a lot comes from china. >> we do bring in a lot, which is also part of the let's bring it here get it made here >> thanks. thank you, everybody "closing bell" starts right now. i'm coming to you live from the goldman sachs hq, where we have an important interview with the chairman and ceo of gold man s goldman sachs. both stocks trading lower. his take on earnings and economic outlook is just moments

ago. >> looking forward to that let's look at what is driving the action in this final hour of trade. earnings are front and center. the latest read in inflation came in hot. boeing is weighing on the dow. 59 minutes to close for the session. wilfred, over to you david solomon is here in a few moments.

we were discussing off-camera, the first in-person, live interview either of us are doing for quite some time. there's so much to cover being back in this office, and their approach to offices has been a story so closely. but also they had blowout earnings, yet the stock is down. we'll explore why. jpmorgan also reported today, we'll explore the themes throughout, particularly the sustainability of the strong capital markets' performance and asset management performance, also the didi ipo, and solomon's view on inflation earlier today, whether or not the fed is behand the curve. mike santoli is tracking all of

today. what are you focused on? >> the inflation number you mentioned definitely has the market a bit unsubtled, unbalanced a handful of stocks are making the damages look less severe at the top line indecent down about 0.5% it comes after 10 of the last 12 sessions have seen a record high clearly any excuse to back off makes sense, but a lot of the cyclical areas are definitely suffering. with what the inflation number might mean so take a look today at the nasdaq 100, of course, packed with those huge megagrowth stocks well, nasdaq 100 has basically overtaken the small caps as of now, so essentially a slower, steadary grind the russell has been range

bound, kind after proxy for reflation, for cyclical strength, but also for risk appetites. that's been a bit wavering at this point five-year yields versus 30-year yields, this is the spread between those two things this is a pretty good read on fed policy 30-year actually coming down, because in theory that would forestall long-term inflation. actually, you know, after a 30-year auction did not go particularly well today, you did see the yields actually pick up on the long end. you could see this -- if this is the peak, if what we saw last month was the peak for the spread, it's not necessarily good news.

on the other hand, this low level of absolute yields were at, remember the 30-year is only at 2% or so, maybe that means the absolute spread can be narrower without it being a negative implication, sara >> what does the market take on the inflation number, mike it's the third hot report we saw coming in a row, but it is a lot of the so-called transitory factors, like airfares, used cars, even energy which shows the base effect from the low levels we were at last year. what is the market read? >> i think, to your point, most of the drivers are not sustainable at these levels. there could be a drag on inflation readings from here on out. on the other hand, you could say that for certain, there is persistence in the ample

pongant, showing some up side. the cleveland fed has this, you know, trimmed median cpi type of number, which makes it more the central tendency, so i think sort of the jury is out. it's not a panic you're just seeing people on alert. of course, we also have to be aware that fed chair powell will be speaking to congress and most likely will try to convey they're not going to be in a hurry. the question is, does the entire committee agree with that take >> technology outperforms. mike, we'll see you soon after the break, our exclusive interview with david solomon live from goldman sachs headquarters wilfred will take to him, a much-see interview, coming up next you're watching "closing bell" on cnbc.

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goldman sachs out with strong q2 earnings, posting a beat despite that strong performance, the stock is lower today by about 0.8% goldman sachs chairman and ceo david solomon joins me in a "closing bell" exclusive really, i am joining you it's the other way around. thank for you having us. >> i'm thrilled to have you. you're sitting here, the light is great, the energy, you're glowing. you look fantastic. >> as are you, but as is everyone behind you. this has been such a hot story

all summer about, are penal forcing their workers back to the office too quickly but the tone, the sense here is quite the opposite is that the feeling you've had the last couple weeks? >> we've been very excited to be in front of the curve, get people back into offices we felt we had the protocols, procedures and ability to keep people safe. obviously keeping our people safe is the number one priority. we've invited people back, and people have been excited to be back you can feel the energy here around the floor they're excited to be with their friends, with other people and collaborating for our clients. so we feel good about how it's progressing. there's more to do, but we're excite d to have people back. >> what, david, though, would be your message if someone said i'm just not comfortable, i don't want to get vaccinated, either, can we kick this off at least

until next calendar year what would be your message >> we have told people in certainly offices in the u.s., we've had said it's safe, we would like you to come back. as you know, when we were discussing, we have about 60% of the people that are assigned to this building here today in a normal day, about 80% would come in. so we're about 75% of what we would normally expect. this is new, it's an adjustment. people are coming back as we progress into the fall, we'll continue to invite more people back. there are people with special needs or conditions, and we've always been flexible with our people, take care of people, and we continue to do that >> and you wouldn't force people to get vaccinated? >> we strongly urge people to get vaccinated, and we talk about continued uptake is really our path as a society, with the

pandemic firmly behind us. i'm a strong believer. we're strongly encouraged vaccines we're doing it in new york, in japan, india and other jurisdictions, providing vaccines for employees so we're doing our part to strongly encourage and support in a process i strongly suggest that government leaders continue to encourage and increase the roll-out of vaccines that's our path to putting the pandemic behind us >> reporter: i think it's fair to say, though, your sector is ahead of the surf on this. similar tones, did you have nuances from jpmorgan and morgan stanley encouraging people back. i wonder if you had a conversation about that, let's be on the same page or not >> i've talked to jamie dimon and james gorman multiple times, but we never had a formal conversation about this. all of us are doing what we think is right for the

businesses that we're responsible to lead. you know, one of the things that'sing interesting to me in the dialogue, people are constantly asking me about the future of work i don't know anything about the future of work, but i do have very strong opinions how goldman sachs works effectively for our clients, how we collaborate and how the apprenticeship program works, so we think we're doing what we think is right my guess if you talked to jamie or james, they would say they think they're doing what is right for their organization earnings, very strong numbers, second-best strongest quarter ever it seemed like on the call, you felt that strong performance is going to continue. >> i feel very good about the

performance, our team is working incredibly hard. i think one of the structural things i mentioned on the wall, wilf is coming out of the pandemic, companies are thinking about how to solidify or strengthen the position they are in people look at the pandemic and the experience they have learned. there are certainly big digit at trends that are reshaping business i think ceos broadly are thinking about how do i take advantage of how do i take advantage and reposition my business, and that's lead to go a lot of dialogue. i think potentially good activity our backlog is at all-time highs, very robust so we certainly expect to see continued strong activity as we head through the fall, given the economic backdrove we currently

have >> reporter: has there been a structural shift that will last? >> i think we will not see the level of activity we saw in the first quarter, for example, and that was clear by the two earnings reports you saw today, but i do think there are two things being on, i think fundamentally, the size of theoverall wallet is larger, and i think the large players also has consolidation. so we feel very good about the way we're positioned we have an atscale leading franchise in global markets. the overall wallet is larger, and i think we will perform well to that wallet our returns in that big are higher, so i think we're very

well well positions, i don't expect to see the kind of activity levels from clients we saw earlier in the year, but i think we're not going back to 2019 levels anytime soon. >> when we look at the cpi number this morning, does it make you concerned that the fed might be behind the curve? >> you know, i'm watching very, very closely i've been encouraged in the last fomc meeting there's nor clarity on their focus on this issue i think the facts around whether or not something will be transitory also depend on where we go, just not with monetary policy, but also fiscal policy there's no question there's inflation, not just labor inflation, but also in supply chains i'm hearing that from ceos i think we'll have to watch it very, very carefully, but i know the fed is extremely focused on 9 issue. the decisions we'll make from here will have a lot of impact

interesting that you weren't just having unrealized gains, but realized gains in that area. i think the word you used was harvesting them, and the word was the markets are supportive >> when we had our investor day a year and a half ago, we laid out one of our principal goals, for asset management business, besides growing it meaningfully as we looked ahead, was to shift the mix in the way we did business we added capital debts, a significant amount of on-balance sheet investing. as we look at our alternatives business as we go forward,

with -- we had stated we would move in that direction we have been executing on that to execute on that, we have to monetize investment when is we can. we have the high-class problems of markets going up, so growing some of that balance sheet even while we're selling, we tried to outline that today in our presentation i think the market is looking at the robust economic recovery we're having, and it's pulling forward some of that roimp recovery obviously you are reporting that earnings momentum is quite strong i think the market is catching up with the strong economic recovery the big question will be what we see in 2022 and 2023, and how will the market rebalance with that at the moment, the market is telling you growth is very, very

robust the bond market is telling you we should be worried about growth it's not at the moment worried about inflation. we clearly have had an accelerating economic environment, as we've seen those gains, we are monetizing where we can, because we would like a less capital-intensive asset management business, with you we're making -- as we stated on the earnings called, we have raised over $75 billionin new fund capital sings we laid out our plan so we're making real process in that business, and i'm pleased with the performance. >> i want to talk about china, in particular as a way into it, the recent didi listing, which of course you guys were leading the offering on. how surprised were you personally by china's crackdown just days off the ipo, on didi >> well, the bilateral relationship between the u.s. and china is quite complicated at the moment. >> to say the least. >> i do think that there is a

significant backlog of chinese companies turning to global capital to raise money to support their growth we have our own backlog, a large number of companies that have been planning to come to the u.s. market. because of the the action the chinese government has taken, i think some of those companies will not come to market at this point in time. what is the long-term effects there are, i think it's too early to tell. i was surprised this played out the way it did at this moment in time, but regulators around the world, are watching and we'll see where it goes. it's early to see how the ship will balance, but no question the chinese want more control in the direction of some of this activity, so they're taking steps to give them more control and more of a say in that process for chinese companies. >> does it torpedo chinese ipos

listing in the u.s. for the next 12 months? >> i -- i'm not so sure that that's the case. i think we have to think about, here, there actually wasn't in the process of a company -- chinese company listing in the u.s., there wasn't a regulator in china that officially had to sign off on it, up until this moment chinese have now put in a process where they have a regulatory agency that has an ability to sign off on listings. that will create a gating. if they sign off on no listings, there will be no listings. if they sign off in an affirmative way, i think there will be good investor demand, so we're seeing a shift, and we're going to have to watch that to understand how that will work going photograph

>> we've had a couple high-profile departures through the year at the same time some stories about junior bankers not being as content as they might be. i just wondered whether one factor that could be a factor to lisk both of those was at play a blowout year, did you not pay enough >> i think we pay people very well, in line with our performance last year. we're performing extremely well this year. we'll pay people extremely well, as we go forward you know, with respect to senior partners, there's nothing different in this cycle versus any other psych the around senior department departures that's different from young people we have a normal pay cycle our banking franchises, as you yourself highlight is a leading franchise, performing very, very well we've had that franchise for a long time, because we have terrific people. we take care of them

we have also paid competitive. for young analysts that pay cycle is later this summer, and given our performance, i think people will see how it works >> as we round up on the share price, almost triples since the pandemic lows, but more pontly up ahead of your peers how regularly do you focus on that >> well, i mean, first of all, everyone at goldman sachs is proud when we perform, and we are performing, and proud, of course, we are i'm proud, but more importantly i take pride in how proud our people are, you know, of that performance. a year and a half ago we laid out a plan to grow our firm, improve our returns, set targets. we're on track for thundershower targets, started to

communication that we're driving towards a firm that can have sustainable mid teens support. i'm confident we'll be rewarded by our shareholders if we continue to execute. >> thank for you having me. >> i really appreciate you being here great to have you in the building, great to come and see how energized people are here. thank for you talking with me today. i appreciate it. >> david 108 month, chairman and ceo of goldman sachs sara, i'll send it back to you. >> a bustling goldman sachs. very timely, wilfred frost, thank you into still to come, irwin simon jones us with the details on the integrate between the company's marijuana and beer division down 15% in the past month, but still seeing strong gains for the year. shares of boeing weighing on

the dow today. we'll talk about the latest headache, and an analyst who upgraded the stock today we'll be right back. young woman whispering: condoms father: condoms charlie. she wants to know if you brought any condoms. young man: yeah i brought some. ancr: eargo a vitually invisible hearing loss solution with high quality sound and lifetime support. eargo 5 is here. our latest device that allows you to personalize your hearing experience. get yours today. and if you're and active or retired federal employee you may qualify to get eargo at no cost to you. - [narrator] dearest noodle houses and hot pot hotshots, thank you for the stir fry that gets us all stirred up. whatever you can serve, we'll proudly deliver. (lively music)

32 minutes left. shares of nokia are moving higher after the company said it's plan to go raise the full-year outlook. conagra. however, it did cut its forecast that's hitting the stock, which is down 5.5% on the flip side. pepsico is higher. we'll talk about that a bit later. boeing, by far the -- amid a new of the 787 dreamliner, phil lebeau has the story. >> anytime you cut production, it's going to hit the stock, as

boeing as announced it will be at least temporarily for a few weeks cutting the monthly production of the dreamliner it was f-5 they won't bring it all the way too zero before they gradually brig it back up. they will now by delivers fewer of half of those through the rest of the year, it's the forward pressure bulkhead, that needs to be inspected, and they will need to repair it the repair time is expected to be about three weeks, and deliveries, they have been halted since may that's the headaches for boeing today. it overshadows, with fairly encouraging news, when it comes to deliver yes, sir of the 737 max.

the dplifr yes in june, in terms of orders. guys, back to you. phil, thank you. ahead we'll talk more boeing when we're joined by hunter kay, who upgrade graded the stock just today plus we're inflation playbook, the impact of today's cpi number, when we're joined by russ costrich. as we head to break, bond yields are moving a bit higher right now.

after a bit of a sloppy auction in the earlier session the initial reaction was actually lower yields. we'll be right back. ♪ ♪ experience, hyper performance that takes you further. at the lexus golden opportunity sales event. get 0.9% apr financing on the all 2021 lexus hybrid models. experience amazing.

seema mody has the detames they keep sparring with the state of florida. >> here's the deal i don't think line royal crib want carnival which no longer

require vaccines norwegian cruise lines is not backing down they're filing a lawsuit, asking the court to block , that the delta variant does pose a risk to its passengers. norwegian says it plans to sell 100% vaccinated ships from florida starting august 15th wrouf an injunction it would face a fine up to $5,000 per passengers it could results $4 million in revenues he wants to protect his passengers and wants to sail 100% vaccinated ships. we'll see what the judge says.

we begin where a chicago banker has been convicted to -- texas republicans have authorized state law enforcement to arrest lawmakers who fled the state. since there's no criminal offense, texas cannot actually ask police in washington, d.c., or any other state, to detain legislators. ? wisconsin, they're calling it a vicious excuse the gunman reportedly drove to another gas station and approached another driver. this one, however, was ahn undercover officer who exchanged fire, and killed him, while also being shot sara, back to you. >> rahel, thank you.

a new report says the cbc-infused beverage market is expected to, up next, what tilray is doing to set itself apart. we'll be right back. [squeaky shopping cart] [sniffing] is the salmon wild-caught? she only eats wild caught. [cash register beeps] uh, i need a price check on honey. don't get mad. get e*trade and get more than just trading. investing. banking. guidance. municipal bonds don't usually get the media coverage get e*trade and get more than just trading. the stock market does. in fact, most people don't find them all that exciting. but, if you're looking for the potential for consistent income that's federally tax-free, now is an excellent time to consider municipal bonds from hennion & walsh.

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shares of tilray, the company recently announcing a new brewery for its sweetwater brand. sweetwater also collaborating with broken coast, and will launch a new beer that will be distributed in the u.s broken coast is a cannabis brand, but this we're will not have cannabis in it.

irwin simon joins us right now isn't the point to put the cbd into the drinks, so people don't have to smoke cannabis >> first of all, good afternoon. number one number two, you said at the beginning the cbd category is about a $14 billion industry le whole craft beer industry is about aa $25 billion industries they, and, listen, one of the reasons we bought sweetwart to be in that industry, to go go out there and set cbd drinks, one day thc drinks, to have the infrastructure and distribution

to do that >> there are all these big growth projections for cbd beverages, but we have seen constellation canopy growth >> supposely tomorrow schumer and booker are supposed to come out with their first act with regards to what they want to see legalization look like, so an important partner is what happens with wheelization, number one there's a lot of -- in which states it's legal, which states it's not, but i think again, we're moving in the right direction. 93% of americans want cannabis legalized. 3% want to buy drinks without thc or cbd, but the demand is there. i think there's a lot of partnerships out there, sara,

but has anybody hit the ball out of the park yet? no who will be first? it will be tilray. we know about consumer products. we're going to build brands. we have launched broken coast brand. >> i'm looking at the stock chart next to. amazing run-up it's drop 18% over the last month. do you think there's concerns about the canadian market? and what is going on there >> so i think, listen, the canadians market is now open canada was closed since november, in regards to sales in canada, in regards to europe sales, but there's a lot of pent-up demand with that, with these two companies, they came together may 1st, we're integrating these. we have one management team in

place. we have already clef the synergies, a lot has happened in regard to pulling these companies together, and, you know, by size, you know, we're the largest in the world today with the infrastructure in europe and canada. with our beveragebusiness and hemp business in the u.s., listen, i think a lot will change, depending on what comes out of the schumer/booker bill with that i'm going to continuously look at where other, you know, acquisitions we're going to look at doing, both in the consumer area, both 2349 beverage area, and looking at where else we can do acquisitions in europe in the medical area, which i think is a big opportunity out there.

so our investors to agree to increase our shares, outstanding shares, and that is to do future acquisitions, to grow the company, no different than tesla has done, no different than an abi has done with that we were basically let with no shares >> got it, got it.

>> you know, legalized today in over 35 states, whether it's adult use or medical so it's about time we get on with it. what 2 does, in regards to each state, what it does for tax dollars, and what it does for clearing up a lot of confusion out there one of toughest jobs i have to do is educate consumers, week can abbess is ready for medical use, adult use it's not bad to be enjoying cannabis >> irwin simon, thank you very much, ceo. tilray strayight ahead, pepsi popping today. that's next in "the market zone."

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plus some of the lowest options and futures contract prices around. don't get mad. get e*trade and start trading today. just under ten minutes left in the trading today mike san toldi is here to break it down. joe terranova is back as well. stocks are under a little pressure here, with consumer prices rising 5.4% how is the market taking it?

>> not sent partnericing obviously it takes statements, even though maybe it pulls forward, that's not usually good, but i also have to take it in the context of we're up 10 to 12 days, the market doubled in almost 16 months. >> do you think this alters the fed expectation of when they will -- >> i think the federal reserve is observing what is now a u-shaped recovery in the labor market they're going to try to ensure we gather momentum like head, when we recovered a significant amount of jobs so i think the fill cass component of this is very critical to the federal reserve.

organic revenue growth coming in strong reopening is definitely helping this company, especially the drinks business. also see growth. the company did note higher costs for ingredients, freight and labor, but i did speak to the ceo, and he says he distinguishes himself from some of the other consumer companies. he said consumers are willing to pay for the innovation that poss pepsi has invested he does expect it to go into

2022, so, no, he does not think it's a six-month phenomenon, but he does expect it to continue to weigh, because these costs are rising, for ingredients, for freight, for logistics campbell's soup also get dinged on this a few weeks ago. therefore, consumers are paying up for drinks like bubbling. >> it has the pricing power. >> yes, we're down a bit today, but the market tase it in stride much more than the first couple hot moments. >> but we can firmly say yes, it is or is not transitory.

the reason the markets are taking it well, is they assume it's going to moderate from there, and it probably will. hi, kate >> wilf, shares of the firm taking a hit that news that apple will be announcing a buy now/pay later product. similar to affirm, some of these loans will be financed by the merchant, and interest-free for customers, according to those reports. goldman has apple's partner, meanwhile, for the apple credit card that launched in 2019 both companies declined to comment.

paypal which offers a similar lending product, dropped a little over 1% back on those news. >> i think we can add a source close to the company says it's happening. also peep it mind.

>> joe, what do you make of this and just theend price action despite really good results, we know that trading, sara, will not be as strong as it was one year ago morgan stanley and goldman sachs have done enough to diverse fit where they were able to incur a slowdown and that's uniquely different to what those two franchises were pricing off of in predict years >> i'm happy to have been

holding them for a long time and will continue to do so the dow is down about 100 points technology is really the only seconder that's port right now >> it really is most by the super hoo human cap. the internaling have been pretty week it's about three quarters to the downside nasdaq not much better. with those increasing or perhaps sooner

it tells you that we're going to tighter here take a look at the a bit of wobbliness, above 17, nothing really alambing, but clearly out of in a downtrend. >> the dollar is strong today. the gold did have a bit of a bounce oil is high by 1.6%. only one sector of 11 is higher, and that's technology. despite yields rising. a bit more for nasdaq, which is down 0.4%. technology, as i said, the only positive sector. the other ten sectors are lower.

only one is higher -- [ bell ringing ] ♪ pulling back from record highs. welcome back to "closing bell. take a look at how he finished up, it reached around intraday record high.

except for technology. the nasdaq down about 0.4% really only the megacaps the russell 2000 got hammered, down almost 2% on the close after the hotter than inflation number boeing, as i mentioned, dragging down the -- but the upgraded the stock earlier today. coming up, find out why he's no longer a boeing bear we're -- first, though, to you mike, to some of the -- >> a similar field in terms of

rotation it wasn't enough to really help out the top-line index holding at least for now that rally we got on friday cl clea clearly what's priced in it was bullish when bond yields seemed to bottom, in the sense that, at least the bond market wasn't in a buying panic, but now it seems as if everyone's on alert about the fed. probably trying to defuse some of the concerns. >> she's a voter, very in line with this, and she saw the number and said it's transitory. where yields are, does it not matter

>> i would say, yes, it probably does not matter. do we get to 3%? i'm going to say, no, we do not but nobody really seems to know. >> what does that mean for your investments? >> i think you guys kind of touched upon it. i think the cyclical trade is petering out down today, down the last week we think high tech is the place to be. blue chip tech companies are the place to be. we think there's very interesting ideas. the market and nasdaq has lagged year to date, but i think the nasdaq is going to be playing catch-up

>> does that hurt certain stocks >> i've been doing this a long time, so i'm worried every today, yet i don't worry very much i think catherine nails is, when she says, we don't really know the wonderful thing for investors is this is not a multiple choice exam this is an open-ended essay exam one thing is obvious to me i think the market is trading up on both strategies it wants quality. look at today. we're talking about an inflationary print that's hot. all consumer-oriented businesses trading at their highs energy equities since may 21th

are flat, so you could be in both places. i think it's important to focus on what the market is doing right now. it wants the better balance sheet. >> sara, by the way -- thank you both for having me if you really look at how they performed over the past 12 months, they had a very strong move >> i think what you're seeing, to me, looks rational. mpts goldman 1.5 with

jpmorgan i spoke earlier with david solomon, and he gave his outlook for trading activity. >> i think broadly, wilf, we're not going tees the level of activity we saw, for example, in the first quarter. but i do think there are two things going on. one, i think fundamentally activity levels, given the size of the overall so wove grown or market hear in our markets business so we feel good about the way we're positioned but i do think we're not goings -- going back to 2019

levels very soon. >> he's essentially saying structurally they are making gains insh and cyclically, invest banks is still looking very strong, despite a lot of, i think that will be taken a good news by various investors on the investment banking side. 2021 is another year for investment banks or retail banks, even if it's not to the same thing as l.a. year. i think that capital markets party is still going, but not quite as strong as it will last quarter it puts up 23%, or thereabouts?

>> at the says we've had miss teen, high teens, so that's a big question price-to-book values, as they probably should be, because returns are at a high. >> i would say the last couple quarters, this is their second-best quarter ever, and weirdly in the few days after earnings last quarter as well, they kind of traded off, and then they showed up again afterwards >> just as well, on their asset management, that's the other reason, blowout on the bottom line and top line, and that's

equity investments so that's one of factors, but i don't think you can argue these numbers overall. joe, you want to weigh in on that >> i do. wilf, they don't have to ask a question from you, what is the direction of loan growth why was loan growth disappointing? they have insulated themselves from that conversation i think that's incredibly important, given where we are right now. you are insulated from that question, your business is diversion fitted clearly there's been an accommodate, an economy of scales, and they're waling in on

t that. >> catherine, do you view today as an opportunity to buy >> i will tell you, sara, i am mi mixed initially i said, buy the rumor, sell the news, but looking at gold man sax results, they were really quite strong. jpmorgan has an 18% r.o.e. goldman i think is still trading at under 1.5 times price to book, but those are pretty good number to go on.

are they going to repeat the first half of this year? probably not >> there was some differential today. it was pretty strong, as expected, where jpmorgan was up. so, again, we'll get an ink listen whether it's market share or cyclical. that's thursday. tomorrow is more of the retail banks so we'll get a pulse on the factors. those all traded down today. >> the cafe was very busy.

>>but, of course they're also down a bit today up next, we'll have a look at what message that's sending to investors and largest monthly year over year. how renewed inflation fears could -- we're back in two minutes. as your broker, i've solved it. that's great, carl. but we need something better. that's easily adjustable has no penalties or advisory fee. and we can monitor to see that we're on track. like schwab intelligent income.

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>> inkling of a bit of a shift this is a chart of the correlation between stock prices and bond prices over the last 20 years or so. you'll see mostly been negative. which means bond prices are up, right? so we have popped up higher, and saul this dynamic. now, why do you think we've been mostly negative here since 2000, the main repralg overlay of concerns was more about deflation or dysinflation and not about inflation. prior to 2000, this was consistently positive. so the question is, are we having a bit of a shift orb is it one of these episodes here?

major averages did close today, showing inflation jumped more than expected, up 5.4% joining us now is blackrock's global allocation bond manager, and michael shoe maker good afternoon to both of you. russ, does this number change anything for you i don't think so, it does confirm that transitory may last for longer than we thought or people would like. you know, there was a geeky number, but it was important number it was kind of a strange day

we saw financials down on the day by 1%. tech action continued to rally our basic view is we're keeping the portfolio structure we've had for several months we're underweight duration we're overweight cyclicals, because we do think that nominal gdp is likely to be elevated going into the end of the year >> michael, how does that different from the way you're reading the data >> so, in one months we found inflation up 29% so it should make people more negative on the bonds.

we have jay powell in washington, is he going to be hawkish? i doubt it but still, it's difficult to take in stride do mod yitsds get hit? >> there's this endless debate of growth/value. our major theme is quality, which means even if we like cyclicals, looking for companies with high-growth, reasonable leverage

materials would be one place i've seen industrials is another, and finally, let ate not forget, there's lots that's not while we've trimmed it back, we have not abandoned it on the commodity side, it's tricky it does depend on what commodity you are tacking about. oil, there's a decent chance we'll see higher oil prices, and as demand rises, but other commodities, notably gold you vulnerable, that's one of the big drivers of gold prices, one of the reasons we have significantly reduced our gold exposure the market is making new highs off of technology this is one of

the mysteries. sara, you have a very important point. some of cyclical play, particularly financials is hostage to the bond market when you look at the effect it's had. we see that rates are leading financials as well as bond yields remain as compressed as they are

or is europe and the uk, possibly japan going to follow sooner than perhaps people are pricing in >> here's the thing, the u.s. will typically lead the way. japan next to nothing, but the big point here is it's a global backup in yields here. we think that other countriless follow suit. that should help support the dollar for a while we think that persists a big longer. >> thank you both. when we come back, boeing, the biggest drag out dow today

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american is expected to report its full numbers last week, but it drops a preannouncement, announcing the large numbers that people will be focused on. not surprising these are better than expected numbers compared to what the estimates were let's talk about net loss per share, expecting a net lox of 1.67 per share it was for a loss also coming in where we're expected to come in better than expected it's the risen that american is expecting there's all of these metrics

they're on the better end of expe expectations now up more than 1.3% guys, back to you. phil, thank you. after a new defect was discovered our next guest upgraded the stock today. joining us today is hunter keay. the timing is a little off does it change your view >> no. you know, i was in bed last night, saw the headline, but decided not to change it at the end of the day, it's another setback. it doesn't impact our free cash flow numbers, but it's the last

thing they need, obvious live. but, again, it's an upgrade, mainly because we are just more, you know, we see a capacity arms race forming here after united's large order. >> so what does it mean? can you tease that out a bit >> well, you know, for about book-to-bill was what mattered a lot for boeing shares. it hasn't mattered the last ten or so because of the cash story that was coming in you're going to see airlines buying planes.

market share loss, now to mention portfolios but orders will go a long way to solve that and they're not going to wait. does it mean you're bullish as well there must be a reason they're buying that. >> no, the opposite. airlines buying new airplanes is something they have to do. we shouldn't expect otherwise. when we were upping or estimates, as i said, we took up cap ex a lot, and they preferred slow and steady growth that all spools up well for boeing the group as the s&p sector is

leadership 19%, so how much more down side do you see it's actually marv weight. by about 25 percentage points, that's only the third time that's happened in the last ten years. so it's about ago bad as it gel. american just bead on earnings, so we'll see what they say for the third quarter guide. i think the long-term case is pretty tough which, again, is less for boeing. >> what is your topics among the airlines then? >> we like a small airlines called sun country they're based in minneapolis they get a bunch of big from flying amazon cargo, a really

good opportunity for using used aircraft it's thinly traded, but they're a great story. ily culp is interesting, and lion air, and among the big ones, probably towards alaska airlines, alaska air group >> hunter, great to see you. thanks so much. >> in a red rocking chair. how peaceful you look. >> just trying to take it easy, you know >> rocking and talking. >> now you've dean the interview and go back and have a nice nap. >> i know. take it easy still ahead, jason goldberg on today's big bank earnings, and what he expects. plus virginia is america's top for business for a -- chet dates made the biggest moves, and you may be surprised

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welcome back goldman sachs and jpmorgan reporting strong earnings before the open today, but both stocks closing lower. earlier i spoke with david solomon and asked him about the outlook. >> we're trying to figure out how do i take advantage in an accelerate the that's the backlog is at all-time highs, very robust, so we certainly expect to see continued strong activity as we head through the

fa fall it sounded like from the earnings call and that interview, there's still a strong cyclical tailwind >> i think that's a fair assumption down year on year. you know, they're up 30%, plus, from twoiers i think part of that is reflective of matter gains, and at the same time, you know, just benefiting from, you know, increases in volatility, and gist more client activity. in the investments there's just a hypingened level of activity

which is going to take several more quarters to adjust to clearly trading up a bit good for their business mix, but in terms of their multiple, do you think there's -- >> you know, goldman trades among, you know, the moyer center banks, that's toward the lower end, but think continue to put up a 20%-plus, and then mid teens on a more normalized basis, which could translate into a higher-priced book to multiple notwithstanding ago improvement we have seen in the last year or so. >> jason, what about loan activity and loan growth, which has been a missing key

or does it not look to improve anytime soon >> certainly that's the biggest theme coming out of the next several days, you know, jpmorgan today report ed much link, with we do see and we expect it lo follow. investment banking is still probably the best place to be.

while it could be down the back half the year versus the first half, just given the -- they should benefit from an ultimate increase in the yield curves obviously they have come in as of late. all of them? which valuations looks best? >> you know, two of our favorites are certainly goldman and j.p., which came out today those would be toward the top of our list >> both reported today, so you're down for the week, jason -- no, i'm kidding i know you will be focused very

tight on the rest of the earnings thank you for joining us. >> thank you. time for a new update with shepard smith. >> from the news on cnbc, here's what's happening dozens of wildfires burning in ten western states now thousands evacuated. the largest fire in oregon, that one is threatening part of california's power supply. one person moves forced to leave him home described this as a fire-nado. there's a suspect in the assassination of haiti's president, and he is a former d.e.a. informant two law enforcement officials say that joseph benson was, at times, a confidential source for u.s. agents. he reach out to one of his

contacts at the dea, which encouraged him to turn himself tonight covid cases are surging almost 50% in the past week the new dangers to all of us, and how to spot fake lotteries, fake cures and more. right after jim cramer see you then thank you. shep ha shepard smith. aianowl your weeks look-ahead chrm pelis set to testify tomorrow we'll be right back. has failed to take off. because it hasn't removed the endless mundane work we all hate. ♪ ♪ ♪ automation can solve that

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i invested in invesco qqq a fund that invests in the innovators of the nasdaq 100 like you become an agent of innovation with invesco qqq the secret is out. america's top state for business is virginia. a strong workforce and great education, it's virginia's fifth win and a repeat of the top win from our last study, but inside our rankings, there's a lot of movement scott cohn has more. >> reporter: that's right, as you said, virginia repeats

but one our rankings, a lot of movement take maryland, on you most-improved state. it actually improved in eight of our ten categories, but nowhere more so than in infrastructure we included broadband as a metric the power grid is reliable, another new metric we are looking at ilnot on infrastructure, and michigan and oklahoma, and yes, we saw plenty of movement the other way. that decline belongs to oregon, falling 13 spots, and these a case of slowing economic growth, especially international trade arizona dropping ten spots, finishing last this year for life, health and inclusion wyoming also falls kansas falls on its infrastructure, workforce and economy. you can see where your state

ranks, and all of our past rankings going back to 2007. we do this every year. we're thrilled to be back. it's a huge team at cnbc and cnbc.com that puts it together i always do like to thank our senior producers here, who do so much, but there's a lot of other people behind this so we hope you take a look at our web sites, read about our study, where your state ranks. that's top states for 2021, guys >> we certainly will in fact, we do we also pass on our thanks to the same people, and to you as well, scott. my question is, whether there are any quick fixes, for those states that have dropped significantly. up from, cleinfrastructure, for

example, is not a quick, easy fix. >> reporter: it certainly seems as though the battleground will go back to talent. workforce was a big issue before the pandemic it's external coming back in terms of worker shortages, so much that we look at in our ten categories of competitiveness ties into attracting and retaining workers in a state, so anything you can do to get them, to educate and retain them i had indication, workforce, all of those different areas this life, health and inclusion thing we are looking at, that doesn't seem to be going away. businesses are talking about it, that's why we're talking about it, because they don't want to let good workers get away. i'm expecting action we continue this, that workforce will become a big deal >> we were just talking, scott, yesterday about the blue state/red state rivalry, which

has heated up. you've seen this migration of people into lower tax states it seems like the receipt states do better on this list i'm looking at your runners-up >> reporter: the interesting thing, sara, is what we found over the years, there's no one path for example, virginia, which is kind of a purple state, definitely being governed blue, is a state with high costs, but sort of in the middle for cost of doing business, really. they have gone really outside what you would expect for a southern state when it comes to a lot of this inclusiveness stuff. that seems to work but look at texas, we have dinged texas for a lot of things, but people are still coming to that state in droves that's why it has the number one workforce. texas is obviously a red state,

or at least that's who's in control right now, so it really is hard to say everybody likes to look at things through a political lens these days what we have found through the years, there is no one path, certainly not the way we mushers it, some of which tilt toward the strengths. not so simple. i was going to say this would be tou tougher, saying that virginia has been so anti-business. >> in fact, my favorite thing about scott's intervie with the governor this morning, was how the governor said we have won three years running, because there was no survey last year. he just said we've been the reigning champion. congratulations to the team as well

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word on the street the first payment from the first expanded child tax credit will be sent to about 39 million families with or roughly 65 million kids this week the firm says walmart, target and grocery outlets are poised to benefit in particular, adding that based on pre-pandemic data, jack in the box will also likely see gains thanks to the tax credit, along with wing stop and darden restaurants > emmy nominations were announced today and there were some big surprises julia has them for us. julia? >> reporter: the emmy nominations give us a window of how much is working and how much companies are making

they have 129 nominations. disney is actually the stealth winner while disney+ has 146 nominations, across all different platforms, the company has 146 nominations, more than any other platform and apple tv+ has 34 with amazon having 18. disney did gain about 4% yesterday. guys, here's one surprise. quimby, remember quimby? it no longer exists.

the three shows now running on roku drew a total of eight nominations. so while the format of quimby didn't work, maybe the shows on a tv screen, not just a mobile device, maybe those shows will work we'll have to see who walks away with the rewards when the ceremony is held that's coming up june 19 >> so maybe some awards to come for roku there julia, clearly there is a lot of discussion post this year's movie awards as to whether that's made a difference this year with the pandemic being in place remains to be seen did these awards make a big difference to the bottom line or the top line of the companies when it comes to tv? >> look, here's the interesting thing about the awards contest winners love to win awards, so they finthink if you have a chance to win an award

from hbo, if they can do so, that will be another lure for content creators it's different marketing for the streamers but it's also value marketing for the creators, because what talent doesn't want to win a big award >> i would vote for "bridgerton. >> i'm amazed "the crown" gets so many as well. didn't think it was as good. julia boorstin, thank you for that key data to watch tomorrow, cgi at 12:00 p.m we'll hear from bank of america,

delta air lines, citigroup and wells fargo. we'll have kathy wood right here on the show tomorrow i can't wait mike, a pretty good day to tee off, and more importantly, from the fed chair. >> remember, it's the house. he's going to have a lot of questions that have nothing to do with -- there is even reporting the white house getting a little bit nervous about the fact you have higher prices at the consumer level obviously he's going to try to defer any sense that there is urgency about moving policy in any direction, but we'll see how the market takes it, because at this point you have not just what he says but the numbers of a few months to play against it. >> were you surprised the market didn't rally more today given the fact the move could be transitory and lower which is beneficial for stocks lately >> i would say it didn't rally on the mix of bond and stock market values. meaning, look, we've known these factors were in the mix for

months economists made their estimates based on those factors and the numbers came ahead of all those as well. it seems like it was just a little too high to dismiss entirely, but again, we're down a third of a percent we just earned in yesterday's rally, so it wasn't as if it was a stampede for the rly balut a little bit of nervousness. >> 3 and 5% on the s&p 500 "fast money" on the other side of this quick break retail s have a black owner. that needs to change. so, i did something. i created a black business accelerator at amazon. and now we have a program that's dedicated to making tomorrow a better day for black businesses. ♪ ♪ i am tiffany. and this is just the beginning.

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tonight the battle over voting rights. lawmakers facing arrests as the president enters the fight plus covid fright. the scam robbing millions of americans. live overlooking new york city's times square, this is the big show, "fast money. i'm dom chu in for melissa tonight. next to me, karen finerman tonight on the show we are breaking down the banks. goldman sachs and jp morgan both falling today. you can see after reporting their results, there is another big slate of bank earnings coming your way tomorrow morning. we have your setupcoming kcominh show