thank you very much. >> after earnings ebay the calls expire next friday, scott. they are the 79 calls. what the 76 is today i'll sell the others as it rallies. >> josh? >> stick with amazon even though it is so boring. hopefully not for long. >> all right guys. good to see everybody. thanks for watching. "the exchange" is now. and thank you very much, scott. hi everybody i'm kelly evans. here is what is ahead this hour. inflation has peaked is the view of economist david rosenberg who says price pressures will start to ease and this is nothing like the 1970s and deflation will win the war. how he says to position your portfolio. checking in on choice hotels parent company of sleep- inn revealing earnings a ride, a burger, and a workout.

we have the action, the story, and the trade ahead of three key earnings tonight uber, shake shack, and peloton we start with the markets. we're getting that sort of settling in from the fed yesterday. >> kind of like what you get when you get a ride after a burger and before -- exactly settling everything. the markets are settling in right now at record high levels with the s&p 500 it gets the gold star and hit a record today so did the nasdaq composite. the dow is not far away but is still down in the session right now. to give you an idea of the trading range so far the s&p at the lows of the session after the opening bell up 26 points at the highs. so tilting a little bit toward the middle of the trading range in the middle of the session today right now 15,910 the last trade for the nasdaq composite up 2/3 of 1% the pacer today one of the big reasons the nasdaq composite is out performing today is computer chip stocks, two especially in focus today. qualcomm after the blockbuster

earnings report and upbeat guidance from that company on the semiconductor side yesterday after the closing bell has those shares up 13%, 14% nvidia also up 11% right now the seventh biggest company in the s&p 500, roughly two times the size of proctor & gamble just to give you an idea of market cap in terms of comparison nvidia and qualcomm both getting positive analyst commentary today as well. some analysts think nvidia could be a real beneficiary if the metaverse starts to take off and the semiconductors etf both of these stocks by the way hit record high levels today so watch those semis. then the stock of the day, worst performing in the s&p 500 or at least it was earlier this morning, kind of battling it out with another casino operator right now, moderna shares down 19%, a massive move lower after a disappointing earnings and revenue report on the quarterly basis. it also lowered its outlook for its vaccine sales and that has some investors worried they've been worried for a while just to give you an idea back in

august they hit a record high. since then down roughly 44% from the intraday record highs woe saw back in august moderna shares a key focus always a popular ticker search on our website cnbc.com. >> a bellwether for the whole covid vaccine story. thank you very much. stocks generally may be hitting new highs again but it is tougher these days for income investors. the s&p 500's dividend yield is historic lows, 1.3%. my next guest says he is still finding attractive names with the higher payout. joining me is dan gentry ceo and chief investment officer of rnc capital management welcome. let's start with kind of very basically where you see dividend yield and how important is this for investors? >> well, it is usually important and it's become increasingly inimportant as obviously interest rates have gone down. you are looking at a bellwether ten-year treasury at 10.5%

a big part of the population with the baby boomers preparing for retirement or retired and they need income, cash flow. it has been declining. early in my career dividends were kind of an also ran it pays the 2.5% dividend. that's nice. now it is a major source of income and company managements are realizing that they are seeing they can add shareholder value not only through stock buybacks but by increasing dividends and people are hunting for that and in many cases depending how high the dividend is they'll buy the stock just for that. i think it is a trend that is going to continue. >> here is a followup question i have a lot of dividend questions these days given everything that's been going on here do you have people who would literally buy say a 5%, 6% dividend yielding stock even if they think the price is going down >> well, they're not going to buy it if they think the price is going down but they will definitely buy it if they think the price is going to be stable because the reality is if you lock at a lot of these large cap companies that have been paying

dividends for a quarter century consistently, you know, the prices tend to be fairly stable or inch up slowly. if you look at an ib vestor and say, look. i can get 6% in dividend it still has preferential tax treatment and maximum of 20% most people 15%. look, three years down the road if the stock has done nothing, if it's just at the same price, hey, i got my 6% it's pretty good all you have to do is say, okay. i feel over a three to five-year cycle it won't go down that is a safe bet with a lot of companies. >> let me ask you one more question it is about a stock you're not necessarily coming to talk about today which is at&t. you know, there is a stock with a very high dividend yield let's see where it is as of today. 8.4% basically i'm sure there are people salivating for that kind of yield and yet the shares are at an 11-year low depending where they wiggle each day would that be a good candidate for a dividend portfolio or not? >> i think what you have to

realize is you don't want to buy companies that you think number one the share price may be going down or frankly that the reason the dividend yield is so high is that the price has gone down so the dividends stayed the same, the price went down, so the current yield is now elevated but that is an environment to where, you know, you may have a very high probability they'll cut the dividend and then that can be a death bell to a stock like that if it is not priced in you don't want to just chase the dividend yield you have to look at the level of the yield, sustainability of the yield, and make sure those companies are viable and earnings are going up and cash flow is there to support the payout ratio. >> i'll leave the pact it is not one of your choices. people can read into that what they will at this point. let's talk about who you would recommend cvs, philips 66, dow chemical talk about why those three in particular jump out to you. >> well, i think cvs is an interesting play just because it is a company going through a transition that is i think going to be successful

the bottom line to that is they are no longer just a pharmacy. they are going to be an integrated health care provider, mainly providing noncritical elements where you don't have to go to the emergency room but you're feeling bad and they are doing it very successfully the dividend is strong it's about a market dividend a little higher 2.1. we think that is stable at a 12 pe on what we see as earnings. we think it is a good overall return there's others that are higher dividend plays like philips 66 and dow. there, too, we think we see significant value with very low pes in the 7x range but they are paying you 4.7% while you wait and increasing dividends 8% to 9% a year. you're not only getting 5% while you wait, taxed at no more than 20%, they are giving you 8%, 9% raise every year very few things you can get high income and then you're going to get a raise that is probably bigger than most people were getting every year in their

paycheck >> my final question goes back to philips 66 and some of the names like that. there seems to be kind of this ideological battle that takes place in the board room when you have a hybrid portion of your shareholder base there for the dividend companies often have to face a choice with that capital do they reinvest for the future or pay it out? i know for many they can do a little bit of both obviously at a time of energy transition we're looking at companies like exxon and chevron and wondering do they just pay the cash back to share holders or try to invest it for the future i wonder if, again, if the dividend base represents to some extent a challenge companies have to overcome because to say, you know, if we change and have to make these big investments, wo we'll completely lose a portion of the share base here just for the payout >> it is an ongoing battle and boards have been making that decision every quarter for 150 years in this country. it is nothing that is going to be new clearly, it is a liability

i mean, a big, big number. it is a big payout when you look at free cash flow and looking even at a percentage of earnings and the payout ratio you've got to be cautious to make sure you're going to be able to keep paying that and they're going to have to have the cash flow to do it companies like we're mentioning have been doing this for a long time they don't do it willy nilly they have very sophisticated budgeting processes and also know that a cut in dividend is something that is very devastating to the stock they do it very cautiously in putting that forth to make sure they can still meet their capx plans and still meet the cash flow right now i don't want to say it is easier but an easier time earnings are up 60% this year. free cash flows are soaring. and you're in a situation to where cash reserves on average for public companies is 28%. it's at historical highs. >> wow. >> they're making the money. they've had the cash flow. they have the cash reserve as a backup if they need it so they see, look.

we can pay this out and people are going to gravitate to our sharrers and it is a tremendous way to create shareholder value. there is a big demand by investors in the marketplace and companies will hear that bell. >> fascinating dan, thanks for letting us probe into that a little bit good to have you on today. >> my pleasure all right. let's move along to square set to report earnings after the bell today with the stock only up about 13% this year after a monster 2020 it is still out performing rivals like visa, mastercard and paypal and the board just approved the $29 billion acquisition of after pay here with more on what to expect, lisa ellis partner and senior equity analyst. it is great to see you again what are you listening for >> probably the top number we're watching for this quarter is the gross profit in the cash out business, square's digital bank that had a huge run during the pandemic there is some concern in the

second half of the year stimulus payments are rolling out that those numbers might be a little light. we're looking for just under $600 million in gross profit there. they've had about 40 million monthly active users, looking for those numbers at a minimum to stay stable sequentially, maybe even uptick a little bit sequentially but that is definitely the nervousness putting a little pressure on the stock in the recent weeks. >> you mean literally just in the cash out gross profit? >> that's right. square's got some funky accounting with the way the bitcoin flows through their income statement so the best kind of top line measure to look at for them is gross profits that is their net revenue so to speak so is usually the metrics they certainly focus on and we focus on as well that number for the cash app business, we're looking for something just under 600 million but we, you know, that is the number of particular focus for

investors this quarter >> i just think it is quite a statement it's the number one focus. this product is how old, maybe a couple years and it had this huge benefit during the pandemic because of stimulus payments and the rest of it. >> you're absolutely right this is a piece of the business, the product has been there for a few years but really surfaced during the pandemic, huge adoption when bank branches were closed, people were trying to figure out how they could collect their stimulus checks, you know, and it is one of these modern, digital banks very much like a chime or sofi but with the brand of square that is very appealing to consumers interestingly, two-thirds of the valuation of square now is attached to that business because it's had just extraordinary growth and also actually has very high incremental margins so a lot of the cash flow of square is coming through the cash app. you know, and folks are kind of

waiting to see is this a state, a permanent trend where we'll see consumers steadily shifting to more use of these digital banks and moving away from the traditional brick and mortar banks or was it sort of a flash in the pan during the pandemic and these next couple quarters for cash app will be a good indicator of that. >> i should note you have a buy rating on the company with i believe a $340 price target. there is also focus on the seller business, point of sale systems, the buy now pay later space. but when two-thirds of the value is coming from the cash app that is extraordinary they just announced yesterday they're trying to roll out the app for i believe teens to use with parents' permission why is this necessary? how much could it engender blowback based on other social media platforms targeting the younger generation lately? >> they're going after, i think, there is one of those extraordinary measures is how stable peoples relationships with their primary checking institution is so it is like

whatever bank account you sign up with first you tend to have for decades. so square is trying to figure out ways to get cash app adopted already at the teen level much like 13, 14-year-old kids can get a bank account that is kind of a sub account under their parents' accounts. you're right as a mobile and also an app that has some more social elements to it like the person-to-person payments, they always have to walk this line with privacy and so they're trying to figure out ways to make sure the right level of parental oversight and regulatory compliance and stuff is baked in. you know, so they're trying to navigate that. but the appeal of bringing that, the gen z group in as they mature is huge. >> as you say that i am realizing i kept my same bank even though it changed owners about four times until i got married and switching it over was a nightmare. you're right it is very sticky. so gross profit on the cash app a key thing to watch tonight thanks so much for the preview

we appreciate it. >> terrific. >> lisa ellis. still ahead shares of denim maker contour brands higher after beating earnings estimates and raising their full-year forecast up next we'll speak with the owner of wrangler and lee. plus if you are sitting at home using uber east to deliver your shake shack before you work it off on your peloton this is the earnings exchange for you. the action, the story, and the trade for those three names reporting after the bell

welcome back contour brands is benefiting from the denim boom beating earnings estimates, raising its outlook and shares on pace for the fourth straight week of gains and the best five day stretch since april. the company recently boosted its dividend by 15%. yields just over 3% right now. joining me is the ceo of contour brands scott baxter. >> reporter: thank you very much scott, thank you for being here with us. a nice set up. clearly you put up a very nice quarter, increased your outlook going forward for the balance of the year we know that when americans emerge from the pandemic we changed the way we looked at our closets and perhaps even more casualized work place going

forward. would you say the results are still riding that wave all investors want to know how long can that really continue? how many new pairs of denim do we need? >> thank for having me on. appreciate it. it is a fundamental change in how people are dressing across the globe. people are casualizing so that is going to go on for a long time we've seen the change in all the major markets across the world in addition, for our company we're more than just a denim company. i'm wearing one of our outdoor vests today, outdoor shirts in our line and we have a pretty big work line that's done very well and we're adding t-shirts because they match up so well with our bottom core denim we think this is something that is going to be here for a really long time. staying on the forefront of design is helping us, too. >> obviously you sell in a variety of ways both direct to the consumer and through wholesale partners

there's ban lot of discussion over the years about wholesale if it still makes sense now that direct to consumer is so much easier but in your results you had really strong wholesale reporting results. what segment, though, is most important? because of course you sell anywhere from discount all the way to some higher end options >> yes, we have some are really important relative to the brand health at the higher end and some really important for our core consumer. that would be in the mass, the mid tier we do an exceptional business in the western business too that is really important to us and farm & fleet stores too. those are the key segments and we're seeing people are going back to stores, getting out and shopping and going back to stores it really is a complement of your director consumer piece and also your wholesale component and we think we're bringing the two together very nicely and it is working really well for us. we talk a lot about winning with winners. so the walmarts, you know,

kohl's, amazon, target, farm & fleet stores those are the winners in the category we've partnered with them very well >> absolutely. on your call you did have a lot of discussion about the supply chain and some specific numbers saying less than 3% of your supply comes from china. much of it that does is so eld in china less than 1% for vietnam. one-third the western hemisphere still you did have some cost pressures, some air freight going on putting it all together, is it fair to say that if consumers are looking for your brands that they'll be available as planned this holiday season? and for prices that aren't necessarily going to increase? >> i think that our product is out there, available in all of those channels i discussed and one of the reasons why is that we made a decision when we spun off two and a half years ago that was to own a large portion of our manufacturing so we own almost 40% of our own manufacturing which is unheard of in our industry

it is in mexico and honduras we don't have to deal with the ports with that 40%. we truck the product right across the line into our distribution centers in the united states and it works really well for us having that big component has been really strategically important during the pandemic and will be going forward. but we're pleased with our product. we're pleased with where it is at we're pleased with the distribution we think we're in really good shape for the holiday season we think the consumer will be really pleased >> very quickly before we let you go here i know when you were part of bf corp that company was always looking for acquisitions. right now you have about three core denim brands. are you looking to add another denim maker to your portfolio? >> yeah. we are looking to add something. it doesn't have to be denim but it will be in the apparel space. we want to stay core and close to home but part of our optionality creating a billion dollars of cash in the next three years you saw we increased our dividend 15%, also had our first ever stock buyback

program, also now putting thoughts together around m & a looks for our company going forward. part of our options. >> great scott baxter, ceo, chairman, and president of kontoor brands. back to you. >> love getting such a clear answer on looking for other companies to add to their portfolio. thank you both very much today still ahead, inflation no more we'll speak with one economist who says we're past peak inflation and that deflation will actually win out. he'll explain and tell you how to position. plus shares of choice hotels are trading at an all time high up more than threefold from their pandemic low the company continues to exceed 2019 levels in the key metric of revenue per available room and now investing in leisure travel brands we'll talk to the ceo about the role it is playing in his growth strategy right after this. feel stuck and need a loan? move to sofi and feel what it's like to get your money right. ♪

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welcome back everybody here is a quick check on markets. near the session lows down 157 that said the s&p is still up 11 points today and the nasdaq strong again adding two-thirds of 1% definitely the leader. here are some of the individual movers zillow again this time trying to stage a rebound after three straight days of declines down more than 30% since monday on pace for its worst week ever after missing estimates in closing its home flipping business adding 3.5% today shares of etsy an all time high. the company posted 18% jump in sales from a year ago helped in part by recent acquisitions and might also be able to side step supply chain issues this holiday season because it has thousands of sellers making things from home its shares are on pace for the

best day since april, 2020 up almost 15% now a cnbc news update hi, sue. >> hello everybody here's what's happening at this hour the house of representatives is getting ready to debate and vote on president biden's two big spending plans the white house now estimates new taxes on corporations and the rich will raise $2.1 billion over the next ten years. that is about $200 billion more than earlier estimates the voting could begin later today. espn is laying out allegations of misogyny and racism against phoenix suns majority owner robert sarver quoting another owner as saying his statements are embarrassing his legal team has denied he ever used racist language. the phoenix suns and nba have not immediately responded to cnbc's request for comment in new jersey the state's longest serving senate president suffering a humiliating

political defeat at the hands of a newcomer democrat steve sweeney has lost re-election to truck driver edward durr who spent as little as $153 on his campaign. durr entered the race after being denied a concealed carry permit despite having a clean record on the news tonight ford goes retro with the latest concept car for an ev pickup get the details tonight at 7:00 p.m. eastern time. you're up to date. i'll send it back to you >> i love that truck i saw that it is very, very cool. >> very cool >> thank you we'll see you soon sue herera coming up in "earnings exchange" option supply and 8% higher for uber. will it play out plus 11% short interest in shake shack. does that make it a target for short squeeze or will history repeat itself as shack has dropped after each of the last four quarters? peloton down more than 40% this

year the numbers and the trade for each of these reports is next. ♪ ♪ ♪ ♪ ♪ ♪ ♪ ♪

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welcome back everybody it's time for another edition

of "earnings exchange" with a twist today. none of these companies will actually report earnings or are not expected to. it is results exchange and we'll give you the action, story, and trade on three key reports on deck today's lineup uber, shake shack, peloton let's kick things off with uber where analysts expect a 33 cent loss per share on $4.4 billion in sales shares are down 11% lacking both broader averages and biggest rival lyft gross bookings did more than double last year as travel demands rebound but a driver shortage has been a head wind all year and restaurant openings eating into food delivery. welcome to both of you lyft is setting a high bar here. >> it certainly is and often does that because reports just a fewdayslater or if not a day later so lyft's good results already followed through in uber share price it has gained on the back so stakes are high.

investors will look for a lot of the same things. you mentioned driver shortage. lyft was able to increase drivers on the platform by 45% year over year can uber do the same of course it has really important implications for profitability or rather narrowing losses, preferred metric of course, adjusted ebitda not really profitability but is their metric can uber roll back some of the incentives they've spent hundreds of millions of dollars on another thing to watch is active users. how many people are actually getting back on the platform whether for food delivery or ride sharing also i mentioned adjusted ebitda losses look out for a dd write down, the chinese ride sharing company really helped boost results last quarter but we know the story here that this stock has really just been a dog given all the pressures in china how will it come through in uber's stake this quarter? >> absolutely. i always forget that aspect of its exposure kim, this did rise on lyft's results. what would you do with the stock

today? >> well, if i owned it i'd get while the getting is good. because there is not a whole lot of good news that might come out. part of my worry is there's only so many people in america that are willing to be drivers. it feels like lyft has been winning the driver race and giving them better compensation, you know, whatever they need to to get those drivers i'm a little bit worried about that and also looking forward which is really what we are looking for out of earnings reports or loss reports, whatever, you know, whatever they are, what we're really looking for is clues about what is going to happen in the next quarter and maybe the next year. we are entering the holiday season here where people do like to enjoy some adult beverages and then take a ride home. how many people are going to be having holiday parties this year i don't know so certainly it will be better than last year

but is it going to be better than 2019? i seriously doubt that maybe that is the bar people are looking at. >> sure. >> i would take uber and get the heck out of it >> just a final word on that you actually to your point wonder why uber might not want to report ahead of lyft in the future to set the tone itself instead of having to adjust. is lyft doing a better job at getting drivers? >> we will certainly find out. that really is the key question. it is interesting what kim said. the street is way more bullish on uber than lyft. both companies really have under performed the market since their ipos and it is always this question they have such intense competition. remember uber also faces competition from the delivery side from door dash so that could also weigh on its results. or it could potentially be a bright spot. >> dash has been a strong performer actually of late thank you. we'll see you soon a preview of uber tonight.

let's move along to shake shack. analysts are expecting a loss of 6 cents a share at $170 million in revenue when they report q3 tonight. unlike most of its peers shares are down 8% this year as head winds persist. it doesn't offer drive through yet, has the rising cost of beef and other supplies cutting into profit margins could it be in line for a reopening boost? what are you watching? >> hey, we'll be looking at same store sales metrics. they are supposed to increase by just under 28% the company ceo said they want to be everywhere we'll be looking at both urban and suburban shack performance last quarter we saw the suburbs come back a bit quicker than their urban based shacks we'll also be seeing if consumers are returning for dine-in, something that shake shack does rely on though it has been diversifying with a more heavy emphasis on digital and as you mentioned labor and commodities will be really important. we've seen some of its peers like mcdonald's and chipotle most recently in the quarters they reported saying they're

raising prices and not yet losing consumers i'll be interested to hear what shake shack has to say on that front but it is under performing a lot of its peers in this space. the only fast food or qsr down about 9% year to date. we are seeing other companies up double digits this year. >> wow. >> definitely a different story for shack >> i can't imagine i feel like i kind of know the investments you like i can't imagine that shake shack would fit the bill how would you think about it >> well, i think of these, all three of these actually as trading stock. these are not things you get comfortable with in your portfolio. they go up they go down this is more of a, you know, let's own it for a solid 15, 20 minutes. i'm kidding. you know, like a short term. i'm not supercharged up about this but you did point out that there is a fare air amount of short interest if they have any good result at all that could make this go up quickly. if you're holding it i'd take a

chance and see if that short squeeze helps you out. maybe get out then. >> a great point we also saw another downgrade i think from mkm yesterday 83 from 103. interesting to see them do that before the results why not just kind of wait a day or two >> i think we're starting to find out as i mentioned earlier who can handle this environment and who can't. maybe some negative outlook from that firm. we'll have to see after the bell, kelly. companies that are able to raise prices and hang on to consumers, that is really key in this environment. we don't know how long it is going to last, right >> exactly longer than we all hoped thank you so much. finally, peloton is out with its first quarter results tonight. the street forecasting a loss of $1.07 per share nearly $810 million in sales. the stay at home darling has gotten hit this year with gyms reopening, treadmill safety controversy, they've lowered prices for the original bike they've relaunched tread mills, and increased marketing spend to draw in new subscribers.

we'll see if any of those move the needle i guess in a way i wonder if this earnings is that telling or if it is more just about them already trying to pull these levers for future growth into next year? >> well, it could be telling because we are concerned about the margins and they've dropped the prices on not only their bike, they dropped the price by at least 400 bucks so now it will only cost 1500 bucks and $39 a month to get the peloton bike they also relaunched their tread after an unfortunate incident. that treadmill is also a little bit cheaper. so given that these products are cheaper, will they be able to maintain the number of subscribers and offset any potential losses going forward the company did warn about the gross expected margin or i should say the gross profit margin falling by 200 basis points year over year. the other major concern, they looked at the social media engagement and find less people are talking about peloton, less people engaging, followers are

falling on twitter as well as instagram. so is this concerning? are people going back to the gyms now are they moving to other fitness apps the positive, though, is that if we look at q4 their last quarter they did see an increase in subscribers by 114% compared to the year prior that isa pretty strong number. it beat what the street was expecting. see if they can keep the momentum going especially into the critical holiday season. >> the shares are down almost 3% today. have they priced in the bad news >> i don't think so. the company is telling you something whenever it is reducing prices. it is saying people aren't buying their products. and i think that is the biggest news that you should take away from this. not just the price of the, you know, whatever the hard good is, the treadmill or the bike, but, also, the service is cheaper and to me, any time you have a premier brand putting itself on sale, it only accelerates the

ride downward. so i would get off the peloton i would drop out of the back of the peloton. >> final followup, kim you are such a tech person isn't the whole narrative in tech to constantly see you lower and lower hardware prices and that is a good thing >> it is but, you know, tell that to apple. >> yeah. touche that phone is not getting cheaper nor are the services we'll leave it there thank you so much today. up next, does the market have it all wrong on inflation one strategist says in his 35 years in the business he's, quote, never seen such a widespread consensus convinced it is smarterthan the dumb central bankers. he tells us what's got him convinced inflation is still transitory, next

that building you're trying to buy, - you should ten-x it. - ten-x it? ten-x is the world's largest online commercial real estate exchange. you see it. you want it. you ten-x it. it's that fast. if i could, i'd ten-x everything. like... uh... these salads. or these sandwiches... ten-x does the same thing, but with buildings. sweet. oh no, he wasn't... oh, actually... that looks pretty good. see it. want it. ten-x it. yum! welcome back the markets are taking yesterday's taper announcement pretty much in stride with the

averages still on pace for a positive week. as the fed ramps up the inflation rhetoric not everyone is buying it my next guest says the current environment is nothing like the 1970s and deflation will win out if history has anything to say about it joining me is david rosenberg founder of rosenberg research. great to have you here i'd like to start with your portfolio positioning recommendations to see how much difference there really is between somebody with your point of view on this and somebody who might be very concerned about inflation. what do you think investors should do? >> well, based on my view i think that when the long bond gets 2 or above 2% i think you want to be adding duration to your bond portfolio. i think that closed end muni funds look good to me as well. and then the stock market, look. i think that we've had a -- obviously a huge supply shock. and the demand earlier was sharply boosted by two massive

rounds of fiscal stimulus in january and then march which really boosted demand, exacerbated the gap between the client demand with the constraints. the constraints by and large are still here, but what is happening is the demand side is starting to wane in fact, i don't think many people even realize that real final sales in the third quarter was fractionally negative. i think the demand is going to play now to what is happening with the supply side and inflation is going to dissipate. i think the futures contracts and the curve pricing in two rate hikes next year, i would want to buy those. that'll take the opposite side of the inflation and rates bet and because i think the economy is going to disappoint, i'm not talking about a recession, but i think growth is going to disappoint the consensus, you want to be in those sectors that are impervious to an economic slowdown especially considering not much if anything is going to

happen on the fiscal side next year it means health care, it means staples, it means utilities, being a bond proxy and i say that my overall view is against consensus i think a deficiency of growth is going to mean growth stocks given the scarcity is where you want to be i'm more in the growth over value cap because value really he needs accelerating growth and inflation and i don't think next year you'll be getting either one of those >> i want to joke that you should have linked up with kathy wood and launched a couple years ago because when she talks about deflation and when you talk about it i hear very similar points of view and kind of similar portfolio recommendations as well. i am glad you explained that thank you because i want people to understand, you might see the economy very similar to the inflation-istas do both of you are describing demand outstripping supply you just think demand will slow and others don't you mentioned real final sales

but nominal gdp is so strong 8% numbers we didn't used to see anything like that during the past cycle. what is your response when people say, yeah, but there is still trillions in kind of dry powder that can be spent here. there is really strong nominal gdp growth we just didn't experience that in the past. >> well, look. for a quarter or two you can argue that we had strong nominal growth last quarter real gdp growth came in well below expectations. just a couple months ago the consensus for the fourth quarter real gdp was 7%, came into two you put on the inflation yeah you got nominal gdp doing what it's been doing. but i said before, right nobody can really define what is transitory to me just means this is not a permanent feature of the landscape. nobody really knows how long the global supply chains are going to thaw out. but the one thing i do know is you cannot forecast inflation with one curve you can't just belly ache about supply constraints and not focus

on demand. what exacerbated inflation of the past several months was the fact we not only had the supply constraints we reopened the economy earlier than expected and at the same time had two massive fiscal boosts which are now in the rear view mirror. now people talk about $2 trillion of, quote, excess savings but excess relative to what i am frankly surprised economists would talk about excess savings because when you go to economics school excess savings is really where are savings benchmarked against desired levels does anybody know what the desired levels are you can't say we're $2 trillion of incremental cash balances and we don't know. call it dry powder but do we know if it will ever really go into the economy for all we know it is going to go into the markets. so the new york fed has done the pains taking work time after time on the impact of cash transfers to the sector on spending only 30% of the money from cash transfers from the government goes into the real economy

that's already happened. so the assumption is this is future spending and i'll say historical evidence says that is just not the case. >> really well described, david. again, thank you for joining us today to talk about that and also again the rubber hitting the road and where you think people should be positioned. great to have you on we'll check back in soon we appreciate it. >> thank you. >> david rosenberg with rosenberg research. up next shares of costco climbing today after reporting huge comp sales. in the investing club newsletter this morning jim cramer calls it his favorite retailer. it's mine, too point your phone's camera at the qr code on the screen or head to cnbc.com/investing club to sign up for that. back in a moment when traders tell us how to make thinkorswim even better, we listen. like jack. he wanted a streamlined version

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still ahead, shares of choice hotels higher today after the company posted stronger than expected earnings. the stock is up 54% over the past year as travel resumes. we will lkta with the ceo about all of that and the upcoming holiday season after this.

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welcome back, everybody. choice hotels are hitting a record high today as positive guidance affirmed a rebound in

leisure travel, the company saying they are seeing the benefits of broader work from home trends, too travelers are extending their days into the quote shoulder days of the weekend. and as the u.s. plans the open its doors on monday to vaccinated overseas travelers, they say holiday travel is expected to be strong. joining us now, the ceo of choice hotels. >> great to be here. >> each of those trends is interesting. let's start with leisure travel, you have more exposure to that than business travel would you say it is fully recovered or is there still room to run >> i think there is room to run. dialing the clock back to memorial day of this past year every holiday we have been surprised by the outperformance we have seen it has continued now into the fourth quarter as more children are getting vaccinated, as you mentioned, the international borders are opening, you know, we have a significant number of snowbirds that we missed out on last year

because the land border between the u.s. and canada was effectively closed those snowbirds travel, by car, to our hotel in arizona, florida, and other locations there is a lot of additional room to grow on the leisure front as we look into the next two quarters. >> how are you preparing for monday when we could see the return of international travelers with possibly quite a vengeance? >> we have been pushing for that as an industry, as you know. we are really pleased the administration has both opened the land corridors and the air corridors into the u.s our hotels are ready our industry has been pushing for this for quite some time we will be excited to welcome back our international travelers, and all the people who support them, all the tourism industry workers who support them as well all of those end up in hotel stays for our industry we are really pleased that that's starting to happen. >> i have to imagine you are hit by labor issues, whether it is

should we call it the worker shortage that you might be exper experiencing i don't know how your vacancies compare with other parts of the industry, wage pressures, that kind of thing as well, and vaccination issues do you guys fall under the vaccine mandate? >> on the labor shortage, that has been our biggest challenge the last two months i have been out regional meetings with our franchisies. i probably met with 700 of them. they represent about half of our hotel portfolio. they tooeld told me their biggest challenge was labor, and they are having to pay for to get employees. the average comfort inn has 25 employees, we are not as impacted as some of the larger big box hotels are how our owners are adapting is they relied on us to use new

technology we are now using housekeeping upon request to allow guests to ocht out of house keeping. that saves the environment and saves on costs we are seeing a lot of adoption out of that. and there is a tool to help customers reprice their rooms every day. the volatility when you are returning to travel is difficult when you are trying to set your pricing this tool is a change for our owners and i louing them to adapt to the changes in the marketplace, tirkcally now in the inflationary environment. >> what are you in work from home i know it was affecting stays at your extended stay properties. >> it is we do see that as a potential. it is not just work from home. it is work from anywhere you can work from a hotel room we saw a lot of that business during the pandemic. we are still seeing it now that the pandemic is subsiding

somewhat we think it is a long term trend and going to i a lou americans to travel different days week and different times of the year. >> thanks for checking in. that does it for "the exchange," everybody tyler is just getting started. stay tuned for "power lunch. as the markets hit another record high, are they starting to get too expensive our guest says yes but there's one sector, says he, that is still cheap despite the rally. he will tell you what it is. plus, oil continues its rally as opec gathers today ask. bank of america says this move higher is just getting started how many high might we go? is 100-plus a barrel in the cards. short sights, avis, bed bath and beyond,