you better tell us when. joey, thank you. michael farr >> donaldson i like it on the pullback here. razor, razor, i own it >> weiss >> gxo, the first day it's gone up in a while. not only scarcity, but logistics is where you want to be. >> all right guys, thank you very much. "the exchange" starts right now. >> thank you very much, scott. welcome to "the exchange," everybody, i'm kelly evans a busy market ahead of us, the dow and s&p on the fourth straight day of losses ahead of the fed in the next hour what economist is getting messy -- with an i, we're not talking about the soccer player. and apple with chip production shortage, if semis are in short supply, why aren't the stocks acting better we'll talk to top analysts about

what the selloff is signaling. and suand rapid fire >> kelly what we have, the market that continues to be in what we call a holding pattern a cautious wait and see kind of mentality. it's playing out today we're waiting foes fed minutes, maybe that's part of the reason why. we're almost dead flat here for the s&p 500. 4350 the last trade there. 14516, the last for the nasdaq off the session lows but again, a fairly tight and muted trading range today. we did, however, kick off concernings season and especially big bank earnings season the report of the day has to go to jpmorgan. those shares are down 2.5% remember, they hit a record high last week. jpmorgan comes out with better

than expected profits, better than expected revenues m and a, helping to offset, the weaker areas in trading. watch those. by the way, jpmorgan chase, one of those bellwethers for the american economy, possibly speaking and then from jpmorgan chase to these stocks, bank of america off 1% citi down 1% wells fargo down 2%. and morgan stanley up. i can only imagine what our colleagues will be doing all day tomorrow watch those big names, the financials in the focus, kelly >> and one in the green, morgan stanley. >> the fed limits due out in the next hour, my next guest is

concerned with supply chain slowing the economy. mark smith, senior vice president portfolio manager at wells fargo advisers and gregory d docko. greg, you say it's not stagflation, but it's messy. what do you mean by that >> what we're seeing a messy environment, with sticky supply chain inflation. that's a long acronym to signal the fact there's this ongoing balance between strong demand, still strong demand, and supply that's taking a bit longer to come up to that demand we're seeing that stickiness in inflation something that is different from the pure transitory team that is expecting inflation to fall back rapidly. >> and mark, do you agree with the stickiness there, does it contribute to your nervousness about the market overall >> yeah, inflation could be here to stay for a while.

many sectors are having inflation affect prices. and i think for a while to come, consumer discretionary, and all of the energy stocks here, many top analysts are saying, you know, $90 to $100 barrel oil could be down the pike in the next year or so. it makes a lot of sense because there's just not enough supply out there. the last time i checked, if you look at the economics if there's not enough supply, prices will go salt of that. that's going to affect the consumer in the next year or two. >> let's turn to the fed, mark, you think they might punt on the papers >> yeah, they could because of what's going on with employment figures. we're saying going into the holiday season because of supply disruption all across the country that it's going to affect businesses that want to hire for the holiday season. if you don't have items to sell

in your store, why would you ramp up hiring to a big degree and we've seen that the fed has made top employment one of their key figures in tapering and raising rates. this portfolio is going to tell a lot what's going on in washington >> and, greg, a lot of us are used to the fed doing this in the last ten years or so as the debt worsens, they punt on the paper. your take on this is a bit different which is they have to, in some ways, slow demand in the economy. i'm curious if they really will, at the time when powell himself may be up for renomination gramming with popularity my point is, why would they take that risk of adding to any slowdown, we're already seeing the economy through their own policies >> well, i think the perspective is slightly different. the way i view it is the economy

is no longer in need of extreme monetary policy accommodation. we are in an environment where the economy remains quite strong and i think the fed has clearly telegraphed that it wants to taper starting next month and going to the middle of next year that's pretty clear. i don't think they'll move away from that. we're not in 2013, in the environment of the taper tantrum in 2013. actually, it's become more hawkish. i think it's more concerned about the persistence of inflation that's higher than forecasted and there's been no pushback and if anything some confirmation that the first rate hike will take place in december of next year so, i think the fed will slowly adopt a more hawkish tilt. it's still got rates at zero it's still got accommodative stance on the monetary fund. but it will start to signal a more hawkish stance that will lead to tightening conditions and have a dynamic effect on the

market >> mark, you point out, on the fiscal side, the fade of the spending bills are a little unclear. we could go from monetary and fi fiscal, up to the recovery being taken away what do you think the sort of risks are around the spending bill >> yeah, the risk is that the market has been used to a lot of this free money flowing for the last year and a half so the last piece, the last leg of this is possibly a $2 trillion infrastructure deal and it could keep the market afloat for now but if all of a sudden we say that's not going to happen on the table. and you've got tapering that's going to start with possible rates going up next year, you know, i think that's a lot of negative news for the market all at once. and that could spell correction, like many are predicting. >> yeah, and we still have several weeks i think if not longer to figure out what that

date would be. guys, thank you both mark and gregory, talking the markets. a new study in retail spending highlights a name of the longer term spending power of millennials in gen-z, 50% of aged and where are they spending, nike still dominant and lululemon made the biggest jump in the survey 30%. it's where and how consumers are finding changes. with half buying on posh mark, like t.j. maxx and half the users buying brands they discovered on tiktok let's bring in john callen what's the biggest investment for you. >> there's huge implications across the public spectrum we published this report with

nine other cowen analysts. on data regarding younger and older consumers. the pick macro takeaway, the biggest wealth transfer in history is under way of $60 trillion in assets that will transfer to gen-z to millennial consumers in the next decade their spending power will obviously increase and you just spoke about the micros >> we're showing nike, lululemon, t.j. maxx, those are stocks that are positive >> yeah, on the survey four years of this data surveying younger consumers, lululemon stood out as the biggest consumer among spenders, in that category, it remains dominant in sneakers and apparel. and then facebook, instagram and tiktok showed huge gains in

purchases on those social platforms. those are the big names we saw >> normally, facebook would have an investing implication, but totally bigger challenges right now. tiktok, obviously, i don't know how you invest in that until you have ideas of what brands. >> well, social media with huge implications the power of these platforms whether facebook, instagram, tiktok, the average r revenue, the power that these platforms have and network of users, the pricing power for advertising has become much more central. the cost across digitally becomes more expensive with scale digitally. we talk about that quite a bit in the report. >> and maybe if this is a choppy retail season it could offer opportunities for people to get into kind of a secular spending power. any smaller names?

many of these are large incumbents >> yeah, supply change led to rapid reprising, valuation multiples down on average, 15%, 20% on sectors, really since september. that's the first correction we've had. burlington stores, roughly $15 billion market cap is one we think earnings could double in the next five year and deckers brand. >> deckers owns -- >> ohka caught up in supply chain disruptions coming out of the vietnam. >> the final word on this, john, before we go, people might be reassured about buying the names that this favors in the long run. what do you think will happen in the next eight weeks now are the stocks pricing in too many disruption? >> modeling the states right now, it's incredibly difficult the conversations with investors, incredibly low risk because of the space right now because of uncertainty

i don't think any of miss supply chain inflation is necessarily transit. it's going to be inflation costs next year. every piece of the supply chain seeing inflation, whether the trucks, the ports, the ships, everything right now is inflationary is there in some magic wand that necessarily resets everything on january 1. people need to be opportunistic but recognize that >> the president himself meeting with leading retailers right now to try and sort this out john, thanks for having you today. john kernen of cowen coming up, apple is apparently slashing its production as a result of those supply chain disruptions speaking of the supply chain, signet avoiding

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♪ welcome back to "the exchange." even the world's biggest companies aren't immune from supply chain woes, with apple reportedly cutting its i13

output due to the chip shortage. joining me now is stacy raskin stacy, it's great to have you back the simple story is wow, the chip shortage is really bad. and down below the average from yesterday. >> yeah, look. one thing the apple story does tell you, it sort of brings home the extent of the shortages. apple is probably the largest purchaser of semiconductors on the planet they tend to get their needs fulfilled when they need them. but the sector right now, there's a whole debate right now, there's this whole detail are they peaked. and the number has really good and the demand super strong. and it's latest longer that what

a lot of people thought. and the cycle which has been winning out, the semi sector has been down. the issue is really around the sustainability of this demand. normally what happens, i talked about this on the show before, what happens in periods of very strong demand when customers can't get the parts they want, they tend to order more. it's the toilet paper from last year sort of writ large across the industry and the tighter things get the stronger the demand because people are using more. we actually don't know how much of the current demand -- which is very strong, we don't know how much is real we won't know that answer for a while. that kind of peak cycle sentiment. >> and we talked to you a week and a half ago, your concern over shipping auto 30% to 40%. hard to tell what the demand is -- >> the industry. >> i'm sorry, the industry

i'm thinking about this from a macro point. in auto, you talked about similar numbers in laptop. my question is are those two sectors uniquely possibly at peak or past peak? or what would you say about -- you know, every day, we bring on people who say it's stronger for longer >> yeah. but it probably depends on the market at least with autos and pcs, those are end markets where you can start to get a handle on it. you can get decent data on data and end markets. there are some end markets, for example, industrial. it's not an end market it's hundreds of end markets tens of thousands or hundreds of thousands of products or hundreds of thousands of customers, there's no good way to get a handle on that. and i would say at least for smartphones, you know, it's a little different the demand for smartphone is getting weak and people are worried about is

china builds and everything else smartphone has been weak for a while. they did not benefit from covid. we don't have some sort of massive covid move forward in smartphones that has to be worked conversely, the dynamic is slightly slower. the demand is off the charts but at the same time, you can get evidence of semi conductor >> and from hyundai, the u.s. chief has said the worst of the chip shortage has passed perversely, for the rest of the market, the drop in semiconductor market, we say it's a barometer, the way it goes, the rest of the space goes and if you look at the charts they're trading at 140, 150. we're 100 above the level. >> i tend to look at the stocks,

you can look at any index you want semis, relative to the overall s&p are not terribly elevated. it does tend to trade -- it's kind of normal on the absolute basis, the valuation has been elevated, but they've been elevated broadly, not just the semis the issue with the valuations, you don't actually know what the denominator, you know the p, you don't necessarily know what the e is we're not going to know, frankly, until supply does normalize. we can start to pull back in and then we'll see how much of this is demand is real and how much it isn't. if it turns out it's all real, it will probably be off to the races again at that point. we're not going to know until we do >> i know you said broadcom is a

favorite name of yours >> i really do like it let's be honest, apple is probably low double digit percentage of their revenue. b broadcom, they do that manufacturing in-house presumably they knew what they were going to ship i like broadcom, in an industry where people are nervous, and maybe i am, sorry, brod adcom h a little more visibility for a variety of reasons we could get into and then a valuable software business, lower volatility, they're going to inflate cash, either buy is something or you a buyback, i'll take one or the other. it's got a great dividend. the dividend is going to grow next year. it's got the highest in the country by a country mile. it's the cheapest thing in the coverage what's not to like >> well, that explanation, it may be shares are only down

0.41% on the news. stacy, thank you for your time >> my pleasure still ahead, could the irs be spying on your bank accounts? we'll parse through the proposal from the white house and tell you what's actually on the table. plus, delta air lines on pace its worst day for the year after posting a profit on the quarter and rrwoies about rising fuel costs we'll hear from the ceo about all of that, ahead

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in filipino: you'll always be in my heart. ♪ welcome back to "the exchange." we're well off the lows. the dow was down 263 at one point earlier on, now only 43 points and nasdaq by half a percent right now. here's some of the movers, the

investors up by 30%. sun power and solar edge and the like putting these moves in perspective, invesco up 31%. sunpower, 50%. and hydrogen fuel, fed powell talked about quite a bit here. up 7% gains after announcing deals with airbus, shares up 35% in a week. 30% in the month morgan stanley upgrading a stock and hiking its target to $40 saying it's well positioned for a significant transition point in energy. plug is still down 50% from its high and does have an analyst day

tomorrow iaa up on pace to snap a five-day losing streak now to rahel solomon for a cnbc update >> hi, kelly this is what's happening this hour secretary of state tony blinken said time is running short for iran to get in compliance with the nuclear deal dylann roof, the first person sentenced to death for a federal hate crime losing another round in his effort to overturn his death sentence. circuit court appeal judges have refused to hear a new petition in the case. more damage from severe storms and tornadoes ahead ripped through the central u.s at a small airport in oklahoma, the local fire chief says all but one hangar was destroyed and the roof of one hangar collapsed. and the fda putting up new guidance to drastically cut the amount of salt used by restaurants and food companies the goal is to reduce americans'

sodium intake for the next 2 1/2 years in an effort to fight heart disease, the number one killer and on the news, making foods healthier and how the companies will respond to this new guidance that's at 7:00 eastern kelly, back to you >> rahel, thanks stronger prices and higher competitions the names on the street that can handle the ongoing supply chain issues and the ones that feel more pain. we'll delve into all of this on "rapid fire. and it's hispanic heritage month. with contributors. here's ceo jose minaya >> we're embodying the hope and dream, my parents came here giving me a home and a better life we empower the community by giving them a path to citizenship which gives them a

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♪ welcome back, everyone

let's catch you up on a huge story that should be on your radar right now. it's time for a supply chain "rapid fire. here to break it down, michael santoli, and seema mody. welcome. how is signet with the supply chain disruptions, thanks to strong vendor and supply chain on containerships. and also seeing rescheduling of weddings from last year, they see the direct to consumer brand diamond direct as reasons to be bullish. seema, you're the wedding expert >> this is clearly a company that has benefited by a surge in nuptials a lot of people had to delay their wedding, yes

at the time when the economy is opening, people want to travel more, not just entertainment i think the supply chain part of the story is very interesting right now. the company getting upgraded because they're less vulnerable to the supply chain stocks we saw a similar story play out with lululemon back in september saying they too are using air he have knew on the air freight >> and on signet, you said you're not a holder but wish you had this >> absolutely. looking at the stock perform going back farther to 2020 that's where the bottom came in, the stock has been rising since. i'm going with seema said as far as demand. consumers are moving ahead and still heavy and thick in the area of jewelry. one of the reasons we saw the numbers 1.8 billion in q2 this year, a huge improvement in stores from last year. going back to 2019, something more comparable, it's about 40%

of increase. that growth is still there the diamond acquisition making a lot of sense and markets still being aggressive when it comes to inorganic and m and a they're raising guidance for the rest of the year this is a great one for people to be in the stock unfortunately, si had not been >> like you said, it's not necessarily a great buy now, but if you had gotten in at low levels what do you think, it's easier to ship jewelry than other areas of the supply chain? >> yeah, very particular case, because of that factor, kelly, also, signet is the biggest, in terms of publicly traded jewelry distributor. the fact that they have those relationships and the buying power it's still a cheap stock earnings momentums, they were supposed to earn $4. now the estimate is $10. now it's stepped down to 8

there's only two ratings on it it's one of the better stories of the pof covid bull market obviously the question is is it a pull-forward of demand can we finally set aside the idea that younger people are maybe not going to do diamonds when they get married. these people are betting otherwise. >> diamonds direct revenue expresses otherwise. signet jewelers up the ceo will join "closing bell" at 3:00 p.m. eastern time to talk about that deal and so much more going on with that company. don't miss it. on to another company seemingly weathering the supply chain right now is tesla the automaker estimating they sold 56,000 china-made vehicles, last week, they reported 1,233 deliveries and well above the street consensus. goldman saying in a note say,

they're going positive on tesla heading into the earnings next week that the company has handled the chip shortage well shares are only up 15% this year still 10% off the all-time highs. what do you say? >> i think looking at this, this is another pricing demand theme here when we talk about the stock, the demand from the vehicle, especially from tesla, they beat heavily on the production and delivery numbers, 241,000 above the consensus. looking at it from standpoint of fundamentally, they're looking at more wide deliveries which is obviously better for them versus model 3. investors want to stay in the stock right now. we're kind of seeing a resurgence of the stock which has been a sleepy stock in the past year here and expecting in 2021, expecting more on that with the execution standpoint, as we get better with execution of deliveries >> and from the chip point,

mike, they do use a different design, and you wonder if they catch up with different combines intel is trying to help on that front. hyundai, by the way, said it's going to look into own chips after being plagued by supply chain problems >> i guarantee every avenue is now being explored by everybody in the industry. i think also just a relatively lower sluft number of vehicles we're talking about, probably doesn't hurt tesla's ability to source gm sold twice as many vehicles last quarter and they were down 200,000 from the year before because of supply problems so it's just about not meeting quite as much in terms of quantity and, you know, i do also think when it comes to the stock it's tough to get to $800 billion market cap by any visible fundamental still for tesla. but moving in the right direction, all of the auto stocks are doing great maybe the market's saying we're past the worst of this chip shortage

>> which is also what hyundai said today, maybe glimmers of the hope there let's go to the weaker side, monster energy downgraded at jeffries monster energy not the name you would have thought of. down 3% today and 8% this year with jeffries noting they face other competition in the buyer market are you a buyer of monster >> i wish you could hold it for the past century here. looking near term, the competition, mavrket share with red bull coupled with the supply chain issues, taking away pricing power on the side for monster. i think that's a big be there story in terms of headwinds for the stock. you mentioned the stock is performing well right now. i want to be a buyer, i want to see strategy with the top line

growth rate, i'm out of the stock right now but something that can be evaluated as we see that play out. >> and i think we're going to have to be careful and look through the quarter and say which are specifically supply chain issues? >> that's a challenge when you look at this, $84 is the key level to watch but to your point, i don't think the market fully appreciated the supply chain issues that a company like monster beverage has. i think of a drink like red bull a drink i would never touch, it brings back such bad memories from college this is something i would drink at 2:00 a.m. to survive. but it also speaks now, how millennials in generaler gravitating more natural drinks, whether turmeric or ginger and other supplement nutrients out there. that's a bigger challenge. >> i thought you were going to talk about the party at your

house. >> i wish. >> seema is like, no, i was studying so hard finally, the material that gets most of our goods everywhere they need to go, icardboard, it might have hit a top they're the second largest producer of container board in north america, but all of the major paper producers are up about 30% in the past year we talked about the paper shortages burning supply chains. it's increasing with e-commerce demand mike, we're talking peak everything in the next couple of months as all the cycles turn. this is a bad news, good news for customers but bad news for the stock? >> yeah, i would say good news for customers. probably the company in general, seeing the rolling tops when it comes to commodities and intermediate goods those peaks in the stocks, though, that you saw in the group, it really matches right

up with the february/march peak enthusiasm for reopening velocity and inflation scare all. stuff that's built into the peak for a lot of things like small caps so, on one hand, the market is saying, yeah, that probably as good as it gets in terms of the actual sector. but we kind of have the ebb ande economy. and gdp and moderated. it's not fallen apart. >> put a pin in all of this, are you a buyer of westrock? >> no i'm not a buyer of westrock, we're cycling out and seeing the top of these cycles this is one i've stayed out of if you look at it from the other side, e-commerce could see growth in bundling in the cardboard area but i'm not a buyer, kelly >> all right some beneficiaries and maybe sor others struggling

thank you for this edition of rapid fire still ahead, is the tellico name hitting an 11-year low ahead of earnings next week. as we go to break, show and tell shares of delta falling. down 6% right now. this is after strong earnings and worried about jet fuel prices with the ceo told phil lebeau, he's expecting big bookings for the rest of the year >> we're only going to be about 65% recovered in october but november and december, we're looking for a ten-point increase in our recovery rates. because increased business demand, increased international opportunities. and most importantly people are not as concerned about the impact of the variant. they're ready to get back to work we're going to end the year at 75% restored we started the year at 25%

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♪ welcome back to "the exchange." let's get to julia boorstin for a market flash julia. >> kelly, at&t shares are trading at an 11-year low today. that stock is down about 12% year to date and this comes ahead of at&t's earnings which are next thursday the company ask expected to report a nearly 7% drop in revenue. and 2% growth in earnings per share. and it all comes as investors reprise the company as it prepares to become a pure play telecom when it completes the sale to warnermedia to discovery. and the consensus estimates for earnings from at&t's wireless division are too high. and there's also a question whether at&t could be hurt if apple's iphone deliveries are

impacted by supply chain >> julia, thank you. fda meets to discuss moderna's covid booster. while ultimately could be approved we'll present the bearish gains next

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♪ welcome back some breaking news on the vaccine front from the national institute of health. meg tirrell here with the details. meg. >> hi, kelly we're getting the first glimpse of highly anticipated results from a trial nih sponsored looking at what happens if you got a different brand of vaccine booster than you got for your primary series what this initial look which has been posted on a preprint server and not yet peer reviewed suggests if you got the j&j vaccine, you're served best by getting one of the boosters from the mrna vaccines. otherwise there was a slight showing that the moderna vaccine was the best booster if you got moderna first, you'd want that as a boost but it was hard to tell with moderna and pfizer both were close. a pretty close difference with

j&j and getting the mrna vaccines this is so important for the commercial question for the companies because after this, they're competing commercely for who will be the booster of chose. moderna is up there because axios has reported this sand it's been up all day on this interestingly, you see companies like novavax which doesn't have that yet because it's matching up >> thank you, meg tirrell. and a booster is expected tomorrow as the panels on the fda will decide who should get that booster and when. moderna has had a huge run shares are 312%. back in 2020, the fda granted the emergency use authorization to their vaccine since then, over the summer, the shares really pictured up momentum when meme traders pushed them up higher. the stock hit a high and hovered around those levels before

taking a dive in september so would this booster approval kick shares into high gear not so fast, says my next guest. the underperformed rating on moderna and a 135 price target jeff, welcome. is this a valuation issue for you, mostly, in issue in the wake this kind of meme run-up? >> thanks for having me, kelly yeah, that's pretty much it. it is valuation. we are not negative on the technology itself. not negative on the potential for the mrna platform to have other indications other than covid. but the valuation, 5 million forever with moderna, less than pfizer the ability to use annual boosters for the foreseeable future we think probably isn't a realistic scenario but that's what the value tells

you. >> meg hinted at the commercial battle between they companies to be the booster of choice how important is that to the company? >> we haven't even talked about johnson & johnson, novavax or others, the ability to take share going forward is going to be important i would say the two mrna vaccines are more alike than different. the moderna vaccine did not typically hit the end point and pfizer's did although i do expect the fda and recommendations for boosters for at-risk people to not really differentiate between the two. but it is clear going forward from a commercial perspective, the booster is going to be key >> getting it to this $5 billion of perpetual sales figure doesn't add up i wanted to ask you about the biden administration, where the chief scientific officer says about moderna, we expect them to

stand up as a company in making this vaccine more available to the worlds but it would seem important that they have a strong relationship with the government, which is basically calling a lot of the shots here in terms of the vaccines. >> yeah. no, two great points kelly i would say the first thing is -- i would -- the vaccines are very similar to other pharmaceutical products that, you know, you see good price point in the you were, u.s., and japan and lower discounts in the rest of the world. vaccines are not that dissimilar from a market commercial perspective. the other piece, just to stay on boosters this is obviously news that just happened very recently, merck's drug -- i get the impression that people want to move on beyond covid and the ability to take an oral once you are testing positive and just move on with life as opposed to getting annual boosters and quarantining, you know, this sort of cycle that we are in now

i think most people aren't excited about being in it the next ten-plus years. >> that's a great point. tell me about your 13r50 price target and what it reflects on a valuation basis and if there are others that you think are more compelling in terms of where investors should be looking? >> in general, we assume a reasonable probability of success for the non-covid pipeline you still have to go through the motions do, the experiments in flu, in cmv, and cancer. and investors are automatically ascribing, in our view, a much higher chance of success with mrna, particularly for moderna but our sense is that, you know, that's sort of an overestimation then from a covid booster perspective, we assume that next year will be -- you know, we will be modestly lower and then it sort of tails off but mostly investors assume in a an annual booster, whether alone

or combined with flu is going to be the standard. we are saying just not so fast if you look at other covid companies i would definitely say that vir has an antibody, as does lily. those are both very good opportunities to take advantage of covid. >> thank you, jeff, for your time today we appreciate it jeff meacham with bank of america. still ahead, will the irs be spying on your bank account? we will clear up some of the facts and the white house proposal to recoup billions worth of taxes right after this. uh carl, are there different planning options in here? options? plans we can build on our own, or with help from a financial consultant? like schwab does. uhhh... could we adjust our plan... ...yeah, like if we buy a new house? mmmm... and our son just started working. oh! do you offer a complimentary retirement plan for him? as in free? just like schwab. schwab! look forward to planning with schwab. that building you're trying to buy, - you should ten-x it. - ten-x it?

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and i said, "look, we can do this." - [narrator] take advantage of some of the lowest online tuition rates in the nation. find your degree at snhu.edu. welcome back a white house proposal to recoup $500 billion in unpaid taxes would increase reporting on bank accounts the backlash from banks, payment companies, and consumers alook has been swift robert frank is here to answer the question, will the irs be spying on us robert >> kelly, this white house plan would require banks and payment services to submit more

information on accounts over $600 bank lobbyists and opponents say this is an invasion of priorsy the irs wants to monitor every deposit, withdrawal, and atm transaction. they say compliance wlb costly and burden shom, they say the irs can't be trusted with sensitive data and they say the irs wants to tax your venn mo and cash app payments here is what is being proposed the white house plan requires two numbers, the total deposited and the total withdrawn for the year not every transaction. as far as the payment services, american rescue plan, that was passed in march. it requires merchants to report transactions over 600s on, say, venmo or paypal that takes ekt effect january 1st 2022 the biden administration expands those to individuals again, gifts to individuals or

friends are not being specifically taxed the house plan hasn't included this in its early draft because it is hotly debated and contested in washington. >> when they say they want this reported, presumably because they want to tax -- in other words, i paid $500 offer a secondhand couch on venmo several years back let's say that was a $600 purchase is that somethingi they would want me to report and pay tax on is that already the rule what is the goal here? >> the goal is unreported income say you have reported $100,000 to the irs but you have deposits of $200,000 the irs is going say you only reported income of 50, and you took in 200, where did that come from that's what they are looking 59 on the income side as opposed to the withdrawal side on both the payments and the bank accounts. >> we know it is a per vaisive issue, but is there any way they

could get at it that would seem less invasive? >> they say it is not invasive toll just have the total at the end of the year. again, they are not looking at individual transactions. they just want to know at the end of the year, what did you take in, what did you get out? with those two numbers it is not that hard to report them and you can tell a lot whether they have accurately reported their incoming and outgoing. >> very interesting, very epful as well, robert frank. that does it for "the exchange." we are just getting started. "power lunch" begins right now welcome to "power lunch," i'm flank holland in for tyler mathisen here's what's ahead. the minutes of the last fed minute are out any second now. it could include key insights into what policy makers are thinking about inflation and the taper time line. also breaking the bottleneck the white house attempts to ease the backlog at the ports are transportation c