important these things are >> mift. metals important for future technology got it thank you very much. that does it for the exchange. "power lunch" begins right now and welcome to "power lunch," everybody. here is what's ahead we've got red hot producer prices twice as high as expected in january and blackrock has a call on cash as a way to reduce risk in this unusual market and no place like home inflation is hitting housing hard our series today looks at lumber prices which are up, get this, 27% just since the first of february creating another headache for home buyers in and builders. kelly. >> thanks. i thought you might come all the way over here. >> i may some day. >> here i am at the markets, which are looking pretty good

today. dow up 408 nasdaq up 289. we'll hear from president biden around 3:30 eastern on the russian situation and it's that easing of tensions between russia an ukraine, at least for now, that has given the markets this positive lift first up day in four for the day. you can see crude here reversing 4% and nat gas up about 1% and the yield on the ten-year is back up above 2% today 2.043. bitcoin trading around 43,000 as risk appetite returns. >> we begin this hour with inflation. the producer price index rising at an accelerated pace in january. up 1% month over month you can do the math there, which is twice what economists expected our next guest says the fed needs to be aggressive in removing a combination and he has a call on cash as a way to mitigate risk in your portfolio.

ross is portfolio manager of blackrock global allocation fund kb good to see you, sir >> thanks, tyler >> let's talk about what you would urge the fed to do when it meets in march it presumably will be done doing quantitative easing and presumably make some sort of interest rate at that time >> i don't think it's a big secret the fed is going to have to move aggressively inflation continues to build not just on the consumer side. we saw on the producer side. we've had a number of strong prints in a row including the january non-farm payroll so we're going to have a very consistent series of hikes by the fed over the coming six or 12 months and that's a different environment. it's an environment in which we're seeing financial conditions normalize after several years when they've been about as accommodative as they've ever been. >> let's talk about your

position on cash it doesn't yield very much i suppose the yields are going to go up as interest rates go up a little bit but it feels to me justlike a tactical, defensive position a derisking of your overall portfolio. you can't get hurt there not going to make much money there. not in any real sense, but you really can't get hurt. >> that's fair but let's be clear about what we talked about with cash not suggesting people sell their stocks and go to cash. we still think this is an environment which equities are going to produce the best risk adjusted return and be higher than they are today. we also believe equities are your best asset class in an environment where inflation is going up we'll talk about that in a moment, but what i'm trying to get at with cash, very few people have 100% in equities you need risk mitigance.

it was treasuries. people looked to gold. the dollar has proved less effective. the point of cash is not tomov your portfolio to cash as you think about where you should be on the risk spectrum in dampening down that equity volatility, cash the probably the last one standing along with owning the right type of equities >> but russ, cash itself is losing value ty just said the producer prices were up 1% in a month. that's a 12% annualized pace i totally take your point from a portfolio management point of view or if this were 2014, but how can you be in cash, which is a guaranteed money loser in real terms? >> you can't be in all cash. that's the important point to make we're talking about in a multias multiasset portfolio go back to the environment where

you had 60% in stocks, 40% in bonds. again, part of the role of those bonds, particularly treasuries, they were going to be negatively correlated with stocks dampen the portfolio ball. today, as we've seen over the last few months, traditional bonds are a source of volatility so for the part of the portfolio that's not in equities, and we still advocate a significant portion to stocks, what is your hedge? and in an environment where bonds and stocks are moving together, you need to have more cash than you would have had a year or two years ago given the environment we're in >> let's close off we talked a lot about cash, but you said at the beginning, russ, that you like equities overall as the basic core of the portfolio that they'll do best by year end. they'll be higher by year end. so what kind of stocks should i buy now for that kind of portfolio? >> i think this is the key question so there are a couple of characteristics i think you want

to emphasize at this point in the cycle. pricing power. stocks that actually have the ability to raise prices in an environment where input costs are going up cash flow generation we're long past the junk rally of a year ago when companies were going up regardless of their prospects for earnings emph emphasize cash flow and earnings consistency. companies that produce consistent earnings, even given the changes we're seeing in the macro environment. those are the three characteristics we focus on. >> russ, thank you very much appreciate your time today >> thanks, tyler >> fantastic let's turn to the russian ukraine border crisis. russian president putin announcing this morning a decision to partially pull back troops from the ukrainian border as russia thinks it may be open to more diplomatic negotiations, but the nato secretary general and u.s. ambassador to the united nations say they've not seen any sign of deescalation.

so what is the next step in the conflict joining me now, michael mcfall, former u.s. ambassador to russia and an nbc news and msnbc international affairs analyst. welcome. i'm glad to have you with us i've seen you many times over the proceedings days why is putin or his deputy, lavrov, still talking to people like the german chancellor, like boris johnson and others >> you know, i don't think vladimir putin's decided what he wants to do. we've been speculating for weeks about what his thinking is, what his intentions are he has amassed the capability to launch a major military invasion of ukraine and i'm not getting too excited about reports they're moving back. i would be caution about overreacting to that but as the forces are there, they are also talking to every leader that wants to talk to

them, including the president of the united states over the weekend. and you know, they put this tv thing together with lavrov sitting, i don't know if you saw it, but he's sitting 25 feet away from putin. that was all designed to say they want to keep talking. so that's a good sign. >> taking social distancing to an extreme as was his meeting last week with president macron of france. there's also some ploy out there this morning about the russian, i guess it's the russian parliament or the russian government doesn't really matter, annexing dunbas, crimea and the other areas in which russia moved in 2014 what is that play about? is he saying in effect, okay, if you just let us what we took in 2014, maybe we can call it a day? >> i'm glad you brought that up because that's exactly the mixed messaging you get from moscow today. so on the same day that lavrov says we should keep negotiating,

the russian parliament passes a resolution, it's a non-binding resolution, by the way, but they pass a resolution saying we should recognize these two places as independent countries. that's exactly what russia did after they invaded georgia in 2008 and so that's es koala torre, that's war. because they don't control all those territories of those two regions right now. for them to recognize those places as independent states would require a military intervention so both signals at the same time one for war, one for negotiation. >> i want to turn to what i think is really at the heart of an article you wrote for foreign affairs very recently and that is the idea that the real solution to what is going on in europe and especially in eastern europe is a much larger sit down

and negotiation for what you describe as helsinki 2.0 it would create a comprehensive security package among the countries of the west with russia and its so-called client states, i suppose. why do you think that is the way to go, number one, and number two, this would take, by your estimation, three years to achieve. by which time president biden might be out of office and someone who is not particularly kindly turned toward multilateral agreements might be back in office >> who are you hinting at there? >> i don't know. >> my idea is a big one and i want to say i have low probability that putin would accept it. but if he was serious about trying to enhance european

security including russian security, i do think there's a path forward a lot of those treaties have broken down over the past ten years and we aren't better off the ukrainians aren't better off, our eu partners aren't and russia's not i'm talking about transparency, arms and soldier movements transparency in arms control, about certain kinds of weapons we did this before we did this during the reagan era. we did it at the end of the cold war. made everybody better off. i think if you want to go forward, there is a path there and remember, there's no court of law, no real international law in international relations, right? let's be clear about that. the only agreements that hold are that if everybody thinks it's in their individual self-interest to negotiate that deal and i think there are concrete ideas out there that we could explore. it will take years it will take a long time

i just don't know if putin actually is serious about negotiation yet. >> the other thing i noted you said is that europe, that the european security ak rchitectur is broken. quickly if i might, ambassador, how did that happen and in what sense is it broken >> well, we have great things like the cfe treaty which put limits on weapons and told everybody to declare their weapons. the russians pulled out of that. we have one of the most fantastic treaties in the world that got rid of a kind of rocket in europe. we pulled out of that. and my idea is maybe we can't go back and repair those old treaties, but we should think about treaties that make us safer and at a minimum, share information about our forces between adversaries. that is a way to reduce tensions >> are any of putin's so-called security concerns legitimate >> yes and no. i mean, should he have the right

to pursue his definition of russian security yes. but he doesn't have the right to pursue it at the expense of other countries and that's what's so preposterous about the situation right now. he is threatening to invade, again, another country to enhance russian security and in doing so the violating all those treaties i was just mentioning so i think he has a legitimate concern to have negotiations about security for russia, but he does not have a legitimate concern to use force to invade other countries and annex other countries. that's a maximus position that nobody should entertain. >> ambassador, really wonderful to have you with us. thank you very much. >> thanks. still ahead, power semi is so s soaring o on a takeover by intel. a top analyst says it is not enough intel shares up 1% today

plus, travel stocks are taking off again and airlines are betting the pent up demand for transatlantic travel will be a game changer for their bottom line american up 8% delta up 6%. we have more when "power lunch" ntue coins. 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!

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can help you switch and save. switch to xfinity mobile and get connected to the most reliable 5g network. talk with our helpful switch squad at your local xfinity store today. welcome back, everybody. despite the widespread shortage, sales of semiconductors still hit a record last year, up 26% from the previous year

and every company is trying to get a bigger piece of that pie today, intel announcing its buying tower semiconductor for about $5.5 billion shares of tower up 42% intel a little less than 1%. joining us now, managing director and senior analyst at bernstein research we know you've had an underperform on intel. maybe this doesn't knock your socks off, but is it a move in the right direction? >> they need something like this so they're trying to build out a foundry business and as a critical piece of their longer term strategy. they don't have a lot of the pieces that they need. especially on some of the older generation technologies. specialty, analog, that sort of thing. this is something they need to be prohibited so they probably need to acquire it they were rumored to be looking at global foundries last year. also much, much bigger

that didn't work out for whatever reason so they had to go down market and they're buying tower tower will give them some of those capabilities, but it is much, mull smaller they've got about 1% market share in the industry. very low margins about 20% gross margins. it's not a super business, but it will give them some of those capabilities that it would be unlikely they could have any success in the foundry business without those. so they need them. >> yeah. again, as part of a, you know, foundry business, as a turn around strategy, they're clearly not going to remake the company with a $5.5 billion deal >> it's a rounding error let's be honest. >> yeah. so what would you like to see them do that would maybe be, you know, a lot costlier than a rounding error >> probably would have been a bigger push.

global foundries had about 7 or 8% market share. they don't really have a lot of choice in the foundry industry you think about the rest of the folks. cmc and samsung are no goes. snick is chinese those aren't going to work the next one is line is power. that's it. they don't have a lot of -- in some sense, it shows you the position they're in that if they're going to go out and acquire these capabilities, this is the asset they have to buy. >> yeah. so tower obviously surging on this deal. there's more maybe that is going to be coming down in the pipeline for intel what's next? >> they have their analyst on thursday at this point, they've given us a flavor for what the strategy is going to be, although that favor itself has been kind of sour we're seeing gross margins coming down. capex ballooning

what we still don't know is what is a good picture. what does this company look like in three years, four years, five years? what is the shape of the bathtub they're probably going to have to go to during the transition where is the trough? how deep is it those are answers we'll ho hopefully get on thursday. it's going to be an eventful day. >> i think of patrick morehead, a fan of intel for the longer run. he sees this is a turnaround plan, but thinks this needs to happen they're going to figure it out if you were able to think on more of a three to five-year horizon, would you be much more bullish and excited about what they're doing here or would you still think they're going in the wrong direction? >> i don't think they're going in the wrong direction in the sense of if they want to have a hope of having a robust, viable company five years, ten years down the line and pat gellis blg

up the model to try to save it now that doesn't mean i want to hold his hand while he's doing it and there's no guarantee it's going to work, but what's the alternative? it's to lay down and die right? that is not what he was brought in there to do he was not brought in there to sort of like manage a long and steady terminal decline. he was brought in to try to bring it back to its former glory. they're doing what they need to do to have a hope to do that but it's not a guarantee call me in five years. >> you don't have enough visibility to get -- >> i'm not blaming them for what they're doing. they're doing what needs to be done, but it's pretty severe >> understood. thanks for your time >> my pleasure ahead on the program, pack your bags with omicron cases easing in the u.s. and europe, airlines loading up their transatlantic schedules for the summer doesn't mean the prices aren't loading up as well. plus, no place, no price like home. we will continue our special

week long series walking you through the growing costs in the home buying process. be right back after this

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here's your cnbc news update a high level federal vacancy now filled in a 50-46 vote, the senate voted robert califf to lead the food and drug administration up in canada, ottawa's police chief is resigning after strong criticism of his failure to handle the truck protest that shut down parts of the city. the cbc reports he's been accused of volatile behavior that's compromised the department's response to the situation. and the sec is looking at binance. "the wall street journal" reports regulators are focusing on how the company told customers about its relationship with two trading firms that have ties to its founder. and simone says it was the easiest yes. yesterday, jonathan owens, who plays for the houston texans football team and has been dating the gold medalist for the past two years, asked her to marry him.

in an instagram post, biles said owens is everything she dreamed of and more and right there, you're seeing thering. no pressure for all the guys out there. u.s. weekly estimates it's eight carats is that what you bought back in the day? >> no, no, no. but can you imagine the athletic couple they will be? i mean, wow. >> make a bet on those kids. frank, thank youvery much. congrats to them both. time for today's power movers and the first up is board warner the automotive components maker. they beat on the top and bottom line expecting improvement in organic sales. fintech is split today robinhood and coinbase are in the green. fidelity in the red. down almost 9% having its worst day since the pandemic lows in march 2020 and avis budget is down more than 10%. the company delivering strong results, revenue falling for the first time in more than a year due to omicron

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comcast business. powering possibilities.™ 90 minutes left in the trading day. before we hear from president biden, let's get you caught up stocks, bonds, commodities, and the new way thieves are stealing crypto let's start with the markets dom? >> the stock market is still solidly higher has been all day it's been a pretty narrow trading range though if you look at the nasdaq composite, which has been the epicenter of recent trading volatility, at the highs of the session, we were up around 2.2%. at the lows, still up 1.3% tech and discretionary, the two sectors you want to keep an eye on they are the biggest and third biggest sectors by weight in the s&p. they make up a combined 40% of the index. with regard to the stocks on the move there it's computer chip makers among some of the best

performers nvidia lam research advanced micro applied materials. within that discretionary trade, sure, amazon is the biggest, but believe it or not, it is an underperformer today but tesla, the ev giant, is the real standout, up nearly 5% and really driving things in trading today. i know it was terrible. i get it, kelly. >> you are forgiven. back up to 918 a share those russia headlines that were sending stocks higher also playing out across the bond market where the ten-year yield is back in positive territory. rick >> yes, it is been a very strange day in treasuries, kelly, and it started about what, 2:00 or 3:00 in the morning. let's start with the short intin intro of tens. i bought the ppi for january out and it was hot, hot, hot whether it was the headline of 1% as tyler's been saying or the

fact that core made a new all-time high, up 9.excuse me, 8.3%, but then we saw the revision of last time which came to 8.5, which is the new high. so everything was high but do you see any movement at 8:30 on the chart? zippo. didn't even notice the hot data. but what it did notice was around 3:00 in the morning when the news came out that russia was moving their troops back, that definitely popped yields up yields went down in flight to safe that reversed it so here we sit at 2.04, on pace for the highest yield close in 30 months going back to july of 2019 finally, yesterday, tens to twos traded under 40. closed at 41 that was an 18-month flat, but thousand it's reversed it's hovering around 48 and the reason is because two-year and

three-year note yields are lower on the day the rest of the curve is higher. back to you. >> like to see that steepness. thank you, rick. >> oil dropping for all the same reasons that stocks and bonds are up pippa? >> oil declining today pulling back from yesterday's multiyear high as tensions between russia and ukraine as you've been talking about appear to be deescalating prices had been higher because any conflict in the area could reduce supply in what is already a very tight market. today's decline needs to be put into broader context with eight strakt weeks of gains. u.s. oil started the year around 75 so in just seven weeks, we're still up more than 15 bucks. let's get a check on prices. wti is down 3.6% at $92.02 that is off the worst level of the session. never dropped below 90 brent is at $93.22 for a loss of

3 1/3. all eyes have been on russia and ukraine, but important not to forget the iran deal saying a deal would upend the market back to you. >> sticking to his guns. thank you. we've been reporting on how the lure of crypto riches can turn into a nightmare. frauds are targeting crypto accounts and they're using technology designed to separate you from your money. eamon javers unravels the crypto nightmare that starts with a phone call >> they were out to dipper in january with their children and his phone wouldn't stop buzzing. the message was alarming >> hello, welcome to coinbase security prevention line we have detected unauthorized activity >> that caught his attention since he and his wife, who are both obstetricians, had more than $100,000 invested in

coinbase he had a bad feeling as soon as he answered. >> something in the back of your head said it didn't quite feel right. just convincing enough >> for an instant, he was convinced it was real. >> we have detected unauthorized activity this was requested from a canada ip address if this is not you, please press 1. >> it says to secure your account, hit 1 so i hit 1 and ads i hit 1, the two factor awe thentification came through this is where it gets hazy, almost like when people were in a car accident and can't remember the details i looked at my wife and said something is wrong let's get to the account so when we opened the app, we could no longer get into the account. >> how long was it from the time the two factor awe th

thentification came? >> less than two >> you tapped something on your phone and two minutes later, you're out and the money was gone >> the access to the money was gone >> the account was completely locked the culprit was part of an increasing trend a one-time password bot to trick you into thinking your account is getting hacked, but in reality, it's stealing your code jessica kelly is an analyst at q6, a cnbc contributor, and authored a report about how these bots work. >> that information gets sent to the bot, which then automatically sends it to the cyber criminal, which then has access to the victim's account, which is the exact opposite of what the victim thinks in that moment >> they sell the bots on telegram, targeting not only coinbase, but other fplatforms. anywhere you use two factor

authentication sometimes the calls aren't bots. they're real people. on this call is someone impersonating a coinbase employee on the other end of the line is a customer, david silver >> immediately, it was an electronic voice that told me it was coinbase fraud department. and i immediately turned to the lawyer sitting next to me and said start videoing. i knew instantaneously what this was and what it was going to be. >> they called the wrong guy silver is not only a coinbase customer, but an attorney who happens to specialize in crypto currency fraud >> you are not going to give any access to any individual or human being, okay. you are going to get connected with our server. >> he was astounded at how much information they already had >> they had a phone number for me to call back on the second thing they said was we can't send you an e-mail because your personal e-mail is already compromised, which i

knew was not true. >> after nearly seven minutes, silver ended the call. that's what anders wishes he had done just hang up instead, he say the ordeal was like watching a theft in progress >> it would be as though we had cameras in the house and couldn't go home and we could watch people just taking stuff out of our house >> now coinbase tells us it never makes unsolicited calls to its customers and cautions against disclosing your personal information to anyone over the phone before you check it out. as far as the doctor's situation goes, he says he still can't get back into his account because the e-mail address was changed coinbase says the matter has been turned over to its security team >> fabulous reporting, eamon terrifying this is a bigger issue than just coinbase, two. if they're able to exploit two factor authentication, which is

now the key way we're protecting our logins to our bank accounts. >> absolutely. it goes for anything you use two factor authentication for. these bots can target that it's exactly that thing we think we're going to secure our accounts, which is the weak point in this type of attack once you type in your two factor authentication and give the criminal that code, they are immediately getting into whatever account it is on the back end with banks and other things that have been around for longer and have more elaborate fraud departments, it's a lot harder for the criminals to pull off this scam than these crypto exchanges which are newer and don't tend to have the infrastructure to prevent this fraud and don't have a lot of stuff to be able to deal with this this happened to the doctor in january so it's been about a month since it happened. he still doesn't have access to his account. >> are any of these accounts insured fdic or anything else? >> no, fdic doesn't apply to

crypto, right? so you are taking your chances when you're investing in crypto. there's a risk of this sort of thing. it's not common, but it happens out there. so when you're dealing in the world, you need to know there's a higher rizsk of this sort of thing happening to you and there's just not the safety net in crypto that exists in the banking system, which has been developed over 100 years or more >> thank you very much fabulous report there. after the break, airline stocks surging today, pulling higher the entire travel group along with them. signs of omicron slowing and a return tonormal yet again. could this be a big summer feor these stocks we'll take a look at the airlines and more when we return new projects means new project managers. you need to hire. i need indeed. indeed you do. when you sponsor a job, you immediately get your shortlist of quality candidates, whose resumes on indeed match your job criteria. visit indeed.com/hire and get started today.

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the markets are having a nice bounceback, but what's really moving is anything involved in travel the cruise lines are the leading edge i should say of the bounceback trade there you can see carnival up about 6% booking, expedia also higher, up 6% and airbnb up.

marriott, hilton and hyatt all in the green hyatt up 7%. that and marriott hitting all-time highs today you can't talk travel without the airlines and wie see sharp gains there as well as they get ready for more americans to travel and to travel overseas this summer. phil has more on the story >> kelly, the reason american, delta, and united are all up big is because all three are expected a big summer when it comes to flying to europe. they have been updating their schedule now we have the folks at oag, an airline consulting firm, crunch the numbers. look at the increase in the number of seats to europe this summer this is compared to right now. but august, united will be up another 223% in terms of seats delta, almost 200% american, 132% when you look at where travel is to europe from the u.s. right now, jeffries says it's down about 36% compared to the same time in 2019 that's why this summer is so

important. you'll see more planes going over there the capacity is expected by the third quarter to pretty much be back to the 2019 levels. so as you take a look at american, delta, and united, remember they are expecting this they've been talking about it for some time and they believe that they are going to have near record demand for their european flights and there's nothing with the way omicron is fading that leads anybody to believe their estimates are not going to true. also, look at jet blue it flies from new york into london and may have already started, boston into the uk, so that transatlantic service is going to be up 10% for jet blue this summer. they are also ordering, converting options for 30 airbus a220 planes. they're saying those those will be used primarily here in the u.s. news alert out of

washington ylan mui has the story >> senate democrats have now officially delayed a committee vote on president biden's nominees to the federal reserve after republicans boycotted the meeting over objections to raskin as vice chair for supervision. democrats are accusing republicans of walking out on their job and undertaking a relentless smear campaign against raskin republicans say they're worried about her position on everything from climate change to her relationship with a fintech company and its work with the federal reserve. unclear what this means. not just for raskin, but also for all of the other fed nominees including chairman jay powell senator brown, the head of the comm committee, says he doesn't know when another vote will be scheduled. if you are building or buying a house, let's hope your costs don't splinter after the break, we'll explore how much inflation is impacting

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all this week, we take a look at how inflation is hitting every step of the home buying process. yesterday, we looked at

mortgages. today, it is lumber. let's bring in diana olick for the nuts and bolts of this story. maybe it's nails and screws, di. >> yeah, it may be, ty look, the price of lumber had been on a roller coaster since the start of the pandemic and it's climbing a big last year, it began to rise in december it's now about 22% lower than the peak, but still about three times its average prepandemic price. that, of course, is adding to the cost of both building a new home as well as remodeling an older home the national association of home builders recently estimated the latest price jump added more than $18,600 to the price of a newly built home and nearly $7,300 to the cost of a new multifamily home which translates into households paying $67 more on rent on a new apartment. now, there are several reasons behind the inflation, but it's mostly that saw mills just can't keep up with the demand. you can see it when you compare

saw mill output to housing starts not even close they drop production sharply at the start of the pandemic, and never really recovered especially when it came to getting enough labor to do it. tyler. >> how about the time from when a contractor orders lumber to the time when she or he gets it? are there slowdowns in delivery? >> absolutely. and supply chain slowdowns across the board and across the country, really. >> yeah, i would think that has really meant a lot here. when you're doing an addition to a house, do we have any idea how much it's adding there you said something like $17,000 to a newly built home, i guess it depends on the addition >> yeah, it's going to depend entirely on the size of the addition, where you are, what the cost is in that area, but it will add, no question, and again, it's that delay time that contractors cannot stop talking about. >> i'm asking for a friend, diana, for a friend, i promise >> of course >> all right for more on the wild moves in

lumber this year and what could be next, let's bring in kyle little, chief operating officer at the building materials wholesaler, sherwood lumber. good to have you with us >> great to be here. >> react to what diana just said about the rerise in lumber prices and how they are three times what they were pre-pandemic what happened that makes them go up in price three times? >> well, we're dealing with what we have seen as a stop and go economy, and lumber was really one of the earliest commodities, earliest asset classes to really see what a true supply side challenge post-pandemic or a pandemic economy could go out there and do right now, we identified this as a bull cycle we're currently in month 19 of this cycle and with omicron and delta waves

past, which would have put the peak supply constraints behind us, we see things slowly but surely improving as we get into the middle part of this year and into the latter part of this year what that will do will ultimately give us a little bit of relief in price >> i guess what i don't understand, and it's not merely endemic to the lumber or building materials area, is what i don't understand is why is it that so many commodities are so much more expensive than they were in 2019 in other words, is the demand for the commodities pulling the price along, has supply constricted, in other words, are there fewer saw mills working? is there something having to do with tariffs at the border with canada i don't know why we would be seeing a tripling in price it's not like we're building three times as many homes. >> you're absolutely correct i really believe in lumber

particularly, i can't speak for all other commodities, but specific to lumber, we have an issue not of enough supply of fiber to build the current amount of homes in the business. we just don't have enough that's actually down the supply chain meaning it hats gone from saw mill to wholesaler to the dealer and ultimately to the job site so we have all of this hyperdemand for product that they want it right now, but in fact, all that production because of labor constraints, because of delays with covid and what have you, it's sitting at the saw mill so the market continues to get bid up for whatever is available right now in the marketplace to temper the needs of the job sites that are operating at this time >> not to bog down here, but when you say it's sitting at the saw mill, does this mean that logs are literally sitting at the saw mill, or that cut lumber is sitting at the saw mill waiting to be put on trucks? >> it would be a combination of both but right now, if you look at

finished product to be delivered to the market, based on our analysis, that inventory sitting, waiting to be shipped to the marketplace is moving towards all-time highs >> those are nice birch right behind you, whatever they are. >> thanks. bl whether that's fake or not, looks good to me thanks kyle little. >> thank you >> up next, a new report from b of a shows investors are buying the dip. i had some of that on sunday, dip. i was heavy tonhe dip long on the dip. we'll tell you what they're loading up on. countless different networks. so how do you get everyone on the same page? microsoft surface devices, orchestrated by cdw. they adapt to each user and deliver multi-layered security, so your workforce gets seamless experiences wherever they roam. for devices that fit your unique workforce, trust microsoft surface and it orchestration by cdw.

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there has been a lot of talk of buying the dip in this volatile market. new report from b of a shows exactly what investors are buying dom chu now back with us >> tyler, the instinct and reflex have a response to the stock market declines is to step in and buy the discount in prices this helped this past week its clients stepped into the market to put money to work as prices fell, acting as net buyers for the third straight week but not all of them were saying mine the private client/individual/retail clients bought for the sixth straight weeks, but institutions and mutual funds bought for the third straight week. it's the hedge funds that said yours and were net sellers in the marketplace as they were for the buying it was generally in small and midcap names as they rotated out

of some of the large caps that had been leaders for some time there may be a good reason for that, tyler, as i see you step in >> i'm coming over here menacingly to throw you off. >> this is forward price to earnings small versus large so this orange line is the average. you can see over the last, say, 20-some, 30 years, it trades pretty much the same valuation, small and mid aps. right now is where we are here a 29% discount for small cap stocks that gives you an idea >> small caps are cheap. >> 29% where they historically are below, 29% where they historically are, which is around the same level as large caps >> do we know where some of the money in the b of a study is going into small caps? >> they're net buyers. they have been for a while, net buyers of the small caps >> using the trading signals >> yes, selling some of those large cap stocks mine and yours but i guess the point is if you look at some of the relative performance at least, small versus midcaps, look at the etfs

that track them, you can see the volatility has been there a little more so if you look at small caps versus large caps in that particular trade, it has been for a while now large caps with leadership. something to keep an eye on. >> we'll be watching the markets the rest of the day, rest of the week come over here, dom. come on. thanks for watching "power lunch. you say -- >> "closing bell" starts right now. >> thank you, tyler and dom. welcome to "closing bell." i'm sara eisen here at the new york stock exchange. bit of a relief rally for stocks today, but the dow, s&p up about 1% nasdaq up 2%, first gain in four sessions >> i'm wilfred frost let's look at what's driving the action russia has pulled back some troops around ukraine, easing concerns about rising geopolitical tensions there. president biden set to speak about ukraine in about thirbt min 30 minutes with that news, oil dropping, and energy the worst performing sector on the s&p 500. as a result. also of note today, small caps