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. investors digesting a slew of

headlines on everything from airlines to banks to aem buffett calling the recovery red hot. fed chair jerome powell saying the economy is making real progress energy is a top performing sector crude prices ticking higher as well some key data coming in as we await friday's all-important jobs number. an ihs read on april manufacturing showing strong growth although a different gauge missing estimates. 59 minutes left to go in the session, wilfred tech is lower but everything else is up. still to come, definitely to come on today's show tom barkin will join us for his first interview since last week's meeting. plus the closing of a joint deal tilray creating a consumer giant. we'll speak with the ceo of the combined company in just a bit.

mike santoli is tracking the market on this first trading day in may and steve kovac is here to talk about apple's battle with epic games. mike, let's start with you broader markets off the highs but overall positive session. >> a little mixed under the surface with the growth stocks weighing things down still, if you look at the six-month chart here, it takes you basically right back to election day at this point that's when the real orderly march higher started it wasn't just that kind of exuberant rush of recovery back after march of last year now, we have flattened out, keep pointing that out. 4201 entire action has operated between last thursday's record high and the lows from friday, so we're just kind of hanging out in that range here but closer a little to the closing highs. take a look at a longer term view we have been in this orderly

uptrend since the election it has resemblances to the past two election years right here is the 2012 election. you had some volatility, a little nervousness and then this relentless march higher through the entirely of 2013 very low volatility, lots of rotation under the surface, kind of similar to right now. the same thing here. this is the 2016 election here you see a little jitteriness around that election and then that burst higher, that reflation trade that got going investors made their piece with the policy mix whatever it is, when people freak out about the election, once it's over they find something to like if it's in a bull market. obviously this looks steeper not all percentage changes look alike and this is an exaggerated version. but still we do have that jumpiness around the election and that orderly march higher. so we'll see if it continues the market on a forward earnings basis is less expensive now than it was at the beginning of the year even though we're up 11%

because that's how fast earnings forecasts are going higher i keep pointing out that credit markets are very supportive. look at the s&p compared to high-yield bond spreads. this is high-yield debt spreads in orange here they have flattened out in the last couple of months actually in other words, they have not improved anymore, even as the s&p 500 has kind of getting this little leg higher beyond that. it doesn't mean it has to match up exactly, but it does show you that mostly it's been equities taking this extra burst of enthusiasm in the last couple of months as opposed to credit conditions which were already incredibly strong, basically flat lining, guys. >> mike, in terms of the intraday action, it's much more the nasdaq that's pulled back % from its highs as opposed to the dow. >> absolutely. if you look under the surface, anything retail, anything home related, energy, financials doing well so basically people came in on monday and said everybody was shopping and house hunting over

the weekend and it seems like this economy is game on and they're buying things accordingly. >> mike, thanks so much for that now, the long awaited battle between epic games and apple kicking off today. the arguments being apple's app store being a monopoly apple's expected arguments include its 30% rate is standard and it doesn't hold a mow nopoly let's bring in steve kovac who's been following the story closy steve, thanks for joining us it's a fascinating case. we're looking forward to the conclusion of it what are the key best arguments that stand out to you on either side >> yeah. right now it's important to keep in mind the ceo of epic is testifying as we speak so there could be more headlines coming out. what i think is really interesting in their opening statements is what epic said about the massive profit margins

apple has in the app store they're claiming it's in the high 70%, which kind of kills apple's argument right there that all the money they collect from these app store fees are to be plowed right back into investment in the app store for things like security and protection for the users on the apple side, what apple tells me they're going to argue is, hey, this is not damaging consumers, it's not raising prices on consumers. consumers are still paying the same amount of money they normally would and that's what u.s. antitrust law really looks at. >> big picture, steve, what's at stake for apple especially in light of the new charges from the eu on this very issue? >> exactly, sara it's not just about this trial apple could win, epic go walking home and crying with their head in their hands and it's still not over for apple we have legislators like senator amy klobuchar looking at these exact same issues. the ftc is looking around it like you said, there's a spotify

case in the eu this all centers around the fees and the power that the app store has over these apps and developers and the way they work even if this trial goes nowhere for epic, it's still not over for apple. >> steve, thank you for joining us keep us posted. after the break, the oracle of omaha giving his take on inflation. >> we're seeing very substantial inflation. it's very interesting. we're raising prices, people are raising prices to us and it's being accepted >> up next, we'll have fed voting member tom barkin, his outlook on inflation, recovery and when the tapering talk should begin you're watching "closing bell" on cnbc.

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states has clearly brightened, but noting we're not out of the woods yet. joining us now is richmond fed president and fomc voting member tom barkin president barkin, great to have you back on the show welcome. >> thanks, sara. great to be here. >> we came out of the fed meeting last week feeling like the fed acknowledged that the economic outlook is looking up things are coming in stronger on the economic front, and yet it's not time to start talking about talking about tapering why is that? >> we've put in place some pretty clear forward guidance, i think, on rates and on tapering. our tapering forward guidance says we'll start to taperwhen we see substantial further progress if you go back to when we said that in december, core pc priced inflation was 1.4. now it's 1.8 but i look at the employment to population when we talked about that in december, it was 57.4.

as of the march employment index, we'll get a new one on friday, it was 57.8. you remember it was 61.1 in february of 2020 so it's only modest progress since 57.4 and we have an outcome-based policy and so when the outcomes look like substantial forward progress, that's the time to talk about it. >> so you are not in the camp that thinks we need to start thinking about it, that the fed needs to be signaling getting out of this emergency mode of buying $120 billion of assets every month. you're not even close to there yet, it sounds like? >> personally i'm always thinking about it but i sort of discipline myself to say let's look at the outcomes when you have outcome-based policy, the thing to do is look at the outcomes. >> are you worried, though, when you look at potential for inflation to pick up, temporary or otherwise, when you look at various commodity prices from, let's say, lumber to corn to copper that those things are surprising you in the short term >> well, i think we will see

price pressure this year you've got a very strong demand situation and you've got constraints of supply. we can talk about both those if you want to. and when those things happen, you're definitely going to see price pressure we're already seeing it on producer prices. you saw the latest index, up 4.2% on the 12 month and even up 11% on the three month if you look at the consumer prices you don't see the same effect the core pce is 1.8 for a 12 month, 1.9 for a 6 month. >> i don't know if you heard, president barkin, what warren buffett said about this topic but he did make some interesting comments with a lot of anecdotes. just listen to this. >> we're seeing very substantial inflation. it's very interesting. we're raising prices people are raising prices to us. and it's being accepted. the costs are just up, up, up.

steel costs, you know, just every day they're going up >> he said substantial inflation. why are you guys at the fed so convinced that it's not going to be the worrisome type of sustained inflation that you'd have to fight? >> well, the first thing i'd say is where you are is based on where you sit. if you look at the elements of the pce, they're roughly 175 of them, you'll see a lot of prices that are up quite significantly. i think rental cars topped the list last month. you also see a lot that aren't and so, again, what you see is where you sit. i'm watching expectations very closely. both survey-based expectations and market expectations. those have firmed. but i'd say there's nothing in either one of those metrics that looks like you're seeing a breakout in inflation. and you have to remember that inflation is a recurring phenomenon prices go up this year, prices go up next year. i think it's fair to argue the

question of whether the combination of supply chain constraints and stimulus driven actually reverse this year. >> do you think the scope that european, asian growth could surprise to the upside in the second half of the year, particularly if vaccination rates improve especially in places like the eurozone and the u.s. treasury market would lose one of the main anchors that it has on yields at the moment? >> well, i'd like to see stronger international growth for those economies, and particularly because i think the growth is driven by health and vaccines and the virus, so that sort of suggests that those countries would have gotten it under control. i think that would have been good for us and good for our exports, for example i'd like to see that growth. like i said about inflation, when we get there, we get there

but we haven't yet gotten there. >> what do you look at when it comes to covid and progress that we're seeing we know that the fed has been very focused on covid-19 and some of the risks with it. the surges, the variants, everything like that so what are sort of the metrics that you are watching that you would think, okay, it seems like the worst is over and we can finally make a move on policy because of it? >> well, we're going to make a move or my impression is we'll make a move on policy when you get the employment to population in the right place and inflation in the right place so i think the virus helps enable those, but i don't directly tie policy to virus case counts and vaccines i am looking hard at the vaccine rollout rate if i sat with you six months ago, it's rolled out at a pace much faster than i might have even hoped then.

and then our implicit strategy as a country, to vaccinate by age, is to try to reverse the most serious outcomes. it's a serious outcome prevention strategy. so hospitalizations and deaths are the things i'm looking at most i'm encouraged by those. certainly if you compare from wednesday to today -- i'm sorry, from january to today, you see enormous drops in all of those outcomes and while it's flattened of late, the numbers i'm looking at suggest that we've got this so far under control. i've just got my fingers crossed we don't have variant problems like some other countries have had. >> do you -- when you look at financial conditions and the way that they haven't really changed at all, despite various talks, talk of higher inflation, talk of higher rates, talk of even higher capital gains taxes, do you look at that and are you encouraged that we're really in quite a strong position on that front, or is there a fear of a calm before a storm type

mentality? >> well, i try not to overthink all those metrics. we've got a relatively accommodative conditions certainly on our side. you've got a bunch of fiscal stimulus you're of course in that situation concerned about overheating. we still haven't seen much of that so i just look at that and i guess i don't try to overthink if it's good or bad. i just look at what we've got and hope that conditions continue to improve in the way they have the last couple of months. >> you say you think a lot about the tapering though you're going to watch the outcomes, like employment to population ratio which isn't there yet for you. do you think the market can handle a tapering? do you think this market and this economy is getting a little dependent on fed policy, the extraordinary stimulus that you've pumped in and the super low interest rates and do you worry about the outcome of

actually making the moves? >> well, i hope the beauty of an outcome-based policy is we see the same outcomes the market sees so if it's working in the right way, markets will automatically adjust as the results come in and as outcomes come in in the way that you'd expect. so rather than sort of dependent on any particular day where somebody stands up in front of a news conference and announces something, hopefully markets would see it in the same way we have that's why i was clear in the couple of metrics that i was watching and i trust others as well but your question is a little volatility healthy i think markets are volatile, and so a little volatility is to be expected in markets i'm hope that feel markets can handle that if and when it comes. >> jamie dimon said recently that he was surprised that governments and regulators broadly had allowed crypto

assets, bitcoin and others, to get as serious as they are what's your take on that general sentiment? >> that regulation will be for other -- for parties other than us you know, i think there's a lot of conversation about a lot of different asset classes right now because i think people are -- we do have a situation where americans have a lot more money in their pockets because of the combination of less spendsi spending during the covid situation. i've mentioned numbers of 2 plus trillion of excess saving. that money is looking to be deployed some of that is getting spent as we speak some of that is getting saved. i think some of it is getting invested so people are looking for various assets to put their money into and crypto is certainly a topic a lot of people are looking at. i don't have a feel for the

question of that regulation, though. >> so put another way, is there ever another conversation at the fed that the currency that ultimately you control the supply of is losing its relative power, its relative place not just in the global currency position but in a domestic position because of the extraordinary growth of these other currencies >> well, i think you're conflating assets and currencies crypto is certainly increasing as an asset class. it's not obvious to me that if you looked at currency you've got a situation that's doing much cannibalization of the dollar. >> chairman powell did say he saw pockets of frothiness in the market do you see that, and if so, where? >> there are a set of situations that when they happen you sort of wonder about froth.

certainly the gamestop situation we had back in i think it was january is certainly a situation with the family office a few weeks ago, those are evidence that things are happening that maybe you didn't realize or didn't know about. any time markets are elevated, you see those sorts of things and wecertainly are seeing the today. >> finally, just quickly on the main point about tapering, how many months of job gains like we saw last time, a million jobs added per month. we're about to get a really strong, hopefully, jobs report on friday, do you need to see before you're satisfied that it's substantial progress? >> on the labor market side of that coin, as i said, i'm really looking at employment to population we started, when we made that announcement at 57.4, where we were in february of 2020 is 61.1 so i'd want to see substantial progress toward getting to 61. >> good to know.

thank you for the reference points and for the specificity always good to talk to you president tom barkin, richmond fed, we appreciate it. >> thanks. good being with you. still ahead, rolling off a deal, pot companies completing their merger today we'll speak with irwin simon about his strategy to create a consumer gas powerhouse. check out some of the top tickers. the 10-year yield on top followed by tesla, apple, followed by tesla, apple, verizo over you. figuratively speaking." but that's not catchy, is it? that's not going to swim about in your brain. so i thought, we'll be right back. serendipity. 15 minutes could save you 15% or more on car insurance.

time for a cnbc news update. rahel solomon has it for us. north carolina calls for justice at the funeral of andrew brown jr brown was shot and killed by deputies who were serving search and arrest warrants. family members compare brown's killing to george floyd's. >> so god used andrew just like he used george floyd to spread his word, to fight for his people now andrew is resting but he left some fighters and warriors to do his bidding. violent storms rolling through western georgia bringing down trees and power lines about 15,000 customers across the state are without electricity. and tornado warnings were even issued in the atlanta area.

the cdc reporting about 1.2 million new vaccinations since yesterday. as vaccination rates slow, an increasing number of states are not accepting all the vaccines they are being offered you are now up to date sara, i'll send it back to you. thank you. up next, palantir bets big on health care. we'll hear from the newj■y■f1 o government chief medical officer, next.mj%■

palantir extending its push into health care by hiring its first ever u.s. government chief medical officer. bill kassler joins the company i spoke earlier with him exclusively about his new post and asked him how palantir will address data privacy concerns surrounding health care. >> data privacy is essential, and that's one of the pitfalls aztec companies try to move into health and health care it is essential. people need to know that their data is private because it is so

sensitive. technology can help. in many ways technology can be superior to some of the old paper and pen medical records. we can have strict access control. we can have a lot of technology driving privacy and security and that is why i am so excited about the palantir platform. >> i also asked about how much the pandemic factored into palantir's interest about health care. >> the pandemic has exposed deep faults within our society that existed before but have come to light. the supply chain, for example, and our ability to handle medical surge or just a need for early situational awareness and public health surveillance and the disparate ways in which the pandemic affected different communities and the disparities that exist all of that can be improved with

bringing data together and rendering data to decision-makers so they can make better decisions. >> so far there is often some question marks over exactly who palantir is and what they do but there isn't the same questions as whether they use users' data. more interesting to me and i would say that many people have tried this in the past, whether it was the recent berkshire hathaway/jpmorgan approach to health care, but can palantir whether it is to their bottom line or not really lower the cost as a percentage of gdp of health care in the u.s >> is that what they're trying to do here i just think it's interesting that they have a title now of a u.s. government chief medical officer at the company you don't necessarily think of that company as a health company. >> right captured in his first answer was, yes, this means we're doubling down in this area but highlights have been not just a

defense company already. it's a massive part of u.s. gdp and a massive part where they feel they can find y inefficiencies and reduce costs. >> well, it's a good time for it we've got just about 28 minutes left to go pr the bell here's where we stand in the markets. starting off may strong where april finished the dow up 254 points. the high of the day was earlier, about 100 points higher than right now. s&p 500 up a third of 1% so the gains are fading a bit in the final hour of trade. russell 2000 index of small caps up 0.7 of 1%. up next, a pot partnership, tilray and aphria completing their merger today we'll talk to the ceo about this is planned for the combined company. 10-year bonds around 1.6%. we've seen some buying of treasuries after a big backup in

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tilray and aphria announcing their merger today shares will continue to trade at the nasdaq under ticker trly the stock falling today but it is up 100% so far this year. irwin simon will take the helm of tilray and joins us for a first on cnbc interview. chairman and ceo of tilray congrats on closing the deal, irwin. >> thank you very much, sara, and dpgood afternoon. >> good afternoon. what does the integration of this company look like tilray is big but never really made any money what are the next steps as far as putting it altogether and what you're going to do with it? >> so since december when we announced this deal, we've been working on the integration we have a third party working with us and now it's day one and it's day go and we're ready. as we have announced it's $80 million in synergies and savings

within the first 18 months, how we bring our people together, how we bring our brands together, how we get a unified strategy and last but not least is what you said, we've got to make money for our shareholders and how do we get return for shareholders i think the biggest percentage of retail shareholders, how do we bring shareholders in that believe in the future of cannabis there's not a lot of opportunities with $100 million of growth opportunities out there. >> do you think if it gets legalized in the u.s. it totally becomes the stock ownership and it becomes more institutional? >> i think that's a big important part, but what tilray brings to the party today, it's legal in canada and canada is a $9 billion market there. it's legal in multiple countries in europe in regards to medical. we can sell into the u.s. and other products that are complementary to cannabis and

with that we'll be a good-size company. the other thing is, listen, a lot of package companies want to get into this category and they're hanging around the rim when the right time is but legalization will have a big part and it's not if it becomes legal in the u.s., it's just a matter of when. >> irwin, now that you have this fully combined entity, talk to us about where you view things in five to ten years' time do you think that cannabis will be sold in the same way as other products are from soda to alcohol to any kind of consumer product where the brand of the company selling it is as important as the asset class and how many years away is that moment >> i see this and that's part of my role, how to transform this into consumer package goods company and build it around brands, build it around distribution, build it around r & d, quality assurance, and

building around consumers that want to buy your products. wilfred, you're right, this will be sold in convenience stores, this will be sold in mass market, this will be sold in supermarkets this is very much similar to the alcohol industry when prohibition started. this is the next big industry with prohibition and legalization how do you get products, you know, that ultimately will give you that enjoyment how do you sell products into the adult use market the other big thing that is different from alcohol here is the medical opportunity here whether it's anxiety, whether it's sleep, whether it's pain, there's multiple uses. this is not only a consumer package goods company, this is a product that will have tremendous opportunities within the pharma world. >> do you think now that this deal closed we'll see more consolidation in the industry? what does that look like and where are you looking next we know you're always looking for deals. >> it has to be, sara. there's over 500 companies in canada, lps in canada.

no longer could we be perceived as just a canadian lp. we're a global company that sells in canada, sells in the u.s. an sells in europe. we've shipped our first cbd products to china. we'll look once india gets itself under control how we sell products in there. globalization is key how do you build global brands, and how do you get distribution in all these different countries? and the other thing is the big consumer package companies are ultimately looking at how do they get in here and have got this on their radar. so you're going to see a lot of consumer package goods companies, a lot of competition come into this industry. and where tilray has the advantage is this here, they are participating today in recreational cannabis, adult use in canada, they are in europe in medical and we have a foot hold in the u.s. market. >> you're going to have to get used to calling yourself tilray now. >> it's the first day. i get a break one day, right

>> well all stop mispronouncing aphria now chairman and ceo of the new company, irwin simon, thank you for joining us today. >> thank you very much. still ahead, verizon sells aol and yahoo! andintel ceo weighs in on the global chip story. those stories and many more in the market zone. you can always listen to us live on the cnbc app. "closing bell" back in a couple. , 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 so vmware helps companies navigate change. faster. vmware. welcome change.

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market zone. commercial-free coverage of all of the action going into the close. mike santoli is here to break down these crucial moments of the trading today. today we've got keith bliss can us as well very good afternoon to you as well, keith. it's the first trading day of may and markets are mixed. the ow, s&p 500 higher and nasdaq in the red. near session lows. the dow is closer to its highs, up 256 the high was up 346. mike, we mentioned that earlier. the tech heavy nasdaq has pulled back intraday and a lot of the cyclicals despite yields pulling back still lead the session. >> exactly the macro message is still pretty positive. the overall index, the s&p has really been just coasting for a couple of weeks now. part of it is this rotation where you have offsetting currents within the market part of it too, though, we've been talking about the news economically has been so good,

but also so well anticipated you know, you have i think two articles in "the wall street journal" today tell you this people are buying real pants again because they have to go out. also, investors have higher equity allocations than ever before so those two things are working somewhat against one another when it comes to the market. >> at ll bean which is not the place to find the hottest trends you see it in american eagle and levi's keith bliss, so the market action is impressive given there are headwinds and risks on the horizon. there are potential higher taxes on corporations, on ndividuals capital gainsinvestments clearly there's talk of fed tapering even though the fed is not ready to talk about it, but that's on the horizon as well and yet the market continues to climb higher what sddoes that tell you >> money, money, money it's going to flow where it gets rewarded and that's going to be equity markets it has for the last few years.

when you're dealing with a real zero interest rate environment, you're finding even people in their retirement age sticking money into the equity market because they are searching for yield. but the robustness of liquidity and capital in the market is really driving this. you did raise the specter of some risks in there. but the only risk i see is around the tax question. inflation is there but as we heard earlier, the fed is not really going to do anything and the market is taken an alfred e. newman approach, what, me worry so as long as that question and debate keeps getting kicked down the road, i don't think it's going to have much of an impact on the markets even as michael pointing out we've been trending sideways, which is not unusual coming into an earnings season once companies report, the economic outlook looks very good we hear that from the fed and the treasury i think we'll continue to grind higher through the summer. verizon selling aol and yahoo! to apollo global

management julia boorstin has details >> it's the end of an era for aol and yahoo! their valuation was $300 billion back in january of 2000. now apollo is paying $5 billion for both companies as part of verizon's media assets this comes after verizon already wrote down $4.5 billion of the $9 billion it spent to acquire both companies verizon will keep a 10% stake and $750 million of stock in the new company which they're calling yahoo! and apollo will generate more revenue from that company's active users, including 1.5 million people who still pay for aol for tech support and identity protection, not email. back over to you >> julia boorstin, thank you don't miss an exclusive interview with hans vestburg on

this show thursday mike, what does it mean for the stock, for verizon >> it's a small piece of the pie but it shows you that there was this gambit that really just didn't play out the way they had hoped in terms of having the programatic digital advertising engine driving through their wireless subscribers they were going to have more of it that was more proprietary sourced inside in terms of content. so i think it was worth a shot and doesn't mean much for the numbers for verizon but it's exactly the kinds of business that arguably private equity can do something with. there still are cash flows it's probably still in shrink mode but they can reduce costs to maybe fit the current footprint and decide what should stay and what should go. >> what about what's left, keith? how does it compare compared to some of the mixed versions like comcast and at&t >> yeah, i wonder what apollo is

going to do with this asset. clearly they're not in the business of running online media platforms and they'll look to capitalize on it listen, verizon capitulated to google and facebook on the digital advertising space. that's why they decided it's not wort it, we can't do it. i don't mean to sound trite and glib with this but $5 billion to verizon is a bit of pocket change to them so they took the hit and moved on i dare say yahoo! especially the finance property, whichcould several hundred million monthly active users on their platform might be a nice platform for one of the big digital platforms like google, facebook, maybe even microsoft if they wanted to expand in that business. that's where i think we'll see yahoo! finance for sure and maybe some of the other properties that are cohorts to yahoo! finance. >> we are just slipping a little bit. only up 0.2 of a percent on the s&p. phil lebeau has a summary of automakers today. >> we knew going into this month

that the april sales would be very strong for the automakers we're in comparison with april of last year when you look at the numbers that we're seeing from toyota, h honda, hyundai, it is compared to a terrible april last year. still, these were all record aprils record monthly sales in some cases for the automakers that's why you have automation, carmax, also penske auto group add them to the list of dealer stocks that are now hitting 52-week highs. one factor we talked about that is playing into all of this when it comes to the auto industry, the chip shortage. you look at intel versus ford. the reason we're showing you intel is because the ceo was on "60 minutes" last night and saying this chip shortage is not ending any time soon ford, we get those numbers for their april sales tomorrow look for those numbers to be strong but not as strong as they could be because they have been cutting back on their production because of the chip shortage back to you. >> keith, where do you stand at

the moment on the orders are they positioned well or due for a little pullback after a nice bounce? >> i think the only way they'd pull back is the supply on the chip side so they can manufacture cars the way they need to these days that is one of the real problems for the automakers in the past if they had labor shortages or labor strife or steel shortages that was something they'd have to contend with but the actual electronics to the vehicles is keeping them from manufacturing cars. i think the auto industry is well positioned. they will have a lot of demand coming out of the reopening of the economy. i also think the auto sales, the year-other-year performance, even though it was a really bad year last year, speaks to the amount of disposable income that consumers have in this country and i think that speaks well to the economy, which will then further translate into gains inside of the broader market, not just for the automakers.

>> speaking this weekend, warren buffett weighed in on his thoughts on bank stocks and specifically bank of america, which is his biggest bank holding. >> i like banks generally, i just didn't like the proportion we had in it compared to the possible risk if we got bad results that did not so far we haven't gotten i like the bank of america and i like the banking business fine so we took that up but we took the overall bank position down we didn't want to go above 10 in any of the others and we did want to increase the b of a position, but we overall didn't want as much in banks as we have >> mike, what stands out to me on this when you pair it together with all of the trades in the bank space that we know he made over the last year and when he made them, which to summarize in a slightly generalizing way was exiting closer to the bottom than the recent recovery positions in

wells fargo, goldman sachs, jpmorgan, for example, but still liking the sector and liking the bank of americas of this world, it's a problem of when you get that big and how long it can take you to exit of course we all understand the threats the banking industry faced at the start of the pandemic, but so swift was the turn-around that it would have been better for him to see it through the other side and be exiting some of them now. >> that's for sure essentially when you become focused on your outsized portfolio risk, when you have a concentrated position in industry, you know, if you decide that you're going to rebalance out of it, the market can basically kind of get there for you and make it an opportunity. that's clearly what happened here, but i do enthusiastic it makes sense how his rationale follows. bank of america fits in a lot of the other businesses that berkshire owns outright. nobody is ever going to build another one. nobody is going to build another

transcontinental railroad. he owns acme brick nobody is building brick companies anymore. so these bank footprints assuming they have a pretty decent future, they're not going to be displaced very quickly. >> when he was talking about mistakes, he alluded to selling some apple last year, not necessarily the banks. twitter is down double digits since reporting earnings on thursday but big names are piling into the stock. elliott management is buying over $200 million of twitter shares kathy woods also bought over 1 million shares on the dip. twitter rolling out its spaces live audio feature to users with 600 or more followers. twitter set a goal to grow its daily active user base to 315 million by the end of 2023 that current count stands just shy of 200 million a miss on the last quarter which caused so much downbeat reaction are you with elliott and kathy wood in buying the stock or not? >> well, remember elliott

management is an activist investor so they're getting into the name when it's pounded down and i'd like to see what their moves are going to be going over the next couple of quarters. i think twitter for a variety of reasons has held themselves out as a bit of a target both from the competition as well as some of our politicians, so they may have tough sledding. i do know a lot of people are leaving the platform for a variety of reasons, mostly political. i'm not sure i'd be in the name right now. with elliott in there messing around, they probably will insist on some changes there might be a few chaotic months inside of twitter and that will translate into a few chaotic months of stock price. >> twitter is down a bit but snap is down as well, some of the other social media stocks that did so well last week are down and pulling back a bit. >> anything that's growth tech is definitely down quite a bit today. clouds stocks are down 2.5%. when it comes to the twitter position, you have ark and

elliott who have already been holders of twitter who are now averaging down by buying more. if you're already in it and liked it up in the 70s, you probably want to own a little more in the 50s. it's more of an asset play you can own some access to those entrenched eyeballs that watch twitter all the time and that mechanism and hope that it gets kinds of run in a way down the road that gets monetized better. >> mike, what are internals showing you today? >> they have been pretty positive the new york stock exchange really a big split between the new york and the nasdaq today. it's about 2-1 advancing to declining volumes on the new york stock exchange. the average stock is outperforming the s&p, which is being weighed down by big nasdaq names. if you look at semis, in the last month relative to industrials, often they would move together, macro tells you have a lot of the same kind of shortage of pricing dynamics. but pretty stark difference. semi conductors down 5% in a month and downsomething like 8

off their highs. probably should get noticed because it tends to be a decent risk appetite indicator and overall traditional industrials doing very well. volatility index, it came into the weekend at a little bit of a premium, looking a little rich in the high 18s. here it is 18.3. we are higher by a couple of points in the vix than we were just a couple of weeks ago when the nasdaq was basically at the same level if that continues, it could be seen as a divergence worth paying attention to. >> we're actually near session lows on the s&p 500. we've lost some momentum in this final hour of trade. the dow is still up 200 points dow strength can be attributed to a number of big cap winners like united health care adding the most in terms of points to the dow, home depot, am again, j&j. salesforce, visa and disney are the biggest weights. when we started at the top of the hour we were sharply higher,

more than 0.7 of a point higher. technology, real estate and now utilities are all red. that explains the weakness in the nasdaq today tech under pressure pulling back nasdaq down about half a percent into the close small caps continue to outperform value and cyclicals have a bit of a winning day over growth as far as the biggest weights on the nasdaq, amazon, tesla, all lower. so some profit taking after a strong earnings week last week. welcome to "the closing bell." i'm wilfred frost along with sara eisen, mike santoli a big slippage in the tech heavy nasdaq closing down half a percent whereas the dow industrials off its highs but only slightly. the high was up 346 points it ended up 240 or up 0.7%

energy, materials up strongly today, whereas communication services and consumer discretionary led the declines coming up, gray croft founder on the outlook for the market and his thoughts on president biden's proposed capital gains hike keith bliss is still with uls and marcy mcgregor from bank of america/merrill lynch joins the conversation mike santoli, you've got cyclicals doing very well but also the likes of gold and silver rallying and clearly ass as sara pointed out, some of the big tech names suffering. >> the growth deflation type plays were weaker and anything that seemed like pricing power, real economy reflation thing was working again. all in the context of a market that's kind of downshifted a bit. volumes have come down people seem fully allocated. yeah, there was a first of the

month pattern where people get a little excited all the returns this year have happened in the first half of each month i don't know if that's going to continue obviously everybody is watching it and thinks this is how it works. so all those things i think kind of really cross winds in this market that are quite apart from the macro message, which is pretty good still coming from the numbers and the fact that the equal weighted s&p was up two-thirds of a percent today. >> ism manufacturing came in a little light, still above 60 reading shows expansion. but a lot of talk, marcy, in the surveys about the supply chain disruptions, the cost pressures. the market has written off a lot of these factors was transitory as chair powell would say. are they right to do that or could it cause some real softness in this boom that we're seeing >> you know, ism today was still

quite strong i know it came in below expectations but this was a good number, the prices paid was a bit of an eye opener i think the supply chain issues are a near term concern. earnings reports will probably talk about it for the next quarter or two but we think that will sort itself out as we get to the end of the year. >> keith, do you feel for example the s&p 500 is stretched to the upside at the moment or not? >> you know, the index is really just the s&p, not the dow. they got a little overbought at the beginning of april and then we traded down but right now we are completely neutral across all the major indexes. in fact the russell which has been the best performer is modestly oversold at this point in time. so i think one thing to point to is when michael showed the internals, as long as we keep that momentum in terms of breadth and where the money flows are in equities as concerns bonds, we're not yet overbought across any of the

indicators i look at right now what we've also witnessed, wilf, over the last couple of months is when we get a pullback in the s&p 500 of 1% or 2%, it's clearly a buy the dip type of mentality going on so as long as the momentum stays fairly healthy on the advanced decline, on the breadth indicators and that we're not overbought yet, i think the market is still set up to move higher, churn higher during the summer. >> marci, do you agree and small caps in particular, is that a place that you like >> i agree sell in may and go away might sound catchy but i don't think it's going to be the case this year i agree we have strong market breadth, we have momentum but i wouldn't necessarily fight that, especially when you have earnings not only coming in strong but we have sentiment and guidance finally coming back i think that can push revision ratios higher. yes, we still like small caps. i think this is a valuation

story. i think they have good timing now that we're probably mid-cycle. i think that's a favorable time for small caps so we're overweight small caps as well as large caps in the u.s. >> last hour we spoke with richmond fed president and voting member this year tom barkin we asked him whether it's time for the fed to start talking about talking about tapering here's what he said. >> personally i'm always thinking about it but i sort of discipline myself to say let's look at the outcome. when you have an outcouples-based policy, the thing is to look at the outcomes add i said i'm really looking at employment to population and when we made that announcement at 57.4, where we were in february of 2020 was 61.1 so i'd want to see substantial progress toward getting to 61. >> he just defined substantial progress to him. we also asked for his thoughts on inflation expectations. here's what he said there. >> if you look at the elements of the pce, they're roughly 175 of them, you'll see a lot of

prices that are up quite significantly. i think rental cars top the list last month you also see a lot that aren't and so, again, what you see is where you sit. i'm watching expectations very closely, both survey based expectations and market expectations those have firmed. but i'd say there's nothing in either one of those metrics that looks like you're seeing a breakout in inflation. >> one word, marci, dovish, right? this is right in line with powell's thinking. this is president barkin defining for us what substantial progress is to him, employment to population. we're at 57% and need to be back toward 61% to start talking about tapering and he doesn't see real signs of consumer price inflation taking hold yet your view on what that means for the market. >> the fed has been consistent they have made it clear that they're a lot more focused on broad inexclusive employment even more so than their

inflation target probably about half of the people still unemployed are because of covid concerns, whether child care or other covid concerns they may come back into the labor market quickly after the summer in our view so you may get a rapid healing of the labor market. and then i think fed chair powell will have a tricky communication plan around the timing of when they finally start to talking about tapering. i think that's going to be tricky but this is a fed that's structurally dovish. we don't think you get your first rate hike until 2023 and probably tapering is likely in q1 of next year. but they have a tricky path ahead of them to start talking about it to the markets. but for now it's a steady message from the fed they're accommodative and they need to be convinced that inflation is not only at 2% but that it's sustained and it will be persistent. but i do think the secular low in inflation and interest rates was 2020. >> if it's not until 2023, do we get a hike

is 1.6% on the 10-year attractive >> yeah, so i do think if we look ahead to next year, about a year from now, we have 2.25 as our target on the 10-year. i think the 10-year will probably spend the year call it between 2% and 3%, so i do think you get a stable march and rates higher from here not the sharp moves that we saw in q1, and i think the market is prepared for that. >> keith, how does the fed factor into your pretty benign view of the equity market right now? eventually they'll have to start talking about tapering >> yeah, they are. but to marci's point, that's not going to be for a while. you laid it out yourself when we look at the 10-year, 1.6. the pce deflator at 1.8. we look at employment to population ratio not even near where president barkin wants to see it, which is back to the pre-pandemic levels. listen, on a short-term basis for the remainder of '21 and

probably all of '22, it's going to be green lights and go inside of the equity market because that's where capital will get rewarded i do think one last point. the real risk to the market as we move down this timeline somewhat and the employment starts to pick up, and if it picks up rapidly, we need to watch and be careful about how sharp the fed's scaplpel actuall is that has a real risk to the marketplace in addition to higher taxes if they come. so it could be a double whammy at the end of '22 we have to be real careful on, but for the short term, green lights are go. >> mike, we mentioned some of those higher priced tech stocks selling off the day. tesla, ark, the semis as well. are you keeping an eye on that >> yeah, have been all the talk seems to be very favorable. we're talking about chip shortages, talking about these companies throwing massive

amounts of capital into new capacity and trying to meet. it seems like the backdrop is very strong and it should be and it is. when the stocks don't really respond in a way that matches up, you have to pay attention. i don't think it has to be a leadership group but if it really did have persistent weakness, because i mean software isn't doing any better. so it seems like tech is being used as a source of fnunds for other parts of the market. but yeah, you have to watch it. >> crm biggest drag on the dow, taking 42 points off keith bliss, marci mcgregor, thank you for joining us woe appreciate it. up next, we'll get reaction to verizon's $5 billion sale of aol and yahoo! when we are joined by alan and hubert joly, how he ul rn around gamestop we're back in 90 seconds

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that looks beyond today's volatility. join the pursuit of outperformance at pgim. the investment management business of prudential. verizon selling its media group, including aol and yahoo! to private equity firm apollo global management for $5 billion. verizon had paid $9 billion for aol and yahoo! but took a $4.6 billion writedown in 2019. joining us is the co-founder of prime time partners. alan, very good to see you, thanks for joining us. i wanted to obviously kick off on these verizon assets and

their sale to apollo two parts to the question. do you think it's a good deal? and why have telecom companies have such sort of poor track record when it comes to executing in this area >> well, yeah. i first ought to give you a quick perspective. when you think about the fact that i started aol in 1980s when we put in a million or $2 million and it ended up getting sold to at&t for $156 million if you recall and verizon picks it up for $9 billion. what a cycle in american stock history. i think verizon made a very good sale and i think apollo made an excellent buy. people are generally -- investors are down on media as an area. they're all focused on tech and computers and cybersecurity. media has kinds of been left behind i think that verizon just felt

they needed to rationalize their business i think yahoo! is a fabulous property i felt this way for years. yahoo! finance, yahoo! sports, the potential for betting. it's never been fully realized so i think apollo is making an intelligent decision at a very reasonable price for what they're buying remember, you look at $2 billion in revenues in the first quarter so buying it at a very reasonable price verizon is keeping 10% so they don't look like they're idiots if they sold it and apollo makes a big win out of it, so they'll get an extra bonus i think it's the natural evolution. telecom companies have tried to buy these companies. bought them and they -- sooner or later they just can't rationalize them the cultures just don't work that's really what it gets down to in the apollo environment, i think they'll probably do very

well. >> alan, pivoting to more broadly what's going on in the market space, clearly tech has been on a tear in recent decades, not just years. do you think the proposed increase in capital gains taxes will lead to a lot of forced selling? >> i don't think so. as you may know, i'm a big supporter of the change in the tax rates. i think that capital gains have been vastly overstated by the way, i'm a victim of the raise in capital gains because i invest in companies to make capital gains. but we're seeing a kind of topsy-turvy shift in government philosophy, which is the president was saying that people who work hard and earn money are entitled to make -- to do equal to what people are who are making money with putting their

capital to work. the original purpose of capital gains was to give an incentive to put money to work and it was just to bring some differential between it i think we're at a stage now where the country needs to have more income. i believe the government has done a good job. look at covid. without government and the vaccines, it never would have happened independently i think they are mobilizing infrastructure, they want to mobilize health, they want to do a lot of things that are very constructive for all of us and it takes -- it's going to take more money. the people at the top can afford it interesting things, i have a lot of friends who are all in this bracket that are going to get hit and there are very few people who are feeling they have been cheated or hurt or taken advantage of they all feel that there's need to improve the situation of

income disparity and if capital gains is one of the issues, i'm not saying the rates that they picked are right maybe there should be a differential, maybe there should be some incentive for holding longer but these things are set by government policy and the government is now taking an attitude that investing capital at the moment is less important than rewarding people who have been disadvantaged i think it's -- that's the period we're going into now. will it change again possibly but right now i think removing this -- not removing, but making the differential smaller i think is a constructive move >> i think we should also for full transparency say that you are a big supporter of president biden's, right you raised money for him >> yeah.

but he hasn't consulted with him about the capital gains hike, i can assure you. >> i was wondering what you thought of what tim draper said, for instance who said that a 43.4% capital gains tax, and i know you're not commenting on the levels, he said it might call the golden goose that is america's silicon valley people need an incentive to build long-term statuteups in value. so not necessarily worried about the people like you who have already made it but the startup community in particular. in california, that rate would go up to the 60s, wouldn't it? >> i'll give you some quotes i believe that the amount of money that will be put into startups will be just as strong as it is now entrepreneurs are not going to stop and say, gee whiz, the capital gains rate has gone up, i better not start my company. v venture capitalists like me are not going to say, gee whiz, the rate has gone up so we haven't justify making investments anymore. i think that investors in general are going to invest

their money the way they have before i think that new companies will be started i think that funds will be formed, private equity will prosper, and i think you've seen it in the market the market is not collapsing because of this announced change in rate. you know, everyone is expecting that the capital gains rate is going to go up i don't think it's going to change behavior. you know, i've said this for many, many years people change rates -- tax rates in a state to attract people to come there, except when you want to get a corporation to open a plant. but other than that, if an entrepreneur wants to start a company, he's not going to start it in south carolina because the tax rate is lower than it is here he wants to -- if he lives here, he's going to do it here if he lives in catlifornia, he'l do it in california. people go where they want to be and people invest through their excitement in young companies. i'm not -- i don't forecast any

kind of dramatic decline as a result of the change in rate i hope there will be more constructive thought about what the differential should be, if any, and how to actually implement it i think congress probably will compromise or in some way this -- the initial proposal will be modified in some way. >> speaking of the enthusiasm out there, we've seen it in the ipo market, we've seen it in the venture capital space, and we've seen it in spacs to some extent. do you see that continuing throughout 2021, that kind of environment? are you feeling it >> i absolutely think it will continue and i think you're seeing the rate has been announced it's going to possibly go up. now the spacs are getting sold maybe there's a setback temporarily. the ipo market has not reacted

negatively and those people buying it are going to be selling their stock at whatever the rate is when they go to sell it so i think we're going to have a good year. i think the 6% growth in the first quarter is nothing compared to what we're going to see in the second quarter. i think it would go to 8% or even 10% in the next quarter or two as we compare with a bad period with a good period. the first quarter, you are still comparing with the first two months of last year which were pretty good. so to get a 6% improvement with only one bad month last year, i think comparing with three bad months last year and then again in the third and fourth quarter, i think we're headed for a very strong economy and i think it's going to be good for the venture industry, it's going to be good for the stock market i think it will be good for consumer goods and i think obviously with the infrastructure bill pending, it's going to be good for capital goods companies. you know, i'm very, very

bullish. i'm very -- i think a lot of the things the president wants to do in terms of helping people with home care, their parents, is a big important issue. helping with child care is important. earned income tax credit is important. all the things being proposed i think are positive for the world we're in today i'm much more optimistic about the future of the middle class and i hate to say the word lower class, but at the bottom rung. i think there's more hope for them and there's more -- it's very encouraging, the whole proposal of the biden administration i'm very glad i supported the president. i think i made the right decision >> well, it's good to hear those forecasts, alan. thanks for joining us. it's great to talk to you. let's send it back over to mike santoli for a look at ceo optimism does it match alan's optimism,

mike >> very much so, sara, at least based on this bank of america analysis of the language being used in earnings conference calls. that's what this is based on it's linguistic analysis this just shows it's as high as it's ever been going back to 2004 just slightly above that point first quarter of 2018. that was the quarter right after the corporate tax cut was passed and of course the economy was also on a roll and anticipated to do better so it isn't a pure contrarian indicator but basically shows you that all the good word is already getting out and ceos are feeling pretty confident and good about their businesses. now take a look at this look from goldman sachs about what corporate behaviors are being rewarded better than others in the stock market so the diffividends and buybacks basket of stocks have done the best over this span. of course it goes back all the way to the early '90s. but it's not necessarily

accelerated. this is what's interesting to me is the capex and capital goods type companies have perked up reech recently m & a has also perked up these are the areas i expect to see get the biggest uptick if you do have ceos feeling very confident about their businesses at the same time when the liquidity and credit is very strong. how to turn around gamestop if he were in charge and some of the key things he did to help best buy no download necessary. and kim. she wanted to execute a pre-set trade strategy in seconds. so we gave 'em thinkorswim web. because platforms this innovative,

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e-commerce providing a big boost during the pandemic. the latest data shows that online sales now account for 19% of retail sales in 2020. that's up from 16% in 2019 however, brick and mortar stores have been slammed with retailers like j. crew, and brooks brothers filing for bankruptcy joining us is former best buy chairman and ceo hubert oley he joined best buy and helped turn the retailer around

he's also author of "the heart of business, leadership principles for the next era of capitalism." welcome back, hubert, it's good to see you. >> good to see you, sara. >> i wanted to start with the moves in today's market. gap went up 10%, ralph lauren. some of these stocks have seen huge bursts as the economy reopens. how do you think about who the winners and losers are going to be in this next wave of the economic strength as we come out of the pandemic? >> yeah, i think we're going to continue to see a difference between winners and losers one of the things i've learned during the delightfully surprising turn-around and resurgence of best buy is several ingredients. it's a philosophy where you put the purpose of the north star of the business what are you going to do that's uniquely good for the world and for customers. then putting people at the center sometimes in a turn-around people say cut, cut, cut close doors, lay off people. no, i learned -- we learned from

the frontliners and created an environment where 100,000 people plus could unleash their human magic as i call it increasingly i see that where i'm on the board you have to embrace all stakeholders the world used to be all about business you have to look at the community and societal issues. the key is to treat profit as an outcome, not the goal. that philosophy is what -- i know it's worked at best buy our share price went from a low of $11 to now more than $110, 10x in nine years. i think it's by focusing on purpose and people that you can get these great outcomes i think that's what the world needs also today the context of this -- the world as this multi-faceted crisis, we

need an urgent of business. >> how does that work for department stores? >> i'm not going to be able to give you the play-by-play for each company but i think the key is what is the underlying needs, what is the purpose. it's the intersection of what the world needs, what you're good at uniquely, what you're passionate about and how you can make money so when i was at best buy, at some point in the journey, in 2017 i think it was, sara, we decided that we were not a consumer electronics retailer. certainly not a brick and mortar retailer we're a company that's there to we said enrich lives through technology by addressing key human needs. and that's a game-changer because it's very inspiring -- imagine for a second when i walked in back in 2012, i told the employees the key thing we're going to do is double the earnings per share or double the shareholder price. that's not inspiring a noble purpose like the one at best buy allows you to expand the addressable market that's how best buy is going

into health care, helping aging seniors live longer in their home by putting sensors in their home and monitoring their life so placing people at the center with their unique genius and unleashing that human magic, that's what's working in my book. >> and you mentioned, hubert, the share price levels from when you started to when you finished, up about 260% from 2012 to 2020 for which what had been a brick and mortar retailer was a fabulous return when many others declined. that said, when you snapshot over the same period of time the returns of amazon or netflix and the broad space on which you operate on, do you look at that and kind of think, this is so frustrating to see such a goliath created when, sure, we were relative bwinners, but not to the multiples they were.

>> yeah, let's all agree that amazon is in many, many ways an amazing company. you know, at best buy we did this partnership with them that surprised many people. i don't see the game as winner take all or zero sum game. one of the things i told our investors when i was ceo, it's clear that amazon is gaining best buy is gaining too and there's room for more than two types of formats the key is to focus on what you're going to be uniquely positioned to do so with amazon, we sort of mutualized them in a way same prices, same great online shopping experience, same speed of shipping. but then we did some unique things if your need is complex, we'll come to your home to look at what we can do for you and we'll become like your cio or cto. so the fact that in life there's always going to be people who do better, but the formula we found at best buy was good for us. it's a winning formula that

shows that you can do well by doing good the game is not over best buy is doing wonderful things, so the game keeps going. >> finally, we wanted to ask you, hubert, about gamestop because it occurred to us that in the best buy days, a lot of people thought best buy was just a showroom for amazon, that what you were selling didn't need to be bought in physical stores, and that's been gamestop's problem and there's been a ton of attention around the stock and retail interest. do you think that's a company that can execute a turn-around like you did >> you know, i have not been offered the job, i'm not there but i think the key principles they lay out are universal gaming is a booming category i used to be in gaming 20 years ago. i green lit war craft. it used to be $500 million in market cap and now it probably is $60 billion or something. what is it that's uniquely good

that you can do in the world if you stay status quo as a brick and mortar retailer, there's no way you can win so i don't have the answer for you on gamestop. if they call me, maybe i'll try to work with them. but it's always this question, what's your unique purpose, how can you create some good things in the world, how do you treat profit as an outcome and embrace all of your stakeholders these are general principles that i know worked at best buy i think they are needed in this time when the world is -- you know, we have the pandemic i know that the economy is good in the short term but we have a number of ticking time bombs, societal issues, racial issues, environmental issues we need a different formula to move forward and that's what i'm passionate about, sara and wilfred. >> well, we look forward to the book and my conversation with you later. >> yes, looking forward to that. >> formerly of apple and of

course burberry. >> sort of suggesting he's available for hire for gamestop. available for consultation, let's say. breaking news on auto sales. phil lebeau has that for us. >> wilf, get a load of this. 18.54 million vehicles that is the sales rate for the month of april that is the second straight month, according to the research firm auto data, where the sales pace for new vehicles topped 18 million vehicles how unusual is that? this is the first time since june and july of 2005 that the pace of vehicle sales has been above 18 million for two consecutive months it's only happened nine months since 2000 so we are certainly seeing territory that few would have expected a year ago and it's certainly very unusual for an auto industry to have sales this strong, especially over a couple of months. again, april auto sales.

the sales rate, 18.54 million vehicles according to auto data. guys, back to you. >> wow, a lot of folks buying cars, thank you. still ahead, former goldman sachs ceo marty chavez whether wall street's culture needs to change amid the burnout at banks. banks. we'll be right back. proactive s for market events before they happen... and insights on every buy and sell decision. with zeron online u.s. stock and etf trades. for smarter trading decisions, get decision tech from fidelity.

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see yourself. welcome back to the mirror. and know you're not alone. because this is not just a mirror. it's an unstoppable community. come on, jesse! one more! it's every workout. come on, you two! let's go! for everyone. so join in now. and see your best self. in the mirror. some breaking news on bill and melinda gates.

just moments ago the pair tweeting that they are filing for divorce. bill gates, i'm just reading from his twitter after a great deal of thought and a lot of work on our relationship, we have made the decision to ends our marriage. we have raised three incredible children, built a foundation that works all over the world to enable all people to lead healthy, productive lives. we continue to share belief in that mission and will continue to work together at the foundation but no longer believe we can grow together as a couple in this next phase of our lives. we ask for space and privacy for our family as we begin to navigate this new life it's a joint statement from bill gates and melinda gates. it is surprising obviously huge benefactors they have both been extremely vocal during covid-19 as their foundation has been on the front lines funding a lot of these vaccines and treatments all over the world. >> the foundation of course that shares both of their names one wonders whether that needs to be separated as well. but as you said, they're asking for space and privacy and this is a joint statement, certainly taking many people by surprise

no kind of lead-up to this at all as far as any of us are aware. >> first bezos, now gates. time for a cnbc news update with shepard smith shep. >> here's what's happening at this hour on cnbc. the country's top general says he no longer opposes a major change in how sexual assault charges are handled in the military general millie stopped short of fully endorsing a proposal to take the decision away from commanders but says he is open to trying new methods to root out sexual assault in the armed forces. the supreme court is letting stand maryland's ban on bump stocks and other devices that make guns fire faster. the justices turned down a case challenging the law. it went into effect before a nationwide ban on bump stocks was put into place by the trump administration. and 80% of young girls say they have used retouching apps

on pictures they take and about as many admit that they change or hide at least one body part before posting online. that's according to research from the dove self-esteem project. tonight selfies and their psychological impact plus how pop star lizzo is trying to help young girls that's tonight on the news, 7:00 eastern, cnbc. see you then sara, back to you. >> shep, thank you. >> we all of course wear makeup. >> i retouch all the time. cfo martin chavez on whether regional bank rgs ulbemeercod on the horizon we'll be back in a couple of minutes.

stocks finishing the first trading day of may mixed the dow and s&p closed higher while the nasdaq closed near session lows all three major averages trading just around all-time highs marty chavez joins us, former goldman sachs cfo who announced he's vice chair and a partner at sixth street

you are already heavily involved but you're going back into full-time day-to-day investor performance, right >> how about that, wilf? i guess i was bad at being retired. >> well, good for you, and great for them and what exactly will the new role be, marty, still very much focused on biotech, life science and finding opportunities there, or investing it across the spectrum >> wilf, i'm going to be working on a bunch of things, investedinv invested -- investing across the spectrum but the intersection of software and the life sciences you know that's something i've been working on but i'm reunited with my former colleague from goldman, adam corn, and we're going to be working on modeling and private capital, which is a very hard problem. makes the trading problem look easy be working on diversity, equity inclusion and culture, a whole bunch of things.

>> do you think that there are fewer pockets of value to find today than, let's say, a decade or so ago or is it just a case of making sure you look in the right places and despite the great run-up we've seen in markets there's plenty of opportunities? >> there's plenty of opportunity. it's not just looking in the right places but looking in the right places in the right way. what really drew me to sixth street was the ability to work with alan waxman and adam corn who i've known for decades and the way that you're going to uncover alpha, you can't just look at the cap table and look at some excel models you have to understand the company, its idiosyncrasies but the whole sector and how it's evolving that's where value is. >> i wanted to ask about the general theme, not goldman sachs specific, but about junior bankers over the course of the last year or so. it's a world you know very well.

can you understand some of the pressures they have been under there's always an industry where you have to work hard because you get paid well for it but has the work from home culture accentuated or can you see how it may have accentuated the pressures of the job without an associated payoff >> well, wilf, i can tell you from my perspective during the last 18 months after goldman, i was supposedly retired, but i was on a bunch of boards i was working 24 by 7 on all kinds of activities, financing, m & a, you name it as i'm reviewing all these books, i'm feeling waves of empathy for the junior bankers because if i'm working that hard, what must they be doing to produce all of those materials and all of that analysis and, yes, i think working from home, it's been a challenge for many

plus we're fortunate to be able to work from home, i'll start with that. but beyond that, setting boundaries and that's just hard and it's especially hard as a junior banker. it's always hard but what i would say to the junior bankers is you do have choices and banks and everybody knows that i also know that they're very actively responding to this. we need more bankers, we need more automation, and we need some more boundaries i think that's going to be especially true as we come out of the pandemic. >> work from home, marty, but also the booming capital markets, what we've seen in some of these investment banks with spacs and ipos and m & a do you see that pace keeping up? >> well, i do. i've been in the business for 26 years, and i have never seen a time like this as you know, i hesitate to make predictions and i certainly won't make predictions about the stock market level but it's hard to see where there

would be an end in sight there is so much opportunity of course there's ups and downs and i would never want to time it, but there's just more and more happening, and i don't see an end to it. >> marty, thank you very much for joining us today it's always good to check in with you. >> always a pleasure, thank you. be well. up next, it's not just president biden's capital gains tax hike proposal that has wealthy investors worried. what could be a ge iree huncasin the death tax, next on "closing bell."

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>> we have a mathematic flash on smile direct club. beckerta coombs with the details. bertha. smile direct club says a cyber attack to haveo could have a material impact on second quarter operations the firm making clear liner place brace they had a system outage on april 14th due to the ache able to resume control of the systems without having a pay ransom, the shutdown caused delays when it comes to treatment planning, manufacturing and product delivery that they say could have a material impact on second quarter results. it is not aware of any data loss or exposure of customer information. smile direct will likely tell us more when they report a week from now, sara. >> the latest to be hacked, thank you. bertha the stock down more than 8% after hours. er> wealthy investors turning er> wealthy investors turning ov to a new ta

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hey, robert. >> wilf, biden is also proposing to eliminate the so-called step up in basis, raising hundreds of billions in revenue and end what some say with a big give away to the wealthy. but combined with the estate kwas tax and capital gains rate could create an effective rate of over 60% on certain wealth. let's say at flam also a asset company or property with a value of $100 million under the bide plan a 43 million capital gains tax on death even if the family does not sell the ast. pete. that they could also owe estate tax including exemptions work out to an additional $18 million that would bring the total taxes on that business to $61 million or a rate of 61% the tax foundation saying the combined rate would be the highest in nearly a century. if it happens, guys. >> as if they bought the asset

for zero. >> that's right, if there is zero basis. >> fine, but most. >> or started the company from zero. >> would carry some kind of original cost. we thank you, robert thank you for that >> want to mention tomorrow on shoet we have the ceo of under armour, the company reporting earnings tomorrow morning. an exclusive with patrick frisk and they announced they are settling with the soek paying $9 million over revenue recognition practices back to 2015. >> even more reason to tune in for that interview tomorrow. and the show's as a whole our apologies to first money stealing nine seconds. >> nine seconds into the ledger wilf i'm melissa lee. "fast money. guy adami, karen seymour, time finerman carter werth has three stocks blooming with opportunity. we brew bring you the names. a twitter talkdown, the social media stock tumble being down 20% in a week. should you