>> josh, over to you >> general motors got hit too hard i would buy it here. >> michael, you get the last word >> truest financial, has a 3.4% defensive send great job today, frank. >> that does it for "half-time." "the exchange w" with kelly evas up now. >> thank you, frank. here is what's ahead this hour the nasdaq hitting a record high topping 15,000 s&p 5005,000 nearing a new high. even though we've been talking about it so much already, ten years of tim cook at apple many wondered how he could ever follow the legendary steve jobs, but he's done it so well, people are worried his replacement won't be able to measure up. plus, back to work or back at

home which is it? we're still buying home office equipment and binging on netflix. we'll dig into it in rapid fire. first let's start with the record highs dom raced over here about eight seconds ago. >> people are buying stocks, too, not just home improvement products or anything else. check out what's happening with the markets. you mentioned the record high levels there are gains for the s&p 500500, dow and nasdaq composite. big tech technology stocks are helping to propel those markets to those fresh all-time highs. the a nasdaq up by about .5% keep an eye on that particular trade there. also, the recovery trade, energy has sold off on delta covid variant concerns there are concerns fuel consumes

might ease now look at wgi crude. up 9% in two days' time. $67.54 the energy sector spdr up 1.5% halliburton up 4.5%. chevron up 1.5% as well. every stock is higher on the day in energy. no surprise given the move in oil prices cybersecurity, a hot market between colonial pipeline, hack attacks, ransomware, cyber is key and it's big business. palo alto, better-than-expected earnings and sales, better-than-expected outlook for the full year. those shares up 19%. crowdstrike, why is it up 9% it's going into the nasdaq 100 index as of thursday it just goes to show, kelly, how massive a deal it is for

cybersecurity. these two companies headlining some of the big moves in stocks today. >> i didn't realize they were popping that much. dom, thank you very much my next guest says the fed will start tapering soon and that will put a total halt to the rally. barry knapp. it's good to have you. you're very focused on the mechanisms, the mechanics of markets and not just the top level calls. why is it that you think the taper triggers a market reset? >> there's three channels that taper alerts, slowing of asset purchases works its way thank you the markets. the one most economist, strategists, fed policy participants focus on is the signaling or discounting effect. if we hear anything from chair powell this week, it will be about separating rate hikes from the actual taper process

they'll do everything they can to deliver dovish taper. that's one of the two channels the second is a move higher in real rates when you discount stocks, create an equity risk premium model, you use a real interest rate even last week as fed officials talked more about a potential taper, steve leisman reported that's a higher probability. you saw a spike higher in real rates in the front end that's what happened in the taper tantrum which was the smallest we had two spikes in real rates in 18 and 19 then the third channel, the one that never gets discussed, kelly, is the volatility channel. that's because when the fed buys mortgages, 100% of the net supply, they suppress mortgage repayment risk they don't hedge it. it causes interest rate volatility to go up. that causes equity volatility to go up, that's where these risk

shocks come from. >> signaling issue, real rates issue, volatility issue, we have all three of these things. what do you say to those who go, no, it's priced in the taper is priced in the markets are slugging it off, looking past it. what if it doesn't create a 10% to 15% correction? >> well, i think with real rates -- you've heard people like my former colleague, rick reader talk about real rates being in the wrong place they're incredibly low i doubt very few would argue with my point that when the fed stops buying $120 billion a month, real rates won't go up. that's primarily what they've been doing anyone who looks at interest rate volatility would have to acknowledge it's way below long-term medium that will go up as well. with those two factors so cheap, it's really difficult to argue this whole thing is priced into

the markets. you can argue all you want that we talked about it and that means it's priced at those two asset classes in particular, real interest rates and interest rate volatility is so below their long-term means. >> let me ask you a separate question putting all that aside, is there a sense in which this market is telling us there will be no corrections or pullbacks does that phenomenon itself need to be explained if we look back over the -- this is a lot of the stuff that brian reynolds talks about, so much liquidity, so many corporate buybacks, so much buying that it basically keeps us from having these mega dislocations if you've been waiting for this correction as an entry point, then the market just got 20% away from you. >> when you introduced me, i think you characterized it as a total stop in the rally. i wouldn't characterize it that

way. if you go back to qe 1, qe2, operation twist, those were your best entry points other than the bottom of the cycle all the way through it what i did back in june when i became convinced this was imminent, i cut all risks, but not all risks. we cut back small caps, materials sector, emerging markets, all the sectors that would be most vulnerable to this kind of risk-off shock with the idea you want to powder dry to put money on this risk-off shock. t it generally lasted two months in the last sielk and the market rebounded and went on its merry way. this isn't a get out of the market because catastrophe is coming with the fed not buying any longer i don't believe those asset purchases have any real economic effect if they don't have much of an economic effect other than to

drive house prices up temporarily, they're not going to really impact the long-term outlook to earnings. you don't want to take all your money out of the market, but be cautious going into it. >> maybe another reason to be cautious on home prices. it isn't typically talked about. bury, thank you. a school lesson but with obvious market implications. we just had a news alert in the bond market. sounds like some pretty strong demand despite everything we're discussing rick, how did it go? >> strong demand, absolutely i gave it an a as in apple 60 billion two-year notes. dutch auction yield .242, .25, where it was trading at one eastern. lower yield, higher price. it priced very solid all the metrics just blew away

ten option averages. i'll hit the highlights. when you look at 60.5 for indirects, that's the group we like to pay attention to, foreigners that want to buy into our paper, that's the strongest percentage since june of 2004. if we look at 18.3 on the dealer tape, basically, like i said, it's like a buffet lunch and the dealers get whatever is left over the smaller amount the dealers get, the more aggressive the auction was. they took 18.3%, the smallest percentage since may of 2016 so a as in apple tomorrow 60 billion five-year notes followed by seven years to 63 billion that's 183 billion in coupon supply what we learned today is that the delta variant definitely in my opinion put a stronger bid into the two-year note auction we'll have to see if the longer maturities fare as well. it really is a very sizable water cooler argument now as to

whether this particular strain is going to push things off the rails a little bit more than it has and should we pay more attention to university of michigan or the markets? we'll have to wait to see. >> that's a great way to frame the next couple weeks. rick, thank you very much. let's get to washington now. a trillion dollar infrastructure bill is hanging in the bans. a vote expected shortly could determine the future of it let's bring in eamon javers to explain the position of house speaker nancy pelosi is in. >> she's in a tough position we're getting more clarity on how she's trying to wriggle her way through all this here is what we know expecting around 2:15 this afternoon a vote in the house rules committee. that vote will be moving a procedural process through in which the new language says that the house will consider the infrastructure bill on september 27th that's that trillion dollar bill that passed in the senate. it's expected to pass

overwhelmingly in the house as well progressives and speaker pelosi don't want to move forward on that until they've pushed forward this additional $3.5 trillion budget process. that's with a lot of spending related to what they're calling human infrastructure as well as the physical infrastructure in the bill that's already passed they're trying to use the bill that's already passed as leverage to get a vote on the other piece which they consider bigger in many ways more important. so the key here is that moderates in the democratic party objected to that they want a vote on the hard infrastructure bill that's already passed as quickly as possible the deal appears to be giving them this sort of date certain in september when they'll vote on the infrastructure bill if they get that, will they vote for the budget process on the $3.5 trillion? that's how pelosi is trying to move through this process in the next couple hours. we'll see if that happens. the situation is very fluid, as

they say >> eamon, do you recall a recent case where a date was used like this it seems like quite a novel approach >> yeah, that's a good one i don't recall -- i'm sure it's been done before, but i don't recall a specific case there was a debate that flared up in the past couple hours about whether this was a date certain or a date uncertain. that is, would it be binding or would it not be binding. the initial language said it was the sense of congress that this vote would happen on that date that's not binding that just means we think it's possible this might happen the new language says the congress shall vote. that's more binding. this has gone to a date uncertain to a date more certain but not entirely certain. >> now we can go over the grammatical meaning of shall. >> shall is one of the most important words in washington. >> eamon,i was going to make a play on how much we shall appreciate your reporting.

thank you. coming up, tim cook celebrating ten years at the top of apple and investors celebrating, too the stock up 1,000 percent in his tenure if you've seen everything there is to watch on netflix, don't worry. they're planning a huge fall lineup, but will it be good enough to get viewers to keep binging? stay with us at usaa, we've been called too exclusive. because we only serve those who honorably served. all ranks, all branches, and their families. are we still exclusive? absolutely. and that's exactly why you should join.

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welcome back today marks tim cook's ten-year anniversary as ceo of apple. the company has come a long way. revenue has nearly tripled, market cap climbed above $2 trillion with looming regulatory concerns and flagship iphone sales slowing, where does tim cook they the company from here gene, let me start by asking, what sort of credit tim cook can take for this? you can see tim cook saying -- everyone saying, it's apple, the iphone, everyone could have done it what has tim cook uniquely been able to do here? >> i think that's a good starting point in my humble opinion, what he's

done has become the world's greatest ceo that's part of his accomplishments, part of steve jobs a thread that gets overlooked, one of steve jobs' greatest legacies is the handoff, the blueprint for all corporate handoffs steve, of course, laid the groundwork, but what tim followed up on is maintaining a culture which is incredible to go from $100 billion in revenue to $400 billion next year. that focus -- its singular focus has been unchanged which is in apple's case to create products that enrich people's lives i think what is the substance of what has tim cook done, he has really shepherded this culture -- tim cook has shepherded the culture that jobs built. >> to follow up on that, gene, is what tim cook has created

transferable >> i think everything is transferable that was the narrative when steve jobs left, that this could not be transferable and here we are. i think it is. i think those conversations i'm sure are going on inside of apple. what's most important is steve jobs had -- with the focus of the products, there are other major areas that apple can get into which i'm sure are the discussion, the hot points for any future leader of apple. >> we're watching the market cap approach nearly $2.5 trillion for apple. the question isn't so much tim cook has done so well, how can he keep doing better it's how big can this company literally get. >> yeah, that's right. 2.5 trillion sounds like a lot now. think of where they were ten years ago when he took over, about $340 billion when he took over that's massive growth, all because tim cook took the ball

from steve jobs and said let's grow this into a booming business to your question, kelly, what happens after the iphone, we know they're dabbling in cars which has a huge addressable market for them. we know they're dabbling in this next era of computing, these glasses that you'll wear on your face, that if you ask the mark zuckerbergs of the world will replace the iphone they're preparing for that in a post tim cook apple. >> at some point we know the technology will move past the era that apple has been the leader of. what would you say to investors who have watched the last ten years, maybe i was in for that ride, maybe i wasn't, what do i do now is it apple? is it facebook should i stop worrying about apple and get focused on metaverse or crypto? where do you make the next trillion dollars >> this is something we obsess about, trying to find the threads. in apple's case one of the

metrics is can you sleep well at night owning an investment i think investors should sleep well knowing they own apple, in part because of leadership and culture, but l what steve mentioned, the two areas they'll be getting over the next decade are fractionally reflected in the current cap. just to put a finer point on it, there are only a few companies that can really power that change, whether it's auto or the metaverse. my take is stay the course i think this company can be $200 or better in the next year, plus i think it will keep moving higher. >> steve, any last words for those who say, all right, i want to get in on the metaverse though >> well, the metaverse is way far away despite what you might hear from facebook this is going to be ten, 15 years before we're in a metaverse. apple is really positioned to make that technology, to make

that platform just like they did the phone and all the layers were built on top of it. billion dollar companies built on top of the iphone they're going to make the next platform when that technology is available, that metaverse will exist on an iphone platform. >> so interesting to see if 3 trillion is even the ceiling steve kovac, gene munster, thank you for joining us today as you heard from gene, he thinks this is the greatest corporate handover of all time. we'll have more on all the day's big movers you need to see brian sullivan's ev road trip through california. is the charging infrastructure good enough to support an influx of electric cars that's still ahead on "the exchange."

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we are morgan stanley. welcome back to "the exchange." let's get you a check on the markets. regard highs for the nasdaq. over 15,000 today, by a point at the moment it's outperforming 2/5 of 1% dow is up 75 let's check on some of the individual movers. we have share of capri holdings seeing a nice jump after the company announced they'll replace their ceo. current ceo john idle will become executive chairman. ford is also moving higher after saying itwill double its production target for the f-150 lightning, that's the ev, due to early strong demand. it was released earlier this year, already had 120,000 customer reservations. shares today are up about 2.5% robinhood is jumping, a $55

price target had a good month of 38%, 40% off the highs trading around 48 today. and also up 5.5%, shopify is currently in pilot mode, up 3.5% now to rahel solomon >> here is what's happening at this hour. the caldor fire has burned more than 117,000 acres and remains only 9% contained. a 40-mile stretch of highway is closed and officials say it's unlikely to be reopened in the near future. president biden has freed up federal aid to help with recovery efforts in tennessee. to humphries county in the

latest for the search for the missing. that airs at 7:00 tonight. unvaccinated people in greece will be banned from certain venues. charlie watts of the rolling stone, who helped build the iconic sound, died at a hospital in london surrounded by his family charlie watts was 80 years old >> rahel, thank you. a bullish call on gym rats, a reopening for casinos, a home boost for best buy all that cing omup in today's rapid fire we're back in a moment lease the 2021 is 300 for $379 a month for 36 months. experience amazing at your lexus dealer.

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welcome back everybody let's catch you up on a few stories that should be on your radar. time for rapid fire and we're drilling down on the die very generals in the recovery here to break down the headlines, michael santoli, julia boorstin welcome everybody. let's start with planet fitness. this is supposed to be a recovery story morgan stanley giving shares an overweight, $93 price target

they're saying any growth concerns would only be a good entry point, talking about recent data pointing to a return to in-person fitness this is quite amazing. planet fitness number ships and usage are at about 90% of pre-covid levels a quarter of the gymsclosed during the pandemic. would this stock be a buy? >> look at the chart to begin with if we look at planet fitness within the overall sector industry, the recreation services, it's moved into a position on a relative rotation where it's starting to outperform the s&p 500 it's interesting technically we've been stuck below 85 for a long time and a breakthrough would be interesting. the general consensus is covid is here to stay. i think people are realizing a healthier lifestyle is the key to fighting disease. people are also maybe dreading another winter inside. maybe they're going to get out

they have a history of missing earnings this was a strong year-over-year growth the first time since q 14, they're trading seven times earnings they have strong profit margins. if they can break through the 85, i think it's a good. >> 47 times earnings where are we on the reopening? we've had financials going sideways, energy down. are we finally at a turning point? if so, why, and is plane fitness representative of that. >> there's a reset low travel in particular, airlines, they're bouncing right now but have actually struggled for months since the beginning of june is when you had a bit of a relapse in investor psychology here. are they ready to burst higher again. is it really going to be an

all-in type, across the board reopening. that's a really big question i don't think there's a lot of confidence even to the extent that things remain closed. planet fitness, the issue is it's not as if it's a depressed stock that's been neglected and everyone expects bad things from it it is already expensive. it's trading higher than it did before covid if you think 25% penetration of u.s. citizens is low, that's part of the bull case. it's hard to make that point. >> julia, where is l.a. on the reopening broadly speaking yea or nay >> look, here in lochlt, i'm a perfect example of someone who had a gym membership i canceled it. i have a peloton i'm never going back as we see more signs of the rise of delta, there is a lot of concern. what's so interesting here is,

yes, this is a company that will benefit from the fact that maybe some of the smaller gyms, the mom and pops, they will be permanently shut down and they'll benefit that people will want to go to a name brand that they know will take covid precautions seriously. there are a lot of people who won't go back to the gym what's particularly interesting about planet fitness, they found not a lot of overlap between planet fitness members and people interested in the high-priced home equipment maybe that's protecting the company. >> totally different market. well said. that was the planet fitness story which seems to be a positive for the reopening so, too, is the data out of mam macau. shares of casinos with macau are all surging today. las vegas, still negative over the past months.

mgm and boyd have held up better does the macau to you signal a china rotation >> i would say no. and when i get through my spiel, i'll say, no, you need to be under invested travel restrictions -- forgive my pronunciation in guangdong, plus the macau government is testing their population aggressively, when you look and compare against the domestic gaming plays with draftkings, churchill downs, you see a clear underperformance that we like to follow if you look at the hang seng, yes, there's reopening, look at the hang sang, not only are we not above the 2018 high, we're

not above the 2007 high. there's chronic underperformance from an investment point of view the play is still here domestically >> that's great perspective. the other stock story is best buy which had strongearnings, strong numbers this is seemingly a pandemic beneficiary, people upgrading and buying a lot of electronics. how do you juxtapose that with planet fitness all these stories about category killers, that the ones who survived during the pandemic now face less competition. >> i definitely think to a degree best buy arguably is a little more all weather than purely a pandemic beneficiary yes, on the pc side of things, they definitely benefited, consumer electronics they're projecting ahead to 9% to 11% comp store sales growth for this fiscal year, well ahead

of what people expected. it seems there's a little more sturdiness here. the stock always fascinating to me, always seems to have this overlay of skepticism or caution. it's like .6 times revenue, same as the gap, same as kohl's that challenge chain store valuation. >> i think they should change the name to geek squad and unlock a higher multiple finally, the ultimate stay-at-home stock is netflix. it's going all out for the last four months of 2021, planning to release 42 films to close out the year shares are seeing their first down day -- year to date, julia, even going back to last year, anecdotally -- i wrote this thing about amazon and so many people say they love amazon prime video and netflix doesn't have anything. is this flood of new content going to work? >> look, kelly, i think netflix

has a lot of content, it will have a lot more in the second half than it did in the first half both analysts and the company itself said one reason they didn't gain as many subscribers as investors would have hoped in the first half of the year is a lot of their content was delayed due to production delays that's why we're seeing this backlog of content hit netflix is really going to use these big names, as they always do movies are always a good way to lure new subscribers to tie it back into the pandemic, netflix is seeing all this content now because of production delays due to the pandemic if you look at the box office, there's also going to be a flood of content of really big movies that typically would be released in the summer. a lot of those summer movies have been moved to the fall. so kelly, you'll have more options this fall than usual. >> even as they're amping up

their aurngs, they'll face competition. todd, what would you do with the stock here >> it's horribly range-bound since july of last year, easing up to 600. as you mentioned, 42 films of the 2300 titles, a third is their own content. ozark which is one of the most watched series is coming back on netflix. i'll name drop a friend of mine, his brother is the co-writer. they're very excited about what's to come they're venturing into gaming. i think it's a doomed effort you've got to power these games with the hardware. gamers require a lot more. they have a lot to prove >> last time we were talking about horse racing now we're talking about the ozarks, you've got friends in high places. >> why else do our careers

unless you have fun with it, like i know you do. >> totally. >> kelly, you know that horse got second, my chad brown horse got second i don't think i got props. >> we're giving you props. mike santoli, julie boorstin, todd gordon, thank you for joining us for this edition of rapid fire. the ev chick inor the egg problem. the next electric vehicle step that people have to take that could slow adoption of evs on a broad scale. we'll explain that next on "the exchange."

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that building you're trying to sell, - you should ten-x it. - ten-x it? ten-x is the world's largest online commercial real estate exchange. if i could, i'd ten-x everything. like a coffee run... don't just sell it. ten-x it. welcome back automakers around the world are betting on electric vehicles there could be one big factor that would discourage drivers from buying evs that weren't teslas brian sullivan hit the road in california to explore.

>> everybody knows what a tesla can do and their excellent super charger network. what about all the non-tesla electric cars about to roll out? what's it like to take a 500-mile road trip in one? the only way to find out is to find out. >> i'm at a walmart in barstow, california and got 84% charge. our first leg through the california desert, not a lot of charging stations out here went to an overnight stop in bakersfield, california. very slow. says it will be charged 100% by 11:30 tomorrow morning, more than 12 hours. >> we awoke to a nice surprise, the car was 89% charged. now we begin the run to san francisco airport for a 4:00 p.m. flight. so i'll take 5 straight through

the gut of california. there's a del taco in our future the car's route planning software shows we needed to stop twice between here and san francisco airport or ar rooifr at the airport with just a 5% charge, something we weren't willing to do. first stop, and sadly not the tesla super charger, look at that they've got shade. let's go find our charger. here it is yikes. it's hot, the sun is beating down in fireball california. the only sit-down restaurant not looking so good. our next leg, a lot better into the heart of silicon valley goodbye range anxiety. plenty of charging stations here in one of the capitals of electric cars. all right. so that was just part of our trip, kelly. the piece is like seven minutes

long it's also got a written piece, on cnbc.com. just a couple things, we didn't pick the car it was what enterprise gave to us, volvo's brand. everyone is like, why didn't you drive a tesla? because everybody knows what their network is like. there are a lot of other companies spending billions to get you and your 42 kids into a minivan and know if you're driving to lexington, virginia, that you'll make it there on one quick charge or have something to do. >> i was kind of thinking through this how would this work for a road trip when i was growing up, my dad would not have stopped for 40 minutes for a charge the one took overnight i don't know if the infrastructure bill -- what changes this tesla says it's going to open up super chargers as a network. it feels like we're going to get to much better options even in the next couple years one way or

another. >> the key is knowing that -- first off, there was no shortage of chargers. we were able to find chargers using plugshare app, electrify america. we only saw one other car charging, an audi in bar stroe when we pulled in, we were the only non-tesla the owners were outside laughing when you're standing -- sitting, whatever, for 45-plus minutes -- by the way, it cost like 20 bucks, it wasn't free either, with nothing to do it's why i noted in the piece that the network will be there everybody is making it about cars it's not about cars. it's about real estate this is a real estate opportunity. the gas station on the corner -- my dad owned a gas station in california when i was a kid. they're not going to put in a charger because they're expensive and eat up real

estate the future is going to be some place to do and something to do with your kids for 45 minutes. check out the pull piece and on cnbc.com. >> could you partner with mcdonald's and partner with them. >> sheets. >> yes the exit in winchester, virginia -- >> is the best one. >> that's a test one i know the sheets family that's the test one, more of a sit-down restaurant. check it out charlie watts. >> brian, thank you very much. brian sullivan, you can check out more of his piece online while the autonomous and evtf drive has climbed more than 70%, look at this, chablink has drop nearly in half the russell 2000 lacked the major averages after a huge

pandemic rally we'll dig into why some funds are closing the pandemic playbook and what that means for small cap. stay with us

welcome back

new data from citi suggests that when it comes to stocks sitting at or near record highs, there's a divergence among wall street managers actively managed funds added a combo of pandemic and free opening plays and ditched many health care and biotech names. hedge funds leading more heavily into reopening beneficiaries let's welcome in scott kroner from citi investment research. scott, this is a huge debate right now. where do you think it makes most sense for investors to put their money? >> look, we have a we have a positive outlook on u.s. small cap into the end of the year our chart for the russell 2000 is about 2400 which is up 8%, 9% from here. the bullish case for small cap increasingly is a function of where forward growth earnings expectations are going so this is the earnings set up as we go into 2022

so where we're focused on this point is making sure we have conviction in companies that have the growth driver in 12 to 18 months ahead. >> so that forward growth driver, hedge funds seem to have more conviction in the reopening trade but also in some pandemic plays, whereas some of the mutual funds seem to be hedging their bets a little bit. in some ways you're paying hedge funds to take big, risky bets and deliver big. should we be encouraged by the idea that they're hoping that the reopening is the place to be >> yeah, i think that's the case, right? so when you look at theuse cas for small cap or the russell 2500 by hedge funds, they're going to go down into our asset class for alpha purposes to accentuate conviction in a broader theme or trend so in this case we've seen them come down. we call out the consumer discretionary area as an area

where we believe they can differentiate. again, it speaks to this ongoing and growing recognition that there's a consumer spending wave that can continue for some time longer so that's an important delta in terms of how we think about the hedge fund positioning on the other hand, your traditional long mutual fund investors, they have to deal with a different dynamic in this case for small cap it's been the issue with health care where u.s. small cap health care has been lagging pretty significantly since the february time frame so again, there's no surprise to see them reduce exposure to those names, redeploy that into what we deem more economically sensitive exposures, financials, industrials, energy, materials. >> one final question on health care itself so i'm glad you brought it up. we were speaking to althea young the other day and she said it came down to the lack of m & a for a lot of small biotech

companies because we've been so focused on the pandemic. yesterday we had pfizer acquire trillium is there maybe a change in behavior under way that could make health care catch up or do you think there are other dynamics that will keep holding it back? >> this is great so keep this in mind russell 2000, you've got 350 stocks categorized as biotech or pharma essentially what's going to drive the risk on allocation towards that sector is either going to be perception around the fda approval process or it's going to be the view that there is an m & a scenario that can play out obviously not all the companies can be m & a, but the recognition that there's implicit value in these companies and their drug pipelines can drive some enthusiasm around that sector. >> absolutely. very interesting one of the many places to watch. scott, thanks for your time today. >> you bet any time. still ahead, walmart is

upping the ante in its fight against amazon for your delivery dollars. the details of their new service, next. so, who's it going to be? tom? danny? guess it's on maggie. plan today. feel comfortable about tomorrow. massmutual.

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welcome back, everybody. walmart is stepping up its delivery game, but it's not focused on getting its own goods to customers frank holland is here with the details. >> walmart's local delivery service is targeting the $83 billion local and same-day delivery market. the retail giant launching that business today the actual delivery is scheduled to begin before the end of 2021 and they will use gig workers, store associates and other delivery companies to make these business-to-consumer deliveries. this will be a white label service meaning delivery will not be in walmart-branded vehicles it also looked to leverage investments in disruptive delivery tech. it included in cruise back in april and has partnerships with ford motor company and nuro.

it invested in drone up and has plans to use drones to make deliveries. >> you mentioned avs and drones. we're invested in these disruptive technologies. we moved past the experiment in these spaces and are truly trying to understand how to you scale this technology. >> a lot of investors are watching u.p.s., fedex and amazon but a large retailer doing local deliveries is a much different business than a national carrier. >> it's fascinating, frank, because i can see how well they could do this on one hand but it's got very tough economics. a lot of delivery companies have been struggling with also will their own brand name be involved? because in some cases that would be a huge attraction to customers. in other cases it might turn them off. >> the real key is let's say we have kelly's dresses the idea is that the delivery is coming directly from kelly's dresses but walmart is providing

the point a to the point b they're also going to offer some of this service to people selling on walmart.com as part of their fulfillment basis. >> so they'll look a little more like amazon opening it up to some third parties as much as that's the only way that amazon can be the everything store, it also means they don't have a lot of discretion over what the items are. people get frustrated that they are looking for one kind of mouthwash and get one that's a totally different size or they think they're getting a legit project and it turns out to be something a little off brand wouldn't it be a risk for walmart to get into the same situation? >> not necessarily, kelly. it's very similar to what u.p.s. or fedex does. they simply take your box, take your packages and move them from point a to point b they're not necessarily responsible for what's in those packages. >> right, exactly. they're just the platform. u.p.s. and fedex have figured out how to do it economically. it's up to walmart to do that as

well that does it f "the exchange" everybody. it's a big hour coming up, don't go anywhere, because "power lunch" starts right now. good afternoon and welcome, everyone, to "power lunch. here's what's ahead in this busy hour keep on rolling. america's aging car fleet giving advanced auto parts a boost but it's not immune to higher wage and delivery costs the ceo will be here to break down his quarterly numbers and tell us what's ahead. >> and a la carte pricing. the airlines do it so why can't hotels we'll talk about a controversial new strategy. we head out to l.a., it's the final stop on our powerhouse road trip where there are signs the scorching housing market is starting, kelly, to cool. >> oh, starting to cool but from a pretty hot place the dow is up 96 points. same for the s&p which is edging towards 4500