and besides, i talk about crypto every once in a while, but it's not something that i go full bore into all the time. >> i want to see the dom chu nft, don't you >> what would i do with it i've got to do something crazy and viral, right thanks for watching "power lunch. everybody, dom, we'll check in with you ralater. "closing bell" starts right now. >> welcome to "the closing bell," everyone, i'm wilfred frost along with sara eisen. stocks losing steam as we head into the close the dow giving up an early gain and the nasdaq has turned negative with just one hour left in the session. >> let's look at what is driving the action retailers getting their time in the earnings spotlight kicking things off with a bang walmart, home depot, macy's, all better than expected results more on that in just a moment. housing starts plunging 9.5% in april those starts were still up 67% this year from last year shares of at&t are seeing more weakness today on the back of

that blockbuster merger with warner media and discovery the stock down 8% since monday's open 59 minutes left to go in the trading day. coming up kyle bass will talk to us about where he's finding opportunities right now, plus his latest thoughts on business in china. plus bitcoin has dropped 25% in the past week, but is the selling over or is there more downside to come we'll ask jeff degraffe and we'll be joined by the ceo of kellogg and whether inflation will eat into your breakfast budget. first let's get straight to the big stories we are watching. mike santoli tracking the market action courtney reagan with the highlights from a busy day of retail earnings and wilfred has details on a high shakeup at jpmorgan chase >> it has softened up in the context of indecisive back-and-forth action this week. the pullback is the big growth

stocks not holding up their side of the bargain it looked like it would be a nasdaq leadership day and they sort of fell back, so we're still just in this range right here that low from last week and the just under 4,100 so basically halfway between the all-time highs and lows of last week. the big question was a 4% pullback enough to refresh things you see some fatigue in areas like financials and industrials. that's also weighing on things but not a decisive move. not a lot of forceful buying or selling frankly today. take a look at some dividend plays. you mentioned at&t's continued weakness this pro shares dividend ep, that's the dividend aristocrats. those are stocks not necessarily with a high yield but a history of raising dividends consistently pretty much every year morningstar dividend etf, the largest holding is at&t, almost 10% of the fund. the second largest holding is

verizon, more than 8% of the fund so one-fifth of this etf is in two big telcos at&t's dividend is slated to be cut down the road. people who owned it just for the 6% yield basically having reason to pull out of that right now and that's probably why at&t is down you also see the dividend growth fund has now overtaken the pure dividend fund and performing in line with the s&p 500. so there's always a little bit of a risk of chasing pure nominal yield. take a look at margin debt we did see another record at the end of april in margin debt. that's money borrowed against stock holdings but over 25 years as schwab points out with this chart, it mostly just tracks the overall value of the stock market. now, there is some concern about the rate of increase over the past year and tremendous surge in margin lending as the market came back. so there are some market timing systems that say that could be a

headwind but in general margin lending going up as the stocks go up and the underlying value of equities goes up is not necessarily in and of itself a big red flag. >> so overall, mike, what is causing stocks to stall out here we had our worst week since february last week and we're lower this week. we just softened and lost a lot of the momentum despite really bullish earnings and economic data. >> i think it's kind of not the right question to say why has it stalled out. why were we up every day going into the middle of april i think we've exhausted a little buying power you had people pretty fully invested at the same time people are very sensitive to the idea that we're past the absolute peak moment of acceleration off of the lows of the economy and earnings all those things working together is leading to this consolidation and everybody knows when you go up 90% in 13 months as we did with the s&p 500, history says a gain like that in year two usually gets

moderated and we're pretty much seeing that. so i'm not sure i would infer much more beyond this flattening out period. >> mike, great stuff thanks for that. turning to retail earnings, walmart, home depot and macy's all reporting strong results before the bell. courtney reagan has the big takeaways for us today court. >> hi, wilf. today's retail earnings blowing past expectations. those shares are somewhat mixed here stimulus checks definitely helped while the back half of the year is still wrought with uncertainly, retail executives have rosy outlooks walmart's sales were 6 times better than consensus. that helps those margins u.s. e-commerce is 37% and global e-commerce is 12% of walmart's total sales. macy's comp sales still below first quarter 2019 when all stores were open, but the department store has seen a major shift in sales with vaccinations on the rise

the ceo says the retailer is prepared to meet that growing demand >> customers are starting to re-emerge. they're going back, they're going to church, they're going out to dinner, they're going to the prom, and places where they're re-emerging, we've got the categories that are going to be right for them. >> hope depot put up u.s. comps of 30% with paint the only category growing less than 20% in the quarter the home improvement retailer said comps are trending above 30% for the first two weeks of may but isn't giving a longer term forecast at this point. sara >> courtney, thank you walmart bucking the overall dow trend adding 22 points we'll talk about that later. meantime, jpmorgan today announcing a slew of leadership changes. wilfred, what does the new structure look like and what are the key takeaways? >> gordon smith, the co-president and co-coo and ceo

of consumer will retire at the end of this year he will not be transitioning to any rival roles in the future. his tenure was very impressive, revenues over $50 billion for that part of the bank. typically 40% to 45% of the entire company he will be succeeded by two people, mary ann lake and jen piepszak they'll share the role the new cfo is jeremy barnum the timing is not a huge surprise smith is 62 and never sought the ceo role himself if anything, it could have happened a fraction earlier if not for the challenges of last year around dimon's health and the pandemic daniel pinto, who runs the investment bank, now becomes sole president and sole coo. he is unquestionably the short-term heir apparent should anything happen to dimon or

should the board decide to remove him that is not expected the board want him to continue to serve, i'm told, for a significant number of additional years. dimon's own permanent repost is always five more years the reality is likely to be at least a few more years in part the wait is to allow one of the younger crop of potential successors to make sure they are ready. the longer the wait, the more other names could come into play too, sara. the other thing that came up as well as the prospect when there is a handover for split chair and ceo roles so dimon could stay on for a period at least. >> so who does this make the heir apparent? you mentioned lake and piepszak are sharing that role? >> unquestionably in the short term it's daniel pinto but looking further afield, there's three takeaways from the fact they're sharing this role

one is that jamie dimon is not ready to go yet so we don't have to anoint a single heir apparent in that sense. secondly, neither jen nor marianne have made it undoubtedly clear that it is them in the last year or so. three, still a small chance that there's somebody else out there in the field that they want to check. there are some other names that have been thrown in in the last year or so to add to the others that exist but definitely jen and marianne in the front of a three-year view and daniel pinto if it's shorter than that. >> but dimon is saying another five years. >> which i say amusing because it's one more than a presidential candidate would chant at a rally we'll see if it actually is until 2026

>> longest serving. >> longe serving, best share price performance, can't argue with it. i think people like the tenure and like him being at the helm and the bench. and the bench is deep. when we come back, "the new york times" out with a story saying apple has compromised on security and privacy to do business in china. we will speak with kyle bass about that plus his thoughts on where to put money to work in this market. you're watching "closing bell" on cnbc.

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wanna help kids get their homework done? well, an internet connection's a good start. but kids also need computers. and sometimes the hardest thing about homework is finding a place to do it. so why not hook community centers up with wifi? for kids like us, and all the amazing things we're gonna learn. over the next 10 years, comcast is committing $1 billion to reach 50 million low-income americans with the tools and resources they need to be ready for anything. i hope you're ready. 'cause we are. welcome back we're down about a third of 1%, just bouncing a little bit following that 2:00 p.m.ish sell-off "the new york times" out with a new investigation into apple's relationship with china. as apple has grown its business in china, it's made compromises on its commitments to privacy and civil liberties.

this includes storing customer data on chinese government servers appendicind sharing cus data with the chinese government karl, thanks >> great to be here, wilfred >> i guess we usually think of apple as one of the companies that protects user data better than most. what's your take on this story >> you know, i think it's a microcosm of the broader story, whether it's apple, bloomberg, nike or the nba. they basically -- who'd have thought you put tim cook and lebron james in the same family album. at the same time, they link their wealth to basically the whims of the chinese communist party. and what they require as far as oppression and suppression and collection of data, you don't have any privacy over there. you basically have to agree to the manner in which the ccp

operates to do business there. there's a schism between wall street and the cabinet level positions that we have here in the united states that believe china is committing genocide and crimes against humanity. there is no other way to talk about this other than a major schism. >> some of your recent tweets, kyle, have suggested that companies are knowingly exploiting those inhumane conditions that you mentioned, those crimes against humanity. do you have evidence to go that far, or is this you'd like to see some laws passed to make it harder for u.s. businesses to do business in china in the way that they are? >> you know, so i'll answer that in a way that might sound unresponsive but i'll tell you, wilfred, that it's important to note that the reason the holocaust back in world war ii was so impactful and the images are so engrained in our mind is that our images are there. we have images of the concentration and video of

auschwitz and the various places there that committed such horrible, unthinkable crimes against humanity during world war ii the problem is now china has it so locked down there is no video, there are no photos therefore, it's out of sight, out of mind. today we live in a post truth world. the world is whatever narrative is being drawn by whoever the narrative author is and the best narrative author wins. in this case when you say do we willingly know or are they co-opted into doing that, anyone who invests in surveillance equipment to the authorities, anyone who's helping the chinese military grow by investing in esg funds that have chinese companies at the tops of them, all of these things you can't make up. they're all happening on a daily basis, wilfred i think all people have to do is open their eyes and pay

attention and read the gao report from the government read the defense industry analysis on china from the u.s. government read some of our official publications from the dmp.o.d., from the gao and develop your own opinions but anyone who is doing business there has to suspend disbelief to even do business there. >> you were worried and you were on with us, kyle, before warning that the administration, the biden administration would be softer on china than the trump administration but they have kept the tariffs in place. they have kept the phase one trade deal in place. been confrontational on taiwan and some of these human rights issues is it tougher than you think >> both yes and no in the trump administration, people on the national security council and various cabinet level positions did a great job kind of enforcing u.s. rule of law in a global rules-based order. and yet trump himself would never call the chinese out on

their human rights violations because he didn't want to affect his coveted trade deal and secretary blinken came in and said he's never going to trade, the biden administration is never going to trade human rights for a trade deal and he's lived up to that i'm very happy about that. but if you looked at recent court cases in the u.s., you know, we are now releasing -- we're taking companies, chinese companies, one by one off the black list due to their lobbying and their legal challenges i think it's just kind of dismantling some of the great strides we made against companies that are knowingly a part of the chinese military industrial complex so i can't say that everyone is holding up their side of the bargain to date. >> let's pivot, kyle, and talk about markets. big picture question, first of all. we've seen some pullbacks, some rotations, but never more than 4%, 5% for the major averages in

the u.s. do you think as we look out through the rest of this calendar year we will see a bigger peak-to-trough pullback than that or it will be the same >> i'm not good at prognosticating pullbacks. but 10% pullbacks are healthy every now and then we've had a meteoric rise. i'll caveat that with you have to realize that today we now have the broad money supplies as a percentage of u.s. gdp at about 85%. for the better part of the last 30 years that number has sat around 58% so we have a step function change in the broad money in our system due to the virus that has decimated the world. we have 20% more broad money in our system today than was there exactly a year ago and that's why you're seeing such enormous moves in stocks and commodities, in just about everything

i actually believe that you're going to see asset prices continue to move higher because i don't think the central bank is going to change its ways any time soon. >> is that an argument to buy bitcoin? >> oh, boy, how long do we have, sara >> about a minute. >> yeah, i'm not quite sure what the practical application of bitcoin is i understand scarcity equals value and it's got a great algorithm and i think there are businesses being built around crypto that some of my friends are running that are phenomenal businesses the question is if you put yourself in the shoes of the u.s. treasury secretary or, god forbid, the financial authorities in china, bitcoin is kind of antithetical to both of them and so in the long run, i have a hard time thinking that it's going to be something that's much bigger than it is today i'm not saying that itcan't go a lot higher first but i think in the long run it's just going to be more of what it is today, something that people

talk about and trade but as far as it being a reserve currency, i think we need to focus all of our attention on central bank digital currencies and the fact that about 80% of the world's central banks are in some stages of rollout today and that is going to change the landscape of the global financial marketplace. >> that's what i was going to ask you next which is the digital yuan whi is testing as we speak. there's a lot of hype about it and whether it could supplant the u.s. dollar on take over the global foreign exchange system do you really think china can convince consumers internationally and investors internationally to get into a digital yuan when they haven't done so with their own currency? >> i don't i think china can force the adoption of their digital currency for traded investment in china per se unless the u.s. and the west outlaws it or basically disallows it as something that can be owned. i know that sounds hyperbolic,

but i don't think you can get a little bit of cancer either you have cancer or you don't. i believe the digital yuan is the largest threat to the west that we faced in the last 30, fort years and it's because it allows china to actually get their claws into everyone in the west and allows them to potentially export their digital authoritarianism i believe it's a digit today only 1.8% of global transactions settle in r & b and that's almost exclusively in hong kong. they need dollars. how they roll out their digital currency and how it affects the world is vitally important to the national security of the united states and europe and the rules-based order. i think that's the big story that we've got to focus on in the next year. >> well, we will continue to do so that's sort of a neil ferguson view as well kyle bass, thank you for joining

us always good to talk to you. >> thank you. we've got just less than 40 minutes before the bell. the dow is down 40 points, the nasdaq has turned lower. the russell 2000 is positive just barely. still to come, the ceo of kellogg joins us sexclusively to talk about price inflation and how the return to normal life could affect breakfast and snack sales. check out some of the top tickers. tesla on top, 10-year yield on top. today walmart joins the party off earnings and so does home depot. stay with us here on "closing bell." we made usaa insurance for members like martin. an air force veteran made of doing what's right, not what's easy. so when a hailstorm hit,

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35 minutes left to go of trading. let's check in on some individual market movers as the overall market turns blower. snowflake is upgraded from buy to hold. the firm expects the company to post strong revenue growth that stock up 6.2% it is well off of its highs near the ipo time. a raymond james upgrading palo alto networks to outperform from market perform. that company can enter into a period of healthy growth and incremental profitability. the stock getting a nice boost, also bucking the trend, up almost 2%, wilfred most sectors are now lower we've got health care, utilities and staples and real estate that are still positive. still to come, walmart shares are leading the dow today after earnings driven by grocery and e-commerce

we'll ask bill simon if he thinks the strong sales can last. plus bank of america upping the ante in the minimum wage race we'll bring you details about the company's latest plan to raise pay next here's a check on bonds. yields mixed, the 10-year around up 1.64%. we'll be right back.

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bank of america significantly boosting investment in its workforce. the company announcing today it will raise its u.s. minimum wage to $25 per hour by 2025, a move it says will benefit around 50,000 employees the firm also says its u.s. vendors must now pay an employee dedicated to the bank at least $15 per hour, which it says will benefit around 43,000 additional external workers not insignificant numbers there. it's not the first time bank of america has raised wages recently last year they upped their pay to $20 following another hike in

2019 two big standout points to me. when it comes to the next round of boosting their dividend or buybacks, they can point to this and say we're not just giving money back to shareholders, we're also taking care of our employees. $25 an hour is quite significant. it's only the last couple of years, it has really elevated to the 15s. other banks have done 15 to 20 to 25. bank of america taking the lead there. the other is inflation you've got to look at this, almost 100,000 workers benefitting from this one way or another. it's another sign of inflation people have got to keep an eye on it but still seeming a little more relaxed with measures like this than we should be. >> is it going to pressure the other big banks to follow suit and where are they on minimum wages? >> i think it will bank of america moving up to the 25 level others have crossed the 20 level recently you know, i think there has been a bit of a race on this level. one wonders whether it's a race for talent as much as wanting to

reward workers for good performance plus be ahead of the curve on the pr political front, but we'll see. we'll see what happens if others follow suit. definitely interesting on the inflation front as additional from the bank front. >> we see wages start to pick up we'll continue to monitor that. time for a cnbc news update with tyler mathisen. >> sara, thank you very much here's what's happening at this hour a juror has been removed from the murder trial of the multimillionaire, robert durst she said she had read news reports on the trial, violating a court order. the trial resumed yesterday after an unprecedented 14-month recess senate majority leader mitch mcconnell said republicans are in favor of forming a panel to investigate january 6th. his statement comes just hours after kevin mccarthy said he's opposed to legislation that would create a bipartisan panel because it overlooks the political violence that has

struck american cities the actor, comedian and author, charles groden has died. he's known for his roles in "midnight run" and "the heartbreak kid." he had a talk show on this network in the mid-1990s he was 86 years old. sara, back to you. >> tyler, thank you. just under 30 minutes left to go before the close here's where we stand in the markets. the dow is down 82 points. the s&p 500 is lower as well you do have some standout groups like real estate and utilities which are higher the nasdaq just going between gains and losses here. it is outperforming today after underperforming yesterday and the previous few weeks the russell 2000 index of small caps just in positive territory. up next we'll talk to the head of google work space about the developer conference that happened this afternoon and some new innovation that could enhance working from home. "closing bell" will be right

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google's annual developer conference kicking off today the company showcasing the latest enhancements to its digital collaboration tools which it's calling smart canvas. joining us is the vice president and gm of google work space. javier, thank you for joining us it was notable that you had top billing. you were the first speaker after sundya today what do investors need to know about what the changes are >> first of all, i'm flattered that i had the opportunity to follow sundar as such an important conference the most important part to get from this, i guess, is the fact that there's a lot of interest in the return to office and the future of collaboration as we evolve into what's next, you

know, in terms of how do we communicate and collaborate at work and other facets of our lives. it's super, super important for google to continue to lead the way there and it also in a way reflects our own priorities. we're a very large company that has innovated in our own practices and google work space plays a critical part in making google do the kind of innovative work that it does across so many areas. so i guess it's a reflection of the importance of this space in general for the world and for the company. >> so what does that mean as far as your enterprise cloud business, which is what the target is, which has grown tremendously, and how you envision companies going back to work and using this product? >> sure. we for the longest time have been very active in helping drive the digital transformation, and the transformation of the workplace, even before the pandemic most companies -- you know, millions of companies around the world have chosen google work

space to drive a different approach for communication amongst their employees, reaching out to their frontline workers and people usually not included in the discussion about your typical collaboration and the things that happen inside of the office so the importance of this as an emerging topic for industries around the world and the growth that it represents to google and google cloud is obviously part of our business, but again it's also important to realize that these same products and part of what we announced today is that we are actually providing these products to everyone, right. so google work space overall has over 3 billion users that's an important component to this these are products that are familiar, used by people in their everyday lives and they have an important transformative role to play inside of the work space. in particular as we look at companies coming back into the office in different ways in

different places around the world. >> talk to us about what was unique and new today i believe smart chips and smart canvas were part of it that exactly are those aspects >> sure. so google pioneered this idea that digital documents aren't just like digital pieces of paper, right, all the way back to 15 years ago now we introduced google docs as an inherently collaborative realtime editing surface powered by the web that's been engrained in people's minds and a lot of people take that for granted students and people entering the workforce know nothing other than the model that google docs got started 15 years ago so today what we announced represents another big step in not just taking the realtime collaboration part of google docs to a new level but also in a way connecting documents further toward the people, tasks

and other content that they apply to and therefore creating ultimately what is much richer, more interactive documents in a way you could think of it this way typically you have people building documents about a plan. so you gather together to build a document or presentation, even a spread sheet, and it's meant to represent people's ideas about what they want to do when it comes to the actual execution of the plan, that document seems to be a marker of reference. with smart canvas, we're bringing those two things closer together because of all the interactivity that people can deploy with smart chips, as you mentioned, you're able to have these longer living, breathing documents that are actually more connected to the people and the processes the other thing we announced today were a set of enhancements to google meet aimed at really facilitating a more effective and inclusive approach to return to office and remote and in-office collaboration. as some companies start looking

at having people be back in the office and including also some people that are not going to be in the office, you have these new challenges of exactly how do you preserve a sense of equity or collaboration the opportunity for people to be seen, be heard and participate regardless of where they are so meets companion mode along with a set of ai-powered capabilities that we announced today are all aimed at making collaboration over video effective, regardless of whether you're sitting in a conference room like i am right now or if you're actually at home or on the road or wherever you might be. >> javier, thanks for joining us. >> my pleasure. a slew of retailers posting blowout earnings this morning. we'll break down those moves, next, in the market zone ke moving forward... even after paying for this. love you, sweetheart they guide me with achievable steps that give me confidence. this is my granddaughter...she's cute like her grandpa.

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15 minutes left in the trading day. we are now in the "closing bell" market so did. commercial-free coverage of all the action going into the close. mike santoli here to break down these crucial moments of the trading day. today we've got joe terranova back as well good to see you, joe the dow and s&p 500 are lower for the second day in a row. the nasdaq is outperforming today but still down more than 4% in the month of may joe, you said the market needs to work off some of that excess leverage, the froth and stacks and crypto and the higher growth names. how far along are we into that process? >> well, i think that process has taken us where it needs to go in terms of price now the question becomes time.

exactly how long is it we correct or consolidate for understand that's something that's a little bit unique for investors. they're normally accustomed the last couple of years to corrections that come very quickly in terms of time and recover in terms of price even faster this one i think takes it a little bit longer as it relates to spacs and hypergrowth oriented names. >> mike, are there signs recently that positioning in some of those big cap tech names has become a bit more favorable now for a bounce or meaningful bounce to try to occur >> obviously the positioning is much lighter naturally they were very crowded going back eight to twelve months ago the series of data points keeps coming out there was a report about hedge fund positioning in mega cap growth that was at multi-year lows last

week the b of a fund manager survey showed technology allocation are down to 15-year lows relative to that survey's history. so it's fairly intuitive we're seeing these 13-f filings dated march 31st that show a rot -- lot of lightening up how does something underperform? people back out of them. to me it means the market is a little more in balance if anything, people leaning a little heavily into the cyclical trends, which makes sense. this isn't a timing mechanism, but it does tell you that the old favorites are not the ones where people are putting the marginal dollar right now. because why? the whole s&p will have 30% earnings growth this year. you don't have to go to a secular grower to get the estimates going higher. >> taking a little leg lower, down 150 points lower on the dow. the nasdaq back into negative territory. joe, does that make you want to go into some of these beaten

down tech names or do you stick with the cyclical groups >> what's interesting is that so far year to date investors are dismissing the quality narrative on value strategy. but yet as it relates to growth, investors want quality they want cisco, they want oracle, they want intuit i think you're okay with alphabet or microsoft. but consistent with mike's comments, and i completely agree, just look at the 52-week high list today. you've got 42 highs raininging from jpmorgan to mosaic and even cvs has made a comeback and is at a 52-week high. >> mike, sorry, just coming to you very quickly big leg down all of a sudden in the market once again approaching those session lows if we can bring up the intraday chart, down 160 on the dow session lows for the dow, half a

percent for the dow and s&p so nothing real pronounced. but as we approach the close, one of them is happening right now. >> there has been low intensity trench warfare here. we've we've crossed the 4150 mark so it doesn't seem like it needs a headline to push things. yesterday we got a levitation in the final hour, again, for no particular reason. i do think within this range there's sort of an indecision that's going on. we're sort of below the very kind of short-term rally twrend line that we were at but we're just a few percent from the high so it's no big deal. i think that's where you get the waffling back and forth. >> we've got ten minutes left in the session and we'll keep an eye on that. let's get to the retail names which we mentioned earlier as well a mixed session for those companies that reported pretty

impressive earnings this morning. walmart saw strong growth in groceries and u.s. e-commerce sales which rose 37% the company's same-store sales grew 6%. macy's had a surprise profit seeing strength in home, fine jewelry, watches and fragrances. same-store sales surged more than 62% in the first quarter but compared to 2019, comps down 10%. home depot also beat expectations paint was the only category to see same-store sales growth of less than 20%. mike, it's really fascinating some of these prints on one level you're seeing the benefits of stimulus and benefits of reopening and it's very encouraging to see. on the other, you're seeing blowout earnings not necessarily leading to great performance in the share prices. >> especially when it's housing related, retail related, stimulus beneficiaries you have multiple reasons why you might say, well, hows it going to improve upon that setup and i think that's the reaction. this is not a huge sell-off but

relative to the size of the outperformance it absolutely was. all the home builder stocks are getting a little retrench right now just because you have seen supply go up of existing homes and home builders, the housing starts number was a downside surprise this morning. >> joe, you're watching home depot in particular and the relationship with lumber prices which we've all been watching as some sort of gaming of inflation, particularly in housing. >> yes, that's important to do, sara may 10th the price of lumber reached a near term peak and it's pulled back significantly since then i suspect investors looking at home depot's earnings today are not really concerned about anything within earnings maybe there's a little relaxation in terms of the overcrowdedness towards home depot, but it is about that correlation with lumber prices if you see a recovery in lumber, i think you'll get a very fast snap back for home depot unfortunately sometimes you have

this relationship develop. we witnessed the same condition back in 2019 with home depot and lowe's and it's present once again today. >> shares of at&t sinking today as wall street processes that major announcement yesterday to merge its warner media division with discovery at&t also signaling that it will likely cut its dividend once its media business spins off the stock is on track for its worst day in 11 months. amazon is down slightly amid reports that it's in talks to by the mgm film steweudio for betwn $7 billion and $9 billion. mike, what do you think of that one? >> it's an interesting bolstering of the content capabilities you want to have that manufacturing of the studio as well as the library. pretty small bet in the scheme of things for amazon it's maybe big for one of amazon's acquisitions, but this is a $1.6 trillion company that can just shrug and grab an asset

of this size in terms of at&t, a lot of people are looking in the cold light of morning about what has gone on here, which is an admission of poor capital allocation in the past and still not a fix for the balance sheet. also at&t shares spurted from 29 to 33 on pretty much no news for a couple of weeks into a may high and it's pretty much given up that little burst higher. >> you're underselling the quality of the franchise it opens the best franchise of all time which i'm saying as an over the top fan but it is one of the highest grossing franchises of all time, partly because they have been able to churn out so many movies. >> you're only going to be able to watch the next bond film on a kindle, wilf, will that be okay with with you? >> no, it wouldn't i have a feeling they would get a one-day window. >> it's so interesting that it came on the same day, this report, that at&t came to this deal with discovery and warner

media, joe it just shows the streaming deals are getting bigger, they're still happening and there's this arms race for content. >> what's amazing is that even that type of commentary can't lift the price of viacom which you'd have thought on a day like today you'd see a big stronger performance. i think jim cramer has been correct in his assess meant of at&t if i'm going to own at&t, i'm doing it for the dividend. now you're taking that away from me to a certain extent that's not good. that's not appealing >> the dow hitting session lows a moment ago we're current ly down 214. big gut check in the last 15 minutes. bounced 20 points while i'm talking but still down 0.6 or 0.7% for the dow and s&p. josh lipton has a preview of earnings. >> take two under some pressure. it's down 15% over the past

three months and down 20% so far in 2021. granted, that is after a stellar 2020 but mkm's eric handler saying some investors are concerned about very limited visibility and take two's release schedule so it's tough to put together an earnings trajectory. eps and bookings guidance, the street wants to see 6.07 on adjusted revenue of $3.15 billion. back to you. mike, the vix today, what do you make of the action it started as a positive session. i guess you'd expect it to spike a bit. but not settling back as you might want to see if this was really a meaningful bounce. >> no, it's not. definitely some apprehension there. last week's pretty sharp if not deep pullback of about 4% definitely revived the volatility index you have people sort of on guard wanting to hedge a little bit o

downside the other small piece of it perhaps is that you've seen a little bit of a rekindling of interest in the meme stocks, in the options and things like amc and gamestop interestingly as bitcoin has come down a lot, those things have revived to some degree. that has acted as a little bit of a prop to the volatility and it's just because the market makers have to absorb the volatility of those names. i would put all of those into the mix. we're still sort inform a downtrend in the volatility mix. we got above 25 last week but it shows you the market is a little bit on guard there. >> 10-year yield at 1.64, joe. not doing anything crazy, slightly higher. are you a buyer of the inflation story, that is inflation lasting longer than the distortion and the pandemic reopening that we're seeing in the economy right now? >> i see reflation i think that's the exact economic climate it's very similar to the experience coming off of 2009.

it's very similar to the experience coming off the 2015 manufacturing recession. inflation is certainly what investors should be allocating towards. inflation? no, i don't necessarily see that. >> well, it jives with what we've been seeing in commodities. we've got two minutes to go in the trading day. really taking a spill here into the close. the dow is down 233 points the nasdaq couldn't hold the gains, mike. >> the nasdaq has been strong but the new york stock exchange if you look at the volume split, it's negative now. it actually had been holding a little bit more toward 50-50 earlier. that last hour's wave of selling did push this to the negative side 1.6 billion versus about 2 billion on the downside. take a look at the u.s. dollar index. that is threatening new multi-year lows. it's still a little above where we got to in january but it's pretty close right there so that's been a resumption of a

downtrend after having bounced in april it's sort of along with the jobs miss that's come out of the dollar the volatility as we were just talking about definitely not really going back to the mid-teens levels which would have said normalcy, summer doldrums, above 21 the vix futures are shaped in such a way that there's not a stress building up but certainly worth watching there, guys. >> just under one minute left and we are continuing to sell into the close now down 233 points on the dow, zmt 0.7% the intraday charts that tell you the story of that sharp sell-off towards the end of the day. the nasdaq was positive for most of the session right in the end of the day is what's taken it negative the russell a similar story. three sectors remain in the green, real estate, health care and utilities.

the other eight are in the red energy down sharply, 2.5%. industrials, materials all down with this end of day selling taking us into the close we are down 272 points on the dow, 0.8%. down 0.9% on the s&p 500 0.6% on the nasdaq, closing at the lows of the day, sara. >> that was a weak finish. welcome back to "closing bell," everyone i'm sara eisen along with wilfred frost and mike santoli take a look at how we closed out the day on wall street with the lows of the session. we saw a steep drop. the dow finishing lower by 267 points about 0.8 of 1%. caterpillar was the biggest drag along with goldman sachs, honeywell. four defensive stocks were the

only gainers the only sectors to close up were real estate and health care, everybody else was lower energy the hardest hit, down 2.6% the nasdaq gave up its gains it was outperforming most of the day and take a look at what happened into the close. down half a percent. technology did fare better but you saw apple, amazon, microsoft, facebook, all down at the close. the russell small caps closing down three-quarters of 1%. investors are waiting results from take two interactive. the stock down 20% this year we'll have instant analysis of the numbers as soon as they are out. plus bitcoin is up more than 300% over the past year but is down 20% just over the last week coming up, you will hear from somebody who sees a top developing in the cryptocurrency. let's talk about the close joe terranova is still with us, dan suzuki joins the conversation mike, what happened there into the close?

>> i don't know that anything in particular happened, to be honest i think we're still in this process of being a little bit destabilized from the shakeout last week. i've been mentioning that until proven otherwise, it looks a lot like the previous pullbacks we've had, 3%, 6%, something like that from january, february, march and a little bit into april but none of those were over in three days so you had this multi-week period of chopping around and it seems like the market at the end of the day getting hit with a wave of repositioning market on unclosed sales and who knows what was driving it. but the market seems to want to test to see if that friday follow-through rally after the bounce was genuine buying. it did seem very machine-like and mechanical while it was going on. >> joe, when you do get a final 20 minutes of trade like that, does it worry you at all is it worse than if closing down 0.8% had happened in a more steady fashion throughout the

day? >> no, it doesn't worry me i'm actually expecting it because i still believe there's a deleveraging process that is needed we're talking about bitcoin prices, which are falling back that's part of the deleveraging conversation the characteristics for an individual that's going to be buying bitcoin or spac or hypergrowth stocks is very similar. so those are the places they're going to be positioned as i said before, i think this is going to play out over a period of time the one concern i have is that investors already allocated to these areas that are deleveraging, are adding to existing positions that's only going to exacerbate this process as we move lower. i can't urge people enough not to do that move towards quality, move towards s&p cyclically oriented businesses. >> you just said you believe in reflation, not inflation there's a key distinction there,

joe. just explain that and what it means for some of the investments you like and the asset classes. >> i think we would have began to see a little bit of a contraction in earnings results. we didn't see that in an inflationary environment, clearly, sara, you're going to see corporate earnings contract significantly. you're going to see guidance impacted we didn't see that now, the price reaction to the earnings report was not a good one. it was a classic example of good news and bad price action. but, sara, we're 12 months removed from a still society, an economic freeze and probably the single largest deflationary shock since the great depression let's first reflate and recover assets in the economy before we introduce this conversation about inflation in a very broad manner i don't see that evidence as being currently present. >> dan, what's your main view in

terms of sector positioning for the rest of this year? do you think cyclicals over growth still satands or have we seen too much of that rotation take place >> yeah, wilf, i think there's plenty of room if you remember just having the same conversation a month ago, two months ago, people were saying very much the same thing. this trade had gone on too long. i think that's kind of the reaction that you always get in the face of a real rotation. i think that whether you look at positioning, you look at valuations or just look at the underlying growth trends for the rest of the year, i think they're all supportive of this continuation of the cyclical trade. that's probably the biggest change that's happened over the last month the s&p is essentially where it was a month ago. the bond market is essentially where it was a month ago but there's been this massive double digit performance spread and the stock market and the

bond market same thing is true with inflation expectations. so it's much more rotation underneath the surface and i think there's plenty of room for that to go. >> mike, as this inflation question has really come center stage and with that talk of the fed tapering or scaling back some of its asset purchases, having to raise rates, what's that done to sentiment which was very, very bullish leading into this whole thing >> i think it's probably helped to rebuild a little bit of the wall of worry out there. i don't think by any means people are truly fearful at the moment in aggregate. but it's one of those things where whenever the obvious risk factors are right in front of everybody and everyone is talking about them, it has a way of essentially talking their power away for the short term. i do think that it's definitely that thing that everybody is already kind of bracing for and so it's hard to know if that's going to be the big swing factor that hurts the market in a deep and enduring way to joe's part about the inherent

leverage out there, we don't know how much leverage exactly has been built on top of things like crypto, which are just now seeing their values go down. that's not a scare story, that's literally we just don't know that would be the sort of thing that could blindcited the market as opposed to everybody knowing that statistically inflation readings are biased to the upside and getting a little fussy about it. >> joe, are there any of last year's big winners, whethers the bitcoins, the tesla, the semis, that you're buying yet or do you think there is a bit more downside for those names >> well, what's interesting is a lot of last year's big winners i've tried to hold on to some of them in the industrial space tethered to logistics. i think the transport of goods over people is the right place to be in a recovering environment. so old dominion freight line is a name i've owned for a while.

landstar is another name that you could own. fedex, u.p.s., those names will work goldman sachs, morgan stanley, charles schwab, these are names that i personally own. they did have a strong performance in 2020. that's really on this gathering of assets, wilf. we know there's so much liquidity in the system, assets are being gathered, they're being managed, they're being priced and transacted upon and i want to participate in that favorable position. >> tech stocks couldn't even hold the gains today, dan. the nasdaq was outperforming all day long are there any companies that you would buy, the fast growing companies that you see as an opportunity now because they have been hit too hard >> new yoro, i don't think so, . i think this is probably the early innings of a longer rotation if you continue this trend, it probably means there's a lot more underperformance to come from the tech names. the issue isn't really so much

about their growth numbers they are going to put up growth numbers. but investors have an opportunity to be comparison shoppers so you can buy -- companies will put up much, much faster growth alongside this recovery that are trading at much, much cheaper valuations and that's been the impetus for this rotation and i think that's going to continue so i wouldn't really be a buyer of anything that's considered expensive or crowded today i think there's a lot of air to come out of that story. >> let's get to take two earnings which just crossed. josh lipton has those for us josh. >> wilf, take two reporting q2 reports. 1.48 on the bottom line. but $785 million in adjusted revenue versus expectations of $664 million q1 they're guiding between 625 and 675 million. that's also a beat that's versus expectations of 592 million. but for the year they're guiding for between 3.2 and 3.3 million.

that does undershoot expectations the street was closer to 3.51 billion. they do say we anticipate that the overall addressable market for our industry will be notably larger going forward than it was pre-pandemic they say, however, as the world returns to a new normal we expect a moderation of the trends that benefited our industry over the past year. this conference call is at 4:30 eastern. back to you. >> stock down 2.5% after hours josh, thank you. switching gears, president biden pitching his electric vehicle agenda today phil lebeau with the details. >> sara, here's something you don't see very often rarely do you see the president of the united states driving a pickup truck that's because the secret service says, no, we don't want you driving a vehicle, certainly not in real world traffic. well, today the president got into the new f-150 lightning it hasn't officially been unveiled but he took it for a quick test drive while touring the plant just outside detroit

today. his analysis, this thing is quick. take a look at the stock ahead of the company unveiling the f series lightning tomorrow night we'll will have an interview with the ceo of ford, jim farley you don't want to miss what he has to say as he is once again laying out their blueprint for going electric over the next several years. speaking of going electric, that is where the industry is headed. look at where sales projections are expected to be for ev sales by 2030. with that in mind it's not surprising that today lamborghini announced it will have its first fully lk velectrc vehicle by the end of the decade they're going to be pumping more than $1.8 billion into this effect we'll have a fully electric lambo by the end of the decade. >> this sucker is quick is a

good quote joe, does this make you want to put money into ford or gm or any of these new ev stocks because they will get such support from this administration as they reimagine the new economy? >> i already have. i was a little bit late relative to my colleagues on the "halftime report." many of them got into gm 18 months ago but yes, i believe that evs and the premise that it is going to see broad-based distribution among the traditional automakers, that is an investable theme, whether it's relating to ford or gm or some of the others. gm is the one i own personally i think ultimately the question becomes does that come at the detriment of tesla that's a question yet to be answered but i think it's fair to give consideration that that possibility might exist. >> joe and dan, thank you for joining us much appreciate it. >> thank you. >> thanks for having me.

the former walmart ceo bill simon on today's earnings and how long pent-up demand could last plus what delinquencies is saying abo tuthe state of the consumer we are back in 90 seconds.

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retail is clearly on the rebound. walmart shares higher today, home depot and macy's closed in the red. joining us now is bill simon, former walmart u.s. ceo. bill, it's good to see you clearly these numbers are very strong, double digit growth, especially compared with this time last year how many quarters do you think this will continue, this strength coming from stimulus and reopening and pent-up demand >> hey, sara, yeah i think it's great numbers today. i do expect that to continue through most of the year there's a lot of categories in retail that just got really, really beat up last year, fashion and department stores. all of us changed sizes during the pandemic some of us got bigger and some of us got smaller and all of us got out of style so there's going to be some real demand there and i think that will last mostly through the summer and into the fall. >> talk about walmart's strategy

on inflation this is a time when a lot of consumer goods that they sell are raising prices kimberly clark, procter & gamble, coca-cola, yet walmart talked about 30% more discounts in stores than last year, trying to undercut their competitors on prices, which is a classic walmart strategy but how does that work, do they absorb it in the margins >> you know, when prices are moving, walmart is really at its best when they're rising or falling because walmart has the ability to bring scale to the equation, particularly on the consumable side of the world where there's a lot of frequency. they can hold price longer, hold price down longer, and they can lower prices more quickly. so in an inflationary period, walmart is going to be very, very successful. >> did we see, bill, in macy's and home depot's numbers the benefits of reopening or stimulus or a bit of both? >> i think both. you know, probably with home depot it was probably more

stimulus probably with macy's more reopening as people get ready to go back to work. like i said, they're going to need new clothes there's a pent-up demand to want to get out and shop. with depot, the stimulus has given people a chance to get out and do some work on their home i think the answer is both and a different combination with each of those two retailers. >> what about macy's, bill they raised their forecast, sounded optimistic, happy to see vaccines is there any reason to think there's more than a short term bounce has macy's done anything to change the trajectory from what they were seeing before the pandemic >> a lot of retail just didn't make it. the ones that made it, the ones that survived are facing increased demand with fewer competitors. i think that's part of the deal with macy's. again, i'd look for them to have a really strong rest of the year maybe they can use this

opportunity and the little breathing room this is going to give them to reinvent themselves, to carry it on past the 12-month time frame. but i do think it gives them a little bit of time >> what's the biggest threat, bill, inflation or stimulus wearing off? >> depends on which segment you're looking at. in walmart's case, the biggest -- the two biggest things that always impacted sales more than anything else, external economic factors were the gas prices, increasing gas prices and unemployment. so i would look for walmart to be real careful about a couple of issues. if the gas price thing revolves itself, the rest of the year will be great for them if it continues on and we see gas prices creep up into the $3 and $4 price range, retailers like walmart will struggle stimulus helps inflation, a couple of percentage points of inflation has always been really good for the walmart model. so there's a bunch of things at

play here that will determine the rest of the year. >> bill simon, good to see you thanks for joining us. >> you bet let's get over to mike now for a look at another sign of consumer health, lower credit card delinquencies mike. >> pretty dramatic considering last year a lot of people thought there might be a consumer credit mini crisis because of the shutdown in the pandemic this is the charge-off rate so that's the bad loans this is from pools of credit card loans and the delinquency rate just late balances. way, way down and really more than 15-year lows. mortgage forbearance and rent moratoriums certainly help to refresh the consumer balance sheet. take a look at the impact at some of the consumer credit stocks it has been dramatic these have been some of the strongest stocks within the financial group, things like synchrony financial, capital one and discover financial have been at new highs and riding there. so a couple of implications

there. the fact that delinquency rates and charge-off rates are low means that you do have refreshed borrowing and buying power in consumers' hands so they have the ability to releverage if th they so choose some people may take longer to go back to work if you don't have late payments, minimum payments that you have to make as much as before. maybe it buys you some time. you don't have to go back to either a unhealthy or unattractive job just to keep those loans serviced so i think there's a lot of macro factors, but that's clearly benefitting that group of financials, guys. >> just more evidence the consumer is in good shape. bitcoin has been a bust recently, down more than 20 % over the last week up next we will hear from a technical analyst about the downward pressure and whether it will continue. plus, finding out whether kellogg is facing in isupply chain issues and how rising food prices are impacting margmargins

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43% of fund managers say long bitcoin is the most crowded trade and 75% say it's a bubble. new data shows that the cryptocurrency hit record outflows last week joining us now is the chairman at renaissance macro research. jeff, what are the key takeaways when you look at the chart of the recent bitcoin price action? >> well, i think what you've got is really the last concept finance area to come under pressure we've seen it in software, biotech, solar, and bitcoin was the stalwart, the holdout. that started to change it had a correction back in april. it rallied back to the 50-day. it then started to fail at the 50-day and started to undercut 45,000 then it started to look distributive and more like a top formation. >> so where does it go from here and what does that mean for other assets that may be correlated, like the stock market

>> well, i'd be careful on the stock market correlation some areas of the stock market again, the concept securities certainly have more of a correlation, but things like john deere, things like cvs don't have much of a correlation to bitcoin the good news for bitcoin is it's right at the 200-day moving average. oftentimes you'll get a pretty good rally off of that in our view i think this is distributive i think the rally should be sold i think it eventually cracks and probably takes you down close to 30,000. >> quickly, jeff, is gold benefitting from bitcoin's pullback >> we've seen a move into gold we put a buy signal out on that earlier in the week after really seeing the same type of capitulation that you like to see. i think gold set up very, very well here. names like newmont have broken out recently i think finally you're getting gold to participate with things

like copper, plaaladium and the like so that's good news, not bad news. >> jeff, good to see you thanks for stopping by. >> thank you coming up, texas governor has just issued an order barring all government entities, including school districts, from requiring masks indoors. he will join us fresh off that news after this break on "closing bell. - [announcer] grubhub perks give you deals on all the food that makes you boogy. (upbeat music) get the food you love with perks from...

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- [narrator] find your degree at snhu.edu. welcome back time for a cnbc news update with shepard smith. hi, shep. >> hi, sara.

here's what's happening at this hour house speaker nancy pelosi says top politicians should boycott the beijing olympics next year to protest china's human rights record she says world leaders who do attend the games will lose their moral authority to speak about human rights abuses. the texas governor, greg abbott, is banning mask mandates by all government entities, including school districts his executive order says that the mandates must end this week, but that existing guidelines for face coverings in schools can continue through june the 4th. governor abbott says the move will reduce confusion over mask mandates and help establish uniform rules all across the state of texas and a prosecutor has ruled that sheriff's deputies were justified when they shot and killed andrew brown jr the district attorney in elizabeth city, north carolina, says brown ignored commands from officers and used his vehicle as a weapon brown's family calls the decision both an insult and a

slap in the face tonight, reaction, the law and what's next. plus the prosecutor's decision not to release the full body cam video. that's right after jim cramer on the news, 7:00 eastern, cnbc wilf, back to you. >> we look forward to your show at 7:00 p.m. you just mentioned the texas governor's executive order banning mask mandates from governor entities and the governor joins us now by join. thanks for joining us. >> my pleasure, wilfred. >> talk us through this announcement you are banning government ent entities from requiring a mask but you're not banning masks. >> that's exactly correct. however, i need to point out as it concerns government entities, this is really just a reamplgs of an executive order that i issued on march the 2nd. on march the 2nd i issued an order effective march the 10th that's been in place two months now that bans any government in the state of texas from

requiring masks and also at that time i opened up texas 100%. after that, there were some local governments that chose to continue to impose mask mandates and they were doing so in contradiction of my original executive order. so we not only reaffirmed that and made it clear, we also in the order today put penalties in against any local government or government official that acts contrary to my executive order what it did in schools is that schools, they were allowed by the texas education agency to continue to require masks. that, quote, requirement will end on june the 4th. however, both for schools as well as all other operations, people are always allowed to make the choice on their own to wear masks and so anybody can wear a mask if they want to. it's just that it's a decision to be made by texans, not to be forced by government

>> i get that final message in your answer, governor. but i guess it points to in the pandemic in the last year, people have been able to be fine for not following covid restrictions as per your executive order. any government entity that tries to impose a mask mandate is the one that can now be fined. so is the general gist, the general message that texans should take from this that masks are not really wanted across texas anymore? >> well, we're making clear that government cannot require people to wear a mask let's be clear about what happened after i issued my executive order back in march. the numbers continue to get better i'll tell you what i reported two days ago that is for the first time ever in our reports, we reported zero covid deaths the fewest covid cases in over 13 months. the lowest seven-day covid positivity rate ever and the lowest hospitalizations in 11 months and so the covid situation in texas is such that we can and

should be open 100%. we can eliminate government required masks we always encourage people to make their own choice for themselves and for their own safety it's just that government should not be dictating what texans should do. >> the cdc is recommending that schools keep the covid-19 guidance, mask wearing and distancing, governor abbott. why not just go with cdc guidance isn't the cdc going to have trouble getting trust if governors are going about it their own way against the studies? >> great question. you need to know the answer. and that is governors don't have a whole lot of trust in the cdc. all of the direction that we've gotten throughout the entire pandemic has been contradicted seemingly on the same day or multiple days after that and there have been completely different messaging from cdc under both presidents. and so governors have lost trust and confidence in cdc. remember this, sara, if you

would, when i made the announcement texas was opening 100%, dr. fauci, the cdc, president biden himself said i was a neanderthal for opening texas up 100%. well, i proved that neanderthals won when we went down to zero covid deaths, the lowest positive rates, lowest covid cases, et cetera everyone who criticized us for opening up, they were wrong and so they didn't know the science or the math behind my decisions and they continued to vacillate themselves upon what they think the correct standard is. remember what cdc director walensky said initially, she said one rule for masks and a different rule she said schools should be open and schools should be closed so they vacillate from a week-to-week basis and so there really is no trust in the cdc anymore. >> unfortunately, i think a lot of people would agree with you and you're vindicated on that initial mask decision, governor, but still on the schools most students aren't vaccinated. so why shouldn't they have to wear masks to protect

themselves >> so for almost all students who are the most at risk as well as the teachers and staff who are at risk of covid, they all have the capability of getting a vaccination if they choose to do so before the mask requirement is eliminated. but also they all have the choice to continue to wear a mask if they feel that's in the best interests of their safety >> governor, it's been a tough year for businesses, tough 12 to 18 months for businesses across america. we all know that but in a relative sense, has it been good for texas in terms of its own businesses or any base there compared to other states and in terms of attracting new businesses how much longer can that go on, what are the driving factors behind it? >> so we -- texas has led the nation for the past eight years in new economic development and corporate relocationrelocations. we did that even more aggressively during the covid

year it was the year that tesla moved to austin, texas the year that oracle moved its headquarters to austin, texas. hewlett-packard moved its headquarters to houston. the list goes on my phone rings off the hook every single day from ceos that are moving their businesses to the state of texas from other places and so our economy continues to grow, continues to add jobs and continues to be a magnet for businesses to relocate to texas from across the entire country it's because we -- in part because we are open, but also in part because our taxes are far lower. we had a constitutional amendment prohibiting an income tax, for example, but also it's because of the regulatory environment. elon musk told me it would be impossible for him to get a giga factory up and running as fast as he was here so he and i had discussions this month and last month and last year, april and may. the deal was finalized in late may. you would not believe how far

along they are in their construction of the giga factory. people are amazed how swiftly that has gone up that could not happen in california. >> governor greg abbott, we certainly appreciate you jumping on the news line to talk us through this latest guidance. >> my pleasure thank you, all. corn prices are up more than 30% although they have fallen a bit over the past week up next the ceo of kellogg on how rising food costs are hurting his business and whether higher prices are being passed along to the consumer. we'll be right back. get decision tech from fidelity. [ cellphone vibrates ] you'll get proactive alerts for market events before they happen... and insights on every buy and sell decision. with zero-commission online u.s. stock and etf trades. for smarter trading decisions, get decision tech from fidelity.

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but how will all that change as the economy reopens? the ceo joins us now for an exclusive interview. steve, it's great to see you. >> great to be with you, sara. thanks for having me. >> if you picked up some of the commentary on today's earnings calls from walmart or macy's, they're talking about teeth whiteners selling out or mother of the bride dresses or suits. americans are going out again and going back to work is that hurting your business? >> no, it's not. and, you know, we're delighted that people are able to get back out into the way that they were acting pre-pandemic. but what we're seeing from a consumer standpoint is that compared to 2019, there will be a lot more stay-at-home activity 2019 is a base year is the right way to look at it. when you look at 2021, although people are more mobile and getting back out again, they're still at home and enjoying eating at home more than they

did in the base year 2019. >> is that why we've seen cereal shortages? what is going on there frosted flakes and a number of other. higher prices and shortages seem to be some of the complaints from consumers. >> well, if you go back to the beginning of the pandemic when it first hit, we were not -- nobody was prepared for the type of surge in demand that happened so our inventory levels as well as our retailers' inventory levels went to zero and into negative territory during the course of the pandemic we were hard at work at keeping people safe, keeping our factories running and meeting demand never with the authority to rebuild inventories or increase our overall capacity we're now at the stage where we can increase capacity. we've been working on that so in the back half of the year you'll see tony the tiger back on shelves fully stocked we never really ran into any out of stock situations, but our ability to promote and really merchandise was a lot less than it was pre-pandemic. >> steve, is the outlook now

that we're past the worst of the pandemic, particularly in the u.s. when you look at certain international markets, are you fearful there are sort of darker corners ahead? >> yeah, wilfred, clearly in the united states we're in a good place right now. you see obviously the virus infections going down. you see people getting vaccinated and, therefore, you see a lot more mobility. but around the world, you're exactly right, in countries like india and brazil, other developing markets, the pandemic is by no means waning. as you travel around the world, it's a different set of circumstances, depending on which country you're talking about. >> what is the inflation story, steve? how much have your costs gone up, and are you passing that along to the consumer in the form of higher prices or taking it in margins? >> so when we talked about our guidance last week when we announced earnings, we did say that they were going to protect our margins despite an overall

inflationary trend and the inflation is real. it's coming through. you guys have been reporting it. it's obviously pervasive now, when you look at the united states as an example, you have a very competitive retail environment and you have a very competitive environment in consumer package goods so you have a lot of pressure to cover as much of that cost inflation as possible through productivity, through joint activity with our retail partners but this level of inflation is unlike we've seen in many, many years. so yes, you will see pricing increase at the shelf and at the retail level i think it's inescapable based on the type of commodity pressure that we're seeing across really everything it's hard to find something that's not inflationary at this moment. >> so interesting to hear you say that so clearly, that the margins won't be protected by other means, this is bypassing on the prices. in escapably, i think you just

said for a long period do you expect or temporary >> it's a great question and i think it's unknown at this stage whether this is a one-time step-up based on all sorts of extraneous factors a lot of them covid related. or is it the beginning of a more year-on-year inflationary cycle. i suspect that it is more of a one-time step-up where you're seeing everything from logistics, costs, shortages of drivers, things that happen all the way back to the suez canal that have really disrupted supply chains fairly significantly. and so i think there's a lot of strong evidence to suggest that this is more of a one-time reset step-up than the beginning of a more inflationary cycle. >> how do you plan to benefit from -- we mentioned the reopening versus the stay at home the reopening trade, positioning in schools or restaurants or convenience stores how do you prioritize that when

so much of the focus on the last year has been the opposite >> you know, we've got a fairly significant away-from-home business we saw the rebound of convenience as the beginning of the rebound of away from home. and that was a lot of people who were on the frontlines from the very beginning more comfortable going back into convenience stores to get, you know, their snacks, to get coffees, to get other things and we're starting to see that spread towards obviously schools reopening. it's terrific for everybody involved we sell a lot of cereal and snacks in schools. we provide a lot of schools with food and now you're seeing that extend to more retail environments some of the last that you're starting to see recover are kind of hotel and leisure, but that too is coming back and so that's good for our business where we have businesses there, but as i said, there's an amount of stickiness to the staying at home where the new environment is going to be,

you know, more of a hybrid of working from home, going to the office more mobility than 2020, but certainly less than 2019 so on balance, you know, we feel that we can cycle the real spike in business that we saw in 2020, even in 2021 so we're feeling good about the power of our the power of our brand, the investments we made in the brand and the consumer retention we should see >> within that trend, steve, what happens to ongoing grocery shopping i think it's less than 10% of overall sails -- sales. grocery stores have been open but many adopted the online shopping model. >> they did and our business is 7% now, it doubled during the pandemic, and off that heightened demand it continues to grow very rapidly so i think we jumped five years

into the future with no signs of slowing down a lot of retailers with brick and mortar have leveraged the environment to provide online shopping for consumers whether that's click and collect or dliry to the door, so the ability for consumers to get groceries and other goods will continue to accelerate in a very dynamic area and it's exciting. you see a lot of players participating in it. i don't see that going backwards. i see that as one of the main, most sticky consumer behaviors that we're accelerated by the pandemic and won't slow down. >> steve cahillane thank you very much for phoning in with an update on the business. >> thanks for having me. up next, capitalism, nonprofit making waves for an a rpatinign targeting big names coore america. when "closing bell" comes back

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eamon. >> this group is consumer's research, it's a seven-figure ad they're launching and critical of ceo's by name, including ceo of coca-cola, american airlines and nike, they say it is designed to force the companies to reconsider political positions they've taken in the past year. the a ds will run on cnbc and local stations where they're headquarters the ads look very much like political campaigns like one candidate against another except it's ceo the financing is not disclosed we don't know who is paying for this coca-cola said this -- we respect everyone's views but believe the best way to make progress is to come together and listen respectfully, share concerns and collaborate on i path forward guys, this group says this is just the beginning there's going to be more of this type of thing to come.

>> eamon, thank you. up next, wall street look ahead, retame results, the fed and results for tomorrow when "closing bell" comes back. and take-two itily wnialere lower but now up 3.5%. we'll be right back. ♪ ♪ ♪ ♪ ♪ ♪

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just a minute or so left, guys, mike, what a crazy final 20 minutes or so of the session, particularly for the tech stock which were high ermost of today's trade ending noticeably low. >> yeah one things that been pretty clear is there isn't a lot of new sponsorship for the big-tech stocks. obviously we were talking earlier about how they're not as crowded and they're suffering from negligent by big investors. there's no real impetus to move fast to buy them up. i think it's really just a lot of waffle-y type trading as we get into options expiration, the fact we're mid-way between record-highs and last-week's lows so the market is a little unsure whether or not we got enough of a purge and app re

hencive considering the s&p is 3% from record. >> and the market is unsure about inflapgs the fed is saying inflation is temporary and won't have to move but we got good sine from bank of america, with wages, and until we get another take on inflation we're indecisive. >> that's the way it sey seems >> that does it for us on "closing bell. "fast money" begins now. i'm melissa lee, this is "fast money. tonight's trader lineup guy adami, tim seymour, karen finerman and dan nathan. tonight on fast, a red alert on housing, one trader says the best is in for the builder boom, how they're positioned for a pull back. plus investors on at&t for the second straight day the stock is down 8% since announcing the warner media spin off. how are traders playing the big draw and after-hours