questions remain about whether we see the endurance in production by the end of september. that doesn't happen, it makes it a much tougher road for lordstown. >> and we remember that liquidation call from the straight a couple of weeks back. tyler, it's been a pleasure. thanks, everybody, for watching "power lunch." >> i'll be in the house tomorrow i'll see you then. welcome to "the closing bell." i'm wilfred frost at the new york stock exchange. stocks mostly lower to kick off a new week on wall street, though still near record levels as we head into the final hour of trade. >> i'm sara eisen. let's look at what is driving the action the dow down more than 200 points but technology is holding on to gains. the nasdaq led higher with names like apple, tesla, facebook. bank of america ceo brian moynihan saying consumer spending is up versus 2019 more on those comments in just a moment and bitcoin is on the

rebound after another tweet from elon musk. this time the tesla boss said his company could resume accepting bitcoin in the future if certain environmental goals are met. 59 minutes left in the session it's on again, off again with elon musk and bitcoin. >> likewise with the markets the nasdaq up, other two indices down we've got a big show coming your way today. we'll speak with the delta ceo's bastian after the tsa said they screened 2 million passengers in a single day. then later morgan stanley ceo james gorman joins us. we'll get his outlook on the bank and the economy ahead of this week's big fed meeting. mike santoli is tracking the market action, wilfred with a look at a number of headlines from big bank executives today mike, kick it off with the broader market which is down 200 and not far from session lows. >> a bit lethargic on the broad index level here we had a breakout in the s&p 500

to a new high late last week but it was the minimally acceptable breakout two years in a row of record closes but less than half percent of where we traded more than a month ago not a lot of momentum being shown, not a lot of urgency on a broad basis but still holding right up there it hasn't really changed this picture from the last couple of months today it's the big growth stocks supporting things. we have yields up a little bit, bank stocks down and tech higher take a look at bank stocks compared to copper what's going on in the markets recently is it's really testing the conviction of the reflation traders, of the cyclical and value camp this looks like not really much of a give-back in terms of year-to-date gains but it shows how it has been trading in a very similar cadence, very similar percent and maybe looking like it's decelerating and losing a little altitude and rolling over globally we have seen some confirmation of the bullishness in terms of non-u.s. stocks.

this is the morgan stanley all country world index except for the u.s., so it's everything outside the united states. it goes all the way back to the inception of the etf back to 2008 and shows that we basically just clicked above an all-time high it actually goes above the 2007 peak in the underlying index for the first time in a while. this was a really aggressive move here, looked like it was going to accelerate higher that was january of 2018 which is one of those dates we keep going back to where it was an all in, everybody is bullish about the future reflation type moment we'll see if it's a lagging or leading indicator. >> in search of events and catalyst, i don't think there was anything for the market out of g-7 we've got a big fed meeting on wednesday. there is a lot of focus on whether the consensus inside the fed is going to change toward thinking about higher interest rates a little sooner, maybe talking about tapering is this one of those fed

meetings that dictates direction of the market? >> i think it's definitely going to be one of those fed meetings where it's in the eye of the beholder based on what you're expecting or hoping to hear right now. i really doubt there will be a radical message of change, of pull forward, of tightening, but we probably have to acknowledge these two straight hot cpi numbers, figure out how that fits into the overall picture of expectations for transient inflation. so i do think it's very widely watched in the absence of other sti stimuli. i think we're looking at a couple of months where economic data has somewhat lower stakes attached to it people are waiting until september, kids back to school, unemployment benefits expiring, maybe that's when we'll know yes or no as to whether in fact we have some kind of new regime and they have to change their set plans for now. >> all right, mike, thank you. see you soon let's folk us in on the financials, underperforming today. worst performing sector along with materials

a number of bank ceos giving fresh comments. >> brian moynihan said this morning and lots of further bank commentary coming from the morgan stanley financials conference jpmorgan's ceo jamie dimon outlined that despite expecting inflation he felt the fed would stand firm and thus lowered his net interest income forecast. >> so we do expect rates to stay long longer because the fed has told us that. >> so what does that mean for your outlook for nii for 2021? i think you guided to $55 billion. is that still intact >> it's $52.5. i know it's a little disappointing, sorry half of the difference is card balances being lower that's not all bad there's a huge offset -- not huge but partial offset in charge-offs. i think the consumer is in unbelievably good shape and that's like the pump is primed

for the future and they will borrow again at one point. >> jpmorgan's share price did react to that comment, currently down 2%. james gorman addressed returning to the office. >> my view is a more nuanced communication is necessary, but make no mistake about it we do our work inside morgan stanley offices. and that's where we teach, that's where our interns learn, that's how we develop people and listen, i allow for the fact we have some flexibility if families haven't been able to get their kids into camp, they have to deal with that reality let's not be dictatorial but labor day i'll be very disappointed if people haven't found their way into the office and then we'll have a different kind of conversation. >> gorman joins us at 4:00 p.m. eastern time sara can't wait for that and we'll dive in on all sorts of topics i think interesting to hear as well what he thinks on rates and inflation because he's tended to

be a bit more hawkish than some of the others so far. >> including his own economist, expecting an interest rate increase for sure. i think the inflation question looms large and what they're seeing in terms of deal pipeline, in terms of economic reopening and just how sustainable things like raising prices are it's notable what he said about the new office environment isn't this the day goldman sachs came back to work? >> it is i had a meeting in there this morning. it was busy and everyone seemed to be happy to come back certainly the few i had conversations with. >> they didn't have to drag them. >> we'll see how the numbers are by the end of the week we might get some numbers, both this office and some others. it will be interesting to see because it's not fully enforced yet. to that extent that gorman is saying labor day they're all doing it in their own different way. what i think will be similar, time will only tell, is by about labor day or beyond they'll all be in the same position. they're doing the transition in

their own ways but i think we'll see most of the banks with a pretty high capacity in this country at least >> they love the charge in bringing people back to the office as opposed to tech and these executives talk longer term hybrid. looking forward to james gorman next hour. shares of delta have doubled since the market's bottom during the pandemic, right in line with the broader global jets. after the break we talk to delta's ceo about the return to travel as the tsa screens 2 million passengers in a single day. first time we've seen that since march 2020 you're watching "closing bell. the dow is down 215.

look...if your wireless carrier was a guy, you'd leave him tomorrow. not very flexible. not great at saving. you deserve better - xfinity mobile. now, they have unlimited for just $30 a month. $30 dollars. and they're number 1 in customer satisfaction. his number? delete it. deleting it. so break free from the big three. xfinity internet customers, take the savings challenge at xfinitymobile.com/mysavings or visit an xfinity store to learn

how our switch squad makes it easy to switch and save hundreds. americans are returning to the skies. the tsa screening more than 2 million passengers on friday and sunday, highest number since march 2020 the lines on this chart showing the seven-day averages you can see we're still about half a million passengers fewer than where we were at this point in 2019. as people continue to hold off

on things like business travel and international travel delta's ceo ed bastian joins us for an exclusive interview on cnbc along with our very own phil lebeau. phil, i took a delta flight yesterday and it was mobbed. >> i was flying this weekend as well, sara, and it is busy ed, thank you for joining us today from the delta gates at laguardia. we know that the leisure traveler is coming back and you clearly are seeing that. but we're getting indications from some in the industry that they're a little more optimistic about corporate travel, which is so important not only for you but all the airlines what is your read right now when it comes to corporate travel and it returning in greater levels >> well, phil, first of all, thanks for having me it's exciting to be here at laguardia. people are heading out, many still for the very first time. i flew in this morning and there were a number of people who came up and said first time back to new york, first time back in the sky so it's an exciting time for people to reconnect and get back

to what we can consider some sense of normalcy. leisure travel is back, as you mentioned. i expect this summer you're going to see the industry back full to where it was in 2019 on a leisure basis. corporate travel is lagging. we need offices to open up i was hearing you guys talking about headquarters starting to open again in new york that's going to be important to get people back on the road with corporate travelers. right now we're about one-third of what we would consider to be our normal volume. of course international will be the lone pole in the tent. >> on the international front we hear people saying they're more optimistic things will open up here in the next three months. are you optimistic that's going to happen or are you a little more cautious given the fact that we've heard this in the past that things will improve and it's been rather slow? >> well, we've been pushing as hard as we can, as you know. u.s. travelers that are vaccinated can get to europe right now. southern european countries

along the mediterranean, franc as well, are opening up their countries and their cities to u.s. travelers the problem is, is that we don't have europeans coming into our country. so without having travel coming back into the u.s., it's not doing anything for the u.s. economy. it's not creating jobs here. it's not getting people back to where we need to be. so right now the big push is to create a u.s./uk travel corridor so we'd be able to have vaccinated, tested, whatever the requirements are, we're going to be able to comply with that. travelers moving in both directions we're having good progress and i think you heard last week the president as well as boris johnson talk about putting a team together to get that going. so hopefully by fourth of july we can start to see u.s./uk travel starting to returni but it's going to take an extended period of time before you see europe open anywhere in terms of how it used to be. >> ed, it's wilf in studio here.

i just have a follow-up, as you might know why i'm interested in that topic there's hope when you and six of your peers clearly made a loud plea on that front just today boris johnson pushing things back to late july for domestic reopening in the uk it sounds like it's unlikely there would be a travel corridor until at least after that ends but you're saying fourth of july, which would be great have you got some indication that that's a date that's possible >> i'm being optimistic, wilf. in this business you've got to be optimistic. i don't know if fourth of july will hold. it seems like that's the soonest that you've been hearing i think you're right, as you said, it may not take until later in the summer to get the u.s./uk open authorities have told us that they want to follow the science in opening up the international borders. we know based on the science it is safe to travel between the u.s. and the uk. our doctors at the mayo have done the studies and they tell

us that the odds of someone contracting the virus onboard a flight between the u.s. and the uk is literally one in a million. and the odds of actually someone from the uk coming into the u.s. carrying the virus is one in 10,000 so we're doing a real good job protecting our borders and protecting the economy, getting our people vaccinated, but it's time to open up international borders to let families reunite and get people back together. >> ed, it's sara i wanted to ask you about pricing and the pricing power that you feel you have it sure feels like it costs more to go on vacation, book a flight, bokok a hotel can you talk about what you're seeing on that front and just how sustainable it will be is this just a one-off because of the demand on the reopening or will airfares continue to climb for the foreseeable future >> well, right now the u.s. -- international obviously is a little different, but in the u.s., leisure fares are pretty

close to where they were in 2019 it varies by market based on what's open and what's not open. but i would expect as the summer goes on, you're going to see fare levels not just for airlines, but for broader travel, transportation, hospitality, approach 2019 levels and potentially even exceed them by the end of the year it really is going to be predicated more on what business is going to do in terms of coming back as compared to leisure. >> my other question was about some of this unruly behavior sure, it gets a lot of attention and the videos are somewhat shocking but you recently had a flight that you had to divert back to oklahoma because of bad behavior from a flight attendant who was off duty what do you think is causing this kind of disruptive behavior on flights, and what are you going to do about it >> it is concerning, sara. right now safety -- not just now, but always safety is paramount. it's top of mind for our

customers, for our crew members. our crews are trained to be able to manage disturbances, whether it's in an airport or aboard a plane. our crews have done a fabulous job with some of the disturbances that you mentioned. no aircraft has ever been in danger, despite the fact there have been some profiled disturbances we have to keep in mind that social media amplifies these disturbances quite a bit we're now carrying 2 million a people a day back into the skies. so while disturbances are up a bit, there's no way that we're starting to see any kind of significant issues that we can start to draw from it. i think as society has opened back up again, we know there were emotional challenges that many people had dealing with the pandemic, and i think we're seeing it in all walks of life, not just in the travel space >> ed, to what extent is it an issue and perhaps not sustainable to have different mask-wearing guidance from the cdc for everyone at large out

and about versus where the faa still is for aircraft travel where it is clear low 100% must be worn at all times you can kind of understand why some people do take issue when they have been told for the last month or so by the cdc that they don't have to wear a mask anymore. >> well, it is confusing sometimes for our customers and our people do a great job of encouraging and mandating that masks be worn on planes and explaining the situation again, i don't think we're seeing the type of disturbances being predicated based on masks, i really don't i just think that with the huge surge of people coming back out into society, coming into the skies, you're starting to see some behaviors that candidly are shocking when you see them on social media but i don't think it's such a trend. 99.99% of our customers are fabulous they wear the masks.

they create a safe environment i was on a plane this morning, it was great it was full, but it was great, so i don't think you can draw any trend lines from this. >> ed, it's phil one last question. you guys along with a number of your competitors have said we will commit to using more sustainable aviation fuel. you would use more of it if more of it was available and if the price would come down of the and yet on the other hand, the energy providers are saying, well, look, we need to have a greater commitment here. does the federal government need to step in and say, look, we're going to mandate that there be more production so that the airlines who want to use it, who are committed to using it do use it and we start to see the transition here? >> i think so, phil. at delta we're committed to having 10% of our consumption be in the form of sustainable aviation fuels by the end of this decade. right now the production doesn't exist. even if we were able to afford to use saf, it's three or four

times the cost of a normal gallon of jet fuel even if delta procured the entire world supply, that would be enough for delta to fuel its planes for one day so there in production out there and we do need the government to get actively engaged we're looking in our industry and are supportive out for a bill for an snincentive for the production of saf. if it's to close relative proximity to what we can produce and use otherwise, we're happy to use saf we're willing to pay a premium, we just can't afford three or four times the cost. >> ed bastian, thanks for the update it's good to hear from you and thanks to phil belebeau as well. >> all four of us on the flights yesterday which tells its own story. >> mine was not purely domestic. >> hence the glowing tan.

>> i don't get tan but the border control at jfk airport is totally empty up next on the show there's a new vaccine in town. we'll hear what the ceo of novavax said about his company's shot amid new data showing 100% efficacy against moderate and severe disease. later don't miss our interview with morgan stanley's ceo, james gorman. the dow down20notofa 2, t o r from session lows. from session lows. we'll be right back. this is the sound of change. the sound of a thousand sighs of relief. and the sound of a company watching out for you. this is the sound of low cash mode from pnc bank, giving you multiple options and at least 24 hours to help you avoid an overdraft fee. because we believe how you handle overdrafts

should be in your control, not just your bank's. low cash mode on virtual wallet from pnc bank. one way we're making a difference. retirement income is complicated. low cash mode on virtual wallet from pnc bank. as your broker, i've solved it. that's great, carl. but we need something better. that's easily adjustable has no penalties or advisory fee. and we can monitor to see that we're on track. like schwab intelligent income. schwab! introducing schwab intelligent income. a simple, modern way to pay yourself from your portfolio. oh, that's cool... i mean, we don't have that. schwab. a modern approach to wealth management. keeping your oysters business growing has you swamped. you need to hire. i need indeed indeed you do. the moment you sponsor a job on indeed you get a shortlist of quality candidates from a resume data base claim your seventy-five-dollar credit when you post your first job at indeed.com/promo

welcome back biotech firm novavax out with strong data surrounding its covid vaccine today. the stock has given up earlier gains. it's down three-quarters of 1% our meg tirrell spoke with the ceo of the company and joins us with more. good news for the world, right >> it is, sara, although it's a little delayed we'll have to wait a bit to see this filed for regulatory clearances around the world. they did show 90% efficacy in this phase three trial, 100% against moderate and severe disease. strong efficacy against variants predominantly the b 117 variant was the one they saw with their trial. filing for those regulatory clearances in the third quarter. generally while safe and tolerated in the study, this is the first vaccine using a more tried and true technology called a protein vaccine. there are other vaccines for other diseases that are already on the market using protein diseases and there's some

thought this could potentially be more tolerable. and so they have been having some delays, though, when it comes to filing for regulatory clearance and manufacturing. they are now saying that by the end of the third quarter they should be at a manufacturing pace of 100 million doses a month, 150 million by the end of the fourth quarter we talked with the ceo about how this vaccine could potentially be used. he said it could be very helpful globally here in the u.s. competing in the booster shot market. he pointed to a study being run comparing different vaccines out of the uk. here's what he said about that >> it's called a mix and match study. so out of that study we'll have a very nice comparable safety profile between the vaccines, and plus i think those data are coming out really soon and then followed a month later by the different immune responses. and so that will be telling as to how the market shapes out for boosters >> guys, we'll have to see how

this shakes out. but he is saying essentially we'll get a head-to-head look at the novavax vaccine versus a few of the others in this mix and match trial. back over to you. >> meg, thanks so much novavax as that chart shows did have a much stronger reaction earlier in the day ending the day essentially flat, down a little bit. meg tirrell, thank you. still to come, morgan stanley ceo james gorman joins us it's an interview you don't want to miss. that's live and exclusive in the next hour of the show. later, a roadblock for roblox facing a $200 million copyright lawsuit. we'll speak with the head of the group that previously did file a lawsuit against and settled with peloton. here's a check on bond yields moving higher but significantly lower from the kind of average of the last month or two, below 1.50 on the 10-year. we're back in a couple of minutes.

♪ ♪ ♪ digital transformation has failed to take off. because it hasn't removed the endless mundane work we all hate. ♪ ♪ ♪ automation can solve that by taking on repetitive tasks for us.

unleash your potential. uipath. reboot work.

30 minutes left of trading the dow is down 202 points

some individual market movers for you. in the food space today raymond james upgrading chipotle to strong buy from outperform higher menu pricing will likely stick and lead to significant upside in the second half of the year that stock up 1.5% it's already had quite a run oatly getting positive ratings jpmorgan gave it a neutral rating noting concerns over competition. morgan stanley rated it equal weight saying strong growth is priced into the stock, which is trading lower by 3%. it's been a good ride since the ipo. we also want to bring you an update to the carlos ghosn saga. americans michael and peter taylor, the duo who allegedly helped carlos ghosn escape japan in that large box and flee to lebanon have pled guilty in a tokyo court. i spoke with ghosn back in november and asked him about the pending extradition of the taylors to japan he told me he was shocked that

the u.s. government would do that, never expected it to happen given his own experience with the japanese justice system the pair could reportedly face up to three years in prison and are expected to have another court appearance later this month. worth noting, they were extradited originally by the trump administration and then the biden administration did follow up and agree to that. we do have an extradition policy with japan just as the saga continues, i just wanted to highlight another kind of explosive corporate governance happening in corporate japan which is toshiba. two board members have stepped down after an explosive -- actually external investigation by lawyers has found that the japanese company colluded with the japanese government to try to dissuade activist investors and push off foreign shareholders revolt. it's just evidence that the sort of scandal is still happening. nobody is going to jail and nobody is being treated as carlos ghosn has, but it is worth noting because these are

japanese executives, unlike ghosn who was an outsider. >> you will look the at it after all the data we learned about of the japanese justice system during the carlos ghosn system in the first place when you see two people plead guilty, one thinks did they have an option otherwise. >> and whether the punishment is worth the proportional with the crime makes you think. we've got less than 30 minutes to go before the bell. here's where we stand in the markets. monday, a little bit lower for the market, at least for the dow. it's down about 200 points financials and materials are weighing on the s&p 500. the nasdaq is up 0.4 of a percent and the russell 2000 index of small caps down about half a percent. paul jones says he's keeping a close eye on the fed. >> if they say we're on path, things are good, then i would just go all in on the inflation.

on the inflation trades. >> when we come back, we'll break down those comments and what to buy in an inflationary environment. "closing bell" will be right "closing bell" will be right back is that how you hold a mirror? [ding] power e*trade gives you an award-winning mobile app with powerful, easy-to-use tools and interactive charts to edge, 24/7 support when you need it the most and $0 commissions for online u.s. listed stocks. don't get mad. get e*trade and start trading today.

we've got a market flash on

pet petco which is moving sharply higher. >> we're tracking shares of petco trading at their highs as the stock gains traction among the meme traders the buying for the day is almost 19 million shares. 580% above its 30-day moving average. short interest in petco is 36% of the shares outstanding. we'll continue to watch that name and all the others in the meme space back over to you. >> frank, thanks for that. time for a cnbc news update. rahel solomon has it for us. >> here's what's happening at this hour. vice president kamala harris continuing efforts to convince americans to get vaccinated at a community center in south carolina she explained how getting vaccinated also helps others >> that's what we're doing it is an extension of love thy neighbor to say when we get vaccinated and make sure everyone we see or know gets vaccinated, it's not just about protecting ourselves, it's about protecting our family and

protecting our friends and we are protecting those who we may never meet >> apparently vermont is getting that message better than most. it's the first state where more than 80% of eligible residents have gotten at least one shot. as a result of hitting that goal governor phil scott is lifting all remaining state covid restrictions. overseas in israel, the brand new ruling coalition promising to reach out to allies abroad and try to heal divisiveness at home but former prime minister netanyahu says that he is already working to oust his successors, saying that he was cheated out of power you're now up to date, wilf. i'll send it back to you. >> thanks so much. hedge fund manager paul tudor jones joined cnbc earlier today saying the fed's credibility is at risk if it continues to downplay what he believes to be the growing threat of inflation. >> if they treat it with nonchalance and say we're on path, things are good, then i

would just go all in on the inflation, on the inflation trades i'd probably buy commodities, buy crypto, buy gold. >> joining us now, paul hickey paul, good to see you, as always my first question is if we do see inflation prove not to be temporary, is that something that all odds will suggest will hurt equities significantly? >> yeah, i think so. inflation is a little like alcohol. it's good at first but the more you overdo it, the worse it gets for you. so i think inflation is like kryptonite for the equity market and especially growth stocks if we do see persistent inflation and this doesn't prove to be temporary, that would be a problem for the market going forward. the question is, is it going to be persistent or will it be temporary? >> and what are your expectations on that front at the moment >> as paul tudor jones

mentioned, there's lots of arguments that say it's going to be consistent but there's also lots of arguments that suggest it's going to be more temporary. so when you have this situation where you have good arguments on both sides, what we want to do is defer to the market the market doesn't have the best track record -- a perfect track record, but it has a better track record than anybody else and what really stood out to us last week is you have "the wall street journal" last week saying inflation at a 13-year high. you have another front page article talking about commodities surging. then you have traders betting on $100 oil with all three of those headlines and all of the economic data, you saw the 10-year yield declining. so the market is suggesting maybe going forward this will be temporary. even other factors like google search trends for different consumption-based activities have been showing signs of rolling over searches for inflation peaked in mid-march and are down

substantially since then so again, while you can say that there's great arguments and we're going to see persistent inflation, there's a lot of arguments suggesting it could be temporary. the market right now at least is suggesting that it's going to be down the road this supply -- supply issues and extreme demands we're seeing are going to work more back into equilibrium once we get back to the fall. >> paul, with the mixed messaging in the markets and in the economy and no real verdict yet, what do you do as an investor how do you hedge yourself in case there's inflation and in case it proves to be temporary or transitory? >> so here's one area where we like right now we're looking at mega cap growth stocks, the mega cap stocks. their valuations are relatively in line with the market, a little more expensive. so if we do see, you know, much stronger inflation going

forward, they won't be hurt as much as these real hypergrowth stocks and they'll fall in line with the market. but what these mega caps also have in common is besides amazon, the other five -- the other four mega caps all have half of theirs outside the u.s if we see an inflationary environment, we'll see a weaker dollar these mega cap companies have overseas exposure and that will benefit their foreign earnings as you translate them to dollars will get a positive boost there. it's growth but more reasonably priced growth. >> paul hickey, great to see you as always. thanks for joining us. >> thanks. up next, bitcoin flies and lordstown flops. we'll break down some of the day's biggest movers when we take you inside the market zone. later, james gorman on the record that exclusive interview coming up after "e osg thclinbell" today. you don't want to miss that. you don't want to miss that. we'll be right back.the fund's investment objectives,

risks, charges and expenses. go to flexshares.com for a prospectus containing this information. read it carefully. need better sleep? try nature's bo a unique tri layer supplement, that calms you helps you fall a sleep faster and stay a sleep longer. great sleep comes naturally with sleep 3 only from nature's bounty ok, at at&t everyone gets our best deals on all smartphones. let me break it down. and stay a sleep longer. great sleep comes naturally you got your new customers — they get our best deals. you got your existing customers they also get our best deals. everyone. gets. the deals. questions? got it. but, why did you use a permanent marker? because i want to make sure you remember. i am going to get a new whiteboard. it's not complicated. only at&t gives everyone our best deals on every smartphone.

look...if your wireless carrier was a guy, you'd leave him tomorrow. not very flexible. not great at saving. you deserve better - xfinity mobile. now, they have unlimited for just $30 a month. $30 dollars. and they're number 1 in customer satisfaction. his number? delete it. deleting it. so break free from the big three. xfinity internet customers, take the savings challenge at xfinitymobile.com/mysavings or visit an xfinity store to learn how our switch squad makes it easy to switch and save hundreds. this is how you become the best!

[wrestling bell rings] [music: “you're the best” by joe esposito] ♪ try to be best 'cause you're only a man ♪ ♪ and a man's gotta learn to take it ♪ ♪ try to believe though the going gets rough ♪ ♪ that you gotta hang tough to make it ♪ ♪ you're the best! around! ♪ ♪ nothing's gonna ever keep you down ♪

[triumphantly yells] ♪ you're the best! around! ♪ [ding] don't get mad. get e*trade and take charge of your finances today. ♪♪ with 14 minutes left in the trading day, we are now in the "closing bell" market zone, commercial-free coverage of all the action going into the close. mike santoli is here to break down the crucial moments of the trading day. today we've got delano sapporo back as well welcome. the dow and s&p 500 falling in today's session while the nasdaq leads. the nasdaq is up for its third straight session, mike, and it's coming off of four weeks in a row of gains and not too far from its own record high

today you can thank apple, microsoft, tesla, facebook a real comeback for tech leadership. >> yeah, it's a little bit of a challenge to the prevailing narrative that we had coming out of the first quarter the nasdaq 100 basically at a new record high. so we'll see if this is persistence or if it's just the market continuing to move ahead but as if in a three-legged race, right? you're kind of tied together and one day banks are forward and tech is back and the next day it's the opposite, but still very, very slow progress forward. so i do think it's tough to make any grand inferences out of what is happening today because it is a watch and wait ahead of the fed without too much macro as the rotation keeps us in place. >> delano, who would be need to be said by the fed to spook equity markets. >> i think it would be a change from their prevailing narrative. they're saying they see inflation as transitory and

they're going to stay the course i think that would spook especially on the growth side, that would spook investors and it's primarily a growth investor, what we saw today was kind of a good indication, as mike was speaking about. there wasn't a big move but it was an indication that these fears, the biggest theme coming out of the first quarter is coming into play and that's something to be watching the biggest thing would be a change in the narrative from the fed. i'm not predicting that. i think they have been staying strong on the transitory effects currently. so i think that would be the biggest thing, though, wilfred >> bitcoin jumping after elon musk made new comments about the cryptocurrency let's get to kate rooney for that story kate >> hey, wilf bitcoin briefly hopping above the $40,000 level for the first time since may the rally started over the weekend after elon musk said tesla would start accepting bitcoin again once there's

confirmation of reasonable clean energy use by miners there's also an upgrade to bitcoin's network coming in the fall bitcoin's move moved even higher after comments by paul tudor jones on "squawk box" this morning. he said he likes bitcoin was a portfolio diversifier and wants 5% of his portfolio in crypto. that's the same level as cash, gold and commodities for jones back to you. >> mike, interesting hearing paul tudor jones' take on this which is an arbitrary 5% long term as specifically to short term, bullish on bitcoin what did you make of elon musk's rationale for selling? >> it seems retroactive. it seems like they sold. some people said, well, they sold and that's how they made their quarter, if you looked on the profit the idea that tesla needed to sell that amount just to test the liquidity of the underlying market to see if it would tank

things i think it was pretty well demonstrated before that that the market could handle that and more so it is very interesting this idea of taking bitcoin as payment for the vehicles is always a little bit of a side issue. really it's all about atmospherics because there's nothing that it really trades off of aside from the baseline long-term expectations or the case for digital money and crowd psychology in the short term so it looks like the chart has maybe made a stand in the low 30,000s a couple of time and that's also giving people some idea that maybe it's firmed up a bit. >> well, there's also this question of how unenvironmentally friendly it is and the mining because elon musk said that is predicated on him buying itten >> or accepting it as payment. >> is there any thought because it's consuming less energy or becoming more renewable to mine bitcoin? >> obviously nothing much has changed in the last couple of months to kind of account for the reversals.

so yeah, that's going to be an issue that shadows cryptocurrencies for a long time is the power consumption and whether in fact it's more renewable than other types of electricity usage. it might be the case but there's an enormous amount of power being consumed by something that many people don't think is crucial to the world people differ on that. >> delano, where do you stand on the broader bitcoin debate and paul tudor jones' point about having as much as 5% in his portfolio long term as a hedge >> yeah, wilf, that's a great allocation i've been telling clients to have anywhere from 5% to 10% as a hedge in their portfolio as was spoke about by the panel, there is obviously the adoption as a payment platform obviously. there's also the talk of an inflation hedge and what it can do for certain economies and countries. but these are all things that are going to be played out over the long term. so as you're looking at these

different price fluctuations over the short term, as a long-term investor you want to look a little further out. obviously sometimes, wilfred, it's hard to understand if i should check cnbc for some of the price ticker changes or just look on elon musk's twitter timeline to see if there's a better gauge on what's going on. >> i just want to show you what's happening with the nasdaq we mentioned the outperformance today. the dow has come back in the last few minutes or so off the session lows down 140. the nasdaq is up half a percent. we're looking at the levels, mike 14,142 14,138 is the april 26th record closing high. >> itgot above 142 but that wa an intraday. >> 14,211.57 we're focused on the levels because that would be a big headline tech was under pressure for the past few months.

there was this whole inflation, higher yield scare that was boosting the value trades and here it's climbed back up four weeks in a row and continuing the strength today. >> the s&p as well. >> it's hit this level twice before so i do think there's a lot of fixation on this idea that if the nasdaq can be the index that follows the s&p to a new high if it's decisive and persuasive, maybe the market has cleared this chop zone for a little bit. >> apple helping today. >> anything positive on the s&p would be a record itself and that has climbed back to being bang-on flat as we speak so we might have two record records. >> anything for a bang-on flat day for you. a bigger deal for the nasdaq because we haven't seen that since april. but the s&p 500 at a record close last week. but still obviously a big headline given that the dow is down 135 points. check out shares of lordstown motors sinking again today on news -- >> shall we just pause and

mention why we do have this round of applause as we approach the close, because ringing the bell today is the u.s. army in celebration of its 246th birthday to honor the occasion, brigadier general mark quander will ring the bell hopefully we'll pick up a shot >> happy birthday to the u.s. army. >> happy birthday. let's get to phil lebeau now as we await the closing bell phil, on this lordstown motors disaster >> yeah, the c suite is a mess at lordstown motors. they are looking for a new ceo after steve burns, the former ceo, the visionary for lordstown motors, announced his resignation not only as ceo but also leaving the board of directors. the cfo also resigned. they have named a new cfo. here are the challenges facing lordstown and they are massive in the near term they have a ceo search

they also need a capital infusion they said last week they're at risk of being a going concern and they have to start a production by the end of the third quarter. that's still the target that they have out there. by the way, they also announced today that they did their own independent -- what they would call independent probe of the allegations raised by the short seller back in march they say in their opinion based on the investigation, most of those claims were largely false. however, there were inaccuracies when it came to the statement of preorders, so to a certain extent hindenberg research, what they claimed there was some validation there the ceo and cfo of lordstown resigning earlier today. guys, back to you. >> phil lebeau phil, thank you. down 19.3% do you consider something like this a wake-up call for spacs or is it just so unique to the story? >> i would say, you know, in general it's a wake-up call -- a

spac story and growth investment story. we saw a lot of momentum plays during the height of the spac craze. this is a prerevenue company talking about lordstown. so these are situations where investors have to stay disciplined. i have clients that are very, very driven by themomentum and the hype of anything related to spacs. going back to your fundamentals and disciplines is the biggest thing you can do while they are high promising growth trades that could play out well over time, there are stories like this where you can see a company come back and say they have an ongoing concern and need a capital infusion. they're shaking up management and there's a lot that can be done in the future to turn this company around but for the most shareholders not happy with what happened over the past eek but this is a wake-up call for investors to make sure that you stick to your discipline and your fundamentals. >> mike, very quickly, the spacs have cooled off significantly but haven't derailed the rest of

the money. >> there was a huge unwind there. there's still a lot of money looking for deals. some will be good, some will be bad but that's a quick unwind without impacting the rest. >> we are positive on the s&p as well microsoft going all in on gaming announcing it will develop a cloud-based gaming surface, ditching the gaming console wars the ceo said microsoft aims to play a leading roll in democratizing gaming and some are calling it a next generation growth driver predicting they can become the netflix of gaming d delano, you're a holder. are you a holder because of gaming >> not just because of gaming but, yes, that is a big reason why we look at microsoft as a play in different industries and different revenues obviously they did $5 billion for the quarterback as far as gaming revenue last quarter. that's an area where this move

that we're seeing them go into, something that could revolutionize and they feel like could make a big move in the direct-to-consumer platform, there could be subscription or different areas where they can add to revenue share for the company. i think this is a great opportunity for them to do that and test the markets i really like microsoft overall as a company and this is a great area for them to expand for shareholders. microsoft, facebook, amazon, apple all powering the nasdaq to a record high. we are right there two minutes to go in the trading day. mike, what are you seeing in the market internals >> a little softer under the surface. look at the new york stock exchange splits. still nisignificantly more stoc down than up today small caps are trailing a bit on the day. take a look at a couple of opposite direction moves in real estate-related sectors if you take a look at xlre, that's commercial properties, rental properties, those have

continued higher the home builders, itb, have had a rough run since the beginning or mid-may when a lot of the reflation reopening trades seemed to hit their maximum. a lot of log jams in the home building market but that's been a little bit of a whipsaw there. take a look at the volatility index. it did rebuild a little bit, up towards 17 earlier, now we're back in the low 16s. really nothing to speak of here. there might be some build into the fed meeting but right now it seems pretty benign. >> a strong final hour of trade has put us on track for two record closing highs today the s&p 500 now in positive territory by 0.1% only, but anything positive is enough for a record for the s&p following two records on thursday and friday the nasdaq itself, though, the one to really watch out for, up 0.7%. got a little breathing room from the necessary level for a record closing high, which will be the first time since april for the

nasdaq the dow not joining that record closing down 0.3% itself today tech, communication services the two best performing sectors. materials and financials the worst. there goes the closing bell run today by brigadier general mark quander who celebrates the 246th birthday of the u.s. army. happy birthday to the army at the closing bell, sara, a record close for the s&p 500 and for the nasdaq >> turned out to be a strong close with a double record welcome back to "closing bell," everyone i'm sara eisen here with wilfred frost and mike santoli, senior markets commentator. the noise is the celebration of the u.s. army birthday, 246 years. it's good to see people back on the floor again. we haven't seen this many people >> it always takes something special to loosen the rules a little bit further and the u.s. army certainly is that. >> absolutely, a nice

celebration. that and vaccines, of course, which helps. the dow closing lower by 85 points we rallied, low, as you can see just in that final half hour traders came back from a deficit of more than 200 points. crn, salesforce, apple, microsoft the leaders of the dow today. goldman sachs, jpmorgan and boeing were the biggest drags. s&p 500 closed up, which means a new record high. record closing high, 4255.20 up 0.2 of 1% real estate, utilities had good days, health care as well. materials and financials at the bottom of the pack the nasdaq, for the first time since april 26th, closing at a record high up three-quarters of 1% it was strong all day long look at that last half hour, really ticked higher microsoft, amazon, apple, google and paypal stronger on the day the russell 2000 small caps down 0.2 of 1%.

coming up, morgan stanley ceo james gorman on the record his thoughts on the economic recovery, interest rates, his outlook for the banks and more we are just moments away from that exclusive interview. first up on this record close, delano sapporo is still with us, liz young joins the conversation first to you, mike, on that bit of buying that we saw into the close, enough to take us over the edge for the nasdaq. >> it remains very resilient even though the market has had a lack of momentum, there's a lot of stocks falling by the wayside but the indexes have managed to plug ahead i don't see a catalyst for that final hour burst it really does seem like much more of an asset allocation type move the mega cap growth stocks were too firm throughout the day. when apple is up 2% on no news, it's going to leave a mark and that's obviously what happened but i think in general you've seen firmness here credit markets have been fine, loose financial condition.

the other thing is the leadership has been swapping back and forth because value is less cheap than it was a few months ago the cyclical trade is much more well embraced, but growth stocks less expensive, less crowded than they were so both sides have a little convergence here. >> liz, do you think the fed might derail things this week? >> i don't think they're going to derail things this week we've got a pretty calm market we have a market that stopped challenging the fed and it started to actually believe what the fed as saying, that we're going to wait and see if it's actually transitory and we're going to see what happens later in the year. i think fall is when we have to start digesting maybe some new fed narrative. but what i think the market will start looking for from the fed is a more clear road map when should we start expecting a taper, when should we start expecting a rate rise. we get a new dot plot this week that should give us some more clarity but at this point the market is on the fed side and i think it will continue to be calm waters and a sideways grind

through summer >> so does your view on some of these mega cap tech that drove the nasdaq to a record high, del ano have to be about inflation on how much exposure you want in big cap tech and the 10-year yield? that's been a big swing factor the 10-year yield went from the high 1.70s down to 1.50 or below. >> i think that's part of it but not all of it. the mega cap and tech stocks have actually become cheaper for a lot of these companies that had strong earnings. they didn't really move from that first quarter earnings print and they were kind of sideways so part of that equation is what rates do and what the fed says, but the other part is that a lot of these companies that are performing really strong and have great earnings haven't moved for a while. now you're seeing that move forward because they're relatively cheap compared to what we saw a year ago so that's

the other part of that equation. >> mike, banks today suffering off the back of obviously some soft nii guidance. put another way, it was almost like a delayed response to yields pulling back again last week. >> it was almost as if you needed that articulation of what the impact was on a bank's books before you got there very interesting because you did see yields up a little bit today. it's almost as if the inverse relationship between big growth stocks and banks is stronger than the relationship between the yields and either of those sectors. >> although over time they have tracked -- >> yes, because yields are already so compressed. >> but again, we've talked about that with the fed, that given yields have pulled back so much, the scope of them to say something that moves them higher this week is probably more significant than lower. >> i would think so. >> liz, i was just going to ask you for your take on the bond move and how much you think that's a defining feature of what's happening in the equity market right now >> i mean honestly i find the

bond move a little baffling. i think a rally in the treasury of this magnitude is a lot in the face of higher inflation, even if these hot inflation prints are transitory. i think we do end up at a higher level of inflation than we were at pre-pandemic because we're going to have wage increases, we're going to have more money moving throughout the economy, which is what creates inflation. so i think the treasury does have some risk here, especially yields to the upside i think that that's probably the biggest risk as we move through the week and hear what the fed has to say. >> paul tudor jones was on "squawk box" early this morning talking about the importance of this week's fed meeting. >> there's a premium on the perceived scarcity of uncertainty. it's turned economic orthodoxy upside down. that's why this meeting is so important, because things are absolutely bat s crazy

and at some point we have to say, okay, wait, slow down we're going to get back in the lanes and we're going to drive like we used to. >> mike, i mean the question, of course, is at what point does the market start to think that the fed will have to tighten a little bit and it would take a lot for the fed to change their tune before the market changes. >> you can start to handicap that it's coming you can say we've already started talking about it and will keep talking about it but the return to the old way as paul tudor jones was saying, which is the fed is going to be vigilant about trying to anticipate the turn and proactively get out in front of it and forestall a rise in inflation, that's gone the fed has told us that's gone. so it's not going to be that message on wednesday it could be something along the lines of, look, we know this process has to evolve from here. we'll have to taper. qe is not forever. down the road there might be some snugging when the first rate hike comes. but i don't think that two cpi

reports is going to steer things for this fed at this point. >> what i don't understand about paul tudor jones' comments is it sounds like he is fighting the fed on the inflation story, correct? >> he said he wouldn't fight the fed if the fed says status quo. >> but he says stick with the inflation trades -- >> right. >> well, the fed wants inflation but they're saying it's not going to be 4% and 5%. >> and the fed doesn't think it will be a sustainable story, which would be different winners and losers in the market, wouldn't it? >> it should, yeah >> liz, just switching focus a little bit in terms of where to put money to work, you're looking at european equities why is that an attractive place at the moment? >> so europe is about six months behind us on this recovery cycle. as we saw the pattern play out in the u.s. as we reopened the economy, we saw it play out in the markets, we're seeing it play out now in economic data. europe will start to see that in the second half of the year, especially as some of those

travel restrictions get lifted as the u.s. individuals can start to travel to europe, obviously that's a huge part of their economy, as europeans can start to travel here and that will start to happen at the end of summer. so i think that's going to be a big boost. there's also a lot of consumerism that the u.s. buys from europe, so there's a lot of products, a lot of automobiles, and i think all of that picks up as we move through 2021. >> we will leave the conversation there liz young, thank you good to see you. d delano sapporo thank you for joining us as well. president biden just wrapping up a news conference i >> he was asked about his conversation with erdogan. he said they had a good meeting and much of it took place one-on-one between the two leaders. no indications of what the takeaways were from that session. the president was asked about his strategy going into his meeting later this week with

vladimir putin of russia the president saying he's not going to negotiate in front of the press. not giving too much of an inkling into his strategy with that putin meeting except to say that he's aware there's some criticism that he's meeting with putin too early in his first term and saying that he feels that he's been reinforced in his decision to do this meeting by his conversations with other world leaders at nato, who he says all came up and told him it's exactly the right thing to do, to meet with vladimir putin at this juncture the president, i could say, was also asked about his comment that vladimir putin is a killer and whether he still holds that view biden gave a rather long and elliptical and round-about answer in which he didn't necessarily say yes. the president clearly at pains to try to avoid antagonizing vladimir putin on the eve of the eve of the summit here in geneva with the russian leader, guys. back over to you >> the eve of the eve of the summit there we go. eamon javers thank you for that. much appreciate it. when we return, morgan stanley chairman and ceo james

gorman will join us live and exclusive. his thoughts on rates, the economic recovery, the rise of the retail trader and very much more more we're back in 90 seconds this is the sound of change. the sound of a thousand sighs of relief. and the sound of a company watching out for you. this is the sound of low cash mode from pnc bank, giving you multiple options and at least 24 hours to help you avoid an overdraft fee. because we believe how you handle overdrafts should be in your control, not just your bank's. low cash mode on virtual wallet from pnc bank. one way we're making a difference. that building you're trying to buy, low cash mode on virtual wallet from pnc bank. - you should ten-x it. - ten-x it? ten-x is the world's largest online commercial real estate exchange. you see it. you want it. you ten-x it. it's that fast.

if i could, i'd ten-x everything. like... uh... these salads. or these sandwiches... ten-x does the same thing, but with buildings. sweet. oh no, he wasn't... oh, actually... that looks pretty good. see it. want it. ten-x it. yum! welcome back shares of morgan stanley finishing the day lower by 1.5%. the bank holding its annual u.s. financials conference earlier today with chairman and ceo james gorman among those speaking he joins us now in a "closing bell" exclusive interview. james, great to see you. thanks for joining us. >> great to be with you, wilf.

>> we wanted to kick off, if we can, on macro topics with the fed meeting coming this week you've raised some eyebrows of late at a conference in tokyo saying you think rates will move higher early next year as opposed to later describe yourself in your conversation with betsy today as a hawk a couple of times talk us through why you have that view and why it's altering your behavior as a ceo. >> sure. we have a very unusual situation. we have record low rates, historically low we have record high fiscal stimulus and we have synchronized recovery of the global economy it's not every single country, but most countries i just heard the comments about europe and europe's following the u.s. which is following asia so there's an enormous number of positives going on right now we've seen inflation creep in. the question is when does the fed move it has to move at some point i think the bias is more likely earlier than the current things would suggest rather than later.

obviously i have no special wisdom on it, but my gut tells me this economy is recovering faster, inflation is moving quicker, and it may not be quite as transitory as we all think. >> so do you think we're, therefore, in an era of a major policy mistake by not starting that process sooner? and do you think equity markets will correct meaningfully when or if they come to join you in your current opinion >> i don't think it's a policy mistake, no. i think these are judgment calls. listen, the fed has a deep responsibility to help the u.s. economy recover and to get people back working. and as we know, wage -- employee participation is not there yet, so we'll see when the extra bonus, if you will, comes up in september how those numbers change right now if you go anywhere around the country, there are help wanted signs everywhere no, i don't think we're at a policy mistake by any stretch. we've still got plenty of time for the fed to move.

i just think my bias is it's likely to happen sooner rather than later. >> james, it's sara. i just wanted to follow up on something you just suggested, which is that you don't think inflation is necessarily going to be transitory why do you disagree with the fed and now the markets, the bond market on this point what do you see? >> well, again, sara, it's my judgment from looking at the numbers, looking at how the economy is behaving and looking at the kind of inflation that we've seen, which in very short term is extremely high so how that rebalances with all the disruption to the supply chains and what's going on in the commodities cycle remains to be seen. but my gut is not all of it is going to go away as we'd all like in the next several months. >> in terms of the action that you're seeing, if we start on the investment banking side of things, james, clearly spacs activities has trailed off a little bit but it seems your comments earlier were pretty optimistic on ipos and m & a

pipeline are they picking up the slack sufficiently >> it was record breaking absolutely everywhere. that said the banking franchise, m & a and underwriting has been strong through the second quarter so those numbers are holding up quite well. you know, we're in a market where we're getting these moments of extreme froth inside a market which is supported by very strong economic recovery. what's gone on with the spacs, with the cryptos, the meme stocks, et cetera, are all evidence of some spurts of exuberance, if you will, but underneath it is a very solid market it's supported by a very solid economic recovery. >> on the wealth and investment management side of things, andy sapstein said you guys could reach a $7 trillion franchise and you upped it to $10

trillion i think you're throwing investor management with wealth rather than the growth being that fast across the pace of a morning can you give us a time frame of when you might hit that number >> you know, wilf, 40 years ago when i joined morgan stanley, i think our total number was something like $700 billion. we're around 5.6 before we got into this quarter so it will be higher than that, 5.6 trillion in that time period. we had net new money of $145 billion. i don't expect that pace to continue, but we could be easily bringing in $300 plus billion across the franchises. with normalized growth, we will get to $10 trillion. i'm not putting it out as a goal, just a statement of fact if you translate revenues on that, that's a $50 billion business which i think morgan stanley will see, maybe not in my tenure but certainly over the next several years >> so that's all of the positive news in recent months.

i wanted to touch on the kind of obvious negative, which was the $900 million loss from archegos, a huge loss for a single client in a single quarter, even in a single week really why such a big loss? what did you get wrong and what have you learned from it >> yeah, it was 911 actually, the worst loss in my tenure in over a decade that we've had the first real own goal we've had since the financial crisis so i was very, very disappointed with it. we are the largest prime broker i think in the world we had very large exposure to this particular family office. that exposure grew dramatically as the portfolio that he had, which turned out to be extremely levered, rose exponentially. we increased the margin not enough but fortunately we increased it and there was some complications around how quickly we could or couldn't unwind certain positions given other client obligations but the main point is that we've gone back and look at all our

margin exposures across the prime brokerage, our wealth management business here, asia, and changed some positions this fund grew too fast. it's a classic case, wilf, of leverage combined with concentration combined with rammed rate of change. and there are warning signs. this was a miss on our part. >> when you said there were complications about how quickly you could unwind positions, to what extent is that because of one stock in particular, viacomcbs, the fact that you were the front-runnerer, the book runner of a secondary placement in that stock that had begun earlier that week? and is that why you had a big loss and goldman sachs didn't? did they start selling that stock quicker than yours is that something that annoyed you perhaps? should you have all been on the same page? >> no, it definitely didn't annoy me i don't want to speak about what they did, but they did nothing wrong in my view at all. we had a different obligation.

we were the lead underwriter and did the right thing by the client caused us some pain. but we also sold out in the following week a number of very -- relatively small long positions of asian securities that frankly i determined we did not want to hold as of 4:00 p.m. on the 31st, which was wednesday. it's bad enough having a loss. we were not going to carry that loss into q2 we crystallized it i said at the time i thought it was money well spent but the bottom line is we should never have been in this position in the first place and have taken some lessons from it. >> my final question, james, on archegos, you were asked about your long-term commit meant to prime brokerage and you said it's not going to change how we feel about prime brokerage this is a gem of a business. we probably generated something close to $40 billion in revenue over a decade. it's a core part and backbone of the equities business so it doesn't change that at all are you in any way concerned

that some staff, junior or senior, will read that comment and think don't lets worry about taking undue risk as long as we print high revenue numbers you know, the risks we're taking don't really matter? >> i would hope not. the commitment to the business is different from how you conduct the business it is a world class business we've been doing it for 30 years. to my knowledge we've never had a loss in it and if we have, it's small enough it never got to my desk so it would be very small. wilf, we've been very clear internally about the positions that we have, the exposures we have, and nobody wants to be the person to walk into my office to tell me we have a problem in that business. i think everybody understands exactly what our standards are. >> i wanted to talk about another part of the business which is retail stock trading. obviously there's e-trade but what you make, james, of the meme stocks and gamestop and amc. is this a good thing that retail traders are in the market in a

way they have not been before, or is it dangerous >> it's both honestly people investing in the market and learning the lessons of the market, the good and the bad, at a relatively young age is a positive because it helps them be fortified to be long-term investors, which is ultimately how you make money. i mean mr. buffett had it right, you stay in this business multiple decades and you will do well i worry when i see something up 1200% year-to-date, which at least one of these stocks is i mean that's a recipe for disaster at some point maybe it never happens and defies reality, but, you know, i would not want to be -- i would not want to be investing at the levels that they're at and that's just my personal view i don't think it's healthy i mean i don't want people to have expectations that stocks can go up hundreds of percent in six months and it's all just something that happens naturally. >> where do you think it goes?

not the stock prices themselves, but this whole trend of the retail participation >> well, i hope we've introduced millions of retail investors to the market we've certainly had incredible account openings at e-trade and the business has done just beautifully, better than our wildest dreams were when we bought it just a year ago so i hope we've brought a bunch of people in the market but i equally hope they understand that this is not speculative. to win in the market you have to take long-term positions it remains to be seen. some people will blow out, there will be a number of accounts closed in the next several years, but i still think millions of people will come back into the market for a decade post the financial crisis weren't there that's a great thing for long-term financial health. >> james, you announced some promotions and new titles for some of your top lieutenants in and around that announcement was sort of guided that you wanted to remain in place for

three or four more years still yourself it's the first time we'vehad a specific number of years from you. is that it or next year will it be three or four more years still, like sometimes we hear from other leaders. is it three or four more years definitive definitively >> well, my job is to manage morgan stanley to the best of our abilities for the businesses we're in now but also to reposition it for the next decade and two decades great companies have durable strong performance, not just short-term one-off performance we've had a terrific run here. but my satisfaction will be ten years from now looking at how morgan stanley is doing, seeing it led really well by the talented internal folks we have and growing. so i gave the board a general understanding, it won't be the next couple of years, i need to get these deals bedded in and make them success. but i'm not going to be here five years plus.

i think it makes sense to have a period where we transition we're not there yet. the team that will step up is not ready yet but that's the general plan and i'm committed to that. >> we just showed, final question, james, a picture of the four individuals who have been sort of named as the four people competing out for that role are you disappointed that they are all white men? >> i mean of course. i'm a -- have been a preacher of diversity my whole career on wall street. i put one of the first cfos, we just appointed another cfo the current leadership group that is most likely to replace me happened to be four white men. that's obviously disappointing but that's the reality i can't change the reality just to make ourselves look better by throwing in names that frankly aren't going to be there as the likely next leader but i'd point out, ahead of

europe and middle eastern africa is a woman our co-head of asia and china is a woman. the head of internal audit is a woman. the co-head of investment banking is a woman we have a number of diverse leaders in my operating committee. in fact my direct reports, 30 direct reports, six of them are diverse. it doesn't happen to be the ones that are the likely next ceo the group behind them and the group behind that and the group behind that, we have legions of talented diverse people that i'm very proud of. >> james, thanks so much for joining us always great to chat. >> great to be with you guys thank you. >> james gorman, chairman and ceo of morgan stanley. >> on a whole host of issues. >> plenty to cover. still to come, we'll discuss some of the headlines there. we're also going to talk roblox because it got sued by the national music publishers association to the tune of $200 million. we'll talk to the ceo of the group that is bringing the

lawsuit about what's behind this legal action. also after the break, retirement on the rise mike santoli looking at the uptick in retirees and what it could mean for the market. could mean for the market. stay with us i' g for info on options trading, and look, it feels like i'm just wasting time. that's why td ameritrade designed a first-of-its-kind, personalized education center. oh. their award-winning content is tailored to fit your investing goals and interests. and it learns with you, so as you become smarter, so do its recommendations. so it's like my streaming service. well except now you're binge learning. see how you can become a smarter investor with a personalized education from td ameritrade. visit tdameritrade.com/learn ♪

[ "me and you" by barry louis polisar ] visit ♪ me and you justearn singing on the train ♪ ♪ me and you listening to the rain ♪ ♪ me and you we are the same ♪ ♪ me and you have all the fame we need ♪ ♪ indeed, you and me are we ♪

♪ me and you singing in the park ♪ ♪ me and you, we're waiting for the dark ♪

s&p and nasdaq both closing at record highs today. let's send it back over to our senior markets commentator, mike santoli, for a closer look at retirement senior it wasn't me, it was your producer sam. >> i was under the impression that was a rank of honor and status take a look at the percentage of the u.s. population that is now retired. it's actually been trending higher with the aging of america. but look at that spike in the early and mid-part of 2020 naturally covid, layoffs, everything really accelerated a lot of retirement plans. so that does create some issues in terms of maybe replacing people in jobs now that the economy is stronger. also in just the longer term vitality of the economy. also, and this is an unrelated trend but it bumps right up against i look at private retirement plans, private

pension plans now are basically fully funded because of how strong the markets have been it's the first time in many years this is the case both of these things, the aging demographic as well as the full funded status of private pensions is being cited as reaches for the bond rally basically people wanting to lock in the gains, they want income, they want certainty, and this is one of the technical factors that's helped to keep a bid in bonds along with lower than expected treasury issuance and lots of other factors. so this is something that's going to play out over quite a long time as we all join these ranks. >> indeed. mike, thank you. up next, the national music publishers association suing roblox in a $200 million copyright infringement lawsuit we'll sit down with the head of that group. coming up this wednesday, the cnbc global summit gathering leaders and innovators around the world for provocative conversations. >> it's a new era for business with singapore. >> for travel in china. >> it's a new era of innovation. >> of business for hong kong.

>> for the travel industry >> it is finally in sight. >> get the latest from around the world. >> from around the world. >> from around the world. >> at cnbc's evolve global summit. >> get all the latest from around the world at cnbc's evolve global summit, live on june 16th. modern or reliable. we want both - we want a hybrid. so do banks. that's why they're going hybrid with ibm. a hybrid cloud approach helps them personalize experiences with watson ai while helping keep data secure. ♪ ♪ ♪ from banking to manufacturing, businesses are going with a smarter hybrid cloud, using the tools, platform and expertise of ibm. ♪ ♪ ♪ this is andy, my schwab financial consultant. here's andy listening to my goals and making plans. this is us talking tax-smart investing, managing risk, and all the ways schwab can help me invest.

this is andy reminding me how i can keep my investing costs low and that there's no fee to work with him. here's me learning about schwab's satisfaction guarantee. accountability, i like it. so, yeah. andy and i made a good plan. find your own andy at schwab. a modern approach to wealth management. uno, dos, tres, cuatro! [sfx]: typing [music starts] find your own andy at schwab.

[sfx]: happy screaming [music ends] welcome back time for a cnbc news update with shepard smith. hey, shep.

>> hi, wilf. from the news on cnbc, here's what's happening qanon is still a threat. followers of the conspiracy theory could target democrats and other political opponents even as the movement's false prophecies fail to come true the report put together by the fbi and the department of homeland security. the murder trial of the new york real estate heir robert durst is set to continue, despite his lawyer's request for a delay. they say he's in so much pain that he can't stand to get dressed for trial. but los angeles county doctors declared durst fit for court. and this may take a while. firefighters say this massive fire at a grease factory near chicago will burn for days evacuations ordered for everyone within a mile of that plant. tonight as firefighters gain control, the latest on air quality fears and smoke damage in the surrounding area on the news, right after jim cramer, 7:00 eastern, cnbc sara, back to you. >> shep, we'll see you then.

thank you. shep smith. up next, roblox getting hit with $200 million lawsuit from the national music publishers association. we'll talk to the ceo of that group, which settled a suit with lolast year. "closing bell" will be right "closing bell" will be right backnd's investment objectives, risks, charges and expenses. go to flexshares.com for a prospectus containing this information. read it carefully.

the national music publishers association which represents song writers behind ed sheeran, ariana grande and others is suing roblox for $200 million for copyright infringement this is the same group that sued peloton and ended up settling that lawsuit earlier last year in a statement roblox says in part, quote, we are surprised and disappointed by this lawsuit which represents a fundamental misunderstanding of how the roblox platform operates and will defend row blocks vigorously as we work to achieve a fair resolution. joining us now in an exclusive interview is the ceo of national music publishers association, which is bringing that suit. david, it's great to have you back on the show welcome. >> thank you for having me back. >> so roblox says you don't fundamentally understand how their platform works what is your understanding of how it works and how they're using the music? >> the problem for roblox is

that we do understand how they're using music and that's why they're being sued you have this lawsuit that represents 30 publishing companies, about 1,000 songs it's just the tip of the iceberg. there actually are a lot more songs that are illegally being used on the site than even in this first complaint they have an enormous problem. there are some social media companies that license music and are good partners like youtube, facebook, tiktok and peloton and there are some companies that don't like twitter and twitch and roblox. and the music is a very important part of the gaming experience most gaming companies license the music that's in the games. unfortunately, roblox doesn't. what makes it even worse is that they're targeting children their customers are mostly underage customers and they're enticing these kids to put music illegally on their games. and it's really an unfortunate situation. >> so as far as your fight goes, does the peloton case provide any legal precedent of any type

on this case >> well, i think it's a story we've seen with a lot of technology companies where they want to ask for forgiveness instead of permission to use the music. peloton did the right thing. we now have a licensing deal with peloton and they're a partner. roblox has not yet come to that place. i suspect that they either will come to that place or this lawsuit will proceed and more like it and they'll lose >> i guess as i understand it, david, and correct me if i'm wrong, the big difference, though, compared to peloton is that this is user generated content as opposed to the company themselves producing content and them adding the music. specifically clearly they are aware of what users are doing on their platform but it does create a difference from the peloton case. i guess it's quite similar, is it not, to where youtube was a decade or so ago when lots of people were uploading content and they were also sort of washing their hands from it for as long as they could? >> well, i think that they would

like you to think that that's the case but they have a few problems one of the problems they have is that these are not children that are just putting music on a game and they have nothing to do with it they're actually involved in placing the music. in fact, they charge the children money to put the music on the games, anywhere between 50 cents and $4. so the idea that they're somehow passive victims too and have nothing to do with this is ridiculous and if you believe their defense, what they're saying is then they want us to go after the children who are putting the music on the games that's insulting and really shameful if you're a parent, i think you would have to think twice about a gaming company that's asking kids to use the platform but is putting them in that jeopardy. we're quite confident that roblox itself is responsible for the music on the games, and that's why they're the target of these suits. >> i don't know how the company would respond, but i would guess some version of them not charging children to copyright

music. >> the fact are the facts, they charge children. >> they would also point to the fact that they promote music and they do virtual concerts, like lil nas and fortnite did one with travis scott and that they actually are very friendly toward artists and musicians in that sense. >> well, if you look at the plaintiffs in this lawsuit or 30 companies that represent a majority of the music industry, the fact that they have hosted a few concerts and try to use that as window dressing to suggest they're friendly to the industry is preposterous. they are violating the copyrights of thousands and thousands of song writers, about a thousand in this first complaint. so if we really thought they were a good partner promoting us, we wouldn't be in this position they're not. they're actually using music to build their platform and to make money for themselves they're not compensating the song writers who that i can these games attractive for kids to play. >> are you representing all publishers, music publishers in this regard? because, again, correct me if i'm wrong, with the peloton case

they were already paying royalties to some publishers but not all. what is the situation with roblox >> right in the peloton case they had taken some music licenses but were using music from other publishers they hadn't licensed. in this case you have almost no direct licenses from music publishers to roblox again, 30 publishing companies from the largest in the united states down to smaller independents and we're just, again, at the tip of the iceberg we filed a complaint with the songs that we've documented and filed. there are a thousand more to come, so this $200 million figure is just scratching the surface of what their liability is going to be at the end. >> without getting too much into the legal case, david, broadly speaking isn't this a good thing for some of your musicians and some of these record labels to be on a platform like roblox which has 42 million active users, a growth of 80% in the last quarter and represents a

huge place where young people are hanging out, places like tiktok, social media and some of these video game interactive sites. isn't that ultimately an exciting opportunity, a growth avenue for your business >> if they were legitimate business partners, it would be fantastic. i hope that they some day will become today i would say it's the equivalent of people, if they were pirating the cnbc site and lots of people were watching your programming without paying you for it and the argument was made to you this is good for you because more people are being exposed to cnbc that's crazy stealing from song writers and then telling them it's good for them because it promotes them is offensive. >> have you gotten any songwriters that want to pull their music off of roblox? >> there are songwriters in these complaints, up to a thousand songs one of them is dead mouse himself. he felt so strongly about this that he decided to be a named plaintiff. and so the songs that are going to be pulled off the site are well beyond around the thousand

that we listed in this first complaint. it's going to be as fast as we can document them and then amend the complaint and add more the site is filled with unlicensed music and that's why the responsible thing to do both for the kids who are their customers but also for just the experience is to do what companies like youtube and facebook and tiktok and peloton have done, which is to license music broadly so music can be a partner with the experience and they can provide a good activity for their customers that want to use music in the games they just haven't done that yet. >> well, we know investors are watching the suit and the issue. david israelite, thank you for joining us to help explain it. >> thank you. >> i'm glad he brought up piracy of cnbc because it's a big problem, just as many people want to rip off our sounds as they do beatles and taylor swift. >> yes, exactly. right up there. >> we should have started with that up next, bubble or bust? clean energy trades are among the biggest laggards for the quarter following a massive flow of investments into the sector

over the last year and now fears of a green bubble are growing. we're going to dissshecu wn "closing bell" comes right back. from fidelity s keep you tuned in all day long. so when something happens that could affect your portfolio, you can act quickly. that's decision tech, only from fidelity.

welcome back wall street's pivot to clean energy led to trillions of dollars being poured into green stocks over the past year and now concerns of a green bubble are on the rise. kristina partsinevelos is here with us. you've used two buzz words,

green and clean. they definitely are buzz words the sector, though, is taking a hit. these popular clean energy etfs that you see on your screen right now down roughly just about 20% year to date if we move to the individual company level, there's a sea of red this year alone. index provider msci said that the renewable energy stocks is as crowded a strtrade azs techny stocks were at the height of the boom the debate is on if they are worth that i weight in green. >> you see it evidenced by companies with sfloe revenue a lot of these companies with zero revenue valued in the multiple billions. we think the bubble has begun to burst. the true bursting happens the second half of the year. >> some argue there could be a

disconnect, there is enthusiasm and that is expected itto remai with the push to go green. it's a matter of who is green washing and who is not. >> thank you, christina. up next, james gorman on the record we caught up with the morgan stanley ceo, got his take on the economy and what his gut is telling him aboutht e fed's next move details when "closing bell" details when "closing bell" comes right back.she's cute like her grandpa. voya doesn't just help me get to retirement... ...they're with me all the way through it. come on, grandpa! later. got grato do. aw, grandpas are the best! well planned. well invested. well protected. voya. be confident to and through retirement.

this is the sound of change. the sound of a thousand sighs of relief. and the sound of a company watching out for you. this is the sound of low cash mode from pnc bank, giving you multiple options and at least 24 hours to help you avoid an overdraft fee. because we believe how you handle overdrafts should be in your control, not just your bank's. low cash mode on virtual wallet from pnc bank. one way we're making a difference. pain? yeah. here. aspercreme with max-strength* lidocaine. works fast and lasts. keep it. you're gonna need it. kick pain in the aspercreme

♪ ♪ look, if your wireless carrier was a guy you'd leave him tomorrow. not very flexible. not great at saving. you deserve better... xfinity mobile. now they have unlimited for just $30 a month... $30. and they're number one in customer satisfaction. his number... delete it. i'm deleting it. so, break free from the big three. xfinity internet customers, switch to xfinity mobile and get unlimited with 5g included for $30 on the nations fastest, most reliable network.

welcome back earlier this hour we caught up with james gorman. his comments when the fed could change policy after the break. plus your wall street look ahead. earnings, key data and the first day on tech d. what to expect when we come back what to expect when we come back

♪ ♪ i had the nightmare again maxine. the world was out of wonka bars... relax. you just need digital workflows. they help keep everyone supplied and happy, proactively. let's workflow it. then you can stop having those nightmares. no, i would miss them too much. whatever you business is facing... let's workflow it. servicenow. at cdw, we get your it staff has be ready to take on new challenges. that's why we built an office obstacle course ... to prepare our people for anything. you're late well, cdw amplified services experts will consult with you to design, orchestrate and manage your most complex technologies to help you quickly overcome any obstacle ...

without all of this. oh, that is better. who's that? oh, if you want coffee, you gotta get past tantrum. you're in for a brewed awakening. for technology that moves you forward, trust cdw amplified services

plus, cracking down on party houses the new pushback from rental companies. the facts, the truth, the news with shepard smith morgan stanley's ceo james gorman joining us earlier. his take on the fed and the risk of inflation. >> the question is, when does the fed move it has to move at some point, and i think the bias is more likely earlier than the current suggestions rather than later. obviously, i have no special wisdom on it but my gut tells me this economy is recovering faster, inflation is moving quicker and it may not be quite as transitory as we all think. >> gorman also weighed in on the meme stocks and the boom in retail trading. >> i worry when i see something up 1,200% year to date at least one of these stocks is.

i mean, that's a resmy fdisaster at some point. maybe it never happens and defies reality, but i would not want to be investing at the levels that they are at. that's my personal view. i don't think it's healthy i don't want people to have expectations that stocks can go up, you know, hundreds of percent in six months and it's all something that happens naturally. >> i thought he was candid on all sorts of topics. the first one, the fed meeting later in the week, he is more of a hawk than some other ceos where to expect inflation. accident say it would derail the economy, equity markets when we see rates go up. that's an important offset to carry along with this if he is rate, the rates go up quicker than people expect. >> that's right. there are multiple levels of inflation. now, maybe it hasn't impacted equity valuations or whatever, but 3% inflation didn't used to

be incompatible with relatively accommodated fed and loose conditions and the rest of it. >> i think the question for the fed, it was always in all the fed meetings, transitory i think what powell will be pressed on and what he has to answer is what which parts of the inflation story are transitory and what can be last sng and will the fed to move when we wtalk about wage pressures, that could be more lasting. lumber prices have cratered. we were watching that earlier. there are parts that is temporary, some part that is bosal necked other parts could last in the camp of seeing the more lasting pressures building and the fed is going to have to move. >> last time in the press conference they kind of stayed away from the idea they were talking about tapering we know if from the minutes they were raising that. he can't escape that question as easily this time. >> other officials have been out publicly talking about it.

that might be the easy move, is to acknowledge what is already effectively acknowledged that this is underway, discussions are underway, but without pinpointing timing. >> that's exciting that's wednesday we've got that. >> powell leads "closing bell. can't beat that. >> until then, we are out of time today thanks for watching "closing bell." "fast money" starts now. from the nasdaq in new york, this is "fast money. i'm brian sullivan welcome. your trader lineup tonight, dan, tim, and karen tonight on "fast" despite a record close for the s&p 500 tony dwyer out with a warning to investors ahead of this week's big decision what that is and where to invest right now ahead. plus, buckle up. we are trading not one, not two, but three big headlines in the auto sector. what they are and how our traders are riding the news. and later on, check this maroon 5 jesse carmichae