target left at piper sandler i like everything happening here >> i remember yesterday it was jon najarian i think during the program bought calls of matterport we talked about it right ahead of some momentum we're watching the stock jump a little bit more as we're talking about it that's an interesting one. we'll follow it. thank you everybody. have a good weekend. we'll see you on the other side. "the exchange" is now. thank you very much, scott hi, everybody. i'm kelly evans. here's what's ahead this hour. with another hot inflation rating, one thing is certain is that the debate over inflation is not proving transitory. the hawks move to costs, the doves say outside those categories prices are muted. plus a new tax proposal that's making its way through washington, and it aims to tax stock buy backs. will that pass and will that cripple a key leg of the market? and a stock that jumped 25%

this week, a solid earnings beat giving it a boost today. we'll speak to the ceo of our mystery hint i guarantee you're not going to guess this one unless we give you too many hints throughout the hour >> i'm not even going to try to guess. but i look forward to the segment. if you want to say it's about flatten the market, you would be hard pressed to find any levels that could be flatter across the board than what we're seeing right now for the s&p 500. it is up three points, seven basis points worth of gain the dow industrial is up four basis points, or 12 full points. and nasdaq, 13 points as well. we might take it if the green sticks it will snap multiday losing streaks, especially for the dow and s&p 500. one thing to keep an eye on over the course of the one week period it has been consumer discretionary. the only s&p 500 sector that's in green for the week-to-date period and that's due to part to strength from tesla and other

stocks like starbucks. that's the reason it's outperforming. communications services down and real estate taking it on the chin, down about 3.5%. some real concerns about the best performing sectors so far is there rotation out of those names. and the single worst performing stock in the s&p 500 has been one of the stars so far this year that's kroger, the grocery store giant. now down about 7% right now off the session lows but on a year-to-date basis, they're up 35% however that drop you're seeing is now down 10% from its recent highs. kroger comes up with better than expected profits, revenues, and same store sales declines that weren't as bad as expected however, with the stock that's run this much, kelly, even an updated forecast, upped forecast for the year can't get the bulls back in this for the time being. profit taking, the name of the game so far with kroger. still it's a name we should watch. back over to you, kell

>> don't you think this is an interesting case study in whether things are transitory or not. kroger should be a beneficiary if we're going to see price pressures. if it's down, maybe it's a vote for transitory >> it's interesting you brought that up because i heard your opening monologue. for kroger, you've got to figure rising commodity costs help pricing margins as well for a company like kroger. they did mention in the latest quarter margins did compress from the same year ago period. if inflation is part of the story, if there's pricing at least power, maybe they can do it but for consumer staples, it'll be kind of tough we'll see whether or not those margin prices continue for a grocery chain like kroger. >> maybe that's all the market needs to know. that's a great point trans thank you very, very much. let's move along to my next guest who says there are too many crosscurrents he says you should take the passive aggressive approach. joining me, senior portfolio

manager. what do you mean by passive aggressive >> in this context with all these crosscurrents, passive aggressive approach means that you take some of your money and you do keep it in the passive indices like the s&p 500 but you cut back you take some of that. you put it in cash, keeps the powder dry we like our conservative bond strategy vault for that piece. and then away from that, you start thinking outside the box you get a little more aggressive and you try to catch secular things, things that diversify away from this s&p 500 because just to cover some of the crosscurrents that you mentioned, you have simultaneous cost pressures that are impacting margins just like you discussed. some firms are able to pass those costs on just great and they're going above and beyond

they're cutting out all discounts, things like that. they're getting margin expansion. and you've got others where their margins get crushed by inflation. every time there's an inflation report it's affecting different companies differently. this helps this company's earnings, it crushes this person's it's tough to know what to do. one thing that's safe to do in that environment, our tips, they continue to outperform traditional treasuries it doesn't seem to matter if treasury yields are going up or down tips can sometimes have a better day than a traditional treasury. >> interesting >> it seems bizarre to me to see what happened yesterday, that after a strong 30-year treasury, 30-year yields dropped sharply but tip yields dropped even sharper. how can that happen? usually if there's a big demand for inflation protection, you see yields rising. and yet i think it's just a matter of too many -- too much cash being just shoved into this system between the stimulus payments and the fed and the ecb. you know, it's forcing

everything up regardless but there are some serious inflation pressures out there. >> yeah, and i think, you know, to your point, the idea this concept of too much cash is showing up in a lot of different corners of the market in interesting ways let's go through some of the other plays. to reiterate the passive aggressive idea is to stay with the markets broadly speaking but have these areas that are not as correlated with the markets normally so, that's where tips would come in for you you like the silver etfs you think this should be a crypto hedge you hacked the etf vault private debt and real estate, harder to show a ticker for. but tell us about the etfs you like >> cybersecurity is a big thing right now. you're seeing money set aside in the infrastructure bill just for that purpose, to protect critical water systems, electrical grids and things like that from cyber security so, that's just going to be a theme. regardless of what you think about earnings and things like that, there's going to be juicy

government contracts going there. so, hack is the way to go. haac that's the play. the other thoughts, i-pay is another good etf it's not like electronic payments are going to be going away the other themes that are out there on a secular basis -- again, this is just a trend that's going to persist over the long term. you've got to cannabis play. it's mj. i don't often recommend that, but that's a way to diversify away from the s&p 500. and then you mentioned silver that i like because i understand the thrill of cryptocurrency, you know and i own some myself, okay? but it's a volatile, dangerous play and i understand that the government's kind of driving investors towards that by printing so much money there's too much spending going on and i get the whole story but it might be nice to, like, smooth out the ride a little bit

and go with precious metal so, silj is a silver play that is a little more stable and a little more rational people should consider if they're looking at just crypto -- don't just do crypto >> or uranium. that's the new silver the way the markets are behaving this week thank you so much for putting it together for us as an investment strategy we really appreciate it today. brice dode i did is with sid investment. i want to move on to the apple saga we have a statement from the ceo. doesn't sound too happy. julia boorstin has the story julia? >> that's right. epic ceo tim sweeney weighing in on the judge ruling, saying the judge's ruling that apple must allow other forms of in-app purchases does not go far enough sweeney tweeting, quote, today'sen ruling is not a win for consumers.

epic is fighting for fair competition among in-app payment methods and app stores thefor billion consumers. saying fortnite will return to the app store when and where it can offer in app payment in fair competition, passing along the savings to consumers i do want to note here that this ruling is helpful for companies, including netflix, spotify and others who have been working to avoid app store fees take a look at some of these stocks on move today netflix shares up about 1% spotify shares up some 3%. bumble up 6% and match group up nearly 7% we're also seeing the impact on other game companies roblox, those shares up about 4% and then zinga shares up over 9% we are awaiting comment from some of these companies. match and spotify, among others, have come out in support of epic's case. so, we'll see if they agree with

sweeney or not >> stick around for more reaction john, we're seeing shares of match continue to move to the upside what more do you expect as people let this sink in? do you think that apple investors are going to shrug it off as a little bit status quo, or are they going to start to have to think about what a deal this could be? >> i think apple investors should in a way shrug this off because the core of apple's business model, where it gets its revenues and profits and what keeps the engine going is not affected directly by this. we're going to get that stuff next week when apple, we expect, unveils the next version of the iphone, apple watch, et cetera apple is really about the vertical integration between that hardware, software and services that keeps people loyal. and because of that they'll probably be able to figure out other mechanisms to get paid on the services end that goes to another piece of this the court said apple is not eamon mri. it said they're completing unfairly according to california state law, and there's an issue

there that's not going to allow payment systems and compete with customers. that's a big deal for a lot of developer, especially gaming companies. but it's not a huge negative impact for apple businesswise. >> what about this idea that epic is going to keep evaluating whether it wants to be in the app store until they think they're on more of a level playing field? do you think they have enough heft to undermine the app store and to continue to press this in other jurisdictions? or will they ultimately have to get with the program or risk losing their customer base >> well, look, kelly, i mean i think one thing's for sure is that this battle is far from over sweeney indicating they're going to appeal this there are parts of this we can expect apple to appeal this is a battle that's going to be dragging out for a very long time we've seen epic and tim sweeney function without the app store for a while, but i think the question is big picture, you know, does epic need to be on apple devices? the answer is yes. does epic want to make a point

here and stake a claim here? and the answer is yes as well. so, i think that this battle is going to continue. john is right in that this is not a meaningful piece or an impactful piece of apple's revenue, but it is a key piece of their business and the way they think about their business. apple has made concessions they were moving in this direction. this is a step further than the concessions apple has made i think this is going to be a lot of negotiation over the long term and this battle is far from over, guys >> john, you do think this could be an area where we should watch stocks like paypal i think stripe is still private. but other payment platforms that could have a big new client base >> absolutely. and also unity software, which makes some software platformwise for gaming, app 11 as well this opens up enormous possibilities in the ecosystem for gaming, for digital payments, for the sorts of companies that would be able to say to developers you need an

alternate payment system that is going to give you better terms than apple would, but you need it to work across not only your app but also your website and other platforms, come to us. those are the sorts of companies that could do that once all of the specifics of this get played out. i mentioned stripe because this is what stripe is so so good at. this could be a huge public company right now, but they've remained private >> thank you both. speaking of payments, we've got lisa ellis on deck let's talk to her about what this could mane for payment stocks will developers be shipping transactions to paypal, stripe and others lisa is senior profits analyst at nathan's research i know it's early to ask, but is john right here about the opportunity? and is stripe's ipo now a sure thing? i mean, they could have done this a long time ago >> well, we certainly hope stripe's ipo is coming soon. it's certainly been one of the hotly anticipated ipos in

payments now for a couple of years. and i guess the latest view is perhaps early in '22 that might be coming. but no question this ruling, while understandably it's kind of viewed as maybe baby steps by epic, is a positive step for the payment's ecosystem who have, for a long time, been frustrated by the closed aspect of apple's ecosystem. particularly positive for paypal that's the player that has been effectively blocked out in many ways of the apple ecosystem because apple restricts access to other payment methods over their platform so, this is most directly a boost for paypal who will be hoping to kind of draft behind this ruling and hopefully have it kind of transition into even more steps where apple needs to open up aspects of their platform to third party payment providers. >> and let's take a step back

here for the payment space you have a brilliant note just pointing out the acquisition we saw between square and afterpay three weeks ago, that you expected to see a huge amount of deal making in the payment space. then we saw amazon go after the big firm, the buy now, pay later candidate. so, what consolidation do you see? and has this set off what's likely to be a race to consolidate? >> we think so it's still a bit of a domino effect where things went quiet as they did across many communities during the pandemic. now all these players with dramatic shift into digital payments that was triggered by the pandemic are moving quickly to strategically position themselves so, square's acquisition of afterpay is one big step we do expect to see further consolidation amongst the buy now, pay later players, the big

ones being affirm, saysal, who are better off as part of larger platforms than trying to go it alone. but we think we could see that triggering consolidation in other areas. for example, potentially some of the hot mobile alternatives to square so, this would be players like toast or upserve there's a number of smaller -- ship more payments is another one. there's a anynumber of smaller systems, those integrated cute white point of sale systems that we think could be targets of consolidation. >> where does this all leave the current giants, the visas, the mastercards? >> so far so good. i mean, you know, they are like switzerland, right as long as ultimately on the back end everything is funded with a card, which by and large it is, and more cash keeps getting displaced, visa, mastercard, american express continue to be those back end

rails, the back end plumbing that really win. but that said, with this amount of innovation and disruption, we are watching of course very closely just whether or not there will be some -- so far so good, but whether or not there will be some komdty zags issues or potentially some substitute ways of paying that could creep into the system. any period of disruption like this you're going to be watching very closely, but so far so good for visa and mastercard. and keep in mind they continue to be two of our top picks because they are huge recovery plays on the still pending recovery in travel across international travel >> i hear a creeping note of caution in your voice. i can't dismiss it it's great to have you here today. we do appreciate it. >> thanks, kelly >> lisa ellis. coming up, bank of america is shaking up itsc suite we've got the details and whether a successor for brian

moynihan is in place is transitory the new normal with index posting the biggest gain on record, we will debate that straight ahead on "the exchange." >> announcer: this is "the exchange" on cnbc.

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suite. wilfred floss has the details for us >> following the news last month two long standing deputies a bank of america were retiring, the company announced a slew of promotions also by the way, two other significant retirements, andrea smith and david leitch the first big take away from today's announcement, brian moynihan is going nowhere. a source close to me suggests at 61 he's keen to remain in place for most of the rest of this decade and it's north noting that nobody received the firm-wide coo title that the departing tom montag had that said, the standout name in the promotions is dean athanasia who adds president of commercial banking to his president of consumer and small business titles this is a significant additional role for him, also a significant change in structure for bank of america. more akin to others like jp

moor morgan and chase alistair back and forth wick is the new cfo meaning he'll have exposure to investors rather than predominantly clients in the years to come. if anything were to happen to moynihan imminently, it would be one of those who take over possibly also the outgoing ceo who is 61 and becoming the vice chair. but if moynihan does indeed complete this full decade as chairman and ceo, a slew of other names will have time to prove themselves and into the running as well, kelly moynihan is establishing nine new direct reports as a result of today's announcement, taking his total number of direct reports to 17. that's hard to really pick out any individuals from a long list of long term candidates. of those 17 direct reports, five are women, two are black, two are asian, and of the eight individual business lines, three are led by women, kelly. >> all right thank you very, very much. we appreciate it

wilfred frost with the latest. the buyback battle is heating up in washington with a platnsorproposal that has imicio f wall street and the stocks in your portfolio we're going to break it down in just a moment. ♪ music playing. ♪ there's an america we build ♪ ♪ and one we explore one that's been paved and one that's forever wild but freedom means you don't have to choose just one adventure ♪ ♪ you get both.

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welcome back to "the exchange." i'm rahel salman and here's what's happening at this hour. president biden visiting a school in washington to make the case for his far reaching battle plan he says he's ready for legal challenges from republicans. >> have at it. look, i am so disappointed that

particularly some republican governors have been so cavalier with the health of these kids, so cavalier with the health of their communities. florida businessman who made headlines for helping rudy giuliani seek damaging information on joe biden has pleaded guilty in a campaign donation case. his plea does not require him to cooperate in other cases hurricane olaf has weakened to a tropical storm. it came ashore as a category 2 hurricanes estimated 20,000 foreign tourists hunkered down in their hotels looking back to the tragedy of 9/11. shep speaks to first responders about their experiences that day, plus a look at where the new terror threats are today that's tonight at 7:00 eastern you're up to date. back to you. still ahead, sandler o'neal lost 66 employees on september 11th we'll speak with cofounder jimmy

dunn about those days and how those attacks have inspired victims' children to follow in their footsteps. that's right here on "the exchange." i wonder how the firm's doing without its fearless leader. you sure you want to leave that all behind? yeah. stay restless with the rx. crafted by lexus. experience amazing at your lexus dealer. wealth is your first big investment. crafted by lexus. worth is a partner to help share the load. wealth is saving a little extra. worth is knowing it's never too late to start - or too early. ♪ ♪ wealth helps you retire. worth is knowing why. ♪ ♪ principal. for all it's worth. i've spent centuries evolving with the world. that's the nature of being the economy.

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welcome back, everybody. more than 3,000 children lost a parent in the september 11th attack to mark the 20th anniversary of that day, we've been telling the stories of some of those families martha coombs is in manhattan with how the attacks impacted the career path of two of the sons >> lost more than 650 souls 20 years ago on september 11th. for the children of those people, it is a very special legacy and for two of them, their crease choices have very much been inspired by the loss of their fathers. raymond's first post being the port authority police was the 9/11 memorial. >> at first, you know, i really

didn't want to work down here. but you know, as i got here, just -- you know, again, it's like an honor to be able to work the site >> reporter: they didn't know his father was one of 658 counter fitzpatrick workers killed in the attack this is where the family marks the anniversary. >> i've been honored to be able to read their names four times >> and our father, we love you >> we thought about following in his dad's footsteps. but what stayed with him about that time, how his town's police officers supported his family. >> i remember they lined my street with cars when they finally delivered the news and i think that's kind of just stuck with me, that brotherhood and that unity >> reporter: austin's dad alfred worked in i.t. at counter fitzpatrick. what's inspired him all these years, ceo howard lut nick's

commitment to support families brian malone, his mentor from the 9/11 group tuesday's children, who also works in finance. >> as soon as i got out of school i was thinking i wanted to work for an investment bank >> reporter: he didn't plan to work at canter, but has been there five years >> just to see my face, i had associated that with my dad for so long. it felt like a full circle moment for sure. it kind of -- for me it was about building my own chapter here at canter while fulfilling his legacy >> saturday raymond and austin will be back at ground zero. >> as long as there is a memorial service on the day and the reading of the names, i think it's kind of the way we've grown accustomed to grieving on the day. so, i think we'll probably continue to do that. >> i'm actually going to be

working at the site again. and i think it'll be -- it's going to be a tough time, but, you know >> it's going to be tough for all of them. interestingly, kelly, you know, they're young men, and both of them noted that there's a whole generation now that didn't experience the 9/11 attack, and that's part of the reason they speak out, to make sure that those people know that this is still very much a living part of our history. >> yeah, for sure. bertha, thank you. bertha coombs downtown today the idea of following in your parent's footsteps happened in a number of places on wall street after 9/11. one of them was o'neal, they lost 66 employees that day, nearly half the work force 20 years later the company employees a number of people who lost their parents that day.

joining me now with how these attacks changed wall street is jimmy dunn jimmy, welcome how are you? it's great to have you let's remind people that a couple days after 9/11, people were wondering if this firm would survive. how did you make it? >> it was a very difficult time for everyone but the truth is we came together as a country. we had people from everywhere trying to help us, kelly and the reason we were successful was our clients stayed with us we had friends we had competitors everybody came together and made a real effort that we stayed in business so, we're very grateful every day. >> let's talk about the reporting that bertha just did about the next generation, the children who lost parents in 9/11 and how they followed in their parents' footsteps you guys have that first hand going on, don't you? >> yeah, well we -- you know, obviously each firm has a particular commitment to the

children of the people, the mothers and fathers that they lost we've spent a lot of time a little more focused on getting them into colleges honestly. i think i know every head of admission at every college in the country at this point in time if they have an interest in wall street or an interest in finance, we'll do anything we can do to help them or any other field. it's important for them to pursue what they want to pursue. we try to do internships for something they find useful and we have a couple, evan and maggie, that are working with us now that their dads worked with us but it's not something that we pursue vigorously. but if we can be helpful and it's a course they want to follow, we're happy to try to follow them. >> do they typically have a determination to follow in these footsteps? do they feel conflicted about it i mean, obviously listening to the people bertha spoke with,

it's very difficult for them to even be near 9/11. so, i'm just curious what that must be like for them to, you know, sort of be in that presence >> well, not a surprise, each child is unique and different. and they have different things that they want to pursue the reality is i would never encourage them to pursue something because their dad or mother did it. they've got to find their own way. they've got to find their own passions, and they've got to try things and if doing an internship with us exposes them to something, they'll either figure at the end of the summer, like it more or like it less and both of those things are okay. sometimes finding out what you don't want to do is as important as finding out what you do want to do. it's probably the same dynamic with most all college kids they're trying to figure out what it is that they're trying to pursue and what really -- what passion -- they're young. that first five years you kind

of figure out things you like or don't like we're trying to be as helpful as you can. >> you've mentioned you placed a number of them with scholarships into college you think that will start to wind down around 2024, 2025. where will your work lead then or is that the completion of these efforts? >> annie armstrong and chuck whitmer helped coordinate this foundation we obviously gave to it along with many, many other people and the whole purpose of that foundation was to provide complete education for every child of someone that was the mother or father at sandler. and that work will be pretty much done in a few years we have our last child in school now. and when he graduates, it will be done. and the foundation will give the money -- whatever balance if there is any balance left to some kind of worthy cause, whatever they deem appropriate but it was designed specifically for that purpose, to educate all

the kids once that's done, it will be done >> well, we all applaud the work that you've done, and we thank you so much for all the dedication you've given to it. jimmy, thanks for joining us today. >> kelly, my thoughts with everybody on this tough weekend. >> jimmy dunn with sandler o'neal a special edition of "the news" with shepherd smith. shep will be broadcasting live from the 9/11 memorial at 7:00 p.m. eastern time. as we mark the 20th anniversary of 9/11, we've been hearing stories from traders at the new york stock exchange that day here's meridian equity partners. >> the one memory from that day that stands out to me was i was working down here on the floor there's not a lotof windows on the exchange here. we were getting calls from the outside of the building telling us what was going on i walked to the front door at 11 wall to look out the window and

all i could see was debris, smoke, parts of buildings coming down it was -- it was something that -- i've walked through those doors thousands of times, but looking out those doors, i've never seen anything le atefe.ik

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welcome back, everybody. the costs keep climbing. the producer price index for august up more than 8% from the previous year, its highest reading in at least a decade with yet another data point coming in higher than expected, is inflation really transitory joining me to discuss, maybe even to debate, legal advisory group and gina sanchez, chief market strategist at lito advisers peter, i know you've been warning for some time that cost pressures will remain elevated, ho how elevated and for how long?

>> as we progress to 2022, they'll get less elevated. the question is do we go back to where we were pre-covid with consumer prices printing 1% to 2% or do we have for a period of time a higher plateau? is it 3% to 4% instead and i'll argue that 3% to 4%, while it's slower than the rate we're seeing now is a big problem because $15 trillion of negative yielding bonds is not a good setup with 3% inflation 1.3% 10-year yield is not a good setup with 3% inflation. s&p 500 trading at 22 times earnings is not a good set up at 3% inflation >> so, basically, peter, you think that there's no -- i'm almost starting to wonder if we had 3% inflation if people would still hold treasuries. i don't know if the yield has -- i know that flies in the face of how finance is supposed to work. but it seems obvious we're going to be at higher than 1.3%, but maybe not over a 10-year time frame. >> well, i want to believe that

there is some market left, free market left in the treasury market, and that if the markets were disabused of the thought this is just transstory and we were well into 2022 and inflation rates are still elevated, then the long end of the curve should adjust. the question is how much is the fed going to fight that and how much of it is going to distort the market and not let the market reflect where they think things should be priced. >> right gina, let me turn to you i don't want to say you're in the transitory camp but i think you're less concerned about persistent cost pressures as we head into 2022 and beyond. you're picking investments based on this view how much does it differ with what peter is describing one of the things when i talk to people about inflation and i ask them what do you think the fed means when you say transitory, most people think that means price levels go up and come back down, something like what happened in 2008 with oil prices

and again in 2011 with oil prices with prices went up, hit big numbers, 140, 110, and came back down to low numbers and there's two other versions of the transitory inflation which still meet with what's been described the first is that you have a one-time price drop and prices remain elevated but don't change much after that. so, the change goes down, but your price levels are permanently higher the second is that prices go up and then they continue to go up, just more slowly both of those things actually technically qualify as transitory inflation and i would make arguments that wages -- for example, right now we've had twice the level of retirements during the pandemic that happened in 2019. a lot of people have retired so, we have a lot of companies looking to replace those there was a lot of sort of wage compression that had been locked up in the wages that they were paying and now they're having to go into the market, and all of those wages are adjusting

upwards. i would argue that's probably not going to continue for many years. i would argue that that's probably a one to two-year adjustments. wages then start into their wage adjustment, their wage compression cycle. and we have low inflation again. >> so, gina, it's obvious peter's not that interested in holding a 10-year treasury at these yields would you? >> well, who loves treasuries at these yields they're terrible but, you know, the reality is that, you know, you have, quite frankly, an everything is too expensive market everything is too expensive, kelly. equities at these levels are too expensive, right and so to some degree, some inflation is actually quite healthy, especially if it comes through wages because higher wages protect higher consumption. higher consumption portends higher growth. all of those things are good for

equities from a fundamental basis because the fundamentals haven't been there for a long time all we've had are margins probably for the past decade so, i think we need some inflation in order to get back to good fundamentals >> peter, it's almost like what gina is describing is that the whole society has a high p/e ratio,but she thinks the e is going to come up because the wage is going to kick in things might look out of whack right now but not if people have more disposable income but i guess the point would be they can afford higher costs, which would make your point about the persistence of cost pressures. >> it is a good thing from an employee standpoint that we are seeing higher wages now. the problem year-to-date, at least, is that inflation is running faster than wage growth. so, we're seeing a decline in real wages so, yes, hopefully we'll continue to see that wage increase but if inflation runs faster, then that's not a good thing a am not in the camp that a little bit of inflation or even more than that is a good thing because that reduces real wages. i want to see very low inflation

and stronger wage growth that's driven by productivity i don't want to see wage growth because there's a lack of workers or other reasons i want to see higher wages because there's strong protect ift. that is healthy wage growth, not because there's a dearth of workers. >> we'll leave it there guys up next, wall street has loved modular sofa maker lovesac over the past years. it's a different story in the near term. the stock is down about 20% as supply chain issues have pressured profits. we'll talk to the ceo about the earnings beat and how the company is handling head winds next , even when you're focused on what's happening right now. and thinkorswim trading™ is right there with you. to help you become a smarter investor. with an innovative trading platform full of customizable tools. dedicated trade desk pros and a passionate trader community

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this whole debate whether inflation is transitory. what does your company think >> i don't believe so. i believe that the whole container price situation and the global supply situation is somewhat transitory, although it will probably never be back to the levels it was. but i think broader inflation is here to stay >> so does that mean -- your stuff isn't cheap. do you increase price a little and, from what i can tell, consumers have a lot of cash and these are hot commodities and they're probably willing to pay those prices is that how it's working >> yeah, that's exactly right. we haven't really taken price yet. we've reduced our discounting cadence quite a bit. and it's been very successful for us taking higher margins at least at the register giving them back to the shipping companies on the freight inbound. lovesac has weathered this very well we protect our gross margins and have driven crazy growth, as you've seen.

we'rewell poised if needed >> if you weren't in such a hot area, home furnishings is probably one of the most in-demand categories must help tell me about costco how much did a partnership benefit sales? is that sustainable? >> it began as a shop -- a pop-up shop situation where we would rotate ten-day stints in their road show program and doing that live and over time we transitioned to all virtual and they've been hugely successful and so that partnership has been pivotal as well as now the best buy partnership we have where we are doing proper permanent shop in shops inside of best buy locations where you can touch, feel, sit on our couches and experience in person >> for investors looking at this, okay, they did much better than expected, but do i want to

jump in right now, it's been a hot stock, what's the next couple of quarters going to bring? how do things look from your point of view? >> we are most excited about a long-anticipated product launch we have coming this fall we're weeks away now from announcing what it is. we have investors on the edge of their seat for a long time, those who track us closely we haven't publicized it yet with consumers very proud of it it's been years in the making, and will dove tail and leverage our showroom footprint so that's a big one. given our growth trajectory, what's happening now, we feel very confident about our future. >> you started with bean bags and now the modular furniture. i'm racking my brain to think what this could mean one more logistical question, tell me about the supply chains going through china or how that country versus vietnam and some of the other asian countries are helping or hindering your

ability to get product cheaply and on time right now. >> luckily we, for the last couple of years, have diversified drastically. we're now manufacturing redundant products and that's what is unique, a bunch of seats and sides, you can build 10,000 different configurations, cover them however you like those same skews are coming to us from china, from vietnam, from malaysia, indonesia, and as things get bungled up, covid flares here or there we can move our manufacturing outflows between each of them and we've never been out of stock. straight through covid, you can order a couch today and get it in days delivered to your door fedex. that's what's so un seekique abt our offering >> with a lot of family there, i'm glad to see a company doing well i appreciate it.

shawn nelson of lovesac. senate democrats proposing a new tax and the authors say it will get wall street to pay its fair share ok, let's talk about those changes to your financial plan. bill, mary? hey... it's our former broker carl. carl, say hi to nina, our schwab financial consultant. hm... i know how difficult these calls can be. not with schwab. nina made it easier to set up our financial plan. we can check in on it anytime. it changes when our goals change. planning can't be that easy. actually, it can be, carl. look forward to planning with schwab. schwab! ♪♪

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welcome back two senate democrats are proposing a new tax outside of president biden's original spending plan, and it could have big implications for markets ylay >> reporter: senate democrats revealed two options to pay for the $3.5 trillion spending and tax cuts the first is a 2% excise tax on stock buybacks that bill is sponsored by senator sherrod brown and wyden. i'm told they expect it will raise roughly $100 billion over a decade the senators say the goal is to prevent abuse and tax avoidance. now the second focuses on

closing loopholes for pass-through entities like partnerships this from senator wyden who says the irs has a tough time enforcing the complicated rules surrounding them and wants to prevent partnerships from shifting incomes and tax liability. these adjustments could raise $172 billion over a decade without technically increasing taxes. neither of these ideas was part of president biden's framework for the spending package senate democrats have been considering a broader list of options like these in order to raise revenue. kelly, the deadline for democrats on the spending and tax package is september 15th. some lawmakers are saying that timing could slip. back to you. >> i think people in markets don't know whether to take this as a real threat or not. what are you hearing in terms of the likelihood we could see something like the buyback tax passed >> reporter: i think they will try to get something passed, whether or not these options make it into the package depends on where some of the other big revenue raisers like the corporate tax rate end up

falling. if the corporate tax rate maybe isn't as high as that 28% president biden originally supported because of moderates like joe manchin, maybe they have to use some of the other proposals to make up the revenue. >> very interesting. that's a good framework, i think, for watching these negotiations play out. ylan, thank you. that does it for "the exchange." stay right there "power lunch" begins right now kelly, thank you very much welcome, everybody i'm tyler mathison here is what's coming up on today's edition of "power lunch. a busy day for apple a judge rules against the company on a key part of the epic games lawsuit making big moves in the car business as well is apple, spending a lot of money on apple tv. they're expecting the iphone 13 announcement next week and some stock picking advice plus, the biden administration making a big push behind solar energy we will talk to an