the europe and the feast a lot of the world is behind us on the recovery and when they can travel again they're going to do it big >> joe >> reiterating on chipotle we're seeing a refreshed and positive momentum. >> okay. dr. jay. >> rocket companies. rkt bought it. >> good stuff. thank you scott. i'm kelly evans. here's what's ahead this hour. microsoft becomes the second member of the superexclusive $2 trillion club will it fair better than apple after hitting this spotlight when everyone else zigs, you should zag one strategist says following the crowd into growth in tech is a mistake, and he will break down why the retail stock that could revenge. we'll get to it all. but we'll start with the markets

this afternoon >> kelly i'm trying to figure out if i should zig or zag right now. i've got a limited amount of real estate. i'm going to go with what's happening in the markets because they're zigging and zagging. it's playing out netting to a fairly flat market near record highs. i will put that gold star next to the nasdaq because we did hit a record the outperformer of the day is .1 of 1%. the s&p500 holding around the 4250 level zig versus zag check out the growth oriented etfs that track certain parts of the markets. the van growth tracking, up about 11.5%. the gains are moderating somewhat the first trust, many of the faang names as part of the index, up about 13% here and the ark innovation still down 1%, but on awe year-to-date

ba basis we've seen a bit of a comeback, a move higher for growth oriented stocks then the stocks we want to focus on today having something to do overall with the bounceback we're seeing in cryptocurrencies whether or not it lasts remains to be seen however, after larger losses over the last few weeks, coin base up 2% microstrategy, up about 5% and then square and riot blockchain some of the names in the ecochain for cryptocurrencies a big debate about whether or not the buy was good for bitcoin after it went below 30,000 we'll see if it lasts. >> thank you very much first it was apple now microsoft is joining the $2 trillion club as it hits an all-time high. five companies, microsoft, apple, alphabet, amazon and facebook make up a quarter of the s&p500's market cap right

now even though tech has been somewhat of a laggard this year. microsoft has flown under the radar this time around, at least after its assent from those earlier anti-trust issues that it had but can it stay that way here to discuss what's ahead from microsoft, dan gallagher is reporter for the "wall street journal" and dan ives is equity of research. let me just start with a comment from you sort of on apple's performance after it crossed the $2 trillion mark this was last august it suddenly expanded its p.e. in a way apple was not known for. i think since then on a split adjusted base, apple is up 5 bucks, maybe 7 is there a risk with microsoft the same kind of trading lift could happen >> yeah, it's a graept point but i think it's different here with microsoft because there's no regulatory overhang right now for apple that's about

a $20 overhang in terms of regulatory as well as epic lawsuit battle and it comes down to cloud really right now this is the best way to play cloud microsoft still a third of the way through the sort of cloud transformational upgrade cycle i think trillion dollar opportunity just on cloud alone over the coming years. that's why i give microsoft -- 325 is our price target. i think it's all crowd growth and talents that we're seeing in the digital transformation >> one more question, dan ives, since you mentioned. i'm just curious why do you say that apple has a $20 overhang from regulatory issues how do you get to that number? >> that's our view right now in terms of it's a little more than 10% on apple and i think worries on the app store what that can do if you look at what's coming down the pike in terms of the beltway and brussels i think that's shined in the spotlight.

we go back six months ago, apple is tangential is antitrust, now definitely in the cross hairs. i think right now it's a significant overhang, $20 per share. >> dan gallagher, do you see any kind of regulatory overhang from microsoft. it's interesting how the force or without being able to help itself, it fell out of the mobile phone revolution. it's benefitting from that because it's not in any regulatory cross hairs or ecommerce. no one seems to care what it's doing in the cloud >> i think that's true for the moment i think part of what i wrote a couple months ago was that, you know, with nearly $2 trillion then and the incredible success they've had over the last several years moving to the cloud and some of their other improvements like margins in that, i do think this raises the stakes for them in the sense they have to keep putting up strong numbers to keep the stock going up and i think moves they've been making lately run the risk of

getting them back in the cross hairs possibly flirted with going after tiktok in this controversial deal that looked like a forced sale involving the president at the time i think it would have brought them a lot of social network baggage and those sorts of overhangs. that didn't happen i think it was good for them but as they've been more vocal about trying to get more regulatory pressure on their competitors like google and speaking outward about that, i do think they run some risk now of making people pay more attention to them. >> so, dan gallagher, here's another question on this issue one of the biggest competitors in the cloud is amazon amazon, everybody loves to beat up on amazon every state, every political regulator, you know, consumers, you name it, right but if amazon is held back from its further ambitions and scale in the cloud are forced to

divest its businesses somehow, is that going to play right into microsoft's hands? >> that's certainly possible i think right now a lot of eyeballs are on amazon with their consumer side with bills about potentially they should break up, separate the third party from the retail arm and this deal is probably going to get a lot more focus i think those are easier things to draw political pressure because people understand those gains really well. whereas i think the cloud is still in this field where a lot of politicians, leaders and that don't fully have their arms around that. i think if amazon is constrained in some way, that could help microsoft. but amazon also -- i think they'll use a lot of of their spotlight to say, hey, pay attention to these in seattle because they were once a major problem too. and if you let it go, it could be another one so, i think -- i've got to -- i think we'll see a lot more tit

for tat between the two companies because of that. >> i'll finally turn to you. both of you seem to see relatively clear sailing ahead for microsoft at this point. could microsoft become the most valuable company in the world? if $2 trillion is not a ceiling and if your price target is accurate, just how big are we talking? >> yeah, i think right now you go out in the next few years this could be a $3 trillion cap. we talk about apple reaching it first. i think that's a great point while there is that battle going on with beltway, i think that's just another feather in their cap when it comes to this cloud arms race. >> all right the dans, thank you both today dan ives, dan gallagher on this key milestone that microsoft has reached. speaking of tech, it's been a bit of a bounceback lately and growth stocks rally in general growth jumped 2.5% in the past week value fell by 1% tech stocks up more than 2% while financials are down almost

3% all of that said, my next guest says don't follow this herd. he's sticking with value in the banks. joining me now is david katz, the chief investment officer at assets managers. david, welcome it's nice to say don't follow the crowd, you should zig when they zag is this an issue about herd and momentum, or let's call them growth investors onto the secular performance that this whole sector has enjoyed because it simply has stronger earnings potential, microsoft being a case and point >> no, we would look at the last week as a outlier and really look at the action over the last five or six months so, coming out of recessions, typically value significant outpaces growth. since last september, value has done except nally well versus growth you're getting a breather now, you're getting a pullback. we think this is going to be the pause that refreshes and we think on a six to 12-month basis, the value still has very good upside

opportunities. we think the same trends that were in place three months ago, low interest rates, improving economy, manageable inflation are still in place we think ultimately rates will drift higher, but not to the extent it should derail value. and bwe think one of the things you mentioned there was financials financials had a great run they've just given back 3% to 7%, certain of the larger banks. we think that is a great opportunity to get involved now because we think we're going to benefit from a rising rate environment. and you might get good news out of the fed in term of their capitalization >> what if rates don't drift higher what does that mean for the financials >> well, in terms of the financials, they've got so many other things going for them that even if rates stay relatively low, they're still making a great deal of money. improving economy means ultimately there's going to be more lending and it also means that their loan portfolio, bad expenses, is going to go down

significantly. so, we think they're in a good place and we think they're going to be allowed to raise their dividends and buy stock back when rates rise that's just going to be the icing on the cake but we do think you want to put it in perspective. the economy is booming right now. you're going to see better trends in terms of the labor markets come september, october. taken altogether, we think ultimately the fed is going to be raising rates what they said last week was that they're probably going to be raising rates sooner than people expected. we think over the next 6 to 12 months they're probably going to move that date forward a little bit more it doesn't mean it's going to derail the economy, but it is out there. >> we're paying attention to comments from the president of bostic this afternoon as well. you have stocks, you're not necessarily recommending sector base bny melon truest financials. you do like viacom, verizon, and merck.

>> we think those fall into the market school. the stocks we just listed there are selled under 12 times earnings, hang anywhere from a 2% to 4% dividend and have very good prospects in terms of business good business, great price let's take bank of new york, for example. they benefit significantly by any sort of rise in rates. if and when the fed does raise rates, and we know it'll happen at some point, they have hundreds of millions of dollars they're not getting on their money market business. they'll fall right into the bottom line and you're paying 12 times earnings for it. so, it's a question of when, not if, and you're getting it at a very good price. it's around tangible value rarely do you get a good financial institution at that sort of price. >> david, we'll leave it there thank you for your time today. >> thanks a lot. have a great day >> you too david katz there's a new etf on the streets. firm number one launching efg focused. you can see the half percent

gain this is not your run of the mill etf. what makes it different and why it raises red flags. a tradition of watching a hit tv show with all of your friends and the whole public might have vanished, leaving many wondering what it means for the future of television and the culture writ large we'll explain all of this ahead on "the exchange."

welcome back engine number one, the activist firm that shocked the world by winning three mobile board seats. they're launching an etf today and rather than buying shares in companies, they're seeking to round up enough votes to enact change at their target companies. in order to do that, they need help from large shareholders like black rock, vanguard or state street and that could raise questions over influence those shareholders have over corporate america. joining me now, dennis vermin and bob pisani bob, just set this up for us it does seem, as you point out, that many of the companies are well-known names in corporate america. they're big companies. they're definitely going to need big institutional backing. >> yeah, this is a very unusual

situation. it's a perfect intersection of three hot investment themes, etfs, esgs, and activist investing. they're not really an etf in the traditional sense they go out and take positions and companies they have strong feelings about or mix with their investment etiologies they're a lobbying organization that's going to try to influence other big shareholders like vanguard and black rock to go along with their climate change esg agenda there's nothing wrong with that. but they're going to get a lot of pushback from people who believe the funds have too much power. but now people are going to get concerned about too much influence in terms of shareholder votes by these big corporate index companies that are out there. and they're going to start saying, hey, wait a minute, now it's getting political now we're getting esg and climate change involved with these fund managers, and i think you're going to see pushback on

that >> dennis, we might see pushback from the broader public, but i don't expect these institutions to push back on engine number one's initiatives. they go with the flow. a firm like black rock, for instance, is never going to say, no, we're not going to vote with you on this. i think there's no way they try to outdo each other >> i can't opine on any individual product i will give you context of the activism world over the last ten years. and bob is aware of this as anyone, i'm sure but there's been a co-existence between small activist funds, small activist players and the largest big asset managers who want to bring change, whether it's in the compensation realm, whether it's in the environmental realm or governance realm and in many cases there's what we call the request for activism where a large player -- this is an active fund is calling up a

small activist saying, hey, can you do something here. so, to me, putting everything into context, this is probably just part of that bigger coexistence between the small activists and the small -- i'm sorry, and the larger institutions >> bob, i think to the point you're making, this is how a very small company achieves very large influence. it's because they do it under the umbrella of esg. so, it's hard for the big institutions to say we're not going to go with you you might get some public pushback, right? so, if some of the public turns to these three major companies and say your values don't reflect mine, doesn't my vote count, it could raise the issue on whether the people voting on these issues are the shareholders themselves and the not the index funds that manage the money for them >> there has been proposals made that we should give all the shareholder rights back to the actual individuals rather than to the funds themselves. that's a real mess i'm not sure that's going to ever happen.

i don't think arguably it should happen but here's what's amazing. this was a very academic discussion wait a minute, index fund providers have too much proxy voting power this was a purely academic discussion nobody cared about it until engine number one won the exxon fight and they won it by getting vanguard and everybody else to go along with them now all of a sudden we've realized you can leverage that because as dennis said, this is the moment for climate change, for investor activism. that's the perfect intersection i was talking about. so, the moment has come. the problem now is that the index providers are now in the cross hair of a political fight about climate change remember, republicans, for example, are pushing back on the s.e.c. about climate change. they've already told gary ginz letter, we don't think this is part of the s.e.c.'s mandate for you to go out and start polling corporate america on what they're doing on greenhouse gas emissions which he brought up

this morning in his speech there's a real political cross winds here in an innocuous corporate development. >> dennis, maybe this is how the backlash happens the one way these index providers could lose power is if ordinary investors to the point bob was making say you don't reflect my values. i'm going to go to a different index provider that is neutral or advances my agenda. could we see that happen or is the whole industry too mature, and will these guys find a way to keep politics out of it >> there's been such a change contextually for the large index providers across the world for that matter, kelly, that are putting esg into their investment products. and you can see a flow of hundreds of billions of dollars into the esg infected funds, particularly in europe but increasingly so in the u.s there may be opportunities to invest in a non-esg fund you can buy a plain vanilla

s&p500 fund today. overall, moving towards more inclusion in terms of the selection criteria, kelly. there may well be a reaction to that, but i think overtime it's going to be more towards esg rather than away from it >> this may be polarizing the issue or bringing that at least into view as to whether there will be more proliferation of different index products as these agendas advance. bob and dennis, thank you both appreciate it both bob pisani, dennis vermin. it's up about half a percent at last check morgan stanley thinks it's found diamond making this stock its new top pick in the mining and metals shares of this stock are up 50% this year, and they can go another 50% higher from here they say as we head to break, june is pride month. all month long, cnbc is spotlighting here is justin nelson.

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welcome back, everybody. let's get over to julia borisen for the market flash >> shares down 3.5% since the supreme court ruled that a message sent by a teen on snapchat to over 200 people was covered by the first amendment, which not allows schools to punish students for speech outside of school grounds. this all comes as social stocks are up-to-date twitter is up more than 3% and about 8% for the week. on pace for its best month since february, as is pinterest. that stock is up about 3% today. facebook is up about half a percent. but that could be related to the antitrust bills that are getting marked up today by the house judiciary committee. those antitrust bills would be unlikely to affect the other social stocks. of course facebook would feel an impact there, kelly. >> the supreme court ruling there, thank you for bringing

that to us over to rah held sol mono. >> on a trip to el paso texas. republicans have been very critical of her for not going earlier as she works to lower the number of central americans trying to enter the u.s. a major free speech decision, the supreme court ruled 8-1 today that public schools generally can't punish students for what they say off campus it's a win for pennsylvania high school cheerleader she was suspendedfor the junio varsity team after repeatedly using a word that school officials found objectionable. this was during a social media post after she didn't make the varsity squad. the supreme court also shut down a law to unionize farm workers. the 6-3 decision allows farm owners to keep union organizers off their property and tonight on the news, the latest where we might here

singer britney spears personally ask her judge to have her father removed as conservator of her finances still lots of attention on that case >> and the legal system in general today. thank you very much. underarmor, marketing mavens, big games for heavy metal. we're going to look at three big thmes readying to go public. s at coming up in rapid fire right after this ot a crack in my windshield... ♪ uh - uh, lisa, maybe less heartbroken? geico lets you file a claim online, over the phone or with their app. ♪ that makes me wanna say... ♪ ♪ stay... ♪ (sniffles) are...are you crying? uhh, there's pollen... geico. great service without all the drama.

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. welcome back, everybody. let's catch you up on a couple stories that should be on your radar right now. it's time for "rapid fire. and joining me, leslie picker, mike santoli, and nancy tangler. welcome everybody. let's begin with recent weakness in the stock of underarmor which collin says is not going to last long, so buy now they're adding best ideas list saying market strategy should pay off in the back half despite shares being down, they put a $31 price target on it underarmor is doing nicely this year, up 22% while nike is down 6%

zoom it out five years, underarmor is down -- over a five-year basis, it's down 50% >> and the bull case for underarmor from day one was it can grow really fast without even cutting into in a huge way nike's market share. having a huge incumbent competitor out there with a premium valued stock i do wonder if it's the right time, of whether it's the athletic apparel cycle right now. have we not passed the peak? also, underarmor is not going achieve stock. you look at the price targeted applied by this target, it still looks rich even a couple years out. >> underarmor, who would you rather or neither? >> we don't own either, so i should say that. i do think underarmor looks interesting. i agree with mike's point up to a point. in term of a relative price to sales ratio, it's pretty attractive based on its history.

i do think people need to get back to the gym even if they don't want to. so, i'm hopeful the company will be able to match the raised values and grow into their multiple >> wait a minute, to be clear, because so many people have been working out at home, they're on their pelotons, living in shorts and ath leisure all the time, you think it could be a tail wind for fitness gear because people might go back to the gym? >> i think some people -- i was on a flight reading "the wall street journal" and they said they're having to allow for heavier passengers and i had noticed the same thing. i think a lot of people need to re-engage in exercise. so, i think that's a potential tail wind for the company. >> politely put. lesley, a quick final word here. >> i would say that i might be one of those people. i went to a gym for the first time last week i've been working out at home, still wearing workout clothes. but i can see the bull case there. but to her point, it could be possible -- and this is what cohen believes -- that management undershocked their

north american guidance, just 5% sales growth >> interesting another one of those little games. we'll keep an eye on the stocks, whose performance lately has been a reversal from the previous few years let's talk about the new names going public krispy kreme is going back into the markets looking to raise up. warren parker filed to go public it's been another record year for ipos it's only june but we've seen $171 billion so far, which is above the record set last year lesley, i mean, each one of these feels like a different story. i want to talk to mike about krispy kreme so we can go down memory lane there. let me ask you about war by parker and the direct option which people were wondering had fallen out of favor somewhat >> i think it's company dependent because they have the brand recognition.

people know who they are, what they are they don't need additional capital, although that's approved by the nyse and the s.e.c. in order to do that if they so choose it's a potential option. it's not for everybody but for consumer names, it could make sense >> michael krispy kreme is the one that raises the ire of guys like greenberg. it was private, now it's going public again someone like that looks at the ipo and goes that's all i need to know that this market is frothy, i don't want to get involved with it >> well, you can't say that without knowing how it's going to trade the reason krispy kreme became an emblem of a little bit of that irrational exuberance was what happened to the stock after it became public all the ipos were doubling and tripling at that time. i also remember having to dial back when krispy kreme became public in '99 to the early '90s when you had boston chicken was

a moon shot ipo and it was a casual restaurant chain. also back then krispy kreme was a regional cult brand that was going to be going national now it's kind of built out you know what you're getting with this one. my bigger question, j.a.b., backing this money of coffee related chains, now they're taking it public i thought they were a buy it and hold it forever kind of investor >> yes, that's a great point >> i thought that too. >> nancy, any color you want to adhere and what do you make of the market now >> i think the renaissance ipo index is well below the s&p year-to-date so, that's worth noting even though we're up 350% in term of ipos year over year. i was on the set of "squawk" when krispy kreme became public and was forced to eat one on television >> forced? >> it was epic, but i'm not interested in continuing that at this point in my life.

i think warby parker ipos are interesting. you know what a trend setter he is i do like that company and i do like the name. >> okay. that said, lesley, i want to circle back on this point that michael raised could this be them testing the waters for additional ipos >> oh, absolutely. the valuation that krispy kreme is seeking maybe making 3x their money at the high end of the range. this would be an enormously successful turn around in just about six years or so. so, you know, when you put that into perspective of a company that -- or a firm that's not really in the business of flipping companies and not really their kind of m.o., it could be -- you know, we could potentially see more panera is one that's been floated out there given they recently raised additional money as an another ipo to look for. >> j.b. seems to hold pretty much all of them i would say household favorites, but fast casual and that sort of thing. all the more reason to watch how this goes.

let's talk about morgan stanley seeing momentum, ahead still for the mining stocks, they just named alcoa the best in the space, saying cleaning up the balance sheet and they should benefit from growing demand for aluminum. they also see opportunity in china's green energy push thanks to the market share there. they outperform and their $50 price target alcoa is 35. i love this story because it was kicked out of the dow. this is alcoa's revenge? >> i do think it is. however i also think you have to have a lot of faith that the chinese are going to deliver on their green energy objective i'm a little too cynical for that so, i would rather own free port here, though i'm happy to see an upgrade in interest in metals because we're long and we think the narrative has a long way to go >> you do? what inning -- i love that analogy. so useful. we talked to goldman which right before the decision last week,

jeff curry told us he's a secular bowl on a bunch of the metals, including copper he says that's the new oil because it's a key input to the electrification story. >> it's four times the amount of copper goes into electrical vehicle than combustible engine. i think we're probably in the fourth inning. the dollar derailed at the recentrally. we got a pull back i think that was an opportunity for us we went in and bought more palladium and copper plays but the narrative is supportive of a supercycle just from the standpoint of fundamentals, not safe havens. so, we still like the story and we continue to commit assets >> michael, what would you add about alcoa? >> what's fascinating is all the bull cases on commodities rely on this supply constraint. the china story is related to that that probably can take us a fair distance here. i would point out alcoa was an $80 stock 14 years ago if you remember the prior

emerging markets commodities boom in theory there's kind of upside if people believe there's any sustainability to the cycle. >> it's fascinating to watch these narratives change in real time you know, something that stuck to them for five and all of a sudden, you know, they get a new story and new life tothem. it's fun to watch. let's move along before we go here, america's self-proclaimed oldest self-driving truck software company -- got all that -- is embarking on a spac merger ticker ngab and a deal that will value the startup around $5 billion embark faces a stiff rival they say their technology sets them apart because they can work with many types of trucks. lesley, which part of this deal most catches your attention? >> the fact that they were founded in 2016 and they claim that they are the oldest self-driving truck software firm, that doesn't seem that old.

but that just speaks to the heart of a lot of these companies that are getting acquired by spacs. they're not that old they're in very early stages of their growth cycle and here you go, they get a $5.2 billion valuation to be taken public this way. now, it's interesting. we do see waves of this. we've lately seen a lot of these self-driving car technology companies go public via spacs. of course there was the ev wave last year. we'll see how this one plays out. you know, i can't comment on the actual competition in the space, but these kind of pre-revenue or early stage companies do tend to see their fair share of volatility >> yeah. well said. for sure sort of a tread carefully kind of warning there but, mike, there's two names that i think of when i think of this story, uber and tesla uber in particular because the stock has gone nowhere since the ipo. and a big part of the story for achieving profitability while still maintaining affordable rides was self-driving and as that thesis fell apart,

the stock has struggled. everyone is complaining about the rides now and the cost of them and they're facing driver shortage if they could get this software right, it could fundamentally change the story for uber and of course it's a key part of the bull story for tesla >> yes and maybe it's still a stretch to say that we're going to get to that point for uber-type rides where it's much more idiosyncratic. and i think one of the interesting things about embark is it is right now limited to longer haul trucking routes. they already have relationships with the carriers and truck makers also it's combining software as a service with autonomous driving with trucking which are three of the sexiest themes in wall street right now. and i think that's one of the reasons there's interest here as opposed to the pie in the sky we're all going to actually have robot cars on all of our roads very soon kind of story. >> nancy, given those sexy themes that mike described, is embark attractive to you are there better ways to play those themes if you want to play them

>> i think you named the best ways to play that theme right now. i think we're a long ways away i used to commute on b.a.r.t. in san francisco, the driverless system that had a driver for safety reasons so, i don't know i mean, maybe i don't have any vision, but i think we're a way away from long haul trucking with driverless trucks >> even if they're the leader in this category, you think we have a long way to go before it's ready for prime time >> i do. >> i have to agree with you. we'll leave it there, everybody, and we'll let people who are proponents make their cases on twitter. thank you all for a great version of "rapid fire" today. must see tv is dead. long lived must see tv we're going to take a deep dive into how streaming has transformed television first the great state tax give away some states are returning surplus revenue back to residents. we have all those details next

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welcome back it sounds look a headline from an alternate universe, but it's not. more than a dozen of states are sending billions of dollars back to taxpayers as they deal with extra revenue. robert is back with the debate its ignited. >> yeah, alternate universe is a great phrase for this. remember a year ago, new jersey was looking at a $10 billion deficit. now it has a $10 billion surplus. now, to spend all that money, the state's going to start sending $500 checks next week, that's to households earning $150,000 or less and it's giving property tax release and bigger child tax credits to certain families. a total of 29 states took in more revenue during the pandemic than before it, and more than a dozen now have surpluses that they are returning they're sending rebate checks, they're cutting taxes, they're boosting spending.

colorado has a $3 billion surplus and will send checks of up of $120 to eligible families. idaho just passed a $400 million tax cut, and they're boosting their infrastructure spend minnesota is planning a $1 billion in tax cuts north carolina considering teacher bonuses of up to $300 per teacher. but it is california that wins on the surplus race here at over $75 billion for california's surplus. it is sending out rebate checks of up to $1,100 per household. it is spending $5 billion to pay all the overdue rent for middle and low-income renters, and it is forgiving certain traffic fines. if you got caught speeding during covid, you don't have to pay. >> i don't know where to begin how did this happen? how did we end up with extra money? where did the money come from? if it came from taxpayers, of

course it should be given back, although i'm sure states with bug pension deficits, maybe there's something else it could be used for. but how did we get here? >> some of the states are giving it to fund their pensions. but how we got here, really two sources. one is all that federal stimulus new york alone is getting $12 billion that it can spend however it wants to, california even more. and income tax collections from the wealthy thanks in large part to the booming stock market. it was the capital gains from the booming stock market, high incomes and the federal stimulus and now of course arguments of whether we should be spending even more given how the states are doing. >> if they already had -- it does seem a little circular that taxpayer money writ large is going to states and returning it to their taxpayers if that's a big piece of this, it would seem to defy logic. but states like colorado, is that a different story is this just a matter of asset prices that have done well, even housing prices

perhaps there's a revenue source there. and is this going to be sustainable or is this an odd quirk that is only going to be the case just this year because of the pandemic? >> that is the big risk because the states, and a lot of them are building this extra money into their spending programs and it's not sustainable, we were not going to get all this pandemic relief next year or the year after, then we could face some real budget constraints in a year or two, even if state economies are doing well because the factors that help these states in the past year are just not going to happen at the same levels going forward so, that is going to be the big risk and the big question going forward is will we have a short fall in 2022 and 2023. >> fascinating what a mess. robert, thanks so much robert frank e ill ahead, athe era of must setv is dead how it's reshaping common culture after this

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guest. the nielsen data seems to agree as the top five most watched tv episodes of all time occurred in the 20th century for more i'm joined by the business of entertainment writer at the "washington post. it's great to have you here. i don't think this is just tv either if you look at the music landscape. >> there's fragmentation going on i think the implications are huge i mean, it wasn't that long ago back in the '90s when we can all talk about a "seinfeld" or "friends" or talk about an "american idol" or "game of thrones. that's not happening anymore that's leading to a lot of fracturing and reflects the divisions we see elsewhere >> yes, and as we think through all of this in an industry or investor point of view, you wonder where the money is to be made, right? netflix and streaming platforms is so ginormous they're somehow

capturing the public eyeballs even if they're fragmented through all these different shows. >> yes, and i'm glad you bring up netflix and their valuation the fact this is happening i don't think is unrelated how successful netflix has been and why the street so believes in them netflix doesn't need a big, broad hit. they don't need a "friends" to gather 30 million people they would like to have some of those shows. what they really want and what executives there talk about is get everybody's favorite show, even if everyone in your house is watching something different, you'll still subscribe and are more likely to subscribe i think this fragmentation is connected to the streaming companies. they don't want, they don't need, in fact, sometimes they prefer not to have one big broad hit but five small ones. >> what are the implications if netflix doesn't even show ads? >> yeah, the madison avenue side of it has been really interesting. we're seeing a lot of spending we saw spending, the upfronts, we're seeing it across the

board. we're seeing it because the audiences are shrinking. advertisers are so desperate now to reach this sort of ever narrowing audience that super bowl ads and the few things that are capturing us on a wide scale are going for record prices. i think advertisers will spend, but the idea of being able to hit everyone, as you say, in one fell swoop, just doesn't exist because a lot of these services don't even carry them. >> i wonder how long longer sports will even be able to do that it just feels like it's a vestige of a time that's past and i'm not sure people care anymore. there is this culture built around it, but you can just see kind of getting chipped away at year after year and delivering value. i want to share an article, a quote from your piece from robert thompson who we've had on the program from syracuse university where he says, decades ago you could disagree with someone on virtually everyone and both still single theme song to "gilligan's island." that common ground is gone i know you're not a political commentator, so to speak, but do

you think there's going to be some sort of societal need for these transcendent shows or something that can bring everybody together >> i do and i think thompson makes a great point that we don't have that and what does it mean for us on a sociological level? we've been talking about economically and financially the incentives aren't there to do that it's much more advantageous not to do that i think that leaves us >> we have the olympics around the corner and usually one of the biggest events of the decade as well. so for those things that can still bring eyeballs relatively speaking, is that where all the advertising money is going and the old tv world, or is netflix the exception to the rule, that they will end up packing in just as much ad load as the product we are used to ten years ago >> it's a very good question and hbo max, as some viewers may know, added an ad-supported option others have the same i don't think netflix is heading

there anytime soon there may be some means to try to do that even with the ads they will get customized the olympics does bring in a broad audience for the opening ceremonies or gymnastics or swimming performance a lot of the stuff, as nbc has been talking about, will be watchable on peacock hours later bundled in different ways. the olympics we're not watching the same thing at the same time. it's a very different world. >> so true it's been a pleasure having you on coming up on "power lunch," earlier this year we told you about the ketchup shortage it's under control and how they're handling inflation with the u.s. president next. ♪ ♪ we made usaa insurance for veterans like martin. when a hailstorm hit, he needed his insurance to get it done right, right away.

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good afternoon and welcome to "power lunch. glad you could join us on a beautiful summer afternoon crypto having a comeback, but still getting crushed over the past two months. are the fundamentals still sound? we'll talk to a guest who says the technicals point to bitcoin at