>> let me take you guys out and looking over at the dow. the dow is down about 440. we're going out with a bit of a whimper, at least at this moment a little more hawkish than perhaps the market was expecting and the stocks took a down leg over that and see how it goes over the next couple hours have a great weekend "the exchange" is now. >> thank you, scott. hi, everybody. i'm kelly evans. this is "the exchange" and here's what is ahead this hour has jay powell been right all along? is inflation really transitory we'll dive in and ask. something very strange is happening in the mortgage market and could have to do with the taper. as inflation wobbles, b bitcoin has a reason to own it just disappeared dom chu is here with the afternoon numbers. >> could be worse but 1.25

decline for the dow jones industrial average and we're not that far off about 500 points plus was kind of where we were at the lowest but still see about 1.13% and the s&p 500 now below 4200 and 1% declines there and the nasdaq composite outperforming, if you will, the level there 14,073 interest rates, as you mentioned, kelly, a key part of this initiative. ten-year yields the longer treasury side of things drift down to about the 1.46 level but more than any absolute level for any part of the yield curve or maturity, it's about the difference between short and long-term rates. that gap is narrowing. it doesn't matter what measure you're looking at. we're going to show you two tens right now. but as you can see here, that steep drop lower that you're looking at here now puts you at the lowest levels going back to february of this year. that's going to have a profound application on many parts of the market, mainly the banks and the

financials so, secertainly a key trade. keep an eye on those banks if you're looking for what else in the market is going down. crypto currencies correlated with the down trend and bitcoin prices currently up about 3% and below the 3,700 mark and either off 4.5% and litecoin and dogecoin. the crypto currency inspire sphere is drifting lower kelly, i know later on you'll be talking about in the show just how much the mining aspect of that whole kind of crypto currency industry will evolve in the coming weeks and months. i'm looking forward to that story. >> bitcoin outperforming gold. as the markets digest the comments about rate hikes potentially coming next year at least in his view, our investors worry that the fed is risking a

policy mistake bob pisani is here with more >> a rough week for inflation and reopening trade and you can see that what is going on with the commodity stocks proxies for the whole reopening trade demand for commodities go up. just take a look at what some of the biggest commodity companies in the world are doing this week one of the biggest copper prous doers in the world down almost 30%. this week freeport-mcmoran down 25% and u.s. steel one of the biggest steel producers in the world down 22% mosaic a huge fertilizer company and go down further cleveland cliffs and iron or producer also down 17%, 18%. vulcam materials that make stone and concrete in the united states also down. nucor big competitor in the steel business and rio tinto one of the biggest minors in the world all in a single week here. kind of a double whammy going on here that is pushing the

commodity stocks down. the first, of course, the big run up everybody global demand increased for the commodities going into may but this week the fed announced essentially applied they're going to slow the economy down in 2022 and that was a trigger for a lot of people to say, this is as good as it's going to get a second issue, though earlier in the week before the fed, china announced the crackdown on speculators they said they would increase the supply of commodities in order to get commodity prices down we have a government out there the biggest commodity in the world that push down prices. you put the two together, you have a double whammy let me show you the copper prices here. we've been watching that they hit a historic high back in may. you see that big move up and look at the move down here tuesday china announced and wednesday the federal reserve meeting and pretty tough situation right now. what's happening here is transitioning essentially from the reopening story and the early cycle recovery and now we're in a more mature phase that's what the fed is implying right now. the economy is still growing and

it's fine, but it's getting the reopening is getting a little bit more mature. what we call mid cycle we'll talk what that means for investors in the next hour guys, back to you. >> well said, bob. we appreciate it we'll see you soon bob pisani. stocks are slumping after the hawkish comments from james bullard. he was on "squawk box" and forecasting rate hikes as early as next year listen >> we were expecting a good year, a good reopening, but the isis a bigger year than we were expecting. more inflation than we were expecting and i think it's natural that we've tilted a little bit more hawkish here to contain inflationary pressures >> you know, keep in mind, he's not a voting member, but those comments still carry a lot of weight joining us co-portfolio manager at the balance fund and emily reuben a financial adviser at global wealth management welcome to both of you

emily, what are you advising clients to do with stocks now? >> all of our clients are very concerned about inflation, taxes and the market being at highs. so, you know, we have to think about the short term and the long term. in the short term we actually do think there is some more room to run on the reopening trade and outside of the u.s. for some markets that are behind on the vaccination front. we saw over the last six weeks europe outperform the u.s. by four percentage points as they got their vaccination program in line and we think the next rate there is likely in asia, typically japan which is six weeks behind europe. we want to focus on our clients on the long term and we see, you know, some different areas when we're looking at the decade ahead. we think it is going to be a little bit more difficult for the traditional asset classes given we're coming into the world that is more undebted and less equal and higher inflation and taxes. so, it's going to be a little more difficult tactically when

we're looking at the decade. >> the debt issue is going to be so interesting i saw a story today, emily, they're trying to figure out how to get people with high student loan debt an easier process to buy housing. you know, so, there's so many different arguments. the argument that the debt will hold back spending and the argument that, you know rbs once you service the debt, you're going to unleash spending and this whole different dynamic that says the high debt levels have no bearing on the level of spending because it might just be the debt to gdp levels that japan or the u.s. has been dealing with gets piled on with very little consequence on what you can do day to day i don't know if that makes any sense, but that's how i feel about the markets right now. they just leave me scratching my head you can make an argument for owning stocks for deflation or in case we're in inflation i know you guys have some specific stock picks and maybe that is the best advice in an environment like this. >> yeah, we tell our clients to just try to sift out the noise

and this is a confusing period we're going from this incredible, you know, dubbish party, if you will to becoming more hawkish and then certainly today with comments, wow, things are coming sooner than we think even compared to wednesday. we want to take this opportunity to look at names that have been beaten up and sift through the rubble and find some things especially as markets sell-off in terms of commodities and cyclicals and this reopening trade. maybe some great opportunities and a few that we like secaesar caesar's administer entertainment we think they're doing well and buy on the dips and make money for our clients >> pnc insurance company, first hawaiian emily, let me turn back to you as we think through this and i want to ask about one of your assumptions or observation of what your clients are looking for as far as inflations and trades do you still recommend those trades or watch things falling apart this week and say that is kind of the wrong way to think about this market certainly

beyond the next 6 or 12 months time >> well, i mean, we think the short term inplaflation is goint continue all this pent-up demand is needing the strength to fly due to supply chain disruptions and labor market but we believe it is going to be transitory or at least largely transitory we think supply chain disruptions will resolve themselves over the next several months and the labor market will ease up as enhanced unemployment restrictions expire and kids back to school so parents can get back to work and older americans get more comfortable going back into the workforce. while we think a lot of the inflation is transitory, we think that some of the price increases may be a little bit more sticky. things like used cars are likely to go down but there are other areas of the market whether it be service areas that we think the prices will increase to offset that. we may have to look at this as a period where we've gone through a period of very low inflation

for a very long time and maybe there is a bit of a catch up in prices right now so, while we think some of the price increases may be sticky, we do think that the rate of those increases will moderate significantly. >> no. exactly. sandy, let me ask you about first hawaiian as a case study here a hawaiian bank you like for a number of reasons, recovery, tourism and all of that. but also on the expectation higher rates and do you have to change your thinking in that regard given what happened to rates this week or is this just a pause before we're on the resume trajectory towards 2% of the ten-year >> i think this is just a pause. this is great opportunity to buy a bank that has been around since 1858 at a more reasonable price because of what is going on in the broad market and certainly inflation fears, et cetera a reopening play as tourists come back to hawaii and they, you know, a type of bank that never took tarp back in the financial crisis

they are just a stable bank and a good place to catch a dividend yield that is higher than the ten-year treasury and a good place to park money today. >> thank you, both, today for dissecting some of these market moves. emily and sandy joining me, we really appreciate it. let's get to the news alert on boeing. the biggest 737 max yet taking off moments ago for its first flight and phil lebeau is here with details phil >> let's look at pictures from washington this is the 737 plant. that's where they build all the maxes and just a few minutes ago the max-10, which is the largest version of the 737 max family taking off clear skies this flight is expected to last a couple hours. this is a plane that can carry up to 230 passengers again, the largest of all the maxes that boeing plans to build. there are four versions. the max-8 and max-9 are in service and the max-7 the smallest has yet to be built

as you look at this plane keep in mind deliveries of the max-20 will not start until 2023. this is an important hurdle for boeing to overcome as it continues to ramp up production. the company has more than 550 max-10s that have been ordered and the backlog, it stands, i believe, at somewhere over 3,000 ma maxes altogether it's crucial they continue moving forward not only with the max-10 but then with the max-7 couple stocks to keep an eye on. boeing as i mentioned, crucial they continue to make progress on increasing max production which they have been doing so, for them, this is a big milestone. and then you've got united airlines it is the launch airline for the 737 max-10 and, again, first deliveries not scheduled until 2023 kelly, back to you >> that's exactly why, you know, sort of the whole market is watching the test flights with the now largest of the 737 max

fleet in the air coming up, caught in the middle in a deflation versus inflation and gold versus the dollar debate where exactly does bitcoin land? we'll explore that and plus an interesting divergence setting up in the mortgage market. what it means for housing and affordability means next right here on "the exchange.

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welcome back to "the exchange," everybody a lot of movement. the dow down more than 1%. the biggest decliner off the session lows as dom was just mentioning. the s&p 500 down 0.8 pe and nasdaq outperforming on a broadly red day only down 0.5% let's check on the individual movers this hour tale of two chips for nvidia and also the second straight all-time high after b of a hiked price target to 900 bucks a share. nvidia on pace for the best month since august that 900 price target is about 100% where we are now. mi micron is on pace for its third straight weekly decline and citigroup is mufing lower, as

well the 12th day in a row the longest losing streak since 201. its cfo warned that trading revenue for the second quarter could drop 30% from a year ago and financials as a whole are lower as bond yields have plunged post-fed look at lennar up 4% today on pace for its best week since march and raised price target to 141. that's almost 50% upside for more on the bullish call that has lennar up head over to cnbc.com/pro. toymaker stocks are down as they deal with shipping delays and shortages overseas is christmas at risk we'll explore. not one, not two, but three of these airline stocks are getting an upgrade the whole sector is green. find out who and why when we come back. to be cared for. ♪ ♪ back up now, ♪

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hi, everybody. welcome back to "the exchange. dow down more than 400 points 1.2% we're watching the bond market, though that is where all the action has been lately. the ten-year yield well below 1.5% the strange thing about this is typically that means mortgage rates are moving lower, but not so and not just this week. over the past month, look at this divergence between the ten-year bond yield and the mortgage rate. mortgage rate is that white line

and spiking higher it got worse after the fed's meeting, too is this a housing version, here's james bullard on the fed's mortgage holdings this morning. bullard indicating they might look at selling some of othe mortgage-backed securities as they look to sell some of the treasuries from their portfolio or to buy fewer of them. let's talk about the dynamics this is creating in the mortgage market let's bring in andy. great to have you here please, explain this mystery for us what is going on in the mortgage market >> i think what you're seeing is somewhat a return to the norm. if you look over the last five years or so, historically a 2% spread between mortgage, 30-year mortgage rates and ten-year treasury yields with all of the bond buying or mortgage security back buying has really tightened up the spreads the increased spread we're seeing is likely in response to kind of the expectation of a somewhat return to more of a normal market. >> can you also tell us what the expectation is right now in the

market for this tapering what do they think will happen on the mortgage piece and the treasury piece >> i think that's what the market is trying to understand and figure out we're in the phase where we're talking about it right now and i don't think there is a set plan in place and i think the market is trying to determine and make expectations for where that will go. >> you're saying kind of going back to normalcy here in terms of the spread of the ten-year yield and the housing rate if we enjoyed where it is lower than normal, lower than normal with everything going on in the ten year, should we expect to see rates edging higher now even though the ten year has slumped this week? >> i think that's the long-term expectation of when and where that will take place and by how much and how quickly is still up in the air but the broad expectation is for mortgage rates to kind of gradually or maybe sharply points rise over the next couple of years in terms of what that means for the mortgage market, if we look at affordability even before

this interest rate move, we were already at a point in the housing market where we should start is to see some inflection and slowing and deceleration to norm this, obviously, pushes us further up that chain and the challenge in the housing market so little inventory that we're continuing to see red hot prices even though your quantity volumes or lot volumes are falling. so, we're seeing a dynamic where the housing market continues to rise faster than it should because of no inventory out there. >> so, basically if we had all the supply we needed, we might already be seeing prices correct a little bit more than they have this kind of goes back to what we learned today from redfin where they were saying that the housing market activity probably peaked around eight or nine weeks ago. do you think there's some truth in that? >> two different things to look at quantities if you're looking at application volumes or rate lock volumes or purchase pending and different direction in price simply

because we're in an environment where we have 60% lower inventory than we should have and continue to see new in-flow of inventory run at 20% lower than it should be and only sell what you're listing. we could see quantities fall and applications fall and pending sales fall at the same time home prices continue to rise. >> so fascinating. so, you know, spin this story forward a year or so, andy, where are we in terms of housing market conditions do you think >> i think that's really the question and the concern for the market right, the question is what happens to affordability we know that we'rer are relatively level now and at a point where we should be slowing but not overly concerning. where are we if home prices continue to rise like they are and then we see tapering and 30-year rates and that puts pressure on the housing market there is a concern how that could play out over the next 12 months >> andy, final question. what is the biggest threat to this housing market? is it, you know, broadly speaking is it that the economy itself, you know, cools a little bit and that we see, you know,

prices normalize what is normal to rents and incomes is it that more supply simply comes online what would you describe as kind of the key thing that people in the market are looking out for >> run too hot for too long and if you continue to see the housing market hot and then a taper effect like you saw in 2013 or 2018, 2019, that's where some of the risk comes into the market >> interesting andy, thanks so much we appreciate it andy walden talking through the risks in the mortgage and housing, markets as we work through what the fed has done this week. a double upgrade on business travels and stranded in toyland and all coming up in today's "ridir rhtft ts.ap fe"ig aerhi

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hi, everybody. let's get out to our cnbc news update. >> hi, kelly hi, everyone here's what's happening at this hour president joe biden will announce 300 million vaccine shots have been given to americans since he took office all adults getting one shot and only 5% of americans were fully

vaccinated when biden took office still unlikely to hit his goal of at least one shot per 70% of all adults by july fourth. on the news the interview of the hospital executive facing rising numbers of covid patients and tracking variants at a waste water plant. overseas in hong kong two executives charged with collusion. condemned the arrests as attack on freedom and a daeanish soccer player who collapsed during a championship game returned from the hospital ekikson now has a heart device in his chest scary moments. back to you. >> when did this happen? his heart stopped on the field >> i believe during play, yeah, exactly. play was stopped

>> wow, holy cow great to see he covered and doing so well. >> agreed. let's move on to rapid fire and catch up on a few stories on your radar joining me contessa brewer, tim seymour seymour asset manager and christina, welcome one and all. our first topic today is basically the topic of the whole week buckle up because deflation, not inflation, is the biggest concern in markets that is the argument that dave rosenberg is making today saying he also expects it will go higher strategist michael darta is also cautious on stocks, especially high multiple ones but for a different reason he thinks the economy is strong and rates will go higher ryan reynolds of reynolds strategy telling clients to buy the dips tim seymour, where are we? >> well, rosenberg who does

great, great work and his metaphor on the deflating bouncy cancel is one that is very vivid if anyone had kids and had thrown a party first of all, david rosenberg has never seen a deflated bouncy cancel he di castal he didn't le a case where the market is behaving opposite of where it needs to be. mega cap tech and higher multiple stocks that seemingly were under a lot of pressure in a world where rates were moving higher just a month ago outperformed and stocks cyclicy and my view is that the market will take a couple days to figure this out. i'm not saying the market is wrong. if you look at the triple qs outperformed the s&p by 2% since the fed meeting began. that's contrary to what we

thought was going to happen if the fed was going to move into a higher gear just a month and a half ago. >> the market's take on their hawkishness is right or wrong? >> i think the market is right i think the fed gained a lot of credibility this week. the market was concerned about inflation and the fed, i'm not saying they're in front of the inflation curve but the fed is going to do something and let's not rehash what we did all week. i think the market is rightly understanding that inflation is in the eyes of the fed and in greater consideration but how do you trade that and putting your money into high multiple equity stocks here in this environment which have outperformed since the fed is correct. >> cutontessa, what caught your eye? citigroup down 15%, copper down 15%. that's all consistent. >> i think it's interesting, too, where people have rushed in to buy on this dip you know, when you're pointing

out some skepticism here about whether the economy continues to grow without that overarching support from the fed and that seems to be the big thing that has people wondering, when do they start rolling back asset purchases and things like that a spoiled child who has been supported by his parents over and over again through all of his failures can make it on his two feet once they pull it out >> christina, this was the thing, interesting to hear james bullard say we're looking to financial markets and we have never been in an environment like this. he's basically saying, listen, you tell us. he wants flexibility about the taper, he doesn't want a locked in one like they did last time you have people in the market who say, you can't babysit the markets. should they be taking their cues from it or saying, we don't care this is what we think we need to be doing and whatever happens

with stocks, they can throw all the tantrums they want we're doing it anyway. >> we don't care, we're doing whatever we want that seems to be the thing from 2021 to contessa's point, a lot of hand holding going on. however, if we go back to the inflationary argument even just to look at what the treasury has given out $6.68 trillion or issued just within the last four months the fed bought $320 billion of that who else is buying all of it i think sometimes it's just maybe too simple to blame everything on the fed. yes, they're behind the curve and i know tim talked about that and a lot of guests we have definitely talk about that and a lot of their policies probably contributing to this market upset we've seen or the volatility but overall you have other players coming in here and the inflation argument we have a chart that we can show you on your screen that i asked for in regard to the fed meeting minutes. the word you can see the averages decreased dramatically. the ecb even less and the bank

of japan didn't mention at all in their recent meeting, as well this is something that clearly there is a bunch of guys and economists and not all economists that they talk about it and debated and they must be seeing something that maybe not everyone is seeing and if you look at trim inflation you take out the most extreme and the lowest, it seems to be, you know, within a decent range. so, i think these are some factors that we need to consider when we blame everything on the fed. not that i'm a proponent for them at all. just trying to take the flip side >> teasing off the top, transitory right all along and now we're flipping after pushing, pushing and them to respond to the inflationary market and going, whoa, maybe we're not ready for this in light of the reopening, the street's number one airline analyst is bullish on delta. hunter kay giving the shares a double upgrade to outperform and demand will surge later this

year like leisure has been doing already. saying this is folks looking to use up their expiring vouchers or maintain their premier status for 2022 and beyond. he upgraded alaska air, contessa, to outperform. >> i love this because i've had a few trips for business since we were allowed to travel again. and it is, it is on my mind. i mean, i wonder if i can make it to the end of the year ask still maintain my status because, boy, is it a pain to wait until you're in group two to board the airplane. it's so ridiculous one of the things he brings out is the skepticism about the delusion that there were other airlines that offered up more stock to raise some cash and skepticism on the part of investors who said even if delta is not doing it now, they may have to do it in the future. boy, did this guy write a fun note and they didn't become

stupid overnight and they're going to figure it out and this is why he gets the double upgrade here >> delta up 47% over the last year or so how much uptick do you think is rea realistic? >> contessa, you have status with us, don't worry about that. when you think about what is going on with airline stocks they outperformed essentially their proportion to pre-covid, revenues in a way that hunter pointed out and contessa brought this up. if you look at the enterprise value of a number of airlines especially in american where they raised a lot of debt. the valuation is very different than it used to be and their earnings profile no where near where it was hunter's other main point and i love this about airlines in this environment. inflation helps airlines they have more pricing power and the ability to actually push through higher fuel costs and it also forces them to be more cautious and more discriminate on capacity growth, which to me ultimately is what the airline industry trades on

it trades on passenger revenue per available seat miles and when you see the numbers start to slip, it's usually the airlines are getting too aggressive and growing their routes and their capacity and investors hate that. >> kristina, i'll give you the last word on this. >> i have a question for tim do you think it's justified at the moment because 2022 and '23 being stellar years. is this something that will stay and really want to hold delta for a really long time if we're already pricing in the upside for the next two years >> airlines are great trading stocks i've been a long-term investor in delta and the valuation there is one i like and i don't like them all >> take it that way everybody else tim, thank you we appreciate it. moving right along, you might want to get your holiday shopping done early this year because reports of a potential toy shortage due to a lack of shipping containers. thousands of toys are boxed and ready to be exported out of china but rising costs and their serious covid outbreak has shipping crippled.

according to the journal the cost of a 40-foot shipping container heading from china to l.a. is up 63% this year contessa, this is the stuff of movies and books and so much fun that we could be having, but the real issue is anyone who doesn't make christmas isn't going to make their numbers, period >> two things. seen this big, "new york post" had pictures of the boxes just filling with empty office space and they make lite-bright and care bears and other toys. their cost for a shipping container have doubled or even tripled. do you think that's not going to get passed along for the toys that actually do make it to the united states? that's number one. then you're looking at the bottom line, again, for these retailers. but back to the spoiled child. i mean, this also might be an opportunity for american parents to give their kids a little lesson in consumerism and the emptyiness of it. >> tim, you know, if toys don't make it here, there won't be a

christmas, right god forbid >> yeah. well, again, and we are certainly not the land of misfit toys here, kelly but i think you have a case where we definitely, if anything, if you're mattel that the demand story is the more important part if you look at some of the toy stocks coming out of covid the pent up demand is something that came at a perfect time for companies like mattel that are going through a major restructuring and a change in their business the overhaul of barbie and ken and also their digital space and that's what i think is actually most interesting about toy companies. i think this is all relatively transitory and, yes, the holiday season is critical and more important is the structural future of their business and those secular tailwinds. >> kristina, back to your point on inflation a great case study on how much consumers are willing to pay up, whatever those margins are going to be. this is all about getting the product here in a moment in time >> if we're going to use

airlines to bring it altogether. people are willing to spend a ridiculous amount on flights and i can't remember the name of the resort that is charging like $3,000 a night and they're seeing their bookings just through the roof i think if we can, we can will it we have savings. people will spend on these toys. they're going to spend more and, unfortunately, that's why you're seeing companies across the board increasing prices on everything because they know there's not going to be as much push back on these price increases from consumers that we've seen in the past >> tessa. >> but, yeah, but, again, the thing is because it costs so much to ship them from china what you're going to see is the lower price toys and the manufacturers taking the big hit there. and who does that hurt in terms of consumers? it hurts those who can least afford to pay higher prices for toys the cheap toys that might be under the christmas tree those are the people who are going to take it >> super yeah, super difficult. again, it has to be all about getting it at that moment in

time finally today morgan stanley an overweight rating and $180 price target 20% outside. pent up demand for online dating post-pandemic should drive second-half growth and hyperconnect is another way to monetize its content tim, i'm going to you because this is a trading question, not for any other purpose. >> okay. all right. i feel like we've done this before, kelly. >> that's why i'm telling you. only because i have a trading question for you if all of this is true and this is, we see, these eight reasons why this is a great stock to own. okay, fine it's up 2% year to date. tell me why then all of that isn't already either priced in or it's clearly, you know, moving off of something else then >> well, i think, look, the multiples here aren't great. i think there was certainly some headwinds and the dynamics in the online dating sphere while other parts of social media soared during covid. i think, excuse me, you've got a

case where hyperconnect two really important i think social platforms in terms of discovery. i think the valuation isn't terrible the chart is something that makes it more interesting. when we're looking at the hypergrowth tech names, this is not one. i think it is really more in a cumodatized business dare i say and i like the upgrade because i think the acquisition makes their portfolio far and away the most interesting with the highest growth of any of their peers. >> they're telling me we have to leave it there contessa, give us a final answer for this whole thing >> he's talking about hyperconnect which has more than 60% of its users younger than 30 that is a real base of consumer growth for match and very interesting to see whether this video platform provides opportunities for something other than dating in the future. more social connections. i want tako know what the market rate is going for a glass of water. >> thank you, everybody. contessa brewer, tim seymour and kristina for rapid fire.

up next, we'll talk to the ceo of the pga superstore and how inflation and supply chain issues are impacting his business. first it's friday and time to look ahead for what is in store for your money for next week here's your friday fast forward. >> summer starts next week and retail will be hot amazon kicks off its prime day on monday. and gamestop's new ceo takes the helm that stock climbing 38% over the past month as new traders continue to pour in. plus consumer sentiment for may is out on friday and with rates on the rise, we'll get a rate on housing with new and existing home sale numbers. kb homes, nike and fedex are some of the big names reporting earnings fed chair powell will testify in person on the coronavirus crisis doximity a platform for health care professionals goes public and with financials ws one of te

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and, alpha-lipoic acid, which relieves occasional nerve aches, weakness and discomfort. live your life with less nerve discomfort with nervive nerve relief. welcome back, everybody. the golf industry posting $3 billion in sales the third highest ever as the pandemic drove up activity and 2021 is seeing more of the same. superstore reporting overall year to date sales 55% above prepandemic figures. so, golfers are spending but with inflation on the rise, supply chain issues around the world and so much more are higher prices around the corner? ceo dick sullivan joins me now to discuss great to have you back welcome. >> thanks, kelly good to be back with you >> so, just to take one example my producer's husband trying to get some golf clubs he ordered for like six month why so many issues with the supply chain >> well, the demand has been

unprecedented. you just mentioned it. the industry is up 40% over the last couple years. we're up 55%, 60% and no factories around the world that predicted this kind of growth. we're not immune to what we're seeing everywhere across all industries but working with all of our suppliers and what may have been a few days of lead time turned into weeks but i was in california working with suppliers to see how we can accelerate the lead time to satisfy this demand. >> not that golf is the typical thing you give for christmas, maybe it is. is that a reasonable time frame or are we talking more into next year >> first, this is our christmas. obviously, the biggest week of the year and i heard you earlier, we have lots of toys, by the way lots of inventory here no issue with shortage of inventory or purchases for father's day but we are hearing that factories are purchasing additional factories overseas to keep up with this incredible demand even if you add another shift, it's not complicated math.

you add another eight hours and produce only 30%, 35% more product. so with the industry up 40, 50, 60%, we are fgoing to be challenged but we'll see because people are now able to forecast i think in a lot of cases the assumptions were once people are vaccinated and once people were able to go back inside, that less people would be outside and we're not seeing that. we're continuing to see people want to be outside and be with their families and, you know, enjoy this unbelievable game of golf. >> sure. i guess kind of a related question is whether you're having staffing issues inside of your own stores? have you had a consistent labor base throughout this pandemic because you were so busy last year or also facing issues getting workers? >> it's a great question clearly, we are challenged we're seeing it everywhere we're increasing our minimum wages. we're recruiting from colleges and recruiting everywhere we possibly can but, of course, we didn't predict this kind of volume. but we're working with organizations like first tee, you may be familiar with that.

founder of home depot donated $10 million to first tee and we have hundreds of high school students that are coming into work in our stores that are part of the program so, we're doing everything we can to make sure that sure that our customers are satisfied with bright levels of service go back depot days wearing orange aprons or blue shirts customer service is most important. keeping in stock is the top priority. >> i know what you're saying so great reminder. dick, happy father's day and thank you for joining us. >> thank you. a quick programming note, catch live coverage of the u.s. open on nbc, golf channel and peacock through sunday. still ahead, inflation versus deflation with all the debate of the fed and the market where does

bitcoin fall we'll explore that next.

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welcome back bitcoin is in the red with the

rest of the market and with gold with the debate raging where does bitcoin land with this? mckenzie, what are the bulls saying about it this week? >> hey, kelly. some investors see bitcoin as a vote of no confidence on fed policy but bitcoin hasn't responded all that well to inflation news or surprises and why people on the street are dismissive of bitcoin as an inflation hedge. looking at the numbers i would be, too. generally it's thought of as a longer term opt out. not to be exposed to fed policy period kelly? >> i know what you're saying and people on the street go we look at the correlations, not that high but i still hear the public holding bitcoin as a hedge against the sort of big

collapse, between the government and the fed and will get this wrong. the dollar's value is going to slide. that's the opposite of this week and bitcoin is what you want to be holding so have any kind of plarngs of that argument been knocked away this week? >> no. you're absolutely right and that's the long term play. what we are seeing is inflationary shocks and not in a 1940s situation where inflation is genuinely ruinous going to negative 5, negative 10, through combination of high inflation and the government engaging yield curve control that's what the more macro focused bitcoiners are looking for, that scenario we are not there yet. >> since you are here, we are curious about the interest in bitcoin as an asset class. there's big news of texas trying

to court the miners. now looking to energy maybe to power bitcoin. miami, as well there's a lot of competition as we debate the price. >> right i'm actually in miami right now and i spoke to the mayor yesterday and what i wanted do get from him is a sense of why they try to court these bitcoin miners more than half of the miners are in china and need a destination. you have florida and texas trying to court the miners and miami known for relatively cheap and clean nuclear power so he's trying to draw in the miners as a larger play as a crypto hub in the u.s. >> yeah. i know the people, states obviously always looking for the

next big thing but especially as texas as people mover away from oil and gas. mckenzie, thank you. coming up next on "power lunch," investors are stuck in the land of confusion as inflation picks up speed bond yields are falling. is it transitory or here to stay we'll try to give you ways to play it after this quick break ♪ ♪ we made usaa insurance for veterans like martin. when a hailstorm hit, he needed his insurance to get it done right, right away. usaa. what you're made of, we're made for. usaa mmm, licorice records. usaa. what you're made of, we're made for. wonka, digital workflows for it tell us

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