ever before. >> wow warren buffett is blasting spacs calling them a killer. after the initial frenzy the returns have been anything but spectacular. >> the reopening stocks versus the stay-at-homes. should you bet or uber or lyft we'll talk to an analyst throwing in the wipes on one stay-at-home darling

"power lunch" starts right now and we start with the markets on that reopening theme. that's where the action is today. let's go to bob pisani for more. hi. >> hello we are up but off the highs. buying yields moved down and bank stocks as well. but we are still doing really well and the reopening stocks matter so seeing steel stocks like nucor at new highs. restaurant companies and food delivery like domino's pizza, the companies package delivery companies like u.p.s. doing well and carmax new highs one group that's not reported yet, 60% earnings season, are retailers on an additional month and are to get the april ending quarters and many are hitting

new highs and also really been moving up on the reopening story so new highs in gap, ross stores, ralph lauren, ptapestry however everyone is still buying stuff for their homes and not right to the stay-at-home trade suspect work as much anymore big companies across the stay-at-home trade do well the paint companies, sherwin williams new high every single day. mohawk in the carpet business and the broader retailers for the home, the target and home depots and lowe's regularly hitting 52-week highs. anything to complain about april 14th earnings season started and it's been sideways once we get earnings season in april it sort of tapered off even though the numbers have come in spectacular. it takes a lot to move the

market forward i'll have more to say about the dividend story in the next hit. >> thank you. the market makes all the-time highs seemingly every day. this year alone the s&p hit 33 records. now those steady gains drive interest and money into stock according to data from jpmorgan and the fed. us households have 41% of the assets in equities that's the highest level on record joining me now is niklas pentssgitsaglu your last name is tough for me you're niklas. i'm tyler. we're glad you're here. >> thank you. >> let me ask you whether the rise to 41% of assets is driven by new money coming into the market or by the appreciation of

money already there. how much of each >> it's mostly due to the appreciation but we have to remember here the flow impulse that is behind any given appreciation with the equity market is not equal to the change in the market cap for example, think about what happened over the past month just the global equity market expanlded by $50 trillion. we clearly didn't get $50 trillion of buying flow so yes it is true that most of these safe 41% record high equity allocation for us households is driven by the appreciation but the flow here is being behind the equity marnket over the las months is important to drive that equity appreciation. >> so you are seeing more flows

in typically individual investors put more money in bond funds than they have been putting in equity funds are you seeing flows into 401(k)s, equity funds, equity etfs >> yes in fact, there is a little bit of a change in behavior with the third stimulus checks. the third round of stimulus checks in the first and second rounds of stimulus checks the flow impulse by the investors seem to be equity market propagating purchase of stocks the third round appears to be different, it has been pom you will gaiting into the equity market by equity gaps where, yes, year to date the in flow into the equity etfs has been close to $300 billion exceeding the flow into bond funds. >> wow a lot of money instead of

individual names goes into the etfs you simply here kind of that this is analogous to the dotcom craze say they support the market and get out at once and how you get this market collapse do you think that's a risk right now? how much of a risk is it when might we see that sentiment change i know the answer is when prices start falling but what are you thinking through in terms of time frame >> yes, it is a risk and it's obviously difficult to gauge here the timing. i think it can happen any time and you don't need any particular trigger the lesson from 2000, the burst of the dotcom bubble at the time, is that you don't need policy trigger or other market trigger to post a change in the equity trend the timing was simply momentum

failing and retail investors in particular started to get out of the equity market, starting taking profit of the previous year's gains and that's the risk here over the next months or quarters i think that at some point if the momentum in the equity equity market flattens retail investors start getting out by taking profit of the money they made over the past year that's been obviously very strong gain. >> so there's the risk that equity investors particularly the new ones get jumpy and pull out. are you already seeing some of that in the form of hedge funds and others that have pulled money out of the market? >> not yet i think there is a little bit of slowing in the buying pace in the sense that the march buying

of equity funds was a lot stronger than in april and perhaps that's natural because most of the bulk of the stimulus check put into u.s. house holds in march and that i think is -- it is a sign here that the impact if you want from the third round of stimulus checks is somehow failing but not yet seeing investors getting out, effectively selling equity funds or individual stocks. >> thank you very much we appreciate your time today and insights, jpmorgan does this enthusiasm for stocks signal the market rally will roll on what about the risk? greg branch and tom lidden joins us great do have you both here. do you think that this is a big risk in the market >> i don't think that that is the primary risk i think that's a consequence of

what some of the primary risks are. one of the primary risks i look at is that inflation may spike more acutely than the fed has said it's comfortable with in the event that happens the market will figure and plan on the fed changing the posture sooner than expected we will have the risk and it is an institutional risk rather than retail risk that assets that my graded up the risk curve retreat to the more traditional risk classes as those yields get pushed and so i'm not so worried act the retail investor exiting as much as i worry about institutional pools of money retreat away from equity as the yields rise. >> that's interesting and maybe it could build on itself in other words, the institutional investors retreat and worried about the taper and spooks retail from the marngt

and maybe not. so you have got technology themes, big tech story with zoom, the banks, consumer stories like walmart and target. you think these perform well even if what you described comes to pass? >> yeah. contrary to earlier, now's the time for identifying great story just the sector trades are largely over when we look back at where the bank indexes were trading november and october, they've made a 50%, 60%, 70% move and now's the time for story picking and looking for stories with great tail winds is where consensus is low in the back half of the year and after this first quarter earnings report showed us areas of strerngth tha may not retras much as we thoug

and those leverage to the digital transformation of the corporation which in the results and web amazon services result are there. i look at things that cross the value shoching trend to emerge with the e-retailing trading and i think will persist so that separates the walmarts and the targets of the record of the rosses of the world. >> interesting like you said you're sort of moving from sectors to stories as niklas said the retail investor is moving from stories to sectors let's bring in tom on that you're looking at the more inflation trades, right? >> it's something to be concerned about for sure we have seen home prices, lumber prices, steel, commodities in general going through the roof and not seen a spike up in

commodities the way we have in the past six months so looking at a basket of commodities the opt mum yield strategy pdbc is a great etf to consider for sure also, small caps really are on sale we have a big boom in the s&p 500 based on the mega cap stocks in that index. small cap stocks are really on sale and also small cap value from an investing standpoint so you can get from a valuation perspective a great discount and when the reopening trade happens, the smaller companies are much easier to ramp un they can hire people quicker they can ramp up with supplies and mump better positioned to take advantage of the reopening trade. >> final question though go back to the commodities trade. what was if people buy in near

the top here how much more room do you think some of the prices at all-time highs can further rise >> some commodities are getting close to all-time highs but the crazy thing is areas like gold is flat for a long period of time so you really have to pick your spots there's etfs that will go specific into any come modify you are interested in but gold which is the benchmark for inflation and pricing really hasn't done a lot. maybe that's because of the great appeal with cryptocurrencies and people talk about that but if you look at the average investor today they have small allocations to commodities and something to consider. >> interesting some stages depending on the point of view. thank you very much. >> thank you. all right. has the ship sailed on spacs

now the pace is slowing. the performance falling off. warren buffett not a fan we'll talk about that and twitter with love despite tumbling last week we'll have the latest. i had saved up some money and then found the home of my dreams. but, my home of my dreams needed some work. sofi was the first lender that even offered a personal loan, and i didn't even know that was an option. the personal loan let us renovate our single family house into a multi-unit home. ♪ and i get to live in this beautiful house,

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welcome back to "power

lunch. it is a tough stretch for spacs lately look at the cnbc spac 50 index down 14% this year let's picker with more details on the slowdown for us. >> the frenzy took a step back in april issuance deseparated and 13 went public thanks to a record breaking 2020 and a record breaking first quarter, goldman sachs estimates there's about $130 billion in spac capital that needs to find an acquisition in less than two weeks. too much capital chasing too few targets on a deadline is a dynamic that warren buff ett calls a killer. >> if you said you have to buy a big business in two years, i would buy one but it wouldn't be much of one.

>> deal making isn't the only head wind here regulatory concerns especially those stemming from a potential s.e.c. crackdown also thwarted the market and now biden's new tax plan could hasten it even more the paper profits in the combined company could be taxed at a higher rate and they would be locked up for months so may not want to be making those moves until their clarity on that front. >> thank you. could a slowdown in the spac market be a welcomed thing so when you have a leisure spac doing a deal and can pass merging with a space company concerns come to mind about company. let's bring in business editor

dan premack and jackie recess. welcome, folks i hope i pronounced your names correctly. dan, have we hit peak spac >> i think we might have we were in a period of h hibernation and part is because we had a huge rush and people to do that got them out there and the s.e.c. thing is real and basically said was even if you filed the paper work and we accepted it we need you to rework some things so you have a massive paper work backup. >> so, dan, jackie says spacs are whacked. have the bestdeals come? are the deals slimmer? what >> you know, look, putt it in c con toex of the overall market and so as much as we have seen volatility in the short term i think spacs are here to stay as an option for companies to

consider going public. they could do direct listings, straight ipos or they could do an spac. having said that, i do think that the changes that dan mentioned always have to have some consideration in a market like this. and as much as they're goating considered in the broader market within the spac market what's happening is the structural changes expected are driving the volatility to the spac market itself so the broader overlay, sure, it has an impact the changes that people expect in order to create guardrails on some of this euphoria is i think what's driving the momentum and changes in the market. >> quickly, you said that spacs have been around for decades why do i feel they haven't been? >> i think the level of issuance you have seen in the last few years peaking out in february has been extraordinary and the

market achieved some level of acceptance in the last few years where historically only existed on the fringes with marginal numbers of deals happening with any given year but they absolutely existed for decades only in the last four years have they really become part of the market nomenclature as an ipo structure. >> dan, we were just running through some graphics of performance. it is not just that issuance is slowing. but performance in many cases has fallen off a cliff why is that? how does a -- how is an investor to know which one has -- which ones have good prospects versus those inflated and then about to pop? >> what's about to realize about spac and i assume it's those that announced deals and they

aren't an asset class. they're a vehicle for taking companies public and like you wouldn't say should i buy ipos overall. no i should look at the particular issuer and decide whether that company is a good prcompany at that price or not. one as jack sy said some potential changes from the s.e.c. and including forward looking companies is they can talk about 2026, 2027 projections without being liable for it that could change and with your potential investor to get freaked out about less visibility going forward and driving them down and then part of it were some people that bought every single spac deal and made it realized it made no deal and sold off. >> how do you read warren buffett's critique he would not

like to be involved in a deal where he's forced to make a dial he likes to size up companies i gather more deeply and not like that kind of pressure weighing on him legitimate or not? >> i wouldn't bet against anything warren buff ett says i think it's logical having a two-year gun to your hold around transactions is incredibly challenging but i don't think that means that the spac market overall doesn't make sense. you have to be mindful of quality managers to make sure who sponsors spacs and whether they have deal flow to generate strong spacs that will be attractive in the market but i think overall warren buffett largely is questioning

the euphoria in the market which makes tons of sense because many of us who study the market see the level of issuance and the level of interest in it and ask questions about whether that makes sense and we really want to look at it as quality more than anything. >> all right folks, thank you very much, dan and jackie. >> thank you. up next, booming demand for used cars is boosting shares of car vrana. and the ride share rivalry uber versus lyft who will diveler better results? "power lunch" is back in a "power lunch" is back in a moment your mover, rob, he's on the scene and needs a plan with a mobile hotspot. we cut to downtown, your sales rep lisa has to send some files, asap! so basically i can pick the with at&t business...

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we want to welcome you back with headlines from new york fed president john williams speaking right now. williams saying he expects the economy to grow at the fastest rate since the early 1980s and expects inflation to come back down to 2% next year and he adds that current conditions are not enough for the fed to shift its

monetary stance. kelly? >> the last part being key let's get to today's power movers first up is twitter rebounding after declines cathy wood is buying and twitter down about 1%. barclays upgrading the baker hughes to outperform up 9%. bank of america on carvana saying they have the inventory to meet the demand for used cars and stock nearly qua drdrupled n the last year. home buyers are facing bidding wars in the competition for the record low supply of homes as mortgage rates are very, very low we'll talk to the ceo of home depot next is clorox wiped out? why an analyst calls the stock

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india is scrambling to prevent the collapse of the health care system exams for doctors and nurses in training have been shelved to free up people with experience to help battle the outbreak. the impact of india's covid crisis could be devastating for poor nations waiting for vaccines from the covax. the world health organization is looking for new donors one potential donor to help fill that gap the u.s. denmark is scrapping plans of johnson & johnson's one-dose shots over fears of a rare disorder the shot was not administered there. last month the american regulators gave the all clear saying that the benefits outweigh the potential risks. and florida governor ron desantis with a law to suspend all covid restrictions and mask mandates, capacity limits and school closures. kelly, back to you. >> thank you so much. let's check on the markets

right now. the dow up 346 at the high today and now off the levels looks like a slight leg up after the comments that tyler mentioned from fed's williams who reiterated the idea that the economy is not yet ready for any kind of tapering s&p 500 up and the dow with a 1% and the nasdaq down a quarter percent. here are the stocks contributing most to the gains today. all up about 2%. let's go to dom chu for more at the commodity desk. >> oil prices higher joining other parts of the marngt. wti crude oil futures $64.50 brent crude right now $67.26 now the optimism over that continued positive trend in the global economy driving a lot of the upside action here coming despite india reporting hundreds

of thousands of new covid cases. the third largest consumer of oil. now fuel demands hit the highest levels since before the pandemic indicating perhaps a more robust summer driving season. tyler, back over to you. >> thank you very much. now the bond market where rick santelli is tracking the action hi, rick. >> hi, tyler all the comments were picking up and doesn't seem to be reflected in today's activity. look at an intra day of 10s. as a matter of fact manufacturing is so good right now the problem is we don't have all the parts to put it together ism comments well, if you look at the xheptds you completely understand that supply is outpacing, underpacing the demand out there

electronics, semis expected to continue into the third quarter. sales are strong but many entities similar prungs. and if you look at bund yields back up to minus 16 and the dollar index of a week losing momentum along with interest rates. listen long and the short of it is things are looking good but we don't have enough materials to give manufacturing the extra boost that the demand needs at the moment tyler and kelly, back to you. >> thank you. let's stick with the market that's dependent on rate just the housing market it's been on a tear and so have the home builder stocks. all up 40% or more this year but another intragal part of the market stumbled. posting much more modest returns with home depot and compass

sinking since the ipo. let's ask someone in the industry joining us is die yeah no olick with anthony shay founder and ceo of loan depot. di >> thank you anthony, thank you for joining us congratulations. >> thank you good to see you. >> you recorded record origination. but net earnings down 22%. what happened there? >> what's happening, what we are seeing today is the fact that record low interest rate that was fueled by the pandemic and we're seeing rising interest rates, as a result origination is forecasted to come down so you have over capacity if the industry that has to catch up to the demand and more competitive pressure and a temporary matter.

overall there's still $11 trillion marngt share and certain companies are well positioned for the future. >> we are see refinance volume doing. applications are down with the rising interest rates. the market is more competitive is this great for the consumer because they might see lower rates due to the competition. >> competition is always good for customers. obviously. but what we need to understand and remember is that rates are still at historical lows they were lower three, four, five months ago but very attractive today or historical standards and it is good to have increased competition for customers to shop. keep in mind that as we move forward in the competitive atmosphere starts to increase i think it is important for a consumer to call out the value and that is the service levels, the brand, the image and the overall speed of the value

proposition looking for a home to buy or refinancing. >> we see applications to buy a home fall. there's just very little for sale do you expect to see that purchase volume to fall further as people can't find an affordable home to buy >> we are getting into the spring buying season certainly volumes spike for purchases in q2 and 3 going boo the fall but inventory is lacking some of the hole builders partners are building as many homes as they possibly can with rising costs to produce. that has not slowed things doing as the demangd for housing is at an all the-time high it seems like but i see the seasonality picking up and the summer to be better than it is today. >> anthony, it is kelly here in studio you have been an innovator past decade or so, the technology that you use and so forth so where are you on the

block chain? is this an area where you are engaged and actively trying to think act how it transforms the home buying process or nothing to do with the day-to-day and not expect to hear about in it industry >> it is an area of great interest for us and continue to monitor it very closely. the mortgage process to many is a broken process it takes so long to close a loan still takes 45 days or so evaluate someone's application that the industry has already evaluated. and to have an appraisal on a property the average home in the country is 30 to 40 years old and been appraised dozens of times before the data collection and the digitization of the industry is happening as we speak and this is why some of the companies such as ourselves by investing into the proprietary technology really gives us an edge as we

move forward as innovation continues to change the industry. >> anthony, we talk a lot about mortgage credit availability you sell 100% of the loans to fannie, freddie so you don't have any portfolio loans we are seeing some tightening in the second mortgage market, investor mortgages and ray case home mortgages is it getting much harder now for the customers and for you to originate second home mortgages? because there's a limit on those that they'll buy >> so we -- the vast majority of our loans are agency or fha and va and not 100% because we go into noncome forming products but to your point any time you have a trend change and that's where we are right now you have higher interest rate and what you are looking at is affordability with interest rates along with the appreciation of home prices,

risk evaluation starts to come into play and that is, you know, everyone wants to forecast before the faults happens because you don't want to get caught too far behind the trend change second homes is viewed as additional, higher risk than primary home if we get into a recession where defaults go up certainly the last home that you default on is the one you and your kids live in second homes are slightly higher risk so i think given the learnings from the previous cycles and certainly the financial crisis it's a proper diligence many credit review and underwriters looking at in boom time so long and everyone looking ahead trying to properly risk assess if this economy starts to change. >> anthony, ceo, thank you back to you.

>> fascinating thank you both. uber versus lyft they climb back from the pandemic lows. our traders will discuss. is clorox dead money why manchesterni uted fans are so angry they stormed their own game stay with us

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welcome back to "power lunch," everybody. lyft reports earnings tuesday. uber wednesday this week lyft is outperforming by nearly year to date should investors hitch a ride with uber? let's ask the trading nation team today katie and ari. katie, who did you pick? >> i goe with uber and not because i lover the set back they both have weak profiles and seem to be a bit top pi of late so i'm not very keen to add exposure to either ahead of earnings comparing the two i would say that the underperformance by uber positions it better noting also

that the 200-day moving average is less than then about 24% below for lyft so that creates some downside risk in the e vechbt that earnings disappoint. >> that's an interest word of caution on both but speaking with uber i see what you're saying there ari, whatabout you which one do you want exposure to >> i'm going to showcase uber but this isn't a call to earnings i agree with katie they stalled out here but i think the long-term set yuch is bull uber out six months. that breakout point of $46 very often prior resistance becomes support while the 200-day moving average catches up to price and what i think is happening and we do ultimately expect a new high above $64 again over the next 3

to 6 months. >> both going with uber and ari more enthusiastically. thank you very much. for more head to the website or follow on twitter. clorox with a huge boost in the pandemic as consumers flocked to stores for disinfectant however the stock is now down 10% this year. time to sell we'll discuss that one next. >> and now the latest from trading nation.cnbc.com and a word from our sponsor.

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call it the ultimate pandemic play. clorox shares rallied 32% in 20 twe 2020 as everyone rushed to clean everything this year the stock is off to a

bleached start our next guest says it may be time to throw in the wipe on the stock. chris kerry double downgraded the stock to underperform today. has a double downgrade mean you took it from a buy to a hold to a sell or whatever your terminology is >> yeah, that's right. we went from an overweight on the stock to an underweight. >> to an underweight this was a very popular stock a year ago for the obvious reasons. you think it's spent >> yeah. effectively what's happened is there's been a debate over the past year over whether our consumption habits have changed. whether we're going to be cleaning more out of the pandemic than we did beforehand. whether that's in professional channels or personal consumption at retail. and i think what's happened here is that there still is a case that we're cleaning more than we were before the pandemic, but certain headwinds have evolved

over the past few months, specifically inflation, and that's left little margin for error in the rest of the business. >> so it's pricing pressure that they're not able to pass on to their end user >> yeah, look. there's an element here just in fairness to the company, and i suppose our prior rating on the company where this business from a cleaning perspective is still above on a dollar basis where it was pre-pandemic in fiscal '19 the problem with that is, however, that year to date the commodity inflation that we've seen is causing a lot of pressure on clorox's gross margins which means the rest of its business was going to have to be basically perfect. what happened on friday with earnings is some of the businesses that we thought might get them over the hump on top of pricing, overcome some of the incremental inflation, didn't

really come through. that has pretty significant implications for earnings. >> what are the inputs whose prices have risen, are they chemicals, what? >> think resins specifically so what basically occurred, and it's not just clorox, you have the texas storms in february which caused a really significant spike in commodities on top of the fact that we're in a cyclical recovery. so inflation is already an issue. and then you have this atypical event with the texas storms. what that means is they're a core commodity, which is resins and different types of resins has materially spiked since february so that was already going to cause pressure on the company and there's a broader debate about sales delivery with cleaning but again, the inflation in resin has meant the rest of the business had to be perfect for earnings. >> i think of clorox as the

ultimate household consumer vendor product but you point out that a lot of their business is in commercial settings if you were to carve up the pie, what would it look like? >> well, if you think about it this way, a high single digit percentage of sales for clorox is in professional channels. historically that's been more hospitals, other businesses, but over the course of the pandemic we've seen clorox sign up a number of other corporations, right, and so it's become a little bit of a thesis in the market that there's more secular structural growth potential in the professional business. businesses will clean more i think what we learned friday is that while that still is certainly an opportunity the development of that business is a little slower than what we had appreciated. sales this quarter more or less bracketed what the company had been doing pre-pandemic. still an opportunity but just

developing a bit slower. >> and you set a price target at 170 down from 240. where do the shares trade now? can we put those up again? 181 right now. so you see another $10 or so in decline there as a price target? >> yeah, simple concept, right we're valuing clorox approximately 23 times forward earnings if you think about comparing them to other large cap hvc companies that's roughly the midpoint but we see upwards of 10% downside earnings so that's a challenging pitch. >> thank you for your insight today, chris, we appreciate it. >> thanks so much. next up, we'll explain why these british soccer fans are so angry at an american billionaire they forced their own team to cancel a game. you can always watch us live or on the go with the cnbc app. stay with us

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check out this video from yesterday. a soccer match had to be cancelled when protesting fans stormed the stadium. manchester united set to host liverpool, but huge crowds gathered outside old trafford and eventually got inside the stadium. they were upset about the team's involvement in the super league which would have created a league of the biggest clubs across europe. let's bring in wilfred frost because the super league idea has been abandoned, wilf why have so many fans stayed mad about it, or has this demon not

had the stake driven through its heart? >> i think the attempt by certain owners to create the super league was seen as the crossing of a line, as it were, by certain fans, and now at the moment they want to continue to protest until their ownership of their club changes it remains to be seen if that protest will be successful clearly yesterday things bubbled over a little bit and no one can or will or is condoning the breaking of the law which happened yesterday if you read all of the coverage, particularly on the sports pages and by sports experts, it's far from universal condemnation of the fans, which again sort of shows you where the middle point of public opinion is here. i think the key question to ask from here is do the fans persist for long enough and in an effective enough way, particularly if it starts to threaten revenues of the owners to see change. they can't just force someone to sell an asset that is privately owned. >> we were just talking about it a moment ago but sometimes you

think that the merit model could be more interesting for some of the u.s. leagues anyway, do you see the banner they put up for you, cnbc soccer correspondent. >> i love that i'll take that and run with it forever. >> you protest that it wasn't football. >> their owner is the glazer family out of tampa? >> yes 10% of the float on the new york stock exchange, yeah. >> all right, thank you, wilf, soccer correspondent. >> thank you for watching "power lunch. welcome to "closing bell." i'm sara eisen along with wilfred frost. stocks kicking off the month on a high note. the dow is leading the gains up 342 or so with the high of the day. as we head into the final hour of the trade, the nasdaq is a laggard. it is the loser of the big bunch. s&p 500, 4211 is the high. investor