>> jenny >> okay. so far i've been wrong, but lumen right now if you were to look at it on a private market value, the company should be up, maybe twice what it is now management standing behind it. >> all right that does it for us today. see you here tomorrow. meantime "the exchange" begins right now. a lot ahead this hour. the fed needs to front load tightening and the credibility is on the line one data point showed breathing room on the inflation line we'll look at what it means for stocks as the nasdaq and the s&p has gone back positive it's not just inflation. it's the supply chain that struggled with overwhelming pain we check in with superstore

tells us how the stores are looking. >> and i've us, marriott and burger king parent restaurant brands are set to report results. we have the action, story and trade. let's start with the markets and where are we right now >> a different narrative from earlier this morning when we thought the ukraine tensions, all the fed uncertainty was going to take the markets down we're seeing specks of green the nasdaq has been pretty much positive all session long. but it's the dow industrials that are approaching session highs right now. we're not there yet. but we're getting closer down one tenth of one percent. a frame of reference, we were down 374 point at the lows of the session. a comeback for the dow the s&p 500 just about flat. 44.21 the last trade the nasdaq up 90-some points about two-thirds of one percent.

one key part of the market folks are focusing on, the vaccine makers we got news that pfizer and the partner in the covid vaccine are going to at least delay their pursuit of getting vaccinations for children under the age of five that's weighing on some of the vaccine makers out there you look at moderna, the worst performing stock in the s&p today. just about 13 percentage points to the downside. pfizer and biontech. a lot fewer people getting covid now. the trends have started to improve. so some of that demand waning a little bit, weighing on some investors. vaccine stocks a focus electric vehicle makers. specifically because of some regulatory filings that show that soros fund management took a stake in rivian automotive, those stocks are up about 10% right now. lucid group up about 8%. fis kerr up 1%

nickel up. the biggest one, necetesla, up % the ev makers are catching a bid. over the near and medium-term, there's been a lot of downside volatility for some of these names? >> a lot of spending on ads last night. plenty of people warning the fed should not tighten too quickly. what if the bigger risk is they don't tighten enough james bullard addressed the need to act boldly and swiftly. >> the last four reports taken in tandem have indicated that inflation is broadening and possibly accelerating in the u.s. economy so i shaded up my position i'm just one person on the committee, but i shaded up my position to say i'd like to see 100 basis points worth of movement on the policy rate by july one so our credibility is on the

line here. and we do have to react today a. however, i think we can do it in a way that's organized and not disruptive to markets. we're only removing accomm accommodation. so still an accommodative policy as we go through the initial rate hikes >> and joining me now is the chief market strategist at jeffries dave, i think you summed things up well and show how different an environment we're in when you say you think there's almost no downside for the fed in acting aggressively here. what do you mean by that >> kelly, we talked about this the last time. the housing market is on fire. we've got more job openings than people looking for jobs. we have a 4% unemployment rate the biggest political complaint that's coming back to the fed through congress is inflation. it's not jobs. it's not difficulty with the real estate markets. so those are really the two that usually come back to bite them when they start on the hiking cycle. i think they've got a lot -- not

to mention we came off the year up 30% for the s&p many people think that may have been too frothy. there are a lot of reasons they can afford to go after this 7.5% headline number and try to get it under control even though the market, much to the chagrin of those bashing on the fed, the market has complete faith in the federal reserve my favorite measure of fed credibility is unchanged over the last year. it's still at 2% that means the market thinks that in five years inflation expectations will still be 2%. i think it's got a great lineup to go strong >> and i think maybe the issue to show the urgency you're talking about is deflation goldman is worry first down you look at university of michigan, one year ahead of expectations new york fed, one year ahead of expectations they're at 5.8%.

they're saying if it's entrenched in a wage price spiral, it could make the fed want to go 50 in march is two tenths move to make them stick with 25? >> as i think you know from a few of my recent discussions, i think they're going to focus more on the balance sheet than aggressive rate hikes. i think they don't want to be seen as chasing the rate market with 50s and intermeeting moods. 25s are fine especially when the bulk of what they did to ease financial conditions during this last two years was $5 trillion balance sheet. it wasn't the 175 basis points of cuts. that was a minor easing by historical standards typical recessions, you know, we cut by 500 or 600 basis points i think the balance sheet, and it was interesting -- >> are they going that route you think they should do this? this is the way to have the most effect it would almost be ineffective not to go this route i'm not getting the sense the

rest of the fed is going to start aggressively draining it here >> i thought it was interesting in the interview this morning with james bullard, where jim said i want to start moving on the paydowns fast, like, immediately. that's not what is priced in but could be an interesting add-on to the march meeting. you say we're going to stop reinvesting immediately. that's one way to be a little more hawkish without doing a 50 and keeping it 25. the other thing is he said something important. he said we should have a plan b so that if by the middle of the year the data are not coming in the way we'd like them to, we can begin to open up for the idea of asset sales. >> yeah. >> i think look, it's there. it's lurking jay powell did not take it off the table in either his testimony or his press conference testimony for renomination or press conference after the last one. i think that's the story of the next quarter to quarter and a

half, kelly, how do they present the balance sheet? >> in the midst of this, i think it's worth going back to talk about why they need to move quickly at all when even the op ed the other day talked about the need for them to go it slow. why is the calculus different now? because from goldman's point of view, they're worried that 6%, 5.8% in one year consumer expectation becomes the five-year forward down the road if the fed doesn't get ahead of this do you think a scenario like that could play out? >> i think the team is spot on with that one. i think that is a worry. and you've got the credibility in the five-year, five-year. don't lose it. you have a financial market that looks great. you have a consumer balance sheet that looks great a corporate balance sheet that looks great. housing market, unemployment situation that is one of the least negative a strong employment situation. what's holding you back? and by the way, it may not be

that the fed itself is responsible for bringing inflation down over the course of this year it may just come down because the supply chain disruptions end. why not be aggressive and sort of like at least wave the flag and say we did that. we were part of the solution, not part of the problem? rather than wait it out? you just have too many free passes that you don't normally have to start a tightening cycle. >> interesting >> be more aggressive. >> a final comment because you always bring this back to marketings i brought this up earlier, but if the 2010 tenner situation was either the economy picks up or the fed -- is today the opposite >> it's not a risk parody story we've been pushing and dave has been a fan of for many years and has made a fortune out of it the fed is not your backstop as i think we've also talked about in a recent discussion the foot strike, where the fed comes in, where the fed kind of

pivots dovish to bail you out of a bad situation is just a lot lower than it usually is it's not down 10% to 15% in the s&p. so that just makes that trading strategy much less entirable to start this year. maybe we'll find a place by the second half of the year where that becomes an interesting strategy but at these levels where we are with the s&p just down 7 % or 8 % for the year and the rate market trying to catch its sea legs in the face of a withdrawal of a combination, it's not a fed bails you out kind of world. that tactic worked great and then our hobby horse here at jeffries for over a decade in terms of risk parody no we're taking a cautious approach probably the least bullish we've been in the equity market in the 13 years i've been here. >> exactly it's been great to have you here to run through this. thank you so much. >> always a pleasure

let's stick with the markets. my next guest is saying don't fear embrace the volatility it could even be profitable. joining me the chief equity strategist at mai capital management we know volatile is good for options but what do you say about broad exposure to the market >> it's nice to be with you again. i'd say a couple things. first, i'd say volatility is scary, but it's also more normal last year was the aberration we hardly had any volatility now we have 2% ten-year. higher inflation we've got ukraine sitting very vulnerable so it's a scary time but i think it also can be profitable it always sounds wiser to be pessimistic and a little bit dower, and i think david supplied that just now but i would say it might be more profitable right now to look at the things that are on the other side that we have going for us and i think there's quite a few.

>> yes so again, i think what to me is most striking about what we hear is that easy formulation of the past decade doesn't work you can't just be long stocks because either the economy will be strong or the fed will support it now it seems to be i don't know. i mean, you could be long socks if you think the fed is going to get the inflation problem right. and that kind of goldilocks scenario that implies a lot where would you be >> i think david is right. the federal reserve safety net, the so-called fed put, is really gone for all practical purposes at least for the time being. but what is replacing that is an unbelievable unprecedented amount of stimulus over the last two years, topping over $5 trillion we think that has primed an engine of economic growth that will really deliver this year. we think s&p earnings by the fourth quarter will be up 32% year over year

now, part of that is because these earnings are nominal and the higher inflation helps the numbers. still, that's an astounding amount and if those earnings are up, and the s&p grows into a more decent valuation, i think that investors would be wise not to head for the sidelines at this point, and to recognize that the market never peaks before rate hikes. it generally peaks in the middle of rate hikes, if at all >> the stocks you like names like boeing and disney, would signal to me you can still hold the dow or the s&p 500 and emerge relatively unscathed maybe from all of this it's kind of trimming the tail risk of the really small very expensive stocks, things like that different kinds of etfs that are more exotic. is that what this boils down to? >> i think so. i like to call it show me the money. those companies, we've had some terrific data points and some folks like disney last

week did show us the money, and some other folks like facebook didn't and they each got the kind of just rewards for that. i would think that investors would be well-served to do a lot of their homework right now. not everything is going to go up, and there clearly are more head winds than the last couple years, but having said that, i think it would be a big mistake to go to cash and think rates are going higher this rally is over >> yeah. i don't think anyone feels good going to cash in a 7.5% inflation environment. >> good point. >> it's a matter of which stocks to be in great to see you today >> you too, thank you. still ahead, the pulse of the reopening. avis, shares more than quadrupled marriott, and restaurant brands international. we're going to get an update and preview of all the earnings on

earns exchange first the latest steps to avoid a military conflict between russia and ukraine we're back in a moment this is wealth. ♪ ♪ this is worth. that takes wealth. ♪ ♪

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welcome back to "the

exchange". crude prices just under $94 a barrel as concerns linger about the russia/ukraine system, palladium is jumping nearly half the world's supply coming from russia let's get the latest on where things stand right now kayla is standing by in washington >> reporter: there's a flurry of conversations today to avert war between russia and the west as moscow signals an interest in pursuing an outcome through diplomatic channels. this morning russian foreign minister met with vladimir putin, russia's president, at a socially distanced table and told him the possibilities to have russia's securities demands met were not exhausted, and that talks should intensify for now putin according to the translations, responded all right. it's unclear how permanent or fleeting this pause would be lavrov suggested the talks not

extent indefinitely. and reporting on u.s. intelligence that putin wanted commanders ready for battle this wednesday, and now ukraine's leader is making wednesday a national holiday in that country. the uncertainty there has already taken a toll on its economy. flights cancelled. residents having fled, and diplomats relocated. the u.s. secretary of state, blinken spoke with his ukrainian counterpart and pledged more support from the u.s. including key financial assistance packages president biden speaking with the uk prime minister last hour. we are awaiting news on how that callwent and germany's chancellor visiting ukraine and russia as well this week we are also going to hear from the pentagon later on this afternoon. the pentagon has already deployed troops to the region and we'll hear from them shortly. >> what about the argument about sanctions, the way the potential package could be shaping up and the deterrent effect it may be having on putin's behavior right

now? >> some of the sanctions under discussion on capitol hill, those talks stalled. but the national security adviser is briefing members of congress today on exactly where things stand in hopes that some of that more classified information, that the administration has not been able to provide publicly, would help bring those negotiators to a place where the sanctions package would move forward of course, the executive branch doesn't need congress to be able to move forward with the financial sanctions that it is packaging together but the administration does want that unified bipartisan show of force and show of support as they try to present a united front with the broader west as well >> yeah. maybe to put it differently, it would be hard for the sanctions to deter any invasion yet if we're not clear on exactly what they are >> well, certainly there has been a lot telegraphed about what the white house sanctions package would be the white house wants russia kicked out of the swift system the white house said if russia

invades the key gas pipeline would never come into online there's a host of things on the table. i think the question is to what extent nato partners would step up with the same severity. because they have deeper trading relationships with russia and in some cases, we've heard from the administration that other countries might take more unique approaches >> exactly very tricky. kayla, we appreciate it. thank you. kayla with the latest. joining us the chairman and kroet of the cohen -- ceo of the cohen group. it's great to have you here. what would you say are the likely steps as we've all heard this wednesday date for days now being bandied about as a possible invasion? >> it's too hard to say. i think it's a mistake to try and pick and take. president putin has a lot of options available. we know that there are european

leaders. so still scheduled to meet with him. and frankly, he's already won his point. he has said in the past that we're not listening to him we're not paying attention to him. well, the world is listening to him. all roads in the past two or three weeks have been leading to moscow he at this point could say i've made my point. i think i'll ease off here and continue the diplomacy and by the way, that may give me more opportunity to plan how i'm going to circumvent the western imposition of sanctions. so he has more options available than anyone else and i think it's a mistake to say what date he may move. because it's still possible he may move back. unlikely, but nonetheless, nothing is impossible until it happens. >> if we were to say that an invasion does not happen here, do you think ukraine should pursue nato membership >> no. not at all nato is open to every nation,

but it has a very steep set of stairs to climb. and so i don't think that ukraine is anywhere near the qualification for nato you have to have unanimous consent to get into nato membership it's a long way off. i don't think any country should ever say i give up on freedom. this is something every western to be sure says is at the heart of our society, the ability to be free from intimidation, from fear, from ganger theism, from parkism, et cetera so to tell the ukrainians that they should give up their quest for freedom, i think, is something that we wouldn't ask of ourselves so no you should never give up the quest for freedom, and we should try to persuade the russians that hey, look what the ukrainians are doing you could have some of this as well, but you're under the roof and the jail of the russians >> the net result here for most

investors and people in the u.s. is if nothing happens, they're going to ignore the situation. it basically falls off the radar. do you think that's right? >> i don't think it will fall off the radar. i don't think that this is just a training exercise by the russians i think what putin is saying is i can do this. and i will do this unless certain guarantees are made to me he's asking the impossible he's saying guarantee to me that ukraine will never be free will never enjoy western freedom. because freedom is a threat to my existence freedom is a threat to the russian people they'll see that i've been ripping them off the oligarchs ripping them off for billions if not trillions of dollars. that is what is frightening to putin. it's almost a line out of the wall street movie with the gecko saying look, if you stop lying about me, i'll stop telling you the truth about you. what the west has to do is to

continue to engage in an information warfare that we tell the people in russia and those countries that are under the heel and boot of imperialism or fascism or simply living in a totalitarian state that it's natural for you to want to be free, and you should always look to the united states and the west as an example but unfortunately, those in russia, those in china, say democracy is dying it is nearly dead and look how it is so divided they can't make decisions and therefore, you need to have strong leadership, and so we're actually offering you a method of organizational principles that will give you safety, security, and stability. you don't get that in the west it's too chaotic there's a real challenge going on on a geo political basis about which system creates the most freedom the most wealth, the most prosperity, and security

>> well-said >> that will take place. >> william, thank you for your time we appreciate it today >> any time. thank you. >> william cohen with the cohen group. still ahead, tracking the defense stocks with some of the biggest names. less than 5% off the highs are they a reliable place to go or too dicey right now we'll explore in a moment. you need to hire. i need indeed. indeed you do. indeed instant match instantly delivers quality candidates matching your job description. visit indeed.com/hire ♪ ♪ wow, we're crunching tons of polygons here! what's going on? where's regina? hi, i'm ladonna. i invest in invesco qqq, a fund that gives me access to the nasdaq-100 innovations, like real time cgi. okay... yeah... oh. don't worry i got it! become an agent of innovation with invesco qqq

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welcome back to the exchange it's time for earnings exchange where we give you the action, story. we're going to start with an $11 billion share meme stock avis shares, a short squeeze drove shares to an all-time

high we're down 60% on those levels we have the story. the chief market technician at piper sandler, welcome to you both phil, avis, what are you watching >> well, i think the thing people will be focussed on two things, really one, does avis give guidance for what they expect for the rest of 2022 the analysts are split some saying i don't think they're going to give guidance because there's a number of variables they can't predict at this point and what do they say about acquisition costs? typically the rental car firms, they will defleet third quarter into fourth quarter. that wasn't a defleeting going on they'd done that during the pandemic they're building up their fleets so what do they say about their vehicle acquisition costs and that might be some indication of what we can expect at least as we head into the summer season which is expected to be by the way, a very active and busy summer season in terms of travel and the rental car companies >> absolutely.

craig, you are a buyer here of avis is that right? >> that's correct. so if you take a look at the chart, it's been a pretty consistent chart we've been up and to the right we've pulled back, retested the longer term up trend support line that's been intact going back to the pandemic close i'd make the observation that if this stock can clear this kind of 50-day moving arch, we think there's potentially 30% up side from the levels back up to the sort of 225, 250 level, and if you look back at ternings -- the earnings reports, eight straight quarters in a row with revisions into the print it's been interesting. we think this is one we want to buy into the print >> how has being a meme stock changed avis if it has at all? >> i'm not sure it has changed them in terms of how they operate as a company i think they are taking the approach of trying to convince investors that they first of all, they got past the pandemic.

and they have a business plan that is set up post pandemic and i think that's the main focus right now. you'll also see some attention paid to what they say about acquiring and adding evs into the fleet. that's going to get some attention on the headlines but the real focus is how are they prepared for the summer when we see a surge in travel? >> we'll watch the levels. thank you. and marriott reporting before the bell tomorrow how they've handled omicron and whether demand for business travel and conferences is bouncing back. dom standing by with the story on marriott. >> that's the key. like with the expedia last week, you could argue the marriott story is one of great expectations after all, it was expedia like just marriott, one of the two s&p 500 travel related companies that hit record highs just a day ago. as for what the earnings expectations are, the street is looking for roughly around a dollar per share an even number roughly $4 billion in revenues like all the other travel stocks, this is about travel

demand yes, the positive momentum is there for the leisure side of things has been for a year and a half the positive pictureup more importantly, the return of the business traveler. and you've got a lot of brands, right, marriott we know about. weston, but renaissance, shorten, business brands are ones to watch. the options market is currently pricing in roughly 5 plus percent move in the stock. higher or lower on the heels of the report tomorrow morning before the opening bell. now, just to give you context, over the last eight quarterly reports from marriott, the stock traded positively half the time. a coin toss over the last eight. the average move up or down over those eight earnings reports has been 2.7% in either direction. so you could say traders are possibly anticipating a lot more volatility almost twice as much volatility as we've seen over the last two years. >> a stalwart performer lately and craig, you like avis, but you really like marriott >> favorite of the two here is marriott

what we're seeing here with the chart is we're just starting to broke out of a nice consolidation range after clearing the resistance off the 19 highs in here both the momentum indicators we've been looking at are confirming the breakout along with the relative strength and as we showed here in the panel on the chart, that you can see marriott is outperforming the s&p 500. picking up nice relative strength that's important for a lot of portfolio managers would be buying it again at the levels >> all right let's move along from two reopening winners to one that's been more of a struggle. tim horton's and burger king parent company restaurant brands reports tomorrow the shares are down about 5% to start off the year about 20% below the recent highs. kate rogers has the stories today. >> you mentioned this is the parent of burger king. pop eyes along with fire house subs piper sandler notes pop eyes is

an outperformer. the category at large is competitive. the key things to watch here will be pricing power and labor. the model for the company is highly franchised. are these franchisees seeing broader labor challenges and how are they combatting those? last quarter reduced hours within example that was given by the company's ceo, about 40% of pop eyes closed dining rooms and shortened hours due to the labor challenges how are price hikes being evaluated? are they being passed onto consumers? so far they've been able do this i'll be interested to hear what they say tomorrow. >> this one, it looks like you're not in a hurry to pick it up >> it does look like a double bottom on the charts you can see that we really need to get it closed above 6075 to confirm for us on the charts that we have a trend change starting to unfold i pass on this one at this point in time. i think there's better places to be like marriott and also avis

>> kate, what about the chicken sandwich that was a cult hit what was that going on maybe a year ago >> yeah. and that continues that's been important. remember, mcdonald's rolled out the big chicken sandwich platform pop eyes is in the mix that's why the one part of the business does tend to outperform if the labor challenges are there or hours are short and they can't get to the customers, how does it shake out in the earnings >> it's not all names in the space. if you consider chipolte, it's quick certain, a category of its own. where else do you see strength if people want -- say where do i go in this sector of the market? >> to be inside this sector, again, i would come back to some of the reopening names the restaurant still have been soft and challenging at this point in time. but we're neutral. in consumer cyclical sector at this point, and where we want to be is overweight energy, financials and some of the larger cap tech names.

>> it feels like an inflation thing. pricing power and all the rest of it as much as it is reopening. craig, it's been great to have you. thank you so much. >> thank you >> craig johnson from piper stand ler. kate rogers all over it for us we appreciate it as always still ahead, the latest on inflation and the supply chain from the ceo of pga tour super store. dick sullivan checks in. he says business is booming and high prices aren't keeping people away from golf. alright, so...cordless headphones, you can watch movies through your phone? and y'all got electric cars? yeah. the future is crunk! (laughs) anything else you wanna know? is the hype too much? am i ready? i can't tell you everything. but if you want to make history, you gotta call your own shots. we going to the league! ♪♪

♪♪ ♪♪

welcome back, erveg. we're well off the lows. the dow and the s&p are negative again as we bounced around this afternoon. the nasdaq up 38 yields reversing friday's drop lower and above the 2 % mark we're watching that closely. a hair over that level and keeping our eyes on energy the sector one of the worst -- the fact performer down nearly 3% with every member of the group lower marathon down almost 5% let's get to frank holland for a cnbc update. >>. >> texas attorney general is suing metafacebook he claims they violated state

privacy protections with the now-discontinued facial recognition tech he is seeking billions of dollars in damages the company will defend itself m m m met. in georgia the jury selected for three -- the judges told attorneys to be ready for opening statements later today canada, the most populous province is ending vac nation requirements to enter many public indoor spaces doug ford says it's not because of protests at the border with the u.s. instead, ford says he's doing it because t safe enough to do so on the nooz news, what it means to make sure there are enough flowers for valentine's

day. there's actually a hot color of rose this year besides red red is always the most popular there's another hot color. we'll tell you tonight >> tell me now, please >> should i spoil it >> you know what, probably not we'll leave that as a tease for everyone, including myself to tune in. frank, thank you coming up with all the volatility we've seen this year, it might be hard to believe. we're only a percent and a half from where we were in the market six month ago. as we head to break, look at the names getting a boost. coin base up 1.5%. remember, they flooded the zone with those crypto ads last night. llg crypto bowl are some are cainit we're back in a moment at vanguard,

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so whatever comes your way, the wheels keep moving. seamlessly modernizing your operations, that's why so many businesses work with ibm. alright, so...cordless headphones, you can watch movies through your phone? and y'all got electric cars? yeah. the future is crunk! (laughs) anything else you wanna know? is the hype too much? am i ready? i can't tell you everything. but if you want to make history, you gotta call your own shots. we going to the league! welcome back it's been a pretty crazy market over the past six months you wouldn't know it if you just woke up and checked the s&p price level now as opposed to a

year ago it's basically in the same spot. mike has more. >> just a six-week pullback, but it's taken us back to where the s&p 500 first reached actually more like july a little over six months ago over that period, though, i think you could argue this kind of stagnation, the reset has done some good on a longer-term basis. one, valuation excesses have eased back we had a stock market trading around 22 times forward earnings back then. now it's around 19.5 not cheap. not back to where we were before the pandemic definitely more moderate over that period of time, when the s&p has been virtually flat, it has outperformed the nasdaq 100 by five percentage point it's somewhat less so right now. also fair to say that the market's been stress tested by the radical rethinking of where the fed is going and what bond yields have done we were at 1.3 on the ten year six months ago the two-year note has gone

flying from almost nothing up. all those things together tell you it's somewhat typical of the sideways choppy period it doesn't mean all the damage has been done. it doesn't mean we're going to escape unscathed from here but i do think that tells you these kind of opposing currents that sometimes come into play when we get into this mid or perhaps later part of the cycle. >> it's sort of the triumph of the s&p 500. everyone who was getting fomo from not being in crypto and all the rest of it is now looking at this and going, given everything that's happened, the s&p is still proving that diversification in large caps can work well through a bunch of different environments >> that's the case and really was the case last year because you never even got a 5% pullback in the s&p and every single stock in the index was down more at one point or another that is true now, this year arguably it's becoming a little easier, so to speak, to beat the s&p

financials and energy, and other cyclicals have widened out their lead that's not to say you're always going to pick the right stocks even if it's more of a ripe period for choosing individual names. >> mike, always good to see you. coming up, hitting record sales and navigating the supply chain just fine. that's according to my next guest. the ceo of pga tour superstore joins us live. remember, you can catch the show any time anywhere by following the exchange podcast search cnbc "the exchange" the show and conversations with kelly. you get everything sign up now. we're back in a moment

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welcome back 529 million rounds of golf were played last year, an all-time record as interest in the game has exploded among the pandemic and pga superstore reaping the benefits sales up 80% in the past two years despite supply chain struggles. let's check in with dick sullivan, the ceo of the pga superstore great to have you back >> great to be here. >> i did my channel checks with

our golf expert, and he says there are still shortages, and little delays sometimes, problems with the golf industry in general how are we today versus where we were a year or two years ago >> well, the whole world is on back order as we know. >> yeah. >> fortunately we're not in nota other industries we have been creative wherever we can we had wedges without grips because there's a rubber shortages and put grips on inside of the stores we try to accelerate that purchase cycle to the consumer things that take two weeks could be taking five weeks we are all seeing some delays. >> i heard that the grips were a particular problem so i guess my question from the market's point of view is, are we weeks or months to work

themselves out or looking into 2023 >> i think we see countries open up like vietnam. many manufacturers moved from china to vietnam and vietnam was hit harder from covid than other countries and starting to see that opening up. we are 95% of where we want to be of inventory. most exciting thing in the past year is more women coming into the game than before why used to be less than 20% now 30% of women women's apparel business and so exciting to see grow with beginners growing. we have plenty of inventory and product. if you special order anything in life you see a delay. >>personally friends are tryin to take up golf now and commend them because i'm not good at it.

>> you said that but the football season is over now and need to do something different two former super bowl quarterbacks in the store. cordell stewart and matt ryan. both are shopping. one getting the clubs regripped and one is buying apparel. >> just like you let me finish you by a question. you're in a unique situation with supply chain bottlenecks and now wages and staffing what's the update there starting to see evidence that people are getting and asking for higher wages these days >> great question. the company is owned by arthur blank. owner of the falcons and founder of home depot and had a value of paying people, putting people

first. we increased the minimum wage and overall by over 10% and countering some of the inflation. we have been fortunate 94% of the associates in this country would refer a friend to work for the company so there's challenges in hiring. we haven't had the challenges. obviously we increased the minimum wage have more wage increases trying to live the values here we are at pga tour superstore. >> he refused to call the headquarters the headquarters. he called it the service center. >> yeah. >> profit margins -- >> store support center. >> real quickly on profit margins, sales are up, have profit margins increased or under some pressure?

>> privately held and significantly increased the margins and we can talk about ebitda all day long. with 80% increase in sales when you work for arthur blank you need leverage only the expense side and we are seeing on top of 80% increase and some are covid driven and playing golf at 5:00 opposed to being in a train at 5:00 but we are seeing this year over 25% again this year and over 20% is through new customers or transactions. it's not all because of inflation. the game is still growing and really excited about where we are. >> very interesting. tell the guys to get to a camera and ask about the favorite super bowl ads or something. >> we have to get you out. >> no. thank you for your time today.

>> thank you. >> ceo and president of the pga tour superstore. defense spending is likely strong in rising geopolitical tensions and certain stocks are positioned to do well because of that we have the names next

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we are morgan stanley. welcome back tensions between russia and ukraine escalate investors' attention is turning to the defense sector morgan brennan has more. >> defense stocks are lower after a friday afternoon pop thanks to russia's top diplomat calling for more talks but experts tell me invasion or not the changes, this changes the geopolitical dynamic among nato members and allies and stateside as lawmakers look to fund the 2022 budget

hopefully in march finally and as a budget request is expected as soon as april to raise defense levels higher. near term threat is a positive for raytheon with the singer anti-aircraft missile system and actually we are already seeing shipments to ukraine longer term general dynamics could benefit as poland looks to buy abrams tanks and more demand potentially for fighter jets like from lockheed and boeing. this could support u.s. army priorities and speaking of missiles, something else to watch today. another big development that's impacting the sector lockheed scrapping the deal for rocket and missile merger with

aerojet. shares are lower down about 6% today. >> morgan, thank you so much this has been a tough environment to get deals done. we watch stocks head to session lows on the concern. we'll pick it up with "power lunch" right now ♪ welcome to "power lunch. i'm dominic chu in for tyler today. putin's power play as the u.s. warns of an eminent attack global energy supplies hang in the balance and focusing attention on the under the raw car lng. buy this and sell that a veteran trade we are a list of stocks to own and those to ditch. and no price like home inflat