stock, really like the diversified investment banks obviously goldman is up 42% but morgan stanley has room to grow in the second half of the year >> you guys are making james gorman very happy today. josh brown finalizing with the final trades >> here's a reit that i'm invested in, simon property group. i think it's worth at least 150 if not more. they said they're doing better now than they were pre-pandemic. i think you need to own this thing if you own any reits >> good stuff. emerson morgan, stanley, simon, thanks to you all. thanks to you all for tuning in. i'll see you tomorrow morning, but "the exchange" with kelly evans begins right now have a great day thank you, brian hi, everybody. i am kelly evans and this is "the exchange. here's what's ahead this hour, a

medical break through but at a price. the cost of the alzheimer's drug $52,000 a year, may be too much for medicare to handle we look at the battle for access and the other treatments on the way. home prices soaring 15% in april, the biggest gain in the history. can this continue and what rule are investors playing in driving up prices? we'll explore that and the rules are changing in rapid fire. the ftc backs off facebook the ncaa lets athletes get paid. and could a bitcoin etf be coming finally christina partsinevelos here with the numbers >> we're only halfway through the day and we're seeing all indices trending green it's a test to see if the s&p 500 and the nasdaq had extend the fresh record closes. utilities sectors are trending lower today and that's in part because of the strength in the community services sector on monday they saw facebook surge

after a federal judge tossed out federal and state antitrust complaints and you can see right now the stock is trending a little bit down, 1% lower although it's been roughly a fairly quiet day for headline news the banks are in focus you've got morgan stanley, goldman sachs, bank of america, jpmorgan passing the fed stress test citigroup is the only one not to do anything on monday. but don't forget citi already pays shareholders roughly 51 cents per quarter, done so since mid-2019 the stock yields just a little shy of 3%, making citi is leader among the big six in that category last but not at least, copperheaded for its worst month since 2020 on fears it may tamp down on rising commodity prices. overall it is up over 20% for the year so, we'll end on a high note, kelly. >> we'll leave it there and revisit in a little while.

thank you very much. meantime over in the world of stocks, the rally is losing steam midday but not before the s&p and nasdaq did set record highs. with inflation fears starting to subside a bit, my next guest says that should support stocks and keep yields rising the ten year treasury could dip to 1.2%. joining me is jim carrie at morgan stanley investment. jim, welcome >> thank you, kelly, for having me on the show >> what do you think is the most out of consensus part of your call here? is it the fact that rates going to 1.2%? we've seen so much of this already priced in lately with the 10-year dropping below 1.5 i'm just curious where the next leg of the pain train is right now. >> so, i think of it in terms of positioning. i think that most people have been set up and most forecasters are calling for higher yields. i'm not going to argue whether yields are going to go up or down what i am going to say is it's a

non-significant chance this doesn't mean yields won't continue to move higher over the longer term or anything like that but what it does suggest is a lot of the inflation risk is starting to get taken out of the market at this point what we have to understand is that in the second quarter we can think of the second quarter as three peaks we have peak growth, peak inflation and peak policy stimulus, whether it's monetary or fiscal. we've gotten all this information at this point in time what's the next catalyst then that could drive interest rates higher if you've already gotten very big inflation rates, we already have the idea that tapering is probably going to start to get announced, come along at some point in time. they're already talking about it so, what's the next catalyst that could drive rates a lot higher in the absence of that catalyst, i could see interest rates drift a little bit lower or at least stay within this range for a longer period of time. >> let me ask the question a

little bit differently why would people want to own a treasury at 1.2% which you could -- goldman's forecast is more dovish than a lot of commentators today would make you believe. so, goldman says core pce is going to be 3% by the end of this year, 2% by the end of next year fine but why does someone want to own a 10-year treasury at 1.2% what if that's wrong is that where you get higher rates? >> yeah, i think at 1.2% i would be harder toown that at that point. but at these levels around 1.5%, i think it's a little bit easier now, look, we're talking about a relatively small move here but what we're also thinking about is a diversified portfolio and positioning. the thrust higher in interest rates took place really in the first quarter, into the second quarter of this year since then we've been moving sideways and we've even been trending a bit lower if you think about it from

owning fixed income to balance your portfolio, your risk asset portfolio that might include equities, i would argue fixed income has opportunities to give you yield and potential return, particularly if things go wrong. what if, for example, we do start to get this decline in inflation? what if the fed becomes a little bit less patient and curves start to flatten down? the back end is going to be the beneficiary of a lot of that as a lot of the inflation risk premium starts to leave the market i think that's one of the reasons why back end rates can look attractive at these levels. i'm not saying that's true for the next two or three years. what i'm saying is over the next couple of months, this might not be a bad place to be >> so, a final question as we talk through the catalyst of the mood of the market to reiterate, the mood of the market has been low rates, don't worry about inflation, growth is back i would argue it has a bit of a pandemic feel to it. maybe that's because of the

delta variant and everything that's going on there. it seems to me that people don't know if that one is going to play out ultimately in term of some kind of additional wave where there's all of a sudden some precautionary measures that people are taking. and if so, we know what that trade is or if it's back to normal. if we move through it, the delta variant kind of peters out and we're back to the value plays and the higher rates i wonder if that's kind of a little bit of an inflection point that we're at right now. >> absolutely. we have a payroll number coming up on friday it could be a big number it's a 700,000 consensus it could even be higher than that but essentially i think you're right, kelly, in saying that the pandemic is going to drive a lot of this. look, i'm not saying that, hey, here's an amazing opportunity, bonds are cheap. bonds are certainly not cheap. what i am saying though is that with all the things going on in the world, whether we look at high yield spreads where they are -- high yields are at very low levels right now there is room for accidents to

happen, right? there is room for a slowdown in the economy. there is room for the pandemic there's a lot of room for things just to not go perfectly right and i think markets today are priced a little bit for perfection and that owning some fixed income at this point might not be such a bad opportunity to at least balance your portfolio. so, 1.2% in the 10-year note certainly can happen the range i'm looking at is anywhere between 1.2 and 2%. i think we're going to stay in that range for the rest of the year but we might touch the lower level before we go higher. >> jim, thanks for joining us. jim caron with morgan stanley investment one place inflation is not cooling is in the housing market where home prices. the price for april rose at its fastest rate ever, up nearly 15% year on year phoenix, san diego, even seattle posted the biggest gains with prices in those cities surging more than 20%. this is interesting as well.

the fhfa index rising faster than k. shiler, which just covers you are ban areas prices around the country were up nearly 16% year-on-year the mid-atlantic and mountain regions covering the most. is this sustainable. ryan gorman joins me ryan, it's good to have you. it's hard to believe the markets so much hotter since just the last time we spoke what's going to happen with prices from here >> well, it's anyone's guess where we go from here. but the fundamentals remain incredibly strong. you're talking about april numbers, national association realtor sources in may everything is very strong. we're debating we're at the high point or one step removed from that the fundamentals, underwriting guidelines, cash offers, low speculation, low building. there's a lot of reason to believe there continues to be a lot of buyers. unfortunately not enough sellers continue to have building

constraints. >> you are echoing what we've heard from one of the top home builder analysts who has told us he sees no reason why prices couldn't go up in the range of 30% year-on-year do you think we could get to price gains that steep >> i think that's a tall order that would certainly be about doubling some all-time peaks however, you're speaking to new home construction, that is a subset of these overall existing home numbers that you're quoting from k. shiler from national association of realtors. some of the new construction inventory is highly sought after. a lot of buildings have threatened to shut down because they don't have enough to deliver whether there's lumber sh shortage or land shortage. i think demand will remain very strong >> even if it stays where we are, we go through another year of this it's going to be a 30% increase over two years which is still just a shocking amount i want to ask you about an issue i hear more and more concern about, which is the role of

investors in the market and the extent to which they're driving up prices or elbowing out other buyers it's a private equity yield grab that's in full force in the first time buyer, in his words, getting screwed here how much competition do you see from buyers like these from investors in the housing market? zblernly like your last guest was mentioning that housing and real estate in general has been an inflation head. so, you would think with the institutional capital flowing into it, some buyers will be squeezed out today is a very, very small percentage of the overall market yes, cash offers are very high the vast majority of cash offers are coming from individuals who are looking to occupy the home and own the home just as they would any other. so, institutional buyers i think are going to continue to blow. money is going to continue to flow into that category. the single family rental will

continue to be strong. in terms of impact on the overall market though, we're talking about percentage points with some markets trending higher than that so, something to watch but not as concerning as it might sound. >> good to hear your perspective because you are right there on the ground where people are battling it out over these properties one final question to circle back to a point you made is there are not enough homes for sale how do you convince -- i hear these anecdotes of people writing letters to homeowners asking them if they would consider listing their house how do you get more supply out of a market where the people who could be sellers feel like they don't want to sell and they don't have any place they want to go? >> additional inventory is the solution to all the analysis of this moment. we talk about manufacturing two ways new home construction. despite high builder confidence, it's going to continue to lag. we're missing 4 to 6 million

homes that we're needing today the biggest draw into the markets today is price increases, existing homeowners finding what their home is worth, finding out what the value of their home is and realizing they can sell and move forward in their life. that's going to draw the most inventory on what was keeping the 20% or so of existing homeowners off the market who were contemplating selling? covid was a very, very big concern, almost 40% of those homeowners with vaccines prevalent across the country now, we're seeing those folks edge on to the market and hopefully that's going to continue to build that inventory. still a sellers market but we would like to build that inventory. >> when i looked at the price it was listing for, it certainly got my attention so, like you said, i think as people see what is happening out there, we may get more supply in the market ryan, thanks, as always, for your time. >> thank you >> ryan gorman is the ceo and president of caldwell banker

we'll break down the numbers, the potential impact on medicare and speak to the most bullish biogen analyst on the street facebook closing above the trillion dollar market cap for the first time on monday that fight is far from over though we have a lot more details ahead on "the exchange." >> announcer: this is "the exchange" on cnbc. hey, it's good to see you. the company we've trusted to keep us working remotely, is the same company we'll trust to bring us back together.

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♪ me and you singing in the park ♪ ♪ me and you, we're waiting for the dark ♪ welcome back to the exchange since the approval of its alzheimer's drug, biogen shares are up 19% as the efficacy and cost of the drug have come under scrutiny if all the of the 6 million eligible adults with alzheimer's took it, it's $56,000 price tag costs more than $334 billion that's led two house committees to investigate the approval and pricing of the drug. bertha coombs has a look at what this could mean for private insurers and michael yee is an analyst with biogen.

let's kick it off with you >> biogen is saying maybe one in six is eligible. the centers for medicare and medicaid has yet to issue coverage guidance for the drug the spokesperson says it's coming soon. but in the meantime because it has to be administered by a clinician, aj home falls under medicare part b. it means paying 56k out of pocket not knowing if it will work dr. joy schneider says that means tough conversations, much as we saw with earlier alzheimer's drugs. >> some of them were pretty costly early on, and i had a lot of conversations with patients that the benefit was small and the cost was high and they might do better to spend their money on something else. >> it costs thousands to figure out if you qualify for the drug because you'll need a positive pet scan to check for am lloyd

plaques. they're pushing for follow-up data >> it would be an important opportunity for the payers and government to work together to create a registry so that we can actually track the initial patients that get this to truly document are we seeing the benefits that we hoped for >> biogen is touting its patient assistance programs, including an equity initiative with cbs health aimed at low income and black hispanic patients to give them access. but, kelly, higher drug spending overall like this could cost all of us more in insurance premiums >> that's what makes it such a thorny issue thank you. despite those challenges that aj helm faces, michael yee says it's something that could benefit biogen and the patient population he's bullish on the company and the launch of the drug there could be road blocks if

they don't come out, cms, and back it and endorse usage of the drug how high of a risk do you think that is? >> it's a great question thanks for having me there's a lot of controversy around the drug and the pricing and i think it makes for a lot of great rhetoric. ultimately we do believe like every single other cancer drug that's approved and every single other important drug that medicare will move to approve and reimburse the coverage of this drug, particularly for the relevant patient population. >> what do you think the costs will end up being? explain different sort of options here, possibilities in terms of how long people are on this, whether it could pay for itself if it makes or lessens the need for some kind of end of life long term care support, that sort of thing >> well, i mean the first most important consideration is there is no real other alternative for these patients who, as you probably know, have a devastating disease for the patients and for the families and caregivers so, point one is there's really

not a lot of alternatives, and it's an important new therapy. and the fda moved to approve it in part because of the significance on that eve point two i think for folks is purportedly there should be a 20% to 30% magnitude of slowing of the disease over time that's what the fda believes that's what certainly supporters of the drug believe and doctors believe. and therefore -- devastated disease, which by the way costs l a lot of money over time there should be a farm coanalysis of that i would remind people that cancer drugs and other therapies that medicare patients are on are $1,000, $2,000, doesn't seem to get much attention, often just adds a few months of life to these patients and we're spending a lon of money on these

drugs. biogen, he thinks theirs is the fastest acting one on the market and he thinks in order to be efficacious it really only has to be taken, in other words, paid for for maybe less than a year is more competition ultimately the answer here? >> you know, i think milley does bring an important consideration for the whole equation i think that's right what we've seen before is in general when you have more drugs on the market and more competition, there should be a free markets dynamic and these people will go out and compete for these patients and for on price and market share. and that's, i think, what people would want so, to david rich, eli lilly, i agree his drug looks very promising. they got break through therapy they may file. there's questions around what may be required for that but i do think more drugs for these patients is going to be good >> you know, he made the analogy

with hep c when those first hit the market we had the discussion they were extremely expensive and over time that price came down. the discussion around the stocks became about their underperformance why aren't these companies doing better because they are ending hep c. the answer was they're ending hep c so the treatment has literally its own shelf life you've got a biogen target if these alzheimer's drugs are effective will we have the same discussion >> i think the lily thing, they use a finite therapy they get it once patients may come off. how that may work. that said, i do -- would remind these chronic therapies in general, certainly for biogen that they're supposed to be on for many years

it's not necessarily a curative therapy like hepatitis c and there are a lot of patients that could benefit from that so, certainly gilead created that stock, biogen stock we believe will go up over that time as billions of dollars will come in and they'll get a lot of share and use. and i think that will ultimately fund other drugs and other drugs coming from not only others but the pipeline that could drive value itself >> all right thanks for joining us today. still ahead, bitcoin is moving higher after kathy woods, bitcoin is down 50% from highs back in april. can kathy woods save crypto? we'll discuss it ahead we're back in a memo

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fuelling increasingly deadly outbreaks across asia. the red cross says asia is nearing catastrophe conditions tonight on "the news" efforts to contain the delta variant here in the united states and a look at how effective the johnson & johnson vaccine is against the more contagious type of covid-19 kelly, back to you >> you will see you next hour. thank you so much. ipos and paying students to play all that and more is ahead in rapid fire tonight be sure to watch "buffet and munger: a wealth of wisdom" as they share stories of their friendship, the deals they've done over the years and what makes berkshire so important i know i'm not missing it. as your broker, i've solved it. that's great, carl. but we need something better. that's easily adjustable has no penalties or advisory fee. and we can monitor

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hi everybody welcome back let's catch you up on a few stories that should be on your radar right now. it is time for rapid fire. here to help break down the ed hadlines, we welcome bob pisani, seema mody, and ceo of destination wealth management. first up it's a win for big

tech the ftc's antitrust complaint against facebook and the entire case brought against 48 attorneys general dismissed by the court ruling, failing to prove facebook's monopoly power. that news sent surging yesterday, propelled facebook above $30 trillion for the first time it isn't the end of the ftc's case bob pisani, i'll start with you. thoughts on the implications of this ruling. >> there has been a problem for years defining what a monopoly is in the modern age it's not like the old age. remember standard oil? remember at&t? you had a company, they gained control of a particular commodity and started raising the prices number one, social networking, they don't have a monopoly they don't control the entire business and number two, nobody's raising prices even with amazon, for example, not only are they not raising prices with 50% of the retail, they're driving prices down. so, people have been trying to

redefine what a monopoly is. and obviously in this particular case, the court was not convinced. >> michael, to quote "news street," the extension of lena con, as they're saying to head the ftc is what they think really puts investors on notice that big changes are coming. she's the one who wrote the woke antitrust, as it's jokingly called, but this new paradigm to find framework and do something about it, do you agree this is now her sort of ascension more than anything, even more than what we heard this week from this judge, more important to bear in mind if you're investing in these big tech companies? >> yeah, i think so. i think the ruling that came down just the other day, i think that certainly is going to be refiled by the government, i'm sure, if hopefully a more pointed case i think you're absolutely right. the new leadership at the ftc as well as frankly mark zuckerberg flat out admitting regulation is

necessary. how often do you see a company that is accused of being a monopoly come out and say we need to be regulated more, we need better rules. i think that's going to happen one way or another whether it's by actions by elizabeth warren or the ftc or the biden administration, whatever it may be i think they're not out of the woods yet. big tech needs to be aware that they need to be careful about using their powers in a way that really looks to squash the competition and impact choice users. >> michael, would you tell investors to shy away from owning these stocks in the meantime >> no, i don't think so. i think, kelly, that these are still names that have tremendous amount of profit opportunity if you look at what's happening in terms of the engagement across the internet, people are communicating more and more. i don't know if that's necessarily a good thing but i think you're going to continue to see tremendous demand for these companies i think more so is apple's

privacy changes. that's more of a concern to me than the antitrust concerns in terms of what it's doing to advertisers and facebook it's already starting to see an impact as facebook mentioned >> fair enough before we leave the discussion, i want to mention the main street thinks the first place to look is the amazon mgm deal because that's one that wouldn't under normal traditional approaches be blocked but could be a test of whether there's a way of staying they might not be in the same industry, all those traditional metrics, but this is still something that shores up big tech's market power. >> listen, maybe they'll use facebook's playbook and say just because we're big does not mean we hold eaa monopoly i think one interpretation to the point is this reduces the potential of a facebook break up so, does this apply to other companies like an amazon will be something to see >> that's a great point as we watch facebook shares, again, now the fifth big tech company

to be worth more than a trillion dollars. moving along the ip market is not slowing down for the summer. a quick round up, didi global is going to price at the top of the indicated range. that values the ride hailing giant at $6 billion. dual lingo are filing to go public as revenues have doubled year to year allbirds are valued around $2 billion the second quarter this year was already the biggest quarter for ipos since 2000 raising nearly $40 billion. one kind of general question to you, is this a frothy environment? do we look at this as a sign of health, wow look at how far we've come since the pandemic, or a sign there's too much liquidity slashing around? >> well, there's a lot of liquidity, and i think that liquidity is going to be spent by companies in terms of acquisitions and certainly through the special acquisition companies you're going to

continue to see tremendous numbers of deals being made. markets are all-time highs this is typically what happens, right? there's a frenzy, so everyone just wants to pile into the frenzy kramer, in his show, i think yesterday if i'm not mistaking was talking about didi, which is the ride sharing company in china. so, there are some companies that have fundamentals that seem reasonable investors need to be careful about these names because we are moving into an ipo market where the markets are all-time highs and you really can't actually dial up a more bubblish scenario than that. so, you need to be very, very careful if you're buying the stock. >> >> allbirds going to be a $2 billion company, what stands out to you >> it's not the ipo boom but the average performance. take a look at the renaissance ipo. it's flat on the year. it's up 3% compared to the s&p 500 which is higher by 14% this year some of the prominent names we talk about a lot, oscar health

is down about 13% in the last one month. what also stands out to me is the performance of the private equity firms, a number of them that were preipo in a lot of these names, carl lyle, black stone, kkr they're having a strong year, up about 49%. so, there's different ways to play this ipo boom, but just interesting to look at the individual players >> yes and bobbi you've been making that point as well which is a lot of taking to market, not necessarily after they've hit the market >> yes and if you look at the first day gains for ipos this year are very robust. 24% was the average gain on an ipo. the problem, kelly, is most of the gains on the first day, 22% of it was on the first day only a couple percent was on the day what we call the aftermarket, the day after and you and i have talked about this, this is when the people can't get in you buy in on the first day. stock prices at 10, opens at 15. you're just an average viewer of cnbc you're buying in at 15 somewhere

and your aftermarket return isn't nearly as great as those people who were able to buy it from the initial -- from the company initially. so, that's the problem but michael really had it right. there are two things that drive ipos first is the state of the market, and we're at new highs so, there's a plus then liquidity and there's oceans of liquidity to buy and there's terrific brand name companies trying to cash in. robinhood, warby parker, flip card, even dole food might go public remember that in the second half of the year. i've got a long list here that we'll talk about >> krispy kremes it feels like every day is filled with offerings. and there is no slowdown for the summer speaking of offerings, kathy wood is launching a big etf, but her arc invest is creating exchange traded fund to track bitcoin but so far there have been eight other bitcoin etfs filed with the ftc so, that honor would go to van

ag her flagship ark invasion fund have done a complete turn around they're now35% off of their ma lows so, what's going to happen here with these bitcoin etfs as this race to go public heats up >> i think this is all just a pr stunt here it seems all the bitcoin believers have had to coalesce together in the last couple weeks to instill confidence in investors within the space one way to do that, launch a bitcoin etf. but it really comes down -- it really starts and stops with the fcc. there have been a number who have tried and failed with getting a bitcoin etf to market. we'll see if kathy wood has what it takes but there are a number waiting to do the same >> michael when your clients ask you for advice on cryptos, do you tell them it's at your own risk do you have a recommended vehicle they should use to invest in it

would you be interested in a bitcoin etf once it's available? >> short answer i would not be interested in that this is basically marketing is what this comes down to. you know, if you want to buy bitcoin, just go to coin base. i'm not sure why etf, you can diversify yourself when people ask about bitcoin, we basically tell them how much money can you afford to lose if you can afford to lose everything, then that's the amount you invest in bitcoin with bitcoin we really don't know what the real value is going to be in a year or two years or three years down the road and just because kathy wood says they have an etf and bitcoin bumps up, that just shows you how volatile the market is it's just another entry comes in that has a visible name and all of a sudden bitcoin bumps up it's not something we're recommending people invest in. i know that's controversial, but we're the kind of people that likes to help people stay retired. >> it's less controversial after

a 50% drop, that's for sure. bob, you get last word here. go ahead >> let me say this, why did jay clayton pass on a bitcoin etf? because he was worried about fraud manipulation and he wanted more exchange of the crypto asset market, the exchanges themselves why is gary gensler punting on the bitcoin etf so far because he's concerned about fraud and manipulation and he wants cover. he wants more regulation of the bitcoin exchanges. this is selling bitcoin to grandma. they're not going to approve that unless they get clear indications they've got more control of the market. and bitcoin going from 66,000 to 33,000 in two months, that does not help anybody's case for a bitcoin etf. he's going to punt in august on the van again down the road to have more time to evaluate things >> you heard it here first great discussion before we go i just want everybody's thoughts here as this is a historic week for colleges and college sports.

the ncaa is rushing a proposal to allow athletes from all 50 states to profit from their name and likeness as soon as july 1st. it comes days before the law set to take effect across the country that would make it legal for college athletes to make money. could provide them with unlimited education related compensation so, quickly, very curious about how everybody feels about this one, even though bob, i'm not sure there's investment implications so, give us your societal ones >> well, look, this is not necessarily about college sports the ncaa is the only one against this and they're against it because they're afraid of losing control and the whole thing is going to turn into a giant pay for play scheme. and it is. what it really is about is the monetization of everything high school kids are going to want to monetize their high school sports. you're going to have third graders monetizing their nfts because they're tiktok stars

i think it's appalling but you can see the trend here >> seema >> i think they'll be very successful with their efforts to monetize their brand look at their following on social media some of the players like jordan bow hannah, a basketball player at university of iowa has more instagram followers than nfl players. >> it's a great point. same point jon was making earlier. we were chatting about this michael, i need everybody's take on this issue i changed my own mind. one day i think it's great the next day i think it's terrible >> it doesn't matter whether you think it's good or bad it's going to happen the bottom line all the money for the ncaa it's going to be great for the athletes it's going to stop or reduce illegal pay offs under the table. and for companies like coca-cola, mcdonald's, pepsi, these are the kind of companies that are going to be all over these athletes

and we could have a poster child in third grade as the next lebron james advertising mcdonald's happy meals >> i just hope it doesn't ruin his life that's all i'm saying. maybe he is the next lebron. maybe he's not we'll have a lot more coverage on the story as this plays out michael yosh kami joining us for rapid fire and coming up take a look at today's mystery chart. shares are down nearly 5% over the past month but the company got an upgrade on the under the rarad success i bet you can't guess it and it's next on "the exchange."

welcome back let's get you a quick check on markets. we're near the lows of the session when the dow was up just 16 points. slight gains for the dow and s&p today. 2% gains for the nasdaq today. you can call it the smallest here are some of the movers this hour we are watching shares of ckeurg

dr. pepper hiked price target to 42 it's at 35 right now and they're highlighting the launch of dr. pepper zero. they're saying demand for low calorie carbonated drinks continues to go up and this is a surprising beneficiary with still more room to run goldman is naming ge a top idea in the large cap space they're saying the stock is poised to benefit from what it says is one of the best backdrops for industrials over the past decade. goldman noting ge is the most sensitive stock in their coverage and they think the rates will end the year at 1.9%. if you feel confident in that rates call, they say ge is the place to go. bank of america is naming fedex is a top transport pick saying shares are trading at a discount and there are good tail winds for the company. they're reiterating a buy rating for more on that, head to

cnbc.com/pro still ahead from ketchup to aluminum cans, major shortages with gun sells at record levels. we're going to look at the ammo shortage next. stay with us i'm dad's greatest sandcastle - and greatest memory! but even i'm not as memorable as eating with gun sells at record levels. well, that's the way the sandcastle crumbles. you can't beat turkey hill memories. it's a thirteen-hour flight, that's not a weekend trip.

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smith and wesson posted huge gains so far in 2021 after gun and ammo sales reached record levels last year these buyers are leading to a shortage josh has that story. >> reporter: we know americans are buying a lot of guns, but finding ammunition for those guns can be tough. i spoke with mani who has owned a gun store in new jersey for about four years yes, he's seen ammo shortages before but never, he says, like this >> ammunition market is dried up there's virtually no ammunition available and it hurts our range business because people don't have the ammo to shoot, number one. number two, the pricing structure for what is available is off the wall. the prices are phenomenal.

>> reporter: now one big reason for this challenge, the historic run on guns we are seeing. if sales continue at the current pace analysts think we could break the all-time record for gun sales set just last year, an estimated 22.8 million according to research firm small automakers nianalytics. it's putting pressure on manufacturers who had to supply millions of existing gun owners now there are millions of new gun owners too i checked with in celestial metz ceo of vista outdoors. he's literally running his three ammo factories 24/7 right now. still this is order backlog in the multiple billions and growing. when will ammo supply catch up with demand? right now i've been told it's impossible to say. >> we'll ask our next guest.

for more on record gun shales and ammo shortages let's bring in editor of firearms publication. when do you think this market normalizes >> i think it will be several years. i did a recent story where i spoke with officials from winchester ammunition and another one and they both have backlogs that stretch out two and a half years it will be a long time before this thing normalizes. >> i read a bunch of stats last year how much gun sales had increased, like 40% increase in background checks that the fbi ran in 2020. are we still increasing over those numbers or starting to taper offer? >> we're still increasing right now. we've seen 8.5 million guns sale related background checks so far in 2021 which is actually up from 8.1 million during the same time period in 2020.

sales aren't slowing down at all. >> what's driving all of this? where specifically is this demand coming from >> well, i think 2020's demand was driven by a number of factors including the uncertainty surrounding the pandemic, meat shortages, prisoner release, police force reductions you had police brutality incidents that drew minorities to buy guns. widespread rioting and political aspect to it too with biden pushing for new gun bans that drives a lot of people to the gun store to buy guns. they fear could be banned over the next couple of years >> is smith and wesson just had a billion dollar quarter this is turning into major profits. the issue is so politically loaded what should we expect from washington as gun sales increase and i read gun ownership in the

country is at 40% or 50% of americans. a very high number that shocked me what kind of reaction do you expect down the road politically? >> yeah. i think politically right now things are fairly stable on the issue, actually, because of the divided nature of congress at this point and, you know, it's likely that that's going to continue for the foreseeable future at the federal level at the very least i don't think there's going be any really significant changes outside of some of the executive actions that biden has taken which could affect millions of gun owners, so it's not insignificant. i wouldn't expect to see any new sweeping legislation on guns coming, and which means i expect these companies to continue to sell a lot of guns at the current, you know, the way things are >> quick final question what's the main reason for the ammo shortage and how are people dealing with it? >> yeah.

i think the main problem is when you add, you know, 8.5 million new customers in an industry like ammo manufacturing, it's difficult to meet that new level of demand when you have some of these companies that have been around for 200 plus years and they are mature manufacturing companies you just can't expand demand or supply 100% overnight. it the takes a long time to build out the infrastructure to do that. that's why you see predictions that this shortage could last for years into the future here it's not going to be solved by, you know, the next big buying surge which will be in the fall. so, people are just going to basically have to get by with what they have for now and it's going to be something that affects shooting ranges, but probably something that positively affects both ammo manufacturers and gun manufacturers going forward. >> thank you for joining us for explaining this trend. we appreciate it that does it for the exchange.

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protect and retire. uno, dos, tres, cuatro! will [sfx]: typingthere [music starts] [sfx]: happy screaming [music ends] welcome to "power lunch," everybody. i'