pete >> exxon >> kerry >> peloton >> dee gus >> sprous farmer's market. >> brenda. >> striker >> all right weiss. >> fedex >> all right rich >> on the market >> it's great to see everybody thanks so much that does it for our stock summit and for the "halftime report" today. "the exchange" is now. thank you, scott hi everybody, i'm kelly evans. welcome to the exchange. all eyes are on powell as the fed chair gets set to testify in the next hours investors are weighing his words of continued support against moving sooner on tightening. we're going to speak to the committee chair of the hearing in a moment. plus what's the number one comment that could be a complete disaster for the markets and economy. and bitcoin just turned positive

a moment ago it's still down more than 50% from it's all-time set just eight weeks ago. will it ever get back up to those levels that's all ahead today >> the pre-powell setup is stable right now, but i get to put a gold star next to one part of the market for the first time in quite some time in nasdaq we did hit a fresh intraday record high for the nasdaq up one-half of 1% so, the near term outperformance continues and the s&p holding just about steady above that 4,200 mark, up about 14 points and all ahead of that big fed testimony from jay powell in front of that house subcommittee on the coronavirus pandemic. so, a bit of a holding pattern for the dow. we'll see what happens here. you mentioned parts of the market that are moving more these days retail a huge focus for traders and investors. it's driving a lot of activity with regard to online shopping,

and we already saw some of the stats. it could be the biggest online shopping day of the year so, keep an eye on some of those names that we're talking about like amazon, etsy, so many other names like home depot, lowe's. the entire complex is doing relatively well at this hour and of course you mentioned what happened with bitcoin prices we hit just about 28,850 or thereabouts depending on the kind of metric you're looking at remember there's no consolidated take for cryptocurrencies. but look at that intraday move here 28.850 was around eastern time we are up 12% give or take from the intraday low so far. if some folks out there have been trying to figure out where about zone could be, it's that just call it 29,000 mark at least for the near term. we'll see if that holds. but again remember, 64,000, odd. that is what it was per coin at the high a big move lower

we'll see if this holds. >> thank you in less than an hour fed chair jerome powell will testify on the response to the pandemic before the subcommittee on the coronavirus crisis he details the unprecedented stimulus tools the fed has deployed and paints a roes si picture of the recovery, though he mentions the labor market and inflation. to give us a preview is congressman james clyburn. he's the house majority whip and chair of that committee. elon e moye is here as well. elon, will you just expand on what dom said a moment ago what is the market expectation when we go back to when bern ec bernanke was on the hill is powell expected to offer any kind of color like that? >> this is the first time investors are going to get to

hear from powell since that meeting last week and he's pretty much going to be sticking to script, at least in his prepared testimony in which he said inflation is notable but does remain transitory perhaps he learned something from ben bernanke because he doesn't mentioned asset management at all in his prepared remarks he really tries to paint the picture of an economy that's strengthening, a labor market that's still healing he points to two risks, slowing rates of vaccination as well as new strains of the virus but his message is that the fed will support the recovery until it's complete. >> would you agree with the picture that chair powell is about to complete? what are the top concerns about the economy and what the fed has been doing >> thank you very much for having me. i think the big thing is whether or not the economy is going to sustain its current growth we see unemployment going down

people are back doing things that they used to do we are back to where what we might call normal. but i think the people are pretty upbeat, and they are really concerned where i'm from you see a slight tick up in the infection rate, but there is concern as to whether or not the new variant will be a problem for us but other than that, people go about their business in a way that makes me hopeful. >> are they worried about inflation? do you hear concern about higher prices do you hear about the housing market in particular >> well, i don't think the people are worrying about that i know there are a lot of news reports about it i talked to chairman powell about it he's not particularly concerned about it

he thinks that what is taking place was to be expected people are rushing back into business and therefore we'll see a tick-up. but he's made it very clear that he has the tools to control any kind of problem that might take place. >> one more question on this everyone has been watching the labor market do you think the jobless benefits are a contributor to why we're seeing so many worker shortages and business leaders feeling like they're competing against the government to find help >> i don't think so. i talked to a lot of very small businesses that tell me they are having some challenges with people coming back to work but the challenges have to do with people not being able to take care of their children. and a lot of people who are in transition because of their parents and grandparents so, the biggest problem i see is that people love to go back to work if they would have the

child care they need that's what is so important. if you look at what president biden is proposing, he is talking about this family plan in addition to the jobs plan and that's what's important if you're going to sustain the economy. >> still the biggest child care component is schools, right? and we've watched and listened to the messaging, especially from a lot of the unions who controlled the public schools who last year were adamant that it wasn't safe to reopen and now are changing trying to insist we're going to be open, we're going to be ready. are they and what are people supposed to do if they're not ready? i can't imagine there's anywhere in the country they would not be contemplating going back to school full-time and if that's the case, would child care still be holding people back. >> well, schools are pretty much closed now i don't know about all over the country, but i know my grandchildren are out of school. they don't expect to go back until the latter part of august.

and i would hope that by that time, you will have the rescue plan -- not the rescue plan but the family plan -- to complement the rescue plan so that we can have kids back in school and parents being able to afford child care that they need. >> chairman clyburn, this is elon in d.c. here. you've been really vocal about the need for the fed to understand what's happening in minority communities, in low-income communities as this recovery continues how do you think that should factor into their decision making as they consider when to raise rates or reduce their support for the economy? >> it should be primary. i've made that very clear. and i'm very convinced in my discussions with him that he is very aware of this he is very sentimental to this

and i have full confidence that he's going to do right >> chair clyburn, if i can switch gears here and shift from monetary policy to more what is happening or not happening on the fiscal side, as we get into june here, should we expect there to be major initiatives under this president we're starting to eye the midterms we're looking whether it's voting rights, whether it's infrastructure, whether it's more stimulus. you've mentioned a couple key goals of the biden administration, but so far there's nothing much to show for them >> well, i think that joe biden made it very clear that he would do everything he possibly could to reach out the to the other side and try to do things in a bipartisan way and he's doing that. you know, he's already gotten off to the races, at least i've been told, and he can come with another reconciliation packet. he would rather not doing that

he's working to keep from having to go democrats only but he's not going to allow republicans to keep him from getting his agenda done. so, he's giving them a lot of time, giving them room and i would hope they would do something this or next week so we can have the bipartisan deal because we're going have a deal. if it's not bipartisan, democrats will go along. >> but chairman, you are also the majority whip. you count the votes in the house. are there the democratic votes to get something done, especially on infrastructure, especially if it doesn't include things like addressing the caps on state and local income tax deductions >> well, the state and local income tax deductions, i think that's not the biggest thing on the house side we are going to pass a bill in the house. no question about that i'm not an expert on the senate. i don't know what they will do

over there, but we will have an infrastructure bill that will pass the house we will be putting that bill on the floor very soon, and we're going to pass it >> are you going to be able to meet the speaker's deadline of getting something done by july 4th? >> i don't know about that you know, once again, the house is on a different timetable and a lot of times -- i'm speaking about the house -- people applied to the full congress i'm not going to deal with deadlines. all i'm going to say is we will get the votes. >> well, congressman james clyburn, thank you for joining us today in advance of this hearing. we really appreciate it. >> thanks for having me. >> elon, thanks very much as well, reporting on capitol hill. my next guest says it's too soon to raise rates and doing so could lead to a deflationary disaster he says the fed hawks are a vocal minority now but any

policy change is a mistake with tens of millions still collecting unemployment benefits he joins me now as the chief economist at mizzou americans. when most people's concern has been running the other way about inflation, the fed is behind the curve, your concern has been largely the other way. maybe the bond moves have validated that do you think powell needs to claw back a little bit of the hawkish ground he's given up here >> well, he hasn't given up anything, and i think when you see the commentary that came from bullard and kaplan earlier this week and mesoer's comments day, they themselves walked back the rhetoric that was applied to them last week i think what the fed is doing is, you know, in their discussions they talk about the gray fine points basically i think all members of the committee are committed to a reactive policy approach

but i think when they talk about -- some of them talk about we should begin the discussion of talking about tapering, the market sees things in black and white. it sees things in binary the switch is either on or the switch is either off and if the fed is either easing or the fed is tightening and that's it and they immediately interpret one for the other and that's exactly what happened. and the market read what the fed said because the fed mistakenly didn't pay attention to where the market was reading and mesoer pointed that out today that the fed has to be cautious when they speak to make sure they don't add unnecessarily to market volatility unfortunately, they did that what i think the chairman will do today is stick directly to the party line and the party line that came out of the latest meeting was an almost completely unchanged policy statement and therefore nothing is really changed in the mindset of this committee. and i think the chairman'sgoin to toe that line very, very carefully. i think he's learned that lesson that a lot of other members of the committee have not

>> let me go back to your big morning, which is if they're too proactive or jump the gun here on tightening, they're going to risk deflation, which are the kind of warnings that seem to have been born out in the bond market if they don't do anything, if they're too reactive, people are going to argue that's also going to usher in deflation. you're going to have home prices, the kinds of unsustainable spikes that could engender collapse and inflation like we saw during the financial crisis as well isn't there some sense in leaning against especially these price spikes before they sort of take off and become too much of a problem to clean up on the other side >> let's understand what happened in the financial crisis was a long-developing balance sheet deterioration led by speculation in the housing market the transitions that's taking place in the housing market right now is not speculation people are not buying homes to

flip them. people are buying homes because they're transitioning from either a city dwelling to a suburban dwelling or from a suburban dwelling to a more rural dwelling because the ability to work from home has increased the housing opportunity for a large section of the population. that's going to have implications for home pricing, and that's not speculative that doesn't lead to a bubble. >> not yet, but what if it starts to? you know, if people see these price increases enough -- i have friends saying investing in real estate looks good. i could buy properties in other states i would get the rental income. i get the home price appreciation i wonder if it warps into something like that. >> sure. however, if the financial industry makes the same mistake of allowing these purchases to take place in some cases 120 fact loan to value, yes you start getting into those

situations if people are going to go out and put 20% down on a home on a rental property and deal with a commercial mortgage, which is not as aggressive as a residential mortgage, you get into a situation where you dramatically already dampened the ability to speculate dod frank has worked the way it was supposed to work to avoid those problems from happening which is when we went into the covid-19 lockdown, when the federal reserve threw the stimulus, the interesting thing is it was never needed because banks have enormous amounts of capital. they have a lot of reserves against their non-performing loans because they're not making the speculative type of loans they were making that led to financial crisis this, again, is people looking at the previous cycle and assuming nothing's been done to change it. and a lot has been done to change the reaction to the markets to it. and we're so early on in this cycle that talking about a

speculative bubble in housing is a big mistake. >> all right steve bra sciutto, we appreciate it very much for those trying to understand the bond market, i think your warnings, explain a lot of the sentiment. we appreciate you joining on the fed. we will be hearing from chair powell at the top of the hour. we have two year notes up for auction. they're pretty sensitive how did it go? >> i don't know if they're sensitive to the fed moves or not as the fed walks everything back i still see a two-year note at 23 1/2 basis points. but nonetheless, 63 million new bouncing baby two years hit the field at .29, a whisker under one quarter of a percent c, very average, c for charlie all the internals are close to the 10-auction average i will underscore indirect bidders was on the light side. those may be foreign buyers. if there's anything about this auction that we should stick in

our minds, it's that the short maturities kelly you're referring to that are normally most sensitive haven't been reverted like the longer dated or some of the spreads already starting to move back. and i think that's very important to keep an eye on. >> and the point being, rick, that that's kind of why we're getting this flattening of the yield curve. you have higher yields on the short end, longer yields longer out. i don't know if you heard everything that steve just said, but i'm just curious what your response would be to those -- and again to the bond market itself which seems to be making the case that the fed could be undergoing a major policy mistake by tightening too quickly here >> i think by tightening too quickly the fed will be doing the right thing. and i find it interesting that as they walk it back, the market goes right back. what does that tell us i think that tells us many important things do-over, do-over forget we ever said it i don't know i think a taper is important

i think the dot plots don't really matter, but they definitely grab the whole of the marketplace to some extent and i think some of what we saw in treasuries was a capitulation of the yield curve trade i don't see anything about deflation. you could read the markets any way you want it's a error shack to me i think the short end will remain sticky for a while. i think even though the fed is walking this back, i think the numbers are going to get too big to walk it back. maybe we're doing the best at reopening, but others are starting to bite at our heels, which is a good thing. and i think some of these prices that have eased back like lumber and these other commodities, don't hold your breath for them to stay there and consider the year-over-year, two-year-over-year are disturbed. >> to your point a little less enthusiasm for that auction

today. rick, thank you very, very much as always. rick santelli in chicago today coming up the eft tracking retail it's on pace for its fifth straight quarter of gains. that's it's longest winning strength since 2010. the pandemic led to a historic shift from services to goods what lasting impact will that have on retailers? but bitcoin chstaging a bouncebk today, breaking below 30,000 for the first time since january look at that climb into positive territory. we're going to look at the collapse in the highs and what it means for the stock market. we're back in a moment this is "the exchange" on cnbc s tea at walmart, walmart can buy more tea from milo's. milo's can create new jobs,

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welcome back to "the exchange." i want to bring you these headlines from san francisco fed president mary daly said the fed set for tapering is in her words, quote, within our line of sight. i think it's possible we could even get there sometime late this year, early next year that's the end quote daly also adding we are not there yet, but it is appropriate to start preparing for the time that we would hit that threshold. so, pretty interesting, you

could almost say pointed remarks from the san francisco fed president there, all this in anticipation of chair powell himself speaking to congress at the top of the hour in a week in which they've cllargely tried to walk back soft of the hawkish read last week we've been seeing a meltdown in things like bitcoins, the spacs, the meme stocks bitcoin is down 43%. spac is down 3%. even amc falling 10% in the past week and my next guest says it's game over for them and it's time to focus on fundamentals. joining me now is neil hennessy. it's great to have you here. maybe you can provide clarity. what do you think is going on here is there direct connection between the frothy blow off and what the fed is up to?

>> i don't think there's any connection there, kelly. i think what you have is speculation, different parts of the market creating bubbles here or there at some point in time people are going to figure out value versus speculation and emotional trades you look at for instance bitcoin, emotional trade what's behind it i don't know you can look at tesla, what's blind it you have technology but is it real a company going forward with all the competition that's coming in. you can look at the meme stocks. it's about me-me, get me in, i'm too late i have to be in on amc i have to be in on gamestop. but when you start to look at that and you compare against value, let me give you an example. something very, very boring as casey's general stores they're general stores they're convenience stores they sold last year 19 million pizzas out of these 2,300 stores they sold 62 slices of pizza out

of these store they earn $8, and you can buy that company for 80 cents on the dollar and then compare it to, say, amc, that you're going to pay $20 for a dollar of revenue compared to 80 cents for a dollar in revenue with a broken business plan, a company that's just raising money in the open market right now to stay alive, and they're losing money so, the concept of what's happening with reddick and people getting in and out, they just don't understand the game and that's the same with the spacs. >> or make you can see they're playing a different game i think some of the people involved would say i'm interesting, take a flier, see what happens, in the sense they know they're not doing what you're doing but they're part of this grass roots movement to save these companies and see what happens and anyway, before we go further down that line of speculation, let me bring it back to one of the main debates in the market right now as it relates to

inflation and so-called value stocks what do you think is going on with inflation is it transitory or no is it affecting your investment decisions? would you even go so far as to describe your investment style as value versus growth or anything like that >> well, hennessy funds, there's always value, kelly. but the inflationary headline we continue to read about is temporary. if you think about it a year ago, a year and a half ago, essentially the economy stopped. nobody went to work. so, what has happened over that time frame of a year and a half, corporations have built their caste position over $7 trillion. individuals have over $2 trillion in their savings accounts in lower debt but what happened is people got bored, so they started gardening, they started to do outdoor activities and what people were working off was inventory because they didn't have anybody to make it

because everybody was home so, essentially you went from the inventory to the extent that, whoa, now we're getting people back to work here once more and more people come back to work, which is a direct benefit of maybe lowering the incentives with it comes to unemployment insurance or whatever you want to call it on a monthly basis. so, i think it's temporary i think you're looking at lumber was temporary. it's come back but until we get actually another six months into this where inventories start to build up, you're going to see this little inflationary bubble >> all right so, you think it's sort of going to pass -- and i mentioned -- you mentioned casey. you mentioned vista outdoors, a pick of yours. k.d. holmes as well. that's kind of a secular growth story. for those in the tech stocks,

we've seen this resurrection in growth over the past week or so, even over the past month or so where all of a sudden the etfs are back to basically all-time highs. do you think it's late in the game for those trades? >> i'm not sure i really understand the question, kelly but i think like i said at the beginning, there's little bubbles, but they're little pockets. it's not the overall market. if you look at a ten-year treasury, the dow jones 30, those stocks yield more than that so, you're looking at people went for growth. and when you're buying growth, you're buying something that might or might not happen in the future when you're buying value, you're buying into a company that's undervalued, for instance like a casey's or a kb or a vista what you're looking for -- and you have to be patient it's not as sexy as, say, bitcoin, but i've been in this

business 42 yoears and i've learned things that are dull make you the most money. in other words, have you ever seen a going out of business sign on a coin-operated laundromat no but how sexy is that story it's not but you make a lot of money doing it >> neil, this is why we love having you on. it is a pleasure thank you for your time, sir neil hennessy with hennessy funds today. coming up, the little engine that could, engine one is getting fit to launch its own etf. their ticker is vote and we have the details ahead. plus the planned factory once touted as the eighth wonder of the world now might be called a bumble ahead of president biden's visit to wisconsin next week, we'll take you inside the incentive war and what this means for other lawmakers looking to lure companies to their states stay with us

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splitting responsibilities for trust reviews. and the journal says the ftc pushed for jurisdiction against the deal the white house is acknowledging that the country will not meet president biden's goal of getting 70% of americans vaccinated by july 4th >> we set 70% of adults as our aspirational target, and we have met or exceeded it for most of the adult population this is a remarkable achievement. when we began our vaccination campaign, we prioritized the most vulnerable. and it's clear from the numbers that this strategy has worked. >> more than 17 mcdonald's locations in california are working with health officials to provide shots in vaccinations rates have been low. tonight on the news, an exclusive interview with the president of the tokyo olympic games on how she's dealing with

the big majority of people in the country who think that the games are too risky amid the pandemic back to you. >> it is coming up soon. meanwhile, let's take a look at the markets the dow is barely green today. it's only up 28 points the nasdaq is outperforming, up .4 kt approximate some of the moving today include game stop in the green after selling 5 million additional shares and raising a billion dollars in capital it's their second stock sale since becoming the most popular game on reddit peloton is up 7% after launching corporate wellness program they're teaming up with the likes of way fair and samsung. the stock is on track for its second straight monthly game adding 5.6% today. and the peloton president will join closing bell for an exclusive interview. shares of sally beauty are up 12% after getting two upgrades to outperform.

the valuation makes the stock a good entry point cowen sees 50% up. you can find out more about the calls on cnbc.com/pro. states have tried to lure companies with lots of incentives those incentives don't always pay off. scott cohn joins us now with more on the latest in this story. scott? >> reporter: hi, kelly welcome to the eighth wonder of the world. at least that's what former president trump and former wisconsin governor scott walker promised a few years ago for this sigte 30 miles south of milwaukee, a giant manufacturer maker for foxconn. the they did get this nifty glass sphere built behind me, and they are doing some manufacturing here, servers currently. but it's a far cry from what they were talking about initially with giant video displays they were going to build here

take a look at the then and now. they originally plan to have some 13,000 high-tech manufacturing jobs here. that's now down to about 1,500, tops, eventually the state was willing to shell out nearly $3 billion in subsidies. that was a record. governor tony evers, the current governor, his administration has negotiated that down to about 80 million, although they sunk a lot of cost for infrastructure and land acquisition now they are rethinking the whole idea of those big, expensive subsidies. >> incentives are not only in monetary financial ways but also in helping to make sure that the companies find the locations that they need, that they get the permitting that they need, all those things to make sure we're really business friendly >> they in fact in wisconsin have vastly increased the amount of grants they give out. a lot of that, of course, is

c.a.r.e.s. act money in a typical year they give out a couple hundred now it's tens of thousands of grants that they're talking about. all of this very important in our america's top states for business study, coming back to cnbc very soon we'll be looking at the cost of doing business incentives. that still looms large but also what the states have been doing to help their businesses through that. you can read more about our upcoming study at topstates.cnbc.com >> thank you very much bitcoin breaking below the low level of 30,000, but he's not nervous about the drop he e teght? weavthlast coming up

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we're up against dom's brother? that's another level. ♪ ♪ i got a plan. [ screaming ] oh my god! man, we really need to work on your planning. welcome back what a session for bitcoin today. it did reverse course, turning positive before midday earlier it was below the 30,000 mark for the first time since january. it's lost half it's value in just two months. while it's painful, it's not time to panic yet. >> we'll see if it holds on today. we might plunge below it for a while and close above it if it's really rich, 25,000 is the next big level of support.

listen, i'm less happy than i was when we were at 16,000, but i'm not nervous. >> well, the less confident are still getting out. according to coin shares, bitcoin has posted a sixth straight week of flows that's the longest stretch since 2018 it's good to have you. anecdotally, the people i know who are really big in the crypto space when it first started selling off a month or six weeks ago were saying everyone's out it's over. they were basically like this was fun. it's been a ride but it's over now. they are just -- i'm not hearing anything like the bullishness that was -- that really took place when this thing was really running up it feels to me like they're saying it's over, we've moved on if you're still talking about bitcoin, you're so last year >> i guess i'm so last year. i just want to bring in, i have this beautiful hat made on new

year's day when bitcoin hit 33k. we started the year here today we're back here. i think bitcoin and the crypto space in general, we started the year under i trillion of market cap. we ran up to 2.5 trillion in aggregate market cap now we're about 1.3 trillion in total market cap bitcoin is flat for the year right now, but if we strip out bitcoin, we're up 200% for the year and i think bitcoin has always been volatile. this asset class is volatile may, we saw a bunch of leverage across the board now we're seeing a lot of cash selling. but i echo mike's sentiments he was on earlier. we're not going anywhere i'm still right here even if we go to 20k. last march we were at 3k for bitcoin, so we have to keep contacts in mind >> here's my point we know you would be there, but is everyone else gone? you know what i'm saying >> yeah. >> i know with institutions they

are in a very long time frame. i think about the big insurers who were just kind of starting to dabble in this and i think absolutely in the years ahead we could see more and more people putting a small percentage of their portfolios into this asset. i could see that but the crypto universe is bigger than ever if bitcoin is a big supply, you have ether to pick from. you have different ones launching all the time with different attributes and characteristics. what do you think is going to be the next big thing in this space? we talked about that market cooling off a few weeks ago. it was seeing nothing like the transactional value it did earlier in theyear >> so, look for me it's very simple bitcoin is here to stay. it's not going anywhere. we're going through a contraction period we have 200 days of market expansion, right you can't have number go up forever. that doesn't happen in any market what we're seeing is a correction, a contraction, and a lot of what's getting shaken out is what we call the paper hands,

the weak hands there's a lot of retail that entered, didn't do the research and is selling there are not a lot of long-term holders selling. they're using this opportunity to accumulate. i think we're going to continue to see consolidation here. there is a lot of macro uncertainty. obviously there's a lot of uncertainty around policy. there's also a lot of negative headlines and i think part of this is the cycle we go through every several years with crypto. but we are seeing a lot of new in-flows we are seeing a lot of activity in particular on the market side i think there's some really exciting developments. the cme launched their bitcoin futures contract obviously there's the e theer yum futures and options contract we continue to see growth in the crypto derivatives market. we continue to see connectivity between the crypto world and the traditional banking world. two areas i'm spending lite a lot of time on, number one, getting bitcoin into retirement

accounts we're doing that in the united states with choice and number two, getting bitcoin into bank accounts via direct deposit so people can buy crypto with their paycheck. it's the future. it's here. i see the look -- you're like i don't know about this. >> i'm like, why do we need that people are doing a great job of getting bitcoin on their -- anyway pleasure to have you on. i know we'll be talking to you soon whether we take that dip mike was talking about or not. >> i'll be here. >> get the new hats made up next from travel to home building to groceries, jpmorgan is staying bullish on retail despite inflation concerns, the names that can not only withstand rising prices but can pass them on to colonel sumers are next it brilliant. the visionary lexus nx. lease the 2021 nx 300 for $359 a month for 36 months. experience amazing at your lexus dealer. $359 a month for 36 months. ♪ ♪ ♪

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welcome back everybody we've all heard about the post-pandemic spending surge with retail on pace for its best year in over a decade, jp moore

dan sees this consumptionship from goods to services continuing academy sports, and targets as retailers that could capitalize on spending while also pazzing on prices to consumers chris, it's good to have you just to make sure i'm clear about this, are you saying the transition is from goods to services or services to good >> thanks for having us, kelly goods to services. last year there was a $350 billion shift out of services categories like apparel, categories like beauty, into goods so, home depot and lowe's benefits, williams sonoma, dicks benefitted as well you're starting to see that transition come back now goods was very strong earlier in the year given the record stimulus that hit the consumer as you're sitting here today, you're starting to see that shift back to services and with more kids getting out of school -- northeast is this

week -- you're going to see more travel you're going to see more spending on areas outside of goods. >> i love how you talk about these companies like they're your children. i'm sure it must feel that way sometimes. >> yes >> if we're starting to see this peel off and go into services, which part can do well it's going to be really hard for home depot to have a year like year have the expectations fallen >> we prefer home depot over lowe's it has a bigger pro business a lot of that went to diy, we're spending times in or backyards, patio furnace, fire pits, gardening that we never did before lowe's is much bigger, but on the other hand, it will be a tremendous back-to-school season 71 of the lastest 121 school districts went fully remote. that's not going to happen this year there will be kids sports, kids need to be dressed

it's a very strong consumption environment, and there's lean inventory. when you think about target, target is more discretionary mix than a walmart, about 20% of sales, which is means pricing power, and you also have beauty being about 7% of the business that part of the business should accelerate 234d fall ulta will fully benefit from that when you have lean inventories and really strong demand, the retailers have a lot of pricing power. >> and it's good for profit margins. is the five groups you split your coverage into, you're pretty bullish on most of them the covid wallet, like target, guilty under proven innocent like best buy. the hybrid reopening plays but

it seems like you might be cautious on the likes of lowe's, williams sonoma, even home depot. like you're saying, it's so hard to see if they will continue earnings >> you're seeing already that electronics business, we were all running out and buys tablets and pcs, so you're already seeing that shift, you know. best buy i think has a tough setup into the back half i think with the outdoor diy business, and home improvement showing signs of weakness, we think that's the canary in the coal mine. as you look into the back half of the year and think about a williams sonoma or wayfair, or bed bath & beyond where you could see some of home furnishings slow down on a lag basis, and the durable side, with the furniture business being the majority of the

reve revenues chris, thanks for your time today we appreciate it. >> thank you, kelly. still ahead, engine number one placing another bet on veineholder activism and esg instg. we have those details, next.

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welcome back, everybody. remember the success in the fight against exxon. engine number one, well, they're not stopping after that win. they're launches an etf. pippa stevens has the incredible story. >> that's right, they're building on the huge success at exxon. they got three of their four members on the board so fast forward a bit of time. they're launching an exchange-traded fund they're hoping through shareholder voting they can exert change across wall street. it's a passively managed fund with an activist bent. that will come from the proxy voting and really taking a stand at all of these companies. >> i'm impressed at the expense ratio.

0.05% is pretty good do we know it will work? we don't know how the stock performance will bear out. >> of course, it remains to be seen they are aiming for a broad audience with that low expense ratio. they're targeting retail investors, so they're hoping to bring this activist-targeted campaign to the mass it is. >> i give them credit for the concept. i can't think of another firm like this, so they continue their maverick-y ways. pippa, thank you. that's does it for "the exchange." we have just moments away from fed chair powell's capitol hill testimony. we're going to bring you the q&a portion of that live as soon as it begins in "power lunch," right after this quick break you did it. a steakhouse with a vegan menu... that serves dinner at 4:30. help to satisfy everyone's taste. just a text away.

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uipath. reboot work. good afternoon, everybody. welcome to "power lunch. good to have you along with us we are waiting to hear today, this hour, from fed chair jay powell he will testify at a congressional hearing about pandemic response, but you know there will be questions about inflation. we will take you there live for